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Notes to Accounts of KEC International Ltd.

Mar 31, 2017

1. General information

KEC International Limited (“the Company”) is a public limited company incorporated and domiciled in India. The registered office of the Company is located at RPG House, 463, Dr. Annie Besant Road, Worli, Mumbai- 400 030.

The Company is primarily engaged in Engineering, Procurement and Construction business (EPC) relating to infrastructure interalia products, projects and systems for power transmission, distribution, and related activities.

2. Application of new and revised Indian Accounting Standards (Ind ASs)

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of Cash Flows’. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of Cash Flows’. The amendments are applicable to the Company from April 1, 2017.

Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of the financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

3. First-time adoption - mandatory exceptions, optional exemptions Overall principle

The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2015 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions availed by the Company as detailed below.

Derecognition of financial assets and financial liabilities

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2015 (the transition date).

Classification of debt instruments:

The Company has determined the classification of financial instruments in terms of whether they meet the amortised cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date.

Impairment of financial assets

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, ‘First Time Adoption of Indian Accounting Standards’, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS101.

Assessment of embedded derivatives

The Company has assessed whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative on the basis of the conditions that existed at the later of the date it first became a party to the contract and the date when there has been a change in the terms of the contract that significantly modifies the cash flows that otherwise would be required under the contract.

Determining whether an arrangement contains a lease

The Company has applied Appendix C of Ind AS 17 Determining whether an Arrangement contains a Lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date.

Cumulative translation differences on foreign operations

The Company has elected the option to reset the cumulative translation differences on foreign operations that exist as of the transition date to zero.

Joint operation- Transition provisions in the financial statements.

Under the previous GAAP, the Company has accounted investment in Al Sharif Group and KEC Limited Company, being a jointly Controlled Entity as an investment at cost. Under Ind AS, this joint arrangement has been classified as joint operation (Refer Note 5.1.1).

Accordingly, the Company has de-recognised the investment and recognised the assets and liabilities in respect of its interest in joint operation. The effect of this transition provision at the date of transition to Ind AS i.e. April 1, 2015 is as under:

4. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Company’s accounting policies, which are described in Note 3, the directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

4.1 Critical judgements in applying accounting policies

The following are the critical judgements, apart from those involving estimations (see Note 5.2 below), that the directors have made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

4.1.1 Classification of Joint Arrangement as a Joint Operation

In terms of Ind AS 111, ‘Joint Arrangement1, the following joint arrangements have been classified as joint operations as the contractual arrangements between the parties specify that parties have rights to the assets, and obligations for the liabilities, relating to the arrangement:

i) Al- Sharif Group and KEC Ltd. Company, Saudi Arabia

ii) EJP KEC Joint Venture, South Africa

iii) KEC-ASSBJV

iv) KEC-ASIAKOM-UBJV

v) KEC-ASIAKOMJV

vi) KEC - DELCO - VARAHAJV

vii) KEC-VARAHA-KHAZANAJV

viii) KEC-VALECHA-DELCOJV

ix) KEC-SIDHARTHJV

x) KEC-TRIVENI-KPIPLJV

xi) KEC - UNIVERSALJV

xii) KEC - DELCO - DUSTANJV

xiii) KEC-ANPR-KPIPLJV

xiv) KEC-PLR-KPIPLJV

xv) KEC - BJCLJV

xvi) KEC-KIELJV

xvii) KEC-ABEPLJV

xviii) KEC-TNR Infra JV

xix) KEC-SMCJV

xx) KEC-WATERLEAUJV

Although Al Sharif Group and KEC Ltd. Company, Saudi Arabia is a limited liability company whose legal form confers separation between the parties to the joint arrangement and the Company itself, the internal agreements (contractual arrangements) entered into between the parties to the joint arrangements for execution of projects (turnkey contracts) reverses or modifies the rights and obligations conferred by the legal form and establishes and define their respective rights and obligations on these projects. As per these contractual arrangements, the parties to the joint arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Accordingly, Al Sharif Group and KEC Ltd. Company, Saudi Arabia is classified as a joint operation of the Company.

4.2 Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

4.2.1 Revenue recognition for construction contracts

As described in Note 3.5, revenue and costs in respect of construction contracts are recognised by reference to the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

4.2.2 Useful lives of property, plant and equipment and intangible assets

As described in Notes 3.11 and 3.12 above, the Company reviews the estimated useful lives of property, plant and equipment and intangible assets at the end of each reporting period. There was no change in the useful life of property, plant and equipment and intangible assets as compared to previous year.

4.2.3 Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Guarantees are also given in the normal course of business. There are certain obligations which managements have concluded based on all available facts and circumstances are treated as contingent liabilities and disclosed in the Notes but are not provided for in the financial statements. Although there can be no assurance of the final outcome of the legal proceedings in which the company is involved it is not expected that such contingencies will have material effect on its financial position or profitability.

4.2.4 Income taxes

In preparing the financial statements, the Company recognises income taxes in each of the jurisdictions in which it operates. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. The uncertain tax positions are measured at the amount expected to be paid to taxation authorities when the Company determines that the probable outflow of economic resources will occur. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

Note 5.1

The title deeds of freehold land and buildings, having gross carrying amount aggregating Rs. 2,634.79 lakh (as at March 31, 2016 Rs. 2,634.79 lakh, as at April 1, 2015 Rs. 2,634.79 lakh) and net carrying amount aggregating Rs. 2,582.45 lakh (as at March 31, 2016 Rs. 2,586.81 lakh, as at April 1, 2015 Rs. 2,591.26 lakh) have been transferred to and vested in the Company, pursuant to the Schemes of Amalgamation/ Arrangement in earlier years and the procedural formalities for transfer in the name of the Company in the relevant documents are in process.

Note 5.2

For details of Property, plant and equipment having gross carrying amount aggregating Rs. 86,222.33 lakh (As at March 31, 2016 Rs. 86,064.38 lakh, as at April 1, 2015 Rs. 85,863.30 lakh), which are pledged as security for borrowings - refer Notes 23 and 27.

Note 6.1

Brands includes brand of the power transmission business amounting Rs.24,000 lakh which was acquired by the Company under the High Court approved Composite Scheme of Arrangement (the ‘Scheme’) in an earlieryear. In terms of the Scheme, the brand is being amortised by the Company over its useful life, which based on an expert opinion is estimated to be of 20 years. The carrying amount of the brand as on March 31, 2017 is Rs.9,600 lakh (as at March 31, 2016 Rs.10,800 lakh, as at April 1, 2015 Rs.12,000 lakh) and the remaining amortisation period is 8 years (as at March 31, 2016 - 9 years, as at April 1, 2015-10 years).

7.1 Investments in equity instruments in subsidiaries and associate is at cost.

7.2 Includes 5,100,000 equity shares pledged in respect of term loan availed during the year by KEC Bikaner Sikar Transmission Private Limited.

7.3 These shares are offered on a private placement basis and it carries a fixed non-cumulative dividend at a rate of 1% per annum. The Company has an option to convert each OCPS into one equity share of Rs.10 each and to demand for the redemption of these shares after a lock in period of 5 years. Fair value is determined in the manner described in Note 48.13. The loss on fair valuation of preference shares of Rs.429.00 lakh is recognised in “Other expenses” (Note 42).

8.1 The cost of inventories recognised as an expense during the year was Rs.360,155.30 lakh (for the year ended March 31, 2016 Rs.366,795.43 lakh).

8.2 The cost of inventories recognised as expense includes Rs.1,894.06 lakh (for the year ended March 31, 2016 Rs. 712.79 lakh) in respect of write-downs of inventory to net realisable value, and has been reduced by Rs.271.86 lakh (for the year ended March 31, 2016 Rs.Nil) in respect of reversal of such write downs.

8.3 The above inventories have been pledged as security for borrowings (Refer Notes 23 and 27)

9.1 Transfer of financial assets

During the current year the Company discounted trade receivables with an aggregate carrying amount of Rs. 34,076.25 lakh to banks for cash proceeds of Rs. 32,840.37 lakh. These arrangements are non-recourse to the Company and accordingly, the Company has de-recognized these receivables as at March 31, 2017. Further, the Company has discounted certain trade receivables with the banks with recourse to the Company. The carrying amount of such receivables as at March 31,2017 Rs.10,606.41 lakh (As at March 31, 2016 Rs.33,979.54 lakh, As at April 1, 2015 Rs.15,297.64 lakh) are recognized as trade receivables and the corresponding carrying amount of associated liabilities are recognized as secured borrowings (Note 27).

10.1 The Company had provided short term loans to wholly owned subsidiary for the purpose of providing loans to and/or making strategic investments in the step down subsidiaries. These loans are given at rates comparable to the average commercial rate of interest.

10.2 Loans and advances to Joint operations have been provided by the Company to meet the short term working capital requirements for execution of projects by the joint operations.

10.3 Disclosure required by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

(i) Loans and advances in the nature of loans given to the wholly owned subsidiary.

(ii) KEC Investment Holdings, Mauritius has no investment in the Company. It has investment of 1 Ordinary Share of USD 50 in KEC International Holdings LLC, USA, its wholly owned subsidiary. During the previous year ended March 31, 2016, KEC Investment Holdings, Mauritius has made investment in SAE Towers Holdings LLC, its wholly owned step-down subsidiary, amounting to USD 10,000,000 Liabilities associated with assets classified as held for sale (i.e. advance against assets classified as held for sale)Rs.940.94 lakh (As at March 31, 2016, Rs.940.94 lakh, As at April 1, 2015, Rs.940.94 lakh) included under Note 31 “Other current liabilities”

11.1 3,750 fully paid up Equity Shares of Rs. 2 each were allotted to a trustee against 1,688 equity shares of the erstwhile RPG Transmission Limited (RPGT), since merged in the Company in 2007-08, where rights were kept in abeyance by RPGT. On settlement of the relevant court cases/issues, the Equity Shares issued to the trustee will be transferred.

11.2 The Company has only one class of Equity Shares having a face value of Rs. 2 each. Every member shall be entitled to be present, and to speak and vote and upon a poll the voting right of every member present in person or by proxy shall be in proportion to his share of the paid- up equity share capital of the Company. The Company in General Meeting may declare dividends to be paid to members, but no dividends shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

Note (a) Capital reserve was created on account of merger of RPG Cables Limited (RPGCL) with the Company pursuant to the Scheme of Amalgamation in the financial year 2009-2010.

Note (b) Securities premium reserve is used to record the premium on issue of shares. The reserve is utilized in accordance with the provisions of the Companies Act.

Note (c) This reserve was created for redemption of preference shares. The preference shares were redeemed in the financial years 2007-08 and 2008-09.

Note (d) Debentures redemption reserve is created towards redemption of debentures referred to in Note 23.

Note (e) General reserve is created from time to time by way of transfer profits from retained earnings. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.

Note (f) This reserve pertains to the Joint Operation at Saudi Arabia. In accordance with the Saudi Arabian Companies law and the Articles of Association, 10 % of the annual net income is required to be transferred to the Statutory Reserve until the reserve reaches 50 % of the capital of the Joint Operation.

12.1 Debentures

(a) 2,500, Secured, Rated, Listed, Redeemable Non-Convertible Debentures (“NCD”) of face value of Rs.10 lakh each aggregating Rs.25,000 lakh issued during the year are secured by first charge on the immovable properties at Vadodara and Mysore. Further secured by hypothecation of movable assets of the Company situated at Mysore and Vadodara. 500 NCD of Rs.10 lakh each aggregating Rs.5,000 lakh are repayable on December 20, 2021, 500 NCD of Rs.10 lakh each aggregating Rs.5,000 lakh are repayable on April 20, 2021 and 1,500 NCD of Rs. 10 lakh each aggregating to Rs.15,000 lakh are repayable on April 20, 2020. Debentures are Zero Coupon with yield on maturity of 9.33% p.a. monthly compounded and payable at maturity (with a yield to maturity @9.74% p.a.)

(b) Rs.Nil (As at March 31, 2016 Rs.7,500 lakh, As at April 1, 2015 Rs.7,500 lakh) 750,11.65%, Privately Placed, Secured, Redeemable Non-Convertible Debenture (“NCD”) of Rs. 10 lakh each aggregating Rs.7,500 lakh, secured by first charge on the Company’s immovable property located at Mysore and hypothecation of all fixed and movable assets of the Company located at Mysore. 350 Debentures of Rs. 10 lakh each aggregating Rs.3,500 lakh which were repayable on June 15, 2018 and 400 Debentures of Rs. 10 lakh each aggregating Rs. 4,000 lakh which were repayable on June 14, 2017 have been repaid during the year.

12.2 Term loans from banks

(a) Rs. Nil (As at March 31, 2016 Rs. 5,006.27 lakh, As at April 1, 2015 Rs. 6,313.55 lakh) secured by first charge on land, building and plant & machinery at Jabalpur and Nagpur factories. The term loan which was repayable by September 28, 2018 has been repaid during the year.

(b) Rs. Nil (As at March 31, 2016 Rs. 4,241.27 lakh, As at April 1, 2015 Rs. 4,736.05 lakh) secured by first charge on land, building and plant & machinery situated atjaipur factory. The term loan which was repayable by March 31, 2019 has been repaid during the year.

(c) Rs. Nil (As at March 31, 2016 Rs. Nil, As at April 1, 2015 Rs. 2,798.50 lakh) secured by first charge on movable assets of Telecom Division including Telecom Towers.

(d) Rs. Nil (As at March 31, 2016 Rs. Nil, As at April 1, 2015 Rs. 564.31 lakh) secured by first charge on movable fixed assets i.e construction equipment pertaining to the Transmission, Distribution and Railway business situated at various projects sites in India.

12.3 Term loans from other parties

(a) Rs. Nil (As at March 31, 2016 Rs. 4,595.65 lakh, As at April 1, 2015 Rs. 6,160.87 lakh) secured by exclusive first charge on the project assets, including immovable properties at Cable factory, Vadodara. The term loan which was repayable by March 20, 2018 has been repaid during the year.

(b) Rs. Nil (As at March 31, 2016 Rs. Nil, As at April 1, 2015 Rs. 807.69 lakh) secured by first charge over the fixed assets pertaining to Tower Testing Station situated in Nagpur.

12.4 Finance Lease Obligations

(a) Rs.8.51 lakh (As at March 31, 2016 Rs.22.40 lakh, As at April 1, 2015 Rs.286.47 lakh) secured against equipment of a joint operation at Saudi Arabia. The lease obligation is repayable in monthly instalments through November, 2017 and the present interest rate is 10.63% p.a.

(b) Rs.412.35 lakh (As at March 31, 2016 Rs.828.45 lakh, As at April 1, 2015 Rs.176.19 lakh) secured against certain vehicles of a joint Operation at Saudi Arabia. The lease obligations are repayable in monthly instalments through December, 2018 and the present interest rates are in the range of 10.63% to 14.84% p.a.

13.1 Loans repayable on demand from banks :

(a) Secured

(i) Rs.5,088.32 lakh (As at March 31, 2016 Rs.90,468.99 lakh, As at April 1, 2015 Rs.51,931.78 lakh) secured by first charge by hypothecation on the whole of the current assets of the Company, both present and future (except specific receivables financed by financial institutions and banks) and second charge on all the movable fixed assets of the Company. Further secured by first charge on fiat situated at Juhu, Mumbai and second charge created on the Company’s immovable properties situated atjaipur, Jabalpur and Nagpur factories. The present interest rates are in the range of 9.50% to 13.50% p.a.

(ii) Rs.1.53 lakh (As at March 31,2016 Rs. 19,138.39 lakh, As at April 1, 2015 Rs.12,735.79 lakh) guaranteed by banks, which in turn is secured by security stated against Note 27.1 (a) (i) above. The present interest rates are in the range of 2.41% to 3.48% p.a.

(iii) Rs.1,489.00 lakh (As at March 31, 2016 Rs.983.10 lakh, As at April 1, 2015 Rs.4,046.69 lakh) secured by assignment of certain overseas book debts of the Company. The present interest rate is 6.00% p.a.

(iv) Rs.20,091.42 lakh (As at March 31,2016 Rs. 14,805.73 lakh, As at April 1, 2015 Rs.1,096.09 lakh), secured by the contract receivables of certain projects of a joint operation at Saudi Arabia. Also secured by bank guarantee given by bankers of the Company which in turn is secured by security of the Company stated against Note 27.1 (a) (i), corporate guarantee of the Company. The present interest rates are in the range of3.50% to 4.50% p.a.

13.2 Other short-term borrowings

(a) From Banks-secured

(i) Rs.44,281.45 lakh (As at March 31,2016 Rs. 46,025.58 lakh, As at April 1, 2015 Rs. 63,143.99 lakh) secured by security stated against Note 27.1 (a) (i) above. The present interest rates are in the range of 1.44% to 2.50% p.a.

(ii) Rs.10,606.41 lakh (As at March 31, 2016 Rs.13,832.76 lakh, As at April 1, 2015 Rs.4,331.08 lakh), secured by the contract receivables of certain projects of a joint operation at Saudi Arabia discounted with the banks. Also secured by corporate guarantee given by the Company. The present interest rates are in the range of3.88% to 4.31% p.a.

(iii) Rs.Nil (As at March 31, 2016 Rs.20,146.78 lakh, As April 1, 2015 Rs.10,966.56 lakh) secured by contract receivables of certain projects of the Company discounted with the banks.

(b) Unsecured

(i) Rs.4,559.71 lakh (As at March 31, 2016 Rs.14,008.76 lakh, As at April 1, 2015 Rs.3,408.94 lakh), pertains to the Company. The present interest rates are in the range of9.50% to 10.50% p.a.

(ii) Rs.5,530.89 lakh (As at March 31, 2016 Rs.484.00 lakh , As at April 1, 2015 Rs.Nil), pertaining to a joint operation at Saudi Arabia. The present interest rates are in the range of2.00% to 4.40% p.a.

(c) From Other Parties-secured

(i) Rs.13,589.90 lakh (As at March 31, 2016 Rs.14,341.61 lakh, As at April 1, 2015 Rs. 15,141.18 lakh) secured by security stated against Note 27.1 (a) (i) above. The loan of Rs. 3,894.74 lakh carries interest rate of 3.82% p.a, loan of Rs.4,857.67 lakh carries interest rate of 3.51% p.a and loan of Rs. 4,837.49 lakh carries interest rate of3.54% p.a.

(ii) Rs.14,831.58 lakh (As at March 31,2016 Rs. Nil , As at April 1, 2015 Rs.25,987.28 lakh) being commercial papers issued against standby facilities from certain banks which in turn is secured by security stated against Note 27.1 (a) (i) above. The present interest rates are in the range of 6.75% to 7.25% p.a. Maximum balance outstanding anytime during the year is Rs.80,000 lakh (during the year ended March 31, 2016 Rs.80,000 lakh)

Acceptances comprises of credit availed for payment to suppliers for materials (including project bought outs) purchased and services availed by the Company. The arrangements are payable as per agreed credit terms. The fair value of acceptances is not materially different from the carrying values presented.

Credit period varies as per the contractual terms of various suppliers/vendors. No interest is generally charged by the suppliers/ vendors. The Company has appropriate policy in place to ensure that all dues are paid within the credit terms agreed with the parties.

14.1 Excise duty shown above includes Rs. (67.99) lakh (Previous Year Rs. (371.98) lakh) being excise duty related to the difference between the closing stock and opening stock of finished goods.

14.2 Other expenses shown above include fees of Rs.152.26 lakh (Previous YearRs.164.54 lakh) paid to branch auditors, fees of Rs.49.92 lakh for auditors of joint operations (Previous Year of Rs. 23.07 lakh) and fees of Rs. 7.00 lakh (Previous YearRs.7.00 lakh) paid to the cost auditors.

Note 15 - Joint Operations

Details of the Company’s joint Operations are as under:

a) The Company accounts for the assets, liabilities, revenue and expenses relating to its interest in joint operations based on the internal agreements / arrangements entered into between the parties to the joint arrangements for execution of projects, which in some cases are different than the ownership interest disclosed above. Accordingly the Company has recognised total income from operations Rs.119,343.53 lakh (for the year ended March 31, 2016 Rs.165,052.02 lakh), total expenditure (including tax) Rs.100,665.36 lakh (for the year ended March 31, 2016 Rs.146,252.15 lakh), total assets as at March 31, 2017 Rs.178,725.71 lakh (as at March 31, 2016 Rs.165,598.36 lakh, as at April 1, 2015 Rs.129,114.57 lakh) and total liabilities as at March 31, 2017 Rs.138,356.72 lakh (as at March 31, 2016 Rs.142,932.10 lakh, as at April 1, 2015 Rs.111,048.36 lakh).

Note 16 - Leases (A) - Operating Leases

(i) The Company has entered into various long term lease agreements for land. The Company does not have an option to purchase the leased land at the expiry of the lease period. The unamortised operating lease prepayments as at March 31, 2017 aggregating Rs.4,123.77 lakh (as at March 31, 2016 Rs.4,201.33 lakh, as at April 1, 2015 Rs. 4,270.21 lakh) is included in other non current/current assets.

(ii) The Company has also entered into agreements for taking on operating lease a factory facility, residential premises, office premises, warehouses, furniture and fixtures and machinery, etc.

(B) - Finance Leases

(i) The joint operation of the Company has taken certain vehicles and equipment under finance lease. The average lease term is 3 years. There is option to purchase the assets at the end of lease terms. The obligation under finance leases are secured by the leased assets. There are no restrictions such as those concerning dividends, additional debt and further leasing imposed by the lease agreement.

Interest rates underlying all obligations under finance leases are fixed at respective contract dates ranging from 10.63% to 14.84% p.a

For net carrying amount of assets acquired under finance lease as at March 31, 2017 - Refer Note 6 Property, Plant and Equipment.

(ii) The maturity profiles of finance lease obligations are as follows:

Note 17 - Financial Instruments

17.1 Capital Management

The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to shareholders through the optimisation of the debt and equity.

The capital structure of the Company consists of net debt (borrowings as detailed in Notes 23 and 27 offset by cash and bank balances in Notes 15 and 16) and total equity of the Company.

The Company is not subject to any externally imposed capital requirements.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital.

The Company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.

17.2 Financial risk management objectives

The Company’s Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company. These risks include market risk (including currency risk, interest rate risk and commodity price risk), credit risk and liquidity risk.

The Company seeks to minimise the effects of currency risk and commodity price risk by using derivative and non derivative financial instruments to hedge risk exposures. The Company has Risk Management Policies to mitigate the risks in commodity and foreign exchange. The use of financial derivatives and non-derivatives is governed by the Company’s policies approved by the Board of Directors (BOD), which provide written principles to use financial derivatives and non-derivative financial instruments, to hedge currency risk and commodity price risk. The Company does not enter into or trade financial instruments, including derivative financial instruments and non-derivative financial instruments, for speculative purposes.

The Treasury Department prepares and submits the report on performance along with the other details relating to forex and commodity transaction to the Risk Management Committee. The periodical forex management report and commodity risk report as reviewed and approved by the Risk Management Committee is placed before the Audit Committee of BOD for review.

17.3 Market risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates (see Notes 48.5 and 48.10 below) and commodity price (see Note 48.8 below). The Company enters into a variety of derivative financial instruments to manage its exposure to foreign currency risk, interest rate risk and commodity price risk including:

- forward foreign exchange contracts to hedge the exchange rate risk arising from execution of international projects.

- Commodity Over the Counter (OTC) derivative contracts to hedge the Price Risk for base metals such as Copper, Aluminium and Zinc.

Derivatives are only used for economic hedging purposes and not as speculative investments. All such transactions are carried out within the guidelines set by the Board of Directors.

17.4 Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as under:

17.5 Sensitivity for above exposures

5% appreciation / depreciation in the functional currency of the Company i.e rupee with respect to the respective foreign currencies would result in decrease/ increase in the Company’s profit before tax and equity by Rs.15,809.86 lakh and Rs.12,643.89 lakh for financial assets and financial liabilities respectively, for the year ended March 31, 2017. 5% appreciation / depreciation in the functional currency of the company i.e rupee with respect to the respective foreign currencies would result in decrease/ increase in the Company’s profit before tax and equity by Rs.14,924.04 lakh and Rs.12,503.81 lakh for financial assets and financial liabilities respectively, for the year ended March 31, 2016. 5% appreciation / depreciation in the functional currency of the company i.e rupee with respect to the respective foreign currencies would result in decrease/ increase in the Company’s equity by Rs.15,179.68 lakh and Rs.14,549.84 lakh for financial assets and financial liabilities respectively, as at April 1, 2015.

17.6 Forward exchange contracts

The Company has adopted a Risk Management Policy approved by the Board of Directors for managing foreign currency exposure. The policy enumerates the mechanism for Risk Identification, Risk Measurement and Risk Monitoring. The policy has approved a set of financial instruments for hedging foreign currency risk. The Company mainly uses forward contracts to manage the foreign currency risk.

The following table details the forward foreign currency (FC) contracts as fair value hedges outstanding at the end of the reporting period:

The line-items in the balance sheet that include the above instruments are “Other financial assets” and “Other financial liabilities”.

For the year ended March 31, 2017, the aggregate amount of gains under forward foreign exchange contracts recognised in the Statement of Profit and Loss is Rs.438.85 lakh (for the year ended March 31, 2016 gain of Rs. 138.54 lakh).

In respect of the Company’s foreign currency forward contract (buy), a 5 % appreciation/depreciation of the foreign currency underlying such contracts would have resulted in an approximate gain/(loss) of Rs. 1,182.50 lakh/( Rs. 1,182.50 lakh) and an approximate gain/(loss) of Rs. 57.65 lakh/ ( Rs. 57.65 lakh) for the year ended March 31, 2017 and the year ended March 31, 2016 respectively in the Company’s Statement of Profit and Loss/Other Comprehensive Income.

In respect of the Company’s foreign currency forward contract (buy), a 5 % appreciation/depreciation of the foreign currency underlying such contracts would have resulted in approximate gain/(loss) of Rs. 526.13 lakh/ (Rs. 526.13 lakh) as at April 1, 2015 in the Company’s Other Equity.

In respect of the Company’s foreign currency forward contract (sell), a 5 % appreciation/depreciation of the foreign currency underlying such contracts would have resulted in an approximate (loss)/gain of ( Rs. 73.73 lakh)/ Rs. 73.73 lakh and an approximate (loss)/gain of( Rs. 407.32 lakh)/ Rs. 407.32 lakh for the year ended March 31, 2017 and the year ended March 31, 2016 respectively in the Company’s Statement of Profit and Loss/ Other Comprehensive Income.

In respect of the Company’s foreign currency forward contract (sell), a 5 % appreciation/depreciation of the foreign currency underlying such contracts would have resulted in approximate (loss)/gain of (Rs.Nil lakh)/ Rs. Nil lakh as at April 1, 2015 in the Company’s Other Equity.

17.7 Commodity price risk

The Company is exposed to movement in metal commodity prices of Copper, Aluminium, Steel and Zinc. Most of our contracts with the Indian customers are backed by a price variation for most of these metals. However, profitability in case of firm price orders is impacted by movement in the prices of these metals. The Company has a well defined hedging policy approved by Board of Directors, which to a large extent takes care of the commodity price fluctuations and minimizes the risk. For base metals like Aluminium, Copper and Zinc, the Company either places a firm order on the supplier or hedges its exposure on the London Metal Exchange (LME) directly. For Steel, the Company either places a long term firm price order with the suppliers or builds stocks on need basis to mitigate the risk.

In respect of the Company’s commodity derivative contracts, a 10 % appreciation/depreciation of all commodity prices underlying such contracts, would have resulted in an approximate gain/ (loss) of Rs. 512.04 lakh/ (Rs.512.04 lakh) and an approximate gain/(loss) of Rs. 1,179.75 lakh/ ( Rs. 1,179.75 lakh) in the Statement of Profit and Loss/other comprehensive income for the year ended March 31, 2017 and for the year ended March 31, 2016 respectively.

17.8 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments. The Company’s major customers includes government bodies and public sector undertakings. Further, many of the International projects are funded by the multilateral agencies such as World Bank, African Development Bank, Asian Development Bank etc. For private customers, the Company evaluates the creditworthiness based on publicly available financial information and the Company’s historical experiences. The Company’s exposure to its counterparties are continuously reviewed and monitored by the Chief operating decision maker (CODM).

Credit period varies as per the contractual terms with the customers. No interest is generally charged on overdue trade receivables.

The Company directly reduce the gross carrying amount of a financial asset when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The amounts of financial assets are net of an allowance for doubtful accounts, estimated by the Company and based, in part, on the age of specific receivable balance and the current and expected collection trends. When assessing the credit risk associated with its receivables, the Company also considers the other financial and non-financial assets and liabilities recognized within the same project to provide additional indications on the Company’s exposure to credit risk. As such, in addition to the age of its Financial Assets, the Company also considers the age of its contracts in progress, as well as the existence of any deferred revenue or down payments on contracts on the same project or with the same client. The Company has used practical expedient by computing expected credit loss allowance for trade receivable by taking into consideration historical credit loss experience and adjusted for forward looking information. The expected credit loss is based on the ageing of the days, the receivables are due and the expected credit loss rate.

Apart from the largest customer of the Company in Saudi Arabia (which is a state controlled enterprise) and a major customer in India (which is a public sector undertaking), the Company does not have significant credit risk exposure to any single customer. Concentration of credit risk related to the customer in Saudi Arabia exceeds 20% of the trade receivables of the Company and credit risk related to the major customer in India exceeds 10% of the trade receivables of the Company. Concentration of credit risk to any other customer did not exceed 10% of the trade receivables at any time during the year.

In addition the Company is exposed to credit risk in relation to financial guarantees given by the Company on behalf of its subsidiaries and joint operations (net of Company’s share). The Company’s maximum exposure in this respect is the maximum amount the Company could have to pay if the guarantee is called on (net of Company’s share in joint operations), as at March 31, 2017 Rs.76,797.28 lakh (as at March 31, 2016, Rs.58,437.96 lakh, as at March 31, 2015, Rs.46,840.07 lakh). These financial guarantees have been issued to the banks on behalf of the subsidiaries and joint operations under the agreements entered into by the subsidiaries/ Joint operations with the banks. Based on expectations at the end of the reporting period, the Company considers the likelihood of any claim under the guarantee is remote.

17.9 Interest rate risk management

The Company is exposed to interest rate risk because the Company borrows funds at both fixed and floating interest rates.

The Company’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management (Refer Note 48.12) of this Note.

17.10 Interest rate sensitivity

The sensitivity analysis below have been determined based on the exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used for the purpose of sensitivity analysis.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s profit for the year ended March 31, 2017 would decrease/ increase by Rs.1,211.89 lakh (for the year ended March 31, 2016 decrease/increase by Rs.1,678.90 lakh). This is mainly attributable to the Company’s exposure to interest rates on its variable rate borrowings.

During the year, the Company’s sensitivity in interest rate has decreased due to reduction in variable debt instruments.

17.11 Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of the financial assets and liabilities.

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The amounts included above for financial guarantee contracts are the maximum amounts the Company could be forced to settle under the arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee (Refer Note 48.9).

The amounts included above for variable interest rate instruments for non-derivative financial liabilities is subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period.

The Company has access to various fund/non-fund based bank financing facilities. The amount of unused borrowing facilities (fund and non fund based) available for future operating activities and to settle commitments as at March 31, 2017 Rs.556,674.58 lakh, (as at March 31, 2016 Rs.441,198.22 lakh, as at April 1,2015 Rs. 381,946.82 lakh).

17.12 Fair value measurements

Fair value of the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis. This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

Some of the Company’s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).

Note 18 - Employee Benefit Plans

1. Defined contribution plans Superannuation

All eligible employees are entitled to benefits under Superannuation, a defined contribution plan. The Company makes yearly contributions until retirement or resignation of the employee. The Company recognises such contributions as an expense when incurred. The Company has no further obligations beyond its yearly contribution.

The Company contributed Rs.103.74 lakh and Rs.107.02 lakh to the Employees’ Superannuation fund for the year ended March 31, 2017 and March 31, 2016, respectively.

Provident Fund

All eligible employees of the Company are entitled to receive benefits under the provident fund, a defined contribution plan in which both the employee and employer (at a determined rate) contribute monthly. The Company contributes as specified under the law to the Provident Fund where set up as a trust and to the respective Regional Provident Fund Commissioner. The Company contributes to the Provident Fund where set up as a trust are liable for future provident fund benefits to the extent of its annual contribution and any short fall in fund assets based on government specified minimum rates of return relating to the current period service and recognizes such contributions and any shortfall, if any, as an expense in year incurred. In accordance with the recent actuarial valuation, there is no deficiency in the interest cost as the present value of expected future earnings of the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest. The Company contributed Rs.894.03 lakh and Rs.838.92 lakh towards the provident fund and family pension fund during the year ended March 31, 2017 and March 31, 2016 respectively.

2. Defined Benefit Plan

a. A general description of the Employee Benefit Plan:

(i) Company (Funded)

The Company has an obligation towards gratuity, a funded defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of the employment of an amount equivalent to 15 days / one month salary, as applicable, payable for each completed year of service or part thereof in excess of six months in terms of Gratuity scheme of the Company or as per payment of the Gratuity Act, whichever is higher. Vesting occurs upon completion of five years of service.

The Company has set up an income tax approved trust fund to finance the plan liability. The trustees of the trust fund are responsible for the overall governance of the plan. The Company makes contribution to the plan. There are no minimum funding requirement for the plan in India. The trustees of the gratuity fund have a fiduciary responsibility to act according to the provisions of the trust deed and rules. Since the fund is income tax approved, the Company and the trustees have to ensure that they are at all times fully compliant with the relevant provisions of the Income tax and rules. Besides this if the Company is covered by the payment of Gratuity Act, 1972 then the Company is bound to pay the statutory minimum gratuity as prescribed under this Act.

(ii) Joint operation in Saudi (Unfunded)

The Joint Operation has an obligation towards a defined benefit retirement plan (akin to gratuity) covering eligible employees. The benefits payable are as under:

b. These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk: Investment risk

The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. Currently, for the plan in India, it has a relatively balanced mix of investments in Insurance related products.

Interest rate risk

A decrease in the bond interest rate will increase the plan liability;however, this will be partially offset by an increase in the return on the plan’s debt investments.

Longevity risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

No other post-retirement benefits are provided to the employees.

In respect of the plan in India and joint operation in Saudi, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at March 31, 2017 by an actuary. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

Note 19 - Related Party Disclosures

Related party disclosures as required by IND AS 24”Related Party Disclosures” are given below:

(A) Name and nature of relationship of the parties where control exists

(B) Details of related parties with whom transactions have taken place Entity having significant influence over the Company

Swallow Associates LLP

Subsidiaries

KEC Power India Private Limited

KEC Global FZ-LLC, Ras UL Khaimah

RPG Transmission Nigeria Limited

SAE Towers Ltd, USA

KEC Transmission LLC, USA

KEC US LLC, USA

SAE Towers Mexico S de RL de CV, Mexico

KEC Investment Holdings, Mauritius

KEC Global, Mauritius

KEC Bikaner Sikar Transmission Private Limited

Key Management Personnel (KMP)

Mr. H. V. Goenka- Chairman

Mr. Vimal Kejriwal - Managing Director & CEO

Mr. A. T. Vaswani - Non - Executive Director

Mr. D. G. Piramal - Non - Executive Director

Mr. G.L. Mirchandani - Non - Executive Director

Ms. Nirupama Rao - Non - Executive Director

Mr. R. D. Chandak - Non - Executive Director (Managing Director upto April 1, 2015)

Mr. S. M. Kulkarni - Non - Executive Director

Mr. S. M. Trehan - Non - Executive Director

Mr. S. S. Thakur - Non - Executive Director

Mr.Vinayak Chatterjee - Non - Executive Director

List of other related parties Post - employment benefit plan

KEC International Ltd. Employees’ Group Gratuity Scheme

KEC International Limited - Provident Fund

KEC International Ltd. Superannuation Scheme

Relative of Key Management Personnel

Mr. Anant Goenka- Relative of Mr. H. V. Goenka

Entities where control / significant influence by KMPs and their relatives exists and with whom transactions have taken place

Harsh Anant Goenka HUF

Chattarpati Investments LLP

Atlantus Dwellings & Infrastructure LLP

CEAT Limited

B. N. Elias & Co. LLP

Palacino Properties LLP

RPG Enterprises Limited

Raychem RPG Private Limited

Ceat Speciality Tyres Limited

Spencers and Company Limited

Zensar Technologies Limited

Notes:

1. Under Previous GAAP, all joint arrangements (referred to in Note 5.1.1) were classified as jointly controlled entities and accounted for using proportionate consolidation method in the Consolidated Financial Statements. Based on assessment under Ind AS 111 “Joint Arrangements”, these Joint Arrangements have been classified as joint operations and have been accounted accordingly in this financial statements.

Consequently total assets as at March 31, 2016 aggregating Rs. 165,598.36 lakh (as at April 1, 2015 Rs. 129,114.57 lakh), and total liabilities as at March 31, 2016 Rs. 142,932.10 lakh (as at April 1, 2015 Rs. 111,048.36 lakh) and total income (net of consolidated adjustments) Rs. 112,685.90 lakh and total expenditure (net of consolidated adjustments) for the year ended March 31, 2016 aggregating Rs. 107,627.77 lakh of Joint Operations have been proportionately consolidated. As a result, the total equity as at March 31, 2016 increased by Rs. 22,666.26 lakh (As at April 1, 2015 Rs. 18,066.21 lakh) and profit after tax for the year ended March 31, 2016 increased by Rs. 5,058.13 lakh.

2. Under Previous GAAP, dividends on equity shares recommended by the Board of Directors after the end of the reporting period but before the financial statements were approved for issue were recognised in the financial statements as a liability. Under Ind AS, such dividends are recognised when declared by the members in a general meeting. The effect of this change is an increase in total equity as at March 31, 2016 of Rs. Nil (as at April 1, 2015 Rs. 2,784.83 lakh), but does not affect Profit after tax for the year ended March 31, 2016.

3. Under Previous GAAP, mark to market gain on outstanding commodity contracts are not recognised, until realised, on ground of prudence. Under Ind AS, since these contracts are measured at fair value, the Company has recognised gain of Rs. 404.31 lakh as at transition date and the same got reversed during the year ended March 31, 2016.

Further under Previous GAAP, in respect of forward exchange contracts the Company has recognised the mark to market loss by comparing the spot rates on booking date with the reporting date and also amortised forward premium over the life of the contract. Under Ind AS, the Company has fair valued the forward contracts. As a result the Company has recognised gain of Rs. 17.98 lakh as at March 31, 2016 (As at April 1, 2015 Rs. 31.87 lakh which got reversed during the year ended March 31, 2016).

The above have resulted in increase in equity as at March 31,2016by Rs. 17.98 lakh (as at April 1,2015 Rs. 436.18 lakh) and decrease in profit for the year ended March 31, 2016 by Rs. 418.20 lakh.

4. Under Previous GAAP, the Scheme of Amalgamation (the Scheme) between Jay Railway Projects Private Limited and the Company which was effective from April 1, 2014 was accounted in the year ended March 31, 2016 since the Scheme became operative from December 30, 2015 upon filing of the certified copy of the order of the High Court with the Registrar of Companies. Accordingly, the Company has recorded all the assets and liabilities of Jay Railway Projects Private Limited at their respective book values on the transition date. This has resulted in decrease in equity as on the transition date by Rs. 114.34 lakh.

5. Under Previous GAAP, the Company has created provision for doubtful debts on receivables on the basis of incurred loss. Under Ind AS, loss allowance on financial assets has been determined on the basis of Expected Credit Loss (ECL). Consequently, the Company has recognised ECL on its financial assets as at March 31, 2016 aggregating Rs. 4,498.66 lakh (As at April 1, 2015 Rs. 4,191.86 lakh). The above has resulted decrease in equity and financial assets as at March 31, 2016 by Rs. 4,498.66 lakh (As at April 1,2015 Rs. 4,191.86 lakh) and decrease in profit before tax for the year ended March 31, 2016by Rs. 306.80 lakh

6. Others includes impact of fair value of financial guarantee contracts in respect of guarantees given on behalf of the subsidiaries which under Previous GAAP were disclosed under contingent liability. This has resulted in increase in carrying amount of certain investments and equity as at March 31, 2016 by Rs. 510.80 lakh (As at April 1, 2015 Rs. 161.69 lakh) and increase in profit before tax for the year ended March 31,2016by Rs. 349.11 lakh.

7. Under Previous GAAP, there is no concept of Other Comprehensive Income (OCI). Under Ind-AS specified items of income, expenses, gains and losses are required to be presented in OCI.

Under Previous GAAP, for designated hedging relationships, the Company has recognised mark to market gain on derivative and non-derivative instruments which are designated in hedging relationship under the Hedging Reserve. Under Ind-AS, movement in this reserve during the year ended March 31, 2016 of Rs. 256.41 lakh (net of deferred tax of Rs. 134.03 lakh) is shown under OCI. Further, exchange loss in translating assets and liabilities of joint operations outside India which are denominated in foreign currency as at March 31, 2016 aggregating Rs. 325.60 lakh (net of deferred tax of Rs. 201.20 lakh) is also recognised in OCI.

Under Previous GAAP, re-measurement of defined benefit plans (gratuity) arising primarily due to change in actuarial assumptions was recognised as employee benefit expenses in the Statement of Profit and Loss. Under Ind-AS, such re-measurements changes relating to defined benefit plans is recognised in the OCI. This change does not affect equity, but there is increase in profit before tax for the year ended March 31, 2016 by Rs.315.51 lakh and corresponding decrease in OCI along with the related deferred tax charge of Rs. 109.19 lakh.

The above has resulted in decrease in OCI (net of tax) for the year ended March 31, 2016 by Rs.275.51 lakh and increase in profit by Rs.315.51 lakh

8. Consequent to classification of Joint arrangements as Joint operations referred to in Note 1 above, the Company has recognised deferred tax liability on undistributed profits as at March 31, 2016 amounting to Rs.5,919.99 lakh (As at April 1, 2015 Rs.4,644.74 lakh). The Company has also recognised deferred tax assets on all other transition adjustments mentioned above aggregating Rs.1,575.49 lakh (as at April 1, 2015 Rs.1,244.22 lakh).

The above has impacted decrease in equity as at March 31, 2016 by Rs. 4,344.87 lakh (As at April 1,2015 Rs. 3,400.52 lakh) and decrease in profit after tax for the year ended March 31, 2016 by Rs.1,254.74 lakh. Further deferred tax credit of Rs. 310.39 lakh recognised in OCI.

9. Under the previous GAAP, excise duty on sale of goods was reduced from sales to present the revenue from operations. Whereas, under Ind AS, this excise duty is included in the revenue from operations and the corresponding expense is included as part of total expenses. The change does not affect total equity as at April 1, 2015 and profit for the year ended March 31, 2016.

(c) Except for Ind AS adjustment mentioned in Note 1 which resulted in net cash outflow of Rs. 3,505.84 lakh for the year ended March 31, 2016, other Ind AS adjustments are either non-cash adjustments or regrouping among the cash flows from operating, investing and financing activities.

Note 20

The details of amounts which are expected by the Company (and relied upon by the Auditors) to be recovered or settled after twelve months in respect of assets and liabilities relating to long-term contracts which are classified as current are as under:

Note 21

The Company is primarily engaged in Engineering, Procurement and Construction business (EPC) relating to infrastructure interalia products, projects and systems for power transmission, distribution, and related activities. Information reported to and evaluated regularly by the Chief Operational Decision Maker (CODM) i.e. Managing Director for the purpose of resource allocation and assessing performance focuses on the business as a whole. The CODM reviews the Comapny’s performance on the analysis of profit before tax at an overall entity level. Accordingly, there is no other separate reportable segment as defined by Ind AS 108.” Operating Segments”. As the Company also prepares the consolidated financial statements (CFS), other relevant segment information is disclosed in the CFS.

Note 22

Based on the details regarding the status of the supplier obtained by the Company, there is no supplier covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act).This has been relied upon by the auditors.

Note 23

The execution of the construction works under contracts of the Company with General Electric Company Libya (a Government of Libya undertaking) is disrupted since February, 2011 due to civil/political unrest in that country. The net assets [including fixed assets, trade receivables etc.] as at March 31, 2017 of the Company relating to these contracts aggregate Rs.2,557.11 lakh (As at March 31, 2016 Rs.3,134.86 lakh, As at April 1, 2015 Rs.5,125.96 lakh) The Company has been receiving time extension from the client, from time to time, for completion of the contracts. The Company is confident of completing these projects.

Note 24

In terms of the agreement entered into, in an earlier year, by the Company with the another joint operator, the Company had funded (including for the other operator’s share) its joint operation at South Africa viz. EJP KEC Joint Venture, South Africa (JO) for smooth execution of the transmission line projects at South Africa referred to in the said agreement, which was ultimately completed by the JO in April 2014. The Company’s share of loss accounted in retained e


Mar 31, 2016

1.1 3,750 fully paid up Equity Shares of Rs. 2 each were allotted to a trustee against 1,688 equity shares of the erstwhile RPG Transmission Limited (RPGT), since merged in the Company in 2007-08, where rights were kept in abeyance by RPGT. On settlement of the relevant court cases/issues, the Equity Shares issued to the trustee will be transferred.

2. The Company has only one class of Equity Shares having a face value of Rs. 2 each. Every member shall be entitled to be present, and to speak and vote and upon a poll the voting right of every member present in person or by proxy shall be in proportion to his share of the paid-up equity share capital of the Company. The Company in General Meeting may declare dividends to be paid to members, but no dividends shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

3. 750, 11.65% Privately Placed, Secured, Redeemable Non-Convertible Debentures of Rs. 10 lacs each aggregating Rs. 7,500 lacs (Previous Year - Rs. 7,500 lacs) are secured by an equitable mortgage on land situated at Cable factory, Mysore and hypothecation of all movable fixed assets situated at Cable factory, Mysore. 350 Debentures of Rs. 10 lacs each aggregating Rs. 3,500 lacs are repayable on June 15, 2018 and 400 Debentures of Rs. 10 lacs each aggregating to Rs. 4,000 lacs are repayable on June 14, 2017.

4. Term loans from banks :

(a) Rs. NIL (Previous Year Rs. 2,798.50 lacs) secured by first charge on movable assets of Telecom Division including Telecom Towers.

(b) Rs. NIL (Previous Year Rs. 564.13 lacs) secured by first charge on movable fixed assets i.e. construction equipment pertaining to the Transmission, Distribution and Railway business situated at various project sites in India.

(c) Rs. 5,015.00 lacs (Previous Year Rs. 6,327.50 lacs) secured by first charge on land, building and plant & machinery at Jabalpur and Nagpur factories, both present and future. The term loan is repayable in remaining 10 quarterly structured installments by September 28, 2018 and the present interest rate is 10.60% p.a.

(d) Rs. 4,250.00 lacs (Previous Year Rs. 4,750.00 lacs) secured by first charge on land, building and plant & machinery situated at Jaipur factory, both present and future. The term loan is repayable in remaining 12 quarterly structured installments by March 31, 2019 and the present interest rate is 11.20% p.a.

5. Term loans from other parties includes :

(a) Rs. Nil (Previous Year Rs. 807.69 Lacs) secured by first charge over the fixed assets pertaining to Tower Testing Station situated at Nagpur.

(b) Rs. 4,595.65 lacs (Previous Year Rs. 6,160.87 lacs) secured by exclusive first charge on the project assets including immovable properties at Cable factory, Vadodara both present and future. The term loan is repayable in remaining 8 equal quarterly installments by March 20, 2018 and the present interest rate is 10.50% p.a.

6. Loans repayable on demand from banks :

(a) Rs. 99,782.20 lacs (Previous Year Rs. 52,086.63 lacs) secured by first charge by hypothecation of all the present and future current assets excluding those covered under Note 4.2 (a) above and first charge on flat situated at Juhu, Mumbai and second charge created on fixed assets situated at Jaipur, Jabalpur & Nagpur factories. The present interest rates are in the range of 9.90% to 13.70% p.a.

(b) Rs. 9,987.42 lacs (Previous Year Rs. 12,735.79 lacs) guaranteed by banks, which in turn is secured by security stated against Note 7.1 (a) above. The present interest rates are in the range of 2.41% to 3.48% p.a.

(c) Rs. 983.10 lacs (Previous Year Rs. 4,046.69 lacs) secured by assignment of certain overseas book debts. The present interest rates are in the range of is 3.50% to 6.00% p.a.

7. Other short-term borrowings

(a) From Banks-secured

(i) Rs. 16,776.52 lacs (Previous Year Rs. 12,109.29 lacs)secured by security stated against Note 7.1 (a) above. The present interest rates are in the range of 1.45% to 2.02% p.a.

(ii) Rs. 3,312.50 lacs (Previous Year Rs. 3,124.75 lacs)secured by security stated against Note 7.1 (b) above. The present interest rate is 3.38% p.a.

(b) From Banks-unsecured

Rs. 7,947.16 lacs (Previous Year Rs. Nil) is repayable by December 2016 and carries interest rate of 1.93% p.a.

(c) From other parties

(i) Rs. 14,341.61 lacs (Previous Year Rs. 15,141.18 lacs) secured by security stated against Note 7.1 (a) above. The loans of Rs. 9,378.69 lacs carries interest of 3.91% p.a and loan of Rs. 4,962.92 lacs carries interest of 3.16% p.a.

(ii) Rs. Nil (Previous Year Rs. 26,000.00 lacs) being commercial paper against standby facilities from certain banks which in turn is secured by security stated against Note 7.1 (a) above. Maximum balance outstanding anytime during the year is Rs. 80,000 lacs (Previous Year Rs. 31,000 lacs)

8. Balances with banks includes deposits amounting to Rs. 115.92 lacs (Previous Year Rs. 153.86 lacs) and margin money or security against the borrowings, guarantees and other commitments Rs. 222.01 lacs (Previous Year Rs. 101.01 lacs) which have an original maturity of more than 12 months.

9. Balances with banks includes deposits amounting to Rs. Nil (Previous Year Rs. 5.92 lacs) which have a maturity of more than 12 months from the Balance Sheet date.

10. : Excise duty shown above includes Rs. (371.98) lacs (Previous Year Rs. 79.94 lacs) being excise duty related to the difference between the closing stock and opening stock of finished goods.

11. : Other expenses shown above include fees of Rs. 164.54 lacs (Previous Year Rs. 154.41 lacs) paid to branch auditors and fees of Rs. 7.00 Lacs (Previous Year Rs. 9.00 Lacs) paid to the cost auditors.

12.: Miscellaneous expenses shown above includes Rs. Nil (Previous Year Rs. 133.00 lacs) being contribution made for political party through an Electoral Trust.

2 Defined Benefit Plan (Funded)

a. A general description of the Employee Benefit Plan:

The Company has an obligation towards gratuity, a funded defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of the employment of an amount equivalent to 15 days / one month salary, as applicable, payable for each completed year of service or part thereof in excess of six months in terms of gratuity scheme of the Company or as per the Payment of the Gratuity Act, whichever is higher. Vesting occurs upon completion of five years of service.

NOTE 13. - The Company is primarily engaged in Engineering, Procurement and Construction business (EPC) relating to products, projects and systems for power transmission, distribution and related activities. Further, the Company''s business is managed across multiple geographies on a worldwide basis and the same is monitored on individual project basis. Accordingly, there is no other separate reportable segment as defined by Accounting Standard (AS) 17 "Segment Reporting". However, in the Consolidated Financial Statements, for the purpose of geographical segments, the consolidated revenue from operations are broadly divided into two segments- India and Outside India and disclosed accordingly.

NOTE 14. - Basic / diluted earnings per share has been calculated by dividing the profit for the year after tax of Rs. 15,800.96 lacs (Previous Year Rs. 11,073.50 lacs), by 25,70,88,370 (Previous Year 25,70,88,370) being the weighted average number of equity shares (having face value of Rs.2/- each) outstanding during the year.

NOTE 15. - Based on the details regarding the status of the supplier obtained by the Company, there is no supplier covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act).This has been relied upon by the auditors.

NOTE 16. - SCHEME OF AMALGAMATION:

1. A Scheme of Amalgamation (the Scheme) between Jay Railway Projects Private Limited (Jay Railway) (engaged in EPC business relating to railways signaling automation systems and technology) and the Company and their respective shareholders under Section 391 to 394 of the Companies Act, 1956 was sanctioned by the Hon''ble High Court of Judicature at Bombay on December 30, 2015. The Scheme, which has become operative from December 30, 2015 upon fling of the certified copy of the Order of the Hon''ble High Court of Judicature at Bombay with the Registrar of Company in the Maharashtra, is effective from April 01, 2014 (The Appointed date).

2. Pursuant to the Scheme, with effect from the appointed date Jay Railway (Transferor Company) is amalgamated in the Company, as a going concern, with all its assets, liabilities, properties, rights, benefits and interest therein.

3. Upon the Scheme being effective, the shares held by the Company and its nominees in the Transferor Company have been cancelled and extinguished and no share was issued by the Company in consideration for the Scheme of Amalgamation. Further intercompany loans and balances between the Transferor Company and the Company have been cancelled.

The Company recorded all the assets and liabilities of Jay Railway and transferred to and vested in the Company at their respective book values. Further, the debit balance in Statement of profit and Loss of the Transferor Company as on the appointed date i.e. April 01, 2014 of Rs. 90.63 lacs and for the financially year 2014-15 of Rs. 22.98 lacs has been adjusted against the Surplus in Statement of profit and Loss of the Company.

4. The amalgamation being "Amalgamation in the nature of merger" has been accounted for under the pooling of interest method as prescribed in the Accounting Standard (AS-14) - "Accounting for Amalgamations".

NOTE 17. - The execution of the construction works under contracts of the Company with General Electric Company Libya (a Government of Libya undertaking) is disrupted since February, 2011 due to civil/political unrest in that country. The net assets [including fixed assets, trade receivables etc.] as at March 31, 2016 of the Company relating to these contracts aggregate Rs. 3,134.86 lacs (Previous Year Rs. 5,125.96 lacs) The Company has been receiving time extension from the client, from time to time, for completion of the contracts. The Company is confident of completing these projects.

NOTE 18. - In terms of the agreement entered into, in an earlier year, by the Company with the joint venture partner, the Company has funded EJP KEC Joint Venture, South Africa (JV) (including for the other venturer''s share) for smooth execution of the transmission line project at South Africa referred to in the said agreement, which was ultimately completed by the JV in April, 2014.

The JV suffered the loss in execution of the aforesaid project, interalia, on account of unexpected weather and terrain conditions, breach of contract by the client (e.g. changes in the specification, withholding payment due to JV).

During the previous year, the JV lodged various claims (viz. compensation and damages claims) on the client to recover additional costs incurred/ damages suffered by the JV during the execution of the project. During the year, the adjudication proceedings have commenced. Based on the claim expert/ legal advice received, the Company is confident that the JV will ultimately succeed in getting these claims from the client and thereby the Company will realise its dues from the JV. Accordingly, amount recoverable (net of provision) from the JV aggregating Rs. 10,998.22 lacs (Previous Year Rs. 13,022.97 lacs) as appearing under ''Short-term loans and advances'' - Note 18, has been considered good and recoverable by the management.

NOTE 19.- The Corporate Social Responsibility (CSR) obligation for the year as computed by the Company and relied upon by the auditors is Rs. Nil (Previous Year Rs. Nil). CSR amount spent during the year is Rs. 93.00 Lacs (Previous Year Rs. 39.50 Lacs).

NOTE 20. – The transaction for sale of telecom tower assets at 381 sites in the states of Chhattisgarh, Meghalaya and Mizoram to ATC Telecom Tower Corporation Private Limited has been completed at a total consideration of Rs. 8,230 Lacs on July 22, 2015. profit on sale of these assets (net of related expenses) of Rs. 536.06 lacs is included under "Other Income" Note 21.

NOTE 21. – During the previous year, pursuant to the notification of Schedule II to the Companies Act, 2013 (the Act) with effect from April 1, 2014, the Company revised the estimated useful life of its assets as mentioned in Note 1(F)(i). Pursuant to the transition provisions prescribed in Schedule II to the Act, the Company had fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be Nil as on April 1, 2014, and adjusted an amount of Rs. 199.01 lacs (net of deferred tax of Rs. 102.48 lacs) against the opening Surplus balance in the Statement of profit and Loss as at March 31, 2014 under Reserves and Surplus. The depreciation expense in the Statement of profit and Loss for the previous year was higher by Rs. 395.51 lacs consequent to the change in the useful life of the assets.

NOTE 22.- Previous Year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2014

1.1 Balances with banks includes deposits amounting to Rs. 8.92 lacs (Previous year Rs. 9.28 lacs) and margin money or security against the borrowings, guarantees and other commitments Rs. 240.78 lacs (Previous year Rs. 201.18 lacs) which have an original maturity of more than 12 months.

1.2 Balances with banks includes deposits amounting to Rs. 5.16 lacs (Previous year Rs. 5.16 lacs) which have a maturity of more than 12 months from the Balance Sheet date.

2.1 : Excise duty shown above includes Rs. 354.48 lacs (Previous year Rs. 59.52 lacs) being excise duty related to the difference between the closing stock and opening stock of finished goods.

2.2 : Professional fees shown above include fees of Rs. 133.30 lacs (Previous year Rs. 110.87 lacs) paid to branch auditors and fees of Rs. 9.00 lacs (Previous year Rs. 8.00 lacs) paid to the cost auditors.

NOTE 3 - Contingent Liabilities and Commitments (To the Extent not Provided for)

(i) Contingent Liabilities

(a) Claims against the Company not acknowledged as debts :

Sr. Nature of Claims Relating to various years Current Year Previous Year No. comprise in the period Rs. in lacs Rs. in lacs

1 Sales Tax / Value Added Tax* 1993–2012 6,599.87 (Tax/Penalty/ Interest) 1993–2011 4,920.31

2 Excise Duty * 1994–2014 3,408.22 (Tax/Penalty/ Interest) 1994–2013 2,629.36

3 Service Tax * 1998–2013 16,983.40 (Tax/Penalty/ Interest) 1998–2013 16,882.72

4 Entry Tax * 2001–2014 1,974.94 (Tax/Penalty/ Interest) 1995–2013 1,788.80

5(i) Income Tax matters mainly in respect of A.y. 2006-07 2,416.10 - allowance of depreciation etc. relating to Power Transmission Business acquired by the Company where during the year Department has fled appeal in the Supreme Court

(ii) Income Tax matters at overseas unit/s 2002–2008 3,143.53 2000–2008 3,462.58

6 Customs Duty 1995–1996 60.14 1995–1996 60.14

7 Civil Suits 1993–2004 72.02 1993–2006 72.02

8 Demands of employees/ subcontractors Amount not determinable

*These claims mainly relate to the issues of applicability, issue of disallowance of cenvat / VAT credit and in case of Sales Tax / Value added tax, also relate to the issue of submission of relevant forms and the Company''s claim of exemption for MVAT on export sales and services.

2 Defined Benefit Plan (Funded)

a. A general description of the employee Benefit Plan :

The Company has an obligation towards gratuity, a funded defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of the employment of an amount equivalent to 15 days / one month salary, as applicable, payable for each completed year of service or part thereof in excess of six months in terms to gratuity scheme of the Company or as per the Payment of the Gratuity Act, whichever is higher. Vesting occurs upon completion of five years of service.

XI Contribution expected to be paid to the Plan during the year ending March 31, 2015 – Rs. 337 lacs.

NOTE 4

The Company is primarily engaged in Engineering, Procurement and Construction business (EPC). Further, the Company''s business is managed across multiple geographies on a worldwide basis and the same is monitored on individual project basis. Accordingly, there is no other separate reportable segment as defined by Accounting Standard -17 "Segment Reporting".

NOTE 5 - Related Party Disclosures

(a) Name and nature of relationship of the party where Control exists Subsidiaries- wholly owned :

(i) RPG Transmission Nigeria Limited, Nigeria

(ii) KEC Global FZ – LLC, Ras UL Khaimah

(iii) Jay Railway Projects Private Limited

(iv) KEC Investment Holdings, Mauritius

(v) KEC Global Mauritius, Mauritius

(vi) KEC Power India Private Limited

(vii) KEC International Holdings LLC, USA

(viii) KEC Brazil LLC, USA

(ix) KEC Mexico LLC, USA

(x) KEC Transmission LLC, USA

(xi) KEC US LLC, USA

(xii) SAE Towers Holdings, LLC, USA

(xiii) SAE Towers Brazil Subsidiary Company LLC, USA

(xiv) SAE Towers Mexico Subsidiary Holding Company LLC, USA

(xv) SAE Towers Mexico S de RL de CV, Mexico

(xvi) SAE Towers Brazil Torres de Transmission Ltda, Brazil

(xvii) SAE Prestadora de Servicios Mexico, S de RL de CV, Mexico

(xviii) SAE Towers Ltd, USA

(xix) SAE Towers Panama Holdings LLC, USA

(xx) SAE Towers Panama S de RL, Panama

(xxi) SAE Engenharia E Construcao Ltda, Brazil (Incorporated on October 29, 2012)

(xxii) SAE Engineering & Construction Services, S de RL de CV (Incorporated on November 8, 2013)

(xxiii) KEC International (Malaysia) SDN BHD (Incorporated on April 19, 2013)

Associate :

(i) RP Goenka Group of Companies Employees Welfare Association (incorporated on May 21, 2012)

key Management Personnel: Mr. R.D. Chandak – Managing Director

(b) Parties with whom transactions have taken place :

Subsidiaries :

(i) RPG Transmission Nigeria Limited, Nigeria

(ii) KEC Global FZ – LLC, Ras UL Khaimah

(iii) Jay Railway Projects Private Limited

(iv) KEC Investment Holdings, Mauritius

(v) KEC Power India Private Limited

(vi) SAE Towers Mexico S de RL de CV, Mexico

Joint Ventures :

(i) Al-Sharif Group and KEC Ltd. Company, Saudi Arabia (formerly known as Faiz Abdul Hakim Al-Sharif Group and KEC Company Ltd., Saudi Arabia)

(ii) EJP KEC Joint Venture, South Africa

(iii) KEC - ASSB JV, Malaysia

(iv) KEC - ASIAKOM – UB JV

(v) KEC - ASIAKOM JV

(vi) KEC - JEI JV

(vii) KEC - DELCO - VARAHA JV

(viii) KEC - VARAHA - KHAZANA JV

(ix) KEC - VALECHA - DELCO JV

(x) KEC - SIDHARTH JV

(xi) KEC - TRIVENI - KPIPL JV

(xii) KEC - UNIVERSAL JV

(xiii) KEC - DELCO - DUSTAN JV

(xiv) KEC - ANPR - KPIPL JV

(xv) KEC - PLR - KPIPL JV

(xvi) KEC - BJCL JV

(xvii) KEC - KIEL JV

(xviii) KEC - ABEPL JV

(xix) KEC - TNR INFRA JV

(xx) KEC - SMC JV

(xxi) KEC - WATERLEAU JV

Associate :

(i) RP Goenka Group of Companies Employees Welfare Association

key Management Personnel: Mr. R. D. Chandak – Managing Director

c) In respect of contracts as referred to in Note 1(C) (iii), the Company has recognised revenue from operations Rs. 2,326.25 lacs (Previous year Rs. 6,914.82 lacs), total expenditure Rs. 2,258.61 lacs (Previous year Rs. 7,323.26 lacs), total assets aggregating Rs. 9,333.78 lacs (Previous year Rs. 14,652.75 lacs) and total liabilities aggregating Rs. 9,262.76 lacs (Previous year Rs. 15,076.69 lacs).

NOTE 6

Based on the details regarding the status of the supplier obtained by the Company, there is no supplier covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). This has been relied upon by the auditors.

NOTE 7

The execution of the construction works under contracts of the Company with General Electric Company Libya (a Government of Libya undertaking) is disrupted since February, 2011 due to civil/political unrest in that country. The net assets [including fixed assets, trade receivable, etc] as at March 31, 2014 of the Company relating to these contracts aggregate Rs. 6,378.26 lacs (Previous year Rs. 5,589.30 lacs). The situation in Libya is returning to normal and the Company is confident of completing these projects.

NOTE 8

The production of Cables at Thane factory has been discontinued from February 11, 2013 and during the year, the Company has given voluntary retirements to all the workers at a cost of Rs. 1,816.42 lacs. The complete range of products manufactured at Thane factory is now being manufactured at new cable factory at Vadodara.

Further the Company signed an ''Agreement for Sale" dated March 29, 2014 for sale of land (book value Rs. 6,313 lacs) to M/s Ardent Properties Pvt. Ltd. (a 100% subsidiary of Tata Housing Development Company Limited) for a consideration of approx. Rs. 21,234 lacs. The Company expects to complete all formalities shortly.

NOTE 9

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

1.1 3,750 fully paid up Equity Shares of Rs. 2 each were allotted to a trustee against 1,688 equity shares of RPGT, since merged in the Company in 2007-08, where rights were kept in abeyance under section 206A(b) of the Companies Act, 1956 by RPGT. On settlement of the relevant court cases/issues, the Equity Shares issued to the trustee will be transferred.

1.2 The Company has only one class of Equity Shares having a face value of Rs. 2 each. Every member shall be entitled to be present, and to speak and vote and upon a poll the voting right of every member present in person or by proxy shall be in proportion to his share of the paid-up equity share capital of the Company. The Company in General Meeting may declare dividends to be paid to members according to their respective rights, but no dividends shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

2.1 Term loans from banks :

(a) Rs. 8,395.50 lacs (Previous Year Rs. 8,395.50 lacs) secured by first charge on movable assets of Telecom Division including Telecom Towers, both present and future. The term loan is repayable in 12 equal quarterly installments commencing from April 24, 2013 and carries interest rate of 7.25% p.a.

(b) Rs. 5,831.56 lacs (Previous Year Rs. 9,167.00 lacs) secured by way of first charge on fixed assets situated at Thane and Mysore. The term loan is repayable in remaining 7 equal quarterly installments by December 9, 2014 and the present interest rate is 11.75 % p.a.

(c) Rs. 1,260.00 lacs (Previous Year Rs. 2,940.00 lacs) secured by way of first charge on land, building and plant and machinery situated at Jaipur. The term loan is repayable in remaining 3 equal quarterly installments by December 31, 2013 and carries interest rate of 10.25% p.a.

(d) Rs. 2,854.92 lacs (Previous Year Rs. 4,000.00 lacs) secured by first charge on movable fixed assets i.e. construction equipment pertaining to the Transmission, Distribution and Railway business situated at various project sites in India, both present and future. The term loan is repayable in remaining 10 equal quarterly installments by September 27, 2015 and the present interest rate is 10.75% p.a.

(e) Rs. 3,700.00 lacs (Previous Year Rs. NIL) collaterally secured by first charge to be created on land, building and plant & machinery situated at Thane and Mysore. The term loan is repayable in 13 quarterly structured installments commencing from March 31, 2015 and the present interest rate is 10.50% p.a.

(f) Rs. 4,700.00 lacs (Previous Year Rs. NIL) secured by first charge to be created on land, building and plant & machinery situated at Nagpur and Jabalpur factories. The term loan is repayable in 20 quarterly structured installments commencing from December 28, 2013 and the present interest rate is 10.85% p.a.

(g) Rs. NIL (Previous Year Rs. 0.32 lacs) secured by hypothecation of vehicles.

2.2 term loans from other parties includes :

(a) Rs. 2,961.54 lacs (Previous Year Rs. 3,500.00 lacs) secured by first charge over the fixed assets pertaining to Tower Testing Station situated at Nagpur both present and future. The term loan is repayable in remaining 11 equal quarterly installments by December 09, 2015. The term loan of Rs. 1,692.32 lacs and Rs. 1269.22 lacs carry interest of 10% p.a. and 12.25% p.a. resepectively.

(b) Rs. 3.44 lacs (Previous Year Rs. 7.14 lacs) secured by hypothecation of vehicles. Out of these, the term loan of Rs. 0.77 lacs is repayable in remaining 5 equal monthly installments by August 03, 2013, Rs. 0.42 lacs is repayable in remaining 5 equal monthly installments by August 09, 2013 and Rs. 2.25 lacs is repayable in remaining 21 equal monthly installments by December 11, 2014 and carry interest rate of 13.20 % p.a.

(c) Rs. 10,334.78 lacs (Previous Year Rs. 7,400 lacs) secured by exclusive first charge on the project assets including immovable properties at Cable factory, Vadodara both present and future. The term loan is repayable in remaining 20 equal quarterly installments by March 20, 2018 and the present interest rate is 11.33% p.a.

3.1 Loans repayable on demand from banks :

(a) Rs. 37,739.19 lacs (Previous Year Rs. 5,640.56 lacs) secured by first charge by hypothecation of all the present and future current assets of the Company excluding those covered under Note 4.1 (a) above and second charge on the Company''s fixed assets situated at Jaipur, Jabalpur & Nagpur factories. The present interest rates are in the range of 10% to 16% p.a.

(b) Rs. 3,488.43 lacs (Previous Year Rs. 2,034.80 lacs) guaranteed by banks, which in turn is secured by security, stated against Note 7.1 (a) above. The present interest rate is 3.00% to 3.50% p.a.

(c) Rs. 2,395.45 lacs (Previous Year Rs. NIL ) secured by assignment of certain overseas book debts. The present interest rate is 3.64% p.a.

3.2 Other short-term borrowings

(a) From Banks

(i) Rs. 7,055.75 lacs (Previous Year Rs. 4,018.52 lacs) secured by security stated against Note 7.1 (a) above. The present interest rates are in the range of 3% to 4% p.a.

(ii) Rs. 2,500.00 lacs (Previous Year Rs. NIL) being commercial paper issued against stand by facility from a bank which in turn is secured by security stated against Note 7.1 (a) above and it carries rate of interest of 9.70% p.a. Maximum balance outstanding any time during the year is Rs. 5,000 lacs (Previous Year Rs. 1,25,000 lacs)

(iii) Rs. 11,394.23 lacs (Previous Year Rs. 15,769.70 lacs) secured by security stated against Note 7.1 (b) above. The present interest rates are in the range of 3% to 4% p.a.

(b) From other parties

Rs. 4,971.00 lacs (Previous Year Rs. 5,000.00 lacs) secured by security stated against Note 7.1 (a) above. The present interest rates are in the range of 4.00% to 10.50% p.a.

4.1 Balances with banks includes deposits amounting to Rs. 9.28 lacs (Previous Year Rs. 8.62 lacs) and margin money or security against the borrowings, guarantees and other commitments Rs. 201.18 lacs (Previous Year Rs. 249.25 lacs) which have an original maturity of more than 12 months.

4.2 Balances with banks includes deposits amounting to Rs. 5.16 lacs (Previous Year Rs. 3.61 lacs) which have a maturity of more than 12 months from the Balance Sheet date.

5.1 : Excise duty shown above includes Rs. 59.52 lacs (Previous Year Rs. 107.62 lacs) being excise duty related to the difference between the closing stock and opening stock of finished goods.

5.2 : Miscellaneous expenses include fees of Rs. 110.87 lacs (Previous Year Rs. 85.75 lacs) paid to branch auditors.

NOTE 6

The Company is primarily engaged in the business of Engineering, Procurement and Construction business (EPC). As such there is no other separate reportable segment as defined by Accounting Standard -17 "Segment Reporting".

RELATED PARTY DISCLOSURES

(a) Name and nature of relationship of the party where Control exists:

Subsidiaries- wholly owned

(i) RPG Transmission Nigeria Limited, Nigeria

(ii) KEC Global FZ - LLC, Ras UL Khaimah

(iii) Jay Railway Projects Private Limited

(iv) KEC Investment Holdings, Mauritius

(v) KEC Global Mauritius, Mauritius

(vi) KEC International Holdings LLC, USA

(vii) KEC Brazil LLC, USA

(viii) KEC Mexico LLC, USA

(ix) KEC Transmission LLC, USA

(x) KEC US LLC, USA

(xi) SAE Towers Holdings, LLC, USA

(xii) SAE Towers Brazil Subsidiary Company LLC, USA

(xiii) SAE Towers Mexico Subsidiary Holding Company LLC, USA

(xiv) SAE Towers Mexico S de RL de CV, Mexico

(xv) SAE Towers Brazil Torres de Transmission Ltda, Brazil

(xvi) SAE Prestadora de Servicios Mexico, S de RL de CV, Mexico

(xvii) SAE Towers Ltd, USA

(xviii) SAE Towers Panama Holdings LLC, USA

(xix) SAE Towers Panama S de RL, Panama

(xx) SAE Engenharia E Construcao Ltda, Brazil (Incorporated on October 29, 2012)

(xxi) KEC Power India Private Limited (Status changed from Joint Venture to Subsidiary w.e.f. March 31, 2012)

(b) Parties with whom transactions have taken place :

Subsidiaries:

(i) RPG Transmission Nigeria Limited, Nigeria

(ii) KEC Global FZ - LLC, Ras UL Khaimah

(iii) Jay Railway Projects Private Limited

(iv) KEC Investment Holdings, Mauritius

(v) KEC Global Mauritius, Mauritius

(vi) SAE Towers Holdings, LLC, USA

(vii) KEC Power India Private Limited (Status changed from Joint Venture to Subsidiary w.e.f. March 31, 2012)

(viii) SAE Towers Mexico S de RL de CV, Mexico Joint ventures:

(i) Al-Sharif Group and KEC Ltd. Company, Saudi Arabia (formerly known as Faiz Abdul Hakim Al-Sharif Group and KEC Company Ltd., Saudi Arabia)

(ii) KEC Power India Private Limited (Status changed from Joint Venture to Subsidiary w.e.f. March 31, 2012)

(iii) EJP KEC Joint Venture, South Africa

(iv) KEC - ASSB JV Malaysia

(v) KEC - ASIAKOM - UB JV

(vi) KEC - ASIAKOM JV

(vii) KEC - JEI JV

(viii) KEC - DELCO - VARAHA JV

(ix) KEC - VARAHA - KHAZANA JV

(x) KEC - VALECHA - DELCO JV

(xi) KEC - SIDHARTH JV

(xii) KEC - TRIVENI - KPIPL JV

(xiii) KEC - UNIVERSAL JV

(xiv) KEC - DELCO - DUSTAN JV

(xv) KEC - ANPR - KPIPL JV

(xvi) KEC - PLR - KPIPL JV

(xvii) KEC - BJCL JV

(xviii) KEC - KIEL JV

Key Management Personnel: Mr. R.D. Chandak - Managing Director

NOTE 7

Basic / diluted earnings per share has been calculated by dividing the profit for the year after taxation of Rs. 455.84 lacs (Previous Year Rs. 18,183.87 lacs), by 25,70,88,370 (Previous Year 25,70,88,370) being the weighted average number of equity shares outstanding during the year.

NOTE 8

Based on the details regarding the status of the supplier obtained by the Company, there is no supplier covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). This has been relied upon by the auditors.

The execution of the construction works under contracts of the Company with General Electric Company Libya (a Government of Libya undertaking) is disrupted since February, 2011 due to civil/political unrest in that country. The net assets [including fixed assets, debtors etc] as at March 31, 2013 of the Company relating to these contracts aggregate Rs. 5,589.30 lacs (Previous Year Rs. 7,688.72 lacs). The situation in Libya is returning to normal and the Company is confident of completing these projects. Further, during the year the Company has realised Rs. 2,155.91 lacs from the customer.

(i) Members of the Company in the Annual General Meeting held on July 05, 2011 accorded consent subject to approval of the Central Government for payment of commission to non- executive directors up to 5% of the net profits of the Company computed as per the provisions of the Companies Act, 1956, at the end of each financial year, for a period of five years commencing from financial year 2010-11 in such manner and upto such extent as the remuneration committee of the Board of Directors of the Company recommends and the Board of Directors determine from time to time.

The Board of Directors in its meetings held on May 08, 2013 and May 03, 2012 determined commission of Rs. 97.55 lacs and Rs. 880 lacs for the financial years ended March 31, 2013 and March 31, 2012 respectively and accordingly provided for the same in the books. The said provisions include commission of Rs. 78.04 lacs and Rs. 695.18 lacs in excess of 1% of the net profit computed under Section 349 of the Companies Act, 1956 which are subject to the approval of the Central Government under the relevant provisions of the Companies Act, 1956. No payments have been made pending receipt of the said approval.

(ii) Remuneration of Rs. 277.74 lacs paid to the Managing Director and debited to the Statement of Profit and Loss for the financial year 2012-13 includes Rs. 180.19 lacs in excess of the limits specified in Section 309 of the Companies Act, 1956. The excess payment is as a result of lower profit for the year due to additional costs incurred in respect of certain contracts which was not envisaged during the year. An application has been made by the Company to the Central Government under Section 309 (5B) of the Companies Act, 1956 to waive the recovery of the said excess remuneration. Pending such approval the Managing Director holds the excess remuneration paid in trust for the Company.

NOTE 9

The production of Cables at Thane plant has been discontinued from February 11, 2013. The complete range of products manufactured at Thane plant is now being manufactured at new cable plant at Vadodara.

Previous Year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2011

1. Scheme of Amalgamation:

1.1 A Scheme of Amalgamation (the Scheme) between RPG Cables Limited (RPGCL) and the Company and their respective Shareholders under Section 391 to 394 of the Companies Act, 1956 was sanctioned by the Hon’ble High Court of Judicature at Bombay on February 26, 2010 and at Karnataka, Bangalore on March 17, 2010. The Scheme, which has become operative from March 31, 2010 upon fling of the certified copies of the Orders of the Hon’ble High Courts with the Registrar of Companies in the respective States, is effective from March 1, 2010 (The Appointed date).

1.2 Pursuant to the Scheme, with effect from the Appointed date RPGCL (Transferor Company) is amalgamated in the Company, as a going concern, with all its assets, liabilities, properties, rights, benefits and interest therein subject to existing charges thereon in favour of banks and financial institutions.

1.3 Also refer Note 2 (c) below.

2. Share Capital: Share Capital includes:

a) 18,81,79,270 equity shares of Rs. 2/- each (previous year 3,76,35,854 equity shares of Rs. 10/- each) allotted in an earlier year for consideration other than cash for acquisition of Power Transmission Business.

b) 5,82,90,010 equity shares of Rs. 2/- each (previous year 1,16,58,002 equity shares of Rs. 10/- each) allotted in an earlier year for consideration other than cash to the shareholders of the erstwhile RPG Transmission Limited (RPGT) and the erstwhile National Information Technologies Limited.

3,750 fully paid up equity shares of Rs. 2/- each (previous year 750 equity shares of Rs. 10/- each) were allotted to a trustee against 1,688 equity shares of RPGT, where rights were kept in abeyance under section 206A(b) of the Companies Act, 1956 by RPGT. On settlement of the relevant court cases/issues, the equity shares issued to the trustee will be transferred.

c) 1,03,65,340 equity shares of Rs. 2/- each (previous year 20,73,068 equity shares of Rs. 10/- each shown as Equity Share Suspense) allotted on April 26, 2010 in consideration for the amalgamation referred to in Note 1 above to the shareholders of the erstwhile RPG Cables Limited (RPGCL).

3. Secured Loans:

3.1 Loans and advances from Banks:

a) Rs. 37,997.54 lacs (previous year Rs. 14,153.79 lacs) secured by first charge by hypothecation of all the present and future current assets of the Company excluding those covered under (g) and (k) and 3.2 (c) below and second charge on the Company’s fixed asset situated at Jaipur, Jabalpur and Butibori factories.

b) Rs. 17,580.12 lacs (previous year Rs. 25,104.69 lacs) guaranteed by banks, which in turn is secured by security, stated against (a) above.

c) Rs. 393.33 lacs (previous year Rs. Nil ) secured by assignment of certain overseas book debts.

d) Rs. Nil (previous year Rs. 119.00 lacs) secured by a first charge by way of hypothecation of specific movable plant and machinery, equipment and other assets acquired by the Company under the Asset Credit Scheme together with machinery spares, tools and accessories and other movables.

e) Rs. 1,161.80 lacs (previous year Rs. 1,907.72 lacs) secured by hypothecation of whole of movables (save and except current assets of the Company including book debts) [excluding those covered under (g),(k) and 3.2 (c) below] and equitable mortgage of the Company’s immovable properties at the Company’s factory at Butibori, Nagpur and subject to prior charge referred to in (a) above on movable assets.

f) Rs. 891.64 lacs (previous year Rs. 1,426.62 lacs) secured by (i) hypothecation of whole movables (save and except current assets of the Company including book debts) at Jabalpur and Gurgaon, subject to prior charge in respect of loans referred in (a) above (ii) hypothecation of whole of movables at Coimbatore and (iii) equitable mortgage of the Company’s certain immovable properties at Jabalpur and Coimbatore.

g) Rs. 8,395.50 lacs (previous year Rs. 8,395.50 lacs) secured by first charge on moveable assets of Telecom Division including Telecom Towers, both present and future.

h) Rs. 10,080.68 lacs (previous year Rs. 10,015.62 lacs) secured by way of first charge on fixed assets situated at Thane and Mysore.

i) Rs. 4,400.00 lacs (previous year Rs. 5,000.00 lacs) secured by way of first charge on land, building and plant and machinery situated at Jaipur.

j) Rs. Nil (previous year Rs. 5,000.00 lacs) being commercial paper issued against stand by facilities from certain banks which in turn is secured by security stated against (a) above. Maximum balance outstanding any time during the year is Rs. 25,000.00 lacs (previous year Rs. 20,000.00 lacs).

k) Rs. 858.82 lacs (previous year Rs. 858.82 lacs) secured by way of first charge on land and building situated at Raebareli and further secured by all tangible movable properties and assets of Raebereli unit, both present and future.

l) Rs. 3.77 lacs (previous year Rs. 8.43 lacs) secured by hypothecation of vehicles.

m) Rs. 4,000.00 lacs (previous year Rs. Nil) secured by first charge on movable fixed assets i.e. construction equipment pertaining to the Transmission, Distribution and Railway business situated at various project sites in India, both present and future.

3.2 Loans and advances from others:

a) Rs. 3,000.00 lacs (previous year Rs. 2,919.15 lacs) secured by security stated against 3.1 (a) above.

b) Rs. 2,000.00 lacs (previous year Rs. Nil) secured by first charge over the fixed assets pertaining to Tower Testing Station situated at Butibori, Nagpur both present and future.

c) Rs. Nil (previous year Rs. 2,619.95 lacs) secured by way of first charge on present and future current assets of Cables division.

d) Rs. 6.62 lacs (previous year Rs. 21.60 lacs) secured by hypothecation of vehicles.

4. Fixed Assets:

a. A plot of leasehold land stated to measure 41 bighas and 1 biswas per deed dated January 17, 1968, was found short by 24 bighas and 18 biswas on actual measurements, for the possession of which the suit was fled on October 19, 1976 in the District Court against the vendors in occupation of the adjacent land. On dismissal of the suit, an appeal has been preferred in the Rajasthan High Court on December 7, 1998, against the order of the District Court.

b. Buildings at Jaipur, Butibori, Bhopal, Raebareli and Vashi, Navi Mumbai are constructed on Leasehold land.

5. Contingent Liabilities in respect of:

(a) Claims against the Company not acknowledged as debts:

Sr. Nature of Claims Relating to various years Current No Year Previous Year comprise in the period Rs. in lacs Rs. in lacs

1 Sales Tax* 1993-2010 2,678.22

(Tax/Penalty/ Interest) 1995-2009 679.06

2 Excise Duty* 1994-2011 1,969.14

(Tax/Penalty/ Interest) 1994-2010 1,316.10

3 Service Tax* 2004-2010 14.84

(Tax/Penalty/ Interest) 2006-2008 24.57

4 Entry Tax 1995-2008 60.43

(Tax/Penalty/ Interest) 1995-2005 32.00

5 (i) Income Tax matters mainly in respect A.Y.2006-07 to 2009-10 7,241.44 of disallowance of depreciation etc. A.Y.2006-07 and 2007-08 5,579.60 relating to Power Transmission Business acquired by the Company

(ii) Income Tax matters at overseas 2002 1,089.79 unit/s 2007 1,104.97

6 Civil Suits 1993-1994 5.00

1993-1994 5.00

7 Demands of employees/ subcontractors Amount not determinable

* These claims mainly relate to the issues of applicability, issue of disallowance of cenvat credit and in case of Sales Tax, also relate to the issue of submission of ‘C forms.

(b) Other matters for which the Company is contingently liable:

Current Year Previous Year Rs. in lacs Rs. in lacs

1 Bills discounted 3,521.17 16,695.61

2 Guarantees given to banks for credit facilities extended/loans given to the wholly owned subsidiary companies Rs. 60,034.21 lacs (previous year Rs. 5,135.64 lacs)

Facilities / loans outstanding at the year end 47,326.57 -

3 Performance guarantee given to a customer of the wholly owned subsidiary Company 19,671.14 19,817.46

4 Bank guarantees provided by the Company to customers of the wholly owned subsidiary companies in connection with the respective contracts awarded/bids made 2,237.42 1,822.11

5 Performance guarantee provided by a bank to the customer of the wholly owned subsidiary Company by utilising the Company’s credit facility with that bank 191.86 -

6 Contingent liability of Income Tax taken over by the Company in terms of the Composite Scheme of Arrangement under which the Power Transmission Business was acquired by the Company 731.25 752.78

Foot Note for 5 (a) and (b) above:

Future ultimate outflow of resources embodying economic benefits in respect of the above matters are

uncertain as it depends on the final outcome of the matters involved.

6. Estimated amount of contracts remaining to be executed on capital account not provided for (net of capital advances) Rs. 8,057.65 lacs (previous year Rs. 410.24 lacs)

7. The amount of interest capitalised during the year Rs. 90.90 lacs (previous year Rs. 432.26 lacs) is included in Fixed assets/ capital work in progress.

8. Excise duty shown in Schedule-16 “Other Expenses” includes Rs. 58.62 lacs (previous year net of Rs. 47.73 lacs) being excise duty related to the difference between the closing stock and opening stock of the finished goods.

11. Managerial remuneration:

Notes:

# Excludes provision for gratuity and compensated absences, which is determined on the basis of actuarial valuation done on overall basis for the Company.

* Excludes sitting fess of Rs. 0.05 lac paid to a director of the erstwhile RPG Cables Limited during the period March 1, 2010 (the appointed date) to March 31, 2010 (the effective date), borne by the Company in terms of the Scheme of Amalgamation referred to in Note 1 above.

Calculation of Net Profit under Section 349 of the Companies Act, 1956

# Footnote: Members of the Company in the Annual General Meeting held on June 27, 2008 and the Central Government vide its letter dated June 30, 2009 approved payment of commission to Non-Executive Directors up to a ceiling of 1% of the net profits of the Company. The Board of Directors in its meeting held on May 06, 2011 has approved payment of commission up to 5% of the net profits of the Company subject to approval of members in the forthcoming Annual General Meeting and of the Central Government as required under section 310 of the Companies Act, 1956. Accordingly, commission of Rs. 625.81 lacs in excess of 1% of the net profits included above, is subject to approval of members and of the Central Government as stated above.

16. There is no supplier covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). This information and that given in Schedule11-“Current Liabilities and Provisions” has been determined based on the details regarding the status of the supplier obtained by the Company. This has been relied upon by the auditors.

2 Defned Benefit Plan (Funded)

a. A general description of the Employees Benefit Plan:

The Company has an obligation towards gratuity, a funded defned benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of the employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.

XI Contribution expected to be paid to the Plan during the year ending March 31, 2012 – Rs. 94.58 lacs

20. Related Party Disclosures:

(a) Name and nature of relationship of the party where Control exists: Subsidiaries- wholly owned

(i) RPG Transmission Nigeria Limited

(ii) KEC Global FZ – LLC, Ras UL Khaimah

(iii) Jay Railway Projects Private Limited (formerly known as Jay Railway Signaling Private Limited) (w.e.f. September 14, 2010)

(iv) KEC Investment Holdings, Mauritius (w.e.f. August 2, 2010)

(v) KEC International Holdings LLC, USA*

(vi) KEC Brazil LLC, USA*

(vii) KEC Mexico LLC, USA*

(viii) KEC Transmission LLC, USA* (ix) KEC US LLC, USA*

(x) SAE Towers Holdings, LLC, USA#

(xi) SAE Towers Brazil Subsidiary Company LLC, USA#

(xii) SAE Towers Mexico Subsidiary Holding Company LLC, USA#

(xiii) SAE Towers Mexico S de RL de CV, Mexico # (xiv) SAE Towers Brazil Torres de Transmission Ltda, Brazil #

(xv) SAE Prestadora de Servicios Mexico, S de RL de CV, Mexico #

(xvi) SAE Towers 2 Investmentos e Participacoes Ltda, Brazil#

(xvii) SAE Towers Limited, USA #

(xviii) SAE Towers Panama Holdings LLC, USA #

(xix) SAE Towers Panama S de RL, Panama #

*w.e.f. September 7, 2010

# w.e.f. September 23, 2010

(b) Parties with whom transactions have taken place:

Subsidiaries

(i) RPG Transmission Nigeria Limited

(ii) KEC Global FZ – LLC, Ras UL Khaimah

(iii) Jay Railway Projects Private Limited

(iv) KEC Investment Holdings, Mauritius

(v) SAE Towers Holdings, LLC, USA

(vi) KEC Transmission LLC, USA

(vii) KEC US LLC, USA

Joint Ventures

(i) Al-Sharif Group and KEC Ltd. Company, Saudi Arabia (formerly known as Faiz Abdul Hakim Al-Sharif Group and KEC Company Ltd., Saudi Arabia)

(ii) Hilltop Infrastructure Inc. USA (Upto February 9, 2011)

(iii) KEC Power India Private Limited

(iv) EJP KEC Joint Venture, South Africa

(v) KEC – ASSB JV, Malaysia

(vi) KEC – ASIAKOM – UB JV

(vii) KEC – ASIAKOM JV

(viii) KEC – JEI JV

(ix) KEC – DELCO – VARAHA JV

(x) KEC – VARAHA – KHAZANA JV

(xi) KEC – VALECHA – DELCO JV

(xii) KEC – SIDHARTH JV

(xiii) KEC – TRIVENI – KPIPL JV

(xiv) KEC – UNIVERSAL JV

(xv) KEC – DELCO – DUSTAN JV

(xvi) KEC – ANPR – KPIPL JV

(xvii) KEC – PLR – KPIPL JV

Key Management Personnel: Mr. R. D. Chandak – Managing Director

23. Disclosure in respect of Joint Ventures under Accounting Standard 27 - "Financial Reporting of Interests in Joint Ventures"

c) In respect of contracts as referred to in Note 2(c) of Schedule 18, the Company has recognised sales and services Rs. 29,528.97 lacs (previous year Rs. 56,481.61 lacs), total expenditure Rs. 27,059.54 lacs (previous year Rs. 54,908.79 lacs), total assets aggregating Rs. 28,098.29 lacs (previous year Rs. 28,857.76 lacs) and total liabilities aggregating Rs. 25,636.51 lacs (previous year Rs. 27,378.94 lacs).

24. Basic/diluted earnings per share has been calculated by dividing the profit for the year after taxation of Rs. 14,709.01.lacs (previous year Rs. 17,099.12 lacs), by 25,70,88,370 (previous year 24,76,03,375) being the weighted average number of equity shares outstanding during the year. For this purpose, equity shares allotted on April 26, 2010 in consideration for the amalgamation referred to in Note 2(c ) above have been considered in the calculation of weighted average number of equity shares in the previous year. Further, as during the year each equity share of face value of Rs. 10/- has been split/subdivided into face value of Rs. 2/-each, the basic/diluted earnings per share for the previous year has been adjusted in accordance with Accounting Standard -20 “Earnings Per Share”.

25. The Company is primarily engaged in the business of Engineering, Procurement and Construction business (EPC). As such there is no other separate reportable segment as defned by Accounting Standard -17 “Segment Reporting”.

26. The execution of the construction works under contracts with General Electric Company, Libya is disrupted since February, 2011 due to civil/political unrest in that country. The net assets [including fixed assets, debtors etc] as at March 31, 2011 of the Company relating to these contracts aggregate Rs. 6,865 lacs. The Company is hopeful to recommence and complete the balance work of the projects on restoration of normalcy in Libya.

27. In view of the matter stated in Note 1 above, the figures of the previous year are not directly comparable with those of the current year. Further previous year figures have been regrouped where necessary to conform to those of the current year.

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