KEC International Limited Integrated Annual Report 2020-21 Build. Sustain. Outperform. About RPG Group BUILD. SUSTAIN. OUTPERFORM. On the Cover We build infrastructure to empower Established in 1979, the RPG Group is a diversified people and nations; we build with a focus to sustain the environment; conglomerate with businesses in the areas of Third line between 400 kV Pavagada - we build to deliver outperformance Gudur-Bitragunta, Devanhalli Transmission infrastructure, tyres, information technology, for our stakeholders. Andhra Pradesh Line, Karnataka pharmaceuticals, energy, and plantations. Starting from the early 1940s, we have grown from strength to strength and are today amongst the most respected Engineering, Procurement, and Construction Founded by Dr. R.P. Goenka, the Group’s lineage (EPC) companies globally. From humble beginnings in the Transmission tower industry, we have built a portfolio of businesses such as Power Transmission & Distribution, Railways, Civil, Urban Infrastructure, Solar, Smart Infrastructure, dates back to early 19th century. Today, the group 765/400 kV North Greenfield cement Oil & Gas Pipelines, and Cables. Our sustained outperformance is a result of Chennai Gas Insulated manufacturing plant at has several companies in diverse sectors such as our single-minded focus on building projects across businesses, countries, and Substation, Tamil Nadu Mukutban, Maharashtra clients. We continue to strengthen our core through focussed investments in KEC International, CEAT, Zensar Technologies, building a world-class engineering organisation, integrated global supply chain, industry-leading execution capabilities by leveraging latest mechanisation, and RPG Life Sciences. Built on a solid foundation automation and digital technologies. Our experience reinforces our belief that to build sustainable businesses, of trust and tradition, the RPG name is synonymous 20 MW Solar Carport Delhi Metro Rail project, we need to build a sustainable ecosystem of environment, society, safety, project, Haryana New Delhi and governance. We are committed to excellence and outperformance by with steady growth and high standards of embedding sustainability practices across our processes and operations. Our well-integrated processes and streamlined operations enable us to be transparency, ethics, and governance. responsive and agile, yet build a scale that drives efficiency and industry leadership. Our commitment towards building a better world is reflected not only in the businesses we operate but also in all our actions, people policies, safety and environment guidelines, and CSR activities. We are powered by our mission to “Build Infrastructure for the World of Tomorrow”. Index Corporate Statutory Overview Reports 02 About the Report 72 Directors’ Report 03 KEC at a Glance 89 Management Discussion 04 Diversified Global Footprint and Analysis 06 Financial Performance 110 Business Responsibility Report hello happiness 08 Corporate Information 119 Corporate Governance 10 Board of Directors Report 2020, the year of adversity, has taught us the value of resilience, courage, and empathy, and more 12 Corporate Governance Structure importantly, the triumph of the human spirit. The pandemic changed many paradigms. Survival and health 13 Delivering Sustainable Growth Financial took precedence over worldly possessions. At RPG, the happiness of our employees, investors, customers 27 Delivering Outperformance Statements KEC on Social Media: and various stakeholders is a priority and forms the bedrock of all initiatives. We made work from anywhere 38 Towards a Greener Future 144 Consolidated a reality for our 30,000+ employees, delivered safe and digital solutions for clients, provided means to food 39 Brief Description of the Six IR Financial Statements @KEC International Ltd. Standalone and sanitation to the underprivileged, covid testing booths and ventilators to stressed healthcare centres and Capitals 224 @KEC_Intl 40 Our Business Model Financial Statements hospitals and we continue to endeavour to make sustainability the core of our brand purpose. @KEC International Limited 42 Stakeholder Engagement and “hello happiness” is not just another tagline for us. It is intrinsic to life at RPG and is our promise to the world, Materiality Scan this code with a signifying our intent to touch and enrich others’ lives and work collectively towards a common goal that makes 46 Risks and Opportunities QR reader app on your smartphones or tablets and each of us rise beyond our limitations. It is a proud proclamation that we are an organisation where fences do 47 Sustainability Roadmap know more about us. not constrain dreams, and each one of us is encouraged to reach for happiness that is within our grasp. 70 Addressing Global Priorities http://www.kecrpg.com/ Corporate Overview Statutory Reports Financial Statements KEC International Limited ABOUT THE REPORT KEC AT A GLANCE KEC International, headquartered in Mumbai, India, is the flagship company of the RPG Group. Our Strengths A USD 1.8 billion Engineering, Procurement, and 9,258 Employees Construction (EPC) major, we deliver projects Well-diversified across in key infrastructure sectors such as Power businesses and geographies 35+ Nationalities Transmission & Distribution, Railways, Civil, Urban Infrastructure, Solar, Smart Infrastructure, Strong project management Oil & Gas Pipelines, and Cables. and execution capabilities ` 13,114 crore Preferred contractor for ahead Our robust and integrated capabilities span Revenue of schedule delivery of projects the entire EPC value chain from ‘concept to commissioning’. We have successfully executed Capabilities to execute complex projects across some of the world’s projects in difficult terrains and ` 19,109 crore most difficult terrains and conditions, aided by conditions Order Book robust engineering, procurement, execution and (as on March 31, 2021) project management capabilities. We have vast Unparalleled manufacturing, manufacturing footprint extending across India, engineering and design Dubai, Brazil and Mexico. Our global presence capabilities has enabled a robust and agile supply chain 2,443 km Rani-Swaroopganj Railway Electrification Project, Rajasthan Backward integration of that extends across six continents in over 105 Transmission Lines Executed countries. operations – Transmission & KEC International places great emphasis on transparent reporting of its performance, strategy and value creation process. The Distribution, Railways, and Company recognises this as a critical responsibility towards its stakeholders. By adopting best global frameworks, guidelines For over 75 years, we have prided ourselves for Solar and practices, the Company endeavours to imbibe high business standards aimed at driving sustainable growth and value for our unmatched expertise in EPC, backed by a 141 the organisation, its stakeholders, the society as well as the environment. Well-integrated global supply strong customer-centric approach, quest for chain Substation Bays built world-class quality, and ‘safety-first’ attitude. APPROACH TO REPORTING RESPONSIBILITY STATEMENT Integrity in our actions and respect for people, Experienced professionals from This is the Company’s second integrated annual report, This report addresses material issues and presents the environment and our stakeholders are the over 35 diverse nationalities aimed at providing a comprehensive depiction of the integrated performance of the Company and its impact in cornerstones of our corporate responsibility. 1,329 RKM Company’s financial and non-financial performance to a fair and accurate manner, in line with the interests and Empowered by a mindset driven to outperform 22% of India’s Railway the stakeholders. This Report provides insights into key priorities of the Company’s stakeholders. and excel, we build infrastructure for the world Tracks electrified strategies, operating environment, risks and opportunities, governance and the Company’s approach towards long-term FORWARD-LOOKING STATEMENTS of tomorrow. value creation. Certain information provided in this Report may contain forward-looking statements, which involve known and REPORTING FRAMEWORKS unknown risks and opportunities, other uncertainties and Vision Statement Values The report is prepared as per the IR Framework of the relevant factors that could turn out to be materially different International Integrated Reporting Council (IIRC), which following the publication of actual results. We have tried, provides a useful basis for disclosing how the Company wherever possible, to identify such statements by using Unleash Talent Dedicated to delivering the best while staying true to creates long-term sustainable value for its stakeholders across words such as “believe,” “plan,” “anticipate,” “continue,” deep-rooted values Enabling environment for people to unleash their entrepreneurial various forms of capitals. Refer page numbers 39 to 70 for the “estimate,” “expect,” “may,” “will” or other similar words. integrated report. We have chosen these assumptions in good faith, and we spirit and realise their full potential believe that they are reasonable in all material respects. We This report also complies with the requirements stated in undertake no obligation to update or revise any forward- Touch Lives the Companies Act, 2013 (including the rules made looking statement, whether as a result of new information, To understand, care and make a meaningful difference to thereunder), the Indian Accounting Standards, the Securities