Download pdf - KEC INTERNATIONAL LIMITED - Bombay Stock Exchange · the first 400 kV transmission line in Ethiopia and a 765 kV line in South Africa. Various projects awarded to the company for

A N N U A L R E P O R T 2 0 0 9 - 1 0

KEC INTERNATIONAL LIMITED

Presentingthe highest-capacity

tower testing

station in the

world

Presentingthe highest-capacity

tower testing

station in the

world

1,200 kV S/C transmission tower tested at

Nagpur test bed in April 2010

Annual Report 2009-10 I 01

02 I KEC INTERNATIONAL LIMITED

KEC has set up

“State of the Art”

tower testing

station at Butibori

to meet extraordinary

Global demand.


Testing Station has

most modern facilities

using SCADA winches

with variable frequency

drives, Touch Screen

Control Panel with

online video recording.


RPG Cables merges into KEC


The Scheme of Amalgamation

of RPG Cables Limited with

KEC International Limited and

their respective shareholders

implemented in five months.


KEC is truly an

international company with

about 60% of its turnover

out of exports during the

past five years.

KEC received

Top Exporter National Trophy

for the year 2007-08 in

Merchant Enterprise Category

from EEPC INDIA.

New Training Centre at Butibori

KEC has set up a Training

Centre, with facilities for

both residential and non

residential training. It has

well equipped class rooms,

dormitories, a sophisticated

computer training facility

and a library. The objective

is to create a large pool of

supervisory talent for the

Transmission and Distribution industry and train

them in the latest technology and techniques.


CONTENTSPage No.

Corporate Information 8Directors’ Report and Annexures 10Management Discussion and Analysis 14Corporate Governance Report 17Auditors’ Report & Annexures 27Balance Sheet 30Profit & Loss Account 31Schedules & Notes to the Accounts 32Cash Flow Statement 59Balance Sheet Abstract 60Auditors’ Report on Consolidated Financial Statements 61Consolidated Balance Sheet 62Consolidated Profit & Loss Account 63Schedules & Notes to Consolidated Accounts 64Disclosure in respect of Subsidiary Companies 83Consolidated Cash Flow Statement 84

FINANCIAL HIGHLIGHTSINR in Crores

USD in Millions

2005-06 2006-07 2007-08 2008-09 2009-10 2009-10

Turnover 1,727 2,041 2,814 3,429 3,907 870 EBITDA 162 252 355 302 407 91 Interest 59 59 68 100 87 19 Depreciation & Amortisation 27 33 25 23 27 6 Profit After Tax 49 105 172 117 190 42 Paid-up Equity Capital 38 38 49 49 49 11Networth 187 272 495 558 787 175 Earning per Share (in Rs./USD) 13.58 27.77 39.56 23.67 38.30 0.85Dividend per Share (in Rs./USD) 1.20 4.50 5.00 5.00 6.00 0.13

Turnover

0

1000

2000

3000

4000

2005-06 2006-07 2007-08 2008-09 2009-10

INR in Crores

0200400600800

2005-06 2006-07 2007-08 2008-09 2009-10

INR in Crores

Net Worth

EBITDA

0

50

150

250

350

450

2005-06

INR in Crores

2006-07 2007-08 2008-09 2009-10

CAGR of four years:

Turnover - 17.75%

EBITDA - 20.25%

Net Worth increased by 4.21 times


BOARD OF DIRECTORS

H. V. Goenka Chairman

R. D. Chandak Managing Director & CEO

S. S. Thakur Director

G. L. Mirchandani Director

D. G. Piramal Director

S. M. Kulkarni Director

A. T. Vaswani Director

J. M. Kothary Director

P. A. Makwana Director

MANAGEMENT TEAM

R. D. Chandak Managing Director & CEO

Vimal Kejriwal Executive Director - International

N. C. Venugopal Executive Director - South Asia

Nikhil Gupta Executive Director - RPG Cables

Vardhan Dharkar Chief Financial Officer

Yugesh Goutam Vice President - Human Resources

Akhil Saxena Vice President - Supply Chain

Anubrata Bhattacharya Chief Executive - Distribution

A. K. Sharma Chief Executive - Telecom

Sanjay Chandra Chief Executive - Railways

K. Ramkumar Vice President - Special Projects

V. Balasubramanian Vice President - International Projects

Deepak Lakhapati Vice President - Engineering Services

Raj Kumar Gupta Vice President - South Asia Projects

Vasant Pandit Vice President - Sales and Marketing (Cables)

CORPORATE INFORMATION


PLANTS

Butibori, Nagpur Butibori 441 108Maharashtra

JhotwaraJaipur 302 012 Rajasthan

DeoriJabalpur 483 220Madhya Pradesh

Hebbal Industrial AreaMysore 571 186 Karnataka

2nd Pokhran RoadThane 400 601Maharashtra

Demni Road Silvassa 396 191Dadra and Nagar Haveli

BANKERS

Bank of India IDBI Bank Limited

Abu Dhabi Commercial Bank Punjab National Bank

Allahabad Bank Standard Chartered Bank

Andhra Bank State Bank of Bikaner and Jaipur

Axis Bank Limited State Bank of Hyderabad

Bank of Baroda State Bank of India

Barclays Bank Plc Syndicate Bank

Central Bank of India The Royal Bank of Scotland N.V.

Corporation Bank UCO Bank

Dena Bank YES Bank Limited

Export Import Bank of India The Dhanlaxmi Bank Limited

ICICI Bank Limited

CORPORATE INFORMATION

COMPANY SECRETARY

Ch. V. Jagannadha Rao

AUDITORS

Deloitte Haskins & SellsChartered Accountants

REGISTRARS & SHARE TRANSFER AGENTS

Link Intime India Private Limited C-13, Pannalal Silk Mills CompoundL. B. S. Marg, Bhandup (W)Mumbai 400 078

REGISTERED OFFICE

1st Floor, CEAT Mahal 463, Dr. Annie Besant RoadWorli, Mumbai 400 030

10 I KEC INTERNATIONAL LIMITED10 I KEC INTERNATIONAL LIMITED

DIRECTORS’ REPORT

FINANCIAL RESULTSRs. in crores

For the year ended 31st March

2010

For the year ended 31st March

2009Gross Sales 3,922.59 3,481.34EBITDA 386.72 300.57Interest 86.53 99.98Profit before Non-Cash Items/Tax 300.19 200.59Depreciation & Amortisation 26.24 22.75Profit before Tax 273.95 177.84Provision for Taxation 102.96 61.55Profit after Taxation 170.99 116.29Appropriations:Balance as per last account 304.85 239.45Capital Redemption Reserve - 10.40Transfer to General Reserve 17.10 11.63Proposed Dividend 30.85 24.67Tax on Dividend 5.25 4.19Balance transferred to Balance Sheet 422.64 304.85

DIVIDEND

Your Directors recommend a dividend of Rs. 6/- per equity share of Rs. 10/- each for the year ended 31st March 2010 on the equity share capital of the company.

SCHEME OF AMALGAMATION

The Scheme of Amalgamation for merger of the erstwhile RPG Cables Limited with the company has become effective on 31st March 2010 after obtaining all necessary statutory approvals. The consolidation has resulted in an integrated operation which qualifies the company to participate in the market for cable laying projects and in house cabling, besides providing synergy benefits to the existing operations. Consequently the consolidated operations of the company comprise of the Engineering, Procurement and Construction (EPC) business in power transmission, distribution, substations, railways, telecom and cables.

PERFORMANCE

The company has achieved a net turnover of Rs. 3,877.24 crores and a net profit of Rs.170.99 crores in the current financial year as against net turnover of Rs. 3,427.39 crores and net profit of Rs.116.29 crores in 2008-09. Earnings before interest, depreciation and tax (EBITDA) is Rs. 386.72

crores in the current financial year as against Rs. 300.57 crores in 2008-09.

The year was eventful with successful completion of several projects in south asian and international markets including the first 400 kV transmission line in Ethiopia and a 765 kV line in South Africa. Various projects awarded to the company for transmission, distribution, substation and railways in international and south asian markets were executed on schedule. The company has recently commenced manufacturing instrumentation and fire survival cables and has begun to undertake turnkey projects as well. A Build Own Operate project for the Universal Services Obligation Fund under the Department of Telecommunications was also successfully completed during the year.

ORDER BOOK AND BUSINESS OUTLOOK

The order book of the company at over Rs. 5,500 crores is a healthy mix of business across different geographies and segments. The company obtained orders from new markets like Cameroon and Peru, thereby widening its global presence and made a successful re-entry in Kuwait. Large orders secured from Algeria, Mali, Abu Dhabi, Kuwait and Oman including an Emergency Line Restoration System project obtained from a private sector client in Abu Dhabi has led to further penetration into existing markets. Major projects were bagged in India from the high potential North East and Western region for transmission business. The distribution and subtstation business of the company was able to secure new projects under the Rajiv Gandhi Grameen Vidyutikaran Yojana scheme. The order book from Railways business was further diversified by projects won in various areas of railway infrastructure.

The Government of India has provided significant impetus to the power sector development by encouraging entry of private sector in power generation and enabling private sector participation in transmission and distribution of power. These initiatives are aimed at improving capacity addition in power and reaching power to rural households spread across the length and breadth of the country. These would generate attractive business opportunities to the transmission, distribution, substations and cables business of the company.

The Central Asian region holds enormous opportunities for EPC projects. There has been steady revival in the Middle East markets due to stabilization of crude prices and with the improvement in commodity prices, fairly robust recovery is also expected in the African region.

Dear Shareholders, Your Directors have pleasure in presenting the Fifth Annual Report along with the audited accounts of the company for the year ended 31st March 2010.

Annual Report 2009-10 I 11Annual Report 2009-10 I 11

Many projects in the Railways business are being floated for construction of new lines, earth works, bridge work, gauge conversion, doubling of lines and electrification. With extensive tower sharing being carried out by telecom service providers, the demand for telecom towers is restricted, though opportunities may open up due to implementation of 3G services.

SHARE CAPITAL

In terms of the Scheme of Amalgamation of RPG Cables Limited with KEC International Limited and their respective shareholders, the company has on 26th April 2010 issued and allotted 20,73,068 fully paid-up equity shares of Rs. 10/- each of the company to the equity shareholders of the erstwhile RPG Cables Limited. As a result, the aggregate paid-up equity share capital of the company stands at Rs. 51.42 crores consisting of 5,14,17,674 fully paid-up equity shares of Rs. 10/- each.

LISTING WITH THE STOCK EXCHANGES

The equity shares of the company continue to remain listed with Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the stipulated listing fees for 2010-11 have been paid. The equity shares of the company, issued and allotted to the equity shareholders of the erstwhile RPG Cables Limited would be listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited upon completion of all formalities.

FIXED DEPOSITS

The company has not accepted any deposits within the meaning of Section 58A and 58AA of the Companies Act, 1956 and the Rules framed thereunder.

RISK MANAGEMENT POLICY

The company has devised and adopted a Risk Management Policy in terms of Clause 49 of the listing agreement with the Stock Exchanges. The policy adopted by the company aligns strategy, processes, people, technology and knowledge for evaluating and managing uncertainties faced by the company and thereby leading to improvement in returns and overall value of the business. The identified risks are reviewed and evaluated on continuous basis and suitable strategies are framed to mitigate the same. The implementation of various strategies to control the said risks is monitored regularly. The Audit Committee reviews the Risk Management process periodically.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORP-TION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies

(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided in the prescribed format as an annexure to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT

As required by the listing agreement with the Stock Exchanges, Management Discussion and Analysis and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from the company’s Auditors confirming the compliance with the requirements of Corporate Governance policies are set out in the Annexure forming part of this Annual Report.

SUBSIDIARY AND JOINT VENTURE COMPANIES

The company has two subsidiary companies, KEC Global FZ LLC and RPG Transmission Nigeria Limited in United Arab Emirates and Nigeria respectively and three joint venture companies, Hilltop Infrastructure Inc. in United States of America, KEC Power India Private Limited in India and AL-Sharif Group and KEC Company Limited in Saudi Arabia. The subsidiary and the joint venture companies are in the business of executing power transmission and distribution projects and providing designing and engineering services for power projects.

The company has obtained necessary exemptions from attaching the annual reports and accounts of its subsidiary companies, KEC Global FZ LLC and RPG Transmission Nigeria Limited. The annual reports and accounts of the said subsidiary companies are kept at the registered office of the company and shareholders desirous of obtaining copies of the reports and accounts of the same may request the company in writing.

CONSOLIDATED FINANCIAL STATEMENTS

In terms of Accounting Standard (AS) 21 on Consolidated Financial Statements, the consolidated financial statements of the company and its subsidiary and joint venture companies are attached herewith.

DIRECTORS

Mr. J. M. Kothary and Mr. P. A. Makwana retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting. Necessary resolutions relating to Directors who are seeking re-appointment are included in the Notice convening the Annual General Meeting. The Board of Directors recommends the re-appointment of Mr. J. M. Kothary and Mr. P. A. Makwana.

In compliance with Clause 49 IV (G) of the listing agreement, brief resume, expertise and other details of Directors proposed to be re-appointed are attached along with the Notice to the ensuing Annual General Meeting.

DIRECTORS’ REPORT


AUDITORS AND AUDITORS’ REPORT

Deloitte Haskins & Sells, Chartered Accountants were appointed as the auditors of the company to hold office from the conclusion of the Fourth Annual General Meeting till the conclusion of the ensuing Annual General Meeting. It is proposed to re-appoint Deloitte Haskins & Sells, as the auditors of the company to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting and to authorize the Audit Committee to fix their remuneration. The company has received a letter from Deloitte Haskins & Sells to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the said Act. The shareholders are requested to appoint Deloitte Haskins & Sells, as auditors of the company and also authorize the Audit Committee to appoint auditor(s) to audit accounts of the branches of the company.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors would like to affirm that the financial statements for the year under review conform in their entirety to the requirements of the Companies Act, 1956.

As stipulated in Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the company hereby state and confirm that:

(i) in the preparation of the annual accounts for the year ended 31st March 2010, the applicable Accounting Standards have been followed;

(ii) such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the year under review;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts for the financial year ended 31st March 2010, have been prepared on a going concern basis.

PARTICULARS OF EMPLOYEES

In terms of provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of

Employees) Rules, 1975 as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors’ Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the company and others entitled thereto. Members who are desirous of obtaining such particulars are requested to write to the company.

CORPORATE SOCIAL RESPONSIBILITY

During the year, the company could accomplish the following initiatives that were focused towards its social responsibility.

� Education: The company is committed to improving facilities in education for the underprivileged and in ensuring that education is reached to all sections of the society. Towards this objective, the company undertook provision of books, school bags, blackboards, furniture and such other infrastructure at Deori and Biharsharif and various other locations at which the company operates its projects. Tuitions were sponsored for students of tenth standard for subjects like Mathematics, Science and English and free computer education was organized for school children at Jabalpur.

� Self Sufficiency: Classes for tailoring, candle making, beautician and practical training of MS office package were organized at Jaipur.

� Community Service: Concrete dustbins for waste management were constructed at Sukli village, Butibori and hand-pumps were installed at Deoghar, Bihar. Blood donation camps were organized at Deoghar, Gurgaon and Butibori and an eye checkup camp was also arranged at Biharsharif.

ACKNOWLEDGEMENT

Your Directors express their grateful appreciation for the assistance and co-operation received from the banks, government authorities, customers, vendors and shareholders during the financial year. Your Directors would also like to once again place on record their appreciation to the employees at all levels, who through their dedication, co-operation and support have enabled the company to move towards achieving its objectives.

For and on behalf of the Board of Directors

H.V.Goenka Chairman

Place: Mumbai Date: 29th April 2010

DIRECTORS’ REPORT


CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO(A) CONSERVATION OF ENERGY Although the company’s operations are not energy

intensive, substantial efforts were made to ensure optimum consumption of fuel and electricity at all the plants of the company. The following specific actions were taken during the year under review:

Maintained power factor; installed automatic power factor controller and maximum demand controller, drying oven in galvanizing, zinc and acid fume extractions for new plant with variable frequency AC drive and transparent translucent FRP roof sheets; separated lighting distribution boards from the power distribution boards; used smaller sized pulley for high pressure blowers; linked the power supply of machine motor with main controls, the control for conductor cleaning blowers with heating process switching control and the DC motor field and blower with the main switch of extruder DC drive and initiated actions for cultivation of jatropa (bio diesel plant).

These efforts have resulted in reduction in power consumption and saving approximately Rs. 30 lacs per annum.

(B) TECHNOLOGY ABSORPTION 1. Specific areas in which R&D is carried out by the

company: Retrofitted CNC drilling machine, bending press,

servo drives and motors of angle punching machine; developed Brush Roller system, heel milling machine, CPUs for old punching CNC machines, electrical panels for old electrical overhead travelling cranes in galvanizing, Sensor PCBs and Micro motor PCBs; and installed Production Downtime analyzer, oil chillers on CNC machine and electronic cards on Angle Punching CNC Machines.

2. Benefits derived as a result of the above R&D: The above efforts have resulted in numerous

benefits including avoidance of capital expenditure, higher production, ease of maintenance, better monitoring and working conditions, avoidance of quality rejections, enhancement of processing speed and reduction in consumption of raw material, production cycle time and cost of production.

3. Future plans of action: Design and install a system for capturing

machine down time; buy software to convert drawings into CNC machine programs, develop indigenous heel milling machine, increase speed of CNC plate processing machine, replace the old Galvanizing electrical panel, old acid fume extraction blower and slip ring motors in old machineries by advanced variable frequency drives, retrofit CNC Machine with Advance Technology; provide Energy saving LED lights in

ANNEXTURE TO THE DIRECTORS’ REPORT

Offices, install advanced CNC punching machine, modify Galva Furnace, SLF Modification and reverse Osmosis plant and upgrade Tower Testing Station.

4. Expenditure on R & D: (a) Capital : Rs. 23.74 lacs (b) Recurring : Rs. 190.95 lacs (c) Total : Rs. 214.69 lacs (d) Total R & D expenditure as a percentage of

total turnover: 0.06 % TECHNOLOGY ABSORPTION, ADAPTION AND

INNOVATION 1. Efforts, in brief, made towards technology

absorption, adaption and innovation: Retrofitted CNC system with advanced system;

replaced old and obsolete PLC Cards with advanced system; installed latest technology CNC angle punching machines, galvanizing furnace having latest technology and profile cutting machine; introduced anti collision system on CNC Bay electrical overhead travelling cranes; used bar allocation, win-nest and win-steel software and developed hydraulic shearing machine.

2. Benefits derived as a result of above efforts: The above efforts have resulted in speedy

operations, better performance and higher availability of the machines, flexibility in bending process, improved working environment, improved safety and machine life, reduction in wastage and cost of production.

3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished:

(a) Technology imported: CNC Angle line punching machines A166T & A124T, Protherm make Galvanizing furnace and Spectrometer

(b) Year of import: 2008-09 (c) Has the technology been fully absorbed? :

Yes (d) If not fully absorbed, areas where this has

not taken place, reasons hereof and future plans of action: NA.

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO Activities relating to exports; initiatives taken to

increase exports; development of new export markets for products and services and export plans are detailed in Management Discussion & Analysis annexed to the Directors’ Report.

Rs. in lacs

2009-10 2008-09Total foreign exchange earned 2,16,413.93 2,11,721.76Total foreign exchange used 1,64,570.45 1,40,586.88


ABOUT THE COMPANY

The company is a global leader in the engineering, procurement and construction (EPC) business executing power transmission, distribution, substations, railways and telecom projects and offering designing and engineering, tower testing, satellite and GPRS surveys and hotline stringing services. The merger of the erstwhile RPG Cables Limited with the company has added the business of power and telecom cables as a new business avenue and the company would utilize its scale and resources to pursue growth opportunities in the cables EPC business.

The company’s global operations span across 24 countries. The company is present in India, Afghanistan, Algeria, Egypt, Ethiopia, Kazakhstan, Kenya, Mali, Nigeria, Oman, Saudi Arabia, South Africa, Tajikistan and United Arab Emirates among several other countries and during the year has further expanded its market by entering Cameroon and Peru and through its subsidiary and joint venture companies, in Chad and Mozambique.

A new sophisticated Tower Testing station, the largest of its kind in the world and also the most advanced, using cutting edge technology, SCADA system and PROFIBUS controls, with capacity for testing towers up to 35 X 35 m base dimensions, 100 meters high and with voltage rating up to 1200 kV has been inaugurated at Butibori, Nagpur in April 2010 to facilitate validation of the largest towers ever designed for the country’s Extra High Voltage energy network.

OVERVIEW OF THE ECONOMIC CONDITIONS

Although the fiscal year 2009-10 began as a difficult one with significant economic slowdown in countries across the world, the global economy and specifically Asian economies like China and India posted a recovery by the end of the year. While world trade is gradually picking up, the other indicators of economic activity such as capital flows, assets and commodity prices are more optimistic.

India was among the first few countries in the world to implement a broad-based stimulus package to respond to the negative fallout of the global slowdown and one of the first to emerge out of the global slowdown. An analysis of growth figures, fundamentals and various other statistical trends in the economy suggest that the nation’s medium- and long-term prospects are encouraging and that the Gross Domestic Product in India is expected to grow around 7 to 8 per cent.

Electricity generation in India emerged from the lackluster growth witnessed in the previous year and equaled its performance in 2007-08 despite several constraints. The growth rate in the manufacturing sector, notable turnaround since the second quarter of 2009-10 in core industries and infrastructure services including power, railway transport and telecommunications also justifies optimism for the Indian economy.

MANAGEMENT DISCUSSION AND ANALYSIS

EPC INDUSTRY STRUCTURE, DEVELOPMENTS AND OUTLOOK

Transmission

India

The need for electrical energy grew unabated which has called for growth in generation capacity and optimal utilization of generating resources through effective transmission and distribution systems. During April-December 2009, the peak and total energy deficits were 12.6 per cent and 9.8 per cent respectively.

While a capacity addition target of 78,700 MW had been set for the 11th Plan, according to the latest assessment of Central Electricity Authority, a capacity addition of 62,374 MW is likely to be achieved with a high level of certainty during 11th Plan period. The Central Government in the Union Budget 2010-11 has provided Rs.1.73 lakh crores for infrastructure development, which accounts for over 46% of total plan allocation and Rs. 5,130 crores (Rs 2,230 crores in 2009-10) for power sector excluding the Rajiv Gandhi Grameen Vidyutikaran Yojana scheme.

Out of nine sites identified by the Central Electricity Authority in consultation with the States for development of Ultra Mega Power Projects (UMPPs) comprising of 765kV & 400kV Lines and Substations having capacity of approximately 4,000 MW each, on a Build, Own, and Operate (BOO) basis, four projects have been awarded to project developers on the basis of tariff based competitive bidding and few more projects are likely to be brought to the bidding stage. The strengthening of the National Power Grid through high capacity AC EHV lines and 765 kV UHV AC lines/ HVDC lines has been envisaged by the Government of India to facilitate transfer of power within and across the regions upto 37,700 MW by 2012. The UMPP and the inter-state and inter-regional transmission system offer good prospects for evacuating and transmitting power from one region to the other.

South Asia

South Asian markets have been floating mainly small and mid size projects in power transmission during the year. A number of larger projects are expected to be offered in South Asian markets in near future.

International

Many large power generating projects are being planned in the Middle East region to address power shortage problems as a result of which there is likely to be considerable demand for new transmission lines associated with these power plants. In addition to this, inter-country/regional interconnection lines are being planned which, going forward, will offer immense opportunities to EPC contractors like the company.


With the global economy coming back on track, the donor countries and multilateral agencies have again started allocating funds for new projects in the African region. In addition to that, the number of inter-government funded projects are also expected to increase. The company has a strong presence in the African continent with projects in Namibia, Egypt and South Africa besides having secured some large orders in Algeria and Tunisia recently.

Central Asian region continues to be a high potential market with many large projects in the pipeline.

Distribution and Substations

The Government of India has in the recent budget announced substantial allocation for Rural Electrification under the Rajiv Gandhi Grameen Vidyutikaran Yojana. It has also allocated funds for the Restructured Accelerated Power Development and Reform Programme. Both these schemes are under the banner “Power for All – 2012” which is expected to be extended further by the Government of India.

In the overseas market, similar rural electrification, semi urban and urban electrification schemes, funded by multi national agencies are also envisaged, particularly in the developing countries in the African region.

Cables

Demand for power cables is dependent on the growth in sectors like Power, Real Estate, Steel, Refineries, Railways, etc. Increase in generating capacity in the 11th Plan, private investment in power generation and privatization of distribution together with the large demand-supply gap in power requirements of the country, are expected to play a significant role in the requirement of power cables in the country.

Railways, Department of Telecommunications and private operators continue to require Jelly Filled and Optic Fiber Cables for their growing networks. There exists a good demand for Jelly Filled and Optic Fiber Cables from various developing countries as well. The expected defence tenders for laying optical fiber network would also provide business opportunities for cables. The requirement for Telecom and Signaling cables is also anticipated to go up due to increase in the capital expenditure planned in infrastructure business.

Railways

During the 11th Five Year Plan period, electrification of 3,500 route km is planned with an outlay of about Rs. 3,000 crores, taking the percentage of electrified railway network to 33.4 per cent. The Central Government in the Union Budget 2010-11, has allocated Rs. 16,752 crores for Railways. 25,000 route km are proposed to be added to Indian railways by 2020 and Rs. 4,411 crores have been allocated in the railway budget for the year 2010-11 for construction of new lines.

Metro rail projects are being implemented in Delhi, Kolkata, Mumbai, Bangalore and Hyderabad and are also expected to be in several other cities.

The Dedicated Freight Corridor (DFC) projects viz., Western DFC (1,483 km) and Eastern DFC (1,806 km) are being implemented by the Dedicated Freight Corridor Corporation of India Ltd. and are expected to be operational before 2020. Along the Western DFC alignment, the Delhi-Mumbai Industrial Corridor is also being set up and feasibility studies have been completed.

Telecom

Sharing of telecom services by telecom operators instead of rolling out new sites has reduced the demand for towers. However, allocation of spectrum for 3G and broadband wireless access (BWA) services may increase the requirements for tower supplies. Tower management business is going through a consolidation phase and the excess capacity and reduction in capital expenditure by the operators may have a bearing on revenue generation in this market.

OPPORTUNITIES

The revival of core sectors of the economy and increase in infrastructure spending would have positive impact on the growth of the EPC business. The business opportunities for the industry look promising with numerous power and infrastructure projects anticipated in India and abroad. The strong global presence, timely completion of projects and established good reputation of the company would support growth of the business.

THREATS

Possible changes in Business Scenario

Uncertainty in the global economy leading to potential reduction in investments in infrastructure may result in reduced order book. The political and environmental issues in India and across various countries determine the actual investments made in this sector.

Competition

Entry of new players, changes to technology and pricing lead to continued challenges for the business.

PERFORMANCE

Large manufacturing and execution capacities, proven in-house design and testing capability, domain knowledge, ability and experience of working in difficult and diverse terrains and global presence have enabled bagging of orders above Rs. 5,500 crores from different locations.

During the year, fifteen projects were successfully completed in the international markets including the first 400 kV transmission line in Ethiopia, a 765 kV line in South Africa and a tower supply order in Australia. The project for setting up Egypt’s first 500 kV double circuit line is progressing very well. The company continued to expand its global footprint by entering new countries. During the year, the company



has entered Cameroon and Peru and re-entered Kuwait. The company secured major orders in Algeria, Abu Dhabi, Kuwait, Oman and Mali during the year. In Abu Dhabi, the company has diversified its client base and is executing its first ever international Emergency Line Restoration System project for a private sector client and has also won a large 400 kV Quad circuit line order.

The company entered the high-potential North-East India region with four projects in that region and also won major orders from Maharashtra State Electricity Transmission Company Limited. The company completed twelve projects in the South Asia region during the year.

The company was successful in bagging orders under the Rajiv Gandhi Grameen Vidyutikaran Yojana scheme for rural electrification in Madhya Pradesh and Maharashtra thereby maintaining its position as a well established player and a high performer in the distribution space in the country. The company was also successful in bagging orders for large number of 220 kV and 132 kV bays in the state of Maharashtra. The order in Ghana for a 161 kV substation marked a breakthrough for the company in the West Africa region in the substation business. In addition, the company bagged further substation orders in Kenya after having successfully completed the earlier project in the country.

The renewed focus on EHV cables market and penetration in both the domestic and exports market has resulted in the growth of the cables business of the company. The company has recently commenced manufacturing Instrumentation Cables, Fire Survival Cables and also undertaking Turnkey Projects.

The company is a major player in the railway Overhead Electrification works and has also entered new railway segments during the year.

A Build-Own-Operate (BOO) Project for Universal Services Obligation Fund under Department of Telecommunication was successfully completed during the year under which 375 towers were set up in Chhattisgarh, Mizoram and Meghalaya.

Financial Performance

The company has earned a net profit of Rs. 170.99 crores on Net Sales of Rs. 3,877.24 crores in the current financial year as against Rs. 116.29 crores on Net Sales of Rs. 3,427.39 crores respectively in 2008-09. The Earnings Before Interest, Depreciation and Tax (EBITDA) is 9.97% as against 8.77% in last year. The Earnings per share in the current financial year is Rs. 34.53 as against Rs. 23.57 in 2008-09.

RISKS & CHALLENGES

The following risks are associated with the business of the company:

1. Major fluctuations in foreign exchange

2. Unknown challenges while operating in newer geographies

3. Variation in prices of commodities and raw material

4. Recruitment and retention of employees with requisite expertise and skills

The risks are periodically reviewed and suitable risk management strategies are adopted by the company so as to minimize the impact of those risks on the company.

ADEQUACY OF INTERNAL CONTROL

The Internal Audit department conducts extensive audits at the head office, manufacturing facilities and international and domestic sites covering all functions with a focus on various operational areas. The suggestions, recommendations and implementation of the same are placed before the Management and the Audit Committee periodically. The adequacy of internal control systems is also periodically reviewed by the Audit Committee.

HUMAN RESOURCES AND CORPORATE SOCIAL RESPONSIBILITY

There are about 3,200 permanent employees in the company.

Various training programmes aligned with the business needs of the company including E-Learning were organized. HR – Helpdesk proved to be a touch point for all employees spread across the globe for resolving queries. The company maintained the Top 5 ‘Employer of Choice’ Brand for Engineering Campus Recruitment.

The company has set up a Technical Training Institute at Butibori, Nagpur with facilities for residential and non residential training with a sophisticated computer coaching facility and a library to create a large pool of supervisory talent for transmission and distribution industry.

A number of Corporate Social Responsibility initiatives in the fields of Education, Self Sufficiency, Environment protection and Community service were undertaken during the year.

CAUTIONARY STATEMENT

Statements in this report describing the company’s objectives, expectations, predictions and assumptions may be ‘forward looking’ within the meaning of applicable Securities Laws and Regulations. Actual results may differ materially from those expressed herein. Important factors that could influence the company’s operations include global and domestic economic conditions affecting demand, supply, price conditions, natural calamities, change in Government’s regulations, tax regimes, other statutes and other factors such as litigation and industrial relations.



1. COMPANY’S PHILOSOPHY

Corporate Governance essentially is a set of standards, which aims to improve the company’s efficiency, effectiveness and social responsibility. The concept emphasizes on transparency, accountability, independence and integrity of the management, with focus on public interest in particular. It further inspires and strengthens investors’ confidence by ongoing commitment to overall growth of the company.

The company’s Corporate Governance philosophy encompasses not only regulatory and legal requirements, such as the terms of listing agreement with stock exchanges, but also several voluntary practices at a superior level of business ethics, effective supervision and enhancement of shareholders’ value.

The company believes that timely disclosures, transparent accounting policies and a strong and independent Board go a long way in protecting shareholders trust while maximizing long-term corporate value.

Our philosophy on Corporate Governance begins with our Board of Directors.

�� More than half of the Board of Directors comprises of Independent Directors.

�� A Non-Executive Director chairs the Board.

�� The Audit Committee is comprised exclusively of Independent Directors.

�� The Board has established terms of reference for its operation and the operation of Audit Committee in line with Clause 49 of the listing agreement and Section 292A of the Companies Act, 1956.

In compliance with the disclosure requirements of Clause 49 of the listing agreement, the details are set out as under:

2. BOARD OF DIRECTORS

Composition of the Board

The Board of Directors of the company, as on 31st March 2010, consists of nine members.

CORPORATE GOVERNANCE REPORT

The company has one ‘Executive’ and eight ‘Non-Executive’ Directors of which seven are Independent and two are Non-Independent Directors. Mr. H.V. Goenka, Chairman is a Non-Independent Director. Mr. R. D. Chandak, Managing Director is the Executive Non-Independent Director.

The Independent Directors of the company are Mr. S. S. Thakur, Mr. G. L. Mirchandani, Mr. D. G. Piramal, Mr. S. M. Kulkarni, Mr. A. T. Vaswani, Mr. J. M. Kothary and Mr. P. A. Makwana.

Board Meetings

The meetings of the Board are generally held at the company’s registered office at Mumbai and are scheduled well in advance. The Board agenda is circulated to the Directors in advance.

The members of the Board have access to all information of the company and are free to recommend inclusion of any matter in agenda for discussion. The Board meets at least once in a quarter to review the quarterly results and other items on the agenda. Additional meetings are held, when necessary.

During the year under review, five meetings of the Board of Directors were held on:

29th April 2009, 26th June 2009, 28th July 2009, 30th October 2009 and 25th January 2010.

Board’s Responsibilities

The Board’s mandate is to oversee the company’s strategic direction, review and monitor performance, ensure regulatory compliance and safeguard the interests of stakeholders.

Role of Independent Directors

The Independent Directors play an important role in deliberations at the Board and Committee meetings and bring to the company their expertise in the fields of finance, management, law and public policy.

Information placed before the Board of Directors

All the information that is required to be made available, so far applicable to the company, in terms of clause 49 of the listing agreement is made available to the Board of Directors.


Constitution of Board of Directors as on 31st March 2010 and related information:

Director Category No. of Board Meetings attended

Attendance at the AGM held on 26th June

2009

No. of outside Directorships(*)

No. of outside Committees@ on which the Director is a

Member (#) Chairman

Mr. H. V. Goenka(Chairman)

Non-ExecutiveNon-Independent

4 Yes 8 - -

Mr. R. D. Chandak (Managing Director)

Executive Non-Independent

5 Yes 3 - -

Mr. S. S. Thakur Non-Executive Independent

5 Yes 9 8 5

Mr. G. L. Mirchandani Non-Executive Independent

5 Yes 8 2 -

Mr. D. G. Piramal Non-Executive Independent

5 Yes 5 2 -

Mr. S. M. Kulkarni Non-Executive Independent

4 Yes 10 7 5

Mr. A. T. Vaswani Non-ExecutiveIndependent

5 Yes 3 3 2

Mr. J. M. Kothary Non-Executive Independent

5 Yes 4 3 1

Mr. P. A. Makwana Non-Executive Independent

5 Yes - - -

# Number of Committees on which the Director is a member also includes the number of Committees on which the Director is the Chairman.

*excluding Directorships in private, foreign companies and companies, which are granted license under Section 25 of the Companies Act, 1956.

@ membership in Audit and Investors Grievance Committee.

Details of Director(s):

In compliance with Clause 49 IV (G) of listing agreement, brief resume, expertise and details of other directorships, membership in committees of Directors of other companies and shareholding in the company of the Directors proposed to be re-appointed are attached along with the Notice to the ensuing Annual General Meeting.

Code of Conduct

The Board has laid down a Code of Conduct for all Board members and senior management of the company which is posted on the website of the company.

All Board members and senior management personnel have affirmed compliance with the Code on an annual basis. A declaration to this effect signed by the Managing Director forms part of this Annual Report.

Committees of the Board

The Board has established various Committees such as the Audit Committee, Remuneration Committee and Investors’ Grievance Committee. The minutes of Committee meetings are circulated and discussed in the Board meetings.

(A) Audit Committee

Composition

i. The Audit Committee has three Directors as members and all the members of Audit Committee are Independent Directors;

ii. All members of Audit Committee are financially literate;

iii. The Chairman of the Audit Committee has accounting or related financial management expertise and is an Independent Director;



iv. The Chairman of the Audit Committee was present at Annual General Meeting to answer shareholders’ queries;

v. The representative of the statutory auditors is invited to attend meetings of the Committee. The Committee also invites such of the executives viz., Managing Director, Chief Financial Officer, Head (Internal Audit), as it considers appropriate to be present at the meetings of the Committee, but on occasions it may also meet without the presence of any executives of the company;

vi. The Company Secretary acts as the Secretary to the Committee.

Name of Members and Chairman

Mr. A. T. Vaswani (Chairman)

Mr. S. S. Thakur

Mr. S. M. Kulkarni

Dates of Meeting

The Committee met on 29th April 2009, 28th July 2009, 17th September 2009, 30th October 2009, 25th January 2010 and 25th March 2010, during the year under review. Mr. A. T. Vaswani and Mr. S. S. Thakur were present at all the meetings. Mr. S. M. Kulkarni was granted leave of absence for meeting held on 30th October 2009.

Brief description of the terms of reference

The role and terms of reference of the Audit Committee specified by the Board are in conformity with the requirements of Clause 49 of the listing agreement as well as Section 292A of the Companies Act, 1956. The Committee acts as a link between the statutory and internal auditors and the Board of Directors. The responsibilities of the Audit Committee include overseeing of the financial reporting process to ensure fairness, adequate disclosures and credibility of financial statements, recommendation of appointment and removal of statutory auditors, branch auditors, review of the adequacy of internal control systems and the internal audit function.

The Audit Committee is authorized to:

1. Investigate any activity within its terms of reference.

2. Seek information from any employee.

3. Obtain outside legal or other professional advice.

4. Secure attendance of outsiders with relevant expertise, if it considers necessary.

Role of Audit Committee

The role of the Audit Committee includes the following:

1. Oversight of the company’s financial reporting process and the disclosure of its financial information.

2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditors and the fixation of audit fees and approving payments for any other services rendered by statutory auditors.

3. Reviewing, with the management, the quarterly and annual financial statements before they are submitted to the Board for approval.

4. Reviewing, with the management, performance of statutory and internal auditors and adequacy of the internal control systems.

5. Reviewing the adequacy of internal audit function.

6. Discussion with internal auditors about any significant findings and follow up there on.

7. Discussion with auditors periodically about internal control systems and ensure compliance of internal control systems.

8. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

9. Discussion with statutory auditors before the audit commences, about the nature and scope of audit including the observations of the auditors, as well as post-audit discussion to ascertain any area of concern.

10. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.

11. To review the following information:

(a) Management discussion and analysis of financial condition and results of operations;

(b) Significant related party transactions;

(c) Management letters / letters of internal control weaknesses issued by the statutory auditors;

(d) Internal audit reports relating to internal control weaknesses;

(e) The appointment, removal and terms of remuneration of the chief internal auditor;

(f) The financial statements, in particular, the investments made by unlisted subsidiary company, if any.

12. To review the functioning of the Whistle Blower mechanism, in case the same exists.



(B) Remuneration Committee

Composition

Remuneration Committee consists of three Directors viz., Mr. J. M. Kothary (Chairman), Mr. A. T. Vaswani and Mr. S. M. Kulkarni.

The function of the Remuneration Committee includes recommendation of appointment of Whole-time Director(s) / Managing Director, evaluation of the performance of the Whole-time Director(s) / Managing Director and recommendation to the Board of the remuneration to Whole-Time Director(s) / Managing Director and such other functions as delegated by the Board from time to time. The Remuneration Committee is also authorized to recommend commission to be paid to the Director(s) of the company who is/are not in the whole time employment of the company, in accordance with and up to the limits laid down under the Companies Act, 1956.

During the year the Committee met on 28th July 2009 to consider and recommend payment of commission to Directors who were not in Whole-time employment of the company and on 23rd October 2009 to consider and recommend increase in the remuneration to the Managing Director. All the members of the Committee were present in the above meetings.

Remuneration Policy

Payment of remuneration to the Managing Director is governed by the Agreement executed between him and the company and is approved by the Board and the shareholders in terms of Schedule XIII to the Companies Act, 1956. His remuneration structure comprises of salary, perquisites, allowances, commission and contribution to provident, superannuation and gratuity funds.

The Non-Executive Directors are paid sitting fees for attending the meetings of the Board of Directors.

In terms of the approval received from the members in the Annual General Meeting held on 27th June 2008 and from the Central Government for payment of remuneration by way of commission to the Non-Executive Directors for a period of five years commencing from the financial year 1st April 2008 and on recommendation received from the Remuneration Committee, the Board of Directors of the company approved payment of commission during the year to the Director(s) who were not in Whole-Time employment of the company in recognition of their performance during the year 2008-09, not exceeding in aggregate 1% of net profits during the financial year 2008-09, calculated under Section 198 and 309 (5) of the Companies Act, after taking into account the qualifications, experience, directorship in other companies having diverse business, time spent on strategic matters and contribution to the company.

Details of remuneration paid to the Managing Director during the year 2009-10:

Rs. in lacs

Name Salary and Allowances

Commission Perquisites Contribution to Provident and other funds

Total#

Mr. R. D. Chandak 156.57 28.41 2.34 15.69 203.01

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

The Agreement with the Managing Director is for a period of approximately five years i.e. 2nd January 2006 to 28th September 2010. In addition to the remuneration, he is also entitled to commission. Either party to the Agreement is entitled to terminate the Agreement by giving not less than four months notice in writing to the other party, provided however, that the company shall be entitled to terminate the incumbent’s employment at any time by payment to him of four months’ salary in lieu of such notice.

Remuneration to Non-Executive Directors is given below: Rs.

Name Commission# Sitting Fees TotalBoard Meetings Committee

MeetingsMr. H. V. GoenkaMr. S. S. ThakurMr. G. L. MirchandaniMr. D. G. PiramalMr. A. T. VaswaniMr. S. M. KulkarniMr. J. M. KotharyMr. P. A. Makwana

3,84,00,0004,00,0004,00,0004,00,0004,00,0004,00,0004,00,0004,00,000

80,0001,00,0001,00,0001,00,0001,00,000

80,0001,00,0001,00,000

-30,000

--

30,00085,00060,000

-

3,84,80,0005,30,0005,00,0005,00,0005,30,0005,65,0005,60,0005,00,000

# includes Rs.164 lacs relating to previous year which is paid during the year on receipt of approval of the Central Government.

Note: Committees include Audit and Finance Committees.



Equity Shares held by the Directors

Except as stated hereunder, none of the Directors hold any shares in the company as on 31st March 2010:

Name of the Director No. of shares held

Mr. R. D. Chandak 1

Mr. J. M. Kothary 750*

* held in trust on behalf of certain shareholders against their rights of equity

shares of the erstwhile RPG Transmission Limited, since merged with the

company, kept in abeyance under Section 206 A (b) of the Companies Act,

1956 due to pending court cases/issues.

The company does not have any Stock Option Scheme.

(C) Investors’ Grievance Committee

Composition

The Investors’ Grievance Committee consists of three Directors viz., Mr. R. D. Chandak, Mr. J. M. Kothary and Mr. P. A. Makwana. Mr. J. M. Kothary chairs the Committee.

The Board of Directors in its meeting held on 31st July 2006 passed a resolution authorizing any one of the members of Investors’ Grievance Committee or the Company Secretary or an authorized signatory to attend to the matters relating to share transfers/transmissions/issue of duplicate share certificates and other related matters under the overall supervision of the Committee.

The function and powers of the Committee include approval and rejection of transfer or transmission of shares, issue of duplicate certificates, review and redressal of shareholders and investors complaints relating to transfer of shares and non-receipt of Annual Report etc. The Committee meets once a month.

The work relating to Share Transfer etc. is looked after by Link Intime India Private Limited. The minutes of the Investors’ Grievance Committee are periodically placed before the Board of Directors.

Name and Designation of the Compliance Officer

Mr. Ch. V. Jagannadha Rao, Company Secretary is the Compliance Officer in terms of Clause 47 of the listing agreement.

Investors’ service

No. of complaints / correspondence received during the financial year ended 31st March 2010.

501

No. of complaints/ correspondence resolved to the satisfaction of shareholders during the financial year ended 31st March 2010.

501

Number of pending requests for share transfers & dematerializations as on 31st March 2010

No. of Requests No. of Securities

Transfers NIL NIL

Dematerialisations 39 2,920

The aforesaid pending requests have been processed subsequently.

General Meetings

Location and time of General Meetings

Year AGM Location Date Time

2008-09 AGM Ravindra Natya Mandir, Prabhadevi, Mumbai-400025

26th June 2009

11:00 a.m.


27th June 2008

3:00 p.m.


24th July 2007

11:00 a.m.

Special Resolution transacted at the last three Annual General Meeting held on

26th June 2009

�� Holding and continuing to hold an office or place of profit in the company by Mr. Anant Goenka, son of Mr. H.V. Goenka, the Chairman of the company, as an employee of the company.

27th June 2008

�� Payment of Commission to Non-Executive Directors.

24th July 2007

�� Borrowings under Section 293(1)(d) of the Companies Act, 1956

Postal Ballot

During the year 2009-10, the company has obtained the approval of its members by passing the following resolutions as Special Resolutions by Postal Ballot in accordance with the procedure prescribed in terms of Section 192A of the Companies Act, 1956 read with the Companies (Passing of Resolutions by Postal Ballot) Rules, 2001 and as amended. Mr. R.D. Chandak, Managing Director conducted the Postal Ballot exercise and Mr. P. N. Parikh of Parikh Parekh & Associates, Practicing Company Secretaries, was appointed as Scrutinizer by the Board.



Date of passing

the Resolution

Subject Matter Votes Cast

In favour

%

Against %

11th January 2010

Special Resolution under Section 17 of the Companies Act, 1956 for alteration of the Objects Clause in the Memorandum of Association of the company

99.99 0.01

Special Resolution under Section 149(2A) of the Companies Act, 1956 for commencement of the business as per the proposed altered Objects Clause in the Memorandum of Association of the company

99.99 0.01

None of the items transacted at the last Annual General Meeting held on 26th June 2009 were required to be passed by Postal Ballot nor any resolution requiring a Postal Ballot is being proposed at the ensuing Annual General Meeting.

3. DISCLOSURES

Related Party Transactions

The company follows the following policy in disclosing the related party transactions to the Audit Committee:

a) A statement in summary form of transactions with related parties in the ordinary course of business is placed periodically before the Audit Committee.

b) Details of material individual transactions with related parties, which are not in the normal course of business, if any, are placed before the Audit Committee.

c) Details of material individual transactions with related parties or others, which are not on an arm’s length basis, if any, are placed before the Audit Committee, together with Management’s justification for the same.

Transactions with related parties entered in the ordinary course of business have been disclosed in Note 20 of the Schedule 19 to the Accounts of the company as at 31st March 2010.

Disclosures on materially significant related party transactions that may have potential conflict with the interests of the company at large

There are no materially significant transactions made by the company with its promoters, Directors or Management,

their subsidiaries or relatives etc. that may have potential conflict with the interest of the company at large.

Risk Management

The company has laid down procedures to inform the Board about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management controls risks by means of a properly defined framework.

Details of non-compliance by the company, penalties and strictures imposed on the company by Stock Exchange(s) or SEBI or any Statutory Authority, on any matter related to Capital Markets

The Stock Exchange(s), Securities Exchange Board of India or any other statutory authority on any matters related to Capital Markets have not imposed any strictures or penalties on the company.

Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of Clause 49 of the listing agreement

Clause 49 of the listing agreement mandates to obtain a certificate from either the Auditors or Practicing Company Secretaries regarding compliance of conditions of corporate governance as stipulated in the Clause and annex the certificate with the Directors’ Report, which is sent annually to all the shareholders. The company has obtained a certificate from its Auditors to this effect and the same is given as an annexure to the Directors’ Report.

The Clause further states that the non-mandatory requirements may be implemented as per the discretion of the company. The company has constituted Remuneration Committee, which is a non-mandatory requirement.

CEO/CFO certification

Certificate from Mr. R. D. Chandak, Managing Director and Mr. Vardhan Dharkar, Chief Financial Officer in terms of Clause 49 (V) of the listing agreements with the Stock Exchanges for the financial year ended 31st March 2010 was placed before the Board of Directors of the company in its meeting held on 29th April 2010.

4. MEANS OF COMMUNICATION

Quarterly Results

The company’s shares are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

The company has furnished quarterly financial results along with the notes on a quarterly basis as per the format



prescribed in Clause 41 of the listing agreement within one month from the end of quarter to the Stock Exchanges.

The company has generally published the financial results within 48 hours of the conclusion of the Board Meeting in at least one daily newspaper circulating in the whole or substantially the whole of India and in one newspaper published in the language of the region, where the registered office of the company is situated. The company informs the Stock Exchanges where its securities are listed about the date of the Board Meeting at least seven days in advance and also issues immediately an advertisement in at least one national newspaper and one regional language newspaper about the aforesaid Board Meeting.

Newspapers wherein financial results are published

Financial Results Un-audited / Audited

News Papers

First Quarter Un-audited Economic Times, Maharashtra Times, Hindu Business Line

Second Quarter Un-audited Economic Times, Maharashtra Times, Hindu Business Line

Third Quarter Un-audited Economic Times, Maharashtra Times, Hindu Business Line

Fourth Quarter/ Full Year

Audited Economic Times, Maharashtra Times, Hindu Business Line

The quarterly financial results during the year 2009-10 were displayed on the website of the company: http://www.kecrpg.com and other than for the period ended 31st March 2010 (since EDIFAR system was discontinued from April 1, 2010) displayed on Securities and Exchange Board of India’s special website www.sebiedifar.nic.in.

The achievements and important events taking place in the company like receipt of major orders are announced through press and electronic media and posted on the company’s website also.

The company’s other press coverage and corporate presentations if made to Institutional Investors and Analysts are also made available on the website. The means of communication between the company and the shareholders are transparent and investor friendly.

Management Discussion and Analysis forms part of this Annual Report.

5. GENERAL SHAREHOLDERS INFORMATION

Registered Office 1st Floor, CEAT Mahal,463, Dr. Annie Besant Road,Worli, Mumbai 400030

Plants’ Location JaipurJhotwara, Jaipur 302 012Rajasthan

ButiboriB-190 Industrial Area,Butibori 441 108Maharashtra

JabalpurDeori,P.O.Panagarh,Jabalpur 483 220Madhya Pradesh

MysoreHebbal Industrial Area, Hootagalli, Belavadi Post, Mysore 571 186 Karnataka

Thane2nd Pokhran Road,Post Box No. 11,Thane 400 601Maharashtra

SilvassaPlot No. 273/4, Demni Road, Silvassa 396 191Dadra and Nagar Haveli

Date, time and venue of Annual General Meeting

22nd June 2010 at 11:00 a.m. at Ravindra Natya Mandir, P. L. Deshpande Maharashtra Kala Academy, Sayani Road, Prabhadevi, Mumbai 400 025

Financial Year 1st April – 31st March

Financial CalendarFirst quarter resultsSecond quarter resultsThird quarter resultsResults for the year ending March 2011

1st April to 31st Marchsecond week of August 2010*second week of November 2010*second week of February 2011*end of May 2011*

*Tentative

Dates of Book closure 14th June 2010 to 22nd June 2010 (both days inclusive)

Dividend Payment date The dividend warrants will be posted on or after 23rd June 2010



Status of listing on Stock Exchanges

The equity shares of the company are listed on the following Stock Exchanges:

Name and address of the Stock Exchange

Stock Code

Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers,Dalal Street, Mumbai 400 001

532714 KECIL

National Stock Exchange of India Limited Exchange Plaza, Plot No. C/1, G Block, Bandra - Kurla Complex, Bandra (E), Mumbai 400 051

KEC

Out of the total 4,93,44,606 equity shares of Rs. 10/- each,

i. 4,84,39,970 equity shares have been listed and admitted to dealings on the Bombay Stock Exchange Limited. Balance 9,04,636 equity shares would be listed on Bombay Stock Exchange Limited as and when physical shares of the company are dispatched in exchange for the physical share certificate(s) held in Summit Securities Limited (formerly KEC Infrastructures Limited).

ii. 4,84,29,488 equity shares have been listed and admitted to dealings on the National Stock Exchange of India Limited. Balance (i) 9,04,636 equity shares would be listed on National Stock Exchange of India Limited as and when physical shares of the company are dispatched in exchange for the physical share certificate(s) held in Summit Securities Limited (formerly KEC Infrastructures Limited) and (ii) 10,482 equity shares would be listed on National Stock Exchange of India Limited as and when the disputes/Court cases are sorted out and dispatch of physical share certificate(s) is done by the company.

In terms of the Scheme of Amalgamation of RPG Cables Limited with KEC International Limited and their Respective Shareholders which has become effective on 31st March 2010, the company has on 26th April 2010 issued and allotted 20,73,068 fully paid-up equity shares of Rs. 10/- each of the company to the equity shareholders of the erstwhile RPG Cables Limited as on 19th April 2010, the record date and accordingly the paid-up equity share capital of the company stands increased to Rs. 51.42 crores consisting of 5,14,17,674 fully paid-up equity shares of Rs. 10/- each. The company is in the process of listing of the said shares on the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited.

Market Price Data – During April 2009 to March 2010

Month BSE NSE BSE Sensex

High (Rs.)

Low (Rs.)

High (Rs.)

Low (Rs.)

High

April 228.00 149.95 227.00 147.00 11,492.10May 419.00 204.10 420.00 203.45 14,930.54June 448.95 350.00 439.70 341.05 15,600.30July 504.70 357.25 503.90 335.00 15,732.81August 555.00 416.00 556.00 416.00 16,002.46September 595.00 501.25 603.50 482.25 17,142.52October 624.00 516.65 622.00 511.05 17,493.17November 599.05 512.00 599.90 516.00 17,290.48December 597.00 550.05 594.95 540.05 17,530.94January 640.00 560.25 640.00 547.70 17,790.33February 602.15 543.00 684.00 551.00 16,669.25March 616.00 511.10 595.00 472.40 17,793.01

Registrar and Share Transfer Agents

Link Intime India Private Limited is the company’s Registrar & Share Transfer Agents and their contact details are as follows:

Link Intime India Private LimitedUnit: KEC International LimitedC-13, Pannalal Silk Mills CompoundLBS Marg, Bhandup (West)Mumbai - 400 078Tel: (022) 25946970 Fax: (022) 25946969Email: [email protected]

Contact Address

Shareholders can send their queries regarding Transfer/Dematerialisation of shares and any other correspondence relating to the shares of the company to the abovementioned address of the company’s Registrar and Share Transfer Agents. Shareholders holding shares in electronic mode should address all correspondence to their respective depository participants.

Share Transfer System

Investors’ Grievance Committee meets once in a month. If documents are complete in all respects, the company’s Registrar & Share Transfer Agents process, register the transfers and return the transferred share certificates to the shareholders, within 30 days from the date of lodgement. The delegated authority as mentioned earlier attends to the share transfer formalities and approves the share transfers at least once in a fortnight.



Distribution of Shareholding

Distribution of shares according to size of holding as on 31st March 2010

No. of equity shares held No. of Shareholders % of Shareholders No. of Shares % of Shareholding1 - 500 41,122 97.11 31,53,719 6.39501 - 1,000 691 1.63 5,11,520 1.041,001 - 2,000 236 0.56 3,43,825 0.702,001 - 3,000 71 0.17 1,77,355 0.363,001 - 4,000 31 0.07 1,07,996 0.224,001 - 5,000 20 0.05 92,035 0.195,001 - 10,000 30 0.07 2,08,820 0.4210,001 & above 143 0.34 4,47,49,336 90.68Total 42,344 100.00 4,93,44,606 100.00

Categories of Shareholders as on 31st March 2010

Category No. of Shares Held % of ShareholdingPromoters 2,07,21,556 41.99Mutual Funds/ UTI 1,64,17,703 33.27Financial Institutions, Insurance Companies and Banks (including Foreign Banks) 29,82,552 6.05Foreign Institutional Investors 26,65,576 5.40General Public 44,18,816 8.96NRIs/OCBs 1,13,516 0.23Other Companies 16,74,612 3.39Clearing Members 36,078 0.07Trusts 3,14,197 0.64TOTAL 4,93,44,606 100.00

Shareholding Pattern as on 31st March 2010

Dematerialisation of shares and liquidity

The company has executed agreement with both the depositories of the country i.e. National Securities Depositories Limited (NSDL) and Central Depository Services

(India) Limited (CDSL) for admission of its securities under dematerialised mode. International Securities Identification Number (ISIN) allotted to the equity shares of the company is INE389H01014. 4,63,26,799 equity shares representing 93.88 % are in dematerialised form as on 31st March 2010.

Shares held by Depositories as on 31st March 2010

There are no outstanding GDRs/ADRs/Warrants or any convertible instruments.


41.99

4.338.96

5.40

6.05

33.27PromotersMutual Funds / UTIFinancial Institutions, Insurance Companies and Banks (includingForeign Banks)Foreign Institutional InvestorsGeneral PublicOthers

% of Shareholding

1.406.12

92.48

NSDL CDSL PHYSICAL


All Board members and senior management personnel have, for the year ended 31st March 2010, affirmed compliance with the Code of Conduct laid down by the Board of Directors in terms of the listing agreement entered with the Stock Exchanges.

For KEC INTERNATIONAL LIMITED

R.D.CHANDAKManaging Director

Place: MumbaiDate: 29th April 2010

DECLARATION - CODE OF CONDUCT

AUDITORS’ CERTIFICATETo the Members of KEC International Limited

We have examined the compliance of conditions of Corporate Governance by KEC International Limited, for the year ended on March 31, 2010, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance as stipulated in the said clause. It is neither an audit nor an expression of opinion on the financial statements of the company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.

We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For DELOITTE HASKINS & SELLS Chartered Accountants

(Registration No. 117365W)

U.M.NEOGIPartner

(Membership No. 30235)

Place: Mumbai Date: 29th April 2010


TO THE MEMBERS OF KEC INTERNATIONAL LIMITED

1. We have audited the attached Balance Sheet of KEC INTERNATIONAL LIMITED (“the Company”) as at 31st March 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto, in which are incorporated the Returns from the Companys’ overseas branches at Afghanistan, Algeria, Bangladesh, Egypt, Ethiopia, Ghana, Kazakhstan, Kenya, Lebanon, Libya, Mali, Namibia, Nigeria, Oman, Tazikistan, Tunisia, United Arab Emirates and that of Cables Division, Mumbai audited by other auditors. These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order on the basis of the information and explanations received by us and reports received by the Company from the auditors of the Company’s overseas branches at Afghanistan, Algeria, Bangladesh, Egypt, Ethiopia, Ghana, Kazakhstan, Kenya, Lebanon, Libya, Mali, Namibia, Nigeria, Oman, Tazikistan, Tunisia, United Arab Emirates and that of Cables Division, Mumbai on which we have relied.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(ii) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the Company’s overseas branches at Afghanistan, Algeria, Bangladesh, Egypt,

AUDITORS’ REPORT

Ethiopia, Ghana, Kazakhstan, Kenya, Lebanon, Libya, Mali, Namibia, Nigeria, Oman, Tazikistan, Tunisia, United Arab Emirates and that of Cables Division, Mumbai audited by other auditors;

(iii) the reports on the accounts of the the Company’s overseas branches at Afghanistan, Algeria, Bangladesh, Egypt, Ethiopia, Ghana, Kazakhstan, Kenya, Lebanon, Libya, Mali, Namibia, Nigeria, Oman, Tazikistan, Tunisia, United Arab Emirates and that of Cables Division, Mumbai audited by other auditors have been forwarded to us and have been dealt with by us in preparing this report.

(iv) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and the audited Branch Returns;

(v) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(vi) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

(b) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. On the basis of the written representations received from the Directors as on 31st March, 2010 taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of Section 274(1)(g) of the Companies Act, 1956.

For DELOITTE HASKINS & SELLS Chartered Accountants

(Registration No.117365W)

U.M.NEOGIPartner

(Membership No. 30235)

Place: MumbaiDate : 29th April 2010


(Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Company’s business / activities / result, clauses (iii), (vi), (x), (xii), (xiii), (xiv), (xv), (xviii), (xix) and (xx) of CARO are not applicable.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) In our opinion and according to the information and explanations given to us, there are generally adequate internal control systems commensurate with the size of the Company and the nature of its business with regards to the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control system.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

ANNEXURE TO THE AUDITORS’ REPORT

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs.5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business.

(vii) The books of account maintained for the period 01st March, 2010 (being the Appointed Date of the Scheme of Amalgamation referred to in Note 1 of Schedule 19) to 31st March, 2010 by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 in respect of Electric Cables and Conductors have been broadly reviewed and prima facie the prescribed accounts and records have been made and maintained. However, a detailed examination of the records has not been made with a view to determine whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

(viii) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2010 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on 31st March, 2010 on account of disputes are given below:


Statute Nature of Dues Forum where Dispute is pending Relating to various years comprise in

the period

Amount involved

Rs. in lacs

Sales Tax Tax/Penalty/Interest Assistant Commissioner/ Joint Commissioner/ Deputy Commissioner/ Additional Commissioner (Appeal)

1990-1991 to 2009-2010

385.35

Rajasthan Tax Board 1994-1995 to 2008-2009

41.31

Appellate Tribunal 1989-1990 to 2003-2004

157.34

High Court 2001-2002 & 2002-2003

10.22

The Central Excise Act

Duty/Penalty/Interest Additional Commissioner/Commissioner (Appeals)

1994-1995 to 2008-2009

208.91

Customs Excise & Service Tax Tribunal 1994-1995 to 2008-2009

335.33

High Court 2001-2002 to 2005-2006

61.76

The Finance Act, 1994

Service Tax Commissioner (Appeals) 2006-2007 & 2007-2008

24.57

The Income Tax Act

Tax/Interest Commissioner of Income Tax (Appeals) A.Y. 2007-2008 1,467.29

Income Tax Appelleate Tribunal A.Y. 2006-2007 1,382.62

For the above purpose only statutory dues payable in India have been considered.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions.

(x) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

(xi) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLSChartered Accountants

(Registration No.117365W)

U.M.NEOGIPartner

(Membership No.30235)

Place: MumbaiDate : 29th April 2010

ANNEXURE TO THE AUDITORS’ REPORT


BALANCE SHEET AS AT 31ST MARCH 2010

Previous YearSchedule Rs. in lacs Rs. in lacs Rs. in lacs Rs. in lacs

I. SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Capital 1 4,934.46 4,934.46 Equity Share Suspense 19 (2.2) 207.31 – Reserves and surplus 2 71,615.69 50,922.07 LOAN FUNDS Secured loans 3 77,550.89 58,393.84 Unsecured loans 4 1,123.48 3,788.23 DEFERRED TAX LIABILITY (Net) 19(17) 4,611.05 2,982.12

1,60,042.88 1,21,020.72

II. APPLICATION OF FUNDS FIXED ASSETS 5 Gross block 82,914.02 62,545.00 Less: Depreciation/Amortisation 15,411.62 12,220.85 Net block 67,502.40 50,324.15 Capital work in progress 3,786.44 5,038.24 Advances for capital expenditure 43.83 99.96 71,332.67 55,462.35 INVESTMENTS 6 186.94 175.67 CURRENT ASSETS, LOANS AND ADVANCES Inventories 7 24,975.29 22,578.14 Sundry debtors 8 1,94,491.95 1,85,096.86 Cash and bank balances 9 6,780.11 13,653.53 Loans and advances 10 39,725.52 32,655.83

2,65,972.87 2,53,984.36 Less:CURRENT LIABILITIES AND PROVISIONS 11 Liabilities 1,71,888.50 1,84,158.32 Provisions 5,561.10 4,443.34

1,77,449.60 1,88,601.66 NET CURRENT ASSETS 88,523.27 65,382.70

1,60,042.88 1,21,020.72

Statement of significant accounting policies 18Notes to the accounts 19

In terms of our report attached


U.M.NEOGIPartner

Place : Mumbai Date : 29th April 2010

For and on behalf of the Board

H.V.GOENKA Chairman

VARDHAN DHARKAR R.D.CHANDAK Chief Financial Officer Managing Director

CH.V.JAGANNADHA RAO A.T.VASWANICompany Secretary Director



PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31ST MARCH 2010


INCOME Sales and services - Gross 3,92,259.05 3,48,133.87 Less: Excise Duty 4,534.66 5,394.61 Sales - Net 12 3,87,724.39 3,42,739.26 Other income 13 98.93 59.14

3,87,823.32 3,42,798.40

EXPENDITURE Cost of materials 14 2,01,089.35 1,97,583.21 Erection and Subcontracting expenses 19(9) 95,043.82 57,462.26 Personnel expenses 15 16,814.34 14,160.99 Other expenses 16 36,204.01 43,534.75 Interest 17 8,652.63 9,998.21 Depreciation/Amortisation (Net) 18(5) 2,624.35 2,274.81

3,60,428.50 3,25,014.23

PROFIT FOR THE YEAR BEFORE TAXATION 27,394.82 17,784.17 Provision for taxation Current Tax [including foreign taxes

Rs. 2,170.98 lacs (previous year Rs. 476.09 lacs) but net of write back of provision pertaining to an earlier year Rs. 36.07 lacs (previous year Rs. Nil)]

5,505.75

5,066.72 Less: MAT Credit 4,655.75 –

850.00 5,066.72 Deferred Tax 9,445.70 978.18 Fringe Benefit Tax – 110.00 PROFIT FOR THE YEAR AFTER TAXATION 17,099.12 11,629.27 Balance as per last account 30,484.61 23,945.09 Transfer to Capital Redemption Reserve – 1,040.28 Transfer to General Reserve 1,709.91 1,162.93 Dividend on equity shares 3,085.06 2,467.23 Tax on distributed profits 524.31 419.31 BALANCE CARRIED TO BALANCE SHEET 42,264.45 30,484.61

Rs. Rs. Earnings per share ( Basic / Diluted) 34.53 23.57 Nominal value of share 10.00 10.00 (Note 25 of Schedule 19)

Statement of significant accounting policies 18 Notes to the accounts 19



U.M.NEOGIPartner



H.V.GOENKA Chairman





SCHEDULE 1 - SHARE CAPITAL Previous Year

Rs. in lacs Rs. in lacs

Authorised:

Equity Shares:

6,00,00,000 Equity shares of Rs. 10/- each 6,000.00 6,000.00

Preference Shares:

15,00,000 Redeemable Preference shares of Rs. 100/- each 1,500.00 1,500.00 7,500.00 7,500.00

Issued, Subscribed and Paid-up:(Note 2.1 of Schedule 19)

Equity Shares:

4,93,44,606 Equity shares of Rs.10/- each fully paid-up 4,934.46 4,934.46 4,934.46 4,934.46

SCHEDULE 2 - RESERVES AND SURPLUS Previous Year

Rs. in lacs Rs. in lacs Rs. in lacs

Capital Reserve (Note 1.5 of Schedule 19)

Balance as per last Balance Sheet – –

Add: Credited during the year 8,497.87 –

8,497.87 –

Capital Redemption Reserve

Balance as per last Balance Sheet 1,427.95 387.67

Add: Transferred from Profit and Loss Account on redemption of preference shares

–

1,040.28

1,427.95 1,427.95

Securities Premium Account

Balance as per last Balance Sheet 8,674.89 9,124.54

Less: Utilised for premium paid for redemption of preference shares (Note 2.1.c of Schedule 19)

–

449.65

8,674.89 8,674.89

Reserve for Amortisation of Brand Account (Note 5b of Schedule 18)


Less: Transferred to Profit and Loss Account 1,200.00 1,200.00

4,957.00 6,157.00

SCHEDULEFORMING PART OF THE BALANCE SHEET


SCHEDULE (CONTD.)FORMING PART OF THE BALANCE SHEET

SCHEDULE 2 - RESERVES AND SURPLUS (CONTD.)


Previous Year

Rs. in lacs

Foreign Currency Translation Reserve

Balance as per last Balance Sheet 286.44 –

Add: Credited/(Debited) during the year on translation of financial statement of Non Integral jointly controlled operation (94.00)

286.44

192.44 286.44

General Reserve


Add: Transferred from Profit and Loss Account 1,709.91 1,162.93

5,601.09 3,891.18

Profit and Loss Account 42,264.45 30,484.61 71,615.69 50,922.07

SCHEDULE 3 - SECURED LOANS

Rs. in lacs

Previous Year

Rs. in lacs(Note 3 of Schedule 19)

Loans and advances from banks 71,990.19 58,393.84

Loans and advances from others 5,560.70 –

77,550.89 58,393.84

SCHEDULE 4 - UNSECURED LOANS

Rs. in lacs

Previous Year

Rs. in lacs

Short term loans and advances:

From Banks – 1,011.38

Other loans and advances:

From Banks 1,010.48 2,663.85

(repayable within one year Rs. 1,010.48 lacs, previous year Rs. 1,653.37 lacs)

From Others 113.00 113.00

1,123.48 3,788.23


SCHEDULE 5 - FIXED ASSETS

Rs. in lacs

GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK

DESCRIPTION As at 31st March

2009

Additions during the

year

Acquired during the

year*

Deductions during the

year

As at 31st March

2010

Upto 31st March

2009


year

For the year

Upto 31st March

2010

As at 31st March

2010

As at 31st March

2009

Tangible Assets

Freehold Land 1,819.39 – 9,660.55 – 11,479.94 – – – – 11,479.94 1,819.39

Leasehold Land ** 6,515.36 133.96 6.14 – 6,655.46 376.32 – 103.05 479.37 6,176.09 6,139.04

Buildings ** 4,062.58 963.11 1,054.59 0.26 6,080.02 1,120.51 0.26 169.81 1,290.06 4,789.96 2,942.07

Plant & Machinery 22,108.67 4,764.99 3,172.54 300.56 29,745.64 4,229.31 150.64 1,778.15 5,856.82 23,888.82 17,879.36

Computers 621.37 276.27 22.20 13.68 906.16 266.55 12.24 106.06 360.37 545.79 354.82

Furniture & Fixtures 785.80 287.64 28.96 121.82 980.58 219.63 57.16 92.27 254.74 725.84 566.17

Electrical Installations 188.42 71.40 29.01 14.64 274.19 34.79 2.96 14.59 46.42 227.77 153.63

Vehicles 1,595.35 88.12 39.48 109.43 1,613.52 494.61 46.99 180.21 627.83 985.69 1,100.74

Sub-Total 37,696.94 6,585.49 14,013.47 560.39 57,735.51 6,741.72 270.25 2,444.14 8,915.61 48,819.90 30,955.22

Intangible Assets (other than internally generated)

Computer Softwares 484.88 693.78 – 0.15 1,178.51 388.57 0.15 107.59 496.01 682.50 96.31

Brand 24,000.00 – – – 24,000.00 4,800.00 – 1,200.00 6,000.00 18,000.00 19,200.00

Goodwill 363.18 – – 363.18 – 290.56 363.18 72.62 – – 72.62

Sub-Total 24,848.06 693.78 – 363.33 25,178.51 5,479.13 363.33 1,380.21 6,496.01 18,682.50 19,368.93

TOTAL 62,545.00 7,279.27 14,013.47 923.72 82,914.02 12,220.85 633.58 3,824.35 15,411.62 67,502.40

Previous Year 52,129.81 11,056.90 – 641.71 62,545.00 8,985.34 239.30 3,474.81 12,220.85 50,324.15

Capital work-in-progress at cost 3,786.44 5,038.24

Advances for capital expenditure 43.83 99.96

Sub-Total 3,830.27 5,138.20

GRAND TOTAL 71,332.67 55,462.35

* Acquired under the Scheme referred to in Note 1 of Schedule 19 ** Note 4 of Schedule 19




SCHEDULE 6 - INVESTMENTS

Rs. in lacs

Previous Year

Rs. in lacs

Trade

Long Term

Unquoted

Subsidiaries

1,00,00,000 Fully paid Ordinary shares of Naira 1.00 each of RPG Transmission Nigeria Limited

34.52 34.52

1,000 Fully paid Equity shares of AED 1,000/- each of KEC Global FZ- LLC-Ras Ul Khaimah, United Arab Emirates

118.65 118.65

Others

30,000 (Previous year 5,000) Fully paid Equity shares of Hilltop Infrastructure Inc. USA, a Joint Venture Company (25,000 shares acquired during the year)

22.72 11.45

1,10,511 Fully paid Equity shares of Rs. 10/- each of KEC Power India Private Limited, a Joint Venture Company

11.05 11.05

186.94 175.67

Aggregate book value of quoted investments – –

Aggregate book value of unquoted investments 186.94 175.67

SCHEDULE 7 - INVENTORIES Previous Year

Rs. in lacs Rs. in lacs Rs. in lacs Rs. in lacs

Stores 145.01 51.83

Dies and tools 2,616.09 2,695.79 2,761.10 2,747.62

Raw materials 15,316.86 13,826.48

Work-in-process 2,366.04 1,264.30

Erection materials 294.16 330.80

Finished goods 3,226.93 3,658.54 21,203.99 19,080.12

Scrap 1,010.20 750.40 24,975.29 22,578.14


SCHEDULE 8 - SUNDRY DEBTORS Previous Year


UNSECURED

(Considered good, unless otherwise stated)

Debts outstanding for a period exceeding six months

Considered good 67,396.01 56,526.83

Considered doubtful 2,683.83 4,140.01

70,079.84 60,666.84

Other debts 1,27,095.94 1,28,570.03

1,97,175.78 1,89,236.87

Less: Provision for doubtful debts 2,683.83 4,140.01

1,94,491.95 1,85,096.86

SCHEDULE 9 - CASH AND BANK BALANCES Previous Year


Cash on hand 183.20 174.71

Cheques on hand – 1,130.59

Bank balances with scheduled banks

In current accounts 1,298.08 6,378.27

In fixed deposits* 681.36 245.47

In margin deposits 1,089.58 269.99

3,069.02 6,893.73

Bank balances with non–scheduled banks

In current accounts 3,440.01 5,133.58

In margin deposits 18.45 36.56

In call deposits 0.76 0.64

In fixed deposits* 68.67 85.11

3,527.89 5,255.89

Remittances in transit – 198.61

6,780.11 13,653.53

* The Banks are having lien on Rs. 279.90 lacs (previous year Rs. 139.18 lacs) included in fixed deposits for the facilities extended to the Company.




SCHEDULE 10 - LOANS AND ADVANCES Rs. in lacs

Previous Year

Rs. in lacs

Advances recoverable in cash or in kind or for value to be received:

Unsecured - considered good* 22,783.22 23,584.88

Considered doubtful 152.20 131.49 22,935.42 23,716.37

Less : Provision for doubtful advances 152.20 131.49 22,783.22 23,584.88

Excise duty recoverable from Government authorities 3,894.90 3,724.34

Balances with customs and excise authorities 1,780.26 1,950.87

MAT Credit Entitlement 4,655.75 –

Current Tax payments less provisions 4,487.01 2,056.07

Sundry deposits 2,124.38 1,339.67 39,725.52 32,655.83

* including Rs. 197.61 lacs (previous year Rs. 279.62 lacs) due from KEC Global FZ-LLC Ras Ul Khaimah, United Arab Emirates, wholly owned subsidiary.

SCHEDULE 11 - CURRENT LIABILITIES AND PROVISIONS Previous Year


A. CURRENT LIABILITIES

Acceptances 67,084.04 59,048.23

Sundry creditors

(i) Total outstanding dues of Micro enterprises and Small enterprises (Note 16 of schedule 19) – –

(ii) Total outstanding dues of creditors other than Micro enterprises and small enterprises 95,811.83 96,355.71

Advances from customers 8,622.99 28,502.87

Unclaimed Dividend# 75.36 41.25

Interest accrued but not due on loans 294.28 210.26 1,71,888.50 1,84,158.32

B. PROVISIONS

Tax provisions less payments 648.89 467.16

Proposed equity dividend 3,085.06 2,467.23

Tax on distributed profits 524.31 419.31

Compensated Absences 731.39 551.32

Gratuity 571.45 538.32 5,561.10 4,443.34

1,77,449.60 1,88,601.66

# The figures reflect the position as at year end. The actual amount to be transferred to the Investor Education and Protection Fund in this respect shall be determined on the due dates.


SCHEDULE 12-CAPACITIES, PRODUCTION, STOCKS AND TURNOVER (figures in brackets are in respect of the previous year)

Quantity Capacities per annum

Opening Stock Acquired* Purchases Production Closing Stock Turnover

Installed Quantity Value Rs. in lacs

Quantity Value Rs. in lacs


Quantity Quantity Value Rs. in lacs


Class of Goods #

Towers & Structurals

Tonnes 1,51,000 (1,51,000)

6,862 (4,820)

3,658.54 (2,216.02)

– (–)

– (–)

35,264 (38,997)

24,035.38 (28,433.61)

1,41,009 (1,38,905)

5,331 (6,862)

2,703.46 (3,658.54)

1,86,943 (1,82,560)

3,73,435.60 (3,38,572.93)

Telecom Cables KMs 9,65,000 (–)

– (–)

– (–)

5,801 (–)

64.95 (–)

– (–)

– (–)

37,548 (–)

9,455 (–)

111.25 (–)

33,894 (–)

361.19 (–)

Power Cables KMs 25,780 (–)

– (–)

– (–)

869 (–)

1,771.60 (–)

– (–)

– (–)

1,320 (–)

253 (–)

412.22 (–)

1,936 (–)

7,855.47 (–)

Service Income @ 2,719.80 (633.35)

Scrap 3,352.33 (3,532.98)

3,658.54 (2,216.02)

1,836.55 (–)

24,035.38 (28,433.61)

3,226.93 (3,658.54)

3,87,724.39 (3,42,739.26)

NOTES :

A. Installed Capacities - on the basis of maximum utilisation of plant & machinery - are stated as certified by the Managing Director, but not verified by the auditors being a technical matter.

B. Towers and Structurals : (i) The quantities of production and turnover include components sold as extras or free replacements. The value of turnover includes tower testing

charges, processing charges for fabrication / galvanising work and erection income. (ii) Production includes the quantities manufactured by third party processors 32,252 MTs (previous year 31,774 MTs). (iii) The value of turnover includes equipment , components and miscellaneous items connected with installation of transmission lines and substations

and those for railway electrification works and items purchased with the object of resale against specific projects / orders. These items being dissimilar in nature, it would be impracticable to furnish quantitative information thereof.

* Acquired under the Scheme referred to in Note 1 of Schedule 19.

@ Including subsidy for setting up and managing infrastructure sites for telecommunication services Rs. 789.86 lacs (previous year Rs. 203.86 lacs)

# As per notification no.477(E) dated 25th July, 1991 issued by the Ministry of Industry, the Company’s industrial undertakings are exempt from the licensing provisions of the Industries (Development and Regulation) Act, 1951. Accordingly, the requirement concerning disclosure of licensed capacity is not applicable.

SCHEDULE 13 - OTHER INCOME

Rs. in lacs

Previous Year

Rs. in lacs

Rent 21.56 33.42

Insurance claims 25.70 0.41

Miscellaneous receipts 51.67 25.31 98.93 59.14

SCHEDULEFORMING PART OF THE PROFIT AND LOSS ACCOUNT


SCHEDULE (CONTD.)FORMING PART OF THE PROFIT AND LOSS ACCOUNT

SCHEDULE 14 - COST OF MATERIALS Previous Year

Rs. in lacs Rs. in lacs Rs. in lacs Rs. in lacs Consumption of raw materials and components: Raw Material Opening stock 13,826.48 13,474.25 Acquired* 2,613.56 – Add : Purchases 1,72,999.28 1,71,113.95

1,89,439.32 1,84,588.20 Less: Closing stock 15,316.86 13,826.48

1,74,122.46 170,761.72 Finished goods, work-in-process and scrap: Opening stock Work-in-Process 1,264.30 1,002.19 Finished Goods 3,658.54 2,216.02 Scrap 750.40 842.91

5,673.24 4,061.12

Purchase of finished goods 24,035.38 28,433.61

Acquired* Work-in-Process 1,934.84 – Finished Goods 1,836.55 – Scrap 90.05 –

3,861.44 – Less: Closing stock Work-in-Process 2,366.04 1,264.30 Finished Goods 3,226.93 3,658.54 Scrap 1,010.20 750.40

6,603.17 5,673.24 26,966.89 26,821.49

2,01,089.35 1,97,583.21


Quantitative information relating to consumption of raw materials and components: Previous Year

Quantity MT Rs.in lacs Quantity MT Rs.in lacs Steel 1,55,012 55,074.76 1,47,836 60,810.21 Zinc 7,241 7,189.96 6,703 5,789.21 Bolts and nuts 8,151 5,696.69 8,373 6,300.75 Copper 1,087 2,852.50 – – Others* 1,03,308.55 97,861.55

1,74,122.46 1,70,761.72

% % Indigenous 68 1,17,861.69 75 1,28,537.23 Imported @ 32 #56,260.77 25 42,224.49

100 1,74,122.46 100 1,70,761.72

* Others include equipment, components and miscellaneous items connected with installation of transmission lines and substations and those for railway electrification works and items purchased with the object of resale against specific projects/orders. These items being dissimilar in nature, it would be impracticable to furnish the quantitative information in respect thereof.

@ Include items procured outside India for overseas projects/orders.# Includes consumption of imported raw materials and components acquired under the Scheme referred to in Note 1 of Schedule 19. For the purposes of para 4D (c) of part II of Schedule VI to the Companies Act, 1956, components and spare parts are assumed to mean those incorporated

in the products finally sold and not those used as spares for the repairs and maintenance of plant and machinery.


SCHEDULE 15 - PERSONNEL EXPENSES Previous YearRs. in lacs Rs. in lacs

Salaries, wages and bonus 14,892.05 12,284.61 Contribution to provident fund, gratuity and other funds 1,085.46 971.04 Welfare expenses 763.32 821.69 Workmen’s compensation 73.51 83.65

16,814.34 14,160.99

SCHEDULE (CONTD.)FORMING PART OF THE PROFIT AND LOSS ACCOUNT

SCHEDULE 16 – OTHER EXPENSES Previous Year

Rs. in lacs Rs. in lacs Rs. in lacs Rs. in lacsTools, non-erection stores and maintenance spares 570.62 588.21 Power and fuel 1,555.51 1,393.88 Rent 1,865.84 1,630.75 Rates and taxes (net) 5,415.34 2,453.35 Excise duty 182.84 28.67 Insurance 1,595.58 1,116.13 Bank (guarantee,letter of credit and other) charges 6,176.57 5,618.09 Commission 3,699.88 5,566.30 Freight (net) 3,850.25 4,514.14 Coolie, cartage and forwarding 551.16 641.80 Repairs:Plant and machinery 594.44 507.89 Buildings 97.47 127.55 Others 501.15 609.81

1,193.06 1,245.25 Travelling & conveyance 2,565.36 2,595.58 Professional fees 1,798.18 1,006.89 Bad Debts written off 2,470.07 1,075.10 Less: Adjusted against provision for doubtful debts 1,126.55 –

1,343.52 1,075.10 Provision for doubtful debts (net) (772.22) 17.26 Directors’ fees 9.65 8.00 Loss on sale / write off of fixed assets (net) 67.52 30.83 Exchange (gain) / loss (net) (978.85) 9,373.33 Miscellaneous expenses 5,514.20 4,631.19

36,204.01 43,534.75

SCHEDULE 17 - INTEREST Previous YearRs. in lacs Rs. in lacs

On fixed period loans 2,707.54 2,343.16 Others 6,739.11 7,824.12

9,446.65 10,167.28

Less: Recoveries - interest on deposits with banks, housing loans etc. [Tax Deducted at source Rs. 69.81 lacs (previous year Rs. 20.62 lacs)] 794.02 169.07

8,652.63 9,998.21


SCHEDULE (CONTD.)

FORMING PART OF THE BALANCE SHEET AND THE PROFIT AND LOSS ACCOUNT

SCHEDULE 18 - STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

1 Basis of preparation of Financial Statements:

The accounts have been prepared on historical cost convention. The Company follows the accrual basis of accounting. The Financial Statements are prepared in accordance with the accounting standards specified in the Companies (Accounting Standards) Rules, 2006 notified by the Central Government in terms of section 211(3C) of the Companies Act, 1956.

2 Revenue Recognition:

a) Sales and Services are recognised on delivery. Sales exclude sales tax/ value added tax and service tax charged to the customers.

b) Revenue from erection contracts is recognised based on the stage of completion determined with reference to the costs incurred on contracts and their estimated total costs.

When it is probable that the total contract cost will exceed total contract revenue, expected loss is recognised as an expense immediately. Total contract cost is determined based on technical and other assessment of cost to be incurred. Liquidated damages/ penalties are accounted as per the contract terms wherever there is a delayed delivery attributable to the Company.

c) i) Revenue from contracts awarded to Jointly Controlled Entity at Saudi Arabia but executed by the Company under the arrangement with the Joint Venture Partner [being in substance in the nature of Jointly Controlled Operations, in terms of Accounting Standard (AS) 27 “Financial Reporting of Interests in Joint Ventures”], is recognised on the same basis as similar contracts independently executed by the Company.

ii) Profit/ Loss on contracts awarded to Jointly Controlled Entity and executed under profit sharing arrangement, is accounted for when determined by the Jointly Controlled Entity.

d) Subsidy is accounted on accrual basis.

e) Dividend income is accounted as and when right to receive dividend is established.

f) Interest income is accounted on time proportion basis.

3 Inventories:

a) Raw materials, work-in-process, finished goods and stores and erection materials are valued at the lower of cost and net realisable value (NRV). Cost of purchased material is determined on the weighted average basis. Cost of Tools and Dies is amortised over its estimated useful life of five years. Scrap is valued at net realisable value.

b) Cost of work-in-process and finished goods includes material cost, labour cost, and manufacturing overheads absorbed on the basis of normal capacity of production.

4 Fixed Assets:

Fixed assets are stated at cost of acquisition or construction net of impairment loss less accumulated depreciation/ amortisation. Cost comprises of purchase/ acquisition price, import duties, taxes and any directly attributed cost of bringing the asset to its working condition for its intended use. Financing cost on borrowings for acquisition or construction of fixed assets, for the period upto the date of acquisition of fixed assets or when the assets are ready to be put in use/ the date of commencement of commercial production, is included in the cost of fixed assets. Assessment of indication of impairment of an asset is made at the year-end and impairment loss, if any, is recognised.

5 Depreciation/ Amortisation:

a) Tangible Assets:

(i) Leasehold land is amortised over the remaining period of the lease.

(ii) Cost of buildings of semi-permanent nature is amortised over 3 years.

(iii) Depreciation on other tangible fixed assets is provided on straight line method at the rates so as to reduce them to their estimated salvage value at the end of their useful lives or at the rates prescribed in Schedule XIV to the Companies Act, 1956 whichever is higher.


The estimated useful lives of assets which are different from the principal rates specified in Schedule XIV to the Companies Act, 1956 are as follows:

Plant and Machinery - 1 to 19 years, Furniture and Fixtures - 10 years, Vehicles - 7 years and Computers - 4 years.

b) Intangible Assets:

(i) Brand is amortised over twenty years being the useful life certified by the independent valuer and goodwill is amortised over five years.

In terms of the Scheme of Arrangement sanctioned in the year 2007-08, out of the balance in ‘Reserve for Amortisation of Brand Account’ an amount equal to annual amortisation of brand is credited to the profit and loss account each year so that overall depreciation/amortisation gets reduced to that extent. Accordingly, Rs. 1,200 lacs being the amortization of brand during the year (previous year Rs. 1,200 lacs) has been credited to the profit and loss account by netting it with Depreciation/Amortisation.

(ii) Computer softwares are amortised on straight line method over the estimated useful life ranging between 4-6 years.

6 Investments:

Long-term investments are stated at cost. Provision is made for diminution, other than temporary, in the value of investments.

7 Sundry debtors as at the year end under the contract are disclosed net of advances relating to the respective contracts received and outstanding at the year end.

8 Foreign Currency Transactions:

a) Foreign branches (Integral):

(i) Fixed assets are translated at the rates on the date of purchase/acquisition of assets and Inventories are translated at the rates that existed when costs were incurred.

(ii) All foreign currency monetary items outstanding at the year end are translated at the year-end exchange rates. Income and expenses are translated at average rates of exchange and depreciation is translated at the rates referred to in (a) (i) above for fixed assets.

The resulting exchange gains and losses are recognised in the profit and loss account.

b) Jointly Controlled Operations (Non Integral):

Assets and liabilities, both monetary and non monetary are translated at the year end exchange rates, income and expense items are translated at the average rate of exchange and all resulting exchange differences are accumulated in a foreign currency translation reserve.

c) Other foreign currency transactions:

(i) Foreign currency transactions during the year are recorded at the rates of exchange prevailing at the date of transaction. Exchange gains or losses realised and arising due to translation of the foreign currency monetary items outstanding at the year end are accounted in the profit and loss account.

(ii) Forward Exchange Contracts:

In case of transactions covered by forward exchange contracts, which are not intended for trading or speculation purposes, premium or discounts are amortised as expense or income over the life of the contract.

Exchange differences on such contracts are recognised in the profit and loss account in the year in which the exchange rate changes.

SCHEDULE (CONTD.)



Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as income or as expense for the year.

9 Excise duty payable is accounted on production of finished goods.

10 Employee Benefits:

(i) Defined Contribution Plans:

The Company’s contributions to the Provident Fund and the Superannuation Fund are charged to the profit and loss account.

(ii) Defined Benefit Plan / Long Term Compensated Absences:

The Company’s liability towards gratuity and compensated absences is determined on the basis of year end actuarial valuation done by an independent actuary. The actuarial gains or losses determined by the actuary are recognised in the profit and loss account as income or expense.

11 Taxation:

Current tax is determined as the amount of tax payable in respect of estimated taxable income for the period.

Deferred tax is calculated at current statutory income tax rate and is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets are recognised on unabsorbed depreciation and carry forward of the losses only to the extent that there are timing differences, the reversal of which will result in sufficient income or there is virtual certainty that sufficient taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date.

Minimum Alternative Tax (MAT) credit asset is recognised only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period. The carrying amount of MAT credit asset is reviewed at each Balance Sheet date.

12 Debts and loans and advances identified as doubtful of recovery are provided for.

13 Contingencies/ Provisions:

Provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimates of the expenditure required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying economic benefits is remote.

14 Uses of Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which results are known/ materialized.

15 Basis of Incorporation of integral foreign operations:

Figures in respect of the Company’s overseas branches in Afghanistan, Algeria, Bangladesh, Egypt, Ethiopia, Ghana, Kazakhstan, Kenya, Lebanon, Libya, Mali, Namibia, Nigeria, Oman, Tajikistan, Tunisia, and United Arab Emirates have been incorporated on the basis of Financial Statements audited by the auditors of the respective branches. In respect of overseas branches in Cameroon, Iran, Iraq and Kuwait the accounts for the year have been prepared and audited in India.

SCHEDULE (CONTD.)



SCHEDULE 19 - NOTES TO THE ACCOUNTS

1 Scheme of Amalgamation:

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

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

1.3 In consideration for the amalgamation, for every 20 fully paid-up equity shares of Rs. 10 each of RPGCL, 1 fully paid-up equity share aggregating 20,73,068 fully paid-up equity shares of Rs. 10 each of the Company have been issued and allotted on 26th April, 2010, to the shareholders of RPGCL whose names appeared in the Register of Members, as on 19th April, 2010, being the record date.

1.4 All the staff, workmen and employees of RPGCL in service as on 1st March, 2010 have become staff, workmen and employees of the Company without any break in their service.

1.5 In terms of the Scheme, the Company recorded all the assets and liabilities appearing in the books of account of RPGCL and transferred to and vested in the Company at their fair values as on 1st March, 2010. For this purpose the fair value of Fixed Assets is as certified by the independent valuers and for other assets including investments is based on the management’s assessment of its recoverability. The difference of Rs. 8,497.87 lacs between the fair value of net assets of RPGCL transferred to the Company, and the value of equity shares allotted by the Company as per paragraph 1.3 above has been credited to ‘Capital Reserve’.

1.6 The amalgamation has been accounted for under the Purchase method as prescribed in Accounting Standard (AS-14)- “Accounting for Amalgamations”.

2 Share Capital and Equity Share Suspense:

2.1 Share Capital:

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

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

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

c) 10,40,280 redeemable preference shares of Rs.100/- each which were allotted in an earlier year for consideration other than cash for acquisition of Power Transmission Business and which were redeemable on 18th March, 2013 (7,25,000 shares), 25th March, 2013 (2,50,000 shares) and 13th May, 2013 (65,280 shares) were prematurely redeemed with mutual consent on 29th May, 2008 at a premium of Rs.43.3687 per share, Rs.43.1740 per share and Rs. 41.8107 per share respectively.

The premium paid on redemption of preference shares aggregating to Rs. 449.65 lacs was utilized from the Securities Premium account.

2.2 Equity Share Suspense:

20,73,068 equity shares of Rs. 10/- each referred to in Note 1.3 above, allotted after the Balance Sheet date i.e. on 26th April 2010 for a consideration other than cash to the shareholders of the erstwhile RPG Cables Limited (RPGCL) pursuant to the Scheme of Amalgamation referred to in Note 1 above have been shown as “Equity Share Suspense”.

SCHEDULE (CONTD.)



3 Secured Loans:

3.1 Loans and advances from Banks:

a) Rs. 14,153.79 lacs (previous year Rs. 11,830.17 lacs) secured by first charge by hypothecation of all the present and future current assets of the Company viz. stocks of raw materials, semi finished and finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivables, book debts and all other movables both present and future [excluding those covered under (g), (k) and 3.2 (b) below] wherever situated and is further secured by mortgage of the Company’s certain immovable properties.

b) Rs. 25,104.69 lacs (previous year Rs. 31,145.60 lacs) guaranteed by banks, which in turn is secured by security, stated against (a) above.

c) Rs. Nil (previous year Rs. 1,813.76 lacs) secured by assignment of certain overseas book debts.

d) Rs. 119.00 lacs (previous year Rs. 166.60 lacs) secured by a first charge by way of hypothecation of specific movable plant and machinery, equipment and other assets acquired by the Company under the Asset Credit Scheme together with machinery spares, tools and accessories and other movables.

e) Rs. 1,907.72 lacs (previous year Rs. 2,902.29 lacs) secured by hypothecation of whole of movables (save and except current assets of the Company including book debts) [excluding those covered under (g),(k) and 3.2 (b) below] and equitable mortgage of the Company’s immovable properties at Butibori, Nagpur and subject to prior charge referred to in (a) above on movable assets.

f) Rs. 1,426.62 lacs (previous year Rs. 2,139.92 lacs) secured by (i) hypothecation of whole movables (save and except current assets of the Company including book debts) at Jabalpur and Gurgaon, subject to prior charge in respect of loans referred in (a) above (ii) hypothecation of whole of movables at Coimbatore and (iii) equitable mortgage of the Company’s immovable properties at Jabalpur and Coimbatore.

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

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

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

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

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

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

3.2 Loans and advances from others:

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

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

c) Rs. 21.60 lacs (previous year Rs .Nil) secured by hypothecation of vehicles.

4 Fixed Assets:

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

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

SCHEDULE (CONTD.)



5 Claims against the Company not acknowledged as debt:

Sr. No

Nature of Claims Relating to various years comprise in the period Rs. in lacs

Previous Year

Rs. in lacs

1 Sales Tax* (Tax/Penalty/Interest)

1995-2009 1991-2009

679.06 935.12

2 The Central Excise Act * (Tax/Penalty/Interest)

1994-2010 1994-2008

1,316.10 866.70

3 Service Tax * (Tax/Penalty/ Interest)

2006-2008 –

24.57 –

4 Entry Tax (Tax/Penalty/Interest)

1995-2005 1995-2005

32.00 31.99

5 Civil Suits 1993-1994 1993-2007

5.00 19.16

Total 2,056.73 1,852.97

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

Future ultimate outflow for above matters and the matters referred to in Note 8 below is uncertain as it depends on the decision by respective Court/Authorities.

Rs. in lacsPrevious Year Rs. in lacs

6 (a) Contingent liabilities in respect of:

(i) Income tax of Summit Securities Limited(formerly known as KEC Infrastructures Limited) Refer Note 8 (d) below

(ii) Taxation Matters Refer Note 8(b) and (c) below.

(iii) Demands of employees/subcontractors Amount not determinable

(b) Bills discounted 16,695.61 2,774.18

(c) Guarantee given to a bank for credit facilities extended to the wholly owned subsidiary company Rs. 5,135.64 lacs (Previous year Rs. Nil.) Credit facilities outstanding as at the year end – –

(d) Performance guarantee given to a customer of the wholly owned subsidiary company. 19,817.46 –

(e) Bank guarantees provided by the company to a customer of the wholly owned subsidiary company in connection with the contract awarded. 1,822.11 –

7 Estimated amount of contracts remaining to be executed on capital account not provided for (net of capital advances) 410.24 1,313.74

8 (a) Provision for taxation has been computed on the basis that section 43B of the Income Tax Act,1961, is applicable to amounts payable in India.

(b) Contingent liability towards income tax for the Assessment Year 2006-07 and 2007-08 aggregating to Rs.5,579.60 lacs (previous year Rs.3,219.26 lacs for 2006-07) in respect of disallowance of depreciation etc. relating to Power Transmission Business acquired by the Company, for which Department /Company’s appeals are pending.

(c) Contingent liability towards income tax at overseas unit/s in respect of matters pending at Appellate level amounting to Rs.1,104.97 lacs (previous year Rs. 756.59 lacs).

SCHEDULE (CONTD.)



(d) In terms of the Composite Scheme of Arrangement under which the Power Transmission Business was acquired by the Company in an earlier year, the Company has taken over contingent liabilities, interalia, of income tax of KEC Infrastructures Limited (now name changed as Summit Securities Limited). In case, the eventual decision in pending appeals (excluding the matters in respect of which Summit Securities Limited /department is in appeal and Summit Securities Limited expects to succeed based on decision in other assessment years) in respect of certain disputed items is unfavourable to Summit Securities Limited, it is estimated that the contingent liability for taxation in respect of pending appeals could be in the region of Rs.752.78 lacs (previous year Rs. 752.78 lacs) and in turn the obligation for the Company would be of the similar amount.

9 Erection and Sub-contracting expenses represents:

Rs. in lacsPrevious Year

Rs.in lacs

Construction materials consumed 22,896.53 14,083.60

Stores consumed 2,238.92 2,006.91

Subcontracting expenses 57,253.95 30,254.85

Power, fuel and water charges 1,503.89 703.80

Construction transport 8,274.54 7,882.64

Others 2,875.99 2,530.46 Total 95,043.82 57,462.26

10 Disclosure under the Accounting Standard - 7 “Construction Contracts”:

As Accounting Standard - 7 “Construction Contracts” comes into effect in respect of accounting period commencing on or after 1st April, 2003; the information given below is only in respect of the construction contracts entered into on or after 1st April, 2003:


Rs. in lacs

(a) (i) Contract Revenue recognised during the year 2,49,323.80 2,26,884.63

(ii) Method used to determine the contract revenue recognised and the stage of completion of contracts in progress Refer note 2 (b) of Schedule 18

(b) Disclosure in respect of contracts in progress as at the year end

(i) Aggregate amount of costs incurred and recognised profits (less recognised losses) 5,03,357.22 3,61,055.33

* (ii) Advances received 7,246.61 20,487.68

* (iii) Retentions receivable 30,560.65 12,381.36

(iv) Gross amount due from customers 11,461.99 12,013.22

- Included under Schedule 8 - Sundry Debtors net of adjustment referred to in Note 7 of Schedule 18 9,582.72 10,237.47

(v) Gross amount due to customers 7,843.64 11,328.47

- Included in Sundry Creditors under Schedule 11 - Current Liabilities and Provisions net of adjustment of respective debit balances of sundry debtors 399.92 1,279.70

*Net of adjustment referred to in Note 7 of Schedule 18.

SCHEDULE (CONTD.)



11 Managerial remuneration:

Rs. in lacs

Previous Year Rs. in lacs

To the Managing Director

Salary & allowances 156.57 136.52

Commission 28.41 30.00

Perquisites 2.34 2.04

Contribution to provident fund and other Funds 15.69 13.83

# 203.01 # 182.39

To directors, other than the Managing Director

Fees *9.65 8.00

Commission to Non- Executive Directors (includes Rs. 164.00 lacs relating to previous year which is paid during the year on receipt of approval of the Central Government.) 412.00 –

Notes:

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

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

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

Previous Year


Profit before tax as per the Profit and Loss account (A) 27,394.83 17,784.17

Add:

Managerial Remuneration 625.66 190.39

Depreciation/Amortisation (Net) 2,624.35 2,274.81

Loss on sale/Write off of Fixed assets (Net) 67.52 30.83

(B) 3,317.53 2,496.03

Less:

Depreciation as per Section 350 of the Companies Act, 1956 2,341.09 1,993.21

Amortisation of Leasehold land and intangible assets 1,483.26 1,481.60

Loss on sale/Write off of Fixed assets as per Section 350 of the Companies Act, 1956(Net) 67.52 30.83

Provision for doubtful debts/advances (Net) 1,998.77 190.85

(C) 5,890.64 3,696.49

Net Profit as per Section 349 of the Companies Act,1956

(A+B-C) 24,821.72 16583.71

(i) Commission to Non-Executive Directors @1% (Previous year 1%) of Net Profit.

(ii) Commission to Managing director @ 0.50% (Previous Year 0.50%) of the Net Profit, restricted to

248.00

28.41

164.00

30.00

SCHEDULE (CONTD.)



12 (a) Payment to statutory auditors:

(Including service tax, where applicable)


Rs. in lacs

As auditors 54.05 54.05

Company law matters – 0.61

In other capacity 63.26 63.56

Reimbursement of out of pocket expenses 1.20 1.67

(b) Miscellaneous expenses include fees Rs. 75.52 lacs (previous year Rs. 74.03 lacs) paid to branch / division auditors.

13 Earnings in foreign exchange and expenditure in foreign currency (ascertained on mercantile basis of accounting):


Rs. in lacs

A. Earnings :

Export of goods:

At FOB price 46,771.28 72,139.00

At invoiced value (Tower testing charges) 677.52 934.94

Sales & Services: Overseas projects 1,67,964.77 1,38,633.90

Interest 2.55 13.51

Others (Insurance claims, etc.) 18.96 0.41

Gain on Foreign Exchange (net) 978.85 –

B. Expenditure :

Expenses of overseas projects (including foreign taxes) 1,50,565.61 1,21,038.47

Commission 1,933.42 2,820.97

Interest paid to Indian FI’s/Banks 1,045.91 808.11

Other interest 226.34 963.79

Professional fees 372.18 82.73

Others (travelling, bank guarantee/ letter of credit charges, taxes, etc.) 1,077.83 445.84

Loss on Foreign Exchange (net) – 9,373.33

14 Direct imports on CIF basis:


Rs. in lacs

Raw materials and components 8,935.06 3,711.58

Spares parts 12.55 28.72

Purchase of fixed assets 401.55 1,313.34

SCHEDULE (CONTD.)



SCHEDULE (CONTD.)


15 Research and Development Expenses:


Rs. in lacs

Revenue expenses charged to Profit and Loss Account (including depreciation on fixed assets) 190.95 194.48

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

17 Major components of deferred tax assets/liabilities arising on account of timing differences are:


Rs. in lacs

Deferred Tax Liability

Depreciation (A) 7,640.88 5,225.68

Deferred Tax Assets

Preliminary expenses – 3.63

Provision for doubtful debts and advances 963.97 1,451.88

Amalgamation expenses 210.22 132.56

Expenses debited to Profit and Loss Account allowed in subsequent year u/s 43B 411.13 566.15

Unabsorbed Depreciation* 1,186.17 –

Others 258.34 89.34

(B) 3,029.83 2,243.56

Deferred Tax Liability (net) (A-B) 4,611.05 2,982.12

* This is recognised in view of confirmed profitable export/domestic orders secured by the Company.

18 Details of Employee Benefits as required by Accounting Standard-15 “Employee Benefits” are as follows :-


Rs. in lacs

1 Defined Contribution Plans

The Company has recognized the following amounts in the profit and loss account:

- Contribution to Provident Fund and Family Pension Fund

- Contribution to Superannuation Fund

The above amount is included in ‘Contribution to provident fund, gratuity and other funds’ under ‘Personnel Expenses’ in Schedule 15.

426.93

128.80

398.89

116.34

2 Defined Benefit Plan (Funded)

a. A general description of the Employees Benefit Plan:

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

b. Details of defined benefit plan - As per Actuarial Valuation are as follows:


SCHEDULE (CONTD.)



Rs. in lacs

I Components of employer expense

1. Current Service cost

2. Interest Cost

3. Expected return on Plan Assets

4. Actuarial Losses / (Gains)

5. Total expense recognised in the profit and loss account (included in ‘Contribution to provident fund, gratuity and other funds’ under ‘Personnel Expenses’ in Schedule 15)

126.92

139.96

(134.51)

128.41

260.78

114.42

139.60

(83.10)

(11.66)

159.26

II Actual Contribution and Benefits Payments for the year.

1. Actual Benefits Payments

2. Actual Contributions

(288.91)

524.66

(278.74)

731.15

III Net asset/(liability) recognised in the Balance Sheet.

1. Present Value of Defined Benefit Obligation

2. Fair Value of Plan Assets

3. Funded Status [Surplus/(Deficit)]

4. Net asset/(liability) recognised in the Balance Sheet

2,377.45

1,806.00

(571.45)

(571.45)

1,969.23

1,430.91

(538.32)

(538.32)

IV Change in Defined Benefit Obligation during the year.

1. Present value of Defined Benefit Obligation as at the beginning of the year

2. Current Service Cost

3. Interest Cost

4. Acquisitions/ Amalgamations

5. Actuarial Losses/ (Gains)

6. Benefits paid

7. Present value of Defined Benefit Obligations as at the end of the year

1,969.23

126.92

139.96

297.01

133.24

(288.91)

2,377.45

1,994.23

114.42

139.60

–

(0.28)

(278.74)

1,969.23

V Change in Fair Value of Plan Assets during the year

1. Plan Assets as at the beginning of the year

2. Acquisition / Amalgamation

3. Expected return on Plan Assets

4. Actuarial Gains/ (Losses)

5. Actual Company Contributions

6. Benefits paid

7. Plan Assets as at the end of the year

1,430.91

–

134.51

4.83

524.66

(288.91)

1,806.00

884.02

–

83.10

11.38

731.15

(278.74)

1,430.91

VI Actuarial Assumptions

1. Discount Rate

2. Expected Return on plan assets

3. Salary escalation Rate

7.50

9.40

5.00

7.00

9.40

4.50

VII The expected rate of return on the plan assets is based on the average long term rate of return expected on investments of the Fund during the estimated term of the obligations.The actual return on plan assets is Rs. 139.34 lacs (Previous Year Rs. 94.48 lacs ).

VIIIThe assumption of the future salary increases, considered in actuarial valuation, takes into account the inflation, seniority, promotion and other relevant factors.


SCHEDULE (CONTD.)



Rs. in lacs

IX The major categories of Plan Assets as a percentage of the total plan assets

Insurer Managed Funds

Note: The details of investment made by the Insurer is not readily available with the Company

100% 100%

X Experience Adjustments 2009-10 2008-09 2007-08

1 Present value of Defined Benefit Obligation as at the end of the year

2 Fair Value of Plan Assets as at the end of the year

3 Funded Status [Surplus/(Deficit)]

4 Experience adjustment on Plan Liabilities

5 Experience adjustment on Plan Assets

2,377.45

1,806.00

(571.45)

(74.71)

(4.83)

1,969.23

1,430.91

(538.32)

0.28

(11.38)

1,994.23

884.02

(1,110.21)

(72.80)

0.66

XI Contribution expected to be paid to the Plan during the year ending 31st March 2011 - Rs.500 lacs

19 The derivative instruments, which are not intended for trading or speculative purpose, outstanding as at March 31, 2010 are as follows:

Forward Exchange Contracts:

Currency Buy/ Sell Cross currency Foreign Currency in lacs

As at 31.3.10 As at 31.3.09

USD Sell INR 45.04 138.00

USD Sell CHF – 2.68

USD Sell EUR 40.33 –

USD Buy INR 293.52 60.00

EUR Buy INR 1.30 –

JPY Buy USD 13,656.12 –

The year end net monetary foreign currency exposure that have not been hedged by a derivative instrument are given below:

Receivables:

As at 31st March 2010 As at 31st March 2009

Currency FC in lacs Rs. in lacs FC in lacs Rs. in lacs

AED 1,103.66 13,495.23 924.64 12,768.64

AFA 4,758.79 4,410.92 4,034.05 3,963.85

BTS 14.74 9.56 – –

CAF 333.40 30.84 – –

DA 1,837.05 1,152.20 2,656.78 1,833.97

EGP 269.59 2,199.70 – –

ETB 248.49 833.20 393.24 1,795.52

EUR – – 91.44 6,171.61

FCFA 175.12 16.18 – –

GHC 23.63 747.58 4.19 151.26


SCHEDULE (CONTD.)


Receivables: (Contd.)

As at 31st March 2010 As at 31st March 2009

Currency FC in lacs Rs. in lacs FC in lacs Rs. in lacs

IRR – – 2,625.20 13.70

KSH 226.75 131.83 406.35 259.33

KWD – – 1.39 241.62

KZT – – 4,081.71 1,372.27

LBP – – 9,499.47 321.08

NAD 10.82 66.30 – –

NGN 9,887.88 2,900.11 7,092.51 2,433.44

OMR 6.27 731.83 – –

PHP – – 0.43 0.46

QR 0.02 0.26 0.03 0.39

SLR 22.84 9.00 97.80 42.84

SR 453.26 5,428.27 – –

SYP 134.06 130.88 330.38 355.72

TND 8.26 264.65 11.09 403.54

TJS 125.20 1,287.45 – –

ZAR 9.16 56.12 10.60 56.41

ZMK 55,757.90 535.28 1,02,850.27 935.94

MZM 41.82 54.59 – –

Payables:*

BTS – – 736.46 541.37

CAD 0.82 36.45 0.22 9.05

CHF 18.79 796.74 – –

EGP – – 319.21 2,873.81

EUR 6.56 397.30 – –

FCFA – – 10,356.62 1,067.77

JPY 2,278.97 1,095.73 5,236.36 2,700.92

KWD 2.99 465.37 – –

KZT 7,485.41 2,286.79 – –

LBP 3,815.02 114.45 – –

LYD 19.85 700.76 10.99 431.50

NAD – – 22.21 118.15

OMR – – 0.76 100.73

SR – – 91.04 1,231.43

TJS – – 79.47 1,067.93

USD 441.00 19,805.50 783.64 39,761.87

* The above excludes term loan taken in foreign currency Rs. 8,395.50 lacs (previous year Rs.8,395.50 lacs) which has been swapped with Rupee currency fixed interest rate loan.


SCHEDULE (CONTD.)


20 Related Party Disclosures (a) Name and nature of relationship of the party where Control exists:

Subsidiaries :

(i) RPG Transmission Nigeria Limited - a wholly owned subsidiary company

(ii) KEC Global FZ - LLC, Ras UL Khaimah - a wholly owned subsidiary company

(b) Parties with whom transactions have taken place :

Subsidiaries :

(i) RPG Transmission Nigeria Limited - a wholly owned subsidiary company

(ii) KEC Global FZ - LLC, Ras UL Khaimah - a wholly owned subsidiary company

Joint Ventures:

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

(ii) Hilltop Infrastructure Inc. USA

(iii) KEC Power India Private Limited

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

(c) Transactions with Related Parties


Rs. in lacsSubsidiaries :(i) RPG Transmission Nigeria Limited

Commission paid – 18.45Advance given – 0.35Purchase of Fixed Assets 32.63 –

(ii) KEC Global FZ – LLC, Ras UL KhaimahInvestment made – 118.65Advance given – 279.62Payments made / expenses incurred on behalf of related party 1,245.41 –Sales & Services 365.81 –Guarantees given 26,775.21 –

Joint Ventures :(i) Al-Sharif Group and KEC Company Limited, Saudi Arabia

Refund of advance – 1,246.76Share of loss 501.42 837.38Sale of Fixed Assets 70.70 312.96Purchase of Fixed Assets 56.13 –

(ii) KEC Power India Private Limited

Investment made – 10.55Expenses recovered 43.02 122.00

Services received. 51.50 –(iii) Hilltop Infrastructure Inc., USA

Investment made 11.27 –Key Management Personnel :Mr. R. D. Chandak - Managing Director For remuneration refer Note 11 above


SCHEDULE (CONTD.)


(d) Balances outstanding as at year end :

Balance as at 31.03.10 Rs. in lacs


Joint Ventures

Al-Sharif Group and KEC Company Ltd., Saudi Arabia 292.42 Dr. 648.21 Cr.

Investment in Hilltop Infrastructure Inc., USA 22.72 11.45

Investment in KEC Power India Private Limited. 11.05 11.05

Subsidiary

RPG Transmission Nigeria Limited 30.09 Cr. 1.55 Cr.

Investment in RPG Transmission Nigeria Limited 34.52 34.52

KEC Global FZ - LLC, Ras UL Khaimah 197.61 Dr. 279.62 Dr.

Investment in KEC Global FZ - LLC, Ras UL Khaimah 118.65 118.65

Guarantee given for KEC Global FZ - LLC, Ras UL Khaimah 26,775.21 –

No amount has been written off/ provided for or written back in respect of amounts receivable from or payable to the related parties.

21 Disclosure for operating leases under Accounting Standard 19 - “Leases”


Rs. in lacs

Disclosure in respect of the agreements entered into after 1st April, 2001 for taking on leave and license / under operating leases the residential / office premises and warehouses, including furniture and fittings and elevators therein and machinery, as applicable is given below:

1 Lease payments recognised in the profit and loss account for the year. [includes minimum lease payment Rs.194.91 (previous year Rs. 78.01 lacs)] 1,396.58 888.84

2 (i) Under some of the agreements, refundable interest free deposits have been given

(ii) Some of the agreements provide for increase in rent

(iii) Some of the agreements provide for early termination by either party with a notice period which varies from 15 days to 3 months

(iv) Some of the agreements contain a provision for its renewal

3 Future minimum lease payments under the agreements, which are non-cancelable are as follows:

(i) Not later than one year 300.82 35.83

(ii) Later than one year and not later than five years 196.74 6.46


22 Particulars in regard to bank balances with non-scheduled banks:

Name of the Bank Maximum Balances at any time during the year

Balances as on

2009-10 Rs. in lacs

2008-09 Rs. in lacs

31.03.10 Rs. in lacs


In current accounts :

Metropolitan Bank, Philippines 0.46 0.46 – 0.46

Commercial Bank of Ethiopia, Adis Ababa (Ethiopia) 433.87 927.68 132.82 179.26

Commercial Bank of Ethiopia, Dessie (Ethiopia) 0.03 0.03 – 0.03

Commercial Bank of Ethiopia, Bedele (Ethiopia) 0.02 0.02 0.01 0.02

Commercial Bank of Syria, Syria 356.09 356.09 131.20 356.09

First Gulf Bank, Abudhabi 4,761.88 3,480.94 3.85 1.75

Al- Ahli Bank of Kuwait 2.48 2.50 2.16 2.48

Commercial Bank of Qatar 0.39 0.45 0.26 0.39

UBA Bank, Nigeria 0.33 0.33 0.29 0.33

Bank Tejarat (Irano-British Bank), Iran 0.02 1.06 – 0.02

Bank Tejarat (Bank of Iran & The Middle East), Iran 0.01 0.01 – 0.01

STB Bank, Tunisia 77.75 419.21 5.38 36.20

Banque Nationale D’ Algerie 2,968.60 1,973.21 2,271.18 1,309.68

Al- Ahli Bank of Kuwait 863.25 64.58 2.49 5.69

First Gulf Bank, Abu Dhabi 1,520.52 1,436.73 4.62 2.19

Union National Bank, Abu Dhabi 171.84 788.23 15.48 0.54

Abudhabi Commercial Bank, Abudhabi 1,225.15 453.21 3.01 0.02

National Bank of Abu Dhabi, U.A.E. 366.46 419.41 – 0.03

Habib Bank Zurich, U.A.E. 177.19 341.54 0.22 0.16

Bank Muskat 1,158.21 3.70 2.33 3.58

Intercontinental Bank of Lebanon 2.56 132.41 – 2.56

Bank TuranAlem, Tenge (Kazakhstan) 3,565.05 2,858.45 12.65 12.34

Indo Zambia Bank, Zambia 520.60 412.58 27.66 42.80

Taib Bank, Kazakhstan 14.90 30.50 – 14.90

Standard Bank, Namibia 1,010.73 753.51 84.50 112.11

Eco Bank, Mali 130.34 87.37 8.71 61.34

National Bank of Egypt 973.98 3,516.67 105.14 295.06

Bank of PHB, Nigeria 1,361.61 2,680.30 265.49 360.37

Saudi Hollandi, Saudi Arabia 2,826.90 6,146.08 5.53 746.45

Bank Saudi Fransi, Saudi Arabia 6,679.71 6,692.00 15.27 1,275.56

Kazcommerce Bank , Tajikistan 629.85 – 38.31 –

Bank Muscat , Saudi Arabia 3.00 – 0.59 –

National Bank of Oman 151.29 – 13.07 –

First Gulf Bank , Mozambique 324.96 – 30.77 –

Standard Bank , Mozambique 124.67 – 119.59 –

National Bank of Kuwait 857.57 – 0.57 –

SCHEDULE (CONTD.)



Name of the Bank Maximum Balances at any time during the year

Balances as on

2009-10 Rs. in lacs

2008-09 Rs. in lacs



Municipal Co Op Bank, Mumbai 0.32 – 0.16 –

Arab National Bank, Saudi Arabia 2,704.89 – 59.71 –

Gumhoria Bank, Tripoli (Libya) 420.94 1,323.41 76.99 311.16

3,440.01 5,133.58

In Margin deposits :

Bank Tejarat (Irano–British Bank), Iran 0.06 0.06 – 0.06

Bank Habitat, Lebanon 36.50 54.76 18.45 36.50

STB Bank, Tunisia – 91.70 – –

18.45 36.56

In Call deposits :


0.76 0.64

In Fixed deposits :

Bank Tejarat (Irano-British Bank),Iran 0.47 0.47 – 0.47

Bank Mellat (Bank of Tehran), Tehran 5.05 5.05 – 5.05


First Gulf Bank,Abu Dhabi 65.84 106.4 59.48 65.84

Bank Turan Alem Tenge, Kazakhstan 2,260.70 1,425.49 6.74 7.64

68.67 85.11

Note :Maximum balances with non-scheduled banks are translated at the year end rates of exchange.

23 Disclosure in respect of Joint Ventures under Accounting Standard 27 - “Financial Reporting of Interests in Joint Ventures” :

Ownership interestCurrent Year Previous Year

a) Jointly Controlled Entities

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

49% 49%

ii Hiltop Infrastructure Inc., USA 50% 50%iii KEC Power India Private Limited 50% 50%

b) Aggregate amount of assets, liabilities, income and expenditure related to the Company’s interests in jointly controlled entities:

Rs. in Lacs Rs. in lacsi Assets

Fixed assets 371.00 361.24 Cash & Bank Balances 98.66 311.59 Debtors 4.73 1,521.52 Loans & Advances 3.73 4.96 Subtotal 478.12 2,199.31

SCHEDULE (CONTD.)



SCHEDULE (CONTD.)


Rs. in Lacs Rs. in lacsii Liabilities

Trade payable 438.54 991.95 Tax provisions less payments – 8.60 Subtotal 438.54 1,000.55

iii Income * 90.55 145.22

iv Expenditure * Construction Cost 224.90 37.17 Other Expenditure 65.72 93.06 Bank charges 131.58 0.09 Bad debts – 753.14

*Excludes income and expenditure disclosed in Note 23 (c) below

c) In respect of contracts as referred to in Note 2(c) (i) of Schedule 18, the Company has recognised sales and services Rs.56,481.61lacs (previous year Rs.43,376.22 lacs) and total expenditure Rs.54,908.79 lacs (previous year Rs. 40,953.96 lacs). Additionally, the total assets aggregating Rs. 28,857.76 lacs (previous year Rs. 24,471.93 lacs) and total liabilities aggregating Rs. 27,378.94 lacs (previous year Rs. 27,034.39 lacs).

24 The amount of interest capitalised during the year Rs. 432.26 lacs (previous year Rs.255.63 lacs) is included in Fixed assets/capital work in progress.

25 Basic / diluted earnings per share has been calculated by dividing the profit for the year after taxation of Rs.17,099.12 lacs (previous year Rs. 11,629.27 lacs) by 4,95,20,675 (previous year 4,93,44,606) being the weighted average number of equity shares outstanding during the year. For this purpose, equity shares issued subsequent to the year end as consideration for the amalgamation referred to in Note 1.3 above have been included in the calculation of weighted average number of equity shares.

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

27 Excise duty shown in Schedule-16 “Other Expenses” includes Rs. 47.73 lacs (previous year net of Rs. 53.21 lacs) being excise duty related to the difference between the closing stock and opening stock of the finished goods.

28 Provision for doubtful debts and for doubtful advances as at the year end include Rs.442.59 lacs and Rs. 20.71 lacs respectively relating to the Sundry Debtors/ Loans and Advances transferred to the Company in terms of the Scheme of Amalgamation referred to in Note 1 above.

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

Signatures to Schedules 1 to 19 which form an integral part of the accounts.


H.V.GOENKAChairman

VARDHAN DHARKARChief Financial Officer



CH.V.JAGANNADHA RAOCompany Secretary

A.T.VASWANIDirector


Previous Year Notes Rs.in lacs Rs.in lacs Rs.in lacs Rs.in lacs

A] CASH FLOW FROM OPERATING ACTIVITIES : PROFIT BEFORE TAXATION 27,394.82 17,784.17 Adjusted for : Depreciation/Amortisation (Net) 2,624.35 2,274.81 Unrealised foreign exchange (gain)/ loss (net) (4,310.70) 3,775.23 Loss on sale / write off of fixed assets (net) 67.52 30.83 Interest expenses 9,446.65 10,167.28 Interest income (794.02) 7,033.80 (169.07) 16,079.08 OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 34,428.62 33,863.25

Changes in : 1 Trade and other receivables 2 (1,342.27) (41,542.32) Inventories 4,146.31 (2,044.84) Trade and other payables 2 (25,800.97) (22,996.93) 53,079.09 9,491.93

CASH GENERATED FROM OPERATIONS 11,431.69 43,355.18

Direct Taxes Paid (net of refund of taxes) (7,754.96) (6,224.78) Fringe Benefit Tax paid - (7,754.96) (150.26) (6,375.04) NET CASH FROM OPERATING ACTIVITIES (A) 3,676.73 36,980.14

B] CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets(after adjustment of increase/ decrease in capital work-in-progress and advances for capital expenditure) (6,048.99) (13,643.72) Sale of fixed assets 222.62 371.58 Interest received 795.22 142.13 Purchase of long term investments - In subsidiary company - (118.65) - In joint venture company (11.27) (10.55) NET CASH USED IN INVESTING ACTIVITIES (B) (5,042.42) (13,259.21)

C] CASH FLOW FROM FINANCING ACTIVITIES Redemption of preference shares - (1,489.93) Proceeds from long term borrowings 32,379.28 20,282.18 Repayment of long term borrowings (26,641.41) (22,617.32) Proceeds from /(Repayment of) short term borrowings (net) (227.98) 283.96 Interest paid [Including interest capitalised Rs. 432.26 lacs

(previous year Rs. 255.63 lacs)] (9,440.26) (10,464.25)

Dividend payment (including tax on distributed profit) (2,852.43) (2,868.89) NET CASH USED IN FINANCING ACTIVITIES (C) (6,782.80) (16,874.25) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) (8,148.49) 6,846.68

CASH AND CASH EQUIVALENTS AS AT THE COMMENCEMENT OF THE YEAR 13,647.28 6,800.60 Add : Cash and bank balance acquired under the Scheme 1,295.66 - CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR 6,794.45 13,647.28 NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (8,148.49) 6,846.68

NOTES :1] The working capital changes for the year have been determined after considering the liabilities taken over and the fair values of assets acquired under the

Scheme of Amalgamation referred to in Note 1 of Schedule 19 to the Accounts. The purchase consideration which has been discharged by way of equity shares is as stated in that Note.

2] Changes in Trade and other receivables and trade and other payables have been arrived at after considering the adjustment referred to in Note 7 of Schedule 18 to the Accounts.

3] As at31.03.2010Rs. in lacs

As at31.3.2009Rs. in lacsCASH AND CASH EQUIVALENTS :

Cash and Bank Balances * 6,780.11 13,653.53 [Include fixed deposits Rs. 279.90 lacs (previous year Rs. 139.18 lacs) on which banks are having lien]Effect of exchange rate changes 14.34 (6.25)

6,794.45 13,647.28 * Includes Cash and Bank Balances of jointly controlled operations referred to in Note 23 (C ) of Schedule 194] Previous year’s figures have been regrouped to conform with those of the current year.

In terms of our report attachedFor DELOITTE HASKINS & SELLSChartered Accountants

U.M.NEOGIPartner


For and on behalf of the Board H.V.GOENKA Chairman


CH.V.JAGANNADHA RAO A.T.VASWANICompany Secretary DirectorPlace : Mumbai Date : 29th April 2010

CASH FLOW STATEMENTFOR THE YEAR ENDED 31ST MARCH 2010


BALANCE SHEET ABSTRACT & COMPANY’S GENERAL BUSINESS PROFILEAs required under Part IV, Schedule VI to the Companies Act, 1956

I. Registration Details

Registration No. 1 5 2 0 6 1 State Code 1 1

Balance Sheet Date 3 1 0 3 1 0

II. Capital raised during the year (Amount in Rs. Thousand)

Public Issue N I L Right Issue N I L

Bonus Issue N I L Private placement N I L

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousand)

Total Liabilities 1 6 0 0 4 2 8 8 Total Assets 1 6 0 0 4 2 8 8

(Excluding Current Liabilites and provisions) (Net of Current Liabilities & Provisions)

Source of Funds

Paid-up Capital* 5 1 4 1 7 7 Reserve & urplus 7 1 6 1 5 6 9

Secured Loans 7 7 5 5 0 8 9 Unsecured Loans 1 1 2 3 4 8

Deferred Tax Liability 4 6 1 1 0 5

Application of Funds

Net Fixed Assets 7 1 3 3 2 6 7 Investments 1 8 6 9 4

Net Current Assets 8 8 5 2 3 2 7 Accumulated Losses -

Deferred Tax Asset -

IV. Performance of Company (Amount in Rs. Thousand)

Turnover (Including other income)

3 8 7 8 2 3 3 2 Total Expenditure 3 6 0 4 2 8 6 0

Profit Before Tax 2 7 3 9 4 8 2 Profit After Tax 1 7 0 9 9 1 2

Earnings Per Share (in Rs.)

3 4 . 5 3 Dividend Rate 6 0 %

V. Generic Names of Three Principal Products / services of the Company

Item Code No. (ITC Code)

7 3 0 8 2 0 . 0 1

Product Description Towers and Structurals

Item Code No. (ITC Code)

-

Product Description Engineering, Procurement & Construction (EPC)

* Including equity share suspense of Rs. 20,731 (Rs. in Thousand) allotted on 26th April 2010 pursuant to the Scheme of Amalgamation between the Company and RPG Cables Limited (Refer note No. 2.2 of Schedule 19).

BALANCE SHEET ABSTRACT


AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTSTO THE BOARD OF DIRECTORS OF KEC INTERNATIONAL LIMITED

1. We have audited the attached Consolidated Balance Sheet of KEC INTERNATIONAL LIMITED (“the Company”), its subsidiaries and jointly controlled entities (the Company, its subsidiaries and jointly controlled entities constitute “the Group”) as at 31st March 2010, the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement of the Group for the year ended on that date, both annexed thereto. The Consolidated Financial Statements include the jointly controlled entities accounted in accordance with Accounting Standard 27 (Financial Reporting of Interests in Joint Ventures) as notified under the Companies (Accounting Standards) Rules, 2006. These financial statements are the responsibility of the Company’s Management and have been prepared on the basis of the separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We did not audit the financial statements of the subsidiaries and joint ventures, whose financial statements reflect total assets of Rs. 2,642.17 lacs as at 31st March, 2010, total revenues of Rs. 2,998.88 lacs and net cash outflow of Rs. 253.12 lacs for the year ended on that date as considered in the Consolidated Financial Statements. These financial statements have been audited by other auditors whose reports have been furnished to us and our opinion, in so far as it

relates to the amounts included in respect of these subsidiaries and joint ventures is based solely on the reports of the other auditors.

4. We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 (Consolidated Financial Statements) and Accounting Standard 27 (Financial Reporting of Interests in Joint Ventures) as notified under the Companies (Accounting Standards) Rules, 2006.

5. Based on our audit and on consideration of the separate audit reports on individual financial statements of the Company, its subsidiaries and joint ventures and to the best of our information and according to the explanations given to us, in our opinion, the Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March, 2010;

(ii) in the case of the Consolidated Profit and Loss Account, of the profit of the Group for the year ended on that date and

(iii) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.


(Registration No. 117365W)

U.M.NEOGIPartner

(Membership No.30235)

Place : MumbaiDate : 29th April 2010


CONSOLIDATED BALANCE SHEETAs at 31st March 2010

Previous yearSchedule Rs. in lacs Rs. in lacs Rs. in lacs Rs. in lacs

I. SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Capital 1 4,934.46 4,934.46 Equity Share Suspense 17 (2.2) 207.31 – Reserves and surplus 2 73,567.63 50,874.47

LOAN FUNDS Secured loans 3 77,550.89 58,393.84 Unsecured loans 4 1,123.48 3,788.23 DEFERRED TAX LIABILITY (Net) 17(10) 4,611.05 2,982.12

1,61,994.82 1,20,973.12

II. APPLICATION OF FUNDS FIXED ASSETS 5 Gross block 83,574.25 63,195.84 Less: Depreciation/Amortisation 15,700.74 12,477.52

Net block 67,873.51 50,718.32 Capital work in progress 3,786.44 5,038.24 Advances for capital expenditure 43.83 99.96

71,703.78 55,856.52 Expenditure during construction period 298.14 295.06

CURRENT ASSETS, LOANS AND ADVANCES Inventories 6 24,975.29 22,578.14 Sundry debtors 7 1,96,235.95 1,86,618.38 Cash and bank balances 8 6,978.72 14,105.25 Loans and advances 9 39,558.30 30,284.45

2,67,748.26 2,53,586.22 Less: CURRENT LIABILITIES AND PROVISIONS 10 Liabilities 1,72,138.91 1,84,312.74 Provisions 5,616.45 4,451.94

1,77,755.36 1,88,764.68

NET CURRENT ASSETS 89,992.90 64,821.54

1,61,994.82 1,20,973.12

Basis of consolidation and significant accounting policies 16

Notes to the accounts 17



U.M.NEOGIPartner



H.V.GOENKA Chairman







U.M.NEOGIPartner



H.V.GOENKA Chairman




CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the year ended 31st March 2010


INCOME Sales and services - Gross 3,95,173.30 3,48,133.87 Less: Excise Duty 4,534.66 5,394.61

Sales - Net 3,90,638.64 3,42,739.26 Share of Sales and services of Joint Ventures 84.63 144.47

3,90,723.27 3,42,883.73 Other income 11 98.93 59.14

3,90,822.20 3,42,942.87

EXPENDITURE Cost of materials 12 2,01,270.06 1,97,583.21 Erection and Subcontracting expenses 95,676.62 57,462.26 Share of Erection and Subcontracting expenses of Joint Ventures 141.68 37.17 Personnel expenses 13 16,887.13 14,199.86 Other expenses 14 36,161.64 43,498.45 Interest 15 8,646.71 9,997.46 Depreciation/Amortisation (Net) 16-B(4) 2,702.45 2,299.89

3,61,486.29 3,25,078.30

PROFIT FOR THE YEAR BEFORE TAXATION 29,335.91 17,864.57 Provision for taxation

Current Tax [includes share of joint ventures of Rs. 15.59 lacs (previous year Rs. 28.52 lacs), but net of write back of provision pertaining to an earlier year Rs. 36.07 lacs (Previous year Rs. Nil)] 5,579.67 5,095.24

Less: MAT Credit 4,655.75 –

923.92 5,095.24 Deferred Tax 9,445.70 978.18 Fringe Benefit Tax [includes share of joint ventures of Rs. Nil

(previous year Rs. 0.25 lac)] – 110.25

PROFIT FOR THE YEAR AFTER TAXATION 18,966.29 11,680.90 Balance in Profit and Loss account as at the commencement of the year (including of subsidiaries and share of joint ventures) 30,532.84 23,941.69 Transfer to Capital Redemption Reserve – 1,040.28 Transfer to General Reserve 1,709.91 1,162.93 Dividend on equity shares 3,085.06 2,467.23 Tax on distributed profits 524.31 419.31

BALANCE CARRIED TO BALANCE SHEET 44,179.85 30,532.84

Rs. Rs. Earnings per share ( Basic / Diluted) 38.30 23.67 Nominal value of share (Note 17 of Schedule 17) 10.00 10.00

Basis of consolidation and significant accounting policies 16Notes to the accounts 17


SCHEDULEFORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 1 - SHARE CAPITAL Previous YearRs. in lacs Rs. in lacs

Authorised:Equity Share: 6,00,00,000 Equity shares of Rs. 10/- each 6,000.00 6,000.00 Preference Share: 15,00,000 Redeemable Preference shares of Rs. 100/- each 1,500.00 1,500.00

7,500.00 7,500.00

Issued, Subscribed and Paid-up:(Note 2.1 of Schedule 17)Equity Share Capital: 4,93,44,606 Equity shares of Rs.10/- each fully paid-up 4,934.46 4,934.46

4,934.46 4,934.46

SCHEDULE 2 - RESERVES AND SURPLUS

Rs. in lacs Rs. in lacsPrevious Year

Rs. in lacs Rs. in lacsCapital Reserve Balance at the commencement of the year 1.16 1.16 Add: Credited during the year (Note 1.5 of Schedule 17) 8,497.87 –

8,499.03 1.16 Capital Redemption Reserve Balance at the commencement of the year 1,427.95 387.67 Add : Transferred from profit and loss account on redemption of preference shares – 1,040.28

1,427.95 1,427.95 Securities Premium account Balance at the commencement of the year 8,674.89 9124.54 Less: Utilised for premium paid for redemption of preference shares (Note 2.1.c of Schedule 17) – 449.65

8,674.89 8,674.89 Reserve for Amortisation of Brand account (Note B(4)(b) of Schedule 16) Balance at the commencement of the year 6,157.00 7,357.00 Less : Transferred to Profit and Loss Account 1,200.00 1,200.00

4,957.00 6,157.00 Foreign Currency Translation Reserve Balance at the commencement of the year 129.66 – Add: Credited/ (Debited) during the year: On translation of non-integral operations in joint venture (94.00) 286.44 Other - on consolidation of foreign subsidiaries and joint ventures 97.28 (156.78)

132.94 129.66 General Reserve Balance at the commencement of the year 3,891.18 2728.25 Add: Transferred from Profit and Loss account 1,709.91 1162.93

5,601.09 3,891.18 Profit and Loss Account 44,179.85 30,532.84

Statutory Reserve Balance at the commencement of the year 59.79 59.79 Add: Credited during the year 35.09 –

94.88 59.79 73,567.63 50,874.47


SCHEDULE (CONTD.)FORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 3 - SECURED LOANS Previous Year(Note 3 of Schedule 17) Rs. in lacs Rs. in lacsLoans and advances from banks 71,990.19 58,393.84 Loans and advances from others 5,560.70 –

77,550.89 58,393.84

SCHEDULE 4 - UNSECURED LOANS Previous YearRs. in lacs Rs. in lacs

Short term loans and advances:From Banks – 1,011.38 Other loans and advances:From Banks 1,010.48 2,663.85 (repayable within one year Rs. 1,010.48 lacs, previous year Rs. 1,653.37 lacs)From Others 113.00 113.00

1,123.48 3,788.23

SCHEDULE 5 - FIXED ASSETS Rs. in lacsGROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK

DESCRIPTION As at 31st

March, 2009

Additions during the

year

Acquired during the

year*


year

As at 31st

March, 2010

Upto 31st

March, 2009


year

For the year

Upto 31st

March, 2010

As at 31st

March, 2010

As at 31st

March, 2009

Tangible AssetsFreehold Land 1,819.39 – 9,660.55 – 11,479.94 – – – – 11,479.94 1,819.39 Leasehold Land ** 6,515.36 133.96 6.14 – 6,655.46 376.32 – 103.05 479.37 6,176.09 6,139.04 Buildings ** 4,062.58 963.11 1,054.59 0.26 6,080.02 1,120.51 0.26 169.81 1,290.06 4,789.96 2,942.07 Plant & Machinery 22,108.67 4,764.99 3,172.54 300.56 29,745.64 4,229.31 150.64 1,778.15 5,856.82 23,888.82 17,879.36 Computers 621.37 276.37 22.20 13.68 906.26 266.55 12.24 106.06 360.37 545.89 354.82 Furniture & Fixtures 817.60 266.47 28.96 121.82 991.21 230.37 57.16 92.27 265.48 725.73 587.23 Electrical Installations 188.42 71.40 29.01 14.64 274.19 34.79 2.96 14.59 46.42 227.77 153.63 Vehicles 1,610.63 76.37 39.48 109.43 1,617.05 498.02 46.99 180.21 631.24 985.81 1,112.61 Sub-Total 37,744.02 6,552.67 14,013.47 560.39 57,749.77 6,755.87 270.25 2,444.14 8,929.76 48,820.01 30,988.15 Intangible Assets (other thaninternally generated)Computer Softwares 484.88 693.78 – 0.15 1,178.51 388.57 0.15 107.59 496.01 682.50 96.31 Brand 24,000.00 – – – 24,000.00 4,800.00 – 1,200.00 6,000.00 18,000.00 19,200.00 Goodwill 363.18 – – 363.18 – 290.56 363.18 72.62 – – 72.62 Sub-Total 24,848.06 693.78 – 363.33 25,178.51 5,479.13 363.33 1,380.21 6,496.01 18,682.50 19,368.93 TOTAL 62,592.08 7,246.45 14,013.47 923.72 82,928.28 12,235.00 633.58 3,824.35 15,425.77 67,502.51 Share of Fixed Assets of Joint Ventures 603.76 162.57 – 120.36 645.97 242.52 45.65 78.10 274.97 371.00 361.24

63,195.84 7,409.02 14,013.47 1,044.08 83,574.25 12,477.52 679.23 3,902.45 15,700.74 67,873.51 Previous Year 52,399.94 11,437.61 – 641.71 63,195.84 9,216.93 239.30 3,499.89 12,477.52 50,718.32 Capital work-in-progress at cost

Advances for capital expenditure

3,786.44 5,038.24

43.83 99.96 Sub-Total 3,830.27 5,138.20 GRAND TOTAL 71,703.78 55,856.52 * Acquired under the Scheme referred to in Note 1 of Schedule 17 ** Note 4 of Schedule 17



SCHEDULE 6 - INVENTORIES Previous YearRs. in lacs Rs. in lacs Rs. in lacs Rs. in lacs

Stores 145.01 51.83 Dies and tools 2,616.09 2,695.79

2,761.10 2,747.62

Raw materials 15,316.86 13,826.48 Work-in-process 2,366.04 1,264.30 Erection materials 294.16 330.80 Finished goods 3,226.93 3,658.54

21,203.99 19,080.12 Scrap 1,010.20 750.40

24,975.29 22,578.14

SCHEDULE 7 - SUNDRY DEBTORS Previous YearRs. in lacs Rs. in lacs Rs. in lacs Rs. in lacs

UNSECURED(Considered good, unless otherwise stated)Debts outstanding for a period exceeding six months Considered good 67,396.01 56,526.83 Considered doubtful 2,683.83 4,140.01

70,079.84 60,666.84 Other debts 1,28,835.21 1,28,570.03

1,98,915.05 1,89,236.87 Less: Provision for doubtful debts 2,683.83 4,140.01

1,96,231.22 1,85,096.86 Share of Sundry Debtors of Joint Ventures 4.73 1,521.52

1,96,235.95 1,86,618.38

SCHEDULE 8 - CASH AND BANK BALANCES Previous Year Rs. in lacs Rs. in lacs Rs. in lacs Rs. in lacs

Cash on hand 185.24 174.75 Cheques on hand – 1,130.59 Bank balances with scheduled banksIn current accounts 1,298.09 6,378.27 In fixed deposits* 681.36 245.47 In margin deposits 1,089.58 269.99

3,069.03 6,893.73 Bank balances with non-scheduled banks In current accounts 3,537.91 5,273.67 In margin deposits 18.45 36.56 In call deposits 0.76 0.64 In fixed deposits* 68.67 85.11

3,625.79 5,395.98 Remittances in transit – 198.61

6,880.06 13,793.66 Share of Cash on hand of Joint Ventures 10.05 7.96 Share of Cheque on hand of Joint Ventures – 5.55 Share of Bank balances of Joint Ventures 88.61 298.08

6,978.72 14,105.25

* The Banks are having lien on Rs. 279.90 lacs (previous year Rs. 139.18 lacs) included in fixed deposits for the facilities extended to the Company.



SCHEDULE 9 - LOANS AND ADVANCES Previous Year


Advances recoverable in cash or in kind or for value to be received:

Unsecured - considered good 22,612.20 21,208.27

Considered doubtful 152.20 131.49

22,764.40 21,339.76

Less : Provision for doubtful advances 152.20 131.49

22,612.20 21,208.27

Excise duty recoverable from Government authorities 3,894.90 3,724.34

Balances with customs and excise authorities 1,780.26 1,950.87

MAT Credit Entitlement 4,655.75 –

Current Tax payments less provisions 4,487.01 2,056.07

Sundry deposits 2,124.45 1,339.94

39,554.57 30,279.49

Share of Advances of Joint Ventures 3.73 4.96

39,558.30 30,284.45

SCHEDULE 10 - CURRENT LIABILITIES AND PROVISIONS Previous Year


A. CURRENT LIABILITIES Acceptances 67,084.04 59,048.23

Sundry creditors 95,455.23 95,518.18 Advances from customers 9,003.90 28,502.87 Unclaimed Dividend# 75.36 41.25 Interest accrued but not due on loans 294.28 210.26

1,71,912.81 1,83,320.79 Share of Sundry creditors of Joint Ventures 226.10 991.95

1,72,138.91 1,84,312.74 B. PROVISIONS Tax provisions less payments 704.24 467.16 Proposed equity dividend 3,085.06 2,467.23 Tax on distributed profits 524.31 419.31 Compensated Absences 731.39 551.32 Gratuity 571.45 538.32

5,616.45 4,443.34 Share of tax provisions less payments of Joint Ventures – 8.60

5,616.45 4,451.94

1,77,755.36 1,88,764.68

# The figures reflect the position as at year end. The actual amount to be transferred to the Investor Education and Protection Fund in this respect shall be determined on the due dates.


SCHEDULE (CONTD.)FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT

SCHEDULE 12 - COST OF MATERIALS Previous Year Rs.in lacs Rs.in lacs Rs. In lacs Rs. In lacs

Consumption of raw materials and components 1,74,457.86 1,70,761.72

Finished goods, work-in-process and scrap: Opening stock Work-in-Process 1,264.30 1,002.19 Finished Goods 3,658.54 2,216.02 Scrap 750.40 842.91

5,673.24 4,061.12

Purchase of finished goods 23,856.04 28,433.61

Acquired during the year* Work-in-Process 1,934.84 – Finished Goods 1,836.55 – Scrap 90.05 –

3,861.44 – Less: Closing stock Work-in-Process 2,366.04 1,264.30 Finished Goods 3,226.93 3,658.54 Scrap 1,010.20 750.40

6,603.17 5,673.24 26,787.55 26,821.49

2,01,245.41 1,97,583.21 Share of cost of material of Joint Ventures 24.65 –

2,01,270.06 1,97,583.21


SCHEDULE 11 - OTHER INCOME Rs. in lacs


Rent 21.56 33.42 Insurance claims 25.70 0.41 Miscellaneous receipts 51.67 25.31

98.93 59.14

SCHEDULE 13 - PERSONNEL EXPENSES Previous YearRs. in lacs Rs. In lacs

Salaries, wages and bonus 14,936.20 12,284.61 Contribution to provident fund, gratuity and other funds 1,085.46 971.04

Welfare expenses 763.32 821.69 Workmen’s compensation 73.51 83.65

16,858.49 14,160.99 Share of personnel expenses of Joint Ventures 28.64 38.87

16,887.13 14,199.86


SCHEDULE (CONTD.)FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT

Previous Year

SCHEDULE 14 - OTHER EXPENSES Rs. in lacs Rs. in lacs Rs. in lacs Rs. in lacs

Tools, non-erection stores and maintenance spares 570.62 588.21

Power and fuel 1,555.51 1,393.88

Rent 1,879.78 1,630.75

Rates and taxes (net) 5,415.34 2,465.59

Excise duty 182.84 28.67

Insurance 1,604.51 1,116.13

Bank (guarantee,letter of credit and other) charges 6,212.74 5,618.09

Commission 3,726.41 5,549.27

Freight (net) 3,850.25 4,514.14

Coolie, cartage and forwarding 551.16 641.80

Repairs:

Plant and machinery 594.44 507.89

Buildings 97.47 127.55

Others 503.61 609.81

1,195.52 1,245.25

Travelling & conveyance 2,609.93 2,595.58

Professional fees 1,798.18 1,006.89

Bad Debts written off 2,470.07 1,075.10

Less: Adjusted against provision for doubtful debts 1,126.55 –

1,343.52 1,075.10

Provision for doubtful debts (net) (772.22) 17.26

Directors’ fees 9.65 8.00

Loss on sale / write off of fixed assets (net) 67.52 30.83

Exchange (gain) / loss (net) (964.72) 9,373.33

Miscellaneous expenses 5,156.43 3,794.72

35,992.97 42,693.49

Share of expenses of Joint Ventures 168.67 804.96

36,161.64 43,498.45

Previous YearSCHEDULE 15 - INTEREST Rs. in lacs Rs. in lacs Rs. in lacs Rs. in lacsOn fixed period loans 2,707.54 2,343.16 Others 6,739.11 7,824.12

9,446.65 10,167.28

Less: Recoveries - interest on deposits with banks, housing loans etc. [Tax Deducted at source Rs. 71.20 lacs (previous year Rs. 20.93 lacs)] 794.02 169.07 Share of interest of Joint Ventures 5.92 0.75

799.94 169.82

8,646.71 9,997.46


SCHEDULE (CONTD.)FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

SCHEDULE 16 - BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES

A) BASIS OF CONSOLIDATION

The consolidated financial statements relate to KEC International Limited (the Company), its Subsidiaries and Jointly Controlled Entities (the Group). The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21(AS 21) “Consolidated Financial Statements” and Accounting Standard 27 (AS 27) “Financial Reporting of Interests in Joint Ventures” specified in the Companies (Accounting Standards) Rules, 2006 notified by the Central Government in terms of section 211(3C) of the Companies Act, 1956.

I. Basis of Accounting

i. The accounts have been prepared on historical cost convention. The Group follows the accrual basis of accounting.

ii. The following Subsidiaries are considered for consolidation:

Country of Incorporation

% of ownership interest and

voting power

RPG Transmission Nigeria Limited Nigeria 100

KEC Global FZ - LLC -Ras Ul Khaimah (w.e.f.28th May, 2008) UAE 100

iii. The following Jointly Controlled Entities are considered for consolidation:

Country of Incorporation

% of ownership interest and

voting power

Al-Sharif Group and KEC Company Limited(formerly known as Faiz Abdul Hakim Al-Sharif Group and KEC Company Limited)

Saudi Arabia 49

Hilltop Infrastructure Inc. USA 50

KEC Power India Private Limited India 50

iv. The financial statements of the subsidiary companies and jointly controlled entities used in the consolidation are drawn up to the same reporting date as that of the Company except for Al- Sharif Group and KEC Company Limited where it is drawn upto December 31, 2009. In respect of Al- Sharif Group and KEC Company Limited, effect has been given to significant transactions between the two reporting dates, which have been certified by the management of the Company and relied upon by the auditors.

II. Principles of Consolidation

i. The financial statements of the Company and its Subsidiary Companies have been combined on a line-by-line basis by adding together like items of assets, liabilities, income and expenses. The intra-group balances and intra-group transactions and unrealised profits or losses are fully eliminated.

ii. The interest of the Company in the Jointly Controlled Entity has been reported by using proportionate consolidation whereby its share of each of the assets and liabilities of the Jointly Controlled Entity is reported as separate line item in the consolidated financial statements. However, in respect of Al-Sharif Group and KEC Company Limited as the assets, liabilities, income and expenses relating to the contracts awarded to Al-Sharif Group and KEC Company Limited but executed by the Company under the arrangement with the Joint Venture Partner [being in substance in the nature of Joint Controlled Operations, in terms of Accounting Standard (AS) 27 “ Financial Reporting of Interests in Joint Ventures”] have already been recognized in the financial statements of the Company considered for consolidation, necessary effects have been given by the management to the financial statements of Al-Sharif Group and KEC Company Limited as referred to in Note A(I) (iv) above which have been considered for consolidation.


iii. The excess of cost to the Company of its investments in the Subsidiary Companies / Jointly Controlled Entities over its share of equity of the Subsidiary Companies / Jointly Controlled Entities, at the dates on which the investments in the Subsidiary Companies / Jointly Controlled Entities are made/acquired, is recognized as ‘Goodwill’ being an asset in the Consolidated Financial Statements. Alternatively, where the share of equity in the Subsidiary Companies / Jointly Controlled Entities as on the date of investment/acquisition is in excess of cost of the investment of the Company , it is recognized as ‘Capital Reserve’ and shown under the head ‘Reserves and Surplus’, in the Consolidated Financial Statements.

B) SIGNIFICANT ACCOUNTING POLICIES

1 Revenue Recognition:

a) Sales and Services are recognised on delivery. Sales exclude sales tax/ value added tax and service tax charged to the customers.

b) Revenue from erection contracts is recognised based on the stage of completion determined with reference to the costs incurred on contracts and their estimated total costs.

When it is probable that the total contract cost will exceed total contract revenue, expected loss is recognised as an expense immediately. Total contract cost is determined based on technical and other assessment of cost to be incurred. Liquidated damages/ penalties are accounted as per the contract terms wherever there is a delayed delivery attributable to the Group.

c) i) Revenue from contracts awarded to Jointly Controlled Entity at Saudi Arabia but executed by the Company under the arrangement with the Joint Venture Partner [being in substance in the nature of Jointly Controlled Operations, in terms of Accounting Standard (AS) 27 “Financial Reporting of Interests in Joint Ventures”], is recognised on the same basis as similar contracts independently executed by the Company.

d) Subsidy is accounted on accrual basis.

e) Dividend income is accounted as and when right to receive dividend is established.

f) Interest income is accounted on time proportion basis.

2 Inventories:

a) Raw materials, work-in-process, finished goods and stores and erection materials are valued at the lower of cost and net realisable value (NRV). Cost of purchased material is determined on the weighted average basis. Cost of Tools and Dies is amortised over its estimated useful life of five years. Scrap is valued at net realisable value.

b) Cost of work-in-process and finished goods includes material cost, labour cost, and manufacturing overheads absorbed on the basis of normal capacity of production.

3 Fixed Assets:

Fixed assets are stated at cost of acquisition or construction net of impairment loss less accumulated depreciation/ amortisation. Cost comprises of purchase/ acquisition price, import duties, taxes and any directly attributed cost of bringing the asset to its working condition for its intended use. Financing cost on borrowings for acquisition or construction of fixed assets, for the period upto the date of acquisition of fixed assets or when the assets are ready to be put in use/ the date of commencement of commercial production, is included in the cost of fixed assets. Assessment of indication of impairment of an asset is made at the year-end and impairment loss, if any, is recognised.



4 Depreciation/ Amortisation:

a) Tangible Assets:

(i) Leasehold land is amortised over the remaining period of the lease.

(ii) Cost of buildings of semi-permanent nature is amortised over 3 years.

(iii) Depreciation on other tangible fixed assets is provided on straight line method at the rates so as to reduce them to their estimated salvage value at the end of their useful lives or at the rates prescribed in Schedule XIV to the Companies Act, 1956 whichever is higher.

The estimated useful lives of assets which are different from the principal rates specified in Schedule XIV to the Companies Act, 1956 are as follows:

Plant and Machinery - 1 to 19 years, Furniture and Fixtures - 10 years, Vehicles - 7 years and Computers - 4 years.

b) Intangible Assets:

(i) Brand is amortised over twenty years being the useful life certified by the independent valuer and goodwill is amortised over five years.

In terms of the Scheme of Arrangement sanctioned in the year 2007-08, out of the balance in ‘Reserve for Amortisation of Brand Account’ an amount equal to annual amortisation of brand is credited to the profit and loss account each year so that overall depreciation/amortisation gets reduced to that extent. Accordingly, Rs. 1,200 lacs being the amortization of brand during the year (previous year Rs. 1,200 lacs) has been credited to the profit and loss account by netting it with Depreciation/Amortisation.

(ii) Computer softwares are amortised on straight line basis over the estimated useful life ranging between 4-6 years.

5 Investments:

Long-term investments are stated at cost. Provision is made for diminution, other than temporary, in the value of investments.

6 Sundry debtors as at the year end under the contract are disclosed net of advances relating to the respective contracts received and outstanding at the year end.

7 Foreign Currency Transactions:

a) Foreign branches (Integral):

(i) Fixed assets are translated at the rates on the date of purchase/acquisition of assets and Inventories are translated at the rates that existed when costs were incurred.

(ii) All foreign currency monetary items outstanding at the year end are translated at the year-end exchange rates. Income and expenses are translated at average rates of exchange and depreciation is translated at the rates referred to in (a) (i) above for fixed assets.

The resulting exchange gains and losses are recognised in the profit and loss account.

b) Jointly Controlled Operations (Non Integral):

Assets and liabilities, both monetary and non monetary are translated at the year end exchange rates, income and expense items are translated at the average rate of exchange and all resulting exchange differences are accumulated in a foreign currency translation reserve.

c) Other foreign currency transactions:

(i) Foreign currency transactions during the year are recorded at the rates of exchange prevailing at the date of transaction. Exchange gains or losses realised and arising due to translation of the foreign currency monetary items outstanding at the year end are accounted in the profit and loss account.



(ii) Forward Exchange Contracts:

In case of transactions covered by forward exchange contracts, which are not intended for trading or speculation purposes, premium or discounts are amortised as expense or income over the life of the contract.

Exchange differences on such contracts are recognised in the profit and loss account in the year in which the exchange rate changes.

Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as income or as expense for the year.

d) On consolidation, the assets, liabilities and capital reserve arising on the acquisition, of the Group’s overseas operations are translated at exchange rate prevailing on the balance sheet date. Income and expenditure items are translated at the average exchange rates for the year. Exchange difference arising are recognised in the foreign currency translation reserve classified under Reserve and Surplus.

8 Excise duty payable is accounted on production of finished goods.

9 Employee Benefits:

(i) Defined Contribution Plans:

The Group’s contributions to the Provident Fund and the Superannuation Fund are charged to the profit and loss account.

(ii) Defined Benefit Plan / Long Term Compensated Absences:

The Group’s liability towards gratuity and compensated absences is determined on the basis of year end actuarial valuation done by an independent actuary. The actuarial gains or losses determined by the actuary are recognised in the profit and loss account as income or expense.

10 Taxation:

Current tax is determined as the amount of tax payable in respect of estimated taxable income for the period.

Deferred tax is calculated at current statutory income tax rate and is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets are recognised on unabsorbed depreciation and carry forward of the losses only to the extent that there are timing differences, the reversal of which will result in sufficient income or there is virtual certainty that sufficient taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date.

Minimum Alternative Tax (MAT) credit asset is recognised only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period. The carrying amount of MAT credit asset is reviewed at each Balance Sheet date.

11 Debts and loans and advances identified as doubtful of recovery are provided for.

12 Contingencies/ Provisions :

Provision is recognised when the Group has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimates of the expenditure required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying economic benefits is remote.

13 Uses of Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which results are known/ materialized.



Schedule 17 - NOTES TO THE ACCOUNTS

1 Scheme of Amalgamation:

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

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

1.3 In consideration for the amalgamation, for every 20 fully paid-up equity shares of Rs. 10 each of RPGCL, 1 fully paid-up equity share aggregating 20,73,068 fully paid-up equity shares of Rs. 10 each of the Company have been issued and allotted on 26th April, 2010, to the shareholders of RPGCL whose names appeared in the Register of Members, as on 19th April, 2010, being the record date.

1.4 All the staff, workmen and employees of RPGCL in service as on 1st March, 2010 have become staff, workmen and employees of the Company without any break in their service.

1.5 In terms of the Scheme, the Company recorded all the assets and liabilities appearing in the books of account of RPGCL and transferred to and vested in the Company at their fair values as on 1st March, 2010. For this purpose the fair value of Fixed Assets is as certified by the independent valuers and for other assets including investments is based on the management’s assessment of its recoverability. The difference of Rs. 8,497.87 lacs between the fair value of net assets of RPGCL transferred to the Company, and the value of equity shares allotted by the Company as per paragraph 1.3 above has been credited to ‘Capital Reserve’.

1.6 The amalgamation has been accounted for under the Purchase method as prescribed in Accounting Standard (AS-14) - “Accounting for Amalgamations”.

2 Share Capital and Equity Share Suspense:

2.1 Share Capital:

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

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

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

c) 10,40,280 redeemable preference shares of Rs.100/- each which were allotted in an earlier year for consideration other than cash for acquisition of Power Transmission business and which were redeemable on 18th March, 2013 (7,25,000 shares), 25th March, 2013 (2,50,000 shares) and 13th May, 2013 (65,280 shares) were prematurely redeemed with mutual consent on 29th May, 2008 at a premium of Rs.43.3687 per share, Rs.43.1740 per share and Rs.41.8107 per share respectively.

The premium paid on redemption of preference shares aggregating to Rs. 449.65 lacs was utilized from the Securities Premium account.

2.2 Equity Share Suspense: 20,73,068 equity shares of Rs. 10/- each referred to in Note 1.3 above, allotted after the Balance Sheet date i.e. on

26th April 2010 for a consideration other than cash to the shareholders of the erstwhile RPG Cables Limited (RPGCL) pursuant to the Scheme of Amalgamation referred to in Note 1 above have been shown as “Equity Share Suspense”.



3 Secured Loans:

3.1 Loans and advances from Banks:

a) Rs. 14,153.79 lacs (previous year Rs. 11,830.17 lacs) secured by first charge by hypothecation of all the present and future current assets of the Company viz. stocks of raw materials, semi finished and finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivables, book debts and all other movables both present and future [excluding those covered under (g),(k) and 3.2 (b) below] wherever situated and is further secured by mortgage of the Company’s certain immovable properties.

b) Rs. 25,104.69 lacs (previous year Rs. 31,145.60 lacs) guaranteed by bank, which in turn is secured by security, stated against (a) above.

c) Rs. Nil (previous year Rs. 1,813.76 lacs ) secured by assignment of certain overseas book debts.

d) Rs. 119.00 lacs (previous year Rs. 166.60 lacs) secured by a first charge by way of hypothecation of specific movable plant and machinery, equipment and other assets acquired by the Company under the Asset Credit Scheme together with machinery spares, tools and accessories and other movables.

e) Rs. 1,907.72 lacs (previous year Rs. 2,902.29 lacs) secured by hypothecation of whole of movables (save and except current assets of the Company including book debts) [excluding those covered under (g),(k) and 3.2 (b) below] and equitable mortgage of the Company’s immovable properties at Butibori, Nagpur and subject to prior charge referred to in (a) above on movable assets.

f) Rs. 1,426.62 lacs (previous year Rs. 2,139.92 lacs) secured by (i) hypothecation of whole movables (save and except current assets of the Company including book debts) at Jabalpur and Gurgaon, subject to prior charge in respect of loans referred in (a) above (ii) hypothecation of whole of movables at Coimbatore and (iii) equitable mortgage of the Company’s immovable properties at Jabalpur and Coimbatore.

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

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

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

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

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

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

3.2 Loans and advances from others:

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

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

c) Rs. 21.60 lacs (previous year Rs .Nil) secured by hypothecation of vehicles.

4 Fixed Assets:

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

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



5 Claims against the Group not acknowledged as debt

Sr. No

Nature of Claims Relating to various years comprise in the period Rs. in lacs

Previous Year Rs.in lacs

1 Sales Tax* (Tax/Penalty/Interest)

1995-2009 1991-2009

679.06935.12

2 The Central Excise Act * (Tax/Penalty/Interest)

1994-2010 1994-2008

1,316.10 866.70

3 Service Tax * (Tax/Penalty/ Interest)

2006-2008 –

24.57 –

4 Entry Tax (Tax/Penalty/Interest)

1995-2005 1995-2005

32.00 31.99

5 Civil Suits 1993-1994 1993-2007

5.00 19.16

Total 2,056.73 1,852.97

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

Future ultimate outflow for above matters and the matters referred to in Note 8 below is uncertain as it depends on the decision by respective Court/Authorities.

Rs. in lacs

Previous Year Rs.in lacs

6 (a) Contingent liabilities in respect of:

(i) Income tax of Summit Securities Limited (formerly known as KEC Infrastructures Limited) Refer Note 8 (d) below

(ii) Taxation Matters Refer Note 8(b) and (c) below.

(iii) Demands of employees/subcontractors Amount not determinable

(b) Bills discounted 16,695.61 2,774.18

7 Estimated amount of contracts remaining to be executed on capital account not provided for (net of capital advances) 410.24 1,313.74

8 (a) Provision for taxation has been computed on the basis that section 43B of the Income Tax Act,1961, is applicable to amounts payable in India.

(b) Contingent liability towards income tax for the Assessment Year 2006-07 and 2007-08 aggregating to Rs.5,579.60 lacs (previous year Rs.3,219.26 lacs for Assessment Year 2006-07) in respect of disallowance of depreciation etc. relating to Power Transmission Business acquired by the Company, for which Department /Company’s appeals are pending.

(c) Contingent liability towards income tax at overseas unit/s in respect of matters pending at Appellate level amounting to Rs.1,104.97 lacs (previous year Rs. 756.59 lacs).

(d) In terms of the Composite Scheme of Arrangement under which the Power Transmission Business was acquired by the Company in an earlier year, the Company has taken over contingent liabilities, interalia, of income tax of KEC Infrastructures Limited (now name changed as Summit Securities Limited). In case, the eventual decision in pending appeals (excluding the matters in respect of which Summit Securities Limited /department is in appeal and Summit Securities Limited expects to succeed based on decision in other assessment years) in respect of certain disputed items is unfavourable to Summit Securities Limited, it is estimated that the contingent liability for taxation in respect of pending appeals could be in the region of Rs.752.78 lacs (previous year Rs. 752.78 lacs) and in turn the obligation for the Company would be of the similar amount.



9 Disclosure under the Accounting Standard - 7 “Construction Contracts”: As Accounting Standard - 7 “Construction Contracts” comes into effect in respect of accounting period commencing

on or after 1st April, 2003; the information given below is only in respect of the construction contracts entered into on or after 1st April, 2003:

Rs. in lacs


(a) (i) Contract Revenue recognised during the year 2,51,358.85 2,26,884.63

(ii) Method used to determine the contract revenue recognised and the stage of completion of contracts in progress Refer note B 1(b) of Schedule 16

(b) Disclosure in respect of contracts in progress as at the year end

(i) Aggregate amount of costs incurred and recognised profits (less recognised losses) 5,05,392.28 3,61,055.33

* (ii) Advances received 7,627.53 20,487.68

* (iii) Retentions receivable 30,560.65 12,381.36

(iv) Gross amount due from customers 11,809.60 12,013.22

- Included under Schedule 8 - Sundry Debtors net of adjustment referred to in Note B (6) of Schedule 16 9,930.33 10,237.47

(v) Gross amount due to customers 7,937.64 11,328.47

- Included in Sundry Creditors under Schedule 11 - Current Liabilities and Provisions net of adjustment of respective debit balances of sundry debtors 493.93 1,279.70

*Net of adjustment referred to in Note B (6) of Schedule 16.

10 Major components of deferred tax assets/liabilities arising on account of timing differences are:

Rs. in lacs


Deferred Tax Liability

Depreciation (A) 7,640.88 5,225.68

Deferred Tax Assets

Preliminary and other expenses – 3.63

Provision for doubtful debts and advances 963.97 1,451.88

Amalgamation Expenses 210.22 132.56

Expenses debited to Profit and Loss Account allowed in subsequent year u/s 43B 411.13 566.15

Unabsorbed depreciation* 1,186.17 –

Others 258.34 89.34

(B) 3,029.83 2,243.56

Deferred Tax Liability (net) (A-B) 4,611.05 2,982.12

* This is recognised in view of confirmed profitable export/domestic orders secured by the Company.



11 Details of Employee Benefits as required by Accounting Standard-15 “Employee Benefits” are as follows:

Rs. in lacs


1 Defined Contribution Plans

The Group has recognized the following amounts in the profit and loss account:

- Contribution to Provident Fund and Family Pension Fund 427.47 399.26

- Contribution to Superannuation FundThe above amount is included in ‘Contribution to provident fund, gratuity and other funds’ under ‘Personnel Expenses’ in Schedule 13.

128.80 116.34

2 Defined Benefit Plan (Funded)

a. A general description of the Employees Benefit Plan: The Group 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 salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service

b. Details of defined benefit plan - As per Actuarial Valuation are as follows:

Particulars Rs.in lacs


I Components of employer expense

1 Current Service cost 126.92 114.42

2 Interest Cost 139.96 139.60

3 Expected return on Plan Assets (134.51) (83.10)

4 Actuarial Losses / (Gains) 128.41 (11.66)

5 Total expense recognised in the profit and loss account (included in ‘Contribution to provident fund, gratuity and other funds’ under ‘Personnel Expenses’ in Schedule 13) 260.78 159.26

II Actual Contribution and Benefits Payments for the year. 1 Actual Benefits Payments (288.91) (278.74) 2 Actual Contributions 524.66 731.15III Net asset/(liability) recognised in the Balance Sheet.

1 Present Value of Defined Benefit Obligation 2,377.45 1,969.232 Fair Value of Plan Assets 1,806.00 1,430.913 Funded Status [Surplus/(Deficit)] (571.45) (538.32)4 Net asset/(liability) recognised in the Balance Sheet (571.45) (538.32)

IV Change in Defined Benefit Obligation during the year.1 Present value of Defined Benefit Obligation as at the beginning of the year

1,969.23 1,994.23

2 Current Service Cost 126.92 114.423 Interest Cost 139.96 139.604 Acquisitions/ Amalgamations 297.01 –5 Actuarial Losses/ (Gains) 133.24 (0.28)6 Benefits paid (288.91) (278.74)7 Present value of Defined Benefit Obligations as at the end of the year 2,377.45 1,969.23



Particulars Rs.in lacs


V Change in Fair Value of Plan Assets during the year 1 Plan Assets as at the beginning of the year 1,430.91 884.022 Acquisition / Amalgamation – –3 Expected return on Plan Assets 134.51 83.104 Actuarial Gains/ (Losses) 4.83 11.385 Actual Contributions 524.66 731.156 Benefits paid (288.91) (278.74)7 Plan Assets as at the end of the year 1,806.00 1,430.91

VI Actuarial Assumptions 1 Discount Rate 7.50 7.002 Expected Return on plan assets 9.40 9.403 Salary escalation Rate 5.00 4.50

VII The expected rate of return on the plan assets is based on the average long term rate of return expected on investments of the Fund during the estimated term of the obligations. The actual return on plan assets is Rs. 139.34 lacs (Previous year Rs.94.48 lacs).

VIII The assumption of the future salary increases, considered in actuarial valuation, takes into account the inflation, seniority, promotion and other relevant factors.

IX The major categories of Plan Assets as a percentage of the total plan assets Insurer Managed Funds

Note: The details of investment made by the Insurer is not readily available with the Group.

100% 100%

X Experience Adjustments 2009-2010 2008-2009 2007-20081 Present value of Defined Benefit Obligation

as at the end of the year 2,377.45 1,969.23 1,994.232 Fair Value of Plan Assets as at the end of the year 1,806.00 1,430.91 884.023 Funded Status [Surplus/(Deficit)] (571.45) (538.32) (1,110.21)4 Experience adjustment on Plan Liabilities (74.71) 0.28 (72.80)5 Experience adjustment on Plan Assets (4.83) (11.38) 0.66

XI Contribution expected to be paid to the Plan during the year ending 31st March 2011 - Rs. 500 lacs

12 The derivative instruments, which are not intended for trading or speculative purpose, outstanding as at March 31, 2010 are as follows.

Forward Exchange Contracts

Currency Buy/ Sell Cross currency Foreign Currency in Lacs

As at 31.3.10 As at 31.3.09

USD Sell INR 45.04 138.00

USD Sell CHF – 2.68

USD Sell EUR 40.33 –

USD Buy INR 293.52 60.00

EUR Buy INR 1.30 –

JPY Buy USD 13,656.12 –



The year end net monetary foreign currency exposures that have not been hedged by a derivative instrument are given below:

Receivables:

As at 31ST March 2010 As at 31st March 2009

Currency FC in Lacs Rs.in lacs FC in Lacs Rs. in Lacs

AED 1,161.16 14,198.34 935.73 12,921.80

AFA 4,758.79 4,410.92 4,034.05 3,963.85

BTS 14.74 9.56 – –

CAF 333.40 30.84 – –

DA 1,837.05 1,152.20 2,656.78 1,833.97

EGP 269.59 2,199.70 – –

ETB 248.49 833.20 393.24 1,795.52

EUR – – 91.44 6,171.61

FCFA 175.12 16.18 – –

GHC 23.63 747.58 4.19 151.26

IRR – – 2,625.20 13.70

KSH 226.75 131.83 406.35 259.33

KWD – – 1.39 241.62

KZT – – 4,081.71 1,372.27

LBP – – 9,499.47 321.08

NAD 10.82 66.30 – –

NGN 9,991.77 2,990.54 7,096.37 2,434.76

OMR 6.27 731.83 – –

PHP – – 0.43 0.46

QR 0.02 0.26 0.03 0.39

SLR 22.84 9.00 97.80 42.84

SR 428.08 5,126.67 – –

SYP 134.06 130.88 330.38 355.72

TND 8.26 264.65 11.09 403.54

TJS 125.20 1,287.45 – –

ZAR 9.16 56.12 10.60 56.41

ZMK 55,757.90 535.28 1,02,850.27 935.94

MZM 594.28 775.83 – –



Payables:*

As at 31ST March 2010 As at 31st March 2009

Currency FC in Lacs Rs.in lacs FC in Lacs Rs. in Lacs

BTS – – 736.46 541.37

CAD 0.82 36.45 0.22 9.05

CHF 18.79 796.74 – –

EGP – – 319.21 2,873.81

EUR 6.56 397.30 – –

FCFA – – 10,356.62 1,067.77

GHC – – – –

JPY 2,278.97 1,095.73 5,236.36 2,700.92

KWD 2.99 465.37 – –

KZT 7,845.41 2,286.79 – –

LBP 3,815.02 114.45 – –

LYD 19.85 700.76 10.99 431.5

NAD – – 22.21 118.15

OMR – – 0.76 100.73

SR – – 34.39 465.22

TJS – – 79.47 1,067.93

USD 440.81 19,796.90 783.41 39,749.90

* The above excludes term loan taken in foreign currency Rs. 8,395.50 lacs (Previous year Rs. 8395.50 lacs) which has been swapped with Rupee currency fixed interest rate loan.

13 Related Party Disclosures

a) Parties with whom transactions have taken place:

Joint Venture :

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

KEC Power India Private Limited

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

b) Transactions with Related Parties


Rs. in lacsJoint Ventures :

(i) Al-Sharif Group and KEC Company Limited. Saudi ArabiaRefund of advance – 1,246.76Sales of Fixed Assets 70.70 312.96Purchase of Fixed Assets 56.13 –

(ii) KEC Power India Private LimitedExpenses recovered 43.02 122.00Services received. 25.75 –

Key Management Personnel :Mr. R.D. Chandak - Managing Director Remuneration 203.01 182.39




c) Balances outstanding as at year end :



Joint Ventures

Al-Sharif Group and KEC Company Ltd., Saudi Arabia 149.13 Dr. 330.59 Cr.

No amounts have been written off/provided for or written back in respect of amounts receivable from or payable to the related parties

14 Disclosure for operating leases under Accounting Standard 19 - “Leases”

Rs. in lacs


Disclosure in respect of the agreements entered into after 1st April, 2001 for taking on leave and license / under operating leases the residential / office premises and warehouses, including furniture and fittings and elevators therein and machinery, as applicable is given below :

1 Lease payments recognised in the Profit and Loss account for the year.[Includes minimum lease payment Rs. 194.91 (previous year Rs. 78.01 lacs)]. 1,411.07 888.84

2 (i) Under some of the agreements, refundable interest free deposits have been given.

(ii) Some of the agreements provide for increase in rent.

(iii) Some of the agreements provide for early termination by either party with a notice period which varies from 15 days to 3 months.

(iv) Some of the agreements contain a provision for its renewal.

3 Future minimum lease payments under the agreements, which are non-cancelable are as follows:

(i) Not later than one year 300.82 35.83

(ii) Later than one year and not later than five years. 196.74 6.46

15 (a) Payment to statutory auditors :

(Including Service tax, where applicable)

Rs. in lacs


As auditors 54.05 54.05 Company law matters – 0.61 In other capacity 63.26 63.56 Reimbursement of out of pocket expenses 1.20 1.67

(b) Miscellaneous expenses include fees Rs.75.52lacs (Previous year Rs. 74.03 lacs) paid to branch / division auditors of the Company and Rs.2.42 lacs (Previous year Rs. 0.60 lacs) paid to statutory auditors of subsidiaries.

16 The amount of interest capitalised during the year Rs.432.26 lacs (Previous year Rs.255.63 lacs) included in Fixed assets/capital work in progress.

17 Basic / diluted earnings per share has been calculated by dividing the profit for the year after taxation of Rs. 18,966.29 lacs (Previous year Rs. 11,680.90 lacs), by 4,95,20,675 (Previous year 4,93,44,606) being the weighted average number of equity shares outstanding during the year. For this purpose, equity shares issued subsequent to the year end as consideration for the amalgamation referred to in Note 1.3 above have been included in the calculation of weighted average number of equity shares.



18 Excise duty shown in Schedule -14 “ Other Expenses” includes Rs. 47.73 lacs (Previous year net of Rs. 53.21 lacs) being excise duty related to the difference between the closing stock and opening stock of the finished goods.

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

20 Provision for doubtful and doubtful advances as at the year end include Rs. 442.59 Lacs and Rs. 20.71 lacs respectively relating to the Sundry Debtors/ Loans and Advances transferred to the Company in terms of the Scheme of Amalgamation referred to in Note 1 above.

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

Signatures to Schedules 1 to 17 which form an integral part of the accounts.


H.V.GOENKAChairman

VARDHAN DHARKARChief Financial Officer



CH.V.JAGANNADHA RAOCompany Secretary

A.T.VASWANIDirector

Disclosure in respect of Subsidiary Companies of the Company for the year ended 31st March 2010

RPG Transmission Nigeria Limited KEC Global FZ LLC

Rs. in Lacs

Previous Year

Rs. in lacs Rs. in Lacs

Previous YearRs. in lacs

(a) Capital (Including share application money) 34.52 34.52 118.65 118.65

(b) Reserves/ (debit balance in profit and loss account) (3.42) 1.26 1,737.58 19.44

(c) Total Asstes (Net of Current Liabilities & Provisions) 31.10 35.78 1,856.23 138.09

(d) Total Liabilities(Excluding Current Liabilities & Provisions) 31.10 35.78 1,856.23 138.09

(e) Investments – – – –

(f) Turnover – 17.02 10,299.33 –

(g) Profit before taxation (0.16) (0.34) 1,904.44 –

(h) Provision for taxation – – 58.34 –

(i) Profit after taxation (0.16) (0.34) 1,846.10 –

(j) Proposed Dividend – – – –

Exchange rate as at year end (Naira/ Dhs) 0.299 0.343 12.228 13.809


Previous Year Notes Rs.in lacs Rs.in lacs Rs.in lacs Rs.in lacs

A] CASH FLOW FROM OPERATING ACTIVITIES : PROFIT BEFORE TAXATION 29,335.91 17,864.57 Adjusted for : Depreciation/Amortisation (Net) 2,702.45 2,299.89 Unrealised foreign exchange (gain)/ loss (net) (4,310.70) 3,773.88 Loss on sale / write off of fixed assets (net) 67.52 30.83 Interest expenses 9,446.65 10,167.28 Interest income (799.94) 7,105.98 (169.82) 16,102.06

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 36,441.89 33,966.63 Changes in : 1 Trade and other receivables 3 (3,669.92) * (38,761.25) Inventories 4,146.31 (2,044.86) Trade and other payables 3 (25,669.89) (25,193.50) * 50,906.57 10,100.46

CASH GENERATED FROM OPERATIONS 11,248.39 44,067.09 Direct Taxes Paid (net of refund of taxes) (7,782.14) (6,244.81) Fringe Benefit Tax paid – (7,782.14) (150.41) (6,395.22)

NET CASH FROM OPERATING ACTIVITIES (A) 3,466.25 37,671.87 B] CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets(after adjustment of increase/decrease in capital work-in-progress and advances for capital expenditure) (6,181.82) (14,319.52) Sale of fixed assets 297.33 371.58 Interest received 799.44 141.68

NET CASH USED IN INVESTING ACTIVITIES (B) (5,085.05) (13,806.26)

C] CASH FLOW FROM FINANCING ACTIVITIES Redemption of preference shares – (1,489.93) Proceeds from long term borrowings 32,379.28 20,282.18 Repayment of long term borrowings (26,641.41) (22,617.32) Proceeds from /(Repayment of) short term borrowings (net) (227.98) 283.96 Interest paid [Including interest capitalised Rs. 432.26 lacs (previous year Rs. 255.63 lacs)]

(9,440.26) (10,464.25)

Dividend payment (including tax on distributed profit) (2,852.43) (2,868.89)

NET CASH USED IN FINANCING ACTIVITIES (C) (6,782.80) (16,874.25)

NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) (8,401.60) 6,991.36

CASH AND CASH EQUIVALENTS AS AT THE COMMENCEMENT OF THE YEAR 14,099.00 6,899.17 Add: Cash and bank balances of Jointly Controlled Operations – * 208.47 Add : Cash and bank balance acquired under the Scheme 1,295.66 – CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR 6,993.06 14,099.00

NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS (8,401.60) 6,991.36

NOTES :1] The working capital changes for the year have been determined after considering the liabilities taken over and the fair values of assets acquired under the Scheme of

Amalgamation referred to in Note 1 of Schedule 17 to the Accounts. The purchase consideration which has been discharged by way of equity shares is as stated in that Note.2] * The working capital changes for the previous year have been determined after considering assets (including cash and bank balances) and liabilities of the Jointly Controlled

Operations as at 30th September, 2008, the control of which was transferred to the Company.3] Changes in Trade and other receivables and trade and other payables have been arrived at after considering the adjustment referred to in Note B (6) of Schedule 16 to the

Accounts.

CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 31ST MARCH 2010

4] As at As at31.3.2010 31.3.2009Rs. in lacs Rs. in lacs

CASH AND CASH EQUIVALENTS :Cash & Bank Balances 6,978.72 14,105.25 [Include fixed deposits Rs. 279.90 lacs (previous year Rs. 139.18 lacs) on which banks are having lien]Effect of exchange rate changes 14.34 (6.25)

6993.06 14099.00 5] Previous year’s figures have been regrouped to conform with those of the current year.

In terms of our report attachedFor DELOITTE HASKINS & SELLSChartered Accountants

U.M.NEOGIPartner


For and on behalf of the Board H.V.GOENKA Chairman




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