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KKV Agro Powers Ltd.

BSE: 538368 Sector: Infrastructure
NSE: KKVAPOW ISIN Code: INE239T01016
BSE 05:30 | 01 Jan KKV Agro Powers Ltd
NSE 05:30 | 01 Jan KKV Agro Powers Ltd

KKV Agro Powers Ltd. (KKVAPOW) - Director Report

Company director report

To

The Members

Your Directors have pleasure and privilege in presenting the 7th AnnualReport together with the Audited Financial Statements of the M/s. KKV Agro Powers Limited("the Company") for the Financial Year ended 31st March 2019.

1. FINANCIAL SUMMARY AND HIGHLIGHTS:

(In Rs.)

Particulars Current Year 2018-2019 Previous Year 2017-2018
Income from Operations 87389460 75239632
Gross Receipts (including other Income) 87389460 75442236
Total Expenditure before Interest and Depreciation 38798173 32853454
Less: Interest and Financial Charges 1758680 2266546
Less: Depreciation and Amortization 12074267 12069871
Profit/(Loss) before taxation for the year 34758340 28252364
Less: Current tax Expenses 7000000 5800000
Less: MAT Credit - -
Less: Deferred Tax Liability/Asset 7602957 7126241
Less : Earlier years - -
Profit/(Loss) after taxation for the year 20155383 15326123
Transfer to Debenture Redemption Reserve - -
Less: Transfer to Reserves - -
Less: Dividend paid on Equity Shares 362800 725600
Less: Dividend paid on Preference Shares 270000 810000
Less: Dividend Distribution Tax 130074 312612
Balance carried forward 19392509 13477911

STATE OF AFFAIRS OF THE COMPANY:

Our Company is an Independent Power Producer (IPP) and Renewable Power GenerationCompany having an installation capacity of 9.6 MW that includes an installation of 7.6MW Wind Energy and 2 MW Solar Energy. The plants are located in the states ofTamil Nadu which is amongst the top four Indian states with the highest wind and solarpotential and offers very favorable incentives for renewable energy companies and in thestate of Andhra Pradesh. Your Company is also Trading REC generated from our plants in IEXand PXIL through TATA Power Trading Company Limited.

THE HIGHLIGHTS OF THE COMPANY'S PERFORMANCE FOR THE YEAR ENDED MARCH 31 2019 ARE ASUNDER:

Revenue from Operations increased by 16.15 % to Rs. 87389460 from Rs. 75239632;PBIT increased by 23.03 % to Rs. 34758340 from Rs. 28252364; Net Profits increasedby 31.51 % to Rs. 20155383 from Rs. 15326123;

The Company is making efforts to improve the business and your Directors are optimisticof better performance during the upcoming years.

2. TRANSFER TO RESERVES:

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

3. DIVIDEND:

Based on the Company's performance the Board of Directors are pleased to recommend aDividend of Rs. 5.00/- per Equity Share (i.e. 50%) (Previous year 10%) for the FinancialYear 2018-2019 subject to the approval of the Shareholders of the Company at the 7thAGM. 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 Rs.2537500/- plus Dividend Distribution tax of Rs. 516635.

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

There is no amount lying in the Unpaid Dividend Account of the Company in respect ofthe Dividend declared and paid during the previous years. Your Company did not have anyfunds lying unpaid or unclaimed for a period of seven years. Therefore there was no fundwhich was required to be transferred to Investor Education and Protection Fund (IEPF).

5. SHARE CAPITAL:

During the year under review the Company has issued and allotted 90700 Fully PaidBonus Equity Shares of Rs. 10 /- each on 21st July 2018 in the ratio of 1:4 bycapitalization of Securities Premium Account. The Bonus Shares issued by the Companyduring the year under review shall rank Parri Passu with existing Equity Shares of theCompany.

The Authorized and Paid up Share Capital of the Company after the Issue and Allotmentof the Bonus Equity Shares is as below:

The Authorized Share Capital of the Company as on March 312019 is Rs. 120000000dividend into 11000000 Equity Shares of Rs. 10 each aggregating to Rs. 110000000 and100000 Preference Shares of Rs. 100 each aggregating to Rs. 10000000.

The Paid up Equity Share Capital of the Company as on March 312019 is Rs. 13535000divided into 453500 Equity Shares of Rs. 10 each aggregating to Rs.4535000 and 90000Preference Shares of Rs. 100 each aggregating to Rs. 9000000.

6. 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:

Mr. T.K. Chandiran (DIN: 00031091) was re-appointed as Managing Director of the Companywith effect from 02nd April 2018 for further period of three years and Mrs. C.Selvi (DIN: 00032962) was re-appointed as Whole-Time Director of the Company with effectfrom 02nd April 2018 for further period of three years.

Mr. Gnanasekar Thiagarajan (DIN: 00904018) Non-Executive Independent Director hasresigned from the Directorship of the Company with effect from 31st March 2019.

Details of changes that took place in the composition of the Board of Directors and KeyManagerial Personnel from the end of the financial year i.e. 31st March 2019and till the date of this report:

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 proposed to be appointed as Non-ExecutiveIndependent Director of the Company for a period of 5 years with effect from 22ndApril 2019. He was appointed as an Additional Director upto the date of the ensuing AGM.The regularisation of appointment is subject to the approval of the members of the companyat the ensuing AGM.

Mr. A. Velayutham Director of the Company resigned from the Board with effect from07.06.2019.

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

Mr. A.C.Vineethkumar (DIN: 06756745) Non-Executive Director of the Company is liableto retire by rotation at the AGM. The Director being eligible to be re-appointed has givenhis consent for his reappointment.

7. 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.

8. 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 there under and theSEBI Regulations.

9. 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.

10. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:

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

11. 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 21stSeptember 2018 till the conclusion of the 11thAnnual General Meeting.

12. 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.

13. COST AUDIT:

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

14. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

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

15. 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.

16. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control systems to monitor business processesFinancial Reporting and Compliance with applicable Laws Rules and Regulations. Thesystems are periodically reviewed for identification of control deficiencies andformulation of time bound action plans to improve efficiency at all levels. The AuditCommittee of the Board constantly reviews internal control systems and their adequacysignificant risk areas observations made by the Internal Auditors on control mechanismand the operations of the Company and recommendations made for corrective action throughthe Internal Audit reports. The Committee reviews the statutory auditors' report keyissues significant processes and accounting policies.

17. 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 2019.

18. 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.

19. EXTRACT OF THE ANNUAL RETURN:

An extract of the Annual Return as of 31st March 2019 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.

20. 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 there under 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 Nine (9) Meetings of the Board of Directors Four(4) Meetings of the Audit Committee Two (2) Meetings of the Nomination andRemuneration Committee and Four (4) Meetings of the Stakeholders RelationshipCommittee were held. Further details of the same have been provided in the CorporateGovernance Report annexed herewith.

21. 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.

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

(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.

(ii) The steps taken by the Company for utilizing alternate sources of energy:

The Company generates energy for captive consumption using environmental friendly windtechnology through its windmills and Solar Plant in the States of Tamil Nadu and AndhraPradesh.

(iii) The capital investment on energy conservation equipments: Nil

B) Technology absorption:

(i) The efforts made towards technology absorption: Technology absorption is acontinuous process and the Company has been deriving various benefits which cannot beattributed to any specific area. In all the Company stands to gain on various fronts onaccount of continuous technology absorption.

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

(iii) In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year) : Nil

(iv) The expenditure incurred on Research and Development: Nil

C) Foreign exchange earnings and Expenditure:

Foreign exchange earnings : Nil

Foreign exchange Expenditure: Nil

23. 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.

24. 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:0042835) as Internal Auditors for the Financial Year 2018-19. 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.

25. 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 website athttp://kkvagropowers.com/wp-content/uploads/2016/06/POLICY-ON-RELATED-PARTY-TRANSACTIONS.pdf.

26. RISK MANAGEMENT POLICY:

The Management has devised robust Risk Management Policy considering the nature ofIndustry and associated risks pertaining to the Industry. The Management is overseeing theimplementation of the Policy on regular basis.

27. 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.

28. CORPORATE SOCIAL RESPONSIBILITY:

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

29. 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.

30. 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 CorporateDisclosures ("Code") as approved by the Board from time to time are in forceby the Company. The objective of this Code is to protect the interest of Shareholders atlarge to prevent misuse of any price sensitive information and to prevent any insidertrading activity by dealing in shares of the Company by its Directors designatedemployees and other employees. The Company also adopts the concept of Trading WindowClosure to prevent its Directors Officers designated employees and other employees fromtrading in the securities of the Company at the time when there is unpublished pricesensitive information.

31. 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.

32. 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 2018 - 2019.

33. 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 atWorkplace (Prevention Prohibition and Redressal) Act 2013" the Company hasconstituted an Internal Complaints Committee and is committed to provide a workenvironment that is free from sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. There was no complaint received fromany employee during the financial year 2018 - 19.

34. CHANGE IN THE NATURE OF BUSINESS IF ANY

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

35. 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.

36. 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.

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

The Observation made by the Statutory Auditors and Secretarial Auditor in their Reportis self explanatory and hence the Board of Directors has not commented about the same.

38. 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:

1. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

2. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofprofit of the Company for that period;

3. 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;

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

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

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

39. 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.

40. COMPLIANCE ON SECRETARIAL STANDARDS:

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

41. ACKNOWLEDGEMENT:

Your Directors wish to place on record their deep gratitude and appreciation towardsthe Company's Suppliers Customers Investors Bankers Government of India StateGovernments and other regulatory authorities for their continued support during the year.Your Directors also acknowledge the commitment and the dedication of the employees at alllevels who have contributed 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
Coimbatore
02.09.2019

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