Sustainable Outperformance
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Annual Report 2019-20 Sustainable Outperformance Sustainable Outperformance KEC International Limited Annual Report 2019-20 About RPG Group Established in 1979, the RPG Group is a diversified conglomerate with interests in the areas of infrastructure, tyres, information technology, pharmaceuticals, energy and plantations. Founded by Dr. R P Goenka, the group’s lineage dates back to the early 19th century. Today, the group has several companies in diverse sectors and the most prominent among them being Zensar Technologies, CEAT, KEC International, and RPG Life Sciences. Built on a solid foundation of trust and tradition, the RPG name is synonymous with steady growth and high standards of transparency, ethics and governance. hello happiness Happiness is intrinsic to life at RPG. Be it in our product innovations, business challenges, people policies or in our community outreach programmes. Our Vision tenets clearly outline the path we collectively traverse – to be an organisation where dreams are not constrained by fences, and each one of us is encouraged to reach for happiness that is within our grasp. “hello happiness”, is a bold statement that helps us open our doors to a world of opportunities and possibilities; a statement that signifies our intent to touch and enrich the lives of others, and work collectively towards a common goal that makes each of us rise beyond our limitations. Outperformance has been a fundamental building block that permeates all strategies, processes and Index functions of the company. Company Starting from the early 1940s, we have grown from strength to Overview strength and are today amongst the most respected Engineering, About KEC --------------------------- 02 Procurement, and Construction companies in the world. Our Financial Performance ---------- 04 sustained outperformance is a result of years of shared and Diversified Global Footprint ---- 06 enhanced value creation, backed by a strong value proposition Corporate Information ------------ 08 and service offerings, robust project management, manufacturing Board of Directors ----------------- 10 and operational excellence, focus on technology and process Delivering Sustainable Growth -- 12 innovations, advanced engineering and design capabilities, Steering Operational well-defined growth strategies and an outperformance- Excellence --------------------------- 25 oriented mindset. Reimagining Digital & Innovation --------------------------- 28 The Company is committed to delivering excellence and Building a Sustainable outperformance with unwavering focus on embedding Community -------------------------- 30 sustainable practices towards improving environment, society, People: Empowering safety and governance. Our diversified presence spanning across Outperformance -------------------- 32 six continents and businesses provide us unique opportunities Fostering a Culture of Safety --- 34 Nurturing a Sustainable to improve quality of lives across the globe. Our efforts towards Environment ------------------------ 36 building a better world is reflected not only in the businesses Integrated Report ----------------- 38 we operate but also in our project execution practices, people Delivering Outperformance ----- 47 practices, safety and environment policies, and CSR activities to Awards ------------------------------- 55 touch lives of people and communities around us. We build infrastructure for the world of tomorrow. We power Statutory Reports happiness. Directors’ Report ------------------ 56 Management Discussion and Analysis ------------------------------ 86 Business Responsibility Report -------------------------------- 106 On the Cover Corporate Governance Report--------------------------------- 115 Financial Statements 765 kV Fatehgarh- 765/400 kV Gas Kasganj-Farrukhabad Metro construction Consolidated Financial Bhadla Transmission Insulated Substation Railway Electrification, works at Kochi, Kerala Statements ------------------------- 140 Line, Rajasthan in Koteshwar, Uttar Pradesh Uttarakhand Standalone Financial Statements ------------------------- 220 KEC on Social Media: Scan this code with @KEC International Ltd. a QR reader app on your smartphones Preheater, cement 132 kV Underground 150 MWp solar project or tablets and know @KEC_Intl manufacturing plant at Cabling works, Oman in Bhadla, Rajasthan more about us. Mundwa, Rajasthan www.kecrpg.com @KEC International Limited KEC International Limited Highlights FY 2019-20 crore 9,328 30+ ` 11,965 crore ` 20,503 Employees Nationalities Revenue Order Book (as on March 31, 2020) Vision Statement Unleash Talent Touch Lives Outperform Enabling environment for To understand, care Sustained and clear To have fun by creating a people to unleash their and make a meaningful outperformance relative high-energy environment entrepreneurial spirit and difference to customers, to all our competitors with a keen sense of realise their full potential employees, society and and industry on financial belonging and smiling all stakeholders and non-financial metrics faces everywhere that matter Values Dedicated to delivering the best while staying true to deep-rooted values Integrity Respect Openness Courage Passion Integrated Report We are proud to commence our journey of Integrated Reporting this year, in line with our commitment towards transparency and highest standards of corporate governance. Refer page numbers 38 to 46 for the report. 765 kV Banaskantha-Chittorgarh Transmission Line, Rajasthan; part of the Green Energy Corridor 2 Annual Report 2019-20 Company Overview Statutory Reports Financial Statements 2,052 km 171 1,095 km Transmission Lines executed Substation Bays built 25% of India’s Railway Tracks electrified Overhead Electrification between Jhansi-Bhimsen, Uttar Pradesh KEC International Limited KEC International, headquartered in Mumbai, India, is the flagship company of the RPG Group. A USD 1.7 billion Engineering, Procurement, and Construction (EPC) major, we deliver projects in key infrastructure sectors such as Power Transmission & Distribution, Railways, Civil, Urban Infrastructure, Solar, Smart Infrastructure, and Cables. Our robust and integrated capabilities span the entire spectrum of ‘concept to commissioning’. We have successfully executed complex projects across some of the world’s most difficult terrains and conditions aided by robust project management and execution capabilities. We have unrivalled expertise in manufacturing and testing, with a footprint extending across India, Dubai, Brazil, and Mexico. Our vast global presence has enabled a robust and agile supply chain that extends across six continents in over 100 countries. For 75 years, we have prided ourselves for our unmatched expertise across EPC, backed by a strong, customer-centric approach, quest for world-class quality, and ‘safety-first’ attitude. Integrity in our actions and respect for people, environment and our stakeholders are the cornerstones of our corporate responsibility. Empowered by a mindset driven to outperform and excel, we build infrastructure for the world of tomorrow. Preferred Unparalleled Well-diversified contractor across manufacturing, Well-integrated for ahead of engineering businesses and schedule delivery global supply geographies and design chain of projects capabilities Backward Strong project integration of Experienced Capabilities to operations – management execute projects professionals and execution Transmission from over in difficult terrains & Distribution, capabilities and conditions 30 diverse Our Railways, and nationalities Strengths Solar Annual Report 2019-20 3 KEC International Limited Financial Performance Revenue (` in crore) Order Book (` in crore) 8,710 8,755 10,091 11,001 11,965 9,449 12,631 17,298 20,307 20,503 2015-16 2016-17 2017-18 2018-19 2019-20 2015-16 2016-17 2017-18 2018-19 2019-20 EBITDA (` in crore) EBITDA Margin (%) 693 818 1,006 1,150 1,234 8.0 9.3 10.0 10.5 10.3 2015-16 2016-17 2017-18 2018-19 2019-20 2015-16 2016-17 2017-18 2018-19 2019-20 PBT (` in crore) PAT (` in crore) 292 463 690 757 790 148 305 460 496 566 2015-16 2016-17 2017-18 2018-19 2019-20 2015-16 2016-17 2017-18 2018-19 2019-20 4 Annual Report 2019-20 Company Overview Statutory Reports Financial Statements Return on Capital Employed (ROCE) (%) EPS (Face value ` 2 each) 12.7 19.5 24.7 26.6 23.2 5.54 11.86 17.91 19.28 22 2015-16 2016-17 2017-18 2018-19 2019-20 2015-16 2016-17 2017-18 2018-19 2019-20 Business-wise Order Book (%) Geography-wise Order Book (%) 21 Power T&D 6 India 4 13 SAE 5 SAARC 5 Railways MENA 49 Civil 63 ROA 17 30 Cables EAP & Others Others Americas (Smart Infra + Solar) 5 Notes: 1. FY 2019-20, FY 2018-19, FY 2017-18, FY 2016-17, and FY 2015-16 numbers are IND AS compliant 2. SAARC – South Asian Association for Regional Cooperation Countries; MENA – Middle East & North Africa; ROA – Rest of Africa; EAP – East Asia Pacific Countries; CIS – Commonwealth of Independent States 3. Graphs are not up to the scale Annual Report 2019-20 5 KEC International Limited Diversified Global Footprint AMERICAS 16 Countries 06 Countries 11 Countries 70+ Countries EPC 80+ Countries Cables Supply 60+ Countries Tower Supply Map not to scale. For illustrative purposes only. 100+ 30+ countries 50% Footprint in no. of countries Executed/ executing EPC Business from (Includes EPC, Supply of projects in FY20 outside India Towers & Cables) 6 Annual Report 2019-20 Company Overview Statutory Reports Financial Statements CENTRAL EUROPE ASIA 1 Country 4 Countries 11 Countries 4 Countries 1 Country 4 Countries