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Directors Report of KNR Constructions Ltd.

Mar 31, 2016

Dear Members,

The Directors are pleased to present the Twenty First Annual Report and the Company’s audited financial statement for the financial year ended March 31, 2016.

FINANCIAL RESULTS

The Company’s financial performance, for the year ended March 31, 2016 is summarized below:

Rs. in Lakhs

PARTICULARS

2015-16

2014-15

Gross Income (including other income)

93304.08

88858.81

Profit before interest and depreciation

18590.02

13859.97

Less: Interest and financial charges

1262.67

1224.30

Profit Before depreciation

17327.35

12635.67

Less: Depreciation and amortization

4314.43

5405.58

Profit before tax

13012.92

7230.09

Provision for tax (including Deferred Tax )

(3099.41)

(71.15)

Profit after tax

16112.33

7301.24

Net Profit for the year

16112.33

7301.24

Profit brought forward from previous year

38661.54

33073.50

Less: Depreciation on transition to Schedule II of the Companies Act,2013

0.00

1374.72

Profit available for appropriation

54773.87

39000.02

Appropriations:

Dividend

281.23

281.23

Dividend tax

57.25

57.25

Balance carried forward

54435.39

38661.54

Paid Up capital

2812.35

2812.35

Reserves and Surplus

69883.70

54108.20

RESULTS OF OPERATIONS AND THE STATE OFCOMPANY’S AFFAIRS

The highlights of the Company’s performance are asunder:

Revenue from operations Rs. 88510.69 Lakhs

PBDIT(Excluding Other Income) increased by 23.20 % to Rs. 15540.68 Lakhs

Profit before Tax increased by 79.98% to Rs. 13012.92 Lakhs

Cash Profit increased by 60.75% to Rs. 20426.76Lakhs

Net Profit increased by 120.68% to Rs. 16112.33 Lakhs

The order book position as on 31st March 2016 stands at Rs. 346350.00 Lakhs.

Reserves

The Company is not proposing to transfer any amount to the General Reserves of the Company out of the profits made during the year. The total Reserves & Surplus (including capital reserves, securities premium Reserves, General Reserves and P&L Account accumulated) as on 31st March 2016 is Rs. 69883.70 Lakhs as against the Paid-up capital of Rs. 2812.35 Lakhs

Dividend

The Board of Directors on 15th March 2016, declared an interim dividend of Rs. 1.00 ( i.e 10%) on each fully paid equity share of Rs. 10/-, which was paid to the members, whose names appeared on the Register of Members as on 23rd March 2016.

Considering the capital requirement, the Board of Directors do not recommend any final dividend on the equity shares and the interim dividend declared is the dividend on equity shares of the Company for the financial year ended 31st March 2016.

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.

Management Discussion and Analysis Statement

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

Transfer to the Investor Education and Protection Fund

In terms of Section 125 of the Companies Act, 2013, an amount of Rs. 64209/- being unclaimed dividend for the Financial Year 2007-2008 was transferred to the Investor Education and Protection fund (IEPF) established by the Central Government during the year under review.

Subsidiaries, Joint Ventures and Associate Companies

During the year under review, no companies have become or ceased to be company’s subsidiaries and during the year the following Joint Ventures were entered by the company i.eKNR - TBCPL - JV and SEL - KNR JV andas per the provisions of section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary Companies and Joint Ventures is prepared in Form AOC-1 and it forms part of the consolidated financial statements and hence not repeated here for the sake of brevity.

The Policy for determining material subsidiaries as approved by the Board may be accessed on the Company’s website: www.knrcl.com

Consolidated Financial Statements

The consolidated financial statements, in terms of Section 129 of the Companies Act, 2013 and Clause 32 of the Listing Agreement and prepared in accordance with Accounting Standard 21 as specified in the Companies (Accounting Standards) Rules, 2014 forms a part of this annual report.

As per the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its Subsidiaries on its website www.knrcl.com and copy of separate audited accounts of its Subsidiaries will be provided to the members at their request.

Directors’ Responsibility Statement;

Pursuant to the requirements under Section 134 (3) (c ) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, Your Directors hereby confirmed that:

(a) in the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) 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, 2016 and of the profit of the Company for the year ended on that date;

c) the Directors 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;

d) the Directors have prepared the annual accounts on a ‘going concern’ basis;

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

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

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.

The CSR Policy may be accessed on the Company’s website at the link: http://www.knrcl.com/images/knrcl CSR.pdf Composition of the CSR Committee

Name

Designation

Category

Shri L. B. Reddy

Chairman

Non-Executive and Independent Director

Shri B. V. Rama Rao

Member

Non-Executive and Independent Director

Shri K. Jalandhar Reddy

Member

Executive and Non-Independent Director

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

1. Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects

2. Rural development projects

3. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;

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

The Annual Report on CSR activities is annexed herewith as “Annexure I” to this report and CSR Policy is posted on the website of the Company and the web link is http:http://www.knrcl.com/images/knrcl CSR.pdf

DIRECTORS

In accordance with the requirements of the Companies Act, 2013 Smt. K Yashoda, Director of the Company is 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 Director 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.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors.

The Board of Directors has complete access to the information within the Company. Independent Directors have the freedom to interact with the Company’s management. Interactions happen during Board / Committee meetings, when MD / ED are asked to make presentations about performance of the Company to the Board. Apart from this, they also have independent interactions with the Statutory Auditors, the Internal Auditors and external advisors appointed from time to time. Further, they meet without the presence of any management personnel and their meetings are conducted informally to enable the Independent Directors to discuss matters pertaining to the Company’s affairs and put forth their combined views to the Board of Directors of the Company.

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 2016 recommended the reappointment 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 AUDITOR & CONTROLS

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

The Company’s internal control systems are well established and commensurate with the nature of its business and the size and complexity of its operations. The Audit Committee reviews adequacy and effectiveness of the Company’s internal control environment and monitors the implementation of audit recommendations. The recommendations/ suggestions of the internal auditors are discussed in the Audit Committee meetings periodically.

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 2016-17.

SECRETARIAL AUDITOR

The Board has appointed M/s. VCSR &Associates, Company Secretaries, to conduct Secretarial Audit for the FY 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed herewith marked as Annexure IIto this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm’s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

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

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. 5.12 lakhs (P.Y Rs. 4.05 lakhs)

b) Import of capital goods and Stores & Spares Rs. 513.09 lakhs(P.Y Rs. 287.64 Lakhs)

c) Advance / Loan to Subsidiaries - Nil(P.Y Nil Lakhs)

d) Term Loan Repayment and interest - Nil(P.Y Nil Lakhs)

FIXED DEPOSITS

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

INDUSTRIAL RELATIONS

Your Directors are happy to report that the Industrial Relations have been extremely cordial at all levels throughout the year. Your Directors record their appreciation for sincere efforts, support and co-operation of all employees being extended from time to time to accelerate the growth of the Company.

DISCLOSURES

Audit Committee

The Audit Committee comprises majority Independent Directors namely Shri L . B Reddy (Chairman), Shri B V Rama Rao, and Shri K Jalandhar Reddy as other members. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has a Vigil mechanism and Whistle blower policy in terms of the Listing Agreement, under which the employees are free to report violations of applicable laws and regulations and the Code of Conduct. Protected disclosures can be made by a whistle blower through a dedicated e-mail, or a letter to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company’s website at the link:http:// www.knrcl.com/images/knrcl_whistleblower.pdf

Meetings of the Board

Nine meetings of the Board of Directors were held during the year under review. For further details, please refer report on Corporate Governance of this Annual Report.

Code of Conduct

A declaration regarding compliance with the code of conduct signed by the Company’s Managing Director is published in the Corporate Governance Report which forms part of the annual report.

Particulars of Loans given, Investments made, Guarantees given and Securities provided

Particulars of loans given, investments made, guarantees given and securities provided are provided in the standalone financial statement.

Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith as Annexure IIIto this Report.

PARTICULARS OF EMPLOYEES

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

i) The percentage of increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2015-16, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2015-16and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

Sl. No.

Name of Director/ KMP and Designation

Remuneration of Director/ KMP for financial year 2015-16 (Rs. in lakhs)

% increase in Remuneration in the Financial Year 2015-16

Ratio of remuneration of each Director/ to median remuneration of employees

Comparison of the

Remuneration of the KMP against the performance of the Company

1

K Narasimha Reddy Managing Director

240.00

38.73%

161

Profit before

Tax increased by 79.98% and Profit After Tax increased by 120.68% in financialYear 2015-16

2

K Jalandhar Reddy Executive Director and CFO

127.20

41.18%

85

3

M V Venkata Rao Company Secretary

12.88

22.09%

9

4

S.Vaikuntanathan, V.P (F&A)1

6.31

N.A

4

5

G. Sravana Kumar, CGM (F&A)2

28.15

19.69%

19

v) Relationship between average increase in remuneration and company performance:-The Profit before tax for the financial year ended March 31, 2016 increased by 79.98% whereas the decrease in median remuneration was 18.83%

vi) Comparison of Remuneration of the Key Managerial Personnel(s) against the performance of the Company:

The total remuneration of Key Managerial Personnel was Rs.414.54lakhswhereas the Profit before tax was Rs. 13012.92 lakhs in 2015-16

vii) a) Variations in the market capitalization of the Company: The market capitalization as on March 31, 2016 at

NSE was Rs. 1,43,401.52lakhs(Rs. 1,19,468.46lakhs as on March 31, 2015)

b) Price Earnings ratio of the Company at NSE was 8.90 as at March 31, 2016 and was 16.36 as at March 31, 2015;

viii) Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2015-16 was 13.60% whereas the increase in the managerial remuneration for the same financial year was 16.62%;

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

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

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

Policy on Sexual Harassment

The Company has adopted policy on Prevention of Sexual Harassment of women at Workplace in accordance with The Sexual Harassment of women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, the Company has not received any complaints pertaining to Sexual Harassment. GENERAL

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

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

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOP referred to in this Report.

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

5. 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.

Appreciation and 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 & CFO

Place: Hyderabad Date: 14.08.2016

Report On Corporate Governance


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


Mar 31, 2011

Dear Shareholders,

The Directors take pleasure in presenting the 16th Annual Report and the Audited Accounts for the Financial Year ended 31st March, 2011.

Financial Results Rs. in Lakhs

PARTICULARS 2010-2011 2009-2010

Gross Income (including other income) 106378.75 90663.08

Profit before interest and depreciation 13810.39 11579.07

Less: Interest and financial charges 782.23 699.08

Profit Before depreciation 13028.16 10879.99

Less: Depreciation 4055.01 2617.52

Profit before tax 8973.15 8262.47

Provision for tax (including Wealth Tax and Deferred Tax ) 2666.20 2692.16

Profit after tax 6306.95 5570.31

Less: Prior year taxes and adjustments 624.43 542.24

Net Profit for the year 5682.52 5028.07

Profit brought forward from previous year 13436.04 9571.03

Profit available for appropriation 19118.56 14599.10

Appropriations:

Transfer to General Reserve 580.00 505.00

Dividend 562.47 562.47

Dividend tax 91.25 95.59

Balance carried forward 17884.84 13436.04

Paid –up capital 2812.35 2812.35

Reserves and Surplus 32919.07 27890.35

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 105127.32 Lakhs as against Rs 89917.27 Lakhs in the previous year, thus registering an increase of 17 %. The company has earned a gross profit of Rs. 13810.39 Lakhs before interest and depreciation as against Rs 11579.07 Lakhs in the previous year, thus registering a growth of 19 %. After deducting an interest of Rs 782.23 Lakhs, providing for Rs. 4055.01 Lakhs towards depreciation, Rs 2666.20 Lakhs towards provision for income tax, wealth tax, and deferred tax, Rs 624.43 Lakhs towards prior period items and taxes, the operations resulted in a net profit of Rs 5682.52 Lakhs as against Rs. 5028.07 Lakhs last year, registering a growth of 13 %.

Following are the major works awarded to our Company from April 2010 to March 2011

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

1 4 Laning of Bijapur - Hungund Section 8250 of NH-13 from Km 102.00 to km 202.00 in the Satate of Karnataka under NHDP Phase III On Design, Build, Finance, Operate and Transfer IDBFOT) Toll Basis from Bijapur Hungund Tollway Private Limited, Sadbhav Engineering Limited

2 Nagpur - Saoner - Betul Project – 3330 Construction Contract 01: Four Laning of KM 76.000 to KM 117.500 of Nagpur – Saoner – Betual Section of NH-69” in the State of Madhya Pradesh to be completed within a period of 23 Months from the Appointed Date. on subcontract basis from Oriental Structural Engineering Private Limited

With the above new orders, the order book position as on 31st March 2011 stands at Rs. 14433.64 Millions.

Dividend

Your Directors have recommended a divided of Rs. 2/- per Equity share for the financial year ended 31st March 2011, amounting to Rs. 562.47 Lakhs. The dividend will be paid to the members whose names appear in the Register of Members as on 22nd September 2011 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. 580.00 Lakhs to the General Reserves of the Company, constituting 10.21 % of the profit made during the year.

Directors

In accordance with the requirements of the Companies Act, 1956 Shri K Jalandhar Reddy, Shri L B Reddy and Shri J S R Chandramouli 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.

Subsidiaries of the Company

Your company has the following subsidiaries:

a. KNR Agrotech & Beverages Private Limited

b. KNR Infrastructure Projects Private Limited (we.f 28.03.2011)

c. KNR Constructions LLC, Oman

d. KNRCL FZE, Ras Al Khaima, UAE (w.e.f 29.11.2010)

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, 2011 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 to relating 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 which 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

a) Advances from KNR Constructions LLC Rs. 189.58 Lakhs ( PY. Nil) Foreign Exchange outgo towards

a) Travel - Rs. 3.38 lakhs (P.Y Rs. 8.92 lakhs)

b) Import of capital goods Rs. 1243.73 lakhs (P.Y Rs. 158.31 Lakhs)

c) Investment - Rs. Nil (P.Y Rs. 206.07)

d) Advance / Loan to Subsidiaries - Rs. 46.67 lakhs ( P.Y Nil)

e) Term Loan Repayment - Rs. 5.95 Lakhs ( P.Y Nil)

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 Government 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 : 08.08.2011


Mar 31, 2010

The Directors take pleasure in presenting the 15th Annual Report and the Audited Accounts for the Financial Year ended 31st March, 2010.

Financial Results Rupees in Lakhs

Particulars 2009-2010 2008-2009

Gross Income (including other income) 90663.08 77545.09

Profit before interest and depreciation 11579.07 10255.29

Less: Interest and financial charges 699.08 1115.70

Profit Before depreciation 10879.99 9139.59

Less: Depreciation 2617.52 2501.90

Profit before tax 8262.47 6637.69 Provision for tax

(including Wealth Tax and Deferred Tax ) 2692.16 2215.77

Profit after tax 5570.31 4421.92

Less: Prior year taxes and adjustments 542.24 56.31

Net Profit for the year 5028.07 4365.61

Profit brought forward from previous year 9571.03 6313.48

profit available for appropriation 14599.10 10679.09 Appropriations:

Transfer to General Reserve 505.00 450.00

Dividend 562.47 562.47

Dividend tax 95.59 95.59

Balance carried forward 13436.04 9571.03

Paid - up capital 2812.35 2812.35

Reserves and Surplus 27890.35 23520.34

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 of Rs 89917.27 Lakhs as against Rs 76865.36 Lakhs in the previous year, thus registering an increase of 16.98 %. The company has earned a gross profit of Rs.11579.07 Lakhs before interest and depreciation as against Rs 10255.29 Lakhs in the previous year, thus registering a growth of 12.91%. After deducting an interest of Rs 699.08 Lakhs, providing for Rs.2617.52 Lakhs towards depreciation, Rs 2692.16 Lakhs towards provision for income tax, wealth tax, and deferred tax, Rs 542.24 Lakhs towards prior period items and taxes, the operations resulted in a net profit of Rs 5028.07 Lakhs as against Rs. 4365.61 Lakhs last year, registering a growth of 15.17 %.

Following are the major works awarded to our Company from April 2009 to March 2010

Dividend

Your Directors have recommended a divided of Rs. 2/- per Equity share for the financial year ended 31st March 2010, amounting to Rs. 562.46 Lakhs. The dividend will be paid to the members whose names appear in the Register of Members as on 21st September 2010 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 Companys policy linked with long term performance, keeping in view the companys 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. 505.00 Lakhs to the General Reserves of the Company, constituting 10.04 % of the profit made during the year.

Directors

In accordance with the requirements of the Companies Act, 1956 Shri J V Panindra Reddy and Shri D Ramaiah 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 hold office until the conclusion of the ensuring Annual General Meeting and are 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 Constructions LLC, Oman

The Statement pursuant to Section 212 of the Companies Act, 1956 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.

Managements Discussion and Analysis Report

Managements 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, 2010 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 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 which 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 need to be absorbed or adapted.

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 Earnings – Nil Foreign Exchange outgo towards

a) Travel – Rs. 8.92 lakhs (P.Y Rs. 0.44 lakhs)

b) Professional Services Rs. Nil lakhs (P.Y 3.74 Lakhs)

c) Import of capital goods Rs. 158.31 lakhs (P.Y Rs. 832.45 Lakhs)

d) Investment – Rs. 206.07 (P.Y Rs. Nil)

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 Companys shareholders, customers, vendors and bankers for their continued support to KNRCLs 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 Government and their various agencies, particularly, 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: 09.08.2010