Your Directors are pleased to present the thirty first (31st) Annual Report and the Company’s audited financial statement (Standalone
and Consolidated) for the financial year ended March 31,2026.

FINANCIAL RESULTS

The Company’s financial performance, for the year ended March 31,2026 is summarised below:

COMPANY'S AFFAIRS AND FUTURE OUTLOOK

As on March 31, 2026 KNRCL holds an outstanding order
book valued at 8,67,256.70 Lakhs, with ' 2,62,003.90 Lakhs
attributed to the road sector, ' 2,50,010.60 Lakhs dedicated to
the irrigation and pipeline projects and remaining ' 3,55,242.20
Lakhs attributed to mining projects. The current order book
position remains stable and provides visibility of execution
over around 1.5 years to 2years excluding mining project
which is to be executed over a period of 6 years.

RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S
AFFAIRS

The highlights of the Company’s performance are as under:

On Standalone basis

• Revenue from operations for the 2025-26 is reported at
' 2,09,671.53 Lakhs.

• PBDIT (Excluding other income& Exceptional Item)
decreased by 71.54% to ' 17,814.51 Lakhs

• Profit before tax Decreased by 82.32 % to ' 16,965.07
Lakhs

• Net profit Decreased by 84.01% to ' 1 1,606.22 Lakhs

• Net worth increased by 2.78% to ' 4,05,479.38 Lakhs
On consolidated basis

• Revenue from operations for the 2025-26 is reported at
' 2,69,801.31 Lakhs.

• Profit before tax (After exceptional items) decreased by
58.49% to ' 52,281.07 Lakhs

• Net profit Decreased by 56.40% to ' 43.686.26 Lakhs

• Net worth increased by 9.48% to ' 4,97,177.86 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 Other Equity (including securities
premium Reserves, General Reserves, Surplus in statement of
profit and loss and other comprehensive income) as on March
31,2026 is ' 3,99,854.68 Lakhs as against the Paid-up capital
of ' 5,624.70 Lakhs

Performance of Subsidiaries

Pursuant to the provisions of Section 128 (3) of the Companies
Act, 2013 read with Rule 5 of Companies (Accounts) Rules,
2014, a Report on the Financial performance of the Subsidiaries
Companies during the Financial Year ended March 31,2026 in
form AOC-1 is annexed herewith as Annexure I.

Dividend

The Board of Directors have recommended a final dividend of
' 0.25/- per Equity Share for the financial year ended March
31, 2026 amounting to ' 703.09 Lakhs. The dividend shall be
paid to the members whose names appear in the Register of
Members as on September 15, 2026. In respect of shares held
in the dematerialised form, it shall 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.

Pursuant to the Finance Act, 2020, dividend income is taxable
in the hands of the shareholders w.e.f. April 01, 2020 and
the Company is required to deduct tax at source (TDS) from
dividend paid to the Members at prescribed rates as per the
Income tax Act, 1961/ Income Tax Act, 2025.

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. The
Dividend Distribution Policy of the Company is annexed
herewith marked as Annexure II to this Report. The Dividend
Distribution Policy is posted on the website of the Company
and the web link ishttp://knrcl.com/images/policies/KNRCL-
DIVIDEND-DISTRIBUTION-POLICY.pdf

There has been no change in the policy during the year.
CHANGE IN NATURE OF BUSINESS

During the year under review, there is no change in the nature
of business in which the Company operates.

MATERIAL CHANGES AND COMMITMENTS, IF ANY,
AFFECTING THE FINANCIAL POSITION OF THE COMPANY.

During the year under review, till the date of this report, there
were no material changes and commitments that may affect
the financial position of the Company.

CAPITAL STRUCTURE
Authorised Capital:

The authorised share capital of the Company is ' 60,00,00,000/-
(Sixty Crores Only) divided into 30,00,00,000 (Thirty Crores
only) Equity shares of ' 2/- (Rupees Two only) each as on
March 31,2026.

During the year under review, there was no change in the
authorised capital of the Company.

Paid-up capital:

As on March 31, 2026, the paid-up capital of the Company
is ' 56,24,69,200/- (Rupees Fifty-Six Crores Twenty-Four
Lakhs Sixty-Nine Thousand Two Hundred Only) divided into
28,12,34,600 (Twenty-Eight Crores Twelve Lakhs Thirty-Four
Thousand Six Hundred only) Equity Shares of ' 2/- (Rupees
Two) Each.

ISSUE OF SHARES:

During the year under review, the Company has not issued
any securities (including convertible warrants) by way of
Sweat Equity or Employee Stock Options or equity shares
with differential voting rights or by any other way of allotment
during the year under review.

CREDIT RATING:

As on the date of the report, CRISIL has made an outlook on
Long term bank facilities as Crisil AA/Stable and the Short
term bank facilities as A1 /Stable.

INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 125 of the Companies Act, 2013, during
the year under review the below amounts were transferred to
Investor Education and Protection Fund

a) An amount of ' 59,828/- being unclaimed dividend for the
financial year 2017-18 and

b) The Company had transferred 3529 equity shares
pertaining to financial year 2017-18 as required under the
provisions of Section 124(6) of the Companies Act, 2013
to IEPF Authority.

Members are requested to note that dividends not
encashed or remaining unclaimed for a period of 7 (seven)
years from the date of transfer to the Company’s Unpaid
Dividend Account, shall be transferred to the Investor
Education and Protection Fund ("IEPF") established
by the Central Government. Further, pursuant to the
provisions of Section 124 of the Act read with the Investor
Education and Protection Fund Authority (Accounting,
Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules’) as
amended from time to time, all shares on which dividend
has not been paid or claimed for seven consecutive years
or more shall be transferred to IEPF Authority as notified
by the Ministry of Corporate Affairs.

The Members/Claimants whose shares, unclaimed
dividend have been transferred to IEPF may claim the
shares or apply for refund by making an application to
IEPF Authority in Form IEPF 5 which is available on www.
iepf.gov.in along with requisite fee as decided by it from
time to time.

Members who have not yet encashed the dividend
warrants from the financial year ended March 31, 2018
onwards are requested to forward their claims to the
Company’s Registrar and Share Transfer Agents without
any further delay. It is in Members’ interest to claim any
un-encashed dividends and for future, opt for Electronic
Clearing Service, so that dividends paid by the Company
are credited to the Members’ account on time.

It may be noted that once the unclaimed dividend is
transferred to IEPF as above, no claim shall rest with
the Company in respect of such amount. It may also be
noted that the unclaimed dividend amount which were
lying with the Company upto the year ended on March 31,
2018, have already been transferred to IEPF. The details of
the unclaimed dividends are available on the Company’s
website at www.knrcl.comand on the website of Ministry
of Corporate Affairs at www.mca.gov.in. Members are
requested to contact the Company’s Registrar and Share
Transfer Agent or the Company to claim the unclaimed/
unpaid dividends.

Nodal Officer

Pursuant to the provisions of Rule 7(2B) of Investor
Education and Protection Fund (Accounting, Audit,
Transfer and Refund) Second Amendment Rules, 2019,
the Company has appointed Smt. Haritha Varanasi,
Company Secretary of the Company as Nodal Officer of
the Company.

DIRECTORS:Non-Independent Directors

During the year under review, there are three non-independent
Directors in the Board namely Shri K Narsimha Reddy,
Managing Director, Shri K Jalandhar Reddy, Executive Director
and Smt. K Yashoda, Non-Executive Director.

In accordance with the requirements of the Companies Act,
2013 Smt. K Yashoda, Non-Executive Director of the Company
is liable to retire by rotation at the Annual General Meeting and,
being eligible, offers herself for reappointment at the ensuing
Annual General Meeting.

During the year under review, there were no directors resigned
from the Board.

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 Regulation 36
of SEBI (LODR) Regulations, 2015 and Secretarial Standard
on General Meetings issued by the Institute of Company
Secretaries of India, is annexed to the notice of the Annual
General Meeting.

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, Independent Directors meet without the
presence of any management personnel and their meetings
are conducted informally to enable them to discuss matters
pertaining to the Company’s affairs and put forth their
combined views to the Board of Directors of the Company.

Independent Directors

The Company has received declarations from the independent

directors of the Company to the effect that they meet the
criteria of independence as laid under the provisions of Section
149 (6) of the Companies Act, 2013 and Regulation 16 (1) (b)
read with Regulation 25 of SEBI (LODR) Regulations, 2015 in
respect of the financial year ended March 31,2026.

The Independent Directors have also confirmed that they are
in compliance with the Code of Conduct as stipulated under
Schedule IV of the Companies Act, 2013 and also of the
Company.

In terms of Regulation 25 (8) of SEBI (LODR) Regulations,
2015 the Independent Directors have also confirmed that they
are not aware of any circumstance or situation, which exists
or which may be reasonably anticipated, that could impair or
impact their ability to discharge their duties with an objective
independent judgement and without any external influence.

During the year under report, the Independent Directors of
the Company had no pecuniary relationship or transactions
with the Company, except to the extent of sitting fees and
reimbursement of expenses incurred by them for the purpose
of attending the meetings of the Board and its committees.

Proficiency of Directors:

In compliance with Rule 6 of Companies (Appointment and
Qualification of Directors) Rules, 2014, all the Independent
Directors of the Company have registered themselves with
the Independent Directors Data Bank maintained by IICA.
Smt. G Chandra Rekha and Shri K Udaya Bhaskara Reddy
have appeared and qualified the proficiency test conducted
by IICA and Shri W R Reddy is exempted from appearing the
proficiency test.

Policy on Director's appointment and remuneration and
Other Details:

The Nomination and Remuneration Committee has laid down
the criteria for Directors’ appointment and remuneration
including criteria for determining qualification, positive
attributes and independence of a Director. The following
attributes/criteria for selection have been laid by the Board on
the recommendation of the Committee:

- The candidate should possess the attributes such as
leadership, professional stature, domain expertise or such
other attributes which in the opinion of the Committee are
in the interest of the Company;

- the candidate should be free from any disqualification as
provided under Sections 164 and 167 of the Companies
Act, 2013;

- the candidate should meet the conditions of being
independent as stipulated under the Companies Act,
2013 and SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, in case of appointment
as an independent director; and

- the candidate should possess appropriate educational
qualification, skills, experience and knowledge in one
or more fields of finance, law, management, technical
operations, infrastructure, or such other areas or disciplines
which are relevant for the Company’s business.

Key Managerial Personnel:

Pursuant to the provisions of Section 203 of the Companies
Act, 2013 the following are the Key Managerial Personnel of
the Company:

- Shri K Narsimha Reddy - Managing Director

- Shri K Jalandhar Reddy - Whole-time Director

& Chief Financial Officer

- Smt. Haritha Varanasi - Company Secretary

Remuneration policy

The Company has in place remuneration policy to ensure that
the Key Managerial Personnel (KMP) and Senior Managerial
Personnel (SMP) shall be competitive in order to ensure that
the Company can attract and retain competent talent.

The remuneration policy of the Company shall ensure that:

• The level and composition of remuneration is reasonable
and sufficient to attract, retain and motivate directors/
KMPs and SMPs of the quality required to run the
Company successfully.

• Relationship of remuneration to performance is clear and
meets appropriate performance benchmarks.

• Remuneration to directors, KMP and SMP involves a
balance between fixed and variable pay reflecting short
and long-term performance objectives and goals set by
the Company.

• Remuneration package is linked to the achievement of
corporate performance targets and a strong alignment of
interest with stakeholders.

The detailed remuneration policy of the Company can be
accessed at the website of the Company through the below
link:

http://knrcl.com/images/policies/Remuneration-Policy.pdf

COMMITEES OF THE BOARD

The Company has duly constituted the following committees
as per the provisions of the Companies Act, 2013 and SEBI
(LODR) Regulations, 2015

a) Audit Committee

b) Stakeholders Relationship Committee

c) Nomination and Remuneration Committee

d) Corporate Social Responsibility Committee

e) Risk Management Committee

Details of the Committees such as Composition, meetings
held during the year under report are provided in Corporate
Governance Report which forms integral part of the Annual
Report.

MEETINGS OF THE BOARD AND COMMITTEES

Eight meetings of the Board of Directors were held during the
year. The Board of Directors and Committees have duly met
during the year under report and the minutes of the meetings
are duly recorded. The details of the meetings of the Board
and its Committees are provided in the Corporate Governance
Report which forms integral part of this report.

RECOMMENDATIONS OF AUDIT COMMITTEE

The Board has taken into consideration, accepted and acted
upon all the recommendations of the Audit Committee.

BOARD DIVERSITY

The Company recognises that having a diverse Board enhances
the quality of its performance. The Company continues to
increase the diversity in the Board as and when required, as the
Company believes that it is an essential element in supporting
and attainment of its strategic objectives and its sustainable
development. The Company has in place policy on Board
Diversity and can be accessed athttp://knrcl.com/images/
policies/Board-Diversity-Policy.pdf.

BOARD EVALUATION

The Nomination and Remuneration Committee lays down the
criteria for performance evaluation of Independent Directors,
Board of Directors and Committees of the Board.

The parameters like attendance and participation of Directors
in the meetings of the Board and its Committees thereof,
contribution to strategic decision making, financial statements
and business performance have been the basis criteria for
performance evaluation.

The evaluation of Board as a whole and each individual director
is performed after seeking all the inputs from the Directors.

The performance evaluation of executive Directors,
Chairperson of the Board is done by the Independent Directors
at their separate meeting.

For the year 2025-26, evaluation of Board as a whole, Non¬
executive and Independent Directors and Executive Directors
of the Company has been duly carried out as per the policy laid
by the Nomination and Remuneration Committee.

FAMILIARISATION PROGRAM FOR INDEPENDENT
DIRECTORS

All Independent Directors are familiarised with the operations
and functioning of the Company. The details of familiarisation
programme are provided in Corporate Governance Report
which forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Management's Discussion and Analysis report for the year
under review as stipulated under Regulation 34(2) (e) SEBI
(LODR) Regulation, 2015 of the LODR Regulations 2015 is
presented in a separate section forming part of the Annual
report

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 confirm that:

(a) in the preparation of the annual accounts for the year
ended March 31, 2026, 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 31,2026 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.

IMPLEMENTATION OF CORPORATE ACTIONS, FAILURES IF
ANY

During the year under review, no instances of failure to
implement corporate actions were reported.

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 SEBI(LODR)
Regulations,2015, 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.

DISPATCH OF ANNUAL REPORTS

In compliance with the applicable provisions, we shall dispatch
the Annual Report for the 2025-26 in electronic format to all
the members whose e-mail addresses are registered and
updated with our Registrar & Transfer Agents

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company is committed to enhance value creation in
the society and community in which it operates. Through its
conduct, services, and CSR initiatives it will strive to promote
sustained growth in the surrounding environs.

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 of the Company
is available on the website of the Company (http://knrcl.com/
images/policies/knrcl CSR.pdf ).

The Annual Report on CSR activities carried out by the Company
for the 2025-26 is annexed herewith as "Annexure IN" to this

report as required under the provisions of the Companies Act,
2013 and applicable rules thereunder.

The impact assessment reports on the CSR projects
implemented by the Company namely construction of
anganwadi schools at Wayanad, Kerala and construction of
road from Varikole to Vemulapally, Telangana are available on
the following link https://www.knrcl.com/csr.html

STATUTORY AUDITORS

M/s K P Rao & Co., Chartered Accountants, were re-appointed
as Statutory Auditors of the Company at the 27th Annual
General Meeting held on September 28, 2022 for a period of 5
years ie., upto conclusion of 32nd AGM to be held in the year
2027.

Further, the Statutory Auditor’s report does not contain any
qualifications, reservations, adverse remarks or disclaimers.
The Statutory Auditors attended the AGM held on September
25, 2025.

Further the Notes on Financial Statements referred in the
Auditors Report are self-explanatory and do not call for any
further comments.

INTERNAL AUDITOR & CONTROLS

The Board of Directors at their meeting held on May 29, 2026,
based on the recommendation of the Audit Committee, has 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 the provisions of Section 148(3) and other
applicable provisions, if any, of the Companies Act, 2013 and
the Companies (Audit and Auditors) Rules, 2014, the Board of

Directors, upon the recommendation of Audit Committee, at
their meeting held on May 29, 2026 has appointed M/s. Suneel
& Associates., Cost Accountants, Hyderabad, as the Cost
Auditors of your Company to carry out the cost audit for the
financial year 2025-26 at a remuneration of ' 3,00,000/-. The
remuneration payable to the cost auditor is required to be placed
before the members in the general meeting for their ratification.
Accordingly, a resolution seeking members’ ratification for
the remuneration payable to M/s Suneel & Associates., Cost
Accountants, is included in the Notice convening the Annual
General Meeting. Your Company is maintaining cost records
as specified by the Central Government under Section 148(1)
of the Companies Act, 2013.

A Certificate from M/s. Suneel & Associates., Cost Accountants
has been received to the effect that their appointment as Cost
Auditor of your Company is in accordance with the limits
specified under Section 141 of the Companies Act, 2013 and
the Rules framed thereunder.

REPORTING OF FRAUDS

During the year under review, there was no instance of
fraud, which required the Statutory Auditors to report to the
Audit Committee and/or Board under Section 143(12) of the
Companies Act, 2013 and the rules made thereunder.

SECRETARIAL AUDITOR

In accordance with Section 204 of the Companies Act, 2013
and Regulation 24A of SEBI (LODR) Regulations, 2015 M/s.
VCSR & Associates, Company Secretaries, were appointed
as secretarial auditors of the Company for a period of 5 years
commencing from 2025-26 to conduct Secretarial Audit of the
Company. The Secretarial Audit Report for the financial year
ended March 31, 2026 is annexed herewith and marked as
Annexure IV to this Report.

There were no qualifications reported in the Secretarial Audit
Report.

SECRETARIAL STANDARDS

During the year under report, the Company has duly complied
with all the applicable secretarial standards as issued by the
Institute of Company Secretaries of India from time to time.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE
COMPANIES

A separate statement containing the salient features of the
Financial statements of the subsidiaries and joint ventures of

the Company is prepared in Form AOC-1 which forms part of
the Consolidated financial statements.

During the year under review, there were no new subsidiaries
of the Company.

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

http://knrcl.com/images/policies/Policy on MATERIAL
SUBSIDIARIES.pdf

MATERIAL SUBSIDIARIES

During the year 2025-26, as per the audited financial
statements for the financial year ended March 31, 2025, the
Company has identified one material unlisted subsidiaries for
the financial year 2025-26:

1. KNR Ramanattukara Infra Private Limited

This subsidiary is considered material due to its significant
impact on the Company’s financial position or performance.

Pursuant to the provisions of Regulation 24A of SEBI Listing
Regulations, 2015, the secretarial audit report of KNR
Ramanattukara Infra Private Limited, is annexed herewith as

Annexure V.NAMES OF COMPANIES WHICH HAVE CEASED TO BE
ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE
COMPANIES DURING THE YEAR

During the year under review, no companies were ceased to
be the subsidiaries of the Company. However, KNR Palani
Infra Private Limited, KNR Ramagiri Infra Private Limited were
ceased to be subsidiaries of the Company w.e.f. May 29, 2026
and June 1 1,2026 respectively.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements are prepared in
accordance with Indian Accounting Standards (Ind AS) as per
the Companies (Indian Accounting Standards) Rules, 2015
notified under Section 133 of the Companies Act, 2013 and
other relevant provisions of the Companies Act, 2013.

The Consolidated Financial Statements for the financial year
ended March 31,2026 forms part of the Annual Report.

Further, we undertake that the Annual Accounts of the
subsidiary Companies and the related detailed information
will be made available to the Company’s shareholders and to
the shareholders of the subsidiary companies seeking such
information at any point of time. Further, the Annual Accounts

of the subsidiary Companies shall also be kept for inspection
by any shareholder at the Registered office of the Company
and that of the subsidiary Companies.

Further, pursuant to the provisions of Section 136 of the Act, the
financial statements of the Company, consolidated financial
statements along with relevant documents and separate
audited financial statements in respect of subsidiaries, are
available on the website of the Company at www.knrcl.com

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://knrcl.com/images/policies/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.

The Company has not entered into any contracts/
arrangements with related parties referred to under Section
188(1) of the Companies Act, 2013, not at arms-length basis
during the year. The details of the related party transactions
are provided herewith as Annexure VI in Form AOC-2.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to Conservation of Energy, Technology
absorption, Foreign Exchange earnings and outgo as required
under f Section 134(3)(m) of the Act read with Rule 8 of the

Companies (Accounts) Rules, 2014 are as follows:

a) Conservation of Energy

The Company has taken suitable measures for
conservation of energy to the extent possible. However,
the core activity of the Company is civil construction
which is not an energy intensive sector where energy
consumption is at intensive level.

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.

a) The Company has not imported any technology during
the last 5 years.

Foreign Exchange Earnings and Outgo

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.

VIGIL MECHANISM

The Company has a Vigil mechanism and Whistle blower
policy in terms of the SEBI (LODR)Regulations, 2015 and the
Companies Act, 2013 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

CODE OF CONDUCT FOR THE PREVENTION OF INSIDER
TRADING

The Board of Directors has adopted the Insider Trading Policy
in accordance with the requirements of the SEBI (Prohibition
of Insider Trading) Regulation, 2015 and amended Regulations
2018. The Insider Trading Policy of the Company lays down
guidelines and procedures to be followed, and disclosures
to be made while dealing with shares of the Company, as
well as the consequences of violation. The policy has been
formulated to regulate, monitor and ensure reporting of deals
by employees and to maintain the highest ethical standards of
dealing in Company securities.

The Insider Trading Policy of the Company covering code of
practices and procedures for fair disclosure of unpublished
price sensitive information and code of conduct for the
prevention of insider trading, is available on our website (http://
knrcl.com/images/policies/knrcl 8insider.pdf )

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, Guarantees and Investments made
during the Financial Year ended March 31,2026, covered under
the provisions of Section 186 of the Companies Act, 2013 read
with Companies (Meetings of Board and its Powers) Rules,
2014, form part of the Standalone Financial Statements.

ANNUAL RETURN

As required under the provisions of Section 92 of the
Companies Act, 2013, copy of Annual Return of the Company
for the year ended March 31, 2026 is made available on the
website of the Company and the same can be accessed
through the following link.

http://knrcl.com/annualreports.html

Risk Management

Your Company has constituted a Risk Management
Committee and formulated a policy on Risk Management in
accordance with the Companies Act, 2013 and Regulation 21
of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 to frame, implement and monitor the risk
management plan for your Company. The Committee is
responsible for monitoring and reviewing the risk management
plan and ensuring its effectiveness. The Audit Committee has
additional oversight in the area of financial risks and controls.
The major risks identified by the businesses and functions
are systematically addressed through mitigating actions
on a continuing basis. The Risk Management Policy of your
Company is posted on the website of your Company which
may be accessed athttp://knrcl.com/images/policies/Risk-
Management-Policy.pdf

MATERIAL ORDERS PASSED BY COURTS/REGULATORS/
TRIBUNALS

There were no material or significant orders passed by the
regulators/courts/tribunals that would impact the going
concern status of the Company and its future operations.

CORPORATE INSOLVENCY RESOLUTION PROCESS
INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY
CODE, 2016.

No corporate insolvency resolution processes were initiated
against the Company under the Insolvency and Bankruptcy
Code, 2016, during the year under review.

DETAILS OF DIFFERENCE BETWEEN THE VALUATION
DONE AT THE TIME OF ONE TIME SETTLEMENT AND
VALUATION DONE WHILE TAKING LOAN FROM THE BANKS
OR FINANCIAL INSTITUTIONS ALONG WITH REASONS
THEREOF

Not applicable as there were no instances of one-time
settlement with the Banks or financial institutions.

INSURANCE

All the movable properties and assets of the Company are
adequately insured for the year under report.

PARTICULARS OF EMPLOYEES

Information pertaining to remuneration as required u/s 197(12)
of the Companies Act, 2013 read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014.

i. The percentage of increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial
year 2025-26, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the
financial year 2025-26 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance
of the Company are as under:

Further details of top ten employees in terms of remuneration drawn during the financial year ended March 31,2026 as required
under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and as amended are:

• None of the above employees were relative of any Directors except in the case of Sri K Jalandhar Reddy and Sri K Narsimha
Reddy, Sri K Jalandhar Reddy is the son of Sri K Narsimha Reddy.

• All appointments are / were contractual in accordance with terms and conditions as per Company rules.

• Gross Remuneration includes perquisites and contribution to Provident fund by the employer.

ii) The median remuneration of employees of the Company
during the financial year was ' 2.76 Lakhs;

iii) In the financial year, there was no Increase in the median
remuneration of employees;

iv) There were 2,542 employees on the rolls of Company as
on March 31,2026

v) Relationship between average increase in remuneration
and company performance: The Profit before tax and
exceptional items for the financial year ended March
31, 2026 decreased by 82.32 % accordingly there is no
increase in median remuneration %.

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

The total remuneration of Key Managerial Personnel was
' 2,482.89 Lakhs whereas the Profit before tax and after
exceptional item was ' 16,965.07 Lakhs in 2025-26 .

vii) a) Variations in the market capitalisation of the

Company: The market capitalisation as on March
31,2026 at NSE was ' 3,17,908 Lakhs (' 6,43,886.61
Lakhs as on March 31,2025)

b) Price Earnings ratio of the Company at NSE was
29.97 as at March 31,2026 and 8.87 as at March 31,
2025;

viii) Average percentage decrease made in the salaries of
employees other than the managerial personnel in the
financial year 2025-26 was 17.44% as well as there is an
increase in the managerial remuneration for the same
financial year was 4.59%

ix) The key parameters for any variable component of
remuneration availed by the executive directors: Financial
performance of the Company

x) The Details of the employee who was in receipt of
remuneration in the 2025-26 which, in the aggregate, or
as the case may be, at a rate which, in the aggregate, is in
excess of that drawn by the managing director or whole¬
time director or manager and holds by himself or along
with his spouse and dependent children, not less than
two percent of the equity shares of the Company: Not
Applicable

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 PREVENTION, PROHIBITION AND REDRESSAL
OF SEXUAL HARASSMENT AT WORK PLACE:

We strongly support the rights of all our employees to work in
harassment - free environment. We have adopted a Policy on
Prevention, Prohibition and Redressal of Sexual Harassment at
workplace as per the provisions of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013 ('’POSH Act") and the Rules made thereunder. The
policy aims to provide protection to Employees at the workplace
and prevent and redress complaints of sexual harassment and
for matters connected or incidental thereto, with the objective
of providing a safe working environment, where Employees
feel secure.

Further, we have in place a committee under the name and
style "Internal Complaints Committee" in compliance of POSH
Act, which looks into various matters concerning harassment,
if any, against women at workplace, addresses concerns and
complaints of sexual harassment and recommends appropriate
action. Details of composition etc., of the said committee are
provided in the section on Corporate Governance. We further
confirm that during the year under review, there were no cases
filed pursuant to the said Act.

COMPLIANCE WITH THE PROVISIONS RELATING TO THE
MATERNITY BENEFITS ACT, 1961

Your Company complies with the provisions of the Maternity
Benefits Act, 1961, extending all statutory benefits to eligible
women employees, including paid maternity leave, continuity
of salary and service during the leave period and post
maternity support such as flexible return-to work option etc,
as applicable. Your Company remains committed to fostering
an inclusive and supportive work environment that upholds the
rights and welfare of its women employees in accordance with
applicable laws.

BUSINESS RESPONSIBILITY AND SUSTAINABLE REPORT
(BRSR)

Your Company being among the top 1000 listed entities
based on market capitalisation, is required to present the
Business Responsibility and Sustainability Report as required
under the Regulation 34(2) (f) of SEBI (LODR) Regulations,
2015. The BRSR of the Company for the year ended March

31, 2026 forms part of this report and annexed herewith as
Annexure VII.

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

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.

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 Director’s 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.

For and on behalf of the Board of Directors
of KNR Constructions Limited

K Narsimha Reddy K Jalandhar Reddy

Managing Director Executive Director& CFO

DIN: 00382412 DIN: 00434911

Place: Hyderabad
Date: August 13, 2026