1. We have audited the accompanying standalone financialstatements of KEC International Limited (“the Company”),which comprise the Balance Sheet as at March 31, 2025,and the Statement of Profit and Loss (including OtherComprehensive Income), the Statement of Changes inEquity and the Statement of Cash Flows for the year thenended, and notes to the standalone financial statements,including material accounting policy information and otherexplanatory information in which are included the fi nancialstatements/financial information for the year ended on thatdate audited by the branch auditors of the Company’s39 branches located at Abu Dhabi, Afghanistan, Algeria,Bangladesh, Benin, Bhutan, Burundi, Burkina Faso,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 and financial statements/financialinformation of 34 jointly controlled operations consolidatedon a proportionate basis. (refer Note 49 to the attachedstandalone financial statements) (hereinafter referred to as“standalone financial statements”).
2. In our opinion and to the best of our information andaccording to the explanations given to us and basedon the consideration of reports of branch auditors andother auditors on audited financial statements/financialinformation of branches and jointly controlled operations,the aforesaid standalone financial statements give theinformation required by the Companies Act, 2013 (“theAct”) in the manner so required and give a true and fairview in conformity with the accounting principles generallyaccepted in India, of the state of affairs of the Companyas at March 31, 2025, and total comprehensive income
(comprising of profit and other comprehensive income),changes in equity and its cash flows for the year then ended.
3. We conducted our audit in accordance with the Standardson Auditing (SAs) specified under Section 143(10) of theAct. Our responsibilities under those Standards are furtherdescribed in the “Auditor’s Responsibilities for the Audit ofthe Standalone Financial Statements” section of our report.We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirementsthat are relevant to our audit of the financial statementsunder the provisions of the Act and the Rules thereunder,and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtainedand the audit evidence obtained by the branch auditorsand other auditors in terms of their reports referred to insub-paragraphs 14 and 15 of the “Other Matter” sectionbelow, is sufficient and appropriate to provide a basisfor our opinion.
4. We draw attention to Note 63 to the standalone financialstatements, regarding an ongoing investigation by agovernment agency. The impact of the matter, if any, onthe standalone financial statements would be dependenton the outcome of this investigation.
Our opinion is not modified in respect of the above matter.
5. Key audit matters are those matters that, in our professionaljudgement, were of most significance in our audit of thefinancial statements of the current period. These matterswere addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon,and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Estimation of construction contract revenue and
Our procedures in respect of recognition of construction
related cost
contract revenue and related cost included the following:
(Refer Notes 38 and 50 to the standalone financial
• Understood and evaluated the design and tested the
statements)
operating effectiveness of key internal financial controls,including those related to estimation of construction
The Company enters into engineering, procurement and
contract costs, contract revenue and review and approval
construction contracts, which are complex in nature andgenerally extend over a period of 2 to 3 years. Contract
thereof.
prices are fixed and/ or subject to price variation clauses.
• Assessed the appropriateness of the revenue recognitionaccounting policies in accordance with Ind AS 115
Contract revenue is measured based on the proportionof contract costs incurred for work performed until
“Revenue from Contracts with Customers”.
the balance sheet date, relative to the estimated total
• For selected sample of contracts, performed the following
contract costs. The recognition of revenue, therefore, is
procedures:
based on estimates in relation to total estimated costs
a) Obtained and examined project related documents
and estimated contract price of each contract.
such as contracts, customer communications and price
This method requires the Company to perform an initial
or scope variation orders.
assessment of total estimated cost which include cost
b) Obtained the percentage of completion calculations,
contingencies and subsequently, reassess the total
agreed key contractual terms with customer contracts/
construction cost at each reporting period to determine
communication, tested the mathematical accuracy of
the appropriate percentage of completion.
the cost to complete calculations and re-performed
Based on contractual tenability of claims, price or scope
the calculation of revenue recognised during the year
variations, and progress of discussions and negotiations
based on the percentage of completion.
with the customers, Management recognises revenue
c) Evaluated Management’s development of the budgeted
for variable consideration and related contract balances
project/ contract costs, changes between planned and
in those circumstances, where it is highly probable thatthere will not be a significant reversal of cumulatively
actual costs, and the estimated costs to complete.
recognised revenue when the related uncertainties areresolved. Recognition of variable consideration involves
d) Verified relevant supporting documents and performedcut off procedures for construction contract related
significant Management judgment considering the
costs incurred through the reporting period.
complexities, uncertainties and extended period of time
e) Evaluated the reasonableness of key assumptions
when the related matters are ultimately concluded.Management periodically assesses the recoverability of
included in the estimated total construction contractrelated costs:
such claims, price, or scope variations recognised as
- Obtained the breakdown of estimated total contract
part of revenue and related contract balances, based on
costs and tested elements of the committed cost by
inputs from Management’s expert, certain assumptions,
obtaining executed purchase orders, agreements,
past experience, facts and circumstances of the
customer confirmations/ documents, evidence
underlying customer contract and consequently updates
relating to variable consideration/ claims.
the amounts recognised in the financial statements.
- Evaluated reasonableness of Management’s
We considered the estimation of construction contract
judgements and assumptions by using past
revenue and related cost as a key audit matter given the
experience and comparing the change in estimated
following:
total construction contract costs at period end fromthe previous periods.
- There is an inherent risk and a presumed risk of fraud
f) Tested trade receivables, contract assets and contract
in revenue recognition, considering also the complex
liability balances based on the status of specific
nature of the customer contracts; and
contracts, considering the billing done, revenue
- Complexities involved and significant Management
recognised and advances received from customer, if
judgement in making forecasts of future cost to
any, through the reporting date.
complete the contract taking into account future
• For selected samples, evaluated Management’s assessment
activities to be performed in the contract, additional
of recognising revenue for variable consideration,
costs to be incurred, which has a consequential
including claims, price or scope variations by reviewing
impact on the amount of revenue recognised,
the contractual terms, client communications and past
variable consideration recognised as revenue andthe significance of these amounts to the financial
experience, as applicable by involving auditor’s expert.
statements.
• Assessed the adequacy of presentation and relateddisclosures in the financial statements.
Recoverability of Trade Receivables and Contract
Our procedures in respect of recoverability of trade receivables
Assets
and contract assets included the following:
(Refer to Notes 10, 15, 19 and 62 to the standalone
• Evaluated the design and tested the operating effectiveness
financial statement)
of key internal financial controls over Management’s
Trade receivables and contract assets representsignificant balances in the Company’s standalone financial
assessment of recoverability of trade receivables andcontract assets.
statements as at March 31,2025. The assumptions used
• Obtained an understanding from Management for a selected
for estimating the expected credit loss in respect of these
sample of such customer balances the related contractual
balances is an area which is influenced by significant
terms, collection experience, basis of Management’s
Management’s judgment.
assessment of collectability, and expected realisation plan.
The Management assesses the estimated credit losses
• Assessed the information used by the Management to
in respect of trade receivables and contract assets
determine the expected credit losses for a selected sample
based on credit risk profile of customers, project status,
of such customer balances by considering credit risk
past collection experience, ongoing litigations and
profile of the customer, contractual terms, project status,
disputes, if any, economic and market conditions and
past collection experience, uncertainties and delays in
applicable forward looking assumptions. Considering
recoveries, subsequent realisation, correspondence with
such assessment, Management uses a provision matrix
the customers, ongoing litigations and disputes, if any.
to recognise impairment for expected credit losses inrespect of such balances.
• Tested the key assumptions and arithmetical accuracy of theprovision matrix model used by Management to calculate
Given the relative significance of these balances to the
the probability of default and estimate the expected credit
standalone financial statements, Management judgement
losses in respect of trade receivables and contract assets.
and uncertainties involved as well as the nature andextent of audit procedures performed to assess therecoverability of trade receivables and contract assets,we determined this to be a key audit matter.
6. The Company’s Board of Directors is responsible for theother information. The other information comprises theinformation included in the annual report but does notinclude the financial statements and our auditor’s reportthereon. The annual report is expected to be made availableto us after the date of this auditor’s report.
Our opinion on the standalone financial statements doesnot cover the other information and we will not express anyform of assurance conclusion thereon.
In connection with our audit of the standalone financialstatements, our responsibility is to read the other informationidentified above when it becomes available and, in doingso, consider whether the other information is materiallyinconsistent with the standalone financial statements or ourknowledge obtained in the audit, or otherwise appears tobe materially misstated.
When we read the annual report, if we conclude that thereis a material misstatement therein, we are required tocommunicate the matter to those charged with governanceand take appropriate action as applicable under the relevantlaws and regulations.
RESPONSIBILITIES OF MANAGEMENT AND THOSECHARGED WITH GOVERNANCE FOR THE STANDALONEFINANCIAL STATEMENTS
7. The Company’s Board of Directors is responsible for thematters stated in Section 134(5) of the Act with respect tothe preparation of these standalone financial statementsthat give a true and fair view of the financial position,financial performance, changes in equity and cash flowsof the Company in accordance with the accountingprinciples generally accepted in India, including the IndianAccounting Standards specified under Section 133 ofthe Act. This responsibility also includes maintenanceof adequate accounting records in accordance with theprovisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds andother irregularities; selection and application of appropriateaccounting policies; making judgments and estimates thatare reasonable and prudent; and design, implementationand maintenance of adequate internal financial controls,that were operating effectively for ensuring the accuracyand completeness of the accounting records, relevant tothe preparation and presentation of the financial statementsthat give a true and fair view and are free from materialmisstatement, whether due to fraud or error.
8. I n preparing the standalone financial statements,management is responsible for assessing the Company’sability to continue as a going concern, disclosing, asapplicable, matters related to going concern and using thegoing concern basis of accounting unless managementeither intends to liquidate the Company or to ceaseoperations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible foroverseeing the Company’s financial reporting process.
9. Our objectives are to obtain reasonable assurance aboutwhether the standalone financial statements as a wholeare free from material misstatement, whether due to fraudor error, and to issue an auditor’s report that includes ouropinion. Reasonable assurance is a high level of assurancebut is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, theycould reasonably be expected to influence the economicdecisions of users taken on the basis of these standalonefinancial statements.
10. As part of an audit in accordance with SAs, we exerciseprofessional judgement and maintain professionalscepticism throughout the audit. We also:
• I dentify and assess the risks of material misstatementof the standalone financial statements, whether dueto fraud or error, design and perform audit proceduresresponsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basisfor our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than forone resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, orthe override of internal control.
• Obtain an understanding of internal control relevantto the audit in order to design audit procedures thatare appropriate in the circumstances. Under Section143(3)(i) of the Act, we are also responsible forexpressing our opinion on whether the Company hasadequate internal financial controls with referenceto standalone financial statements in place and theoperating effectiveness of such controls.
• Evaluate the appropriateness of accounting policiesused and the reasonableness of accounting estimatesand related disclosures made by management.
• Conclude on the appropriateness of management’suse of the going concern basis of accounting and,based on the audit evidence obtained, whethera material uncertainty exists related to events or
conditions that may cast significant doubt on theCompany’s ability to continue as a going concern.If we conclude that a material uncertainty exists,we are required to draw attention in our auditor’sreport to the related disclosures in the financialstatements or, if such disclosures are inadequate,to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditionsmay cause the Company to cease to continue asa going concern.
• Evaluate the overall presentation, structure and contentof the standalone financial statements, including thedisclosures, and whether the standalone financialstatements represent the underlying transactions andevents in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regardingthe financial information of the branches and jointlycontrolled operations within the Company to expressan opinion on the standalone financial statements.We are responsible for the direction, supervision andperformance of the audit of the financial statementsof such entities included in the consolidated financialstatements of which we are the independent auditors.For the other entities included in the standalonefinancial statements, which have been audited bybranch auditors and other auditors, such branchauditors and other auditors remain responsible for thedirection, supervision and performance of the auditscarried out by them. We remain solely responsible forour audit opinion.
11. We communicate with those charged with governanceregarding, among other matters, the planned scope andtiming of the audit and significant audit findings, includingany significant deficiencies in internal control that weidentify during our audit.
12. We also provide those charged with governance with astatement that we have complied with relevant ethicalrequirements regarding independence, and to communicatewith them all relationships and other matters that mayreasonably be thought to bear on our independence, andwhere applicable, related safeguards.
13. From the matters communicated with those charged withgovernance, we determine those matters including thosereported by the branch auditors and other auditors that wereof most significance in the audit of the standalone financialstatements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor’sreport unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances,we determine that a matter should not be communicatedin our report because the adverse consequences of doingso would reasonably be expected to outweigh the publicinterest benefits of such communication.
operating effectiveness of such controls, refer to ourseparate Report in “Annexure A”.
(i) With respect to the other matters to be includedin the Auditor’s Report in accordance with Rule11 of the Companies (Audit and Auditors) Rules,2014 (as amended), in our opinion and to thebest of our information and according to theexplanations given to us:
i. The Company has disclosed the impact ofpending litigations on its financial position inits financial statements (Refer Note 56 to thefinancial statements);
ii. The Company has made provision, as requiredunder the applicable law or Indian AccountingStandards, for material foreseeable losses,if any, on long-term contracts includingderivative contracts (Refer Note 36.3 to thefinancial statements);
iii. There has been no delay in transferring amounts,required to be transferred, to the InvestorEducation and Protection Fund by the Companyduring the year.
iv. (a) The management has represented to us
and to the branch auditors that, to the bestof its knowledge and belief, other than asdisclosed in the notes to these standalonefinancial statements, no funds have beenadvanced or loaned or invested (eitherfrom borrowed funds or share premiumor any other sources or kind of funds) bythe Company or any of the branches to orin any other persons or entities, includingforeign entities (“Intermediaries”), with theunderstanding, whether recorded in writingor otherwise, that the Intermediary shall,whether directly or indirectly, lend or investin other persons or entities identified in anymanner whatsoever by or on behalf of theCompany or any of the branches (“UltimateBeneficiaries”) or provide any guarantee,security or the like on behalf of the UltimateBeneficiaries (Refer Note 9.7 and 9.8 to thestandalone financial statements);
(b) The management has represented to usand to the branch auditors that, to thebest of its knowledge and belief, otherthan as disclosed in the notes to thesestandalone financial statements, no fundshave been received by the Company orany of the branches from any persons orentities, including foreign entities (“FundingParties”), with the understanding, whetherrecorded in writing or otherwise, that the
14. The financial statements/financial information of 38Branches and 32 jointly controlled operations includedin the standalone f nancial statements of the Companyreflect total assets of ' 3,637 crores and net assets of' 450 crores as at March 31, 2025, total revenue fromoperations of ' 2,065 crores, net profit after tax of ' 26crores, total comprehensive income (comprising of profitand other comprehensive loss) of ' 6 crores and net cashinflows amounting to ' 44 crores for the year then ended.These financial statements and other financial informationhave been audited by branch auditors and otherauditors whose reports have been furnished to us by themanagement, and our opinion on the standalone financialstatements including other information in so far as it relatesto the amounts and disclosures included in respect of thesebranches and jointly controlled operations, is based on thereports of such branch auditors and other auditors and theprocedures performed by us. Material uncertainty related togoing concern has been reported by 1 branch, on accountof losses incurred during the year by this branch, which isnot material in relation to the operations of the Company.
15. The financial statements/financial information of 1 branchand 2 jointly controlled operations located outside India,included in the standalone financial statements, whichconstitute total assets of ' 1,923 crores and net assetsof ' 591 crores as at March 31, 2025, total revenue fromoperations of ' 2,384 crores, net profit after tax of ' 219crores, total comprehensive income (comprising of profitand other comprehensive income) of ' 238 crores and netcash outflows amounting to ' 6 crores for the year thenended, have been prepared in accordance with accountingprinciples generally accepted in their respective countriesand have been audited by branch auditor and otherauditors under generally accepted auditing standardsapplicable in their respective countries. The Company’smanagement has converted the financial statements/financial information of such branch and jointly controlledoperations located outside India from the accountingprinciples generally accepted in their respective countriesto the accounting principles generally accepted in India.We have audited the conversion adjustments, if any, madeby the Company’s management. Our opinion in so far asit relates to the balances and affairs of such branch andjointly controlled operations located outside India, is basedon the report of such branch auditor and other auditors andthe conversion adjustments prepared by the managementof the Company and audited by us. Material uncertaintyrelated to going concern has been reported by 1 jointlycontrolled operation, on account of trading being dissolvedduring the year by this jointly controlled operation, which isnot material in relation to the operations of the Company.
Our opinion on the standalone financial statements andour report on Other Legal and Regulatory Requirementsbelow, is not modified in respect of the above matters of
our reliance on the work done and reports of the branchauditors and other auditors.
16. As required by the Companies (Auditor’s Report) Order, 2020(“the Order”), issued by the Central Government of India interms of sub-section (11) of Section 143 of the Act, we givein the Annexure B a statement on the matters specified inparagraphs 3 and 4 of the Order, to the extent applicable.
17. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information andexplanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.
(b) I n our opinion, proper books of account as requiredby law have been kept by the Company so far as itappears from our examination of those books andthe reports of the branch auditors and other auditorsexcept for the matters stated in paragraph 17(i)(vi)below on reporting under Rule 11 (g) of the Companies(Audit and Auditors) Rules, 2014 (as amended).
(c) The reports on the accounts of the branch offices ofthe Company audited under Section 143(8) of the Actby branch auditors have been sent to us and havebeen properly dealt with by us in preparing this report.
(d) The Balance Sheet, the Statement of Profit andLoss (including other comprehensive income), theStatement of Changes in Equity and the Statement ofCash Flows dealt with by this Report are in agreementwith the books of account and the financial information/financial statements received from branches and thejointly controlled operations.
(e) In our opinion, the aforesaid standalone financialstatements comply with Indian Accounting Standardsspecified under Section 133 of the Act.
(f) On the basis of the written representations receivedfrom the directors as on April 1, 2025 taken onrecord by the Board of Directors, none of thedirectors is disqualified as on March 31, 2025, frombeing appointed as a director in terms of Section164(2) of the Act.
(g) With respect to the maintenance of accounts andother matters connected therewith, reference is madeto our remarks in paragraph 17(b) above on reportingunder Section 143(3)(b) and paragraph 17(i)(vi) belowon reporting under Rule 11 (g) of the Companies (Auditand Auditors) Rules, 2014 (as amended).
(h) With respect to the adequacy of the internal financialcontrols with reference to standalone financialstatements of the Company and its branches, and the
Company or any of the branches shall,whether directly or indirectly, lend or investin other persons or entities identified in anymanner whatsoever by or on behalf of theFunding Party (“Ultimate Beneficiaries”)or provide any guarantee, security or thelike on behalf of the Ultimate Beneficiaries(Refer Note 9.8 to the standalone financialstatements); and
(c) Based on such audit procedures that weconsidered reasonable and appropriate inthe circumstances performed by us andthose performed by the branch auditors,nothing has come to our or branch auditorsnotice that has caused us or branchauditors to believe that the representationsunder sub-clause (a) and (b) contain anymaterial misstatement.
v. The dividend declared and paid by the Companyduring the year is in compliance with Section123 of the Act.
vi. Based on our examination, which includedtest checks and that performed by the Branchauditors, the Company and its branches haveused an accounting software for maintainingits books of account which has a feature ofrecording audit trail (edit log) facility and thathas operated throughout the year for all relevanttransactions recorded in the software, exceptthat in case of the Company, the audit trail isnot maintained in case of any changes by userswith certain privileged access and for any directdatabase changes to its accounting software.During the course of our audit and basis thereport of the branch auditors, except for theaforesaid instance, where the question of ourcommenting on whether the audit trail has beentampered with does not arise, we or the branchauditors did not notice any instance of audit trailfeature being tampered with.
18. The Company has paid/provided for managerialremuneration in accordance with the requisite approvalsmandated by the provisions of Section 197 read withSchedule V to the Act.
Firm Registration Number: 012754N/N500016
Partner
Place: Mumbai Membership Number: 105869
Date: May 26, 2025 UDIN: 25105869BMOPCD8789