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Directors Report of KNR Constructions Ltd.

Mar 31, 2014

Dear Shareholders,

The Directors take pleasure in presenting the 19th Annual Report and the Audited Accounts for the Financial Year ended 31st March, 2014.

Financial Results Rs. in Lakhs PARTICULARS 2013-14 2012-13

Gross Income (including other income) 85030.99 70962.06 Profit before interest and depreciation 14131.02 13394.10 Less: Interest and financial charges 1719.45 1125.45 Profit Before depreciation 12411.57 12268.65 Less: Depreciation and amortization 5723.15 5566.96 Profit before tax 6688.42 6701.69

Provision for tax (including Deferred Tax) 590.17 1488.74 Profit after tax 6098.25 5212.95 Net Profit for the year 6098.25 5212.95 Profit brought forward from previous year 27456.28 22702.36 Profit available for appropriation 33554.53 27915.31

Appropriations: Transfer to General Reserve 152.00 130.00 Dividend 281.23 281.23 Dividend tax 47.80 47.80 Balance carried forward 33073.50 27456.28 Paid Up capital 2812.35 2812.35 Reserves and Surplus 48519.88 42753.24

REVIEW OF PERFORMANCE:

Your company continues to be in the business of work contracts specializing in Roads and Bridges and other infrastructure projects like irrigation projects. During the year under consideration, your company has achieved a turnover (on stand-alone basis) of Rs. 83702.90 Lakhs as against Rs. 68867.94 Lakhs in the previous year, thus registering a growth of 21.54 %. The company has earned a gross profit of Rs. 14131.02 Lakhs before interest and depreciation as against Rs. 13394.10 Lakhs in the previous year, thus registering a growth of 5.50 %. After deducting an interest of Rs. 1719.45 Lakhs, providing for Rs.5723.15 Lakhs towards depreciation, Rs. 590.17 Lakhs towards provision for income tax and deferred tax, the operations resulted in a net profit of Rs. 6098.25 Lakhs as against Rs. 5212.95 Lakhs last year, registering a decline of 16.98 %.

The order book position as on 31st March 2014 stands at Rs.12960.26 Millions.

Dividend

Your Directors have recommended a divided of Rs. 1/- per Equity share for the financial year ended 31st March 2014, amounting to Rs. 281.23 Lakhs. The dividend will be paid to the members whose names appear in the Register of Members as on 23dr September 2014 in respect of shares held in the dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited as beneficial owners as on that date.

The dividend pay out for the year under review has been formulated in accordance with the Company''s policy linked with long term performance, keeping in view the company''s need for capital for its growth plans and the intent to finance such plans through internal accruals to the maximum.

Reserves

It is proposed to transfer Rrs. 152.00 Lakhs to the General Reserves of the Company, constituting 2.5 % of the profit made during the year.

Directors

In accordance with the requirements of the Companies Act, 2013 Shri K Jalandhar Reddy and Shri M Rajesh Reddy Directors of the Company are liable to retire by rotation at the Annual General Meeting and, being eligible, offer themselves for reappointment at the ensuring Annual General Meeting.

Brief resume of the Directors proposed to be reappointed, nature of their expertise in specific functional areas, names of the companies in which they hold directorships and relationships between directors inter-se, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, are provided in the Report on Corporate Governance.

Statutory Auditors

Pursuant to the provisions of Section 139(2) of the Companies Act, 2013, on rotation of audit firms, and based on the recommendation of the Audit Committee, the Board has at its meeting held on 30th May 2014 recommended the re-appointment of M/s. Sukumar Babu & Co., Chartered Accountants, Hyderabad, as the Statutory Auditors of the Company to hold office from conclusion of this Annual General Meeting to the Conclusion of the next Annual General Meeting. M/s. Sukumar Babu & Co., Chartered Accountants, Hyderabad, have confirmed that the appointment, if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013. Accordingly, the appointment of M/s. Sukumar Babu & Co., Chartered Accountants, Hyderabad, as the Statutory Auditors, is being proposed as an Ordinary Resolution

Internal Auditors

The Board of Directors based on the recommendation of the Audit Committee have re-appointed M/s. K.P Rao Associates, Chartered Accountants, Hyderabad, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on quarterly basis.

Cost Auditors

In accordance with Section 141 of the Companies Act, 2013 (corresponding Section 233B of the Companies Act, 1956) and the MCA General Circular No. 15/2011 dated April 11, 2011, (as amended vide General Circular No. 36/2012 dated November 6, 2012), the Audit Committee has recommended and the Board of Directors had appointed M/s. K.K. Rao & Associates, Cost Accountants, Hyderabad, being eligible and having sought re- appointment, as Cost Auditors of the Company, to carry out the cost audit for the Company during the financial year 2014-15.

Subsidiaries and Consolidated Financial Statements

As required under the Listing Agreement entered into with the Stock Exchanges, a consolidated financial statement of the Company and all its subsidiaries is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under section 211(3C) of the Companies Act, 1956. These financial statements disclose the assets, liabilities, income, expenses and other details of the company, its subsidiaries and associate companies.

Pursuant to the provisions of section 212(8) of the Companies Act, 1956, the Ministry of Corporate Affairs (MCA), Government of India, New Delhi vide its Circular No.2/2011 dated: 08-02- 2011 has granted general exemption from attaching the balance sheet, statement of profit and loss and other documents of the subsidiary companies with the balance sheet of the Company.

A statement containing the brief financials of the Company''s subsidiaries for the financial year ended March 31, 2014 is provided as Annexure "C" to this report. Accordingly, this annual report does not contain the reports and other statements of the subsidiary companies.

Subsidiaries of the Company

Your company has the following subsidiaries:

a. KNR Agrotech & Beverages Private Limited

b. KNR Infrastructure Projects Private Limited

c. KNR Energy Limited

d. KNRC Holdings and Investments Private Limited

e. KNR Walayar Tollways Private Limited

f. KNR Constructions LLC, Oman

g. KNRCL FZE, Ras Al Khaima, UAE

The Statement pursuant to Section 212 of the Companies Act, 1956 is at Annexure B. The summarized financial performance of the subsidiaries is at Annexure C.

Consolidated Financial Statements:

In accordance with the Accounting Standards AS-21 and AS-27 on Consolidated Financial Statements read with the Accounting Standard AS-23 on Accounting for Investments in Associates, the Audited Consolidated Financial Statements are provided in the Annual Report.

Management''s Discussion and Analysis Report

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of Listing agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

Fixed Deposits:

The Company has not accepted any deposits from the public in terms of Section 58A of the Companies Act, 1956 Particulars of Employees:

The particulars of employees whose details need to be provided under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is presented as an Annexure A to this report.

Directors Responsibility Statement:

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i) in the preparation of the annual accounts, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departure from the same;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and profit for the year ended on that date;

iii) the Directors have taken proper and sufficient care 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 and

iv) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Out Go:

The particulars relating to Conservation of Energy, Technology absorption, Foreign Exchange earnings and outgo as required under section 217 (1) (e) of the Companies Act, 1956 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. The core activity of the company is civil construction that is not an energy intensive activity.

b) Technology absorption, Adoption and Innovation

There is no information to be furnished regarding Technology Absorption as your Company has not undertaken any research and development activity in any manufacturing activity nor any specific technology is obtained from any external sources, which needs to be absorbed or adopted.

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

Foreign Exchange earnings and outgo

Foreign Exchange Inwards - Nil

Foreign Exchange outgo towards

a) Travel - Rs. 6.55 lakhs (P.Y Rs. 0.47 lakhs)

b) Import of capital goods Rs.199.03 lakhs (P.Y Rs. 1234.52 Lakhs)

c) Advance / Loan to Subsidiaries - Rs. 21.78 lakhs (P.Y Rs. 1.77 Lakhs)

e) Term Loan Repayment and interest - Nil (P.Y Rs. 131.31 Lakhs)

Corporate Governance:

In pursuance of Clause 49 of the Listing Agreement entered into with the stock exchanges, a separate section on Corporate Governance has been incorporated in the annual report for the information of shareholders. A certificate from the auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 also forms part of the annual report.

Acknowledgements:

Your Directors wish to place on record their gratitude to the Company''s shareholders, customers, 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 made by employees at all levels, who through their competence, sincerity, hard work, solidarity and dedicated support, have enabled your Company to make rapid strides in its business initiatives Your Directors also thank the Central and State Governments and their various agencies, particularly, the National Highway Authority of India and other Governmental agencies for extending their support during the year, and look forward to their continued support.

On behalf of the Board of Directors of KNR Constructions Limited

Sd/- Sd/- K Narasimha Reddy K Jalandhar Reddy Managing Director Executive Director Place: Hyderabad Date: 14.08.2014


Mar 31, 2013

Dear Shareholders''

The Directors take pleasure in presenting the 18th Annual Report and the Audited Accounts for the Financial Year ended 31st March'' 2013.

FINANCIAL RESULTS

Rs.in Lakhs

PARTICULARS 2012-13 2011-12

Gross Income (including other income) 78339.17 87267.10

Profit before interest and depreciation 13394.10 13943.06

Less: Interest and financial charges 1125.45 963.75

Profit Before depreciation 12268.65 12979.31

Less: Depreciation and amortization 5566.96 5137.56

Profit before tax 6701.69 7841.75

Provision for tax

(including Deferred Tax ) 1488.74 2565.38

Profit after tax 5212.95 5276.37

Net Profit for the year 5212.95 5276.37

Profit brought forward from previous year 22702.36 17884.84

Profit available for appropriation 27915.31 23161.21

Appropriations:

Transfer to General Reserve 130.00 132.00

Dividend 281.23 281.23

Dividend tax 47.80 45.62

Balance carried forward 27456.28 22702.36

Paid –up capital 2812.35 2812.35

Reserves and Surplus 42753.24 37868.98

REVIEW OF PERFORMANCE:

Your company continues to be in the business of work contracts specializing in Roads and Bridges and other infrastructure projects like irrigation projects. During the year under consideration'' your company has achieved a turnover (on stand-alone basis) of Rs. 76934.17 Lakhs as against Rs. 86599.78 Lakhs in the previous year'' thus registering a decrease of 11 %. The company has earned a gross profit of Rs. 13394.10 Lakhs before interest and depreciation as against Rs. 13943.06 Lakhs in the previous year'' thus registering a decline of 3.93 %. After deducting an interest of Rs. 1125.45 Lakhs'' providing for Rs. 5566.96 Lakhs towards depreciation'' Rs. 1488.74 Lakhs towards provision for income tax and deferred tax'' the operations resulted in a net profit of Rs. 5212.95 Lakhs as against Rs. 5276.37 Lakhs last year'' registering a decline of 1.20 %.

FOLLOWING ARE THE MAJOR WORKS AWARDED TO OUR COMPANY FROM APRIL 2012 TO MARCH 2013

SL. PARTICULARS OF THE PROJECT AMOUNT

NO. (Rs. IN

MILLIONS)

1. "2 laning Gobuk - Mariyang - Sihjon Nallah from Km 26.210 ( Gobuk) to 75.485 ( Sijhon Nallah) Existing CH. 27.000 - 75.000 Net Length 49.275 1804.03 km in Arunachal Pradesh Under Arunachal Pradesh Package of SARDP - NE"

2. Strengthening and widening of Radial Roads in and around Hyderabad city with loan assistance of JICA under Loan Agreement No. 492.55 ID-P: 198: Radial Road No. 16 from ECIL X Road to Cherial X Road in the stretch from Km 7.0 to 1 7.1 8 0

3. "Four Laning of Walayar - Vadakkancherry Section Km 182/250 to Km 240/000 of NH -

47'' Package NS-2/BOT/KL-2 790.00

7905.00

With the above new orders'' the order book position as on 31st March 2013 stands at Rs. 26290.58 Millions.

DIVIDEND

Your Directors have recommended a divided of Rs. 1/- per Equity share for the financial year ended 31st March 2013'' amounting to Rs. 281.23 Lakhs. The dividend will be paid to the members whose names appear in the Register of Members as on 14th September 2013 in respect of shares held in the dematerialized form'' it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited as beneficial owners as on that date.

The dividend pay out for the year under review has been formulated in accordance with the Company''s policy linked with long term performance'' keeping in view the company''s need for capital for its growth plans and the intent to finance such plans through internal accruals to the maximum.

RESERVES

It is proposed to transfer Rs. 130.00 Lakhs to the General Reserves of the Company'' constituting 2.5 % of the profit made during the year.

DIRECTORS

In accordance with the requirements of the Companies Act'' 1956 Shri L B Reddy and Shri J S R Chandar Mouli Directors of the Company are liable to retire by rotation at the Annual General Meeting and'' being eligible'' offer themselves for reappointment at the ensuring Annual General Meeting.

Brief resume of the Directors proposed to be reappointed'' nature of their expertise in specific functional areas'' names of the companies in which they hold directorships and relationships between directors inter-se'' as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India'' are provided in the Report on Corporate Governance.

AUDITOR AND AUDITORS REPORT:

M/s. Sukumar Babu & Co.'' Chartered Accountants'' Statutory Auditors of the company holds office until the conclusion of the ensuring Annual General Meeting and is eligible for reappointment.

The Company has received letter from the Statutory Auditors to this effect that their reappointment'' if made'' would be within the prescribed limits under the Section 224(IB) of the Companies Act'' 1956 and they are not disqualified for such reappointment within the meaning of Section 226 of the said Act.

AUDITOR''S QUALIFICATION

In our opinion and to the best of our information and according to the explanations given to us and subject to the qualification given on the issue of non - accounting of share of profit/(loss) from M/s. Patel-KNR-JV for the period of nine months from 01.07.2012 to 31.03.2013 in the note number 42 on the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet'' of the state of affairs of the Company as at March 31'' 2013;

b) in the case of the Profit and Loss Account'' of the profit/ loss for the year ended on that date; and

c) in the case of the Cash Flow Statement'' of the cash flows for the year ended on that date.

MANAGEMENT''S RESPONSE ON THE AUDITORS QUALIFICATION:

Based on the available information'' financial statements of Patel KNR JV have been prepared for the financial year 2012-13 which are unaudited as on date and the loss is estimated at Rs. 3.55 Crores for the said period and the share of loss of KNRCL will be Rs. 1.77 Crores.

The impact of the above on statement of profit and loss account of KNR CL is that the Profit After Tax (PAT) would be Rs. 50.36 Crores as against the audited profit after tax of Rs. 52.13 Crores.

SUBSIDIARIES AND CONSOLIDATED FINANCIAL STATEMENTS

As required under the Listing Agreement entered into with the Stock Exchanges'' a consolidated financial statement of the Company and all its subsidiaries is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under section 211(3C) of the Companies Act'' 1956. These financial statements disclose the assets'' liabilities'' income'' expenses and other details of the company'' its subsidiaries and associate companies.

Pursuant to the provisions of section 212(8) of the Companies Act'' 1956'' the Ministry of Corporate Affairs (MCA)'' Government of India'' New Delhi vide its Circular No.2/2011 dated: 08-02-2011 has granted general exemption from attaching the balance sheet'' statement of profit and loss and other documents of the subsidiary companies with the balance sheet of the Company.

A statement containing the brief financials of the Company''s subsidiaries for the financial year ended March 31'' 2013 is provided as Annexure "C" to this report. Accordingly'' this annual report does not contain the reports and other statements of the subsidiary companies.

SUBSIDIARIES OF THE COMPANY

Your company has the following subsidiaries:

a. KNR Agrotech & Beverages Private Limited

b. KNR Infrastructure Projects Private Limited

c. KNR Energy Limited

d. KNRC Holdings and Investments Private Limited

e. KNR Walayar Tollways Private Limited

f. KNR Muzaffapur Holdings Private Limited

g. KNR Constructions LLC'' Oman h. KNRCL FZE'' Ras Al Khaima'' UAE

The Statement pursuant to Section 212 of the Companies Act'' 1956 is at Annexure B. The summarized financial performance of the subsidiaries is at Annexure C.

CONSOLIDATED FINANCIAL STATEMENTS:

In accordance with the Accounting Standards AS-21 and AS-27 on Consolidated Financial Statements read with the Accounting Standard AS-23 on Accounting for Investments in Associates'' the Audited Consolidated Financial Statements are provided in the Annual Report.

MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

Management''s Discussion and Analysis Report for the year under review'' as stipulated under Clause 49 of Listing agreement with the Stock Exchanges in India'' is presented in a separate section forming part of the Annual Report.

FIXED DEPOSITS:

The Company has not accepted any deposits from the public in terms of Section 58A of the Companies Act'' 1956 Particulars of Employees:

The particulars of employees whose details need to be provided under section 217(2A) of the Companies Act'' 1956 read with the Companies (Particulars of Employees) Rules'' 1975 is presented as an Annexure A to this report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 217 (2AA) of the Companies Act'' 1956'' with respect to Directors'' Responsibility Statement'' it is hereby confirmed that:

i) in the preparation of the annual accounts'' the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act'' 1956'' have been followed and there are no material departure from the same;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31'' 2013 and profit for the year ended on that date;

iii) the Directors have taken proper and sufficient care 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 and

iv) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

CONSERVATION OF ENERGY'' TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO:

The particulars relating to Conservation of Energy'' Technology absorption'' Foreign Exchange earnings and outgo as required under section 217 (1) (e) of the Companies Act'' 1956 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. The core activity of the company is civil construction that is not an energy intensive activity.

B) TECHNOLOGY ABSORPTION'' ADOPTION AND INNOVATION

There is no information to be furnished regarding Technology Absorption as your Company has not undertaken any research and development activity in any manufacturing activity nor any specific technology is obtained from any external sources'' which needs to be absorbed or adopted.

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

FOREIGN EXCHANGE EARNINGS AND OUTGO Foreign Exchange Inwards - Nil

FOREIGN EXCHANGE OUTGO TOWARDS

a) Travel – Rs. 0.47 lakhs (P.Y Rs. 3.67 lakhs)

b) Import of capital goods Rs. 1234.52 lakhs (P.Y Rs. 163.80 Lakhs)

c) Advance / Loan to Subsidiaries – Rs. 1.77 lakhs (P.Y Rs. 12.31 Lakhs) e) Term Loan Repayment and interest – Rs. 131.31 Lakhs (P.Y Rs. 165.95)

CORPORATE GOVERNANCE:

In pursuance of Clause 49 of the Listing Agreement entered into with the stock exchanges'' a separate section on Corporate Governance has been incorporated in the annual report for the information of shareholders. A certificate from the auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 also forms part of the annual report.

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their gratitude to the Company''s shareholders'' customers'' 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 made by employees at all levels'' who through their competence'' sincerity'' hard work'' solidarity and dedicated support'' have enabled your Company to make rapid strides in its business initiatives Your Directors also thank the Central and State Governments and their various agencies'' particularly'' the National Highway Authority of India and other Governmental agencies for extending their support during the year'' and look forward to their continued support.

On behalf of the Board of Directors of KNR Constructions Limited Sd/- Sd/-

K Narasimha Reddy K Jalandhar Reddy

Managing Director Executive Director

Place: Hyderabad

Date: 01.08.2013


Mar 31, 2012

The Directors take pleasure in presenting the 17th Annual Report and the Audited Accounts for the Financial Year ended 31st March, 2012.

Financial Results Rs.in Lakhs

PARTICULARS 2011-2012 2010-2011

Gross Income (including other income) 87267.10 106378.75

Profit before interest and depreciation 13943.06 13282.52

Less: Interest and financial charges 963.75 782.23

Profit Before depreciation 12979.31 12500.29

Less: Depreciation and amortization 5137.56 4144.10

Profit before tax 7841.75 8356.19 Provision for tax

(including Deferred Tax ) 2565.38 2673.67

Profit after tax 5276.37 5682.52

Net Profit for the year 5276.37 5682.52

Profit brought forward from previous year 17884.84 13436.04

Profit available for appropriation 23161.21 19118.56 Appropriations:

Transfer to General Reserve 132.00 580.00

Dividend 281.23 562.47

Dividend tax 45.62 91.25

Balance carried forward 22702.36 17884.84

Paid-up capital 2812.35 2812.35

Reserves and Surplus 37868.98 32919.07

REVIEW OF PERFORMANCE:

Your company continues to be in the business of work contracts specializing in Roads and Bridges and other infrastructure projects like irrigation projects. During the year under consideration, your company has achieved a turnover (on standalone basis) of Rs 86599.78 Lakhs as against Rs105127.32 Lakhs in the previous year, thus registering an decrease of 17 %. The company has earned a gross profit of Rs13943.06 Lakhs before interest and depreciation as against Rs13282.52 Lakhs in the previous year, thus registering a growth of 5 %. After deducting an interest of f 963.75 Lakhs, providing for Rs 5137.56 Lakhs towards depreciation, Rs 2565.38 Lakhs towards provision for income tax and deferred tax, the operations resulted in a net profit of Rs 5276.37 Lakhs as against Rs 5682.52 Lakhs last year, registering a growth of 0.68%.

Following are the major works awarded to our Company from April 2011 to March 2012

Sl. Particulars of the Project Amount No. (Rs In Millions)

1. Pichhore - Chanderi - Mungawali - Onder - Kurwai Road: 1458.99 Package No. 03 under MPSRP-III

2. Rehabilitation and up gradation to two lane with paved shoulders and maintenance 5801.70 of (i) Chhhindwara-Linga-Umarnala-Saner Section of NH-26B (from Ch. 1.000 Km to 87.00 Km - Length 86 Km) Including Part of Chhindwara by pass (Km 23.553 to Km. 29.275 - length - 5.722 Km), and (ii) Multai (Km. 244.425) upto near Imlikhera (Km 167.700) - Length 76.725 Km.

3. Two Laning of Muzaffarpur-Barauni Section of NH-28 from KM 519.600 to KM 3540.00 627.000 in the state of Bihar under NHDP Phase IVB through Public Private

Partnership (PPP) on Design, Build, Finance, Operate And Transfer Toll Basis DBFOT

4. Received 3 orders from Government of Karnataka 3906.64 Up gradation of the Road from Mangadi NH-48 ( Km 0 000) to Koratagere (Km 68 200) of SH -3 Up gradation of the Road from Shelvadi ( Km 0 000) to Mundargi (Km 68 400) of SH -45 Up gradation of the Road from Mudgal ( Km 0 000) to Gangawathi (Km 74 200) of SH -29

5. Received an order from GMR Projects Private Limited 6200 towards, Design, Build, Finance, Operate, And Transfer (DBFOT) to Augment the

Existing Road on the Kishangarh Udaipur Ahmedabad section of NH -79A, NH - 79, NH - 76 and NH - 8 in the States of Rajasthan and Gujarat

6. Received 2 orders from GVK 6750 towards, Engineering, Procurement And Construction of 4-Laning of Shivpuri - Dewas section of NH-3 in the State of Madhya Pradesh Package- 1 from Km 0 000 to km. 42 900 Package- 2 from Km 42 900 to km. 85 450

With the above new orders, the order book position as on 31st March 2012 stands at Rs 30420.25 Millions.

Dividend

Your Directors have recommended a divided of Rs 1/- per Equity share for the financial year ended 31st March 2012, amounting to Rs 281.23 Lakhs. The dividend will be paid to the members whose names appear in the Register of Members as on 8th,August, 2012 in respect of shares held in the dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited as beneficial owners as on that date.

The dividend payout for the year under review has been formulated in accordance with the Company's policy linked with long term performance, keeping in view the company's need for capital for its growth plans and the intent to finance such plans through internal accruals to the maximum.

Reserves

It is proposed to transfer Rs 132.00 Lakhs to the General Reserves of the Company, constituting 2.5 % of the profit made during the year.

Directors

In accordance with the requirements of the Companies Act, 1956 Shri M Rajesh Reddy and Shri B V Rama Rao Directors of the Company are liable to retire by rotation at the Annual General Meeting and, being eligible, offer themselves for reappointment at the ensuring Annual General Meeting.

During the year Shri D Ramaiah, Independent Director of the Company has resigned from the Company w.e.f 10.01.2012.

Brief resume of the Directors proposed to be reappointed, nature of their expertise in specific functional areas, names of the companies in which they hold directorships and relationships between directors inter-se, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, are provided in the Report on Corporate Governance.

Auditor and Auditors Report:

M/s. Sukumar Babu & Co., Chartered Accountants, Statutory Auditors of the company holds office until the conclusion of the ensuring Annual General Meeting and is eligible for reappointment.

The Company has received letter from the Statutory Auditors to this effect that their reappointment, if made, would be within the prescribed limits under the Section 224(IB) of the Companies Act, 1956 and they are not disqualified for such reappointment within the meaning of Section 226 of the said Act.

Subsidiaries of the Company

Your company has the following subsidiaries:

a. KNR Agrotech & Beverages Private Limited

b. KNR Infrastructure Projects Private Limited

c. KNR Energy Limited

d. KNRC Holdings and Investments Private Limited

e. KNR Muzaffapur Barauni Tollway Private Limited

f. KNR Constructions LLC, Oman

g. KNRCL FZE, Ras Al Khaima, UAE

The Statement pursuant to Section 212 of the Companies Act, 1956 is at Annexure B. The summarized financial performance of the subsidiaries is at Annexure C.

Consolidated Financial Statements:

In accordance with the Accounting Standards AS-21 and AS-27 on Consolidated Financial Statements read with the Accounting Standard AS-23 on Accounting for Investments in Associates, the Audited Consolidated Financial Statements are provided in the Annual Report.

Management's Discussion and Analysis Report

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of Listing agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

Fixed Deposits:

The Company has not accepted any deposits from the public in terms of Section 58A of the Companies Act, 1956 Particulars of Employees:

The particulars of employees whose details need to be provided under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is presented as an Annexure A to this report.

Directors Responsibility Statement:

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

i) in the preparation of the annual accounts, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departure from the same;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and profit for the year ended on that date;

iii) the Directors have taken proper and sufficient care 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 and

iv) the Directors have prepared the annual accounts of the Company on a "going concern' basis.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Out Go:

The particulars relating to Conservation of Energy, Technology absorption, Foreign Exchange earnings and outgo as required under section 217 (1) (e) of the Companies Act, 1956 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. The core activity of the company is civil construction that is not an energy intensive activity.

b) Technology absorption, Adoption and Innovation

There is no information to be furnished regarding Technology Absorption as your Company has not undertaken any research and development activity in any manufacturing activity nor any specific technology is obtained from any external sources, which needs to be absorbed or adopted.

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

Foreign Exchange earnings and outgo

Foreign Exchange Inwards

Advances received from subsidiaries - Rs Nil (P.Y 189.58 Lakhs)

Foreign Exchange outgo towards

a) Travel - Rs3.67 lakhs (P.Y Rs 3.38 lakhs)

b) Import of capital goods Rs163.80 lakhs (P.Y Rs1243.73 Lakhs)

c) Advance / Loan to Subsidiaries - Rs12.31 lakhs (P.Y Rs 46.67 Lakhs)

e) Term Loan Repayment and interest - Rs 165.95 Lakhs (P.Y Rs 56.95)

Corporate Governance:

In pursuance of Clause 49 of the Listing Agreement entered into with the stock exchanges, a separate section on Corporate Governance has been incorporated in the annual report for the information of shareholders. A certificate from the auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 also forms part of the annual report.

Acknowledgements:

Your Directors wish to place on record their gratitude to the Company's shareholders, customers, 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 made by employees at all levels, who through their competence, sincerity, hard work, solidarity and dedicated support, have enabled your Company to make rapid strides in its business initiatives Your Directors also thank the Central and State Governments and their various agencies, particularly, the National Highway Authority of India and other Governmental agencies for extending their support during the year, and look forward to their continued support.

On behalf of the Board of Directors

of KNR Constructions Limited

Sd/- Sd/-

K Narasimha Reddy K Jalandhar Reddy

Managing Director Executive Director

Place: Hyderabad

Date : 28.05.2012

 
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