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KEC International Ltd.

BSE: 532714 | NSE: KEC |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE389H01022 | SECTOR: Power - Transmission & Equipment

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Annual Report

For Year :
2022 2019 2017 2016 2015 2014 2013 2012 2011

Director’s Report

The Directors are pleased to present the Seventeenth Annual Report (Integrated) of the Company together with Consolidated and Standalone Audited Financial Statements of the Company for the financial year ended on March 31, 2022.

1. FINANCIAL RESULTS

Exceptional items include an amount of '' 43.64 Crore written off against a legacy arbitration in South Africa in both Consolidated and Standalone financial statements and an amount of '' 99.20 Crore towards provision for impairment of investments in subsidiaries in Standalone financial statement, which mainly includes '' 97.34 Crore for its investment in KEC Investment Holdings, Mauritius, on account of significant losses incurred by the Company’s step down subsidiary in Brazil i.e. SAE Towers Brasil Torres de Transmissao Ltda.

('' in Crore)

Particulars

Consolidated

Standalone

FY 2021-22

FY 2020-21

FY 2021-22

FY 2020-21

Revenue from Operations

EBITDA

Finance Cost

13,742.26

903.50

316.00

157.86

443.07 (43.64) 399.43

67.35

332.08 102.84

13,114.20

12,573.27

1,129.32

269.30

123.32

755.70

(142.84)

612.86

178.42

434.44

102.84

11,851.79

1,141.21

1,231.73

262.69

241.35

Depreciation & Amortisation

152.53

121.78

Profit Before Tax (PBT)

755.91

896.62

Exceptional Items - Gain/ (Loss)*

-

896.62

PBT after Exceptional Items

755.91

Tax Expenses

203.19

250.53

Profit After Tax

552.72

646.09

102.84

Dividend on equity shares

102.84


2. PERFORMANCEFinancial Performance

The Company commenced the financial year amidst a global upheaval due to the COVID-19 pandemic. The environment continued to be challenging due to a relapse of the pandemic in many countries, supply chain disruptions and continuous rise in commodity prices and logistics costs. The situation showed signs of improvement with gradual reduction in commodity prices in the last quarter of FY 2021-22. However, the ongoing conflict in Ukraine created fresh geopolitical uncertainties and a further surge in the already elevated commodity prices.

On a consolidated basis, the Company achieved a revenue of '' 13,742 Crore in FY 2021-22 with growth of about 5 percent over last year and a net profit of '' 332.08 Crore as against '' 552.72 Crore in the previous year. The growth in revenue has been contributed by good performance of Civil, Railways and Cable businesses. The Company progressed well in deploying several mechanization, automation, and digitalization initiatives, across projects to improve productivity and quality of execution. In line with the long term strategy, the share of Non-T&D businesses has now increased to 50 percent from 42 percent in the previous year. The growth could have been higher, but for a few unforeseen issues such as suspension of projects in Afghanistan, impact on Delhi metro projects due to

environmental restrictions, COVID-19 challenges in international projects and increasing commodity prices. The Company achieved an EBITDA margin of 9 percent at the standalone level and 6.6 percent at the consolidated level for FY 2021-22. The margins and net profit have been impacted primarily due to cost and time escalations in EPC projects in the Company’s step down subsidiary in Brazil coupled with significantly higher commodity prices.

The Company has adopted a prudent approach and made an exceptional provision of '' 99.20 Crore towards impairment of investment in Subsidiaries, which mainly includes '' 97.34 Crore for its investments in KEC Investment Holdings, Mauritius, due to significant losses incurred by the Company’s step-down subsidiary in Brazil i.e. SAE Towers Brasil Torres de Transmissao Ltda. This has impacted the Company’s profit at the standalone level. During the year, the Company made an exceptional write-off amounting to '' 43.64 Crore towards a legacy arbitration in South Africa. This has impacted the profit both at standalone and consolidated level. Excluding the impact of these exceptional items, the net profit for FY 2021-22 was '' 564.91 Crore at the standalone level and '' 363.34 Crore at the consolidated level. During the year, the Company witnessed slightly elevated level of working capital, owing to slower collections, losses in the Company’s step down subsidiary in Brazil and increase in inventories due to higher commodity prices. This has led to higher interest cost during the year.

During the year, the Company secured highest ever orders of '' 17,203 Crore, a robust growth of 45 percent over the previous year. The orders have been led by large contributions in the Civil and International T&D businesses. This has significantly enhanced the Company’s closing order book to '' 23,716 Crore, a growth of 24 percent over the previous year. The Company’s order book is well diversified across businesses with an equal share in both T&D and Non-T&D businesses.

Power Transmission & Distribution (T&D) - The T&D

business achieved revenues of ~ '' 6,900 Crore for the year. The revenues could have been higher but for global headwinds such as the political unrest in Afghanistan causing suspension of projects, pandemic challenges in international projects and the continued elevated levels of commodity prices. The business has secured significant orders of over '' 7,400 Crore across transmission lines and substations. The inflows are led by orders in the international markets, especially in the Middle East, SAARC, and Americas. In line with the Company’s strategy, the business has expanded its footprint to two new countries this year. Despite a muted domestic environment this year, the business has strengthened its presence in India with orders of over '' 1,500 Crore from PGCIL, private players and state utilities including Green Energy Corridor projects. During the year, the business has also reinforced its presence in cabling solutions segment and has secured a large order for laying underground cables for a state utility in India.

Railways - The Railway business continued its growth trajectory as it achieved revenues of '' 3,860 Crore for the year, a growth of 13 percent compared to the previous year. The business has been successful in delivering double digit margins for the second consecutive year, despite a challenging environment. The Company continues to maintain leadership in the area of Overhead Electrification (OHE) by successfully executing about 23 percent of India’s railway electrification in FY 2021-22, the highest in the industry. The business has secured orders of over '' 2,500 Crore, a growth of 46 percent over the previous year and a market share of over 20 percent. In line with its diversification journey, the business has deepened its presence in technologically enabled areas of metros with orders in OHE, Power supply, Ballastless tracks and Third rail and has also widened its presence in the conventional segments with orders in speed upgradation, port connectivity, tunnel ventilation and railway sidings. The Company has seen some good success with orders in these new areas especially in the Semi High-Speed Rail where the current market share is over 60 percent.

Civil - The Civil business has presented a robust performance with revenues of ~ '' 1,900 Crore, an impressive growth of 75 percent over the previous year. The growth has been delivered on the back of rigorous execution across metro, water pipeline and industrial projects. The business has also seen a record year in terms of order inflows in excess of '' 5,800 Crore in FY 2021-22, a growth of 4 times over the previous year. The business continued its diversification by foraying into public spaces segment with orders for construction of Airport and High Court buildings, reinforced its presence in Industrial and Residential segments, strengthened portfolio in Urban Infra and Water Pipelines segments and expanded footprint in data centers. The uptick in order intake has significantly enhanced the order book including L1 in this segment to an all-time high of over '' 7,500 Crore.

Oil & Gas Pipelines - The Company had entered the Oil & Gas cross-country pipelines business, in line with Government’s thrust in this sector and the Company’s vision to strategically expand its business portfolio into adjacencies. To accelerate growth in the business, the Company acquired KEC Spur Infrastructure Private Limited (formerly known as Spur Infrastructure Private Limited) (“KEC Spur”) making it a wholly owned subsidiary of the Company. The business has demonstrated notable performance post acquisition. The Company is leveraging cross-functional synergies with KEC Spur for faster growth. With an order book of over '' 800 Crore, this business is becoming a significant part of the Company’s overall business portfolio.

Smart Infra - The Smart infra business secured an order as a Master System Integrator (MSI) for three smart city projects in Punjab. In terms of execution, the project for Integrated Perimeter Security System is progressing well towards completion.

Cables - The Cables business has delivered a strong performance registering its highest ever revenues and profitability during FY 2021-22. The business achieved revenues of '' 1,524 Crore with a growth of 44 percent over the previous year.

3. DIVIDEND

The Board of Directors recommends a dividend of '' 4/-per equity share i.e. 200 percent of the nominal value of '' 2/- per equity share for the financial year ended March 31, 2022. The said dividend if approved, by the Members at the ensuing Annual General Meeting, would involve a cash outflow of about '' 103 Crore.

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended (“SEBI Listing Regulations”), the Company has formulated a Dividend Distribution Policy which details various considerations based on which the Board may recommend or declare Dividend. The Policy is available on the website of the Company at https://www.kecrpg.com/policies.

4. TRANSFER TO RESERVES

The Company has not transferred any amount to reserves during the year under review.

5. SHARE CAPITAL

The paid-up Equity Share Capital of the Company as on March 31,2022 was '' 51.42 Crore. There was no change in the share capital during the year under review.

The performance highlights of wholly owned operating subsidiaries and their contribution to the overall performance of the Company during the financial year ended March 31, 2022 are as under:

Subsidiary

Performance during FY 2021-22 ('' in Crore)

Contribution to overall performance of the Company (%)

Revenue

Profit After Tax

Revenue

Profit After Tax

KEC Spur Infrastructure Private Limited*

180.74

16.69

1.32

5.03

SAE Towers Brasil Torres de Transmissao Ltda.

693.37

(238.61)

5.05

(71.85)

SAE Towers Mexico, S de RL de CV

185.12

0.22

1.35

0.07

SAE Towers Ltd.

186.92

0.44

1.36

0.13

KEC International (Malaysia) SDN.BHD.

145.61

4.78

1.06

1.44

KEC Towers LLC

SAE Prestadora de Servicios Mexico, S de RL de CV

369.19

21.27

2.69

6.41

12.61

(0.97)

0.09

(0.29)

performance given since October 13, 2021 being the date of acquisition.

10. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of clause (c) of sub-section (3) and sub-section (5) of Section 134 of the Act, the Board of Directors of the Company hereby confirm that:

1. in the preparation of the annual accounts for the financial year ended on March 31,2022, the applicable Accounting Standards have been followed and no material departures have been made from the same;


6. DEPOSITS

The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 (“the Act”) and the Rules framed thereunder during the year under review. As on March 31,2022, there were no deposits lying unpaid or unclaimed.

7. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company funds its subsidiaries, from time to time, in the ordinary course of business and as per the funding requirements, through equity, loan and/or guarantee(s) to meet working capital requirements.

The loans given, investments made and guarantees given and securities provided during the year under review, are in compliance with the provisions of the Section 186 of the Act and Rules made thereunder and details thereof are given in the notes to the Standalone Financial Statements.

8. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of sub-section (3) of Section 129 of the Act and SEBI Listing Regulations, the Consolidated Financial Statements of the Company, including the financial details of its subsidiary companies, forms part of this Annual Report. The Consolidated Financial Statements have been prepared in accordance with the Accounting Standards prescribed under Section 133 of the Act.

9. SUBSIDIARY AND ASSOCIATE COMPANIES

The Company has nineteen subsidiaries as on March 31,2022, comprising of nine direct subsidiaries and ten step-down subsidiaries, of which nine subsidiaries are

Pursuant to the provisions of Section 136 of the Act, the Financial Statements of these subsidiaries are uploaded on the website of the Company i.e. www.kecrpg.com under ‘Investors’ tab. Further, in terms of SEBI Listing Regulations, the Company has formulated a policy for determining its ‘material subsidiaries’ which is available on the website of the Company at https://www.kecrpg.com/policies.

operating subsidiaries and three subsidiaries function as special purpose vehicles. The Company has one associate company under Section 8 of the Act for the welfare of the past employees.

During the year under review, a step-down subsidiary namely KEC EPC LLP was incorporated on October 06, 2021 in Dubai. KEC Towers LLC, a wholly owned subsidiary of the Company is the sole shareholder of KEC EPC LLP.

During the year under review, the Company acquired 100 percent equity shares of KEC Spur Infrastructure Private Limited (formerly known as Spur Infrastructure Private Limited) (“KEC Spur”) on October 13, 2021. KEC Spur is engaged in setting up of cross-country Oil and Gas Pipelines and city gas distribution networks. The Company had entered into Oil and Gas Pipeline EPC business and this acquisition is in line with its vision to strategically expand this business. KEC Spur delivered revenues of '' 181 Crore and secured orders of '' 300 Crore in the second half of FY 2021-22. At a standalone level, KEC Spur delivered revenues of '' 255 Crore for FY 2021-22 against '' 104 Crore in the previous year, with a robust growth of 145 percent. The Company has laid special emphasis to integrate KEC Spur with the Company’s policies and processes during the year.

Performance Highlights

Pursuant to the provisions of sub-section (3) of Section 129 of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, the salient features of the Financial Statements of each of the subsidiaries and associate companies are set out in the prescribed Form AOC-1 and the same forms part of the Financial Statements section of the Annual Report.

2. we have selected such accounting policies and applied 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 31,2022 and of the profit of the Company for the year ended on March 31,2022;

3. we 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;

4. we have prepared the annual accounts for the financial year ended on March 31,2022 on a going concern basis;

5. we have laid down internal financial controls and the same have been followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

11. MANAGEMENT DISCUSSION AND ANALYSIS REPORT, BUSINESS RESPONSIBILITY REPORT AND CORPORATE GOVERNANCE REPORT

In terms of Regulation 34 of SEBI Listing Regulations, a separate section on Management Discussion and Analysis, Business Responsibility Report and Corporate Governance Report together with a certificate from a Practicing Company Secretary confirming compliance with the Regulations relating to Corporate Governance of SEBI Listing Regulations are set out and form part of this Annual Report.

12. DIRECTORS & KEY MANAGERIAL PERSONNEL12.1 Directors

During the year under review, Mr. Vimal Kejriwal, Managing Director and CEO was re-appointed as “Managing Director and CEO” of the Company with effect from April 01, 2022 for a further period of two years. The re-appointment was approved by the Members of the Company at the last Annual General Meeting by passing the requisite resolution in this regard.

Based on the recommendation of the Nomination and Remuneration Committee (NRC), the Board of Directors had appointed Mr. Vinayak Chatterjee as an Additional Director in Non-Executive Non-Independent category, on the Board of the Company w.e.f. December 06, 2021 to hold office till the conclusion of ensuing Annual General Meeting. A notice under Section 160 of the Act, has been received from a Member proposing his candidature for appointment as a Director, liable to retire by rotation. Accordingly, the proposal for his appointment is included in the Notice convening the ensuing Annual General Meeting.

Pursuant to the provisions of sub-section (6) of Section 152 of the Act and Articles of Association of the Company, Mr. Harsh V. Goenka, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

I n compliance with sub-regulation (3) of Regulation 36 of SEBI Listing Regulations and Secretarial Standard - 2 on General Meetings, brief resume, expertise and other details of Director(s) proposed to be appointed/re-appointed are given in the Notice convening the ensuing Annual General Meeting.

The Board recommends the appointment/re-appointment of Directors as stated above in the ensuing Annual General Meeting.

12.2 Key Managerial Personnel

Pursuant to the provisions of sub-section (51) of Section 2 and Section 203 of the Act read with the Rules framed thereunder, the following persons are the Key Managerial Personnel of the Company as on March 31,2022:

1. Mr. Vimal Kejriwal, Managing Director & CEO;

2. Mr. Rajeev Aggarwal, Chief Financial Officer; and

3. Mr. Amit Kumar Gupta, Company Secretary.

During the year under review, there were no changes in the Key Managerial Personnel of the Company.

12.3 Declaration by Independent Directors

In terms of the provisions of sub-section (6) of Section 149 of the Act and Regulation 16 of SEBI Listing Regulations including amendments thereof, the Company has received declarations from all the Independent Directors of the Company that they meet the criteria of independence, as prescribed under the provisions of the Act and SEBI Listing Regulations, as amended from time to time. There has been no change in the circumstances affecting their status as an Independent Director during the year. Further, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and re-imbursement of expenses, if any, incurred by them for the purpose of attending meetings of the Board/Committee(s) of the Company.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and they hold highest standards of integrity.

The Independent Directors have registered their names in the data bank maintained with the Indian Institute of Corporate Affairs (‘IICA’). As per the proviso to Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors of the Company are exempted from undertaking the online proficiency self-assessment test.

12.4 Board Evaluation

The Board has carried out annual performance evaluation of its own performance, the Directors individually and of its Committees pursuant to the provisions of the Act and the SEBI Listing Regulations. The Board evaluation was conducted through questionnaire designed based on the criteria for evaluation laid down by the Nomination and Remuneration Committee. In order to have a fair and unbiased view of all the Directors, the Company engaged the services of an external agency to facilitate the evaluation process.

A meeting of Independent Directors was held on March 15, 2022 chaired by Mr. A. T. Vaswani, Lead Independent Director, to review the performance of the Chairman, Non-Independent Director(s) of the Company and the performance of the Board as a whole as mandated by Schedule IV of the Act and SEBI Listing Regulations. The Directors also discussed the quality, quantity and timeliness of flow of information between the Company management and the Board, which is necessary for the Board to effectively and reasonably perform their duties. The feedback of the meeting was shared by Lead Independent Director with the Board of the Company.

The action areas identified on the basis of the feedback from the evaluation process are under implementation.

12.5 Familiarisation Programme for Independent Directors

The details of the induction and familiarisation programme are explained in the Report on Corporate Governance and are also available on the Company’s website i.e. www.kecrpg.com under ‘Investors’ tab.

12.6 Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and Senior Management Personnel

The Board of Directors has adopted a Nomination and Remuneration Policy in terms of the provisions of sub-section (3) of Section 178 of the Act and SEBI Listing Regulations dealing with appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel.

The policy covers criteria for determining qualifications, positive attributes, independence and remuneration of its Directors, Key Managerial Personnel and Senior Management Personnel. The said Policy is annexed to this Report as Annexure ‘A’ and is also available on the Company’s website i.e. www.kecrpg.com under ‘Investors’ tab.

12.7 Meetings of the Board of Directors

During the year under review, the Board of Directors met six times. The details are given in the Corporate Governance Report which forms a part of the Annual Report.

12.8 Meetings of the Audit Committee

During the year under review, the Audit Committee met eight times. The details of the meetings, composition and terms of reference of the Committee are given in the Corporate Governance Report which forms a part of the Annual Report.

13. AUDITORS13.1 Statutory Auditors

The Statutory Auditors’ Report for the FY 2021-22 does not contain any qualifications, reservations, adverse remarks or disclaimer and no frauds were reported by the Auditors under sub-section (12) of Section 143 of the Act.

As per Section 139 of the Act, read with the Companies (Audit and Auditors) Rules, 2014, the term of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No. 012754N/N500016) as the Statutory Auditors of the Company, expires at the conclusion of Seventeenth Annual General Meeting of the Company.

The Board of Directors of the Company at their meeting held on May 03, 2022, on the recommendation of the Audit Committee, has made its recommendation for re-appointment of M/s. Price Waterhouse Chartered Accountants LLP (“PwC”) as the Statutory Auditors of the Company, to hold office from the conclusion of Seventeenth Annual General Meeting till the conclusion of Twenty Second Annual General Meeting of the Company, subject to the approval of the Members at the ensuing Annual General Meeting.

PwC has expressed its willingness to be re-appointed as the Statutory Auditors of the Company and also confirmed its eligibility in compliance with the provisions of Sections 139, 141 and other applicable provisions of the Act.

The Board of Directors recommends to the Members the re-appointment of PwC as the Statutory Auditors of the Company. Accordingly, the proposal for their re-appointment is included in the Notice convening the ensuing Annual General Meeting.

13.2 Cost Auditors

In terms of Section 148 of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the Company is required to maintain cost records in respect of its steel and cables manufacturing facilities in India and have the cost records audited by a qualified Cost Accountant.

The Board of Directors of the Company at its meeting held on May 03, 2022 on the recommendation of the Audit Committee, approved the appointment of M/s. Kirit Mehta and Co., Cost Accountants (Firm Registration No.: 000353) as the Cost Auditors for the FY 2022-23 and recommends their remuneration to the Members for their ratification at the ensuing Annual General Meeting.

The Cost Auditors’ Report of FY 2020-21 did not contain any qualifications, reservations, adverse remarks or disclaimers and no frauds were reported by the Cost Auditors to the Company under sub-section (12) of Section 143 of the Act. The said Cost Audit Report was filed with the Ministry of Corporate Affairs on August 16, 2021.

13.3 Secretarial Auditors

I n terms of the provisions of Section 204 of the Act and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Parikh Parekh & Associates, Practicing Company Secretaries, as Secretarial Auditors to conduct Secretarial Audit for the FY 2021-22. The Secretarial Audit Report in Form MR-3 is annexed to this Report as Annexure ‘B’. The said Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks and no frauds were reported by the Secretarial Auditors to the Company under sub-section (12) of Section 143 of the Act.

14. SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY

The Sustainability and Corporate Social Responsibility (“SCSR”) Committee of the Board of Directors inter alia gives strategic direction to the Corporate Social Responsibility (CSR) initiatives, formulates and reviews annual CSR plans and programmes, formulates annual budget for the CSR programmes and monitors the progress on various CSR activities. The scope of the functioning of the Committee was widened to cover sustainability and the Committee has been renamed as Sustainability and Corporate Social Responsibility Committee with effect from May 03, 2022. Details of the composition of the SCSR Committee have been disclosed separately in the Corporate Governance Report.

The CSR Policy of the Company adopted in accordance with Schedule VII of the Act, outlines various CSR activities to be undertaken by the Company in the areas of promoting education, enhancing vocational skills, promoting healthcare including preventive healthcare, community development, heritage conservation and revival, etc. The CSR policy of the Company is available on the Company’s website i.e. www.kecrpg.com under ‘Investors’ tab.

During the year under the review, the Company’s CSR initiative continued to include COVID-19 related relief in multiple locations, apart from its ongoing CSR programmes in terms of the Annual Action Plan of the Company. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time, is annexed to this Report as Annexure ‘C’.

15. POLICY ON CODE OF CONDUCT & ETHICS AND SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

The Company has adopted the RPG Code of Corporate Governance & Ethics (“RPG Code”) which is applicable to all the directors and employees of the Company. The Code provides for the matters related to governance, compliance,

ethics and other matters. The Code lays emphasis amongst others that all the activities and business conducted are free from the influence of corruption and bribery in line with the anti-corruption and anti-bribery laws. The Corporate Governance & Ethics Committee (CGEC) oversees the ethical issues and acts as a central body to monitor the compliance of the Code. To raise awareness of the Code amongst employees, the Company conducts regular awareness workshops from the induction stage to periodic courses on mandatory basis for all employees.

I n accordance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has adopted a Policy on Prevention of Sexual Harassment at Workplace (“the Policy”) to ensure prevention, prohibition and redressal of sexual harassment at workplace. The Policy has been formed to prohibit, prevent and deter the commission of the acts of sexual harassment at workplace and to provide the procedure for redressal of complaints pertaining to sexual harassment. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. The Company provides an equal employment opportunity and is committed for creating a healthy working environment that enables employees to work without fear of prejudice, gender bias and sexual harassment. The Company also believes that all employees of the Company have the right to be treated with dignity. All employees are covered under this Policy and the Policy is gender neutral. The orientation programs for new employees include awareness sessions on prevention of sexual harassment and upholding the dignity of employees. During the year under review, no complaints of any nature were received.

16. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy and has established the necessary vigil mechanism, as envisaged under the provisions of sub-section (9) of Section 177 of the Act, the Rules framed thereunder and Regulation 22 of SEBI Listing Regulations for the directors and its employees to raise their concerns or observations without fear, or report instances of any unethical or unacceptable business practice or event of misconduct/unethical behavior, actual or suspected fraud and violation of RPG Code etc.

The Policy provides for protecting confidentiality of those reporting violation(s) and restricts any discriminatory practices against them. The Policy also provides for adequate safeguards and protection against victimization of persons who avail such mechanism. To encourage employees to report any concerns and to maintain anonymity the Policy provides direct access for grievances or concerns to be reported to the Corporate Governance and Ethics Committee (CGEC), a Committee constituted for the administration and governance of the Policy. The Policy also facilitates direct access to the Chairman of the Audit Committee in appropriate and exceptional cases. The Policy can be accessed on the Company’s website i.e. www.kecrpg.com under ‘Investors’ tab.

17. RISK MANAGEMENT POLICY

The Company is a global infrastructure major engaged in Engineering, Procurement and Construction (“EPC”) business and is exposed to various risks in the areas it operates. In a fast changing and dynamic business environment, the risk of political and economic uncertainties, market volatility, cut-throat competition, technological and digital disruptions and cyber threats have increased manifold. The Company’s Risk Management Policy outlines guidelines in identification, assessment, measurement, monitoring, mitigating and reporting of key business risks associated with the activities conducted. The risk management mechanism forms an integral part of the business planning and review cycle of the Company. It is designed to provide reasonable assurance towards achievement of its goals by integrating management control into daily operations, ensuring compliance with legal requirements and safeguarding the integrity of the Company’s financial reporting and the related disclosures.

The Company has a mechanism in place to inform the Risk Management Committee and Board members about risk assessment, minimization procedures and periodical review thereof. The Risk Management Committee of the Company inter alia reviews Enterprise Risk Management functions of the Company and ensures appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company. The Committee periodically, validates, evaluates and monitors key risks and reviews the measures taken for risk management and mitigation. The key business risks faced by the Company and the various mitigation measures taken by the Company are detailed in Management Discussion and Analysis section.

18. INTERNAL FINANCIAL CONTROL

Details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis section.

19. RELATED PARTY TRANSACTIONS

All transactions entered into by the Company with related parties were in the ordinary course of business and at arm’s length basis. The Audit Committee grants an omnibus approval for the transactions that are in the ordinary course of the business and repetitive in nature. For other transactions, the Company obtains specific approval of the Audit Committee before entering into any such transactions. A statement giving details of all Related Party Transactions are placed before the Audit Committee on a quarterly basis for its review. Disclosure as required under Indian Accounting Standards (“IND AS”)-24 have been made in the Note No. 56 to the Standalone Financial Statements.

There are no materially significant related party transactions entered into by the Company with its Directors/Key Managerial Personnel or their respective relatives, the Company’s Promoter(s), its subsidiaries/joint ventures/ associates or any other related party, that may have a potential conflict with the interest of the Company at large. The Policy on Related Party Transactions, as formulated

by the Board is available on the Company’s website i.e. www.kecrpg.com under ‘Investors’ tab.

20. ANNUAL RETURN

The Annual Return as required under Section 92 and Section 134 of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the website of the Company i.e. www.kecrpg.com under ‘Investors’ tab.

21. ENVIRONMENT HEALTH AND SAFETY (EHS)

The Company has undertaken various EHS management processes and implemented them under the EHS system, in line with the commitment to achieve its objective of providing a safe workplace for its stakeholders. The Company continues to be certified under the latest international standards of Integrated Management System that encompasses ISO 9001:2015, ISO 14001: 2015 and ISO 45001: 2018 standards.

The Company is successfully leveraging modern technology and analytics to enable data driven decisions, improve safety, and ensure strict adherence to safety rules and procedures. The Company has migrated to a digital Environment, Health and Safety (EHS) reporting system which provides a real time reporting framework at all levels of the organization, enabling immediate action. The Company continues to invest in imparting industry specific EHS training by leveraging cutting-edge technologies such as Virtual and Augmented Reality and focus on risk-based safety and skill development to its employees and workmen, to ensure that all its stakeholders become more safety conscious and thereby improve the organization’s approach towards prevention of loss.

During the year, the Company has bagged various EHS awards and appreciation from its prestigious customers and independent agencies. A separate section has been added to this Integrated Annual Report with details on EHS initiatives of the Company.

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

The Company has strong commitment towards conservation of energy, natural resources and adoption of latest technology in its areas of operation. The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under clause (m) of sub-section (3) of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed to this Report as Annexure ‘D’.

23. PARTICULARS OF EMPLOYEES

In terms of the requirements of sub-section (12) of Section 197 of the Act read with sub-rule (1) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, the disclosures pertaining to the remuneration and other details, are annexed to this Report as Annexure ‘E’.

The statement containing names and other details of the employees as required under sub-section 12 of Section 197 of the Act read with sub-rules (2) & (3) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of the Annual Report. In terms of sub-section (1) of Section 136 of the Act, the Annual Report is being sent to the Members and others entitled thereto, excluding the aforesaid information. The said information is open for inspection and any Member interested in obtaining a copy of the same may write to the Company.

24. HUMAN RESOURCE / INDUSTRIAL RELATIONS

The Company understands that people are its most valuable asset and recognizes talent as the primary source of competitive edge. Realizing the criticality of talent, the Company continues to focus on capability building by building talent pool, through dedicated talent pipelines and competency upgradation through Behavioral, Technical, Functional, and Digital learning and development initiatives.

Creating employee happiness has been focus area for concerted efforts, which has led to conceptualizing, evolving and implementation of Happiness Framework, with the sole purpose of creating and sustaining Employee Engagement.

Despite unprecedented challenges posed by COVID-19 pandemic, the Company leveraged all channels of communication, reviewed and monitored crisis resolution, Health, Safety & Hygiene of employees, connected with employees and their family to align with the new normal.

The employee relations remained cordial throughout the year. As on March 31, 2022, the Company had 6,038 permanent employees, excluding its subsidiaries. The Board places on record its sincere appreciation for the valuable contribution made by the employees across all levels whose enthusiasm, team efforts, devotion and sense of belonging has always made the Company proud.

25. INTEGRATED ANNUAL REPORT

The Company has voluntarily provided Integrated Annual Report for the financial year 2021-22, prepared as per IR Framework recommended by the International Integrated Reporting Council (IIRC) and the same is aimed at providing the Company’s stakeholders a comprehensive depiction of the Company’s financial and non-financial performance. The Report provides insights into the Company’s key strategies, operating environment, risks and opportunities, governance framework and its approach towards long-term sustainable value creation across six capitals viz. financial capital, manufactured capital, intellectual capital, human capital, social & relationship capital and natural capital.

26. OTHER DISCLOSURES

The Directors state that no disclosures or reporting is required in respect of the following items, as the same is either not applicable to the Company or relevant transactions/events have not taken place during the year under review:

a) The Company has not issued any equity shares with differential rights as to dividend, voting or otherwise.

b) The Company has not issued shares (including sweat equity shares) to employees under any scheme.

c) There was no revision in the financial statements.

d) There has been no change in the nature of business of the Company as on the date of this Report.

e) The Managing Director & CEO of the Company did not receive any remuneration or commission from any of its subsidiaries.

f) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

g) There have been no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this Report.

h) There are no proceedings pending under the Insolvency and Bankruptcy Code, 2016 as at the end of financial year March 31,2022.

The Company has been in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India, during the financial year.

27. ACKNOWLEDGEMENT

The Directors take this opportunity to thank the Central and State Government Departments, Organizations and Agencies in India and Governments of various countries where the Company has its operations for their continued support and co-operation. The Directors are also thankful to all valuable stakeholders viz., customers, vendors, suppliers, banks, financial institutions, joint venture partners and other business associates for their continued co-operation and excellent support provided to the Company during the year. The Directors acknowledge the unstinted commitment and valuable contribution of all employees of the Company.

The Directors also appreciate and value the trust reposed in them by Members of the Company.

28. ANNEXURES

The following annexures, form part of this Report:

a) Nomination and Remuneration Policy - Annexure ‘A’

b) Secretarial Audit Report - Annexure ‘B’

c) Annual Report on Corporate Social Responsibility - Annexure ‘C’

d) Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo - Annexure ‘D’

e) Information under sub-rule (1) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 - Annexure ‘E’

For and on behalf of the Board of Directors Harsh V. Goenka

Place: Mumbai Chairman

Date: May 03, 2022 (DIN: 00026726)

Director’s Report