K.P. Energy Ltd Directors Report.

TO THE MEMBERS,

The Directors are pleased to present the 12th Annual Report on the business and operation of your Company together with audited financial statements of account for the year ended March 31, 2021.

1. FINANCIAL RESULTS:

(Rs.inlacs)

Particulars Standalone Consolidated
2021 2020 2021 2020
Revenue from operations 6,904.18 7411.61 7,173.59 7499.25
Other Income 147.63 59.73 147.63 59.73
Total Income 7,051.81 7471.34 7,321.21 7558.98
Expenditure 5120.96 6334.62 5390.34 6421.54
Profit Earnings before interest, tax, depreciation and amortization (EBITDA) 1930.85 1136.72 1930.87 1137.44
Finance Cost 519.41 461.41 519.50 462.13
Depreciation 432.42 397.01 461.61 397.01
Profit Before Taxation 979.02 278.30 949.77 278.30
Tax expenses (81.08) (168.28) (166.59) (168.28)
Profit for the period 720.70 110.02 605.94 110.02

2. PERFORMANCE HIGHLIGHTS:

On a standalone basis, the revenue for FY 2021 was Rs.6,904.18 Lacs compare to previous years revenue of Rs.7411.61 Lacs. The profit after tax (PAT) attributable to shareholders for FY 2021 and FY 2020 was Rs.720.70 Lacs and Rs.110.02 Lacs respectively. The PAT attributable to shareholders for FY 2020 registers significant increase in growth compare to FY 2020 PAT.

On a consolidated basis, the revenue for FY 2021 was Rs.7,173.59 Lacs compare to previous years revenue of Rs.7499.25 Lacs. The profit after tax (PAT) attributable to shareholders for FY 2021 and FY 2020 was Rs.605.94 Lacs and Rs.110.02 Lacs respectively.

Details ofyour Companys Operational and financial performance as published on the Companys website and presented during the Analyst Meet, after declaration of annual results, can be accessed using the following link: https://www. kpenergy.in/kpedata/assets/uploads/Investor%20 Presentation%20along%20with%20Key%20 highlights%20of%20Q4FY21%20performance.pdf

3. DIVIDEND AND RESERVES:

For the year ended March 31, 2021, the Board of Directors has not declared/recommended any dividend for the current financial year and have opt for conservation of profits and continued investment in the business. The company has transferred the whole amount of Profit to Reserve and surplus account as per attached audited Balance sheet for the year ended March 31, 2021.

4. SHARE CAPITAL:

During the year under review, there was no change in Authorised, Issued, Subscribed and Paid-up Share Capital of the Company. The Company has not issued any equity shares with differential rights during the year.

The Authorised Share Capital of the Company is Rs.12,50,00,000/- (Rupees Twelve Crores Fifty Thousand only) divided into 1,25,00,000 (One Crore Twenty-Five Lacs) Equity Shares of Rs.10/- (Rupees ten only) each.

The Paid-up Share Capital of the Company is Rs.11,11,50,000 (Rupees Eleven Crores Eleven Lacs Fifty Thousand Only) divided into 1,11,15,000 (One Crore Eleven Lac Fifteen Thousand) equity shares of Rs.10/- (Rupees Ten only).

5. ORGANISATIONAL INITIATIVES IN RESPONSE TO COVID-19 SITUATION:

The Operations & Management of Windfarm sites being catered continued without any interruptions as power generation was permitted under all restrictions imposed from time to time except the repair and preventive maintenance schedules were not undertaken due to unavailability of skilled labour and restricted movements.

The controlling office works resumed only from 20th May, 2020 after permissions were granted in Surat City in specific areas to open office with 33% staff for limited hours. COVID-19 vaccinations drive have been carried out for all the employees at office and sites of the Company.

6. AMOUNT OF UNPAID/UNCLAIMED DIVIDEND TRANSFER TO UNPAID DIVIDEND ACCOUNT OF THE COMPANY:

During the financial year 20-21, Company does not require to transfer any amount of unpaid/ unclaimed dividend to the Unpaid Dividend Account. The Statement of unpaid / unclaimed dividends as on March 31, 2021 is uploaded on the Companys website www.kpenergy.in.

No funds were required to be transferred to Investor Education and Protection Fund (IEPF) during the year under review.

7. DEPOSITS FROM PUBLIC:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

8. CREDIT RATING:

For the year under review, CARE (Credit Analysis and Research) has assessed the ratings assigned to the bank facilities of the Company and has not changed the assigned ratings and has reaffirmed the ratings and outlook. As per the review, CARE assigned "Triple B minus" (Negative Outlook) for long term Bank facilities of Rs.29.27 Crores (Term Loan), and "Triple B minus/A three" (Negative Outlook) for Long term/Short Term bank facilities of Rs.11 Crores and "A Three" to Rs.1.80 Crore Short term bank facilities.

9. QUALITY INITIATIVES:

During the financial year 2020-21, surveillance audit was conducted by Deutsch Quality System(DQS) India, partner of UL (Underwriters Laboratories) LLC, a global safety certification company having head quarter in Northbrook, Illinois, United States for ISO 9001:2015 (Quality Management System), ISO 14001:2015 (Environment Management System) and ISO 45001:2018 (Occupational Health & Safety Management System) and on successful completion and verification that the management system fulfills the requirements of the standards, all certificates have been renewed.

10. EMPLOYEE STOCK OPTION PLAN:

Your Company approved the Employee Stock Option Scheme to reward its employees for their past association and performance. The scheme named as ‘K.P. Energy Limited Employee Stock Option Plan Tranche - I (‘Scheme) recommended by the Board of Directors on August 28, 2017 which was approved by the Shareholders vide special resolution on September 23, 2017. Pursuant to the same, our company intend to grant up to 1,00,000 options to the employees. However, during the year under review, no option has been granted to any employee of the Company.

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

There have been no material changes and commitments which affects 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.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

• BOARD OF DIRECTORS:

The Company has Eight (8) Directors consisting of three (3) Independent Directors, two (2) NonExecutive Directors, one (1) Managing Director and Two (2) Whole Time Directors. In accordance with the provisions of Section 152 and other applicable provisions of the Companies Act, 2013, Mr. Farukbhai Gulambhai Patel (DIN: 00414045) Managing Director is liable to retire by rotation and offer himself for re-appointment as Director of the company. After considering recommendations of Board, the Members of the Company at the ensuing Annual General Meeting may re-appoint Mr. Patel as Director of the company. Brief profile of Mr. Patel has been given in the Notice convening the 12th Annual General Meeting. During the year 2020-21 there was a change in Directors/Key Managerial Personnel as stated below:

a. Mr. Raghavendra Rao Bondada (DIN: 01883766) resigned as Non-Executive Independent Director w.e.f. August 28, 2020.

b. Mr. Vendhan Ganeshan Mudaliar (DIN: 08042293) was appointed Non-Executive Independent Director w.e.f. September 29, 2020.

• KEY MANAGERIAL PERSONNEL:

The following are the Key Managerial Personnel of the Company pursuant to Section 2(51) and 203 of the Companies Act, 2013:

1. Mr. Farukbhai Gulambhai Patel, Managing Director

2. Mr. Ashish Ashwin Mithani, Whole Time Director

3. Mr. Affan Faruk Patel, Whole Time Director

4. Mr. Karmit Haribhadrabhai Sheth, Company Secretary and Compliance Officer

5. Mr. Pravin Radhekant Singh, Chief Financial Officer

13. DECLARATION BY AN INDEPENDENT DIRECTOR(S):

Pursuant to Section 149 and other applicable provisions of the Companies Act, 2013, the Company has received declarations from the Independent Directors of the Company confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also confirmed that they have complied with the Companys code of conduct.

14. BOARD EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and Listing Regulations. The performance of the Board was evaluated by the Board after seeking inputs from all the Directors based on criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members based on criteria such as the composition of committees, effectiveness of Committee meetings, etc.

The NRC reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of the Executive Director and NEDs.

15. MEETINGS OF BOARD:

The Board of Directors met 9 (nine) times during the year under review. The details of board meetings and the attendance of the Directors are provided in the Corporate Governance Report which forms part of this Report.

16. INDEPENDENT DIRECTORS AND THEIR MEETING:

The Independent Directors met on March 02, 2021, without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole; the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

17. COMMITTEES OF THE BOARD:

The Company has constituted various Committees pursuant to the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013. Presently, the Company has following Committees of the Board of Directors:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

The details with respect to the composition, meetings, powers, roles, terms of reference, etc. of these Committees are given in the ‘Report on Corporate Governance of the Company which forms part of this Annual Report.

18. AUDITORS AND AUDITORS REPORT:

• STATUTORY AUDITORS:

The Auditors Report given by M/s. K A SANGHAVI & CO LLP, Statutory Auditors, on the financial statements of the Company for the year ended March 31, 2021 forms part of the Annual Report.

Pursuant to the provisions of Section 139 and all other applicable provisions, if any, of the Companies Act, 2013, and the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, M/s. K A SANGHAVI & CO LLP, Chartered Accountants, bearing Firm Registration No. 120846W, on the recommendations of the Audit Committee were appointed as the Statutory Auditors of the Company to hold office from the conclusion of 7th Annual General Meeting until the conclusion of the 12th Annual General Meeting of the Company on such remuneration as may be determined by the Board of Directors of the Company on a year to year basis. Accordingly, the term of the, M/s. K A SANGHAVI & CO LLP, Chartered Accountants as Statutory Auditors of the Company shall be completed at the conclusion of the 12th AGM.

The Audit Committee and the Board at their meeting held on August 31, 2021 approved the appointment of M/s. MAAK and Associates, Chartered Accountants (Firm Registration No. 135024W) for a term of five (5) years i.e from conclusion of the 12th annual general meeting till the conclusion of 17th annual general meeting.

The necessary resolution(s) seeking your approval on the appointment of M/s. MAAK and Associates, Chartered Accountants is included in the notice of the ensuing annual general meeting along with brief credentials and other necessary disclosures required under the Act and the Regulations.

• STATUTORY AUDITORS OBSERVATIONS IN AUDIT REPORT:

There has been no observation, qualification, reservation or adverse remark or disclaimer made by the statutory auditor in their Report.

SECRETARIAL AUDITOR:

Pursuant to provision of Section 204 of Companies Act, 2013 and Rules made thereunder, on the recommendations of the Audit Committee, the Board of Directors of the Company has appointed M/s. SJV & Associates, Practicing Company Secretaries, as a Secretarial Auditor of the Company to undertake the Secretarial Audit for the Financial Year 2020-21 in Meeting of Board of Directors held on June 30, 2020. A Secretarial Audit Report in "Form MR-3" provided by M/s. SJV & Associates, Practicing Company Secretaries has been provided in an "Annexure- I" which forms part of this Report.

SECRETARIAL AUDITORS OBSERVATIONS IN SECRETARIAL AUDIT REPORT:

There is no qualification, reservation or adverse remarks or disclaimer made by the secretarial auditor in their report.

INTERNAL AUDITOR:

Pursuant to Section 138 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, on the recommendations of the Audit Committee, the Board of Directors of the Company has appointed M/s. RHA & Co., Chartered Accountants (FRN. 142551W) as an Internal Auditor of the Company to undertake the internal Audit for the Financial Year 2020-21 in Meeting of Board of Directors held on June 30, 2020.

COST AUDITOR:

Pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules 2014 and subject to the approval of Central Government, on the recommendations of the Audit Committee, the Board of Directors of the Company has appointed M/s. Nanty Shah & Associates, Cost Accountants as Cost Auditors to undertake the Cost Audit and maintain the Cost records for the Financial Year 2020-21 in Meeting of Board of Directors held on August 29, 2020. After considering the recommendations of Board of Directors of the Company the remuneration payable to the Cost Auditor shall be ratified by the members at the ensuing Annual General Meeting.

REPORTING OF FRAUDS BY AUDITORS:

During the year under review, the Statutory Auditors, Internal Auditor and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143 (12) of the Companies Act, 2013, details of which needs to be mentioned in this Report. Hence, it is NOT APPLICABLE to the Company.

19. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company has constituted the Corporate Social Responsibility (CSR) Committee in accordance with Section 135(1) of the Companies Act, 2013, the Company has undertaken activities in the area of Education, Environment care & Protection, Public Infrastructure Development and Health Care and these activities are in accordance with Schedule VII of the Companies Act, 2013 and the Companys CSR policy. The Report on CSR activities as required is annexed as ‘Annexure II" to this report. Approved CSR policy is also available on the Companys website www.kpenergy.in.

20. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

As on March 31, 2021, your Company has Six (6) subsidiary companies and Six (6) project specific Special Purpose Vehicles (SPVs) in form of Limited Liability Partnership. As on March 31, 2021, there are no joint ventures/associates of the Company.

The list of Subsidiaries and Associates of your Company as on March 31, 2021, is forming a part of Boards Report and the details under section 129 of the Companies Act, 2013, read with rule 5 of Companies (Accounts) Rules, 2014 regarding the performance and financial position of each of the Subsidiaries, Associates and Joint Ventures of the Company is provided in "Form AOC-1" under Annexure - III which forms part of this report.

21. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report on the operations of the Company as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section which forms part of this Annual Report.

22. CORPORATE GOVERNANCE:

As per Regulation 34(3) read with schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, a separate section on corporate governance practices together with a certificate from the Companys Auditors confirming compliances is annexed separately to this report.

23. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has a well-placed, proper and adequate internal financial control system which ensures that all the assets are safeguarded and protected and that the transactions are authorized recorded and reported correctly. The internal audit covers a wide variety of operational matters and ensures compliance with specific standard with regards to availability and suitability of policies and procedures. During the year no reportable material weakness in the design or operation were observed.

24. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

In pursuant to the provisions of section 177(9) & 177(10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company www.kpenergv.in

25. ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return as on March 31, 2021 is available on the Companys website on at https://www.kpenergy.in/kpedata/assets/uploads/ Annual%20Return%202020-21.pdf

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

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Companys future operations.

27. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The provisions of Section 186 of the Act, with respect to a loan, guarantee or security is not applicable to the Company as the Company is engaged in providing infrastructural facilities which is exempted under Section 186 of the Act. The details of investment made during the year under review are disclosed in the financial statements.

28. RELATED PARTY TRANSACTIONS:

All Related Party Transactions that were entered into during the financial year were on an arms length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Regulations. All Related Party Transactions are placed before the Audit Committee for approval and prior omnibus approval of the same has been obtained for the transactions which are planned/repetitive in nature and omnibus approvals are taken as per the policy laid down for unforseen transactions. The particulars of contracts / arrangements with related parties referred to in Section 188(1) entered into during the financial year under review as required to be given in Form AOC-2, have been provided in an Annexure - IV which forms part of this Report.

29. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with rule 8 of The Companies (Accounts) Rules, 2014, as amended from time to time is annexed to this Report as Annexure - V.

30. PARTICULARS OF EMPLOYEES AND REMUNERATION:

The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are not applicable to the Company as none of the employees has received remuneration above the limits specified in the rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 during the financial year 2019-20. Further, the disclosures pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed in Annexure VI.

31. POLICIES:

The policies adopted by the Company as per statutory and governance requirements are uploaded on website of the Company at https:// www.kpenergv.in/policies-disclosures

32. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act is available on the website of the Company at https://www.kpenergy.in/ kpedata/assets/uploads/135852.pdf

33. HEALTH, SAFETY & ENVIRONMENT POLICY:

The Company has recognized, health management, occupational safety and environment protection (HSE) as one of the most important elements in the organizations sustainable growth and has closely linked it to its cultural values. Company continually strives to create a safe working environment by being responsive, caring and committed to the various needs governing the security and wellbeing of employees. The HSE policy has been reviewed by the company and is also available on the Companys website at https://www.kpenergy. in/kpedata/assets/uploads/483595.pdf

34. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Prevention of Sexual Harassment Policy has been reviewed by the company and is also available on the Companys website at https://www.kpenergy. in/kpedata/assets/uploads/104406.pdf

35. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, state the following:

I. that in the preparation of the annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

II. that such accounting policies have been selected and applied consistently and judgements and estimates have been made 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 the profit and loss of the Company for that period;

III. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

IV. that the annual financial statements have been prepared on a going concern basis;

V. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

VI. those proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

36. COMPLIANCE WITH SECRETARIAL STANDARDS:

The Directors have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems were adequate and operating effectively.

37. OTHER DISCLOSURES:

• As per SEBI Listing Regulations, the Corporate Governance Report with the Auditors Certificate thereon, and the Management Discussion and Analysis are attached, which forms part of this report.

• None of the Directors of the Company has been debarred or disqualified from being appointed or continuing as a Director by SEBI / Ministry of Corporate Affairs / Statutory Authorities.

• Neither the Managing Director nor the Wholetime Directors of the Company receive any remuneration or commission from any of its subsidiaries.

38. ACKNOWLEDGEMENT:

Your Directors are extremely grateful for all the guidance, support and assistance received from the Government of India, Government of Gujarat, Financial Institutions and Banks. Your Directors thank all shareholders, esteemed customers, suppliers and business associates for their faith, trust and confidence reposed in the Company.

Your Directors wish to place on record their sincere appreciation for the dedicated efforts and consistent contribution made by the employees at all levels, to ensure that the Company continues to grow and excel.

For and on behalf of the Board of Directors K.P. Energy Limited
Place: Surat Farukbhai Gulambhai Patel Ashish Ashwin Mithani
Date: August 31, 2021 Managing Director DIN: 00414045 Whole Time Director DIN: 00152771