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A N N U A L R E P O R T 2 0 0 9 - 1 0

KEC INTERNATIONAL LIMITED

Presentingthe highest-capacity

tower testing

station in the

world

Presentingthe highest-capacity

tower testing

station in the

world

1,200 kV S/C transmission tower tested at

Nagpur test bed in April 2010

Annual Report 2009-10 I 01

02 I KEC INTERNATIONAL LIMITED

KEC has set up

State of the Art

tower testing

station at Butibori

to meet extraordinary

Global demand.

Annual Report 2009-10 I 03

Testing Station has

most modern facilities

using SCADA winches

with variable frequency

drives, Touch Screen

Control Panel with

online video recording.

04 I KEC INTERNATIONAL LIMITED

RPG Cables merges into KEC

Annual Report 2009-10 I 05

The Scheme of Amalgamation

of RPG Cables Limited with

KEC International Limited and

their respective shareholders

implemented in five months.

06 I KEC INTERNATIONAL LIMITED

KEC is truly an

international com

pany with

about 60% of its

turnover

out of exports du

ring the

past fiveyears.

KEC received

Top Exporter Nati

onal Trophy

for the year 2007

-08 in

Merchant Enterpr

ise Category

from EEPC INDIA

.

New Training C

entre at Butibo

ri

KEC has set u

p a Training

Centre,with fa

cilitiesfor

both resident

ial andnon

residential tra

ining.It has

well equipped

class rooms,

dormitories, a s

ophisticated

computer tra

ining facility

and a library.

The objective

is to create a

large pool of

supervisory ta

lent for the

Transmission a

nd Distribution

industry and t

rain

them inthe late

st technology a

nd techniques.

Annual Report 2009-10 I 07

CONTENTSPage No.

Corporate Information 8Directors Report and Annexures 10Management Discussion and Analysis 14Corporate Governance Report 17Auditors Report & Annexures 27Balance Sheet 30Profit & Loss Account 31Schedules & Notes to the Accounts 32Cash Flow Statement 59Balance Sheet Abstract 60Auditors Report on Consolidated Financial Statements 61Consolidated Balance Sheet 62Consolidated Profit & Loss Account 63Schedules & Notes to Consolidated Accounts 64Disclosure in respect of Subsidiary Companies 83Consolidated Cash Flow Statement 84

FINANCIAL HIGHLIGHTSINR in Crores

USD in Millions

2005-06 2006-07 2007-08 2008-09 2009-10 2009-10

Turnover 1,727 2,041 2,814 3,429 3,907 870 EBITDA 162 252 355 302 407 91 Interest 59 59 68 100 87 19 Depreciation & Amortisation 27 33 25 23 27 6 Profit After Tax 49 105 172 117 190 42 Paid-up Equity Capital 38 38 49 49 49 11Networth 187 272 495 558 787 175 Earning per Share (in Rs./USD) 13.58 27.77 39.56 23.67 38.30 0.85Dividend per Share (in Rs./USD) 1.20 4.50 5.00 5.00 6.00 0.13

Turnover

0

1000

2000

3000

4000

2005-06 2006-07 2007-08 2008-09 2009-10

INR in Crores

0200400600800

2005-06 2006-07 2007-08 2008-09 2009-10

INR in Crores

Net Worth

EBITDA

0

50

150

250

350

450

2005-06

INR in Crores

2006-07 2007-08 2008-09 2009-10

CAGR of four years:

Turnover - 17.75%

EBITDA - 20.25%

Net Worth increased by 4.21 times

08 I KEC INTERNATIONAL LIMITED

BOARD OF DIRECTORS

H. V. Goenka Chairman

R. D. Chandak Managing Director & CEO

S. S. Thakur Director

G. L. Mirchandani Director

D. G. Piramal Director

S. M. Kulkarni Director

A. T. Vaswani Director

J. M. Kothary Director

P. A. Makwana Director

MANAGEMENT TEAM

R. D. Chandak Managing Director & CEO

Vimal Kejriwal Executive Director - International

N. C. Venugopal Executive Director - South Asia

Nikhil Gupta Executive Director - RPG Cables

Vardhan Dharkar Chief Financial Officer

Yugesh Goutam Vice President - Human Resources

Akhil Saxena Vice President - Supply Chain

Anubrata Bhattacharya Chief Executive - Distribution

A. K. Sharma Chief Executive - Telecom

Sanjay Chandra Chief Executive - Railways

K. Ramkumar Vice President - Special Projects

V. Balasubramanian Vice President - International Projects

Deepak Lakhapati Vice President - Engineering Services

Raj Kumar Gupta Vice President - South Asia Projects

Vasant Pandit Vice President - Sales and Marketing (Cables)

CORPORATE INFORMATION

Annual Report 2009-10 I 09

PLANTS

Butibori, Nagpur Butibori 441 108Maharashtra

JhotwaraJaipur 302 012 Rajasthan

DeoriJabalpur 483 220Madhya Pradesh

Hebbal Industrial AreaMysore 571 186 Karnataka

2nd Pokhran RoadThane 400 601Maharashtra

Demni Road Silvassa 396 191Dadra and Nagar Haveli

BANKERS

Bank of India IDBI Bank Limited

Abu Dhabi Commercial Bank Punjab National Bank

Allahabad Bank Standard Chartered Bank

Andhra Bank State Bank of Bikaner and Jaipur

Axis Bank Limited State Bank of Hyderabad

Bank of Baroda State Bank of India

Barclays Bank Plc Syndicate Bank

Central Bank of India The Royal Bank of Scotland N.V.

Corporation Bank UCO Bank

Dena Bank YES Bank Limited

Export Import Bank of India The Dhanlaxmi Bank Limited

ICICI Bank Limited

CORPORATE INFORMATION

COMPANY SECRETARY

Ch. V. Jagannadha Rao

AUDITORS

Deloitte Haskins & SellsChartered Accountants

REGISTRARS & SHARE TRANSFER AGENTS

Link Intime India Private Limited C-13, Pannalal Silk Mills CompoundL. B. S. Marg, Bhandup (W)Mumbai 400 078

REGISTERED OFFICE

1st Floor, CEAT Mahal 463, Dr. Annie Besant RoadWorli, Mumbai 400 030

10 I KEC INTERNATIONAL LIMITED10 I KEC INTERNATIONAL LIMITED

DIRECTORS REPORT

FINANCIAL RESULTSRs. in crores

For the year ended 31st March

2010

For the year ended 31st March

2009Gross Sales 3,922.59 3,481.34EBITDA 386.72 300.57Interest 86.53 99.98Profit before Non-Cash Items/Tax 300.19 200.59Depreciation & Amortisation 26.24 22.75Profit before Tax 273.95 177.84Provision for Taxation 102.96 61.55Profit after Taxation 170.99 116.29Appropriations:Balance as per last account 304.85 239.45Capital Redemption Reserve - 10.40Transfer to General Reserve 17.10 11.63Proposed Dividend 30.85 24.67Tax on Dividend 5.25 4.19Balance transferred to Balance Sheet 422.64 304.85

DIVIDEND

Your Directors recommend a dividend of Rs. 6/- per equity share of Rs. 10/- each for the year ended 31st March 2010 on the equity share capital of the company.

SCHEME OF AMALGAMATION

The Scheme of Amalgamation for merger of the erstwhile RPG Cables Limited with the company has become effective on 31st March 2010 after obtaining all necessary statutory approvals. The consolidation has resulted in an integrated operation which qualifies the company to participate in the market for cable laying projects and in house cabling, besides providing synergy benefits to the existing operations. Consequently the consolidated operations of the company comprise of the Engineering, Procurement and Construction (EPC) business in power transmission, distribution, substations, railways, telecom and cables.

PERFORMANCE

The company has achieved a net turnover of Rs. 3,877.24 crores and a net profit of Rs.170.99 crores in the current financial year as against net turnover of Rs. 3,427.39 crores and net profit of Rs.116.29 crores in 2008-09. Earnings before interest, depreciation and tax (EBITDA) is Rs. 386.72

crores in the current financial year as against Rs. 300.57 crores in 2008-09.

The year was eventful with successful completion of several projects in south asian and international markets including the first 400 kV transmission line in Ethiopia and a 765 kV line in South Africa. Various projects awarded to the company for transmission, distribution, substation and railways in international and south asian markets were executed on schedule. The company has recently commenced manufacturing instrumentation and fire survival cables and has begun to undertake turnkey projects as well. A Build Own Operate project for the Universal Services Obligation Fund under the Department of Telecommunications was also successfully completed during the year.

ORDER BOOK AND BUSINESS OUTLOOK

The order book of the company at over Rs. 5,500 crores is a healthy mix of business across different geographies and segments. The company obtained orders from new markets like Cameroon and Peru, thereby widening its global presence and made a successful re-entry in Kuwait. Large orders secured from Algeria, Mali, Abu Dhabi, Kuwait and Oman including an Emergency Line Restoration System project obtained from a private sector client in Abu Dhabi has led to further penetration into existing markets. Major projects were bagged in India from the high potential North East and Western region for transmission business. The distribution and subtstation business of the company was able to secure new projects under the Rajiv Gandhi Grameen Vidyutikaran Yojana scheme. The order bo