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Kalpataru Power Transmission Ltd.

BSE: 522287 | NSE: KALPATPOWR |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE220B01022 | SECTOR: Power - Transmission & Equipment

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Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Director’s Report

Directors’ Report

TO, THE MEMBERS,

The Directors are pleased to present the 38th ANNUAL REPORT of your Company together with the Audited Financial Statements (standalone and consolidated) for the financial year ended March,31, 2019.

FINANCIAL HIGHLIGHTS

(Rs, in Crores)

Revenue from Operations

Consolidated

Standalone

2018-19

2017-18

2018-19

2017-18

10,840.48 8,741.72

7,115.12 5,778.50

Profit before Depreciation, Tax and amortization expense

990.29 669.27

710.37 575.94

Less: Depreciation and amortization expenses

210.94 191.51

85.99 76.60

Profit before Tax

779.35

477.76

624.38

499.34

Share of Profit / (Loss) from Joint Venture

(18.10)

(16.84)

-

-

Tax Expense

274.16

182.66

223.09

177.34

Profit for the period

487.09

278.26

401.29

322.00

Other Comprehensive Income(net of tax)

Items that will be reclassified subsequently to Profit or Loss

24.51

8.34

18.00

4.66

Items that will not be reclassified subsequently to Profit or Loss

1.34

(0.23)

1.54

0.92

Total Comprehensive Income for the period Retained Earnings - Opening balance

512.94

1,378.86

286.37

1,200.04

420.83

1,540.72

327.58

1,314.97

Add: Impact of Ind AS 115 (net of taxes)

5.24

-

6.14

-

Add: Profit for the year

466.751

280.68*

401.29

322.00

Less: Acquisition of non-controlling interest

1.64

-

-

-

Less: Dividends including Dividend Tax

46.93

37.28

44.86

36.25

Less: Transfer to Debenture Redemption Reserve

36.86

52.18

25.00

50.00

Less: Transfer to General Reserve

12.25

12.25

10.00

10.00

Less: Transfer to other reserves

0.20

0.16

-

-

Retained Earnings - Closing balance

1,752.97

1,378.85

1,868.29

1,540.72

* Profit for the year attributable to Owners of the Company

OPERATIONAL HIGHLIGHTS

The Standalone revenue of your Company increased by 23.13% to RS,7,115.12 Crores as against RS,5,778.50 Crores in the previous financial year due to strong focus on project delivery and robust execution across business verticals. Total Export revenue (including overseas projects) was RS,2,730.70 Crores or approx. 38.38% of revenues in financial year 2018-19.

The Standalone net profit for the year increased by 24.63% to RS,401.29 Crores as against RS,322.00 Crores in the previous financial year. The Company successfully delivered on the Profitability front with Core EBIDTA increasing by 23.29% to RS,778.19 Crores with margins on standalone level at 10.94% primarily driven by operational excellence while the initiatives for cost rationalizations and productivity enhancement continue to gain momentum.

Your Company has supplied 1,70,696 MTs of Transmission Line Towers during the year under review. The Company has also initiated manufacturing of Railway structures at existing manufacturing plant of the Company and the same has been approved by Central Organization for Railway Electrification (CORE”).

Your Company has a standalone order book in excess of RS,14,000 Crores excluding fairly placed bids. Your Company has received Orders in excess of RS,8,300 Crores in the current financial year 2018-19. The current year Order inflow in Railways Business highlights your Company''s commitment to establish itself as a leading Railway EPC player. It reaffirms that Railways will continue to be a key growth driver going forward. On the back of solid order book, your Company is confident of delivering its guidance for coming years on both revenue and profitability front.

Financial year 2018-19 was remarkable year for your Company. At Consolidated level, your Company crossed RS,10,000 Crores in Revenue with order book nearing to RS,24,000 crores, spread across various businesses and geographies.

The consolidated revenue of your Company increased by 24.01% to RS,10,840.48 Crores as against RS,8,741.72 Crores in the previous financial year.

On the back of such strong performance across the businesses, the consolidated net profit for the year increased by 75.05% to RS,487.09 Crores as against RS,278.26 Crores in the previous financial year with Core EBIDTA increasing by 31.86% to RS,1,347.21 Crores with margins on Consolidated level at 12.43%, an improvement of -70 basis points over the previous year.

The long term focus on cost management and return ratios continues to strengthen your Company''s balance sheet, with optimal debt levels.

During the year under review, your Company through its wholly owned subsidiary in Sweden forayed a strategic investment to enhance KPTL''s position in the global T&D EPC business and acquired on 29th April, 2019 85% equity stake in Linjemontage i Grastorp AB (LMG”). This acquisition has been carried out on grounds of strategic fit both to capture local market opportunity and to help your Company in expanding presence in Nordic countries where it does not have any former presence.

There has been no change in the nature of business of your Company during the year under review.

During the year under review, your Company has issued and allotted 1,000 Zero Coupon unsecured, rated, listed, non-convertible, redeemable, taxable Debentures of the face value of RS,10 Lakhs each aggregating to RS,100 Crores on a private placement basis.

AWARDS & RECOGNITION:

The Company has received various Awards and recognitions during the year under review, some of which are elaborated hereunder:

A) Gandhinagar manufacturing plant of your Company received Silver Certificate of Merit at

India Manufacturing Excellence Awards 2018 conceptualized by Frost & Sullivan for appreciating efforts taken by the Plant and its personnel in enhancing manufacturing and Supply chain excellence

B) Your Company''s Padampur Power Plant received Apex India Occupational Health & Safety Excellence Award 2017 under Gold category. It also received State Level Factory & Safety Award from Department of Factory & Boiler, Government of Rajasthan.

C) Gold Standard Organization hosted a competition, where an independent panel of judges evaluated the projects that not only help protect the climate but also enable local communities to develop sustainably based on their impact, innovation & visualization. Your Company''s Biomass power plants were rated as one of the best 3 CDM Projects globally. The link of Gold Standard is https://www.goldstandard.org/our-story/ innovation-and-impact

D) Your Company received Bronze Trophy at RoSPA Safety Awards, 2018” from The Royal Society for the Prevention of Accidents - UK for 400 KV OHL

Baarakaha Bab Grid Station, Abu Dhabi.

E) Your Company received Award for Export Excellence from EEPC India, Western Region for Special Trophy for Engineering Process Outsourcing services 201617 - Large Enterprise Category”

F) Your Company was honoured with BEST EXPORTER OF THE YEAR 2017-2018 award at Exim Club Awards, 2018 organized by Exim Club, Association of Exporters and Importers

G) Your Company received Letter from Power Grid Corporation of India Limited (PGCIL”) appreciating your Company''s approach for Environment, Health & Safety while executing Drass - Kargil Transmission Line

H) PGCIL also conferred a Certificate of Appreciation

to your Company in recognition to its significant achievement of One Million Safe Man hours” during the period from August, 2016 to January, 2019 without any lost time accident and maintaining improved EHS standards at 765 kV D/C Ajmer - Bikaner Transmission Line” project associated with Green Energy Corridors

I) Your Company received Special Appreciation from PGCIL for Excellence in new work - Railway Electrification” for Mansi- Madhepura Railway Project

J) ONGC also conferred to KPTL Certificate of Appreciation on achieving Four million safe man hours without any lost time incident during execution of a Pipeline Project. It also conferred to KPTL Certificate of Appreciation on achieving one million safe man hours at Navagam Koyali Pipeline Project.

K) Your Company''s efforts towards Environment, Health & Safety has been acknowledged by State Government of Gujarat and its Manufacturing Plant at Gandhinagar was chosen and honoured during Shram Parotoshik Award for the period 2016-17

L) Your Company received award at 11th CIDC Vishwakarma Awards - 2019” in the category of Achievement Award for Best Artisans and Supervisors - 12 Supervisors”

M) World HRD Congress 2019, recognized your Company''s Training Initiatives by conferring Excellence in Training & Development Award - An Overall Award for Best Result Based Training''.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF YOUR Company

There are no material changes and commitments, affecting the financial position of your Company which has occurred between end of financial year of the Company i.e. March,31, 2019 and the date of Directors'' Report i.e. 9th May, 2019.

DIVIDEND

Your Directors are also pleased to recommend dividend for the year ended March,31, 2019 @ RS,3 (150%) per equity share of RS,2 each in line with Dividend Distribution Policy of the Company.

TRANSFER TO RESERVES

Your Company has transferred following amounts to various reserves during the financial year ended March,31, 2019:

Amount transferred to

Amount

in Rs, Crores

General Reserve

10.00

Debenture Redemption Reserve

25.00

PERFORMANCE AND FINANCIAL POSITION OF EACH SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

A statement containing the salient features of financial statements of each of the subsidiaries, associates and joint venture companies in terms of provisions of Section 129(3) of the Companies Act, 2013 in the prescribed Form AOC- 1 is annexed to Consolidated Financial Statements and hence not repeated here for the sake of brevity.

The brief details of the activities carried out by key subsidiaries / new subsidiaries of your Company are provided below.

- JMC Projects (India) Ltd.

JMC Projects (India) Limited (“JMC Projects” or “JMC”) is a leading construction Company in India, with revenue over USD 400 million, having presence in South Asia and Africa. It is certified under ISO 9001:2015 (Quality Management), ISO 14001:2015 (Environment Management) and BS OHSAS 18001:2007 (Occupational Health & Safety).

It addresses critical needs in key sectors -Infrastructure (Highways, Flyovers, Elevated corridors, Metros, Railways, Bridges, Water Supply & Irrigation projects), Construction of Buildings (High-rise, Integrated Township, Residential, Commercial, IT Parks, Institutional, Hospital, Sports Complex, Tourism projects), Factories, Industrial Plants & Power projects among others. JMC''s integrated capabilities span the spectrum of ''EPC'' solutions with Safety, Quality and On-time delivery as the 3 pillars.

Over three decades of a strong, customer-centric approach and a sharp focus on world-class quality have enabled JMC to maintain a leadership position in its major lines of business. Characterized by professionalism, high standards of corporate governance and sustainability, JMC continues to evolve, seeking better ways of engineering to meet emerging challenges leveraging the power of People-Processes-Technology (PPT).

The order booked by JMC during FY2018-19 was more than RS,5,600 Crores and value of the order on hand as on March,31, 2019, stood at around RS,9,962 Crores. Your Company holds 67.19% equity shares of JMC.

- Shree Shubham Logistics Ltd (“SSLL”)

SSLL undertakes an array of activities in the postharvest value chain primarily for agri-commodities and currently present in 10 states and managing inventories above 1.4 million MT. The activities include warehousing, collateral management, funding facilitation, funding, testing & certification and pest management. The activities are aimed at a wide spectrum of market participants dealing in agri-commodities, including farmers, traders & aggregators, government agencies, banks and electronic commodities exchanges. Through the integrated business model, SSLL believes that they are able to create value in the post-harvest value chain. Your Company holds 80.06% equity shares of SSLL.

SSLL has been awarded with IDC Insights Awards 2018” for excellence in operations by implementing Warehouse Management Software which has helped the organization in achieving efficiency, ease of doing business and Transparency. This prestigious Award is to acknowledge and applaud the transformative IT initiatives that organizations have undertaken towards accelerating success.

- Kalpataru Power Transmission Sweden AB (“KPTS”)

During the year under review, your Company incorporated a wholly owned subsidiary in Sweden namely Kalpataru Power Transmission Sweden AB to explore business opportunities in Nordic Countries and Europe.

During the year under review, one new Company (i.e. KPTS) has become Subsidiary of your Company. No new Company has become Associate Company of your Company.

During the year under review, no Company have ceased to be Subsidiary Company, Associate Company or Joint Venture Company of your Company.

Accordingly, as on the date of this Report your Company have 21 direct and indirect subsidiaries and 2 joint venture Companies.

Pursuant to provisions of Section 129 of the Companies Act, 2013, your Company has placed Consolidated Financial statements before the members for its approval. Further, pursuant to provisions of Section 136 of the Companies Act, 2013, your Company will make available the Annual Accounts of the Subsidiary Companies and the related information to any Members of the Company who may be interested in obtaining the same. The Annual Accounts of the Subsidiary Companies are also uploaded on the website of the Company i.e. www.kalpatarupower.com and will also be kept open for inspection at the Registered Office of your Company and that of the respective Subsidiary Company.

ACQUISITION OF LINJEMONTAGE I GRASTORP AB (“LMG”)

The wholly owned subsidiary of your Company in Sweden namely Kalpataru Power Transmission Sweden AB has accquired on 29th April, 2019, 85% equity stake in Linjemontage i Grastorp AB, a Swedish EPC Company headquartered in Grastrop, Sweden along with its two wholly owned subsidiaries. LMG founded in 1993, specializes in power supply solutions and services for electricity networks up to voltage range of 400 kv. LMG mainly operates into three main business areas, comprising of Substation, Transmission & Local Networks and Electricity Network Services with revenue of around SEK 700 Mn (around USD 75 Million) in 2018 and has a profitable track record. The Company has presence in Sweden & Norway with an order book of around SEK 710 Mn (around USD 77 Million).

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Audited Consolidated Financial Statements pursuant to Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Consolidated Financial Statements presented by your Company include the financial results of its Subsidiary Companies, Associate and Joint Venture Companies.

DIRECTORS

Mr. Subodh Kumar Jain (DIN: 07085318), Non-Executive Director of the Company tendered his resignation from the Board w.e.f. 25th May, 2018.

The Board of Directors based on recommendation of Nomination and Remuneration Committee has appointed Mr. Sanjay Dalmia (DIN: 03469908) as an Additional Director in the category of Executive Director on rotational basis for a tenure of 3 years w.e.f. 8th August, 2018 subject to approval of shareholders of the Company.

Further, the Board of Directors at the recommendation of Nomination and Remuneration Committee, re-appointed Mr. Sajjanraj Mehta (DIN: 00051497), Mr. Vimal Bhandari (DIN: 00001318), Mr. Narayan Seshadri (DIN: 00053563) and Mr. K. V. Mani (DIN: 00533148) as Independent Directors of the Company for a second term of 5 consecutive years w.e.f. 1st April, 2019 subject to approval of shareholders of the Company.

Your Company has received declarations from all the Independent Directors confirming that they meet with the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and under Regulation 16 (1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, pursuant to Section 164(2) of the Companies Act, 2013, all the Directors have provided declarations in Form DIR- 8 that they have not been disqualified to act as a Director.

In terms of Section 152 of the Companies Act, 2013, Mr. Manish Mohnot (DIN: 01229696) being the longest in the office shall retire at the ensuing AGM and being eligible for re-appointment, offers himself for reappointment.

A brief resume of directors being appointed / re-appointed along with the nature of their expertise, their shareholding in your Company and other details as stipulated under Regulation 36 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended as an annexure to the Notice of the ensuing Annual General Meeting.

BOARD MEETINGS

The Board met Six (6) times during the financial year ended on March,31, 2019. The dates on which the Board Meetings were held are May 25, 2018, August 7, 2018, October 31, 2018, January 7, 2019, February 1, 2019 and March,22, 2019.

The number of Meetings of the Board that each Director attended is provided in the Report on Corporate Governance.

COMMITTEES

Your Company has several Committees which have been established as a part of best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statues.

The Board has constituted following Committees.

- Audit Committee

- Nomination and Remuneration Committee

- Stakeholder''s Relationship Committee

- Corporate Social Responsibility Committee

- Risk Management Committee

- Share Transfer Committee

- Executive Committee

The details with respect to the compositions, powers, roles, terms of reference etc. of relevant Committees are given in detail in the ''Report on Corporate Governance'' of your Company which forms part of this Annual Report. The dates on which Meeting of Board Committees were held during the financial year under review and the number of Meetings of the Board Committees that each Director attended is provided in the ''Report on Corporate Governance''. The minutes of the Meetings of all Committees are circulated to the Board for discussion/ noting / ratification.

During the year, all recommendations of the Committees were approved by the Board.

KEY MANAGERIAL PERSONNEL (KMP)

During the year under review, Mr. Rahul Shah, Company Secretary of the Company resigned w.e.f. close of working hours of 15th February, 2019. In the interim, the Company has designated Mr. Basant Kumar Parasramka, Dy. President (F&A) as an Interim Compliance Officer in terms of Regulation 6 of the SEBI (LODR) Regulations, 2015 effective from 16th February, 2019 and as an Interim Company Secretary and Key Managerial Personnel effective from 9th May, 2019.

Further, the Board of Directors at the recommendation of Nomination and Remuneration Committee and Audit Committee, appointed Mr. Ram Patodia as a Chief Financial Officer (CFO”) of the Company effective from 1st April, 2019 due to retirement of Mr. Kamal Kishore Jain,

Director (Finance) & CFO w.e.f. close of working hours on 31st March, 2019. The Board of Directors appreciated his 32 years of distinguished service extended to the Company and his valuable contribution in the growth of the Company. He continues to be associated with the Company as Director (Procurement & Operations).

Mr. Manish Mohnot, Managing Director & CEO, Mr. Ram Patodia, President (F&A) & CFO and Mr. Basant Kumar Parasramka, Dy. President (F&A) & Company Secretary are the Key Managerial Personnel (KMP) as per provisions of Companies Act, 2013.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits from the public as per the provisions of Section 73 to 76 of the Companies Act, 2013. Hence, the disclosures required as per Rule 8 (5) (v) & (vi) of the Companies (Accounts) Rules, 2014, are not applicable to your Company

CORPORATE GOVERNANCE

Your Company believes that sound Corporate Governance is critical for enhancing and retaining stakeholder''s trust and your Company always seeks to ensure that its performance goals are met accordingly. The efforts of your Company are always focused on long term value creation. Inherent to such an objective is to continuously engage and deliver value to all its stakeholders including members, customers, partners, employees, lenders and the society at large.

The Report on Corporate Governance, as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this Report. The Report on Corporate Governance also contains certain disclosures required under Companies Act, 2013.

A certificate from M/s. B S R & Co. LLP, Statutory Auditors of the Company confirming compliance to the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed to Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Management Discussion and Analysis Report outlining the business of your Company forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has formed the CSR Committee as per the requirement of the Companies Act, 2013. On recommendation of CSR Committee, the Board of Directors'' of your Company has approved the CSR Policy which is available on the website of your Company at www.kalpatarupower.com. The brief outline of the Corporate Social Responsibility (CSR) Policy of your Company and the initiatives undertaken on CSR activities during the year are set out in Annexure A of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

BUSINESS RESPONSIBILITY REPORT

As stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective forms part of this Annual Report.

VIGIL MECHANISM

The details of establishment of Vigil mechanism (“Whistle Blower Policy”) is given in the ''Report on Corporate Governance'' of the Company which is annexed to this Report.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal Financial Controls are an integrated part of the risk management process, addressing financial risks and financial reporting risks. The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

Assurance on the effectiveness of internal financial controls is obtained through management reviews, continuous monitoring by functional experts and testing of the internal financial control systems by the internal auditors during the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively considering the nature of our industry and are operating as intended.

STATUTORY AUDITOR AND AUDITORS’ REPORT

M/s. B S R & Co. LLP (Firm Registration No. 101248W/ W-100022), Chartered Accountants, have been appointed as Statutory Auditors of the Company at the 37th Annual General Meeting held on August 7, 2018 to hold office from the conclusion of 37th Annual General Meeting (AGM) till the conclusion of the 42nd Annual General Meeting of the Company, subject to compliance of the various provisions of Companies Act, 2013.

Statutory Auditors'' comments on your Company''s accounts for year ended March,31, 2019 are self-explanatory in nature and do not require any explanation as per provisions of Section 134(3)(f) of the Companies Act, 2013. There were no qualifications, reservation or adverse remark or disclaimer made by Statutory Auditor in its report.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, your Company had appointed Mr. Urmil Ved, Practising Company Secretary, Gandhinagar, as its Secretarial Auditor to conduct the Secretarial Audit of your Company for FY 2018-19. The Report of the Secretarial Auditor for the FY 2018-19 is annexed to this report as Annexure B.

There were no qualifications, reservation or adverse remark or disclaimer made by Secretarial Auditor in its report.

COST AUDITOR

The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013 and the Company has maintained cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014 as prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the cost records in respect of Electricity and Steel Structures needs to be audited. In compliance to the above, the Board of Directors upon the recommendation of the Audit Committee, appointed M/s. K. G. Goyal & Associates, Cost Accountants, as the Cost Auditor of your Company for the FY 2018-19.

RISK MANAGEMENT FRAMEWORK

Your Company has an elaborate Risk Management Framework, which is designed to enable risks to be identified, assessed and mitigated appropriately. Your Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. Your Company''s SOP''s, Organizational structure, management systems, code of conduct, policies and Values together govern how your Company conducts its business and manage associated risks.

The Risk Management framework enables the management to understand the risk environment and assess the specific risks and potential exposure to the Company, determine how to deal best with these risks to manage overall potential exposure, monitor and seek assurance of the effectiveness of the management of these risks and intervene for improvement wherever necessary and report throughout the management chain upto the Risk Management Committee on a periodic basis about how risks are being managed, monitored, assured and improvements are made.

PARTICULARS OF REMUNERATION

A. The ratio of the remuneration of each director to the median employee''s remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 (the Act) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time are forming part of this report as Annexure C .

B. The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. However, this report and the accounts are being sent to the members excluding the said annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of your Company. Any member interested in obtaining a copy of the same may write to the Company Secretary.

PERFORMANCE EVALUATION

The criteria for performance evaluation and the statement indicating the manner in which formal annual evaluation has been made by the Board are given in the Report on Corporate Governance”, which forms part of this Annual Report.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR

Your Company''s policy on remuneration for the Directors, Key Managerial Personnel and other employees are forming part of this Report as Annexure D . The same is also placed on website of the Company www.kalpatarupower.com. The said Policy has been amended during the year under review. It was amended in line with the requirements of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 and certain administrative changes.

Your Company''s policy on Directors'' appointment including criteria for determining qualifications, positive attributes, independence of a director are forming part of this Report as Annexure D2.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE INFLOW & OUTFLOW

Information required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed hereto as Annexure E and forms part of this Report.

DIVIDEND DISTRIBUTION POLICY

In terms of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016, your Company has formulated Dividend Distribution Policy and the same is annexed to this report as Annexure F and is also available on the website of the Company i.e. www.kalpatarupower. com.

EXTRACT OF ANNUAL RETURN

Pursuant to sub-section (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extract of the Annual Return as at March,31, 2019 forms part of this report as Annexure G.

The annual return referred to in Section 134(3)(a) of the Companies Act, 2013 shall be placed on the website of the Company and can be accessed at www.kalpatarupower.com.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note No. 38 to the Standalone Financial Statements).

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions that were entered during the financial year were on arm''s length basis. There were no material related party transactions i.e. transaction / transactions entered into individually or taken together with previous transactions entered during the financial year, exceeds ten percent of the annual consolidated turnover of the Company as per the last audited financial statements, entered by your Company with its related parties which may have a potential conflict with the interest of your Company. All Related Party Transactions are placed before the Audit Committee for approval in terms of requirement of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy on materiality of Related Party Transactions is uploaded on the website of your Company and the link for the same is provided in the ''Report on Corporate Governance''. Attention of Members is drawn to the disclosure of transactions with related parties set out in Note No. 42 of Standalone Financial Statements, forming part of the Annual Report.

STOCK OPTIONS

Your Company does not have any stock options schemes.

DISCLOSURE UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has zero tolerance towards any action on the part of any executive which may fall under the ambit of ''Sexual Harassment'' at workplace and is fully committed to uphold and maintain the dignity of every women executive working in your Company. The Sexual Harassment Policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints.

Your Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There were no complaints pending as on the beginning of the financial year and no new complaints were filed during the financial year under review.

POLICY ON CODE OF CONDUCT AND ETHICS

As an organization, your Company places a great importance in the way business is conducted and the way each employee performs his/her duties. Your Company encourages transparency in all its operations, responsibility for delivery of results, accountability for the outcomes of our actions, participation in ethical business practices and being responsive to the needs of our people and society. Towards this end, your Company has laid down a Kalpataru Code of Conduct (KCoC”) applicable to all the employees of your Company and conducted various awareness sessions across the Company. The Code provides for the matters related to governance, compliance, ethics and other matters.

SIGNIFICANT OR MATERIAL ORDERS AGAINST COMPANY

No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and your Company''s operation in future.

STATEMENT OF DIRECTORS’ RESPONSIBILITY

Pursuant to requirement under Section 134(3)(c) of the Companies Act, 2013 (Act), Directors confirm that:

(a) in the preparation of the annual accounts for the year ended on March,31, 2019, the applicable accounting standards read with requirement set out under Schedule III to the Act, have been followed and there are no material departures from the same;

(b) they have 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 as at March,31, 2019 and of the profit of the Company for the year ended on that date;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they had prepared the annual accounts on a going concern basis;

(e) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company''s internal financial controls were adequate and effective during FY 2018-19.

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank all the Government and Regulatory Authorities, Financial Institutions, Banks, JV Partners, Consortium Partners, Customers, Vendors, Suppliers, Sub-Contractors and Members and all other stakeholders for their valuable continuous support.

The Boards of Directors also wish to place on record its deep sense of appreciation for the committed services by the Company''s executives, staff and workers. Your Directors also appreciate and acknowledge the confidence reposed in them by members of the Company.

On behalf of the Board of Directors

Mofatraj P. Munot

Place: Mumbai Executive Chairman

Date: 9th May, 2019 DIN: 00046905

Director’s Report