Provisions are recognised when the Company has a presenlobligation (legal or constructive) as a result of a past event;
it is probable that the Company will be required to settlethe obligation in respect of which a reliable estimate can bemade of the amount of the obligation.
The amount recognised as a provision is the management’sbest estimate of the consideration required to settle thepresent obligation at the end of the reporting period, takinginto account the risks and uncertainties surrounding theobligation. When a provision is measured using the cashflows estimated to settle the present obligation, its carryingamount is the present value of those cash flows (when theeffect of the time value of money is material).
When some or all of the economic benefits required to settlea provision are expected to be recovered from a third party,a receivable is recognised as an asset if it is virtually certainthat reimbursement will be received, and the amount of thereceivable can be measured reliably.
Present obligations arising under onerous contracts arerecognised, measured and disclosed as provisions infinancial statements. An onerous contract is consideredto exist where the Company has a contract under whichthe unavoidable costs of meeting the obligations underthe contract exceed the economic benefits expected to bereceived from the contract.
A disclosure for a contingent liability is made when there isa possible obligation or a present obligation that may, butprobably will not require an outflow of resources embodyingeconomic benefits or the amount of such obligation cannotbe measured reliably. When there is a possible obligation ora present obligation in respect of which likelihood of outflowof resources embodying economic benefits is remote, noprovision or disclosure is made.
Contingent assets: A contingent asset is a possible assetthat arises from past events and whose existence willbe confirmed only by the occurrence or non-occurrenceof one or more uncertain future events not wholly withinthe control of the entity. Contingent assets are notrecognised but disclosed only when an inflow of economicbenefits is probable.
Financial assets and financial liabilities are recognised whena Company becomes a party to the contractual provisionsof the instruments.
Financial assets except trade receivables and financialliabilities are initially measured at fair value. Trade receivablesare initially measured at transaction value. Transaction coststhat are directly attributable to the acquisition or issue of
financial assets and financial liabilities other than financialassets and financial liabilities at fair value through profit orloss (FVTPL) are added to or deducted from the fair valueof the financial assets or financial liabilities, as appropriate,on initial recognition. Transaction costs directly attributableto the acquisition of fi nancial assets or fi nancial liabilities atfair value through profit or loss are recognised immediatelyin the Statement of Profit and Loss.
Regular way purchases and sales of financial assets arerecognised on trade-date, being the date on which theCompany commits to purchase or sell the financial asset.Financial assets are derecognised when the rights toreceive cash flows from the financial assets have expiredor have been transferred and the Company has transferredsubstantially all the risks and rewards of ownership.
Financial assets are subsequently measured atamortised cost if these financial assets are heldwithin a business whose objective is to holdthese assets in order to collect contractual cashflows and the contractual terms of the financialasset give rise on specified dates to cash flowsthat are solely payments of principal and intereston the principal amount outstanding.
Income is recognised on an effective interestbasis for financial assets other than thosefinancial assets classified as FVTPL or FVOCI.Interest income is recognised in the Statementof Profit and Loss.
Financial assets are measured at fair valuethrough profit or loss unless it is measured atamortised cost or at fair value through othercomprehensive income on initial recognition.Gains or losses arising on remeasurement arerecognised in the Statement of Profit and Loss.The net gain or loss recognised in the Statementof Profit and Loss incorporates any dividendor interest earned on the financial asset and isincluded in the ‘Other income’ line item.
The Company derecognises a financial assetwhen the contractual rights to the cash flowsfrom the asset expire, or when it transfersthe financial asset and substantially all therisks and rewards of ownership of the assetto another party and does not retain controlof the asset. The Company continues torecognise the asset to the extent of Company’scontinuing involvement.
On derecognition of a financial asset in itsentirety, the difference between the asset’scarrying amount and the sum of the considerationreceived and receivable and the cumulativegain or loss that had been recognised in othercomprehensive income and accumulated inequity is recognised in the Statement of Profit andLoss if such gain or loss would have otherwisebeen recognised in the Statement of Profit andLoss on disposal of that financial asset.
and equity instruments
Debt and equity instruments issued by aCompany are classified as either financialliabilities or as equity in accordance with thesubstance of the contractual arrangementsand the definitions of a financial liability and anequity instrument.
Equity instruments issued by the Company arerecognised at the proceeds received, net ofdirect issue costs.
Financial liabilities are subsequently measuredat amortised cost using the effectiveinterest method.
Financial liabilities that are not held-for-trading and are not designated as at FVTPLare measured at amortised cost at the end ofeach accounting period. The carrying amountsof financial liabilities that are subsequentlymeasured at amortised cost are determinedbased on the effective interest method.
Financial guarantee contracts issued by aCompany are initially measured at their fairvalue and, if not designated as at FVTPL, aresubsequently measured at the higher of:
• the amount of loss allowance determined inaccordance with impairment requirementsof Ind AS 109, ‘Financial Instruments’; and
• the amount initially recognised less, whenappropriate, the cumulative amount ofincome recognised in accordance with theprinciples of Ind AS 115, ‘Revenue fromcontract with customers’.
The Financial guarantees issued to third partieson behalf of subsidiaries/Jointly ControlledOperations are recorded at fair value. The sameis recognised as Other income in the statementof Profit and Loss.
The Company derecognises financial liabilitieswhen, and only when, the Company’sobligations are discharged, cancelled or haveexpired. An exchange with a new lender of debtinstruments with substantially different termsis accounted for as an extinguishment of theoriginal financial liability and the recognition ofa new financial liability. Similarly, a substantialmodification of the terms of an existing financialliability (whether or not attributable to the financialdifficulty of the debtor) is accounted for as anextinguishment of the original financial liabilityand the recognition of a new financial liability.The difference between the carrying amountof the financial liability derecognised and theconsideration paid and payable is recognised inthe Statement of Profit and Loss.
Trade Acceptances represents amount payabletowards arrangements wherein banks andfinancial institutions make direct paymentsto the Company’s suppliers for materials andservices. The banks and financial institutionsare subsequently repaid by the Company atthe due date of such acceptances. Under sucharrangements, the Company is eligible to receiveextended credit period benefit. Further, the bankcharges interest to the Company for extendedcredit period. For the purposes of cash flowpresentation, the economic substance of thesetransactions is determined to be operating innature, and accordingly, settlement of such trade
acceptances by the Company is treated as cashflows from operating activity.
The Company enters into a variety of derivative financialinstruments to manage its exposure to foreign exchangerate risks and commodity price risks. These instrumentsinclude foreign exchange forward contracts andcommodity contracts - Over the Counter (OTC) derivatives.Derivatives are only used for economic hedging purposesand not as a speculative investment.
Derivatives are initially recognised at fair value at thedate the derivative contracts are entered into and aresubsequently remeasured to their fair value at the endof each reporting period. The resulting gain or loss isrecognised in the Statement of Profit and Loss immediatelyunless the derivative is designated and effective as ahedging instrument, in which event the timing of therecognition in the Statement of Profit and Loss dependson the nature of the hedging relationship and the nature ofthe hedged item.
The Company designates certain hedging instruments,which include derivatives in respect of foreign currency riskand commodity price risk as cash flow hedges. Hedges offoreign exchange risk and commodity price risk for highlyprobable forecast transactions are accounted for as cashflow hedges. Hedges of the fair value of recognised assetsor liabilities are accounted for as fair value hedges.
At the inception of the hedge relationship, the entitydocuments the relationship between the hedging instrumentand the hedged item, along with its risk managementobjectives and its strategy for undertaking various hedgetransactions. Furthermore, at the inception of the hedge andon an ongoing basis, the Company documents whether thehedging instrument is highly effective in offsetting changesin fair values or cash flows of the hedged item attributableto the hedged risk.
The effective portion of changes in the fairvalue of derivatives that are designated andqualify as cash flow hedges is recognised inother comprehensive income and accumulatedunder the heading of cash flow hedging reserve.The gain or loss relating to the ineffective portionis recognised immediately in the Statementof Profit and Loss. For cash flow hedgingrelationships that span multiple reporting
periods, the ineffectiveness for the periodis calculated as the difference between thecumulative ineffectiveness as at reporting date(based on the ‘lesser of’ the cumulative changein the fair value of the hedging instrument and thehedged item), and the cumulative ineffectivenessreported in prior periods.
Amounts previously recognised in othercomprehensive income and accumulated inequity relating to effective portion as describedabove are reclassified to the Statement ofProfit and Loss in the periods when thehedged item affects profit or loss, in thesame line as the recognised hedged item.However, when the hedged forecast transactionresults in the recognition of a non-financialasset or a non-financial liability, such gainsand losses are transferred from equity (but notas a reclassification adjustment) and includedin the initial measurement of the cost of thenon-financial asset or non-financial liability.
Hedge accounting is discontinued whenthe hedging instrument expires or is sold,terminated, or when it no longer qualifies forhedge accounting. Any gain or loss recognised inother comprehensive income and accumulatedin equity at that time remains in equity andis recognised when the forecast transactionis ultimately recognised in the Statement ofProfit and Loss. When a forecast transaction isno longer expected to occur, the gain or lossaccumulated in equity is recognised immediatelyin the Statement of Profit and Loss.
Where the hedged item subsequently resultsin the recognition of a non-financial asset, thedeferred hedging gains and losses, are includedwithin the initial cost of the asset. The deferredamounts are ultimately recognised in profit orloss as the hedged item affects profit or lossthrough cost of material consumed.
For the purpose of presentation in statement of cashflows, cash and cash equivalents include cash on hand,deposits held at call with financial institutions, other shortterm highly liquid investments with original maturities of3 months or less that are readily convertible to knownamount of cash and which are subject to an insignificantrisk of change in value.
The Group delivers projects in key infrastructure sectorssuch as power transmission and distribution, railways tracklaying, electrification, civil, urban infrastructure, oil and gaspipelines etc. through its various Strategic Business Units(SBUs). The nature of the entire business remains within theboundaries of development of infrastructure, adhering to aconsistent execution methodology used across stages suchas Design/Engineering, Procurement, and Construction.Each project may have distinct characteristics in termsof scale and type, but the fundamental process centeredaround construction/erection is consistent across all theseSBUs. The class of the customers across segment isprimarily Government, Public Sector undertaking (PSUs),State Governments, Utilities and large Private Sector.Over long-term basis, the margin profiles of each of theseSBUs is also in the similar range, however the same maydiffer on project to project basis in the short term.
Considering the similarity in the economic characteristicsand nature of these Engineering, Procurement, andConstruction (‘EPC’) businesses, the Company hasapplied aggregation criteria for reportable segments underInd AS 108 and disclosed EPC segment as one of thereportable segment.
Basic earnings per share is calculated by dividing:
• the profit attributable to owners of the Company
• by the weighted average number of equity sharesoutstanding during the financial year, adjusted forbonus elements in equity shares issued during theyear and excluding treasury shares.
Diluted earnings per share adjusts the figures usedin the determination of basic earnings per share totake into account:
• the after-income tax effect of interest and otherfinancing costs associated with dilutive potentialequity shares and
• the weighted average number of additional equityshares that would have been outstanding assumingthe conversion of all dilutive potential equity shares.
Exceptional Items include income/expenses that areconsidered to be part of ordinary activities, however ofsuch significance and nature that separate disclosureenables the users of financial statements to understand theimpact in more meaningful manner. Exceptional Items areidentified by virtue of their size, nature and incidence.
The transaction costs of an equity transaction areaccounted for as a deduction from equity to the extentthey are incremental costs directly attributable to theequity transaction.
All amounts disclosed in the financial statements and noteshave been rounded off to the nearest crore as per therequirement of Schedule III, unless otherwise stated.
I n the application of the Company’s accounting policies,which are described in Note 3, the Management of theCompany are required to make judgements, estimatesand assumptions about the carrying amounts of assetsand liabilities that are not readily apparent from othersources. The estimates and associated assumptions arebased on historical experience and other factors that areconsidered to be relevant. Actual results may differ fromthese estimates.
The estimates and underlying assumptions are reviewed onan ongoing basis. Revisions to accounting estimates arerecognized in the period in which the estimate is revisedif the revision affects only that period, or in the period ofthe revision and future periods if the revision affects bothcurrent and future periods.
The following are the critical estimates and judgements thathave a significant effect on the amounts recognised in thefinancial statements.
I n terms of Ind AS 111, ‘Joint Arrangement’, the Companyhas classified its joint arrangements as jointly controlled
operations as the contractual arrangements between theparties specify that parties have rights to the assets, andobligations for the liabilities, relating to the arrangement(Refer note 49 for the list of joint arrangements).
Refer note 3.3.2 and note 50.
The impairment provisions for trade receivables andcontract assets are based on assumptions about the riskof default and expected loss rates. The Company usesjudgement in making these assumptions and selecting theinputs to the impairment calculation, based on Company’spast history, credit risk, existing market conditions aswell as forward looking estimates at the end of eachreporting period.
Determining whether the investments in subsidiariesare impaired requires an estimate in the value in use ofinvestments. The Company reviews its carrying value ofinvestments carried at cost annually, or more frequentlywhen there is an indication for impairment. The carryingamount of investment is tested for impairment as a singleasset by comparing its value in use with its carrying amount,any impairment loss recognised reduces the carryingamount of investment. In considering the value in use,the Board of directors have anticipated the future marketconditions and other parameters that affect the operationsof these entities including operating results, businessplans, future cash flows and economic conditions and keyassumptions such as estimated long term growth rates,weighted average cost of capital and estimated operatingmargins. Cash flow projections take into account pastexperience and represent management’s best estimateabout future developments.
During the year, the Company has acquired Nil (previous year 7,771,318 shares of USD 1 each) of KEC Investment Holding, Mauritius.Note 9.2
This represents investment in preference shares of KEC Investment Holdings, Mauritius. These shares are compulsorily convertibleinto equity shares with a conversion ratio of one is to four. The issuer has the option of early conversion as well with above fixedratio. There is no mandatory dividend payout year on year. Considering the said terms, the investment has been classified as equity.
As per Article of Association of the ‘RP Goenka Group of Companies Employees Welfare Association (Entity)’, no portion of incomeor property shall be paid or transferred directly or indirectly, by way of dividend, bonus or otherwise by way of profit to membersof the Entity. Any surplus upon winding up or dissolution of the Entity shall not be distributed amongst the members of the Entitybut shall be given or transferred to such other companies having objects similar to the objects of this Entity, to be determined by
the members of the Entity at or before the time of dissolution or in default thereof, by the High Court of Judicature that has or mayacquire jurisdiction in the matter.
As, there are significant restrictions on the ability of the Entity to transfer funds to the Company in the form of cashdividends, the fair value of the Company’s investment in the Entity is concluded to be equal to cost.
a) During the earlier years the Company had made impairment provision of ' 172.79 crore for its investments in KEC InvestmentHoldings, Mauritius, due to significant losses incurred by the Company’s step down subsidiary in Brazil i.e. SAE Towers BrasilTorres de Transmissao Ltda (a wholly owned subsidiary of SAE Towers Holdings LLC, USA). Provision for impairment ofinvestment was recognised to the extent the recoverable value of investments was lower than the carrying value of investments.The recoverable value of investments was calculated using value in use method. The value in use was determined based ondiscounted cash flow projections prepared after considering significant judgments while finalizing assumptions on growth inrevenues, EBITDA and discount rates.
b) During the earlier years the Company had also made below impairment provisions for its investments in various subsidiaries.Impairment was provided due to losses incurred by these subsidiaries from its operations. Provision for impairment ofinvestment was calculated by comparing the recoverable value of these investments (as per value in use) and the carryingvalue of investments.
i) I mpairment of Investment in RPG Transmission Nigeria Limited : ' 0.17 crore.
ii) I mpairment of Investment in KEC Power India Private Limited : ' 0.50 crore.
During the year, the Company (including nominee shareholders) has acquired 4,845,000 shares of ' 10 each at premium of ' 240 pershare in its wholly owned subsidiary KEC Asian Cables Limited (previous year: Nil). (Refer note 65)
During the year, the Company has acquired 2,50,000 shares of ' 10 each at premium of ' 240 per share in its wholly ownedsubsidiary of KEC Power India Private Limited (previous year: Nil).
' Nil (As at March 31, 2024: ' 33.70 crore) External Commercial Borrowing loan secured by first and exclusive charge overconstruction Equipments both present and future at all projects site relating to its Transsmission, Railway and Civil business inIndia. Repayment terms are three equal yearly installments starting from August, 2023. Interest rate is 3M LIBOR 160 bps.The Company has made prepayment of ECB last tranche in November 2024.
' 195 crore (As at March 31,2024: ' Nil crore) unsecured Term loan availed during the year. Loan repayment is in 3 years fromdisbursement date. The variable interest rate is MCLR-1Y Spread p.a.
' Nil (As at March 31,2024: ' 200 crore) secured by security stated against Note 29.1 (i) The loan is repaid during the year.The interest rates were in the ranges from 8.46% to 8.87% p.a.
(c) As at March 31, 2025, the total borrowing of the Company stood at ' 3,172.27 crore (As at March 31, 2024 ' 3,259.32crore). The Company was in compliance with all of its debt covenants for outstanding borrowings for both years exceptnon-compliance with respect to long term ECB loan relating to previous year, which is repaid in current year.
During the year ended March 31, 2022, the Company had received ' 0.50 crore towards government grant from Government ofRajasthan for setting up an Oxygen plant under Special package for Medical oxygen. The Company has amortised the grant basedon useful life of the plant and recognised income for current year of ' 0.02 crore (previous year ' 0.02 crore) under other income(Refer Note No. 39). The balance amount of grant is shown as “Deferred Grant” in non-current liability ' 0.41 crore (previous year' 0.43 crore) and other current liability of ' 0.02 crore (Refer Note 35). The Company does not have any unfulf lled conditions or othercontingencies attached to the same.
(i) ' 1,622.24 crore (As at March 31,2024: '1,473.80 crore) obtained from consortium of banks which are secured by first paripassu charge on the entire current assets of the Company, both present and future (except specif c export receivables financedby f nancial institutions and banks), second pari passu charge on fixed assets of the Company’s manufacturing facilities situatedat Jaipur, Jabalpur and Nagpur factories and further secured by first pari passu charge on flat situated at Juhu, Mumbai infavour of working capital consortium bankers. The interest rates are in the ranges from 8.10% to 10.50% p.a. (previous yearranges from 7.5% to 8.70% p.a).
(ii) ' 47.82 crore (As at March 31, 2024: ' Nil), pertains to a jointly controlled operation at Saudi Arabia secured by irrevocableCorporate Guarantee from the Company. The interest rates were in the ranges of 6.87% p.a to 7.25% p.a.
(iii) ' 11.90 crore (As at March 31, 2024: ' 11.36) obtained for Bangladesh project & secured primarily by Hypothecation 2ndcharge on pool of receivables against work orders executing in Bangladesh, secured by company through international biddingprocess and collateral given as Standby Letter of Credit (SBLC) in equivalent USD covering 110% of Company’s proposedcredit limit First Class Indian Bank. The interest rate is 10.26% p.a.
(a) From Banks-secured
(i) ' 493.75 crore (As at March 31, 2024: ' 597.52 crore) Buyer’s Credit/Packing Credit in Foreign Currency and FCNR (B)loans secured by security stated in Note 29.1(a) (i) above. The interest rates are in the ranges from 5.7% to 6.54% p.a.(previous year ranges from 3.81% to 6.65% p.a.).
(ii) ' Nil (As at March 31, 2024: ' 19.02 crore) Buyers credit secured by assignment of certain book debt at Abu Dhabiprojects. The interest rates are in the ranges from 7.53% to 8.33% p.a.
(iii) ' Nil (As at March 31,2024: ' 29.70 crore) debtors bill discounting secured by assignment of certain book debt for Cableprojects. The interest rates for previous year ranges from 8.00% to 8.55% p.a.
(b) ' 51.92 crore (As at March 31, 2024: ' Nil) pertains to a jointly controlled operation at Saudi Arabia secured by irrevocableCorporate Guarantee from the Company. The interest rate ranges between 5.49% to 6.65% p.a.
' 553.50 crore (As at March 31,2024: ' 771 crore) short term loan from various banks carrying interest rates ranging from 7.90%to 8.55% p.a. (previous year interest rate ranges from 7.00% to 8.05 % p.a.)
' Nil (As at March 31, 2024: ' 25.02 crore) being unsecured loan taken from a wholly owned subsidiary for working capitalrequirement interest rate for previous year was 8.50% p.a. This was repaid during the current year.
' 196.14 crore (As at March 31, 2024: ' 98.20 crore) being listed commercial papers which carries interest rate 8.40% p.a.(previous year interest rate ranges from 7.90% p.a. to 8.20% p.a.) having maturity period of 90 days (previous year 85-90 days).
(a) From Banks-secured:
(i) ' Nil (As at March 31,2024: ' 33.70 crore) External Commercial Borrowing loan secured by first charge over construction
Equipments present at all projects site relating to its Transmission, Railway and Civil business in India. During the currentfinancial year, the Company has prepaid the loan in November 2024. Interest rate is 3M LIBOR 160 bps.
(i) ' 40 crore (As at March 31,2024: ' Nil) loan repayment is in 24 installment out of which 8 installment due within 1 year.
The variable interest rate is MCLR-1Y Spread p.a.
(i) ' Nil (As at March 31, 2024: ' 200 crore) secured by security stated against Note 29.1 (i) Repayment made on April 29,
2024 and September 24, 2024. The interest rates were in the ranges from 8.46% to 8.87% p.a.
The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns orstatements of current assets fled by the Company with banks and financial institutions are in agreement with the books of accountsduring current and previous years.
unsatisfied contracts as of March 31, 2025 will be recognised as revenue during the next reporting period depending upon theprogress on each contract. The remaining amount is expected to be recognised in subsequent years, largely in year 2. The amountdisclosed above does not include variable consideration.
In case of transmission and distribution projects, where the goods are procured from a third party, the Company makes an assessmenton the impact of revenue recognition with respect to uninstalled materials. Considering, the Company is significantly involved indesigning and manufacturing the procured material and there is no significant time gap involved between transfer of control andinstallation, there is no material impact on revenue recognized. There is a significant management judgement involved in makingthis assessment.
(a) Total cash outflow for leases during current financial year is ' 30.78 crore (previous year : '13.00 crore)
(b) Additions to the right of use assets during the current financial year is ' 128.18 crore (previous year : '0.76 crore)
(c) During the current year ended 31st March 2025, the Company has sold and leased back assets with written down valueaggregating ' 69.08 crore for a sale consideration of ' 70.07 crore. The assets were leased back for a lease term of 5 years andall the payments in the lease agreements have been included in the measurement of lease liabilities. As per the requirementsof Ind AS 116, the right of use assets was recognised to the extent of the written down value of the assets and no profit or losshas been recognised in respect of this transaction. The cash flow from sale of assets have been presented separately as partof investing activity in the Statement of cash flows.
(d) Payments associated with short-term leases of equipment and vehicles are recognised on straight line basis as an expense inprofit or loss.
(e) Short term leases are leases with a lease term of 12 months or less. There are no leases of low value assets during the currentand previous year.
(f) When measuring lease liabilities for leases that were classified as operating leases, the Company discounted leasepayments using its incremental borrowing rate. The weighted average incremental borrowing rate applied is 9.10% p.a.(Previous year: 7.25% p.a.)
(g) The freehold land has been leased to a related party under operating leases with rentals payable monthly. Lease income fromoperating leases where the Company is a lessor is recognized in the Statement of Profit and Loss on a straight-line basis overthe lease term.
The Company manages its capital to ensure that the Company will be able to continue as a going concern while maximising thereturn 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 24 and 29 offset by cash and cash equivalents in Note 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 equity.
The Company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. The Companymanages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristicsof the underlying assets.
" ueDt is denned as long-term and snort-term Dorrowings (excluding derivative and tinanciai guarantee contracts), as described in Notes 24and 29 and includes interest accrued thereon and lease liabilities as per Note 25 and 30.
During the year ended March 31,2024, the Company has distributed the tnal dividend of ' 4 per equity share for the year endedMarch 31,2024 amounting to '102.84 crore.
The Board of directors, at their meeting held on May 26, 2025 recommended the tnal dividend of ' 5.50 per equity share for the yearended March 31,2025, subject to approval from shareholders. On approval, the total dividend outgo is expected to De ' 146.41 crorebased on number of shares outstanding as at March 31,2025.
III. Assets and liabilities which are measured at FVPL or FVOCI
This note provides information about how the Company determines fair values of various financial assets and financial liabilitiesmeasured at FVPL or FVOCI. Fair value of the Company’s financial assets and financial liabilities are measured on a recurringbasis 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 techniaue(s) and inputs used).
The Company’s Corporate Treasury function provides services to the business, co-ordinates access to domestic andinternational fi nancial markets, monitors and manages the fi nancial risks relating to the operations of the Company. These risksinclude 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 fi nancialinstruments to hedge risk exposures. The Company has Risk Management Policies to mitigate the risks in commodity prices andforeign exchange. The use of fi nancial derivatives and non-derivatives is governed by the Company’s policies approved by the Boardof Directors (BOD), which provide written principles to use fi nancial derivatives and non-derivative financial instruments, to hedgecurrency risk and commodity price risk. The Company does not enter into or trade fi nancial instruments, including derivative financialinstruments 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 andcommodity transaction to the Risk Management Committee. The periodical forex management report and commodity risk report asreviewed and approved by the Risk Management Committee is placed before the Audit Committee for review.
The Company’s activities expose it primarily to the fi nancial risks of changes in foreign currency exchange rates and interest rates(see Notes 53B.1 (a) and 53B.1 (b) below) and commodity prices (see Note 53B.1 (c) below). The Company enters into a variety ofderivative fi nancial instruments to manage its exposure to foreign currency risk, interest rate risk and commodity price risk including:
- foreign currency forward 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, Zinc and Lead.
Derivatives are only used for economic hedging purposes and not as speculative investments. All such transactions are carried outwithin the approved guidelines set by the Board of Directors .
The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactionsin various currencies. Foreign currency risk arises from future commercial transactions and recognised assets and liabilitiesdenominated in a currency that is not the Company’s functional currency (INR). The risk is measured through a forecast ofhighly probable foreign currency cash flows. The objective of the hedges is to minimize the volatility of the INR cash flows.
The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominatedfinancial instruments.
The impact on other components of equity arises from financial instruments in the books of jointly controlled operations andbranches whose functional currency is other than INR and also on account of Foreign currency derivative contracts which aredesignated as Cash flow Hedges.
5% appreciation / depreciation in the foreign currency will have following impact on profit / (loss) before tax and equity[gains / (losses)]:
The Company is exposed to movement in metal commodity prices of Copper, Aluminium, Zinc and Lead. Most of the Company’scontracts with the Indian customers are backed by a price variation for most of these metals. However, proftability in caseof Arm price orders is impacted by movement in the prices of these metals. The Company has a well defined hedging policyapproved by Board of Directors of the Company, which to a large extent takes care of the commodity price fluctuations andminimizes the risk. For base metals like Aluminium, Copper, Zinc and Lead, the Company either places a firm order on thesupplier or hedges its exposure on the London Metal Exchange (LME) directly. Refer Note 53C, for further details on commodityderivative contracts.
The Board of Directors of the Company have established an appropriate liquidity risk management framework for the managementof the Company’s short-term, medium-term and long-term funding and liquidity management requirements. The Company managesliquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecastand actual cash flows, and by matching the maturity profiles of the financial assets and liabilities.
The following table details the Company’s remaining contractual maturity for its financial liabilities with agreed repayment periods.The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which theCompany can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are linkedto floating rate, the undiscounted amount is derived from interest rate at the end of the reporting period.
The Company is exposed to interest rate risk because the Company borrows funds at both fixed and floating interest rates.The Company’s exposure to changes in interest rates relates primarily to the Company’s outstanding floating rate debt.Local currency debts are on fixed rate basis and hence not subject to interest rate risk. Foreign currency debts which are linkedto international interest rate benchmarks like SOFR are subject to interest rate risk.
Interest rate sensitivity
The sensitivity analysis below have been determined based on the exposure to interest rates for non-derivative instrumentsat the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liabilityoutstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is usedfor 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 31,2025 would decrease/increase by ' 4.95 crore (for the year ended March 31,2024: decrease/increase by '7.41 crore). This is mainly attributable to the Company’s exposure to interest rates on its variable rate borrowings.
The Company has access to various fund and 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 is ' 8,003.79 crore as at March 31,2025 (' 8,301.12 crore as at March 31,2024).
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 contract assets) and from itsinvesting activities, including deposits with banks, foreign exchange transactions and other financial instruments. The Company’smajor customers includes government bodies and public sector undertakings. Further, many of the International projects are fundedby 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 historicalexperiences. The Company’s exposure to its counterparties are continuously reviewed and monitored by the Chief OperatingDecision Maker (CODM).
Credit period varies as per the contractual terms with the customers. The Company does not have significant financing componentin the contracts with customers.
The Company directly reduces the gross carrying amount of a financial asset when the Company has no reasonable expectations ofrecovering a financial asset in its entirety or a portion thereof. The amounts of financial assets are net of an allowance for expectedcredit losses, estimated by the Company and based, in part, on the age of specific receivable balance and the current and expectedcollection trends. When assessing the credit risk associated with its receivables, the Company also considers the other financial andnon-financial assets and liabilities recognized within the same project to provide additional indications on the Company’s exposureto 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 and contract assetsby taking into consideration payment prof les of sales over a period of 36 months before the reporting date and the correspondinghistorical credit loss experiences within this period for each Strategic Business Unit (SBU). The historical loss rates are adjusted torefect current and forward looking information taking into account the macro economic factors affecting the ability of the customersto settle the receivables. The expected credit loss is based on the ageing of the days, the receivables due and the expected creditloss rate. In addition, in case of event driven situation such as litigations, disputes, change in customer’s credit risk history, specificprovisions are made after evaluating the relevant facts and expected recovery.
The Company has adopted a Risk Management Policy approved by the Board of Directors of the Company for managing theforeign currency exposure. The policy enumerates the mechanism for Risk Identif cation, Risk Measurement and Risk Monitoring.The policy has approved a set of f nancial instruments for hedging foreign currency risk. The Company mainly uses forward contractsto manage the foreign currency risk.
Concentration risk: As at March 31, 2025, two of the customers exceed 10% of the Company’s total trade receivables. As atMarch 31,2024, none of the customer exceeded 10% of the Company’s total trade receivables.
In addition, the Company is exposed to credit risk in relation to f nancial and performance guarantees given by the Company on behalfof its subsidiaries and jointly controlled operations (net of Company’s share). The Company’s maximum exposure in this respectis the maximum amount the Company could have to pay if the guarantee is called on (net of Company’s share in jointly controlledoperations), as at March 31, 2025 is 1997.41 crores (as at March 31, 2024; ' 1,840.96 crore). These financial and performanceguarantees have been issued to the banks / customers on behalf of the subsidiaries and jointly controlled operations under theagreements entered into by the subsidiaries / jointly controllled operations with the banks / customers. Based on management’sassessment as at the end of the reporting period, the Company considers the likelihood of any claim under the guarantee as remote.
The cash and cash equivalents are held with bank and financial institution counterparties with good credit rating.
Other bank balances are held with bank and financial institution counterparties with good credit rating.
The derivatives are entered into with bank and financial institution counterparties with good credit rating.
Other financial assets are neither past due nor impaired.
(A) Superannuation
All eligible employees are entitled to benefits under Superannuation, a defined contribution plan. The Company makesyearly contributions until retirement or resignation of the employee. The Company recognises such contributions as anexpense when incurred. The Company has no further obligations beyond its yearly contribution.
(B) Provident Fund
The Company makes contribution to respective regional provident fund commissioners in relation to the workers employedat factories located at Butibori, Jaipur, Jabalpur, Mysore and Vadodara. The Company recognises such contributions asan expense when incurred. The Company has no further obligations beyond its yearly contribution.
(C) Employees’ State Insurance Corporation (ESIC)
The Company makes contribution towards Employees State Insurance scheme operated by ESIC Corporation.The contributions payable to these plans by the Company are at rates specif ed in the rules of the scheme. The Companyrecognises such contributions as an expense when incurred. The Company has no further obligations beyond itsyearly contribution.
(D) Employees’ Pension Scheme (EPS)
The Company pays pension fund contributions to publicly administered pension funds as per regulations. All eligibleemployees are entitled to benefits under employees pension scheme, a defined contribution plan. The Company makesmonthly contributions until retirement or resignation of the employee. The Company recognises such contributions as anexpense when incurred. The Company has no further obligations beyond its monthly contribution.
(A) Gratuity
(i) Company and its Jointly Controlled Operations in India
The Company and its jointly controlled operations (JCO) in India has an obligation towards gratuity, a funded definedbenefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees atretirement, death while in employment or on termination of the employment of an amount equivalent to 15 days / onemonth salary, as applicable, payable for each completed year of service or part thereof in excess of six months in termsof the Gratuity scheme of the Company/JCOs in India or as per payment of the Gratuity Act, 1972, whichever is higher.
The Company has set up an income tax approved trust fund to finance the plan liability. The trustees of the trust fund areresponsible for the overall governance of the plan. The Company makes contribution to the plan. There are no minimumfunding requirement for the plan in India. The trustees of the gratuity fund have a fiduciary responsibility to act accordingto the provisions of the trust deed and rules.
The Jointly Controlled Operation has an obligation towards an unfunded defined benefit retirement plan i.e. End ServiceBenefit plan, (akin to gratuity) covering eligible employees. The benefits payable are as under:
The Company has established ‘KEC International Limited Provident Fund’ in respect of employees, other than factoryworkers, to which both the employee and the employer make contribution equal to 12% of the employee’s basic salaryrespectively. The Company’s contribution to the provident fund for all employees, are charged to the Statement of Profitand Loss. In case of any liability arising due to shortfall between the return from its investments and the administeredinterest rate, the same is required to be provided for by the Company.
The above defined benefit plans typically expose the Company to actuarial risks such as: investment risk, interest raterisk, longevity risk and salary risk.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligationas it is unlikely that the change in assumption would occur in isolation of one another as some of the assumptionmay be correlated.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years and samedata, method and assumptions have been used in preparing the sensitivity analysis which are used to determine periodend defined benefit obligation.
* There are no employees as at the year end
The Company has established ‘KEC International Limited Provident Fund’ in respect of employees other than factoryworkers to which both the employee and the employer make contribution equal to 12% of the employee’s basic salaryrespectively. The Company’s contribution to the provident fund for all employees, are charged to the Statement of Profitand Loss. In case of any liability arising due to shortfall between the return from its investments and the administeredinterest rate, the same is required to be provided for by the Company. 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 theexpected amount to be credited to the individual members based on the expected guaranteed rate of interest.
NOTE 60 - Figures in respect of the Company’s overseas branches in Abu Dhabi, Afghanistan, Algeria, Bangladesh, Benin, Bhutan,Burkina Faso, Burundi, Cameroon, Egypt, Ethiopia, Georgia, Ghana, Guinea, Ivory Coast, Jordan, Kenya, Kuwait, Libya, Malaysia,Mali, Moldova, Morocco, Mozambique, Nepal, Nigeria, Oman, Papua New Guinea, Philippines, Senegal, Sierra Leone, South Africa,Sri Lanka, Tanzania, Thailand, Togo, Tunisia, Uganda, and Zambia have been incorporated on the basis of financial statements (theBranch Returns) audited by the auditors of the respective branches.
NOTE 61 - Commercial papers (CP) raised by the Company are unsecured and short-term in nature ranging between sixty onedays to Ninety days. These CP are having a Credit Rating of CRISIL A1 and IND A1 and are listed on BSE Limited. During the yearended March 31,2025, the Company has redeemed CP on the relevant due dates.
NOTE 62 - The Company’s projects in Afghanistan are on hold due to a force majeure event, with no material financial impactexpected, as these are funded by international agencies (ADB, USAID and World Bank). As of March 31,2025, the Company hasreceived ' 148 crores from USAID and partial payment ' 296 crores from the World Bank. ADB has also communicated to resolvethe outstanding payments and has appointed a third-party agency, United Nations Office for Project Services, for verification of thephysical work. The Company is discussing with international funding agencies, including discussion around possible resumption ofwork in respect of certain projects. The Company’s net assets exposure in these projects, including its Afghanistan branch, is ' 151crore.
NOTE 63 - In the month of March 2025, one Public Sector Undertaking (“PSU”) official and an employee of Company was takeninto custody by a government agency in relation to a Transmission Project. No chargesheet has been filed in the matter so far. TheCompany upholds the highest standards of corporate governance, ethics, and compliance in all its operations and conducts itsbusiness with integrity, transparency, and adherence to applicable laws and regulations. The matter is under investigation, howeverthe Company is of the view that this matter would not have any material impact on the operations and financial statement of theCompany.
NOTE 64 - The Company raised capital of ' 870.16 Crores through Qualified Institutions Placement (“QIP”) of equity shares. TheCommittee of Directors of the Company, at its meeting held on September 26, 2024, approved the allotment of 91,11,630 equityshares of face value ' 2 each to eligible investors at an issue price of ' 955 per equity share (including a premium of ' 953 per equityshare). QIP share issue expenses amounting to '19.04 crore has been adjusted from securities premium.
NOTE 65 - Pursuant to the approval of the Board of Directors on November 04, 2024, the Company has signed the Business TransferAgreement (“BTA”) with KEC Asian Cables Limited (“KACL”), a wholly owned subsidiary, on December 30, 2024, for transfer of itscable business to KACL, as a going concern, on slump sale basis, for a lump sum consideration of ' 125 Crore. The consideration isbased on fair market value determined as per Rule 11UAE of the Income Tax Rules 1962. Further, consequent to the completion ofclosing conditions in terms of the said BTA, the cable business of the Company is transferred to KACL effective January 01,2025.
The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both duringthe current or previous year.
There are certain charges which are historical in nature, and it involves practical challenges in obtaining no-objection certificates(NOCs) and/or getting requisite formalities completed towards charge satisfaction from the charge holders of such charges, despiterepayment of the underlying loans. The Company is in the continuous process of getting the charge satisfaction e-form fled andprocessed with MCA, within the timelines, as and when it receives NOCs/confrmation from the respective charge holders.
The borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which suchloans were taken.
NOTE 77 - Previous period figures have been regrouped / recasted / reclassified wherever necessary to conf rm with current yearpresentation.
NOTE 78 - The Company has approved its financial statements in its board meeting dated May 26, 2025.
Signatures to Notes 1 to 78 which form an integral part of financial statements.
In terms of our report of even date For and on behalf of the Board of Directors
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
H.V GOENKA VIMAL KEJRIWAL
Chairman Managing Director and CEO
SUMIT SETH DIN - 00026726 DIN - 00026981
Partner
Membership Number : 105869 RAJEEV AGGARWAL SURAJ EKSAMBEKAR
Chief Financial Officer Company Secretary
Place : Mumbai Place : Mumbai
Date : May 26, 2025 Date : May 26, 2025