KKV Agro Powers Ltd Directors Report.

To

The Members,

Your Directors have pleasure and privilege in presenting the 7th Annual Report 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 8,73,89,460 7,52,39,632
Gross Receipts (including other Income) 8,73,89,460 7,54,42,236
Total Expenditure before Interest and Depreciation 3,87,98,173 3,28,53,454
Less: Interest and Financial Charges 17,58,680 22,66,546
Less: Depreciation and Amortization 1,20,74,267 1,20,69,871
Profit/(Loss) before taxation for the year 3,47,58,340 2,82,52,364
Less: Current tax Expenses 70,00,000 58,00,000
Less: MAT Credit - -
Less: Deferred Tax Liability/Asset 76,02,957 71,26,241
Less : Earlier years - -
Profit/(Loss) after taxation for the year 2,01,55,383 1,53,26,123
Transfer to Debenture Redemption Reserve - -
Less: Transfer to Reserves - -
Less: Dividend paid on Equity Shares 3,62,800 7,25,600
Less: Dividend paid on Preference Shares 2,70,000 8,10,000
Less: Dividend Distribution Tax 1,30,074 3,12,612
Balance carried forward 1,93,92,509 1,34,77,911

STATE OF AFFAIRS OF THE COMPANY:

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

THE HIGHLIGHTS OF THE COMPANYS PERFORMANCE FOR THE YEAR ENDED MARCH 31, 2019 ARE AS UNDER:

Revenue from Operations increased by 16.15 % to Rs. 8,73,89,460 from Rs. 7,52,39,632; PBIT increased by 23.03 % to Rs. 3,47,58,340 from Rs. 2,82,52,364; Net Profits increased by 31.51 % to Rs. 2,01,55,383 from Rs. 1,53,26,123;

The Company is making efforts to improve the business and your Directors are optimistic of 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 the Reserves for the year under review.

3. DIVIDEND:

Based on the Companys performance, the Board of Directors are pleased to recommend a Dividend of Rs. 5.00/- per Equity Share (i.e. 50%) (Previous year 10%) for the Financial Year 2018-2019 subject to the approval of the Shareholders of the Company at the 7th AGM. The Board of Directors has also approved a Dividend of 3% on the Redeemable Cumulative Preference Shares.

The Dividend on Equity and Preference Shares would involve a cash outflow of Rs. 25,37,500/- plus Dividend Distribution tax of Rs. 5,16,635.

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 of the Dividend declared and paid during the previous years. Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there was no fund which 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 90,700 Fully Paid Bonus Equity Shares of Rs. 10 /- each on 21st July 2018 in the ratio of 1:4 by capitalization of Securities Premium Account. The Bonus Shares issued by the Company during the year under review shall rank Parri Passu with existing Equity Shares of the Company.

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

The Authorized Share Capital of the Company as on March 31,2019 is Rs. 12,00,00,000 dividend into 1,10,00,000 Equity Shares of Rs. 10 each aggregating to Rs. 11,00,00,000 and 1,00,000 Preference Shares of Rs. 100 each aggregating to Rs. 1,00,00,000.

The Paid up Equity Share Capital of the Company as on March 31,2019 is Rs. 1,35,35,000 divided into 4,53,500 Equity Shares of Rs. 10 each aggregating to Rs.45,35,000 and 90,000 Preference Shares of Rs. 100 each aggregating to Rs. 90,00,000.

6. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Your Company has an optimum combination of Executive and Non-Executive Directors. Your Company is led by an experienced team of Directors alongside a talented management which has vast experience, knowledge, and expertise in this field. Each member in our group contributes to the Companys growth.

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

Mr. T.K. Chandiran (DIN: 00031091) was re-appointed as Managing Director of the Company with 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 effect from 02nd April, 2018 for further period of three years.

Mr. Gnanasekar Thiagarajan (DIN: 00904018), Non-Executive Independent Director, has resigned 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 Key Managerial Personnel from the end of the financial year i.e. 31st March 2019 and till the date of this report:

Mrs. C. Renuka (Membership No. 9460) resigned from the office of Company Secretary, Compliance Officer and Chief Financial Officer of the Company with effect from 22.04.2019 and thereafter Mr. C. Arun Kumar (PAN: AUEPA4777G) was appointed as the Chief Financial Officer and Mr. G. Vivek (Membership No. A55386) was appointed as Company Secretary and Compliance Officer of the Company with effect from the same date.

Mr. Bhagavan Mohan (DIN: 05255699) was proposed to be appointed as Non-Executive Independent Director of the Company for a period of 5 years with effect from 22nd April 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 company at the ensuing AGM.

Mr. A. Velayutham, Director of the Company, resigned from the Board with effect from 07.06.2019.

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 liable to retire by rotation at the AGM. The Director being eligible to be re-appointed has given his consent for his reappointment.

7. BOARD EVALUATION:

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

8. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to act as Independent Directors under the provisions of the Companies Act, 2013, the relevant rules made there under and the SEBI Regulations.

9. POLICY ON DIRECTORS APPOINTMENT AND

REMUNERATION:

The Companys policy on Directors appointment and remuneration and other matters provided in Section 178 of the Companies Act, 2013 has been disclosed in the Corporate Governance 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, Coimbatore were appointed as Independent Statutory Auditors of the Company for a period of five years from the conclusion of the 6th Annual General Meeting held on 21st September 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 148 of 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 terms of Schedule V of the SEBI (Listing obligations and Disclosures Requirements) Regulation, 2015, a separate report on Corporate Governance is furnished as Annexure - 2 to this report.

16. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control systems to monitor business processes, Financial Reporting and Compliance with applicable Laws, Rules and Regulations. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all levels. The Audit Committee of the Board constantly reviews internal control systems and their adequacy, significant risk areas, observations made by the Internal Auditors on control mechanism and the operations of the Company and recommendations made for corrective action through the Internal Audit reports. The Committee reviews the statutory auditors report, key issues, significant processes and accounting policies.

17. CODE OF CONDUCT:

In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 and the Companies Act, 2013, the Company has framed and adopted a Code of Conduct applicable to 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 have affirmed 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 the meaning 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 the sub-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 and convened as per the applicable provisions of the Companies Act, 2013, the relevant Rules made there under, the SEBI Listing Regulations, the Secretarial Standards issued by the Institute of Company Secretaries of India and the Principles of Corporate Governance laid down 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 and Remuneration Committee and Four (4) Meetings of the Stakeholders Relationship Committee were held. Further details of the same have been provided in the Corporate Governance 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 any Loan, Guarantee or Security within the meaning of the provisions of Section 186 of the Companies Act, 2013.

22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: 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 and educating 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 wind technology through its windmills and Solar Plant in the States of Tamil Nadu and Andhra Pradesh.

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

B) Technology absorption:

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

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution: Nil

(iii) In case of imported technology (imported during the last three years reckoned from 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 are enumerated in the Corporate Governance Report. The Company has devised a vigil mechanism in the form of a Whistle Blower Policy in pursuance of provisions of Section 177(10) of the Companies Act, 2013 and the policy is explained in Corporate Governance report and also 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 rules made thereunder your Company has appointed M/s. Suri &Co., Chartered Accountants (FRN: 0042835) as Internal Auditors for the Financial Year 2018-19. The Audit Committee discusses and reviews with the Internal Auditors about the functions and activities of the company at periodic intervals. The Audit Committee then appraises the Board of Directors about the findings, if any.

25. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All transactions with Related Parties are at arms length and in the ordinary course of business duly approved by the Audit Committee of the Board. The details of material related party transactions at arms length and in the ordinary course of business are detailed 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 uploaded on the Companys website at http://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 of Industry and associated risks pertaining to the Industry. The Management is overseeing the implementation 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 has appointed Shri. Vasudevan G, FCS, of M/s. G. V and Associates, Company Secretaries in Practice, Coimbatore to undertake the Secretarial Audit of the Company. The report of the Secretarial 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 Act 2013, 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 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of the remuneration of Directors, Key Managerial Personnel and employees are enclosed as Annexure 6 forming part of the report.

30. INSIDER TRADING REGULATIONS:

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 1992 read with SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, 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 to protect the interest of Shareholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, designated employees and other employees. The Company also adopts the concept of Trading Window Closure, to prevent its Directors, Officers, designated employees and other employees from trading in the securities of the Company at the time when there is unpublished price sensitive information.

31. DEPOSITORY SYSTEM:

As the Members are aware, your Companys Equity Shares are tradable compulsorily in electronic form and your Company has established connectivity with both National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The ISIN allotted to the Companys Equity shares is INE239T01016.

32. LISTING WITH STOCK EXCHANGES:

At present the Equity Shares of the Company are listed on the EMERGE - the SME Growth Platform of National Stock Exchange at Mumbai. The Company confirmed that has no dues outstanding to the National Stock Exchange for the year 2018 - 2019.

33. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

As per the requirements specified in the "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013," the Company has constituted an Internal Complaints Committee and is committed to provide a work environment that is free from sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There was no complaint received from any 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 financial position of the company which have occurred between the end of the financial year to which the 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 or tribunal which would impact the going concern status and the Companys operations in future.

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

The Observation made by the Statutory Auditors and Secretarial Auditor in their Report is 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 and explanations obtained by them, your Directors make the following statements in terms of Section 134(3) (c) of the Companies Act, 2013:

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

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

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 operating effectively and

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

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

There was no instance of fraud identified or reported by the Statutory Auditors during the 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 the Institute of Company Secretaries of India.

41. ACKNOWLEDGEMENT:

Your Directors wish to place on record their deep gratitude and appreciation towards the Companys Suppliers, Customers, Investors, Bankers, Government of India, State Governments and other regulatory authorities for their continued support during the year. Your Directors also acknowledge the commitment and the dedication of the employees at all levels 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