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K E C International Ltd

BSE Code : 532714 | NSE Symbol : KEC | ISIN:INE389H01022| SECTOR : Capital Goods - Electrical Equipment |

NSE BSE
 
SMC up arrow

434.40

3.50 (0.81%) Volume 280564

26-Feb-2021 09:29:56

Prev. Close

430.90

Open Price

427.95

Bid Price (QTY)

434.00(50)

Offer Price (QTY)

434.40(204)

 

Today’s High/Low 435.00 - 425.00

52 wk High/Low 444.95 - 154.05

Key Stats

MARKET CAP (RS CR) 11066.37
P/E 18.53
BOOK VALUE (RS) 121.3644038
DIV (%) 170
MARKET LOT 1
EPS (TTM) 23.23
PRICE/BOOK 3.54675659849449
DIV YIELD.(%) 0.79
FACE VALUE (RS) 2
DELIVERABLES (%) 51.74
4

News & Announcements

22-Feb-2021

K E C International Ltd - KEC International Limited - Analysts/Institutional Investor Meet/Con. Call Updates

19-Feb-2021

K E C International Ltd - Announcement under Regulation 30 (LODR)-Analyst / Investor Meet - Intimation

17-Feb-2021

K E C International secures new orders worth Rs 1681 crore

17-Feb-2021

K E C International Ltd - KEC International Limited - Press Release

17-Feb-2021

K E C International secures new orders worth Rs 1681 crore

21-Jan-2021

KEC International to conduct board meeting

11-Jan-2021

K E C International secures orders worth RS 1024 crore

28-Oct-2020

KEC International to conduct board meeting

Corporate Actions

Bonus
Splits
Dividends
Rights
Capital Structure
Book Closure
Board Meeting
AGM
EGM
 

Financials

Income Statement

Standalone
Consolidated
 

Peers Comparsion

Select Company Name BSE Code NSE Symbol
Associated Transrail Structures Ltd(merged) 40477
Baroda Power Transmission Ltd 40200
BS Ltd 533276 BSLIMITED
EMC Ltd 40691
Indus Towers Ltd 534816 INDUSTOWER
Jyoti Structures Ltd 513250 JYOTISTRUC
Kalpataru Power Transmission Ltd 522287 KALPATPOWR
Modern Malleables Ltd 517336 MODERNMAL
Neueon Towers Ltd 532887 NTL
RPG Transmission Ltd(merged) 590029 RPGTLTD
Suyog Telematics Ltd 537259
Transpower Engineering Ltd 517282

Share Holding

Category No. of shares Percentage
Total Foreign 26434473 10.28
Total Institutions 66930710 26.03
Total Govt Holding 0 0.00
Total Non Promoter Corporate Holding 3357515 1.31
Total Promoters 133210543 51.82
Total Public & others 27155129 10.57
Total 257088370 100
  • Total Foreign
  • Total Institutions
  • Total Govt Holding
  • Total Non Promoter Corporate Holding
  • Total Promoters
  • Total Public & others

About K E C International Ltd

KEC International Limited is the largest Power Transmission Company in the world, which was incorporated in 18th March of the year 2005. The Company is primarily engaged in Engineering, Procurement and Construction business (EPC) relating to infrastructure interalia products, projects and systems for power transmission, distribution, railways and related activities. As on March 31, 2018, the Company has seventeen subsidiaries comprising of seven direct subsidiaries and ten step down subsidiaries. The Cables business has a significant presence in the International market with exports to more than 40 countries. The flagship company in the transmission sector of the RPG Group, KEC strengths its presence in the areas of Design, Manufacture, Supply and Construction of Turnkey Projects of Power Transmission lines of voltages upto 800 KV and in the execution of Railway Electrification projects, setting up sub-stations and Power Distribution Networks, Optical Fibre Cable (OPGW) installations, Turnkey Telecom Infrastructure Services and maintenance of Power Transmission Lines. With global operations spanning over 20 countries, the company is present in India, UAE, Libya, Ghana, Algeria, Afghanistan, Nigeria, Kazakhstan, Mali, Oman, South Africa, Kenya and Ethiopia among several other countries. The Company forayed into distribution market in the year 2005 itself and bagged noteworthy electrification projects across the globe. The Company had secured new orders worth Rs339 crore from Afghanistan and Ethiopia in December of the year 2005. During May of the year 2006, KEC had entered into the North American market with a joint venture with US-based Power Engineers Inc. KEC Power Inc. (KPI) the new company formed in the US is a 50:50 joint venture, based in the state of Idaho. The Company had bagged a major Rs. 380 crore worth of order in Kazakhstan during May of the year 2007. The Scheme of Arrangement between KEC, RPG Transmission (RPGT) & National Information Technologies Limited (NITEL) and MP Power Line Limited, now called Octav Investments Ltd., became effective from 1st October of the year 2007. During the year 2007-08, the company completed 21 projects in the South Asian markets and 15 projects in International markets. In the same year, RPG Transmission Nigeria Limited, the subsidiary company of the erstwhile RPG Transmission Limited at Nigeria became the subsidiary of the company. As at February 2008, KEC had received the Amity Corporate Excellence award at the International Business Summit and Research Conference. A joint venture company named KEC Power India Private Limited' with M/s. Power Holdings Inc., USA as a joint venture partner was incorporated in the state of Maharashtra in the month of March 2008 to provide services like conceptualizing, designing, developing power transmission and distribution lines, sub-stations and all types of power generating projects. The Company bagged two orders worth of Rs. 124 crores from NTPC Electric Supply Company Ltd. (NESCL) and Rs. 55 Crores from Power Grid Corporation of India Limited (PGCIL) in September of the year 2008. In the year 2009, the company executed several major transmission line projects as well as distribution, substation, railway electrification and telecom projects, besides entering new regions. The company entered three new geographies, Mali, Tajikistan and Australia in short time. The company won the largest ever-international order in its history valued at approximately Rs 636 Crores from Egypt. In the year 2010, the scheme of amalgamation for merger of the RPG cables Limited with the company. The company has set up a training centre at Butibori with facility of residental and non-residental training. The company obtained orders from new markets like Cameroon and Peru, thereby widening its global presence and made a successfully re-entry in Kuwait. Large orders secured from Algeria Mali, Abu Dhabi, Kuwait and Oman. In the year 2011, the company entered into the 400 KV sub-station segment and secured two orders worth Rs. 130 crore from PGCIL. The company acquired Jay Railway Signating Priviate Limited, which shall help us in building pre-qualification for the signating projects. The company diversified into the water Resource Management business Vertical during the current financial year to leverage expertise in project management and EPC infrastructure space. In the year 2012, Net Sales increased by 16.12% to Rs.4604.33 crore in this year and Net Profit increased by 23.62% to Rs. 181.84 Crore. Transmission business entered into DR Congo by securing order of Rs.213 Crore. The company has gradually ventured into new business- power systems, cables, railways and water. It's order book from these business incerased from Rs 1173 Crore in FY10 to Rs 2343 crore in FY12. During the year 2015, the Company completed the prestigious Haldia River Crossing project in West Bengal. The project included construction of two of the tallest (775 feet) and heaviest towers (each weighing more than 1790 MT) on the Hoogly River. This project reaffirms the Company's capability to execute challenging projects in difficult terrains and adverse weather conditions. The Company also expanded its domestic presence in Substation business by securing large and prestigious orders for the establishment of various Gas Insulated Substations (GIS). A 765 kV GIS in Thiruvalam, Tamil Nadu constructed by KEC has been commissioned by PGCIL during the year, and this is the second GIS Sub Station in India. The Company also expanded its strong global EPC expertise in the Americas through its wholly owned subsidiary SAE Towers by securing five transmission EPC projects in Brazil.During the year ended 31 March 2015, the Company consummated the transaction for sale of its surplus land at Thane near Mumbai for a total consideration of Rs. 212.35 crore. Further the Company entered into agreement for sale of its telecom assets in the states of Chhattisgarh, Meghalaya and Mizoram. Jay Railway Projects Private Limited, a wholly owned subsidiary of the Company, merged with the Company on 30 December 2015, with appointed date of 1 April 2014. Further, during the year under review, SAE Towers Panama Holdings LLC and SAE Towers Panama S de RL Panama, step down subsidiaries, were dissolved. During the year 2016, the Company had incorporated a subsidiary Company namely KEC Bikaner Sikar Transmission Private Limited as a Special Purpose Vehicle (SPV), to execute a project awarded to the Company by Rajasthan Rajya Vidyut Prasaran Nigam Limited in the State of Rajasthan. The Company's Water Business having a significant component of Civil and Structural Engineering was merged with the Civil Business with effect from 1 April 2017 with a view to drive further synergies and manage efficiencies. In Water business, the Company closed most of its legacy projects and is currently focusing on complete integrated Water and Waste Water/ Sewage Treatment projects including Embankment & Flood Control, Sewage & Industrial Effluent Treatment and Potable Water Treatment & Distribution in FY 2017. In FY 2017, five step down subsidiaries of the Company located at Delaware, USA namely KEC International Holdings LLC, KEC Brazil LLC, KEC Mexico LLC, KEC Transmission LLC and KEC US LLC have been merged with SAE Towers Holdings LLC, a step down subsidiary at Delaware, USA with effect from 29 September 2017. The Company acquired 2.10% shares in Al Sharif Group & KEC Limited Company, a Joint Venture company located in Saudi Arabia. Consequent to such acquisition, the shareholding of the Company increased from 49% to 51.10% and the Joint Venture Company became a subsidiary of the Company with effect from 26 March 2018. In the South- American region, the Company signed two large EPC contracts to execute 546 km of transmission lines in Brazil during FY 2018. The Company successfully expanded its client portfolio to include CORE, RVNL, IRCON, RITES and PGCIL. It succeeded in diversifying its project portfolio, with about 70% of its order book comprising of composite and signaling & telecommunication works in FY 2018. In Civil business, the Company successfully executed four complex silos with Slipform and climbing formwork technologies, thereby achieving faster execution and superior quality. Several exclusive tie-ups with OEMs for strategic equipment like batching plants, tower cranes and other equipment has proved beneficial in reducing mobilization time and fast-tracking project execution in FY 2018. During FY 2018, the Company successfully entered the international Solar EPC market by commissioning a ground mount project in the Kingdom of Saudi Arabia. During FY 2018, the Company consolidated its manufacturing footprint by shifting operations from its manufacturing plant at Silvassa to Vadodara, thus creating an integrated facility offering the entire gamut of products ranging from EHV, HT and LT Cables. The Company secured its largest ever EHV order for 220 kV cables from Power Grid Corporation of India Limited, helping it establish pre-qualification for similar cables, as well as cabling projects.

K E C International Ltd Chairman Speech

Chairman Statement

The Directors have pleasure in presenting the Ninth Annual Report, along with the audited accounts of the Company, for the year ended March 31, 2014.

1. Financial Results

Rs in crore
Particulars Consolidated Standalone
FY14 FY13 FY14 FY13
Net Revenue from Operations 7,901.83 6,979.49 6,558.77 5,592.08
EBITDA 493.27 381.40 372.89 231.09
Finance Cost 263.27 194.40 231.42 164.81
Depreciation & Amortisation 70.52 56.08 55.42 43.05
Profit Before Tax 155.10 146.83 150.86 43.74
Tax Expenses 88.34 81.79 65.27 39.18
Profit After Tax 66.75 65.04 85.59 4.56
Proposed Dividend on equity shares 18.05 15.22 18.05 15.03
(including tax on dividend)
Transfer to General Reserve 8.56 0.45 8.56 0.45

2. Dividend

The Board of Directors has recommended a dividend of Rs 0.60 per equity share of Rs 2 each for the year ended March 31, 2014, on the equity share capital of the Company, aggregating to Rs 15,42,53,022 (Rupees Fifteen Crore Forty Two Lacs Fifty Three Thousand Twenty Two only). The dividend on equity shares is subject to the approval of the members at the ensuing Annual General Meeting. Further the Board of Directors proposes to transfer an amount of Rs 8.56 crore to the General Reserve.

3. Performance

Financial Performance

On a consolidated basis, the net revenue from operations increased by 13.21% to

Rs 7,901.83 crore. The net Profit increased by 2.6% to Rs 66.75 crore. On a standalone basis, the net revenue from operations increased by 17.29% to Rs 6,558.77 crore, while the net Profit was Rs 85.59 crore in FY14, as compared to Rs 4.56 crore in FY13.

During the year under review, several measures have been taken for improving the performance of the Company and to secure new orders across various businesses and geographies. The order intake for the year increased by 13.34% to Rs 8,482 crore. The closing order book has increased by 7.7% to Rs 10,200 crore by FY14 end.

While the transmission business continued to perform well both in terms of revenue and Profitability, the overall Profitability of the Company on consolidated basis was impacted due to revenue de-growth in the wholly owned subsidiary

SAE Towers. It was also impacted due to time and cost overruns in Railways, Power Systems and Water businesses. In the Cables business Profitability was impacted due to pricing pressure as also higher costs at the new manufacturing facility established at Vadodara.

Operational highlights

The key highlights for the Company’s various businesses are as follows:

Power Transmission & Distribution: This is the Company’s largest business vertical which provides end-to-end solutions for power evacuation from generating stations to consumer distribution points.

The order intake for the business increased by 12.1% to Rs 6,951 crore. The orders came from across all the regions. These also include large value orders from Tanzania Rs (772 crore), Saudi Arabia (Rs 708 crore) and Afghanistan (Rs 590 crore).

The Company is also leveraging its strong global EPC expertise along with a local foothold in American market through SAE Towers. During FY14, SAE towers entered in EPC business and secured two transmission line EPC orders in Brazil. These orders were of approx. Rs 94 crore.

The Company also expanded its international presence in Substation space by securing orders in Laos, Philippines, Malaysia, Saudi Arabia and Afghanistan during the year. Further, the Company has increased its presence in Gas Insulated Substations (GIS) by securing a

Rs 102 crore order in Bihar.

SAE Towers completed expansion of its pole production capacity at its existing facility in Mexico from 5,000 MTs to 12,000 MTs per annum. In addition to this, the Company has also completed expansion of its tower manufacturing capacity at its existing facilities in Jaipur, Jabalpur and Nagpur from 1,74,000 MTs to 2,11,200 MTs per annum.

Cables: Consequent upon the commencement of the new plant at Vadodara, the manufacturing facility at Thane has been closed down and the Company has entered into an agreement for sale of this land. The complete range of products manufactured at Thane plant are now being manufactured at the Vadodara plant. The annual order intake for the business increased by 26.5% to Rs 855 crore in FY14.

Railways: The Company has secured a large composite order from the Rail Vikas Nigam Limited, India. The order includes electrification, civil works, signalling and telecommunication works in the state of Uttar Pradesh and the order value is Rs 228 crore. The Company also intends to target projects related to Metro and dedicated freight corridors in partnerships with other Indian and foreign players.

Water: The Company secured two Sewage Treatment orders in Bengaluru and Uttarakhand of total Rs 205 crore. In addition to this, it secured its first ever Dam construction order in Madhya Pradesh of Rs 99 crore. Further, it also secured Canal construction orders in Madhya Pradesh of

Rs 75 crore. Based on orders in hand and execution in FY14, the Company is also building its pre-qualification base in this business.

4. Listing

The Equity Shares of the Company continue to remain listed on BSE Limited and National Stock Exchange of India Limited. Further during the year the Company has listed its equity shares on MCX Stock Exchange Limited. The stipulated listing fees for FY15 have been paid to all the above Stock Exchanges.

5. Fixed Deposits

The Company has not accepted any deposits within the meaning of Sections 58A and 58AA of the Companies Act, 1956, and the Rules framed thereunder and any re-enactments thereof.

6. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided in the prescribed format as an annexure to this Report.

7. Management Discussion and Analysis and Corporate Governance Report

In compliance with Clause 49 of the Listing Agreement entered into with the Stock Exchanges, a separate section on Management Discussion and Analysis, as approved by the Board of Directors, which includes details on the state of affairs of the Company as required to be disclosed in the Directors’ Report forms a part of this Annual Report. Further, the Corporate Governance Report, duly approved by the Board of Directors, together with a certificate from the Statutory Auditors confirming the compliance with the requirements of Clause 49, also forms a part of this Annual Report.

8. Subsidiary Companies

At the beginning of FY14, the Company had twenty two direct and step down subsidiary companies. One step down subsidiary company has been incorporated in Mexico to explore the business opportunities in EPC business. Accordingly, the number of direct and step down subsidiaries of the Company stands increased to twenty three as on the date of this Report. The details pertaining to subsidiaries are mentioned under the statement made pursuant to Section 212 of the Companies Act, 1956, which forms a part of this Annual Report.

Ministry of Corporate Affairs vide Circular No: 02 / 2011 dated February 08, 2011, has, subject to compliance with certain conditions, granted general exemption to the companies from applicability of Section 212 of the Companies Act, 1956. As per the general exemption, a statement containing brief financial details of the Company’s subsidiaries for the year ended March 31, 2014, is included in this Annual Report. The Annual Accounts of these subsidiaries and the related detailed information will be made available to any Member of the Company / its subsidiaries seeking such information at any point of time and are also available for inspection by any Member of the Company / its subsidiary(ies) at the Registered Office of the Company / its subsidiary(ies).

9. Consolidated Financial Statements

In accordance with Clause 32 of the Listing Agreement entered into with the Stock Exchanges, the Consolidated Financial Statements of the Company, including the financial details of all the subsidiary companies of the Company, forms part of this Annual Report. The consolidated Financial Statements have been prepared in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India.

10. Directors

In accordance with the provisions of the Companies Act, 2013,Mr.H.V.GoenkaandMr.A.T.Vaswani,areliabletoretire by rotation and eligible for re-appointment at the ensuing Annual General Meeting. Further the Board of Directors has appointed Mr. Vinayak Chatterjee as an Additional Director w.e.f. April 30, 2014. Pursuant to Section 161 of the Companies Act, 2013, and Article 124 of the Articles of Association of the Company, Mr. Vinayak Chatterjee holds Office upto the date of the ensuing Annual General Meeting of the Company and is eligible for appointment as Director. Further as per the provisions of the Companies Act, 2013, the independent directors of the Company will have to be appointed by the members for a term upto five years, and no independent director shall be liable to retire by rotation. Further Mr. S. S. Thakur, Mr. G. L. Mirchandani, Mr. D. G. Piramal, Mr. S. M. Kulkarni, Mr. S. M. Trehan and Mr. Vinayak Chatterjee have given declaration to the Company under Section 149(6) of the Companies Act, 2013, that they qualify the criteria of independence mentioned under that sub-section. Accordingly it is proposed to appoint them as independent directors not liable to retire by rotation for a term of five years from the ensuing Annual General Meeting.

In view of the provisions of Section 165 of the Companies Act, 2013, which restricts the directorship of a director in ten public limited companies and the proposed amendment to the Listing Agreement entered into with the Stock Exchanges, which restricts the directorships of independent directors to seven listed companies only, Mr. M. K. Sharma, who was a director of the Company resigned from his Office w.e.f. March 31, 2014. The Board places on record its sincere appreciation for the valuable services rendered by Mr. M. K. Sharma during his tenure as the Member of the Board.

In compliance with Clause 49 IV (G) of the Listing Agreement, brief resume, expertise and other details of all the directors proposed to be appointed / re-appointed are attached to the Notice of the ensuing Annual General Meeting.

The Board of Directors recommends to the members the appointment of the above referred independent directors and the re-appointment of Mr. H. V. Goenka and Mr. A. T. Vaswani as the directors of the Company.

11. Auditors

Statutory Auditors

In view of the provisions of Section 139 of the Companies Act, 2013, and the Rules made thereunder, a listed company cannot appoint an audit firm as the Auditors of the Company for more than two terms of five consecutive years and which shall be subject to ratification by the members at every Annual General Meeting. For reckoning this term, the period already served by the firm as auditors shall be counted. According to the Illustration 2 appended to sub-rule 3 of Rule 6 of the Companies (Audit and Auditors) Rules, 2014, every firm of the Auditors who has completed 7 or more years as an Auditor of the prescribed classes of companies (including listed companies), can be appointed as an Auditor for a further period upto three years only. Accordingly Delloitte Haskins & Sells (DHS) is entitled to be appointed as Statutory Auditors of the Company for a further period upto three years. In view of the same it is proposed to appoint DHS as the Statutory Auditors of the Company to hold Office from the conclusion of the ensuing Annual General Meeting until the conclusion of the Twelfth Annual General Meeting and to authorise the Board of Directors to fix their remuneration. The Company has received a letter from DHS to the effect that their appointment, if made, would be within the limits prescribed under the provisions of the Companies Act, 2013 and that they are not disqualified for such appointment within the meaning of the said Act. The Board of Directors recommends the appointment of DHS as the Statutory Auditors of the Company for a period of three years.

Branch Auditors

In terms of Section 143(8) of the Companies Act, 2013, the audit of the accounts of the branch Offices of the Company located outside India is required to be conducted by the person(s) or firm(s) qualified to act as Branch Auditors. The Board of Directors recommends to the members to pass the resolution, as stated in Item No.6 of the Notice, convening the ensuing Annual General Meeting.

Cost Auditors

The Central Government has approved the appointment of M/s. Kirit Mehta & Co., Cost Accountants, Mumbai, as Cost Auditors, for conducting Cost Audit in relation to Electrical Cables and Conductors and Steel Towers manufactured by the Company for FY14 under The Companies (Cost Accounting Records) Rules, 2011. The Cost Audit Report and the Compliance Report for FY13 was filed by the Cost Auditors with the Ministry of Corporate Affairs on September 30, 2013.

12. Policy on Code of Conduct and Ethics

The RPG Group has laid down a Code of Conduct and Ethics (Code) applicable to all the employees in RPG Group companies. The Code provides for the matters related to governance, compliance, ethics and other matters within the RPG Group companies. The Code also includes the policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace in accordance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

13. Awards Received During the Year

For FY 14 the Company was conferred with the ‘Utkrishta Puraskar’ i.e. Best Transmission Line Company Award and ‘Sahbhagita Puraskar’ i.e. Support Outside Line of Duty Award from Power Grid Corporation of India Limited. Further the Company also won the prestigious, "Best Employer Award, 2013" by Aon Hewitt and the "Indo-American Corporate Excellence Award" by the Indo-American Chambers of Commerce for best Indian company operating in US. The details of these Awards & Recognition are mentioned on page 18 & 19 of this Annual Report

14. Directors’ Responsibility Statement

The Board of Directors would like to affirm that the financial statements for the year under review conform in their entirety to the requirements of the Companies Act, 1956. As stipulated in Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the annual accounts for the year ended March 31, 2014, the applicable Accounting Standards have been followed; (ii) such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Profit of the Company for the year under review; (iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) the annual accounts for the financial year ended March 31, 2014, have been prepared on a going concern basis.

15. Particulars of Employees

In terms of provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors’ Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report, excluding the aforesaid information, is being sent to all the members of the Company and others entitled thereto. Members who are desirous of obtaining such particulars are requested to write to the Company Secretary of the Company.

16. Acknowledgement

Your Directors take this opportunity to thank the Customers, Vendors, Financial Institutions, Banks and all other stakeholders for their continued co-operation and support to the Company. Further the Directors would also like to thank the Central and State Government authorities and Regulatory authorities for their support.

Your Directors appreciate and value the trust reposed and faith shown by every shareholder of the Company.

Last but not least the Board wishes to place on record its deep gratitude to all its employees whose enthusiasm, team efforts, devotion and sense of belongingness has made this Company proud.

For and on behalf of the Board of Directors
H. V. Goenka
Chairman
Place: Mumbai
Date: April 30, 2014

 

   

K E C International Ltd Company History

KEC International Limited is the largest Power Transmission Company in the world, which was incorporated in 18th March of the year 2005. The Company is primarily engaged in Engineering, Procurement and Construction business (EPC) relating to infrastructure interalia products, projects and systems for power transmission, distribution, railways and related activities. As on March 31, 2018, the Company has seventeen subsidiaries comprising of seven direct subsidiaries and ten step down subsidiaries. The Cables business has a significant presence in the International market with exports to more than 40 countries. The flagship company in the transmission sector of the RPG Group, KEC strengths its presence in the areas of Design, Manufacture, Supply and Construction of Turnkey Projects of Power Transmission lines of voltages upto 800 KV and in the execution of Railway Electrification projects, setting up sub-stations and Power Distribution Networks, Optical Fibre Cable (OPGW) installations, Turnkey Telecom Infrastructure Services and maintenance of Power Transmission Lines. With global operations spanning over 20 countries, the company is present in India, UAE, Libya, Ghana, Algeria, Afghanistan, Nigeria, Kazakhstan, Mali, Oman, South Africa, Kenya and Ethiopia among several other countries. The Company forayed into distribution market in the year 2005 itself and bagged noteworthy electrification projects across the globe. The Company had secured new orders worth Rs339 crore from Afghanistan and Ethiopia in December of the year 2005. During May of the year 2006, KEC had entered into the North American market with a joint venture with US-based Power Engineers Inc. KEC Power Inc. (KPI) the new company formed in the US is a 50:50 joint venture, based in the state of Idaho. The Company had bagged a major Rs. 380 crore worth of order in Kazakhstan during May of the year 2007. The Scheme of Arrangement between KEC, RPG Transmission (RPGT) & National Information Technologies Limited (NITEL) and MP Power Line Limited, now called Octav Investments Ltd., became effective from 1st October of the year 2007. During the year 2007-08, the company completed 21 projects in the South Asian markets and 15 projects in International markets. In the same year, RPG Transmission Nigeria Limited, the subsidiary company of the erstwhile RPG Transmission Limited at Nigeria became the subsidiary of the company. As at February 2008, KEC had received the Amity Corporate Excellence award at the International Business Summit and Research Conference. A joint venture company named KEC Power India Private Limited' with M/s. Power Holdings Inc., USA as a joint venture partner was incorporated in the state of Maharashtra in the month of March 2008 to provide services like conceptualizing, designing, developing power transmission and distribution lines, sub-stations and all types of power generating projects. The Company bagged two orders worth of Rs. 124 crores from NTPC Electric Supply Company Ltd. (NESCL) and Rs. 55 Crores from Power Grid Corporation of India Limited (PGCIL) in September of the year 2008. In the year 2009, the company executed several major transmission line projects as well as distribution, substation, railway electrification and telecom projects, besides entering new regions. The company entered three new geographies, Mali, Tajikistan and Australia in short time. The company won the largest ever-international order in its history valued at approximately Rs 636 Crores from Egypt. In the year 2010, the scheme of amalgamation for merger of the RPG cables Limited with the company. The company has set up a training centre at Butibori with facility of residental and non-residental training. The company obtained orders from new markets like Cameroon and Peru, thereby widening its global presence and made a successfully re-entry in Kuwait. Large orders secured from Algeria Mali, Abu Dhabi, Kuwait and Oman. In the year 2011, the company entered into the 400 KV sub-station segment and secured two orders worth Rs. 130 crore from PGCIL. The company acquired Jay Railway Signating Priviate Limited, which shall help us in building pre-qualification for the signating projects. The company diversified into the water Resource Management business Vertical during the current financial year to leverage expertise in project management and EPC infrastructure space. In the year 2012, Net Sales increased by 16.12% to Rs.4604.33 crore in this year and Net Profit increased by 23.62% to Rs. 181.84 Crore. Transmission business entered into DR Congo by securing order of Rs.213 Crore. The company has gradually ventured into new business- power systems, cables, railways and water. It's order book from these business incerased from Rs 1173 Crore in FY10 to Rs 2343 crore in FY12. During the year 2015, the Company completed the prestigious Haldia River Crossing project in West Bengal. The project included construction of two of the tallest (775 feet) and heaviest towers (each weighing more than 1790 MT) on the Hoogly River. This project reaffirms the Company's capability to execute challenging projects in difficult terrains and adverse weather conditions. The Company also expanded its domestic presence in Substation business by securing large and prestigious orders for the establishment of various Gas Insulated Substations (GIS). A 765 kV GIS in Thiruvalam, Tamil Nadu constructed by KEC has been commissioned by PGCIL during the year, and this is the second GIS Sub Station in India. The Company also expanded its strong global EPC expertise in the Americas through its wholly owned subsidiary SAE Towers by securing five transmission EPC projects in Brazil.During the year ended 31 March 2015, the Company consummated the transaction for sale of its surplus land at Thane near Mumbai for a total consideration of Rs. 212.35 crore. Further the Company entered into agreement for sale of its telecom assets in the states of Chhattisgarh, Meghalaya and Mizoram. Jay Railway Projects Private Limited, a wholly owned subsidiary of the Company, merged with the Company on 30 December 2015, with appointed date of 1 April 2014. Further, during the year under review, SAE Towers Panama Holdings LLC and SAE Towers Panama S de RL Panama, step down subsidiaries, were dissolved. During the year 2016, the Company had incorporated a subsidiary Company namely KEC Bikaner Sikar Transmission Private Limited as a Special Purpose Vehicle (SPV), to execute a project awarded to the Company by Rajasthan Rajya Vidyut Prasaran Nigam Limited in the State of Rajasthan. The Company's Water Business having a significant component of Civil and Structural Engineering was merged with the Civil Business with effect from 1 April 2017 with a view to drive further synergies and manage efficiencies. In Water business, the Company closed most of its legacy projects and is currently focusing on complete integrated Water and Waste Water/ Sewage Treatment projects including Embankment & Flood Control, Sewage & Industrial Effluent Treatment and Potable Water Treatment & Distribution in FY 2017. In FY 2017, five step down subsidiaries of the Company located at Delaware, USA namely KEC International Holdings LLC, KEC Brazil LLC, KEC Mexico LLC, KEC Transmission LLC and KEC US LLC have been merged with SAE Towers Holdings LLC, a step down subsidiary at Delaware, USA with effect from 29 September 2017. The Company acquired 2.10% shares in Al Sharif Group & KEC Limited Company, a Joint Venture company located in Saudi Arabia. Consequent to such acquisition, the shareholding of the Company increased from 49% to 51.10% and the Joint Venture Company became a subsidiary of the Company with effect from 26 March 2018. In the South- American region, the Company signed two large EPC contracts to execute 546 km of transmission lines in Brazil during FY 2018. The Company successfully expanded its client portfolio to include CORE, RVNL, IRCON, RITES and PGCIL. It succeeded in diversifying its project portfolio, with about 70% of its order book comprising of composite and signaling & telecommunication works in FY 2018. In Civil business, the Company successfully executed four complex silos with Slipform and climbing formwork technologies, thereby achieving faster execution and superior quality. Several exclusive tie-ups with OEMs for strategic equipment like batching plants, tower cranes and other equipment has proved beneficial in reducing mobilization time and fast-tracking project execution in FY 2018. During FY 2018, the Company successfully entered the international Solar EPC market by commissioning a ground mount project in the Kingdom of Saudi Arabia. During FY 2018, the Company consolidated its manufacturing footprint by shifting operations from its manufacturing plant at Silvassa to Vadodara, thus creating an integrated facility offering the entire gamut of products ranging from EHV, HT and LT Cables. The Company secured its largest ever EHV order for 220 kV cables from Power Grid Corporation of India Limited, helping it establish pre-qualification for similar cables, as well as cabling projects.

K E C International Ltd Directors Reports

To the Members of KEC International Limited

The Directors are pleased to present the Fifteenth Annual Report of the Company together with Consolidated and Standalone Audited Financial Statements of the Company for the financial year ended on March 31,2020.

1. FINANCIAL RESULTS

Particulars (Rs. in Crore)

Consolidated

Standalone

FY 2019-20 FY 2018-19 FY 2019-20 FY 2018-19
Revenue from Operations 11,965.37 11,000.55 10,470.62 10,117.80
EBITDA 1,234.35 1,149.91 1,126.06 1,086.74
Finance Cost 307.98 311.87 276.96 284.15
Depreciation & Amortisation 147.20 117.13 117.69 105.52
Profit Before Tax 790.27 756.94 745.28 735.19
Tax Expenses 224.75 261.17 199.55 237.50
Profit After Tax 565.52 495.77 545.73 497.69
Dividend on equity shares (including tax on dividend)* 105.38 83.68 105.38 83.68

*Interim Dividend declared on February 07, 2020.

2. PERFORMANCE

Financial Performance

On a consolidated basis, the Company achieved a turnover of Rs. 11,965 Crore in FY 2019-20 with a 9 percent growth over FY 2018-19. The growth would have been higher however, disruption caused by the COVID-19 pandemic affected performance in the latter half of March 2020. Power Transmission & Distribution (T&D) business and Railways business were the primary growth drivers during FY 2019-20. EBITDA margins for FY 2019-20 stood at 10.3 percent, with EBITDA growth of 7 percent over FY 2018-19. The net profit for FY 2019-20 was Rs.566 Crore as against Rs496 Crore in FY 2018-19, a growth of 14 percent. The Company achieved a reduction in Interest costs through better working capital management and reduction of high cost loans. On a standalone basis, the Company achieved a turnover of Rs.10,471 Crore and a net profit of Rs.546 Crore.

During the year, the Company secured orders of Rs.11,331 Crore, ending the year with a robust order book of Rs.20,503 Crore. The orders were primarily driven by the Non-T&D businesses as the Company forayed into the fast-expanding Urban Transport sector and bagged multiple orders from reputed customers.

Power Transmission & Distribution (T&D) - The Power Transmission and Distribution business continues to be the Company's largest business vertical, which includes turnkey construction of power transmission lines as well as the construction of Gas Insulated Substations (GIS) and Air Insulated Substations (AIS). During the year, the business surpassed turnover of Rs.8,000 Crore with a growth of 12 percent backed by robust execution in Americas, UAE and SAARC region. In line with the diversification and de- risking strategy, the Company has expanded footprint into three new countries in Africa this year.

Railways - The Railways business continued its growth momentum, as it crossed a turnover of Rs.2,500 Crore for the first time with a growth of 33 percent over last year. During the year, the business diversified its portfolio to include RRTS (Regional Rapid Transit System) and Road over bridge (ROB) projects in addition to the existing offerings of Overhead Electrification and composite projects.

Civil - During the year, the Civil business faced headwinds on account of muted industrial capex cycle in India and challenges faced by the Realty sector. However, the business has scaled up its order book significantly to over Rs.2,700 Crore, backed by 3 metro projects for DMRC and Kochi Metro. The business continued its diversification strategy and secured entry into the Defence sector with two orders including one for the construction of a Data Centre.

Solar - During the year, the Company successfully commissioned its single largest project in terms of capacity, a 150 MWp ground mount project in Rajasthan. The business has also secured an order to construct the largest carport project in India. The domestic market continued to remain challenging during the year on account of lower capex.

Smart Infra - In its second year of operations, the business continued execution of two Smart City projects in Maharashtra, secured last year.

Cables - The Cables business witnessed a slowdown during the year, owing to the unprecedented COVID-19 pandemic and decrease in metal and optical fibre prices. However, the business recorded improved margins across product segments, driven by innovation in product design and increased efficiency in manufacturing operations.

3. DIVIDEND

The Board of Directors had during the year approved payment of interim dividend at the rate of Rs.3.40 per equity share i.e. 170 percent of the nominal value of Rs.2/- each for the financial year ended March 31, 2020 (previous year final dividend of Rs.2.70 per equity share of nominal value of Rs.2/- each). The record date for the payment of interim dividend was fixed as February 15, 2020 and interim dividend was paid on February 24, 2020. This involved a cash outflow of Rs.87.41 Crore, excluding Dividend Distribution Tax of Rs.17.97 Crore. The said Dividend Distribution Tax on the dividend has been set off to the extent of the income tax paid by the Company on the dividend received by the Company from its subsidiaries during FY 2019-20.

With a view to conserve resources for future expansion and business growth, the Board of Directors does not recommend any further dividend and that the interim dividend be considered as final dividend for the financial year ended on March 31,2020.

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 is enclosed herewith as Annexure ‘A', and is also available on the website of the Company at https://www.kecrpg.com/policies.

4. SHARE CAPITAL

The paid-up Equity Share Capital of the Company as on March 31, 2020 was Rs.51.42 Crore. There was no change in the share capital during the year under review.

5. DEBENTURES

As on March 31, 2020, the Company has 2,500 secured, rated, listed, non-convertible, redeemable, taxable Debentures (Series I, II and III) of the face value of Rs.10,00,000/- each aggregating to Rs.250 Crore, issued on a private placement basis. The redemption/repayment is in accordance with the terms of the respective Series of Debentures. These Debentures are listed on BSE Limited. The Company has redeemed 1,500 Debentures (Series I) on April 20, 2020, being the due date of redemption.

6. DEPOSITS

The Company has not accepted any deposits within the meaning of sub-section (31) of Section 2 and Section 73 of the Companies Act, 2013 ("the Act") and the Rules framed thereunder. As on March 31, 2020, there were no deposits lying unpaid or unclaimed.

7. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The loans given, investments made and guarantees given & 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. MANAGEMENT DISCUSSION AND ANALYSIS REPORT, CORPORATE GOVERNANCE REPORT AND BUSINESS RESPONSIBILITY 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.

9. 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 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.

10. SUBSIDIARY AND ASSOCIATE COMPANIES

The Company has seventeen subsidiaries as on March 31, 2020 comprising of eight direct subsidiaries and nine step- down subsidiaries. It also has one associate company in India. During the year under review, the Company has acquired 100 percent shareholding of its step-down subsidiary KEC International (Malaysia) SDN. BHD, thereby making it a direct subsidiary of the Company. The Company has liquidated an inoperative step-down Joint Venture company in Malaysia.

During the year under review, the Company has incorporated a wholly owned subsidiary in Dubai namely KEC Towers LLC on November 24, 2019. The Company, through this subsidiary has acquired its eighth manufacturing unit, a state-of-the-art 50,000 MTPA tower manufacturing facility in Dubai, taking its total tower manufacturing capacity to 4,22,200 MTPA, making the Company one of the largest globally operating T&D player. The facility is yet to start operations.

Performance Highlights

The Company has six operating subsidiaries, three subsidiaries functioning as special purpose vehicles and eight subsidiaries are non-operating companies. Further, the Company has one associate company which is a company incorporated under Section 8 of the Act for the welfare of the past employees.

The performance highlights of operating subsidiaries and their contribution to the overall performance of the Company during the financial year ended March 31,2020 are as under:

Subsidiary

Performance during FY 2019-20 (Rs. In Crore)

Contribution to overall performance of the Company (%)

Revenue Profit After Tax Revenue Profit After Tax
Al Sharif Group & KEC Ltd. Co. 235.02 5.23 1.96 0.92
SAE Towers Brazil Torres de Transmisao Ltda. 1,227.20 33.44 10.26 5.91
SAE Towers Mexico, S de RL de CV 304.28 (2.81) 2.54 (0.50)
SAE Prestadora de Servicios Mexico, S de RL de CV 56.37 0.70 0.47 0.12
SAE Towers Ltd. 201.99 0.40 1.69 0.07
KEC International (Malaysia) SDN. BHD 87.74 4.48 0.73 0.79

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, which forms part of the Financial Statements section of the Annual Report. 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.

Pursuant to SEBI Listing Regulations, the Company has formulated a policy for determining its ‘material subsidiaries'. The said Policy is uploaded on the website of the Company at https://www.kecrpg.com/policies.

11. 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 31,2020, 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, 2020 and of the profit of the Company for the year ended on March 31,2020;

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, 2020 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.

12. DIRECTORS & KEY MANAGERIAL PERSONNEL

12.1 Directors

Retirement/ Cessation:

During the year under review, Mr. S.M. Kulkarni, Independent Director retired from the Board of the Company with effect from July 27, 2019. Further, Ms. Manisha Girotra and Mr. Vinayak Chatterjee, Independent Directors of the Company ceased to be Directors of the Company pursuant to their resignation from the directorship of the Company with effect from the close of business hours on June 11, 2019 and August 12, 2019 respectively, on account of their professional commitments. They have confirmed that there was no material reason other than that mentioned above.

The Board has placed on record its appreciation for the valuable contributions made by Mr. Kulkarni, Ms. Girotra and Mr. Chatterjee during their association as Directors of the Company.

Appointment / Re-appointment:

During the year under review, Mr. G.L. Mirchandani, Mr. D.G. Piramal and Mr. S.M. Trehan were re-appointed as "Independent Directors" for the second term of five consecutive years commencing from July 28, 2019 up to July 27, 2024. Mr. Ramesh Chandak was also made as an Independent Director on the Board with effect from May 08, 2019 for the first term of 5 years. Mr. Vimal Kejriwal, Managing Director and CEO was re-appointed as "Managing Director and CEO" of the Company with effect from April 01, 2020 for a further period of two years.

All the above appointment/re-appointments were approved by the Members of the Company at the last Annual General Meeting by passing the requisite resolutions in this regard.

With a view to further strengthen the Board of the Company, pursuant to the provisions of Section 149 of the Act and the SEBI Listing Regulations, the Board appointed Mr. Vikram Gandhi and Mr. M. S. Unnikrishnan as Additional and Independent Directors of the Company for a period of five years with effect from August 07, 2019 and

November 08, 2019 respectively, subject to the approval of the Members of the Company at the ensuing Annual General Meeting.

Mr. A.T. Vaswani and Ms. Nirupama Rao, who were appointed as "Independent Directors" by the Members at the Tenth Annual General Meeting of the Company effective July 29, 2015 for a period of five years up to July 28, 2020, will be completing their first term as Independent Directors and are eligible for re-appointment for a second term of five years.

The evaluation of Independent Directors was conducted by the entire Board of Directors (excluding the Director being evaluated). Based on the evaluation, the Nomination and Remuneration Committee and the Board of Directors of the Company at their respective meetings held on May 28, 2020 and May 29, 2020 have recommended the re-appointment of Mr. A.T. Vaswani and Ms. Nirupama Rao, as Independent Directors, not liable to retire by rotation, for a second term of five consecutive years commencing from July 29, 2020 upto July 28, 2025, subject to approval of the Members by special resolution at the ensuing Annual General Meeting of the Company. The said Directors have given their consent for re-appointment and have also confirmed that they retain the status as Independent Directors and do not suffer from any disqualifications for re-appointment.

Pursuant to the provisions of sub-section (6) of Section 152 of the Act, Mr. H. V. Goenka, Chairman, 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, brief resume, expertise and other details of the 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 were Key Managerial Personnel of the Company as on March 31, 2020:

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

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

3. Mr. Amit Kumar Gupta, Company Secretary.

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 with the criteria of independence, as provided in the Act and SEBI Listing Regulations. 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 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 confirmed that they have registered their names in the data bank maintained with the Indian Institute of Corporate Affairs (‘IICA'). In terms of Section 150 of the Act read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014, the Independent Directors are required to undertake online proficiency self-assessment test conducted by the IICA within a period of one year from the date of inclusion of their names in the data bank. The Independent Directors to whom the provisions of proficiency test are applicable, will take the said online proficiency self-assessment test in due course.

12.4 Board Evaluation

The Board has carried out annual performance evaluation of its own performance, the Directors individually and of its Committees as mandated under the Act and SEBI Listing Regulations. 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.

The Directors were provided with an electronic platform to record their views and a consolidated report was generated by the agency based on the views expressed by all the Directors. The reports generated out of the evaluation process were placed before the Board at its meeting and noted by the Directors.

Further, a meeting of Independent Directors was held on May 27, 2020 to review the performance of the Chairman, Non-Independent Director 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 with the Chairman of the Company.

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 subsection (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 ‘B'.

12.7 Meetings of the Board of Directors

During the year under review the Board of Directors met four 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 seven 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

Price Waterhouse Chartered Accountants LLP, Chartered Accountants (Firm's Registration No. 012754N/N500016) ("PwC"), were appointed as the Statutory Auditors of the Company to hold office for a period of five years from the conclusion of the Twelfth Annual General Meeting until the conclusion of the Seventeenth Annual General Meeting. The requirement of seeking ratification of appointment of the Statutory Auditors by the Members at every Annual General Meeting has been done away with effective May 07, 2018 by making amendment to the provisions of the Companies Act, 2013 by the Ministry of Corporate Affairs and accordingly PwC continue to hold the office of Statutory Auditors for FY 2020-21.

The Statutory Auditors' Report for the FY 2019-20 does not contain any qualifications, reservations, adverse remarks or disclaimer and no frauds were reported by the Auditors to the Company under sub-section (12) of Section 143 of the Act.

13.2 Branch Auditors

In terms of provisions of sub-section (8) of Section 143 of the Act read with Rule 12 of the Companies (Audit and Auditors) Rules, 2014, the audit of the accounts of the branch offices of the Company located outside India is required to be conducted by the person(s) or firm(s) qualified to act as Branch Auditors in accordance with laws of that country. The Board of Directors seek approval of the Members to authorise the Board of Directors/Audit Committee to appoint Auditors for the branch offices of the Company and also to fix their remuneration. The Board of Directors recommends to the Members the resolution, as stated in Item No.4 of the Notice convening the ensuing Annual General Meeting.

13.3 Cost Auditors

In terms of the provisions of Section 148 of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the cost records, in respect of manufacturing of Steel towers and Cables, are required to be audited by a qualified Cost Accountant. The Cost Auditors' Report does not contain any qualifications, reservations, adverse remarks or disclaimer. The Board of Directors, upon the recommendation of the Audit Committee, has appointed M/s. Kirit Mehta and Associates, Cost Accountants (Firm's Registration No.: 000353) to conduct audit of the cost records of the Company for the FY 2019-20. In accordance with the above provisions, the remuneration payable to the Cost Auditor is required to be ratified by the Members in a General Meeting. Accordingly, the Board of Directors recommends to the Members, the resolution as stated in Item No.5 of the Notice convening the ensuing Annual General Meeting.

The Company has filed the Cost Audit Report for the FY 2018-19 with the Ministry of Corporate Affairs on September 05, 2019.

13.4 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 2019-20. The Secretarial Audit Report in Form MR-3 is annexed to this report as Annexure ‘C'. 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. CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility ("CSR") Committee of the Directors inter alia gives strategic direction to the 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. Details of the composition of the CSR 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 health, water, sanitation, promoting education, skill development 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 was required to spend 2 percent of the average net profits for the preceding three financial years calculated in terms of the provisions of Section 198 of the Act and has therefore made contributions to the Implementing Agency. The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure ‘D'.

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

The Company has adopted the RPG Code of Corporate Governance & Ethics ("RPG Code") applicable to all the Directors and employees of the Company. The Code provides for the matters related to governance, compliance, ethics and other matters.

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. 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.

An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this Policy and the Policy is gender neutral. 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, its employees to voice their concerns or observations without fear, or raise reports of instance of any unethical or unacceptable business practice or event of misconduct/unethical behavior, actual or suspected fraud and violation of RPG Code etc. to the Corporate Ethics and Governance Committee.

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 against victimization of persons who use such mechanism and make provision for 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 engaged in Engineering, Procurement and Construction ("EPC") business and is exposed to various risks in the areas it operates. The Company has a well-defined risk management framework in place which works at various levels across the enterprise. The risk management mechanism forms an integral part of the business planning and review cycle of the Company and it is designed to provide reasonable assurances that goals are achieved by integrating management control into daily operations, by ensuring compliance with legal requirements and by safeguarding the integrity of the Company's financial reporting and its related disclosures. The identification, analysis and putting in place the process for mitigation of these risks is an ongoing process. 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 Directors constituted by the Board inter alia reviews Enterprise Risk Management functions of the Company and is responsible for framing, implementing, monitoring and reviewing Risk Management framework of the Company. The Committee on periodical basis, validates, evaluates and monitors key risks and reviews the measures taken for risk management and mitigation and effectiveness thereof. The key business risks faced by the Company and the various 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 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. Disclosures as required under Indian Accounting Standards ("IND AS") - 24 have been made in the Note No. 54 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

Pursuant to the provisions of sub-section (3) of Section 92 and sub-section (3) of Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return as on March 31, 2020 in the prescribed Form MGT-9 is enclosed as Annexure ‘E' and the full Annual Return of the Company will be available on the website of the Company i.e., www.kecrpg.com under ‘Investors' tab.

21. ENVIRONMENT HEALTH AND SAFETY (EHS)

The Company is committed to achieving its EHS objective of providing a safe workplace for its stakeholders and has undertaken various EHS management processes and implemented them under the EHS system. 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 continues to invest in imparting industry specific EHS training with a 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 Annual Report with details on EHS objectives of the Company and various awards received by 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, are provided in the prescribed format and is enclosed as Annexure ‘F'.

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 given in Annexure ‘G'.

In terms of the provisions of sub-rules (2) and (3) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other details of the employees drawing remuneration in excess of the limits set out in these Rules forms part of the Annual Report. In terms of Section 136 of the Act, this report is being sent to the Members and others entitled thereto, excluding the aforesaid information. In terms of Section 136 of the Act, the said annexure 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 its diverse employees are its most vital and valuable assets. The Company recognises people as the primary source of its competitiveness and continues its focus on people development through digital and bespoke interventions. The Company has developed a continuous learning human resource base to unleash potential and fulfill the aspirations of the employees. The strategic thrust of Human Resource has been on improvement of the performance of employees through training & development and also to identify outperformers who have the potential for taking higher responsibilities.

The employee relations remained cordial throughout the year. The Company (excluding subsidiaries) had 5,713 permanent employees on its rolls as on March 31, 2020. The Board places on record its sincere appreciation for the valuable contribution made by employees across all levels whose enthusiasm, team efforts, devotion and sense of belonging has always made the Company proud.

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

26. ACKNOWLEDGEMENT

The Directors take this opportunity to thank the Central and State Government Departments, Organizations and Agencies for their continued support and cooperation. 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.

27. ANNEXURES

The following annexures, form part of this Report:

a. Dividend Distribution Policy - Annexure A

b. Nomination and Remuneration Policy - Annexure ‘B'

c. Secretarial Audit Report - Annexure ‘C'

d. Annual Report on Corporate Social Responsibility - Annexure ‘D'

e. Extract of Annual Return - Annexure ‘E'

f. Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo - Annexure ‘F'

g. Information under sub-rule (1) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 - Annexure ‘G'

For and on behalf of the Board of Directors
H.V. Goenka
Chairman
(DIN: 00026726)
Place: Mumbai
Date: May 29, 2020

   

K E C International Ltd Company Background

H V GoenkaVimal Kejriwal
Incorporation Year2005
Registered OfficeRPG House,463 Dr Annie Besant Road Worli
Mumbai,Maharashtra-400030
Telephone91-22-66670200,Managing Director
Fax91-22-66670287
Company SecretaryAmit Kumar Gupta.
AuditorPrice Waterhouse Chartered Accountants LLP
Face Value2
Market Lot1
ListingBSE,MSEI ,NSE,
RegistrarLink Intime India Pvt Ltd
C-101 247 Park ,L B S Marg ,Vikhroli West ,Mumbai-400083

K E C International Ltd Company Management

Director NameDirector DesignationYear
H V Goenka Chairman 2020
G L Mirchandani Independent Director 2020
D G Piramal Independent Director 2020
A T Vaswani Independent Director 2020
S M Trehan Independent Director 2020
Nirupama Rao Independent Director 2020
Vimal Kejriwal Managing Director & CEO 2020
R D Chandak Director 2020
Amit Kumar Gupta. Company Secretary 2020
Vikram S Gandhi Addtnl Independent Director 2020
M S Unnikrishnan Addtnl Independent Director 2020

K E C International Ltd Listing Information

Listing Information
BSE_500
CNX500
BSESMALLCA
BSEPOWER
CNXSMALLCA
BSEALLCAP
INDUSTRIAL
BSESMALLSE
SML250
MSL400
NFTYMSC400
NFTYSC50
NFTYSC250

K E C International Ltd Finished Product

Product NameUnit Installed
Capacity
Production
Quantity
Sales
Quantity
Sales
Value
Construction Contract- OthersNA0009141.03
CablesNA000753.67
Towers & StructuralsTon000374.79
Other Operating RevenueNA000176.04
Sale of ServicesNA00025.09
ScrapNA0000
Export IncentivesNA0000
Excise dutyNA0000
Transmission & DistributionNA0000

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