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KNR Constructions Ltd.

BSE: 532942 Sector: Infrastructure
NSE: KNRCON ISIN Code: INE634I01029
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OPEN 254.10
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VOLUME 16380
52-Week high 329.80
52-Week low 202.85
P/E 16.82
Mkt Cap.(Rs cr) 6,848
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 254.10
CLOSE 254.55
VOLUME 16380
52-Week high 329.80
52-Week low 202.85
P/E 16.82
Mkt Cap.(Rs cr) 6,848
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

KNR Constructions Ltd. (KNRCON) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the Twenty Sixth Annual Report and the Company'saudited financial Consolidated) for the financial year ended March 31 2021.

FINANCIAL RESULTS

The Company's financial performance for the year ended March 31 2021 is summarisedbelow:

Particulars Year Ended March 31 2021 Year Ended March 31 2020
Standalone Consolidated Standalone Consolidated
Total revenue (including other income) 275227.53 295525.62 230082.75 251736.99
Profit before interest depreciation and tax 58548.22 75849.16 54365.85 69954.82
Less: Interest and financial charges 4872.73 13404.93 4741.07 11023.08
Profit Before depreciation Exceptional items and tax 53675.49 62444.23 49624.78 58931.74
Less: Depreciation and amortisation 14437.48 18990.47 19184.77 25412.63
Profit before exceptional items and tax 39238.01 43453.76 30440.01 33519.11
Less: Exceptional Items 1124.70 (8525.20) 1072.14 1072.14
Profit before tax 38113.31 51978.96 29367.87 32446.97
Provision for tax 13695.66 13695.66 6845.56 6852.77
(including Deferred Tax)
Profit after tax 24417.65 38283.30 22522.31 25594.20
Add: Other Comprehensive Income (23.34) (23.27) (38.66) (40.90)
Total Comprehensive Income for the period 24394.31 38260.03 22483.65 25553.30
Attribution to:
Shareholders of the Company 24394.31 40738.05 22483.65 26550.58
Non-Controlling Interest NA (2454.75) NA (956.38)
Balance of Profit/(Loss) for earlier years 144257.80 137088.83 123261.19 112063.95
Less: Dividend - - (1265.56) (1265.56)
Dividend Tax - - (260.14) (260.14)
Balance carried forward 168675.45 177826.88 144257.80 137088.83

RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

The highlights of the Company's performance are as under:

On Standalone basis

Revenue from operations for the FY 2020-21 are reported at ` 270262.93 Lakhs.

PBDIT (Excluding other income & Exceptional Item) increased by 10.13% to `53583.62 Lakhs

Profit before tax increased by 29.78% to` 38113.31 Lakhs

Net profit increased by 8.42% to` 24417.65 Lakhs

Net worth increased by 15.02% to 186783.15 Lakhs

The order book position as on March 31 2021 stands at

` 711787 Lakhs.

On consolidated basis

Revenue from operations for the FY 2020-21 are reported at ` 290363.48 Lakhs.

Profit before tax (After exceptional item) increased by

60.20% to ` 51978.96 Lakhs

Net profit increased ` 38283.30 Lakhs

Net worth increased by 26.09% to 196781.37

Reserves

The Company is not proposing to transfer any amount to the

General Reserves of the Company out of the profits made during the year. The totalOther Equity (including securities premium

Reserves General Reserves Surplus in statement of profit and loss and othercomprehensive income) as on March 31 2021 is

` 181158.45 Lakhs as against the Paid-up capital of ` 5624.70 Lakhs

Performance of Subsidiaries

As per Rule 8 of Companies (Accounts) Rules 2014 a Report on the Financialperformance of the Subsidiaries Companies during the Financial Year ended March 31 2021is Annexed herewith as Annexure I.

Dividend

The Board of Directors have recommended final dividend of ` 0.25/- per Equity Share forthe financial year ended March

31 2021 amounting to ` 703.09 Lakhs. The dividend shall be paid to the members whosenames appear in the Register of Members as on September 22 2021 in respect of shares heldin the dematerialised form it shall be paid to members whose names are furnished byNational Securities Depository Limited and Central Depository Services (India) Limited asbeneficial owners as on that date.

Pursuant to the Finance Act 2020 dividend income is taxable in the hands of theshareholders w.e.f. April 1 2020 and the

Company is required to deduct tax at source (TDS) from dividend paid to the Members atprescribed rates as per the Income-tax

Act 1961.

The dividend payout for the year under review has been formulated in accordance withthe Company's policy linked with long term performance keeping in view the Company's needfor capital for its growth plans and the intent to finance such plans through internalaccruals to the maximum. The Dividend Distribution Policy of the Company is annexedherewith marked as Annexure II to this Report. The Dividend Distribution Policy isposted on the website of the Company and the web link is http://knrcl.com/images/policies/KNRCL-DIVIDEND-DISTRIBUTION-POLICY.pdf There has been no changein the policy during the year.

CHANGE IN NATURE OF BUSINESS

During the year under review there is no change in the nature of business in which theCompany operates.

MATERIAL CHANGES AND COMMITMENTS IF ANY

AFFECTING THE FINANCIAL POSITION OF THE COMPANY. During the year under review tillthe date of this report there were no material changes and commitments that may affectthe financial position of the Company.

CAPITAL STRUCTURE

Authorised Capital:

The authorised share capital of the Company is ` 600000000/-

(Sixty Crores Only) divided into 300000000 (Thirty Crores only)

Equity shares of ` 2/- (Rupees Two only) each as on March 31 2021.

During the year under review the authorised share capital of the Company was increasedfrom ` 350000000/- (Rupees Thirty-Five Crores) divided into 175000000 (SeventeenCrores Fifty Lakhs only) equity shares of ` 2/- (Rupees Two) each to

` 600000000/- (Sixty Crores Only) divided into 300000000

(Thirty Crores only) Equity shares of ` 2/- (Rupees Two only) each by way of specialresolution passed by the members of the Company through postal ballot on January 24 2021.

Paid-up capital:

As on March 31 2021 the paid-up capital of the Company is ` 562469200/- (RupeesFifty-Six Crores Twenty-Four Lakhs Sixty-Nine Thousand Two Hundred Only) divided into

281234600 (Twenty-Eight Crores Twelve Lakhs Thirty-Four

Thousand Six Hundred only) Equity Shares of ` 2/- (Rupees Two) Each.

ISSUE OF SHARES: BONUS ISSUE:

During the year under review the Company has issued and allotted 140617300(Fourteen Crores Six Lakhs Seventeen

Thousand Three Hundred) equity shares by way of Bonus Issue in the ratio of 1:1 onFebruary 5 2021 (Date of allotment). Apart from the above the Company has not issued anysecurities (including convertible warrants) by way of Sweat Equity or Employee StockOptions or equity shares with differential voting rights or by any other way of allotmentduring the year under review.

CREDIT RATING:

During the year under report a) CRISIL has revised its outlook to AA-(Positive) fromAA-

(Stable) and CRISIL A1+ (Reaffirmed) for Long term and short-term bank facilities.

b) India Ratings has re-affirmed AA- (IND AA-/Stable/IND

A1+) for various bank facilities of the Company.

INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 125 of the Companies Act 2013 an amount of ` 27754/- beingunclaimed dividend for 2012-13 was transferred to the Investor Education and Protectionfund (IEPF) established by the Central.Government during the year under review.

The Company has transferred 293 equity shares as required under the provisions ofSection 124(6) of the Companies Act 2013 to IEPF Authority pertaining to 2012-13.

Members are requested to note that dividends not encashed or remaining unclaimed for aperiod of 7 (seven) years from the date of transfer to the Company's Unpaid DividendAccount shall be transferred to the Investor Education and Protection Fund("IEPF") established by the Central Government. Further pursuant to theprovisions of Section 124 of the Act read with the Investor Education and Protection FundAuthority (Accounting

Audit Transfer and Refund) Rules 2016 (‘IEPF Rules') as amended from time totime all shares on which dividend has not been paid or claimed for seven consecutiveyears or more shall be transferred to IEPF Authority as notified by the Ministry ofCorporate Affairs.

The Members/Claimants whose shares unclaimed dividend have been transferred to IEPFmay claim the shares or apply for refund by making an application to IEPF Authority inForm IEPF 5 which is available on www.iepf.gov.in and on the website of the Companywww.knrcl.com along with requisite fee as decided by it from time to time.

Members who have not yet encashed the dividend warrants from the financial year endedMarch 31 2014 onwards are requested to forward their claims to the Company's Registrarand Share Transfer Agents without any further delay. It is in Members' interest to claimany un-encashed dividends and for future opt for Electronic Clearing Service so thatdividends paid by the Company are credited to the Members' account on time. It may benoted that once the unclaimed dividend is transferred to IEPF as above no claim shallrest with the Company in respect of such amount. It may also be noted that the unclaimeddividend amount which were lying with the Company upto the year ended on March 31 2013have already been transferred to IEPF. The details of the unclaimed dividends areavailable on the Company's website at www.knrcl.com and on the website of Ministry ofCorporate Affairs at www.mca.gov.in. Members are requested to contact the Company'sRegistrar and Share

Transfer Agent or the Company to claim the unclaimed/unpaid dividends.

Nodal Officer:

Pursuant to the provisions of Rule 7(2B) of Investor Education and Protection Fund(Accounting Audit Transfer and Refund) Second Amendment Rules 2019 the Company hasappointed Smt. Haritha Varanasi Company Secretary of the Company as

NodalOfficer ofthe

DIRECTORS:

Non Independent Directors

During the year under report Shri K Narsimha Reddy and Shri K Jalandhar Reddy werere-appointed as Managing Director and

Executive Director of the Company respectively for a period of

5 years effective April 01 2021 pursuant to special resolutions passed by the membersof the Company by way of postal ballot and the results of postal ballot were declared on24thJanuary 2021.

In accordance with the requirements of the Companies Act 2013 Shri K Jalandhar ReddyDirector of the Company is liable to retire by rotation at the Annual General Meeting andbeing eligible offer himself for reappointment at the ensuing Annual General Meeting.

Save and except the aforesaid there was no appointment / reappointment of any Directoron the Board of the Company during the FY 2020-21.

Brief resume of the Director proposed to be reappointed nature of their expertise inspecific functional companies in which they hold directorships and relationships betweendirectors inter-se as stipulated under Regulation 36 of SEBI (LODR) Regulations 2015 andSecretarial Standard on General Meetings issued by the Institute of Company Secretaries ofIndia is annexed to the notice of the Annual General Meeting.

The Board of Directors has complete access to the information within the Company.Independent Directors have the freedom to interact with the Company's management.Interactions happen during Board / Committee meetings when MD / ED are asked to makepresentations about performance of the Company to the Board. Apart from this they alsohave independent interactions with the Statutory Auditors the Internal Auditors andexternal advisors appointed from time to time. Further Independent Directors meet withoutthe presence of any management personnel and their meetings are conducted informally toenable the Independent Directors to discuss matters pertaining to the Company's affairsand put forth their combined views to the Board of Directors of the Company.

Independent Directors

The Company has received declarations from the independent directors of the Company tothe effect that they meet the criteria of independence as laid under the provisions ofSection 149 (6) of the Companies Act 2013 and Regulation 16 (1) (b) read with Regulation25 of SEBI (LODR) Regulations 2015 in respect of the financial year ended March 31 2021.

The Independent Directors have also confirmed that they are in compliance with the Codeof Conduct as stipulated under Schedule IV of the Companies Act 2013 and also of theCompany.

In terms of Regulation 25 (8) of SEBI (LODR) Regulations 2015 the IndependentDirectors have also confirmed that they are not aware of any circumstance or situationwhich exists or which may be reasonably anticipated that could impair or impact theirability to discharge their duties with an objective independent judgement and without anyexternal influence.

During the year under report the Independent Directors of the Company had no pecuniaryrelationship or transactions with the

Company except to the extent of sitting fees and reimbursement of expenses incurred bythem for the purpose of attending the meetings of the Board and its committees.

Proficiency of Directors:

In compliance with Rule 6 of Companies (Appointment and

Qualification of Directors) Rules 2014 all the Independent

Directors of the Company have registered themselves with the

Independent Directors Data Bank maintained by IICA. Except Smt. G Chandra Rekha whohas appeared and qualified the proficiency test conducted by IICA none of the otherindependent

Directors were required to appear the aforesaid test.

Policy On Director's Appointment and Remuneration and Other Details: The Nominationand Remuneration Committee has laid down the criteria for Directors' appointment andremuneration including criteria for determining qualification positive attributes andindependence of a Director. The following attributes/criteria for selection have been laidby the Board on the recommendation of the Committee:

- The candidate should possess the attributes such as leadership professional staturedomain expertise or such other attributes which in the opinion of the Committee are in theinterest of the Company; - the candidate should be free from any disqualification asprovided under Sections 164 and 167 of the Companies

Act 2013;

- the candidate should meet the conditions of being independent as stipulated under theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 in case of appointment as an independent director; and

- the candidate should possess appropriate educational qualification skillsexperience and knowledge in one or more fields of finance law management technicaloperations infrastructure or such other areas or disciplines which are relevant for theCompany's business.

Key Managerial Personnel:

Pursuant to the provisions of Section 203 of the Companies Act 2013 the following arethe Key Managerial Personnel of the Company:

- Shri K Narsimha Reddy Managing Director
- Shri K Jalandhar Reddy Whole-time Director & Chief Financial Officer
- *Shri M V Venkat Rao Company Secretary
- #Smt. Haritha Varanasi Company Secretary

*Resigned w.e.f. 06.03.2021 #Appointed w.e.f. 06.03.2021

Remuneration policy

The Company has in place remuneration policy to ensure that the Key ManagerialPersonnel (KMP) and Senior Managerial Personnel (SMP) shall be competitive in order toensure that the Company can attract and retain competent talent.

The remuneration policy of the Company shall ensure that:

The level and composition of remuneration is reasonable and sufficient to attractretain and motivate directors/

KMPs and SMPs of the quality required to run the Company successfully.

Relationship of remuneration to performance is clear and meets appropriate performancebenchmarks.

Remuneration to directors KMP and SMP involves a balance between fixed and variablepay reflecting short and long term performance objectives and goals set by the Company.

Remuneration package is linked to the achievement of corporate performance targets anda strong alignment of interest with stakeholders.

The detailed remuneration policy of the Company can be accessed in the website of theCompany through the below link: http://knrcl.com/images/policies/Remuneration-Policy.pdf

COMMITEES OF THE BOARD

The Company has duly constituted the following committees as per the provisions of theCompanies Act 2013 and SEBI (LODR) Regulations 2015 a) Audit Committee b) StakeholdersRelationship Committee c) Nomination and Remuneration Committee d) Corporate SocialResponsibility Committee e) Risk Management Committee Details of the Committees such asComposition meetings held during the year under report are provided in CorporateGovernance Report which forms integral part of the Annual Report.

MEETINGS OF THE BOARD AND COMMITTEES

The Board of Directors and Committees have duly met during the year under report andthe minutes of the meetings are duly recorded. The details of the meetings of the Boardand its Committees are provided in the Corporate Governance Report which forms integralpart of this report.

RECOMMENDATIONS OF AUDIT COMMITTEE

The Board has taken into consideration accepted and acted upon all the recommendationsof the Audit Committee.

BOARD DIVERSITY

The Company recognises that having a diverse Board enhances the quality of itsperformance. The Company continues to increase the diversity in the Board as and whenrequired as the Company believes that it is an essential element in supporting andattainment of its strategic objectives and its sustainable development. The Company has inplace policy on Board Diversity and can be accessed at http://knrcl.com/images/policies/Board-Diversity-Policy.pdf .

BOARD EVALUATION

The Nomination and Remuneration Committee lays down the criteria for performanceevaluation of Independent Directors Board of Directors and Committees of the Board.

The parameters like attendance and participation of Directors in the meetings of theBoard and its Committees thereof contribution to strategic decision making financialstatements and business performance have been the basis criteria for performanceevaluation.

The evaluation of Board as a whole and each individual director is performed afterseeking all the inputs from the Directors.

The performance evaluation of executive Directors Chairperson of the Board is done bythe Independent Directors at their separate meeting.

For the year 2020-21 evaluation of Board as a whole Non-executive and IndependentDirectors and Executive Directors of the Company has been duly carried out as per thepolicy laid by the Nomination and Remuneration Committee.

FAMILIARISATION PROGRAM FOR INDEPENEDNT DIRECTORS

All Independent Directors are familiarised with the operations and functioning of theCompany. The details of familiarisation program are provided in Corporate GovernanceReport which forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Management's Discussion and Analysis report for the year under review as stipulatedunder Regulation 34(2) (e) SEBI (LODR) Regulation 2015 of the LODR Regulations 2015 ispresented in a separate section forming part of the Annual report

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134 (3) (c) of the Companies Act 2013 withrespect to Directors' Responsibility

Statement Your Directors hereby confirm that:

a) in the preparation of the annual accounts for the year ended March 31 2021 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2021 and of the profit ofthe Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a

‘going concern' basis;

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

IMPLEMENTATION OF CORPORATE ACTIONS FAILURES IF

ANY

During the year under review no instances of failure to implement corporate actionswere reported.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The report on CorporateGovernance as stipulated under the SEBI (LODR) Regulations 2015 forms an integral partof this Report. The requisite certificate from the Auditors of the Company confirmingcompliance with the conditions of corporate governance is attached to the report onCorporate Governance.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company is committed to enhance value creation in the society and community inwhich it operates. Through its conduct services and CSR initiatives it will strive topromote sustained growth in the surrounding environs.

The Corporate Social Responsibility Committee (CSR Committee) has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Company which has been approved by the Board. TheCSR Policy of the Company is available on the website of the Company (http://knrcl.com/images/policies/knrcl_CSR.pdf ).

The Company has identified three focus areas of engagement which are as under:

1. Promoting education including special education and employment enhancing vocationskills especially among children women elderly and the differently abled and livelihoodenhancement projects

2. Rural development projects

3. Promoting gender equality empowering women setting up homes and hostels for womenand orphans; setting up old age homes day care centers and such other facilities forsenior citizens and measures for reducing inequalities faced by socially and economicallybackward groups;

The Company as part of its Corporate Social Responsibility (CSR) initiative undertookprojects like promotion of education in rural areas infrastructure and maintenance andrenovation of old age homes.

The Annual Report on CSR activities carried out by the Company for 2020-21 is annexedherewith as "Annexure III" to this report as required under theprovisions of the Companies Act 2013 and applicable rules thereunder.

STATUTORY AUDITORS

M/s K P Rao & Co. Chartered Accountants were appointed as Statutory Auditors ofthe Company at the 22nd Annual General Meeting held on September 28 2017 for a period of5 years ie. upto conclusion of 27th AGM to be held in the year 2022.

Pursuant to Notification issued by the Ministry of Corporate

Affairs on May 7 2018 amending section 139 of the Companies Act 2013 and the Rulesframed thereunder the mandatory requirement for ratification of appointment of Auditorsby the

Members at every Annual General Meeting ("AGM") has been omitted and hencethe Company is not proposing an item on ratification of appointment of

Further the Statutory Auditor's report does not contain any qualificationsreservations adverse remarks or disclaimers. The Statutory Auditors attended the AGM heldon September 28 2020.

No frauds were reported by the Statutory Auditors during the year under report.

INTERNAL AUDITOR & CONTROLS

The Board of Directors at their meeting held on May 20 2021 based on therecommendation of the Audit Committee has reappointed M/s. K. P. Rao AssociatesChartered Accountants Hyderabad as the Internal Auditors of your Company. The InternalAuditors are submitting their reports on quarterly basis.

Internal Auditors findings are discussed and suitable corrective actions are taken asper the directions of Audit Committee on an on-going basis to improve efficiency inoperations.

The Company's internal control systems are well established and commensurate with thenature of its business and the size and complexity of its operations. The Audit Committeereviews adequacy and effectiveness of the Company's internal control environment andmonitors the implementation of audit recommendations. The recommendations/suggestions ofthe internal auditors are discussed in the Audit Committee meetings periodically.

COST AUDITOR

In accordance with Section 148(3) and other applicable provisions if any of theCompanies Act 2013 and The Companies (Audit and Auditors) Rules 2014 the Board ofDirectors upon the recommendation of Audit Committee at their meeting held on May 202021 has appointed Shri D Zitendra Rao Cost Accountant Hyderabad being eligible andhaving sought appointment as Cost Auditor of the Company to carry out the cost audit ofthe Company for the financial year

2021-22 at a remuneration of ` 3 lacs.

SECRETARIAL AUDITOR

In accordance with Section 204 of the Companies Act 2013 the Board has re-appointedM/s. VCSR & Associates Company Secretaries to conduct Secretarial Audit forthe Financial Year

2020-21. The Secretarial Audit Report for the financial year ended March 31 2021 isannexed herewith and marked as

Annexure IV to this Report.

SECRETARIAL STANDARDS

During the year under report the Company has duly complied with all the applicablesecretarial standards as issued by the Institute of Company Secretaries of India from timeto time.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE

COMPANIES

A separate statement containing the salient features of the Financial statements of thesubsidiaries and joint ventures of the Company is prepared in Form AOC-1 which forms partof the

Consolidated financial statements.

The Company has two new companies (SPVs) as wholly-owned subsidiaries namely KNRGuruvayur Infra Private Limited and KNR Ramanattukara Infra Private Limited which areincorporated after the closure of the financial year.

The Policy for determining material subsidiaries as approved by the Board may beaccessed on the Company's website: http://knrcl.com/images/policies/Policy_on_MATERIAL_SUBSIDIARIES.pdf

MATERIAL SUBSIDIARIES

During the year under report the Company has three material subsidiaries namely KNRShankarampet Projects Private Limited KNR Srirangam Infra Private Limited and KNRTirumala Infra Private Limited.

Secretarial Audit of Material Subsidiaries:

As required under the provisions of Regulation 24 of SEBI (LODR) Regulations 2015 thesecretarial audit reports of the material subsidiaries of the Company are annexed herewithas

Annexure V.

SALE OF 100% STAKE IN THE MATERIAL WHOLLY OWNED

SUBSIDIARIES:

The Board at its meeting held on August 30 2021 has accorded its approval for sale of100% stake held by the Company in the following material wholly owned subsidiariesincluding transfer of control in one or more tranches to Cube Highways andInfrastructures III Pte Ltd.

KNR Shankarampet Projects Private Limited

KNR Srirangam Infra Private Limited and

KNR Tirumala Infra Private Limited

Accordingly the Company is seeking approval from the members of the Company for thesale of stake as required under the provisions of Regulation 24(5) of SEBI (LODR)Regulations 2015.

NAMES OF COMPANIES WHICH HAVE CEASED TO BE

ITS SUBSIDIARIES JOINT VENTURES OR ASSOCIATE

COMPANIES DURING THE YEAR

During the year under review KNR Walayar Tollways Private Limited has ceased to besubsidiary of the Company w.e.f. September 28 2020.

Further KNR Chidambaram Infra Private Limited has also ceased to be subsidiary of theCompany as the Company has been struck off from the register of Companies by the Ministryof Corporate Affairs pursuant to the strike off application filed by the Company.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements are prepared in accordance with Indian AccountingStandards (Ind AS) as per the Companies (Indian Accounting Standards) Rules 2015 notifiedunder Section 133 of the Companies Act 2013 and other relevant provisions of theCompanies Act 2013.

The Consolidated Financial Statements for the financial year ended March 31 2021 formspart of the Annual Report.

Further we undertake that the Annual Accounts of the subsidiary Companies and therelated detailed information will be made available to the Company's shareholders and tothe shareholders of the subsidiary companies seeking such information at any point oftime. Further the Annual Accounts of the subsidiary Companies shall also be kept forinspection by any shareholder at the Registered office of the Company and that of thesubsidiary Companies.

Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited financial statements in respect of subsidiaries are available on thewebsite of the Company at www.knrcl.com

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the

Company during the financial year with related parties were in the ordinary course ofbusiness and on an arm's length basis. During the year the Company had not entered intoany contract / arrangement / transaction with related parties which could be consideredmaterial in accordance with the policy of the Company on materiality of related partytransactions.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: http://knrcl.com/images/policies/policy_on_materiality.pdf Your Directors drawattention of the members to Notes to the financial statement which sets out related partytransactions and disclosures.

The Company has not entered into any contracts/arrangements with related partiesreferred to Section 188(1) of the Companies Act 2013 not at arms-length basis during theyear. The details of the related party transactions disclosed herewith as Annexure VIin Form AOC-2.

Disclosure under Regulation 34(3) read with Schedule V of the Listing RegulationsRelated Party disclosure as per Schedule V of the Listing Regulations

S No. In the accounts of Particulars Amount at the year ended 2020-21 Maximum outstanding amount during the year 2020-21
1. KNR Constructions Limited (i) Loans/Advances to subsidiaries
(Holding Company) KNR Agrotech & Beverages Pvt Ltd. 191.54 191.54
KNR Energy Ltd. 146.90 146.90
KNRC Holdings and Investments Pvt Ltd. 233.35 233.35
KNR Muzaffarpur Barauni Tollway Pvt. Ltd. 736.48 736.48
KNR Infrastructure Projects Pvt. Ltd. 10.59 10.59
KNR Muzaffarpur Holdings Pvt. Ltd. 13.60 13.60
KNR Srirangam Infra Pvt. Ltd. 121.68 121.68
KNR Tirumala Infra Pvt Ltd. 0.00 488.12
KNR Shankarampet Project Pvt Ltd. 0.31 7.16
KNR Somwarpet Infra Project Pvt Ltd. 0.23 0.39
KNR Palani Infra Pvt. Ltd. 4.07 55.68
(ii) Loans/advances to associates 0.54 149.57
a) Patel KNR Heavy Infrastructures Limited
b) Patel KNR Infrastructures Limited 0.04 0.89
(iii) Loans/advances to firms/Companies in which Directors are interested NotApplicable NotApplicable
2. KNR Constructions Limited (Holding Company) Investment by the Loanee in the shares of parent company/ subsidiary company when the company has made a loan or advance NotApplicable NotApplicable

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to Conservation of Energy Technology absorption ForeignExchange earnings and outgo as required under section 217 (1) (e) of the Companies Act1956 read with Companies (Disclosure of particulars in the Report of Board of Directors)Rules 1988 are as follows

a) Conservation of Energy

The Company has taken suitable measures for conservation of energy to the extentpossible. However the core activity of the Company is civil construction which is not anenergy intensive sector where energy consumption is at intensive level.

b) Technology absorption Adoption and Innovation

There is no information to be furnished regarding Technology Absorption as your Companyhas not undertaken any research and development activity in any manufacturing activity norany specific technology is obtained from any external sources which needs to be absorbedor adopted.

Innovation is a culture in the Company to achieve cost efficiency in the constructionactivity to be more and more competitive in the prevailing environment that cannot bequantified.

c) The Company has not imported any technology during the last 5 years.

Foreign Exchange Earnings and Outgo

Particulars 2020-21 2019-20
1) Foreign Exchange Inwards Nil Nil
2) Foreign Exchange Outgo 1039.78 340.45
- Import of capital goods and
Stores and spares
3) Foreign Currency Nil 2.80
Expenditure/Remittance
- On account of travel/other expenses

DEPOSITS

Your Company has not accepted any deposits covered by the provisions of Section 73 ofthe Companies Act 2013 and the Rules framed there under.

VIGIL MECHANISM

The Company has a Vigil mechanism and Whistle blower policy in terms of the SEBI (LODR)Regulations 2015 and the

Companies Act 2013 under which the employees are free to report violations ofapplicable laws and regulations and the Code of Conduct. Protected disclosures can be madeby a whistle blower through a dedicated e-mail or a letter to the Chairman of the AuditCommittee. The Policy on vigil mechanism and whistle blower policy may be accessed on theCompany's website at the link: http://knrcl.com/images/policies/knrcl_whistleblower. pdf

CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the Insider Trading Policy in accordance with therequirements of the SEBI (Prohibition of Insider Trading) Regulation 2015 and AmendedRegulations 2018. The Insider Trading Policy of the Company lays down guidelines andprocedures to be followed and disclosures to be made while dealing with shares of theCompany as well as the consequences of violation. The policy has been formulated toregulate monitor and ensure reporting of deals by employees and to maintain the highestethical standards of dealing in Company securities.

The Insider Trading Policy of the Company covering code of practices and procedures forfair disclosure of unpublished price sensitive information and code of conduct for theprevention of insider trading is available on our website (http://knrcl.com/images/policies/knrcl_8insider.pdf )

CODE OF CONDUCT

A declaration regarding compliance with the code of conduct signed by the Company'sManaging Director is published in the Corporate Governance Report which forms part of theannual report.

PARTICULARS OF LOANS GIVEN INVESTMENTS MADE

GUARANTEES GIVEN AND SECURITIES PROVIDED

Particulars of loans given investments made guarantees given and securities providedforms part of the standalone financial statements.

ANNUAL RETURN

As required under the provisions of Section 92 of the Companies Act 2013 copy ofAnnual Return of the Company for the year ended March 31 2021 is made available on thewebsite of the Company and the same can be accessed through the following link.http://knrcl.com/ar-2020-21.html

MATERIAL ORDERS PASSED BY COURTS/REGULATORS/TRIBUNALS

There were no material or significant orders passed by the regulators/courts/tribunalsthat would impact the going concern status of the Company and its future operations.

CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCYAND BANKRUPTCYCODE 2016.

No corporate insolvency resolution processes were initiated against the Company underthe Insolvency and Bankruptcy Code 2016 during the year under review.

INSURANCE

All the movable properties and assets of the Company are adequately insured for theyear under report.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is as follows:

The percentage of increase in remuneration of eachDirectorChiefFinancialOfficerandCompany Secretary during the financial year

2020-21 ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year

2020-21 and the comparison of remuneration of each Key Managerial Personnel (KMP)against the performance of the Company are as under:

Sl. No. Name of Director/KMP and Designation Remuneration of Director/KMP for 2020-21 (` in Lakhs) * % increase in Remuneration in the Financial Year 2020-21 Ratio of remuneration of each Director/ to median remuneration of employees Comparison of the Remuneration of the KMP against the performance of the Company
1 Shri. K Narsimha Reddy Managing Director 999.00 26.14% 378
2 Shri. K Jalandhar Reddy Executive Director and CFO 666.00 26.14% 252 Profit before Tax and exceptional item increased by 28.90% and
3 Shri. M V Venkata Rao* Company Secretary 14.52 -8.33% 6 Profit After Tax and comprehensive income increased by 8.5% in
4 Smt. Haritha Varanasi ($) Company Secretary 1.26 - - 2020-21
5 Shri S.Vaikuntanathan V.P (F&A) 33.30 0.00% 13

* Resigned w.e.f. March 6 2021. $ Appointed w.e.f. March 6 2021.

During the period under review no employee of the Company is employed throughout thefinancial year and in receipt of` 102.00 Lakhs or more or employed for part of the yearand in receipt of ` 8.5 Lakhs or more a month or was in receipt of remuneration in excessof that drawn by the managing director or whole time director or manager and holds byhimself or long with his spouse and dependent children not less than two percent of theequity shares of the Company under Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

Further details of top ten employees in terms of remunerationdrawnduringthefinancialyear ended March 31 2021 as required under

Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 and as amended are:

Sl. no. Name of the Employee & Designation Age (years)

Qualification

* Gross Remuneration in ` Experience (years) Date of Commencement of Employment Previous Employment % of holding in the Company
1 Shri K. Narsimha Reddy Managing Director 73 B.A 99900000 52 Yrs 11.07.1995 - 32.89%
2 Shri K.Jalandhar Reddy Executive Director & CFO 50 B.E Computers 66600000 24 Yrs 11.07.1995 - 13.96%
3. Shri K.Shankar Reddy Vice President 50 B.Tech Civil 7250000 24 Yrs 01.10.1999 Rani Constructions --
4 Shri.V.Narasimha Ramana Sr.Vice President – Technical 58 M.Tech Civil 6764400 33 Yrs 09.06.2018 BSCPL --
5 Shri V. Venugopal Reddy Director-Projects 44 B.E 6306000 20 Yrs 21.08.2000 - 0.09%
6 Shri Maj. T.L. Verma Sr.Vice President – Technical 65 B.E. Civil 6000000 41 Yrs 12.07.2011 LANCO --
7 Shri. T. Bhaskar Rao Sr.Vice President – Technical 54 M.Tech Civil 5580000 34 Yrs 06.08.2018 GVR Infra Projects --
8 Shri.E.Srinivasa Rao Vice President - Technical 57 B.E Civil 3900000 26 Yrs 02.12.2012 Navayuga --
9 Shri K Venkata Ram Rao General Manager (F&A) 47 FCA & FCS 3600000 18 Yrs 28.09.2015 Ramky Infrastructure Limited --
10 Shri. S. Vaikuntanathan Vice President (F&A) 66 FCA 3330000 40 Yrs 07.01.2016 Vaibhav Jyothi Power --

None of the above employees were relative of any Directors except in the case of Shri KJalandhar Reddy and Shri K

Narsimha Reddy. Shri K Jalandhar Reddy is the son of Shri K Narsimha Reddy

All appointments are / were contractual in accordance with terms and conditions as perCompany rules.

* Gross Remuneration includes perquisites and contribution to Provident fund by theemployer.

ii) The median remuneration of employees of the

Company during the financial year was ` 2.64 Lakhs;

iii) In the financial year there was no increase in the median remuneration ofemployees;

iv) There were 2162 employees on the rolls of Company as on March 31 2021

v) Relationship between average increase in remuneration and Company performance: - TheProfit before tax and exceptional items for the financialyear ended March 31 2021increased by 28.90% whereas there is no increase in median remuneration.

vi) Comparison of Remuneration of the Key Managerial Personnel(s) against theperformance of the Company: The total remuneration of Key Managerial Personnel was `1714.08 Lakhs whereas theProfitbefore tax and after exceptional item was ` 38113.31Lakhs in 2020-21

vii) a) Variations in the market capitalisation of the Company: The marketcapitalisation as on March 31 2021 at NSE was ` 600155 Lakhs (` 276313 Lakhsas on March 31 2020) b) Price Earnings ratio of the Company at NSE was 15.97 as at March31 2021 and was 12.26 as at March 31 2020;

viii) Average percentage increase made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2020-21 was 2.29% whereas theincrease in the managerial remuneration for the same financial year was 25.19%.

ix) The key parameters for any variable component of remuneration availed by thedirectors: Not applicable

x) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but received remuneration in excess of the highest paid directorduring the year Not Applicable; and

xi) It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employees.

Policy on Sexual Harassment

The Company has adopted policy on Prevention of Sexual

Harassment of women at Workplace in accordance with The

Sexual Harassment of women at Workplace (Prevention

Prohibition and Redressal) Act 2013 and a committee has been set up for redressal ofsexual harassment complaints received.

During the year under review the Company has not received any complaints pertaining toSexual Harassment.

BUSINESS RESPONSIBILITY REPORT

Your Company being among the top 1000 listed entities based on market capitalisationis required to present the Business Responsibility Report as required under the Regulation34(2) (f) of SEBI (LODR) Regulations 2015. The Business Responsibility Report of theCompany for the year ended March 31 2021 forms part of this report and annexed herewithas Annexure VII.

General

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.

INDUSTRIAL RELATIONS

Your Directors are happy to report that the Industrial Relations have been extremelycordial at all levels throughout the year.

Your Directors record their appreciation for sincere efforts support and co-operationof all employees being extended from time to time to accelerate the growth of the Company.

Appreciation and Acknowledgements

Your Directors wish to place on record their gratitude to the Company's shareholderscustomers vendors and bankers for their continued support to KNRCL's growth initiatives.Your Directors also wish to place on record their appreciation of the contribution madeby employees at all levels who through their competence sincerity hard work solidarityand dedicated support have enabled your Company to make rapid strides in its businessinitiatives. Your Directors also thank the Central and State Governments and their variousagencies particularly the National Highway Authority of India and other Governmentalagencies for extending their support during the year and look forward to their continuedsupport.

For and on behalf of the Board of Directors
of KNR Constructions Limited
K Narsimha Reddy K Jalandhar Reddy
Place: Hyderabad Managing Director Executive Director & CFO
Date: August 30 2021 DIN: 00382412 DIN: 00434911

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