3.17 Provisions and contingencies

Provisions are recognised when the Company has a presenl
obligation (legal or constructive) as a result of a past event;

it is probable that the Company will be required to settle
the obligation in respect of which a reliable estimate can be
made of the amount of the obligation.

The amount recognised as a provision is the management’s
best estimate of the consideration required to settle the
present obligation at the end of the reporting period, taking
into account the risks and uncertainties surrounding the
obligation. When a provision is measured using the cash
flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flows (when the
effect of the time value of money is material).

When some or all of the economic benefits required to settle
a provision are expected to be recovered from a third party,
a receivable is recognised as an asset if it is virtually certain
that reimbursement will be received, and the amount of the
receivable can be measured reliably.

Present obligations arising under onerous contracts are
recognised, measured and disclosed as provisions in
financial statements. An onerous contract is considered
to exist where the Company has a contract under which
the unavoidable costs of meeting the obligations under
the contract exceed the economic benefits expected to be
received from the contract.

A disclosure for a contingent liability is made when there is
a possible obligation or a present obligation that may, but
probably will not require an outflow of resources embodying
economic benefits or the amount of such obligation cannot
be measured reliably. When there is a possible obligation or
a present obligation in respect of which likelihood of outflow
of resources embodying economic benefits is remote, no
provision or disclosure is made.

Contingent assets: A contingent asset is a possible asset
that arises from past events and whose existence will
be confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly within
the control of the entity. Contingent assets are not
recognised but disclosed only when an inflow of economic
benefits is probable.

3.18 Financial instruments

Financial assets and financial liabilities are recognised when
a Company becomes a party to the contractual provisions
of the instruments.

Financial assets except trade receivables and financial
liabilities are initially measured at fair value. Trade receivables
are initially measured at transaction value. Transaction costs
that are directly attributable to the acquisition or issue of

financial assets and financial liabilities other than financial
assets and financial liabilities at fair value through profit or
loss (FVTPL) are added to or deducted from the fair value
of the financial assets or financial liabilities, as appropriate,
on initial recognition. Transaction costs directly attributable
to the acquisition of fi nancial assets or fi nancial liabilities at
fair value through profit or loss are recognised immediately
in the Statement of Profit and Loss.

Regular way purchases and sales of financial assets are
recognised on trade-date, being the date on which the
Company commits to purchase or sell the financial asset.
Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired
or have been transferred and the Company has transferred
substantially all the risks and rewards of ownership.

3.19 Classification and Measurement of Financial Assets

3.19.1 Financial assets at amortised cost

Financial assets are subsequently measured at
amortised cost if these financial assets are held
within a business whose objective is to hold
these assets in order to collect contractual cash
flows and the contractual terms of the financial
asset give rise on specified dates to cash flows
that are solely payments of principal and interest
on the principal amount outstanding.

Effective interest method

Income is recognised on an effective interest
basis for financial assets other than those
financial assets classified as FVTPL or FVOCI.
Interest income is recognised in the Statement
of Profit and Loss.

3.19.2 Financial assets at fair value through profit or
loss (FVTPL)

Financial assets are measured at fair value
through profit or loss unless it is measured at
amortised cost or at fair value through other
comprehensive income on initial recognition.
Gains or losses arising on remeasurement are
recognised in the Statement of Profit and Loss.
The net gain or loss recognised in the Statement
of Profit and Loss incorporates any dividend
or interest earned on the financial asset and is
included in the ‘Other income’ line item.

3.19.3 Dividend income is recognised when the right
to receive payment has been established.

3.19.4 Derecognition of financial assets

The Company derecognises a financial asset
when the contractual rights to the cash flows
from the asset expire, or when it transfers
the financial asset and substantially all the
risks and rewards of ownership of the asset
to another party and does not retain control
of the asset. The Company continues to
recognise the asset to the extent of Company’s
continuing involvement.

On derecognition of a financial asset in its
entirety, the difference between the asset’s
carrying amount and the sum of the consideration
received and receivable and the cumulative
gain or loss that had been recognised in other
comprehensive income and accumulated in
equity is recognised in the Statement of Profit and
Loss if such gain or loss would have otherwise
been recognised in the Statement of Profit and
Loss on disposal of that financial asset.

3.20 Classification and Measurement Financial liabilities

and equity instruments

3.20.1 Classification as debt or equity

Debt and equity instruments issued by a
Company are classified as either financial
liabilities or as equity in accordance with the
substance of the contractual arrangements
and the definitions of a financial liability and an
equity instrument.

3.20.2 Equity instruments

Equity instruments issued by the Company are
recognised at the proceeds received, net of
direct issue costs.

3.20.3. Financial liabilities

Financial liabilities are subsequently measured
at amortised cost using the effective
interest method.

3.20.4 Financial liabilities subsequently measured at
amortised cost

Financial liabilities that are not held-for-
trading and are not designated as at FVTPL
are measured at amortised cost at the end of
each accounting period. The carrying amounts
of financial liabilities that are subsequently
measured at amortised cost are determined
based on the effective interest method.

3.20.5 Financial guarantee contracts

Financial guarantee contracts issued by a
Company are initially measured at their fair
value and, if not designated as at FVTPL, are
subsequently measured at the higher of:

• the amount of loss allowance determined in
accordance with impairment requirements
of Ind AS 109, ‘Financial Instruments’; and

• the amount initially recognised less, when
appropriate, the cumulative amount of
income recognised in accordance with the
principles of Ind AS 115, ‘Revenue from
contract with customers’.

The Financial guarantees issued to third parties
on behalf of subsidiaries/Jointly Controlled
Operations are recorded at fair value. The same
is recognised as Other income in the statement
of Profit and Loss.

3.20.6 Derecognition of financial liabilities

The Company derecognises financial liabilities
when, and only when, the Company’s
obligations are discharged, cancelled or have
expired. An exchange with a new lender of debt
instruments with substantially different terms
is accounted for as an extinguishment of the
original financial liability and the recognition of
a new financial liability. Similarly, a substantial
modification of the terms of an existing financial
liability (whether or not attributable to the financial
difficulty of the debtor) is accounted for as an
extinguishment of the original financial liability
and the recognition of a new financial liability.
The difference between the carrying amount
of the financial liability derecognised and the
consideration paid and payable is recognised in
the Statement of Profit and Loss.

3.20.7 Trade Acceptances

Trade Acceptances represents amount payable
towards arrangements wherein banks and
financial institutions make direct payments
to the Company’s suppliers for materials and
services. The banks and financial institutions
are subsequently repaid by the Company at
the due date of such acceptances. Under such
arrangements, the Company is eligible to receive
extended credit period benefit. Further, the bank
charges interest to the Company for extended
credit period. For the purposes of cash flow
presentation, the economic substance of these
transactions is determined to be operating in
nature, and accordingly, settlement of such trade

acceptances by the Company is treated as cash
flows from operating activity.

3.21 Derivative financial instruments

The Company enters into a variety of derivative financial
instruments to manage its exposure to foreign exchange
rate risks and commodity price risks. These instruments
include foreign exchange forward contracts and
commodity contracts - Over the Counter (OTC) derivatives.
Derivatives are only used for economic hedging purposes
and not as a speculative investment.

Derivatives are initially recognised at fair value at the
date the derivative contracts are entered into and are
subsequently remeasured to their fair value at the end
of each reporting period. The resulting gain or loss is
recognised in the Statement of Profit and Loss immediately
unless the derivative is designated and effective as a
hedging instrument, in which event the timing of the
recognition in the Statement of Profit and Loss depends
on the nature of the hedging relationship and the nature of
the hedged item.

3.22 Hedge accounting

The Company designates certain hedging instruments,
which include derivatives in respect of foreign currency risk
and commodity price risk as cash flow hedges. Hedges of
foreign exchange risk and commodity price risk for highly
probable forecast transactions are accounted for as cash
flow hedges. Hedges of the fair value of recognised assets
or liabilities are accounted for as fair value hedges.

At the inception of the hedge relationship, the entity
documents the relationship between the hedging instrument
and the hedged item, along with its risk management
objectives and its strategy for undertaking various hedge
transactions. Furthermore, at the inception of the hedge and
on an ongoing basis, the Company documents whether the
hedging instrument is highly effective in offsetting changes
in fair values or cash flows of the hedged item attributable
to the hedged risk.

3.22.1 Cash flow hedges that qualify for hedge
accounting

The effective portion of changes in the fair
value of derivatives that are designated and
qualify as cash flow hedges is recognised in
other comprehensive income and accumulated
under the heading of cash flow hedging reserve.
The gain or loss relating to the ineffective portion
is recognised immediately in the Statement
of Profit and Loss. For cash flow hedging
relationships that span multiple reporting

periods, the ineffectiveness for the period
is calculated as the difference between the
cumulative ineffectiveness as at reporting date
(based on the ‘lesser of’ the cumulative change
in the fair value of the hedging instrument and the
hedged item), and the cumulative ineffectiveness
reported in prior periods.

Amounts previously recognised in other
comprehensive income and accumulated in
equity relating to effective portion as described
above are reclassified to the Statement of
Profit and Loss in the periods when the
hedged item affects profit or loss, in the
same line as the recognised hedged item.
However, when the hedged forecast transaction
results in the recognition of a non-financial
asset or a non-financial liability, such gains
and losses are transferred from equity (but not
as a reclassification adjustment) and included
in the initial measurement of the cost of the
non-financial asset or non-financial liability.

Hedge accounting is discontinued when
the hedging instrument expires or is sold,
terminated, or when it no longer qualifies for
hedge accounting. Any gain or loss recognised in
other comprehensive income and accumulated
in equity at that time remains in equity and
is recognised when the forecast transaction
is ultimately recognised in the Statement of
Profit and Loss. When a forecast transaction is
no longer expected to occur, the gain or loss
accumulated in equity is recognised immediately
in the Statement of Profit and Loss.

Where the hedged item subsequently results
in the recognition of a non-financial asset, the
deferred hedging gains and losses, are included
within the initial cost of the asset. The deferred
amounts are ultimately recognised in profit or
loss as the hedged item affects profit or loss
through cost of material consumed.

3.23 Cash and cash equivalents

For the purpose of presentation in statement of cash
flows, cash and cash equivalents include cash on hand,
deposits held at call with financial institutions, other short
term highly liquid investments with original maturities of
3 months or less that are readily convertible to known
amount of cash and which are subject to an insignificant
risk of change in value.

3.24 Segment reporting

The Group delivers projects in key infrastructure sectors
such as power transmission and distribution, railways track
laying, electrification, civil, urban infrastructure, oil and gas
pipelines etc. through its various Strategic Business Units
(SBUs). The nature of the entire business remains within the
boundaries of development of infrastructure, adhering to a
consistent execution methodology used across stages such
as Design/Engineering, Procurement, and Construction.
Each project may have distinct characteristics in terms
of scale and type, but the fundamental process centered
around construction/erection is consistent across all these
SBUs. The class of the customers across segment is
primarily Government, Public Sector undertaking (PSUs),
State Governments, Utilities and large Private Sector.
Over long-term basis, the margin profiles of each of these
SBUs is also in the similar range, however the same may
differ on project to project basis in the short term.

Considering the similarity in the economic characteristics
and nature of these Engineering, Procurement, and
Construction (‘EPC’) businesses, the Company has
applied aggregation criteria for reportable segments under
Ind AS 108 and disclosed EPC segment as one of the
reportable segment.

3.25 Earnings per share

Basic earnings per share is calculated by dividing:

• the profit attributable to owners of the Company

• by the weighted average number of equity shares
outstanding during the financial year, adjusted for
bonus elements in equity shares issued during the
year and excluding treasury shares.

Diluted earnings per share adjusts the figures used
in the determination of basic earnings per share to
take into account:

• the after-income tax effect of interest and other
financing costs associated with dilutive potential
equity shares and

• the weighted average number of additional equity
shares that would have been outstanding assuming
the conversion of all dilutive potential equity shares.

3.26 Exceptional items

Exceptional Items include income/expenses that are
considered to be part of ordinary activities, however of
such significance and nature that separate disclosure
enables the users of financial statements to understand the
impact in more meaningful manner. Exceptional Items are
identified by virtue of their size, nature and incidence.

3.27 Share Issue Expenses

The transaction costs of an equity transaction are
accounted for as a deduction from equity to the extent
they are incremental costs directly attributable to the
equity transaction.

3.28 Rounding off amounts

All amounts disclosed in the financial statements and notes
have been rounded off to the nearest crore as per the
requirement of Schedule III, unless otherwise stated.

4. CRITICAL ESTIMATES AND JUDGEMENTS

I n the application of the Company’s accounting policies,
which are described in Note 3, the Management 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
recognized 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.

The following are the critical estimates and judgements that
have a significant effect on the amounts recognised in the
financial statements.

4.1 Classification of Joint Arrangement as a Jointly
Controlled Operations

I n terms of Ind AS 111, ‘Joint Arrangement’, the Company
has classified its joint arrangements as jointly controlled

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
(Refer note 49 for the list of joint arrangements).

4.2 Revenue recognition for construction contracts

Refer note 3.3.2 and note 50.

4.3 Impairment of trade receivables and contract assets

The impairment provisions for trade receivables and
contract assets are based on assumptions about the risk
of default and expected loss rates. The Company uses
judgement in making these assumptions and selecting the
inputs to the impairment calculation, based on Company’s
past history, credit risk, existing market conditions as
well as forward looking estimates at the end of each
reporting period.

4.4 Impairment of Investments of subsidiaries

Determining whether the investments in subsidiaries
are impaired requires an estimate in the value in use of
investments. The Company reviews its carrying value of
investments carried at cost annually, or more frequently
when there is an indication for impairment. The carrying
amount of investment is tested for impairment as a single
asset by comparing its value in use with its carrying amount,
any impairment loss recognised reduces the carrying
amount of investment. In considering the value in use,
the Board of directors have anticipated the future market
conditions and other parameters that affect the operations
of these entities including operating results, business
plans, future cash flows and economic conditions and key
assumptions such as estimated long term growth rates,
weighted average cost of capital and estimated operating
margins. Cash flow projections take into account past
experience and represent management’s best estimate
about future developments.

Note 9.1

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 convertible
into equity shares with a conversion ratio of one is to four. The issuer has the option of early conversion as well with above fixed
ratio. There is no mandatory dividend payout year on year. Considering the said terms, the investment has been classified as equity.

Note 9.3

As per Article of Association of the ‘RP Goenka Group of Companies Employees Welfare Association (Entity)’, no portion of income
or property shall be paid or transferred directly or indirectly, by way of dividend, bonus or otherwise by way of profit to members
of the Entity. Any surplus upon winding up or dissolution of the Entity shall not be distributed amongst the members of the Entity
but 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 may
acquire 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 cash
dividends, the fair value of the Company’s investment in the Entity is concluded to be equal to cost.

Note 9.4

a) During the earlier years the Company had made impairment provision of ' 172.79 crore for its investments in KEC Investment
Holdings, Mauritius, due to significant losses incurred by the Company’s step down subsidiary in Brazil i.e. SAE Towers Brasil
Torres de Transmissao Ltda (a wholly owned subsidiary of SAE Towers Holdings LLC, USA). Provision for impairment of
investment 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 on
discounted cash flow projections prepared after considering significant judgments while finalizing assumptions on growth in
revenues, 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 of
investment was calculated by comparing the recoverable value of these investments (as per value in use) and the carrying
value 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.

Note 9.5

During the year, the Company (including nominee shareholders) has acquired 4,845,000 shares of ' 10 each at premium of ' 240 per
share in its wholly owned subsidiary KEC Asian Cables Limited (previous year: Nil). (Refer note 65)

Note 9.6

During the year, the Company has acquired 2,50,000 shares of ' 10 each at premium of ' 240 per share in its wholly owned
subsidiary of KEC Power India Private Limited (previous year: Nil).

(a) *Term loans from banks :

Secured :

' Nil (As at March 31, 2024: ' 33.70 crore) External Commercial Borrowing loan secured by first and exclusive charge over
construction Equipments both present and future at all projects site relating to its Transsmission, Railway and Civil business in
India. 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.

From Banks: unsecured:

' 195 crore (As at March 31,2024: ' Nil crore) unsecured Term loan availed during the year. Loan repayment is in 3 years from
disbursement date. The variable interest rate is MCLR-1Y Spread p.a.

(b) From Financial Instituitions
Secured:

' 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 ' 3,259.32
crore). The Company was in compliance with all of its debt covenants for outstanding borrowings for both years except
non-compliance with respect to long term ECB loan relating to previous year, which is repaid in current year.

Note 28.1:

During the year ended March 31, 2022, the Company had received ' 0.50 crore towards government grant from Government of
Rajasthan for setting up an Oxygen plant under Special package for Medical oxygen. The Company has amortised the grant based
on 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 other
contingencies attached to the same.

Note 29.1 Loans repayable on demand from banks :

Secured:

(i) ' 1,622.24 crore (As at March 31,2024: '1,473.80 crore) obtained from consortium of banks which are secured by first pari
passu charge on the entire current assets of the Company, both present and future (except specif c export receivables financed
by f nancial institutions and banks), second pari passu charge on fixed assets of the Company’s manufacturing facilities situated
at Jaipur, Jabalpur and Nagpur factories and further secured by first pari passu charge on flat situated at Juhu, Mumbai in
favour of working capital consortium bankers. The interest rates are in the ranges from 8.10% to 10.50% p.a. (previous year
ranges 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 irrevocable
Corporate 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 2nd
charge on pool of receivables against work orders executing in Bangladesh, secured by company through international bidding
process and collateral given as Standby Letter of Credit (SBLC) in equivalent USD covering 110% of Company’s proposed
credit limit First Class Indian Bank. The interest rate is 10.26% p.a.

Note 29.2 Other short-term borrowings

(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 Dhabi
projects. 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 Cable
projects. 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 irrevocable
Corporate Guarantee from the Company. The interest rate ranges between 5.49% to 6.65% p.a.

Unsecured:

' 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.)

(c) From Related Party
Unsecured:

' Nil (As at March 31, 2024: ' 25.02 crore) being unsecured loan taken from a wholly owned subsidiary for working capital
requirement interest rate for previous year was 8.50% p.a. This was repaid during the current year.

(d) From Financial Institutions
Unsecured:

' 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).

Note 29.3 Current Maturities of Long Term Borrowings

(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 current
financial year, the Company has prepaid the loan in November 2024. Interest rate is 3M LIBOR 160 bps.

(b) From Banks-unsecured:

(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.

(c) From Other Parties - Secured

(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.

Note 29.4

The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or
statements of current assets fled by the Company with banks and financial institutions are in agreement with the books of accounts
during current and previous years.

(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 value
aggregating ' 69.08 crore for a sale consideration of ' 70.07 crore. The assets were leased back for a lease term of 5 years and
all the payments in the lease agreements have been included in the measurement of lease liabilities. As per the requirements
of 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 loss
has been recognised in respect of this transaction. The cash flow from sale of assets have been presented separately as part
of 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 in
profit 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 current
and previous year.

(f) When measuring lease liabilities for leases that were classified as operating leases, the Company discounted lease
payments 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 from
operating leases where the Company is a lessor is recognized in the Statement of Profit and Loss on a straight-line basis over
the lease term.

NOTE 52 - CAPITAL MANAGEMENT

The Company manages its capital to ensure that the Company will be able to continue as a 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 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 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.

" ueDt is denned as long-term and snort-term Dorrowings (excluding derivative and tinanciai guarantee contracts), as described in Notes 24
and 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 ended
March 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 year
ended March 31,2025, subject to approval from shareholders. On approval, the total dividend outgo is expected to De ' 146.41 crore
based on number of shares outstanding as at March 31,2025.

B Financial risk management

The Company’s Corporate Treasury function provides services to the business, co-ordinates access to domestic and
international fi nancial markets, monitors and manages the fi nancial 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.

Note 53 B.1: Market risk

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

(a) Foreign currency risk management

The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions
in various currencies. Foreign currency risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the Company’s functional currency (INR). The risk is measured through a forecast of
highly probable foreign currency cash flows. The objective of the hedges is to minimize the volatility of the INR cash flows.

Sensitivity for above net exposures:

The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated
financial instruments.

The impact on other components of equity arises from financial instruments in the books of jointly controlled operations and
branches whose functional currency is other than INR and also on account of Foreign currency derivative contracts which are
designated as Cash flow Hedges.

5% appreciation / depreciation in the foreign currency will have following impact on profit / (loss) before tax and equity
[gains / (losses)]:

(c) Commodity price risk

The Company is exposed to movement in metal commodity prices of Copper, Aluminium, Zinc and Lead. Most of the Company’s
contracts with the Indian customers are backed by a price variation for most of these metals. However, proftability in case
of Arm 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 of the Company, which to a large extent takes care of the commodity price fluctuations and
minimizes the risk. For base metals like Aluminium, Copper, Zinc and Lead, the Company either places a firm order on the
supplier or hedges its exposure on the London Metal Exchange (LME) directly. Refer Note 53C, for further details on commodity
derivative contracts.

Note 53B.2: Liquidity risk management

The Board of Directors of the Company have 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 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 the
Company can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are linked
to floating rate, the undiscounted amount is derived from interest rate at the end of the reporting period.

(b) 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 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 linked
to 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 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 31,2025 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).

Note 53B.3: 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 contract assets) and from its
investing 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. The Company does not have significant financing component
in the contracts with customers.

The Company directly reduces 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 expected
credit losses, 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 and contract assets
by taking into consideration payment prof les of sales over a period of 36 months before the reporting date and the corresponding
historical credit loss experiences within this period for each Strategic Business Unit (SBU). The historical loss rates are adjusted to
refect current and forward looking information taking into account the macro economic factors affecting the ability of the customers
to settle the receivables. The expected credit loss is based on the ageing of the days, the receivables due and the expected credit
loss rate. In addition, in case of event driven situation such as litigations, disputes, change in customer’s credit risk history, specific
provisions are made after evaluating the relevant facts and expected recovery.

Note 53 C: Derivative Financial instruments

The Company has adopted a Risk Management Policy approved by the Board of Directors of the Company for managing the
foreign 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 contracts
to 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 at
March 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 behalf
of its subsidiaries and jointly controlled 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 jointly controlled
operations), as at March 31, 2025 is 1997.41 crores (as at March 31, 2024; ' 1,840.96 crore). These financial and performance
guarantees have been issued to the banks / customers on behalf of the subsidiaries and jointly controlled operations under the
agreements entered into by the subsidiaries / jointly controllled operations with the banks / customers. Based on management’s
assessment as at the end of the reporting period, the Company considers the likelihood of any claim under the guarantee as remote.

Cash and cash equivalents:

The cash and cash equivalents are held with bank and financial institution counterparties with good credit rating.

Other Bank Balances:

Other bank balances are held with bank and financial institution counterparties with good credit rating.

Derivatives:

The derivatives are entered into with bank and financial institution counterparties with good credit rating.

Other financial assets:

Other financial assets are neither past due nor impaired.

NOTE 54 - EMPLOYEE BENEFIT PLANS
Brief description of the plans

1 Defined contribution plans

(A) 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.

(B) Provident Fund

The Company makes contribution to respective regional provident fund commissioners in relation to the workers employed
at factories located at Butibori, Jaipur, Jabalpur, Mysore and Vadodara. The Company recognises such contributions as
an 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 Company
recognises such contributions as an expense when incurred. The Company has no further obligations beyond its
yearly contribution.

(D) Employees’ Pension Scheme (EPS)

The Company pays pension fund contributions to publicly administered pension funds as per regulations. All eligible
employees are entitled to benefits under employees pension scheme, a defined contribution plan. The Company makes
monthly 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 monthly contribution.

2 Defined Benefit Plans

(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 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 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 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.

(ii) Jointly Controlled operation in Saudi (Al Sharif JV)

The Jointly Controlled Operation has an obligation towards an unfunded defined benefit retirement plan i.e. End Service
Benefit 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 factory
workers, to which both the employee and the employer make contribution equal to 12% of the employee’s basic salary
respectively. The Company’s contribution to the provident fund for all employees, are charged to the Statement of Profit
and Loss. In case of any liability arising due to shortfall between the return from its investments and the administered
interest 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 rate
risk, longevity risk and salary risk.

Sensitivity analysis method

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation
as it is unlikely that the change in assumption would occur in isolation of one another as some of the assumption
may be correlated.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years and same
data, method and assumptions have been used in preparing the sensitivity analysis which are used to determine period
end 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 factory
workers to which both the employee and the employer make contribution equal to 12% of the employee’s basic salary
respectively. The Company’s contribution to the provident fund for all employees, are charged to the Statement of Profit
and Loss. In case of any liability arising due to shortfall between the return from its investments and the administered
interest 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 the
expected 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 (the
Branch 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 one
days to Ninety days. These CP are having a Credit Rating of CRISIL A1 and IND A1 and are listed on BSE Limited. During the year
ended 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 impact
expected, as these are funded by international agencies (ADB, USAID and World Bank). As of March 31,2025, the Company has
received ' 148 crores from USAID and partial payment ' 296 crores from the World Bank. ADB has also communicated to resolve
the outstanding payments and has appointed a third-party agency, United Nations Office for Project Services, for verification of the
physical work. The Company is discussing with international funding agencies, including discussion around possible resumption of
work in respect of certain projects. The Company’s net assets exposure in these projects, including its Afghanistan branch, is ' 151
crore.

NOTE 63 - In the month of March 2025, one Public Sector Undertaking (“PSU”) official and an employee of Company was taken
into custody by a government agency in relation to a Transmission Project. No chargesheet has been filed in the matter so far. The
Company upholds the highest standards of corporate governance, ethics, and compliance in all its operations and conducts its
business with integrity, transparency, and adherence to applicable laws and regulations. The matter is under investigation, however
the Company is of the view that this matter would not have any material impact on the operations and financial statement of the
Company.

NOTE 64 - The Company raised capital of ' 870.16 Crores through Qualified Institutions Placement (“QIP”) of equity shares. The
Committee of Directors of the Company, at its meeting held on September 26, 2024, approved the allotment of 91,11,630 equity
shares of face value ' 2 each to eligible investors at an issue price of ' 955 per equity share (including a premium of ' 953 per equity
share). 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 Transfer
Agreement (“BTA”) with KEC Asian Cables Limited (“KACL”), a wholly owned subsidiary, on December 30, 2024, for transfer of its
cable business to KACL, as a going concern, on slump sale basis, for a lump sum consideration of ' 125 Crore. The consideration is
based on fair market value determined as per Rule 11UAE of the Income Tax Rules 1962. Further, consequent to the completion of
closing conditions in terms of the said BTA, the cable business of the Company is transferred to KACL effective January 01,2025.

NOTE 74 - VALUATION OF PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSET:

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during
the current or previous year.

NOTE 75 - REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES:

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, despite
repayment of the underlying loans. The Company is in the continuous process of getting the charge satisfaction e-form fled and
processed with MCA, within the timelines, as and when it receives NOCs/confrmation from the respective charge holders.

NOTE 76 - UTILISATION OF BORROWINGS AVAILED FROM BANKS AND FINANCIAL INSTITUTIONS:

The borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which such
loans were taken.

NOTE 77 - Previous period figures have been regrouped / recasted / reclassified wherever necessary to conf rm with current year
presentation.

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