KNR Constructions Limited has received penalty orders totaling approximately ₹71 crore from the Income Tax Department for assessment years ranging from 2017-18 to 2020-21. The company intends to challenge these orders, asserting that the demands are not maintainable under the law.

The penalties were issued by the Assistant Commissioner of Income Tax, Central Circle 2(2) Hyderabad, following search-related assessments. The company disclosed this development in a filing to stock exchanges on September 30, 2026, citing Regulation 30 of SEBI (LODR) Regulations, 2015.

Breakdown of penalty amounts

The total penalty liability is distributed across four assessment years, with the highest single-year impact recorded in AY 2019-20. The specific breakdown of the penalty orders is as follows:

The largest portion of the penalty, ₹56.40 crore, relates to AY 2019-20, accounting for nearly 80% of the total demand. The penalties were levied under Section 270A of the Income Tax Act, 1961, which pertains to misreporting or underreporting of income.

Company response and next steps

In its statement, KNR Constructions stated that based on its internal assessment, the penalty demands are legally unsound. The company confirmed it will file an appeal before the appropriate forum within the stipulated timeline. It further noted that it would update stakeholders on the outcome of these proceedings as they progress.

The receipt of these orders highlights a significant regulatory risk for the infrastructure major, although the company maintains that the financial impact is contestable. Investors will monitor the appeal process for any potential cash outflow implications should the initial legal challenges fail.

KNR Constructions Limited shareholders approved all six resolutions proposed at the 31st Annual General Meeting held on September 25, 2026. The meeting, conducted via video conferencing, saw the adoption of financial statements and the declaration of a final dividend.

The company declared a final dividend of ₹0.25 per equity share with a face value of ₹2.00 for FY26. This resolution received overwhelming support, with 99.9980% of votes polled in favor. The record date for determining eligibility was September 18, 2026.

Governance and Financial Approvals

Shareholders ratified the appointment of Smt. K Yashoda as Director, who retired by rotation and offered herself for reappointment. The resolution passed with 99.9954% support from those voting. Additionally, the remuneration of Cost Auditors for FY27 was ratified, passing with negligible opposition.

The audited standalone and consolidated financial statements for the year ended March 31, 2026, were adopted. The voting results indicate strong promoter alignment, with promoters and promoter group holding 137,259,146 shares and casting 100% of their votes in favor of all routine items.

Related Party Transactions

Two material related party transactions were approved, though they faced notable dissent from institutional investors. The first involved transactions with KNRHC Baidyanath Banhardih Coal Mine Private Limited, a subsidiary. The second covered transactions with KNR-SIML (JV), a related party.

In both cases, institutional public shareholders voted against approximately 22% of the valid votes cast. Promoter group votes were excluded from the validity calculation for these specific resolutions as per SEBI (LODR) Regulations, 2015.

What the Numbers Show

A distinct divergence appears between routine governance items and related party transactions. While routine resolutions enjoyed near-unanimous support from institutional investors (100% in favor), institutional opposition to the two material related party transactions was significant, reaching 22.0793% of valid votes cast. This suggests that while institutional confidence remains high in general management, there is specific caution regarding the scale or nature of dealings with the coal mine subsidiary and the joint venture.