k e c international ltd share price Directors report

To the Members of KEC International Limited

The Directors are pleased to present the Eighteenth 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, 2023.

1. FINANCIAL RESULTS

Rs ( in Crore)

	Consolidated		Standalone
Particulars	FY 2022-23	FY 2021-22	FY 2022-23	FY 2021-22
Revenue from Operations	17,281.71	13,742.26	15,413.23	12,573.27
EBITDA	829.73	903.50	849.88	1,129.32
Finance Cost	538.59	316.00	433.91	269.30
Depreciation & Amortisation	161.48	157.86	126.96	123.32
Profit Before Tax (PBT)	160.98	443.07	325.72	755.70
Exceptional Items - Gain/(Loss)*	-	(43.64)	(75.57)	(142.84)
PBT after Exceptional Items	160.98	399.43	250.15	612.86
Tax Expenses	(15.05)	67.35	69.90	178.42
Profit After Tax	176.03	332.08	180.25	434.44
Dividend on equity shares	77.13	102.84	77.13	102.84

*Exceptional items include an amount o fRs 75.45 Crore towards provision for impairment of investments in subsidiary company namely KEC Investment Holdings, Mauritius on account of significant losses incurred by the Companys step-down subsidiary in Brazil i.e.

SAE Towers Brasil Torres de Transmiss?o Ltda.

2. PERFORMANCE

Financial Performance

The Financial year commenced with unprecedented volatility in commodity prices and freight rates due to the Russia-Ukraine conflict and ended with a global outlook of recession, high inflation and high interest rates. Fortunately, in the second half of the year, commodity prices began stabilizing and global logistics costs came down to near pre-pandemic levels. Notwithstanding these challenges, the Company has achieved its highest ever revenues, highest ever order intake and improved in working capital. Besides this, the Company has built a robust order book on account of its geographical and business portfolio diversification which are expected to lead to improved performance in the coming years.

On a consolidated basis, the Company has recorded a robust revenue growth of 26 percent over the previous year with highest ever revenues of Rs 17,282 Crore in FY 2022-23.

EBITDA margins were 4.8 percent and net profit margin was 1 percent in FY 2022-23. The overall margins for the year were affected by unfavourable commodity prices, higher logistic costs and the adverse performance of the Companys subsidiary, SAE in Brazil.

The order intake for the FY 2022-23 was at a record level of Rs 22,378 Crore, with a robust growth of 30 percent over the previous year. The order intake has been contributed primarily by T&D, Civil and Railways businesses and also the Cables and Oil & Gas operations.

The traction in order intake has significantly expanded the Companys closing order book to an all-time high of Rs 30,553 Crore. Additionally, the Company has an L1 position of over Rs 3,500 Crore, diversified across businesses. With this, the order book plus L1 position stands at over Rs 34,000 Crore, equally divided between the T&D and Non T&D businesses.

The Company has brought down the net debt including acceptances by ~Rs 1,100 Crore from its peak level of June 2022. The debt level including acceptances stands below Rs 5,000 Crore at Rs 4,985 Crore as on March 31, 2023, largely at the same level as last year, despite a growth of 26 percent in the revenue over the previous year. The Company has also reduced the net working capital by 30 days to 118 days as on March 31, 2023, from its peak level of 148 days in June 2022. The Company is confident of a further improvement in working capital going forward.

Power Transmission & Distribution (T&D) – The T&D business has achieved revenues of Rs 8,809 Crore for the year, a growth of 27 percent over the previous year. The growth has been delivered on the back of robust project execution both within and outside India. The business has significantly expanded its order book with strong order inflows of over Rs 10,000 Crore across India, Middle East,

Africa, East Asia Pacific and Americas. In India T&D, the business secured orders of over Rs 4,000 Crore. The business forayed into emerging areas of Digital GIS substations and HVDC terminal stations. It also expanded its customer base to include power producers and refineries in addition to the existing clientele comprising Power Grid Corporation of India Limited (PGCIL), state utilities and private developers. The recent growth in orders and focus of the Government on green hydrogen and renewables, reaffirm the Companys confidence in the sustained growth of the India T&D business. In International T&D, the business continues to expand its presence with multiple order wins in key markets. The business has also consolidated its leadership position in the Middle East market by re-entering Kuwait and securing large Gulf inter-connection orders. The business is witnessing a significant demand in Tower supply with orders over Rs 2,000 Crore across the Middle East, North and South Americas. During the year, the business has also reinforced its presence in the international cabling solutions segment with orders from SAARC and the Middle East. Saudi Arabia is a promising market for the Company with new imminent projects in the pipeline.

In SAE, the Companys subsidiary in the Americas, record orders of over Rs 1,500 Crore were secured across Brazil, Mexico and USA. With this, the order book plus L1 in SAE has increased to ~Rs 1,600 Crore, for supply of towers, hardware and poles and engineering and testing of towers. The business is witnessing a very healthy pipeline for lattice structures and poles from the Americas. The robust supply order book, better business outlook and refinancing of local borrowings gives confidence of delivering profitable growth in SAE going forward.

The overall tender pipeline in T&D continues to remain strong both in domestic and international markets given the push for renewables, strengthening of the existing T&D infrastructure and establishment of new transmission lines, substations and underground cabling.

Railways – The Railway business has achieved revenues of Rs 3,701 Crore for the year. The business continued to maintain leadership in the conventional area of Overhead Electrification (OHE) having successfully executed ~24 percent of Indias railway electrification in FY 2022-23. The order intake for the business stands at ~Rs 2,900 Crore, a growth of 15 percent over the previous year. The orders include conventional OHE/composite projects as well as projects in new areas of speed upgradation and technologically enabled segment of metros. With the increase in the capital allocation on Railways in the Union budget, the Company expects the tender pipeline to improve going forward. The Company continues to focus on international opportunities across the geographies on the back of its global T&D network.

Civil – The Civil business continues to deliver good performance with an impressive growth of 75 percent over the previous year with revenues of Rs 3,319 Crore. The growth has been delivered on the back of robust execution across all segments. The business has been consistent on the order intake front and has secured record order inflows of over Rs 6,600 Crore including the single largest order in the history of the Company of Rs 2,060 Crore in the water segment. During the year, the business strengthened its presence with significant order wins in the water, industrial, residential, public spaces and data centre segments. The business has also expanded its presence in commercial buildings and logistic parks. The uptick in order intake has significantly enhanced the order book plus L1 to over Rs 10,000 Crore, comprising of turnkey EPC projects across segments from marquee clients. The Company is confident that this business will continue to grow going forward.

Oil & Gas Pipelines – The Oil & Gas pipelines business has registered a healthy growth following the acquisition of KEC Spur Infrastructure Private Limited in FY 2021-22. The business has achieved revenues of Rs 483 Crore, a robust growth of 2.7 times over the previous year. The business has secured an order intake of ~ Rs 500 Crore with entry into new areas such as composite station works which help in augmenting the pipeline laying capacity.

The business continues to focus on widening its market by focusing on enhancing its pre-qualifications. The business has a strong order book plus L1 of over Rs 1,000 Crore comprising government and private players. The Company is confident of scaling up this business in the coming years.

Solar – In line with the Governments focus on Green Hydrogen and associated renewable energy capacity addition of about 125 GW in the country by 2030, the Company has started refocusing on the Solar business. The business has commenced execution of its largest solar project of 500 MW in Karnataka secured in the second half of the year. This project will utilize tracker-based technology, further enhancing our credentials in the growing renewables market.

Cables – The Cables business continues to deliver a good performance with the highest ever revenues, order intake and profitability in FY 2022-23. The business achieved revenues of Rs 1,615 Crore, a growth of 6 percent over the previous year. The business is also progressing well with the development of new products, most of which have been successfully commercialized. As a part of backward integration, the business has commissioned the PVC compounding plant at Vadodara which will help improve profitability. The Company is confident that this business will continue to grow in terms of revenue as well as margins.

3. DIVIDEND

The Board of Directors recommends a dividend of Rs 3/- per equity share (150 percent of the nominal value of Rs 2/- per equity share) for the financial year ended March 31, 2023. The said dividend if approved, by the Members at the ensuing Annual General Meeting, would entail a cash outflow of about Rs 77.13 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, 2023 was Rs 51.42 Crore. There was no change in the share capital during the year under review.

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, 2023, 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 relevant SEBI Listing Regulations, the Consolidated Financial Statements of the Company, including the financial details of all the 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 eighteen subsidiaries as on March 31, 2023, comprising of eight direct subsidiaries and ten step-down subsidiaries of which nine subsidiaries are 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 employees.

During the year under review, the Board of Directors had approved voluntary liquidation of two of the Companys inoperative overseas Wholly Owned Subsidiaries (‘WOS) namely KEC Global FZ LLC and KEC Global Mauritius, domiciled in the United Arab Emirates and the Republic of Mauritius respectively. The liquidation process of KEC Global FZ LLC has been completed and the said entity has been de-registered with effect from March 08, 2023. Liquidation process of KEC Global Mauritius is in process.

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 the associate company are set out in the prescribed Form AOC-1 and the same forms part of the Financial Statements section of the Annual Report.

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, 2023 are as under:

Subsidiary	Performance during FY 2022-23 (Rs in Crore)		Contribution to overall performance of the Company (%)
	Revenue	Profit After Tax	Revenue	Profit After Tax
KEC Spur Infrastructure Private Limited	481.06	44.12	2.78	25.06
SAE Towers Brasil Torres de Transmiss?o Ltda.	827.21	(216.64)	4.79	(123.07)
SAE Towers Mexico, S de RL de CV	489.44	18.89	2.83	10.73
SAE Towers Ltd.	456.87	0.54	2.64	0.31
KEC International (Malaysia) SDN.BHD.	101.09	15.02	0.58	8.53
KEC Towers LLC	450.46	29.61	2.61	16.82
KEC EPC LLC	426.91	32.45	2.47	18.43

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 and the same is available on the website of the Company at https://www.kecrpg.com/policies.

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, 2023, the applicable Accounting Standards have been followed and no material departures have been made from the same;

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, 2023, and of the profit of the Company for the year ended on March 31, 2023;

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, 2023, 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 AND SUSTAINABILITY REPORT AND CORPORATE GOVERNANCE REPORT

In terms of Regulation 34 of SEBI Listing Regulations, a separate section on Management Discussion and Analysis, Business Responsibility and Sustainability 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 PERSONNEL 12.1 Directors

During the year under review, appointment of Mr. Vinayak Chatterjee, Non-Executive Non-Independent Director of the Company, was approved by the Members of the Company at the Annual General Meeting held on June 30, 2022.

Mr. Vimal Kejriwal was re-appointed as Managing Director & CEO of the Company by the Members on August 04, 2021 effective April 01, 2022 for a period of 2 years. The present term of Mr. Vimal Kejriwal as Managing Director & CEO will end on March 31, 2024. Based on the performance evaluation of Mr. Vimal Kejriwal, the Nomination and Remuneration Committee and the Board of Directors of the Company at their respective meetings held on May 03, 2023 recommended the extension of his tenure as Managing Director & CEO of the Company w.e.f. April 01, 2024 to March 31, 2025, subject to approval of Members at 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. Vimal Kejriwal, Managing Director & CEO, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

In 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 Mr. Kejriwal are given in the Notice convening the ensuing Annual General Meeting.

The Board recommends the re-appointment of Mr. Vimal Kejriwal as stated above in the ensuing Annual General Meeting.

12.2 Key Managerial Personnel (KMP)

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, 2023:

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 reimbursement 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.

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 pro_ciency self-assessment test.

12.4 Board Evaluation

The Board has carried out an 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 a structured 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 21, 2023 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 relevant provision of SEBI Listing Regulations. The Independent 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 out of evaluation process have been discussed and are being implemented.

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 Companys 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 Companys 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 five 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 the reference of the Committee are given in the Corporate Governance Report which forms a part of the Annual Report.

13. AUDITORS 13.1 Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, Price Waterhouse Chartered Accountants LLP, Chartered Accountants (Firm Registration No. 012754N/N500016) ("PwC"), were appointed as the Statutory Auditors of the Company to hold office for a second term of five years from the conclusion of the Seventeenth Annual General Meeting until the conclusion of the Twenty Second Annual General Meeting.

The Statutory Auditors Report for FY 2022-23 does not contain any qualifications, reservations, adverse remarks or disclaimers and no frauds were reported by the Auditors under sub-section (12) of Section 143 of the Act.

13.2 Cost Auditors

In terms of Section 148 of the Act read with 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, 2023 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 2023-24 and recommends their remuneration to the Members for their rati_cation at the ensuing Annual General Meeting.

The Cost Auditors Report of FY 2021-22 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 24, 2022.

13.3 Secretarial Auditors

In 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 2022-23. 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, monitors the progress on various CSR activities and sustainability. The sustainability areas inter alia include to review performance on sustainability goals, targets and strategy, review and recommend to the Board a Sustainability Report. Details of the composition of the SCSR Committee have been disclosed separately as part of 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,enhancingvocationalskills,promotinghealthcare including preventive healthcare, community development, heritage conservation and revival etc. The CSR policy of the Company is available on the Companys website i.e. www.kecrpg.com under ‘Investors tab.

The Company, in line with sub-rule (3) of rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, carried out impact assessment through an independent agency in the FY 2022-23 for the applicable projects. The impact assessment report is available on the Companys website at https://www.kecrpg.com/ corporate-governance-csr

During the year under review, the Company continued with 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 and the Anti-Bribery and Anti-Corruption Policy and the Conflict of Interest Policy adopted by the Company. 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 right from the induction stage to periodic courses on a mandatory basis for all employees.

In 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 values and hence 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, the Company also conducted an awareness workshop for all the employees. No complaint of any nature was received during the year.

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, its employees as well as external stakeholders (customers, vendors, suppliers, outsourcing partners, etc.) 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) as well as evidence submitted and restricts any discriminatory practices against complainants. 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 Companys 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 geo-political and economic uncertainties, commodity price variation and currency fluctuation, interest rate fluctuation and cyber threats have increased manifold. The Companys 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 Companys 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 the 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 the 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 arms 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. For material related party transaction, the Company obtains prior approval of the Members of the Company. A statement giving details of all Related Party Transactions are placed before the Audit Committee on a quarterly basis for its review. Disclosure of related party transactions 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 Companys 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.

Pursuant to SEBI Listing Regulations, the resolution seeking approval of the Member on material related party transactions with Al Sharif Group & KEC Limited Company, subsidiary of the Company, is being proposed at the ensuing Annual General Meeting. The Board recommends the said resolution for approval by the Members.

The Policy on related party transactions, as formulated by the Board is available on the Companys 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 Companies Act, 2013 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 had undertaken various measures for effective and uniform implementation of EHS management across all the verticals, in line with the commitment to achieve its objective of providing an injury free workplace for all. 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 has successfully implemented digital platform and analytics to enable data driven decisions, improve safety, and ensure strict adherence to safety rules and procedures. It has migrated to a digital Environment, Health and Safety (EHS) reporting system which provides a real time reporting & escalation framework at all levels of the organization, enabling immediate action. To strengthen the EHS compliances, digital applications like E-work permits and last-minute risk assessment have been implemented across all verticals.

The Company is proactively committed toward ESG priorities which have been integrated into its business operations, to ensure sustainable growth.

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 organizations approach towards prevention of loss.

During the year, the Company has bagged various EHS awards and appreciation from its prestigious customers and independent agencies including National Safety Council of India, British Safety Council, Greentech Foundation and Construction Industry Development Council.

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

The Company has a 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 employees are its most valuable asset and recognizes talent as the primary source of competitive edge. Recognizing the crucial role of talent, the Company remains committed to enhancing its capabilities by creating a pool of talented individuals through dedicated talent pipelines and providing opportunities for developing competencies in areas such as Behavioral, Technical, Functional, and Digital skills. The Company remains focused on various learning and development initiatives to upgrade the skills and capabilities of its workforce.

Creating employee happiness has been a 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.

The COVID-19 pandemic has highlighted the importance of digitalization, leading to the implementation of several initiatives to ensure the safety and well-being of employees. This has resulted in a new way of working that relies on data-driven decision-making.

The Company prioritizes diversity in its workforce throughout the organization, as it improves collective skills and encourages a culture of creativity. Embracing diversity and inclusivity is a fundamental principle that ensures all employees have equal and fair opportunities.

The employee relations remained cordial throughout the year. As on March 31, 2023, the Company had 6,429 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 have always made the Company proud.

25. INTEGRATED ANNUAL REPORT

The Company has voluntarily published Integrated Annual Report for the financial year 2022-23, prepared as per IR Framework recommended by the International Integrated Reporting Council (IIRC) and the same is aimed at providing the Companys stakeholders a comprehensive depiction of the Companys financial and non-financial performance. The Report provides insights into the Companys 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 and 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 Companys 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 corporate insolvency resolution for the end of financial year March 31, 2023. i. There was no instance of one-time settlement with any Bank or Financial Institution.

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, 2023	(DIN: 00026726)