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KKV Agro Powers Ltd.

BSE: 538368 Sector: Infrastructure
NSE: KKVAPOW ISIN Code: INE239T01016
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KKV Agro Powers Ltd. (KKVAPOW) - Director Report

Company director report

To

The Members

Your Directors have pleasure and privilege in presenting the 8th AnnualReport together with the Audited Financial Statements of the M/s. KKV Agro Powers Limited("the Company") for the Financial Year ended 31st March 2020.

1. FINANCIAL SUMMARY AND HIGHLIGHTS:

Particulars Current Year 2019-2020 Previous Year 2018-2019
Income from Operations 392825688 87389460
Gross Receipts
(including other Income) 393337393 87389460
Total Expenditure before Interest and 358171166 38798173
Depreciation
Less: Interest and Financial Charges 512990 1758680
Less: Depreciation and Amortization 12001662 12074267
Profit/(Loss) before taxation for the year 22651575 34758340
Less: Current tax Expenses 4900000 7000000
Less: MAT Credit (4900000) -
Less: Deferred Tax Liability/Asset 6670110 7602957
Less : Earlier years (12978676) -
Profit/(Loss) after taxation for the year 28960141 20155383

 

Particulars Current Year 2019-2020 Previous Year 2018-2019
Transfer to Debenture - -
Redemption Reserve
Less: Transfer to Reserves - -
Less: Dividend paid on Equity Shares 2267500 362800
Less: Dividend paid on Preference Shares 270000 270000
Less: Dividend Distribution Tax 521710 130074
Balance carried forward 25900931 19392509

STATE OF AFFAIRS OF THE COMPANY:

On 24th March 2020 the Government of India ordered a countrywide lockdownto control the spread of COVID-19 which has been declared as a pandemic by the WorldHealth Organization (WHO). The lockdown notice exempted essential services of which theCompany's operations were also considered a part of. Ministry of New and Renewable Energy(MNRE) has also clarified that renewable power plants must be allowed to be operated andall payments to the such renewable developers should continue to be honoured by theDistribution companies. However this pandemic has the potential to impact variousstakeholders especially the Commercial and Industrial customers. The Company has receiveda Force Majeure (FM) notices from few of its Commercial and Industrial customers who haveexpressed their inability to offtake power from the Company's power plants as their ownfacilities have been locked down. The Company is evaluating the potential impacts of thispandemic and shall adapt its business and operations to the new ‘normal' whileensuring safety of all its stakeholders namely its employees vendors contractors andsociety at large.

Operations:

As on 31st March 2020 the operating capacity of the Company was 8.6 MWconsisting of 1 MW of Solar plants and 7.6MW of Wind plants.

The Company has planned to commission a new solar plant in upcoming year which will add2MW MW to its operating portfolio.

THE HIGHLIGHTS OF THE COMPANY'S

PERFORMANCE FOR THE YEAR ENDED MARCH 31 2020 ARE AS UNDER:

Revenue from Operations to. 393337393 from.87389460; Net Profits increased to.28960141 from. 20155383; The Company is making efforts to improve the business andyour Directors are optimistic of better performance during the upcoming years.

2. COVID -19:

The Covid-19 outbreak from China was declared a pandemic by World Health Organisationin the last quarter of the financial year causing a social and economic turbulence. Wehave taken actions to ensure safety health and well-being of our employees and theirrespective families. Covid-19 is seen having an unprecedented impact on people andeconomies worldwide.

The Company is taking all necessary measures in terms of mitigating the impact of thechallenges being faced in the business. The Company is working towards being resilient inorder to sail through the current situation. It is focussed on controlling the fixedcosts maintaining liquidity and closely monitoring the supply chain to ensure that themanufacturing facilities operate smoothly.

In keeping with its employee-safety first approach the Company quickly institutedmeasures to trace all employees and be assured of their well-being. Our teams reacted withspeed and efficiency and quickly leveraged technology to shift the workforce to anentirely new ‘work-from-home' model.

These are challenging times for the world at large. The outbreak of COVID-19 and itsrapid acceleration across the globe are concerning. While the human impact of the virustakes precedence for all of us we continue to monitor the developments closely and arewary of the adverse impact on our business.

The Covid-19 pandemic may have an extended impact but this means opportunities as wellas challenges. The Board through its engagement with the management will guide theCompany in recalibrating its growth strategy to address these challenges and to make useof the new opportunities

3. TRANSFER TO RESERVES:

The Board of Directors of your Company has decided not to transfer any amount to theReserves for the year under review.

4. DIVIDEND:

Based on the Company's performance the Board of Directors are pleased to recommend aDividend of.5.00/- per Equity Share (i.e. 50%) (Previous year 50%) for the Financial Year2019-2020 subject to the approval of the Shareholders of the Company at the 8thAGM. The Board of Directors has also approved a Dividend of 3% on the RedeemableCumulative Preference Shares.

The Dividend on Equity and Preference Shares would involve a cash outflow of.2537500/-

5.AMOUNT LYING IN THE UNPAID DIVIDEND ACCOUNT AND TRANSFER TO IEPF:

The details of unpaid dividend Account FY 2020 are as follows:

Financial Amount of unpaid Number of
Year Dividend Shares
18-19 Rs. 25060 5012

Subsequently Company paid. 25000 to respective Shareholders. The details of Unpaiddividends as on June 2020 is mentioned in website of the company at www.kkvagropowers.com.

Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there was no fund which was required to be transferred to InvestorEducation and Protection Fund (IEPF).

6. SHARE CAPITAL:

During the year under review there is no change in the Share Capital of the Company.

The Authorized Share Capital of the Company as on March 312020 is. 120000000dividend into 11000000 Equity Shares of. 10 each aggregating to

Rs. 110000000 and 100000 Preference Shares of.100 each aggregating to.10000000.

The Paid up Equity Share Capital of the Company as on March 312020 is. 13535000divided into 453500 Equity Shares of. 10 each aggregating to. 4535000 and 90000Preference Shares of. 100 each aggregating to. 9000000.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Your Company has an optimum combination of Executive and Non-Executive Directors. YourCompany is led by an experienced team of Directors alongside a talented management whichhas vast experience knowledge and expertise in this field. Each member in our groupcontributes to the

Company's growth.

Details of changes happened in the composition of Board of Directors during the periodunder review:

Mrs. C. Renuka (Membership No. 9460) resigned from the office of Company SecretaryCompliance Officer and Chief Financial Officer of the Company with effect from 22-04-2019and thereafter Mr. C. Arun Kumar (PAN: AUEPA4777G) was appointed as the Chief FinancialOfficer and Mr. G. Vivek (Membership No. A55386) was appointed as Company Secretary andCompliance Officer of the Company with effect from the same date.

Mr. Bhagavan Mohan (DIN: 05255699) was appointed as Non-Executive Independent Directorof the Company for a period of 5 years with effect from 22-04-2019. He was appointed as anAdditional

Director upto the date of the 07th AGM. The regularisation of appointment ismade at the 07th AGM held on 27-09-2019

Mr. A. Velayutham Director of the Company resigned from the Board with effect from07-06-2019

Mr. G.Vivek (Membership No. A55386) resigned from the office of Company SecretaryCompliance Officer with effect from 9th December 2019 and thereafter Mrs.Srividya.M (Membership No. A58222) was appointed as Company Secretary and ComplianceOfficer of the Company with effect from 05-03-2020

Mr.Shankarasubramanian was appointed as Chief Executive Officer of the Company witheffect from 05-03-2020.

Details of the Appointment / Re-appointment proposed to be made at the AGM:

Mr. T.K. Chandiran (DIN: 00031091) Managing Director of the Company is liable toretire by rotation at the AGM. The Director being eligible to be reappointed has given hisconsent for his reappointment.

Mr. V.N. Chandrasekaran was re-appointed as Independent director for second five yearsterm and the same has been placed in the AGM Notice for members approval

8. BOARD EVALUATION:

Pursuant to the provisions of the Act the Board has carried out an annual evaluationof its own performance the individual Directors (including the Chairman) as well as anevaluation of the working of all Board Committees. The performance evaluation was carriedout on the basis of inputs received from all the Directors / Members of the Committees asthe case may be. The Independent Directors of the Company have also convened a separatemeeting for this purpose. All the results of evaluation have been communicated to theChairman of the Company/Board of Directors.

9. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of Independence as stipulated in Section 149(6) ofthe Companies Act 2013 so as to qualify themselves to act as Independent Directors underthe provisions of the Companies Act 2013 the relevant rules made thereunder and the SEBIRegulations.

10. POLICY ON DIRECTORS' APPOINTMENT AND

REMUNERATION:

The Company's policy on Director's appointment and remuneration and other mattersprovided in Section 178 of the Companies Act 2013 has been disclosed in the CorporateGovernance Report.

11. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Joint Venture Subsidiary or Associate Company.

12. STATUTORY AUDITORS:

M/s. VKS Aiyer & Co. (Firm Reg. No. 000066S) Chartered Accountants Coimbatorewere appointed as Independent Statutory Auditors of the Company for a period of five yearsfrom the conclusion of the 6th Annual General Meeting held on 21-09-2018 tillthe conclusion of the 11thAnnual General Meeting.

13. MAINTENANCE OF COST RECORDS:

The maintenance of Cost Records is not applicable as per the provisions of Section 148of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014.

14. COST AUDIT:

Not applicable to the Company as per the provisions of the Companies Act 2013.

15. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The details of Management Discussion and Analysis Report are furnished in Annexure -1 to this Report.

16. CORPORATE GOVERNANCE:

Your Company has been practicing the principles of good corporate governance. In termsof Schedule V of the SEBI (Listing obligations and Disclosures Requirements) Regulation2015 a separate report on Corporate Governance is furnished as Annexure - 2 tothis report.

17. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company's internal financial control systems are commensurate with the nature ofits business and the size and complexity of its operations. The internal controlprocedures have been planned and designed to provide reasonable assurance of compliancewith various policies practices and statutes in keeping with the organisation's pace ofgrowth and achieving its objectives efficiently and economically.

The internal controls risk management and governance processes are duly reviewed fortheir adequacy and effectiveness through periodic audits by the Internal Audit department.Post-audit reviews are also carried out to ensure that audit recommendations areimplemented. The Audit Committee reviews the adequacy and effectiveness of the Company'sinternal control environment and monitors the implementation of audit recommendationsincluding those relating to strengthening of the Company's risk management policies andsystems. The ultimate objective being a Zero Surprise Risk Controlled Organization.

18. CODE OF CONDUCT:

In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 andthe Companies Act 2013 the Company has framed and adopted a Code of Conduct applicableto the members of the

Board the executive officers and all the employees of the Company.

All the members of the Board the executive officers and senior financial officers haveaffirmed compliance with the Code of Conduct as on 31st March 2020.

19. DEPOSIT:

During the year under review the Company has not accepted any Deposits within themeaning of the provisions of Section 2 (31) of the Companies Act 2013.

20. EXTRACT OF THE ANNUAL RETURN:

An extract of the Annual Return as of 31st March 2020 pursuant to thesub-section (3) of Section 92 of the Companies Act 2013 in Form MGT-9 is furnished as Annexure- 3 to this report. The same is available in our website at www.kkvagropowers.com

21. MEETINGS OF BOARD AND ITS COMMITTEES CONDUCTED DURING THE PERIOD UNDER REVIEW:

The Meetings of Board of Directors of the Company and its Committees are called andconvened as per the applicable provisions of the Companies Act 2013 the relevant Rulesmade thereunder the SEBI Listing Regulations the Secretarial Standards issued by theInstitute of Company Secretaries of India and the Principles of Corporate Governance laiddown by the Company.

During the year under review Five (5) Meetings of the Board of Directors Five(5) Meetings of the Audit Committee Three (3) Meetings of the Nomination andRemuneration Committee and One (1) Meetings of the Stakeholders RelationshipCommittee were held. Further details of the same have been provided in the CorporateGovernance Report annexed herewith.

22. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY:

During the year under review the Company has not made any Investment or given anyLoan Guarantee or Security within the meaning of the provisions of Section 186 of theCompanies Act 2013.

23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO: A) Conservation of energy:

The Company monitors auxiliary consumption at its plants and takes measures to reduceit through use of energy efficient appliances prudent use of resources naturalventilation etc.

(i) The steps taken or impact on conservation of energy:

Strict vigilance is maintained over usage of Energy by constant monitoring andeducating the need to conserve energy.

The steps taken by the Company for utilizing alternate sources of energy: The Companygenerates energy for captive consumption using environmental friendly wind technologythrough its windmills and Solar Plant in the States of Tamil Nadu and Andhra Pradesh. Thecapital investment on energy conservation equipments: Nil

Technology absorption:

The Company ensures that its equipment vendors share their supplier details designdrawings and train Company personnel in operation and maintenance of the equipment.

The efforts made towards technology absorption: Technology absorption is a continuousprocess and the Company has been deriving various benefits which cannot be attributed toany specific area. In all the Company stands to gain on various fronts on account ofcontinuous technology absorption.

(ii) The benefits derived like product improvement cost reduction product developmentor import substitution: Nil

In case of imported technology (imported during the last three years reckoned from thebeginning of the financial year) : Nil

The expenditure incurred on Research and Development: Nil

C) Foreign exchange earnings and Expenditure:

Foreign exchange earnings : Nil Foreign exchange Expenditure: Nil

24. COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Board has constituted an Independent Audit Committee details of which areenumerated in the Corporate Governance Report. The Company has devised a vigil mechanismin the form of a Whistle Blower Policy in pursuance of provisions of Section 177(10) ofthe Companies Act 2013 and the policy is explained in Corporate Governance report andalso posted on the website of Company and can be accessed at the link www.kkvagropowers.com.During the year under review there was no complaint received under this mechanism.

25. INTERNAL AUDITORS:

Pursuant to the Provisions of Section 138 of the Companies Act 2013 and relevant rulesmade thereunder your Company has appointed M/s. Suri&Co. Chartered Accountants (FRN:004283S) as Internal Auditors for the Financial Year 2019-20. The Audit Committeediscusses and reviews with the Internal Auditors about the functions and activities of thecompany at periodic intervals. The Audit Committee then appraises the Board of Directorsabout the findings if any.

26. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All transactions with Related Parties are at arm's length and in the ordinary course ofbusiness duly approved by the Audit Committee of the Board. The details of materialrelated party transactions at arm's length and in the ordinary course of business aredetailed in Form AOC-2 and the same is furnished in Annexure 4 to this report.

The Board has formulated Policy on Related Party Transactions and the same is uploadedon the Company's websiteathttp://kkvagropowers.com/wp-content/uploads/2016/06/POLICY-ON-RELATED-PARTY-TRANSACTIONS.pdf.

27. RISK MANAGEMENT POLICY:

The Management has devised robust Risk Management Policy considering the nature of

Industry and associated risks pertaining to the Industry. The Management is overseeingthe implementation of the Policy on regular basis.

28. SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of The Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Shri. Vasudevan G FCS of M/s. G. V and Associates Company Secretaries inPractice Coimbatore to undertake the Secretarial Audit of the Company. The report of theSecretarial Auditor is furnished as Annexure 5 to this report.

29. CORPORATE SOCIAL RESPONSIBILITY:

The Company does not meet the criteria as specified in Section 135 of Companies Act2013 in relation to Corporate Social Responsibility.

30. PARTICULARS OF REMUNERATION PAID TO KEY MANAGERIAL PERSONNEL:

The information required pursuant to the provisions of Section 197(12) read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of the remuneration of Directors Key Managerial Personnel and employees areenclosed as Annexure

6 forming part of the report.

31. INSIDER TRADING REGULATIONS:

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations 1992read with SEBI (Prohibition of Insider Trading) Regulations 2015 as amended from time totime the Code of Conduct for prevention of Insider Trading and the Code for

Corporate Disclosures ("Code") as approved by the

Board from time to time are in force by the Company. The objective of this Code is toprotect the interest of Shareholders at large to prevent misuse of any price sensitiveinformation and to prevent any insider trading activity by dealing in shares of theCompany by its Directors designated employees and other employees. The Company alsoadopts the concept of Trading Window Closure to prevent its Directors Officersdesignated employees and other employees from trading in the securities of the Company atthe time when there is unpublished price sensitive information.

32. DEPOSITORY SYSTEM:

As the Members are aware your Company's Equity Shares are tradable compulsorily inelectronic form and your Company has established connectivity with both NationalSecurities Depository Limited (NSDL) and Central Depository Services (India) Limited(CDSL). The ISIN allotted to the Company's

Equity shares is INE239T01016.

33. LISTING WITH STOCK EXCHANGES:

At present the Equity Shares of the Company are listed on the EMERGE-the SME GrowthPlatform of National Stock Exchange at Mumbai. The Company confirmed that has no duesoutstanding to the National Stock Exchange for the year 2019-2020.

34. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:

As per the requirements specified in the "The Sexual

Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013" the Company has constituted an Internal Complaints Committee and is committedto provide a work environment that is free from sexual harassment. All employees(permanent contractual temporary trainees) are covered under this policy. There was nocomplaint received from any employee during the financial year 2019 - 20.

35. CHANGE IN THE NATURE OF BUSINESS IF ANY

During the year there was no change in the nature of business of the company.

However we expanded our business into Bullion Sales purchase during the year.

36. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There have been no material changes and commitments which affect the financialposition of the company which have occurred between the end of the financial year to whichthe financial statements relate and the date of this Report.

37. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL:

There was no significant and material order passed by the regulators or courts ortribunal which would impact the going concern status and the Company's operations infuture.

38. EXPLANATIONS OR COMMENTS BY THE BOARD ON OBSERVATION MADE BY STATUTORY AUDITORS ANDSECRETARIAL AUDITORS

A) Observations made by Statutory Auditors and Secretarial Auditor:

The Company has entered related party transaction with Group Company in the OrdinaryCourse of business. Through by strict interpretation of Section 188 the provisions arenot applicable to the Company. However as a best practice shareholders approvals wereobtained. As the limit as approved by the shareholders during the last meeting hasmarginally exceeded the same placed for ratification of Shareholders during this AnnualGeneral Meeting.

B) The other Observations made by the Statutory Auditors and Secretarial Auditor intheir Report areself-explanatory and hence the Board of Directors has not commented aboutthe same.

39. DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3) (c) of the Companies Act 2013:

In the preparation of the annual accounts the applicable accounting standards had beenfollowed along with proper explanation relating to material departures;

The Directors had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of profitof the Company for that period;

The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

The Directors had prepared the annual accounts on a going concern basis;

The Directors had laid down Internal Financial Controls are adequate and operatingeffectively and

The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

40. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THANTHOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:

There was no instance of fraud identified or reported by the Statutory Auditors duringthe course of their Audit pursuant to Section 143(12) of the Companies Act 2013.

41.COMPLIANCE ON SECRETARIAL STANDARDS:

The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.

42. ACKNOWLEDGEMENT:

Your Directors wish to place on record their deep gratitude and appreciation towardsthe Company's

Suppliers Customers Investors Bankers Government of India State Governments andother regulatory authorities for their continued support during the year. Your Directorsalso acknowledge the commitment and the dedication of the employees at all levels who havecontributed to the growth of the Company.

FOR AND ON BEHALF OF THE BOARD
sd/- sd/-
T.K Chandiran A.C.Vineethkumar
(DIN: 00031091) (DIN: 06756745)
Managing Director Director

Place: Coimbatore

Date: 05-09-2020