Notes to Accounts of KNR Constructions Ltd.

Mar 31, 2025

2.17 Provisions

Provisions are recognised only when:

a) An entity has a present obligation (legal or
constructive) as a result of a past event

b) It is probable that an outflow of resources embodying
economic benefits will be required to settle the
obligation; and

c) A reliable estimate can be made of the amount of the
obligation.

Reimbursement expected in respect of expenditure
required to settle a provision is recognised only
when it is virtually certain that the reimbursement
will be received.

Provisions are measured at the present value of
management''s best estimate of the expenditure
required to settle the present obligation at the end
of the reporting period. The discount rate used to
determine the present value is a pre-tax rate that
reflects current market assessments of the time
value of money and the risks specific to the liability.
The increase in the provision due to the passage of
time is recognised as interest expense.

2.18 Contingent liability, Contingent Assets and

Commitments

i) Contingent liability is disclosed in case of

a) A present obligation arising from past events,
when it is not probable that an outflow
of resources will be required to settle the
obligation

b) A present obligation arising from past events,
when no reliable estimate is possible.

ii) Contingent assets are disclosed where an inflow of
economic benefits is probable.

iii) Commitments are future liabilities for contractual
expenditure. Commitments are classified and
disclosed as follows:

a) Estimated amount of contracts remaining to be
executed on capital account and not provided
for

b) Other non-cancellable commitments, if any,
to the extent they are considered material and
relevant in the opinion of management.

c) Other commitments related to sales/
procurements made in the normal course of
business are not disclosed to avoid excessive
details.

Contingent liabilities, Contingent assets and
Commitments are reviewed at each Balance Sheet
date.

2.19 Revenue recognition

Accounting for Construction contracts

The Company constructs infrastructure projects on behalf
of clients. Delivering the project as per the contractual
terms is the only performance obligation that has been
identified. Under the terms of the contracts, the company
will perform its obligations on time to time as per the timing
schedule indicated in the contract with the asset having no
alternative use to the entity and the company having an
enforceable right to receive payment for the work done.
Hence, Revenue is therefore recognized over time on a cost
to cost method, i.e. based on the proportion of contract
costs incurred for the work performed to date relative to
the estimated total contract costs. The management
considers that this input method is an appropriate measure
of the progress towards complete satisfaction of these
performance obligations under Ind AS 115.

Provisions for estimated losses, if any, on uncompleted
contracts are recorded in the period in which such
losses become probable based on the expected contract
estimates at the reporting date.

As per the contract, when there is a right to consideration
in exchange for goods or services that have been
transferred to a customer when that right is conditioned
on something other than the passage of time, a contract
asset is recognised to the extent of the consideration due.

Similarly, when there is an obligation to transfer goods or
services to a customer for which the entity has received
consideration from the customer, a contract liability is
recognised to the extent of the obligation.

Accounting for Claims

Claims are accounted as income in the period of receipt
of arbitration award and acceptance by client. Interest
awarded, being in the nature of additional compensation
under the terms of the contract, is accounted as other
Income on receipt of arbitration award and acceptance
by client.

Other Income

Interest income: Finance income is accrued on a time
proportion basis, by reference to the principal outstanding
and the applicable Effective interest rate (EIR). Other
income is accounted for on accrual basis. Where the
receipt of income is uncertain, it is accounted for on
receipt basis.

Dividend income: Dividends are recognised in profit or
loss only when the right to receive payment is established,
it is probable that the economic benefits associated with
the dividend will flow to the company, and the amount of
the dividend can be measured reliably.

Other Items of Income: Other items of income are
accounted as and when the right to receive arises and
it is probable that the economic benefits will flow to the
company and the amount of income can be measured
reliably.

2.20 Employee benefits

a) Short term employee benefits:

All employee benefits falling due wholly within

twelve months of rendering the service are classified
as short-term employee benefits. The benefits like
salaries, wages, and short term compensated

absences etc. Expenses on non-accumulating
compensated absences are recognised in the period
in which the absences occur.

b) Post-employment benefits:

i. Defined contribution plans: The state

governed provident fund scheme, employee
state insurance scheme and employee pension
scheme are defined contribution plans. The
contribution paid/payable under the schemes
is recognised during the period in which the
employee renders the related service.

ii. Defined benefit plans: The employees’ group
gratuity fund schemes are managed by Life
Insurance Corporation of India (L.I.C), and
post-retirement provident fund scheme are the
Company’s defined benefit plans. The present
value of the obligation under such defined
benefit plans is determined based on actuarial
valuation using the Projected Unit Credit
Method.

The obligation is measured at the present value
of the estimated future cash flows. The discount
rate used for determining the present value
of the obligation under defined benefit plans,
is based on the market yield on government
securities of a maturity period equivalent to the
weighted average maturity profile of the related
obligations at the Balance Sheet date.

Re measurement, comprising actuarial gains and
losses, the return on plan assets (excluding net
interest) and any change in the effect of asset
ceiling (wherever applicable) are recognised in other
comprehensive income and is reflected immediately
in retained earnings and is not reclassified to profit
and loss.

The net interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets.
This cost is included in employee benefit expense in
the statement of profit and loss.

I n case of funded plans, the fair value of the plan
assets is reduced from the gross obligation under
the defined benefit plans to recognize the obligation
on a net basis.

Gains or losses on the curtailment or settlement of
any defined benefit plan are recognised when the
curtailment or settlement occurs. Past service cost
is recognised as expense at the earlier of the plan
amendment or curtailment and when the Company
recognizes related restructuring costs or termination
benefits.

2.21 Taxes on Income

I ncome tax comprises of current and deferred tax. It is

recognized in profit or loss except to the extent that it

relates to an item recognized directly in equity or in other

comprehensive income.

i. Current tax

Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable
in respect of previous years. The amount of current
tax reflects the best estimate of the tax amount
expected to be paid or received after considering
the uncertainty, if any, related to income taxes. It is
measured using tax rates (and tax laws) enacted or
substantively enacted by the reporting date.

Current tax assets and current tax liabilities are
offset only if there is a legally enforceable right to
set off the recognised amounts, and it is intended to
realise the asset and settle the liability on a net basis
or simultaneously.

ii. Deferred tax

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the financial statements and the corresponding
tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised
for all taxable temporary differences. Deferred tax
assets are generally recognised for all deductible
temporary differences to the extent that it is
probable that taxable profits will be available against
which those deductible temporary differences can
be utilized. Such deferred tax assets and liabilities
are not recognised if the temporary differences arise
from the initial recognition (other than in a business
combination) of assets and liabilities in a transaction
that affects neither the taxable profit nor the
accounting profit. In addition, deferred tax liabilities
are not recognised if the temporary difference arises
from the initial recognition of goodwill.

The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow
all or part of the asset to be recovered. Deferred tax
assets and liabilities are measured at the tax rates
that are expected to apply in the period in which
the liability is settled or the asset realised, based on
tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting
period.

2.22 Foreign currencies

a) The Functional Currency of the Company is Indian
Rupees (INR), and these financial statements are
presented in Indian rupees (Lakhs).

b) Foreign Currency transactions are recorded on
initial recognition in the reporting currency, using the
exchange rate on the date of the transaction.

c) At each Balance Sheet date, foreign currency
monetary items are reported using the closing rate
or at amount likely to be realized from or required
to disburse. Exchange differences that arise on
settlement of Long Term monetary items or on
reporting of Long Term Monetary items at each
Balance sheet date, at the closing rate are charged
to Statement of Profit and loss.

2.23 Cash Flow Statement

The Cash flow statement is prepared in accordance with
Ind AS 7 by using indirect method by segregating as cash
flows from operating, investing and financing activities.
Under the Cash flow from operating activities, the net
profit is adjusted for the effects of Non-cash items,
Changes in working capital and other items for which the
cash effects are investing or financing cash flows.

Cash and cash equivalents (including bank balances) are
reflected as such in the Cash Flow Statement.

Cash comprises cash on hand. Cash equivalents are
balances with banks including cheques on hand and
short-term balances (with an original maturity of three
months or less from the date of acquisition).

2.24 Dividend to equity shareholders

Dividend to equity shareholders is recognised as a liability
and deducted from shareholders equity, in period in which
the dividends are approved by the equity shareholders in
general meeting.

2.25 Earnings per share

a) Basic Earnings per share

Basic earnings per share are calculated by dividing:

• the profit attributable to owners of the company

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

b) Diluted earnings per share

Diluted earnings per share adjust the figures used

in the determination of basic earnings per share to

take into account:

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

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

2.26 Borrowing Costs

Borrowing costs include interest expense calculated
using the effective interest method. Borrowing costs
that are attributable to the acquisition, construction or
production of a qualifying asset are capitalized as part
of cost of such asset till such time the asset is ready for
its intended use or sale. A qualifying asset is an asset
that necessarily requires a substantial period of time to
get ready for its intended use or sale. All other borrowing
costs are recognised in profit or loss in the period in which
they are incurred.

2.27 Exceptional Items

Exceptional Items represents the nature of transactions
which are not in recurring nature during the ordinary
course of business but lead to increase / decrease in
profit / loss for the year.

2.28 Key accounting estimates and judgements

The preparation of these financial statements in
conformity with Ind AS requires the management to make
estimates and assumptions considered in the reported
amounts of assets, liabilities (including contingent
liabilities), income and expenses. The Management
believes that the estimates used in preparation of the
financial statements are prudent and reasonable. Actual
results could differ due to these estimates and the
differences between the actual results and the estimates
are recognized in the periods in which the results are
known / materialize. Estimates include the property
plant and equipment, inventory; future obligations in
respect of retirement benefit plans, provisions, fair value
measurement and taxes etc.

a) Revenue Recognition

The Company follows the percentage completion
method, based on the proportion that contract cost
incurred as on reporting date to the total estimated
contract cost including escalations/variations, this
method is followed when reasonably dependable
estimates of costs applicable to various elements
of the contract can be made. Key factors that
are reviewed in estimating the future costs to
complete include estimates of future labor costs
and productivity efficiencies. Because the financial
reporting of these contracts depends on estimates

that are assessed continually during the term of
these contracts, recognized revenue and profit are
subject to revisions as the contract progresses to
completion. When estimates indicate that a loss will
be incurred, the loss is provided for in the period in
which the loss becomes probable.

b) Property, plant and equipment

The company reviews the estimated useful lives of
property plant and equipment at the end of each
reporting period. During the current year, there has
been no change in life considered for the assets.

c) Fair value measurement of financial instruments

When the fair values of financials assets and
financial liabilities recorded in the Balance Sheet
cannot be measured based on quoted prices in
active markets, their fair value is measured using
valuation techniques, including the discounted cash
flow model, which involve various judgements and
assumptions.

d) Leases

The Company evaluates if an arrangement qualifies
to be a lease as per the requirements of Ind AS
116. Identification of a lease requires significant
judgment. The Company uses significant judgement
in assessing the lease term including anticipated
renewals and the applicable discount rate.

The Company determines the lease term as the
non-cancellable period of a lease, together with both
periods covered by an option to extend the lease
if the Company is reasonably certain to exercise
that option; and periods covered by an option to
terminate the lease if the Company is reasonably
certain not to exercise that option.

I n assessing whether the Company is reasonably
certain to exercise an option to extend a lease,
or not to exercise an option to terminate a lease,
it considers all relevant facts and circumstances
that create an economic incentive for the Company
to exercise the option to extend the lease, or not
to exercise the option to terminate the lease. The
Company revises the lease term if there is a change
in the non-cancellable period of a lease. The discount
rate is generally based on the incremental borrowing
rate.

e) Provision for employee benefits

The Company uses actuarial assumptions to
determine the obligations for employee benefits at
each reporting period. These assumptions include
the discount rate, expected long-term rate of return
on plan assets, rate of increase in compensation
levels and mortality rates.

f) Income Taxes

Significant judgments are required in determining
the provision for income taxes, including the amount
expected to be paid/ recovered for uncertain tax
positions.

g) Estimation of net realisable value of inventories

In estimating the net realisable value of Inventories
the Company makes an estimate of future selling
prices and costs necessary to make the sale.

h) Impairment of trade receivables and advances

Significant estimates are required in ascertaining
the provision to be made for impairment of trade
receivables and advances.

35 | CAPITAL MANAGEMENT_

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to
the equity shareholders of the Company, the Company’s policy is to maintain a strong capital base so as to safeguard its ability to
continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and for
the future development of the Company. In order to maintain or achieve an optimal capital structure, the Company may adjust the
amount of dividend payment, return on capital to shareholders or issue of new shares.

The management assessed the financial assets and liabilities measured at amortised cost are approximate to the fair values
since the Company does not anticipate that the carrying amounts would be significantly different from the values that would
eventually be received or settled.

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

a) credit risk

b) liquidity risk

c) market risk

The Company’s focus is to estimate a vulnerability of financial risk and to address the issue to minimise the potential adverse
effects of its financial performance.

a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Company’s receivables from customers; loans and investments
in debt securities.

36 | FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (CONTD.)_

The carrying amounts of financial assets represent the maximum credit risk exposure.

Credit risk on trade receivables is limited as the customers of the Company mainly consists of the Government promoted
entities having a strong credit worthiness. Accordingly, the Compnies customer credit risk is low. The Company’s average
project execution cycle is around 24 to 36 months. General payment terms are with a credit period ranging from 45 to 90
days and retention money to be released at the end of the project. however, in some cases retention money can released
by substituting with bank guarantees. The Company has a detailed review mechanism for review of overdue receivables at
various levels to ensure realisation of the such receivables.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company
uses activity-based costing to cost its products and services, which assists it in monitoring cash flow requirements and
optimising its cash return on investments.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross
and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.

c) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices will
affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimising the return.

i) Foreign currency risk

Foreign Currency risk is the risk that fair value or future cash flow of a financial instrument will fluctuate because of
changes in foreign exchange rate.

The Company is not exposed to foreign currency risk as it has no borrowing or no material payables in foreign currency

ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. Since the Company has insignificant variable interest bearing borrowings, the
exposure to risk of changes in market interest rates is minimal.

iii) Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market prices (other than those arising from interest rate risk or currency risk).

The Company is exposed to price risk due to investments in mutual funds and classified as fair value through profit
and loss.

The Company measures risk through sensitivity analysis.

The Company’s risk management policy is to mitigate the risk by investments in diversified mutual funds.

The Company does not have any closing investments in mutual funds as on March 31,2025 and March 31,2024

40 | DISCLOSURE PURSUANT TO IND AS 19 “EMPLOYEE BENEFITS"_

In accordance with the Payment of Gratuity Act, 1972 the Company provides for gratuity covering eligible employees. The liability
on account of gratuity is covered partially through recognised Gratuity Funds managed by Life Insurance Corporation of India (LIC)
and the balance is provided as liability on the basis of valuation by an independent actuary as at the year end. The management
understands that LIC overall portfolio of assets is well diversified and as such, the long term return on the policy is expected to be
higher than the rate of return on Central Government bonds.

A Defined benefit plans:

i. Liability for gratuity as on March 31,2025 is '' 1,313.08 Lakhs (March 31,2024: '' 1,169.49 Lakhs) of which '' 477.07 Lakhs
(March 31,2024: '' 315.06 Lakhs) is funded with the Life Insurance Corporation of India. The balance of '' 836.01 Lakhs
(March 31,2024: '' 854.43 Lakhs) is included in Provision for Gratuity.

ii. Details of the Company’s post-retirement gratuity plans for its employees including whole-time directors are given below,
which is certified by the actuary.

42 | DISCLOSURE PURSUANT TO IND AS 115 “REVENUE FROM CONTRACTS WITH CUSTOMERS":_

The Company constructs infrastructure projects on behalf of clients. Delivering the project as per the contractual terms is the only
performance obligation that has been identified. Under the terms of the contracts, the Company will perform its obligations on time
to time as per the timing schedule indicated in the contract with the asset having no alternative use to the entity and the Company
having an enforceable right to receive payment for the work done. Hence, Revenue is therefore recognised over time on a cost to cost
method, i.e. based on the proportion of contract costs incurred for the work performed to date relative to the estimated total contract
costs. The management consider that this input method is an appropriate measure of the progress towards complete satisfaction of
these performance obligations under Ind AS 115.

47 | SEGMENT INFORMATION_

The Company’s operations predominantly consist of "Construction and Engineering activities". Hence there are no reportable
segments. During the year under report, substantial part of the Company’s business has been carried out in India. The conditions
prevailing in India being uniform, no separate geographical disclosures are considered necessary and the segment report is
reviewed by Chief Operating Decision Maker, accordingly the Company has considered the business as a whole as a single
Operating Segment in accordance with Ind AS 108.

48 | With respect to the search operation conducted by the Income Tax Department under Section 132 of the Income-tax Act, 1961

in March 2022, we further disclose that the Assessing Officer has initiated the proceedings for re assessment of income, as is
relevant for each of the financial years from 2016-17 to 2021-22 under the applicable provisions of the Income tax Act, 1961.
The re assessment proceedings has been completed by the Assessing Officer during the financial year 2023-24 for the aforesaid
years and based on Assessment Orders, the Company made an additional provision of '' 845.34 Lakhs towards Income tax
and '' 423.78 Lakhs towards interest on Income Tax for the above said years due to corporate additions/adjustments, which
has been duly reflected in the Standalone Profit and Loss under the head "tax relating to earlier years" and "finance cost"
respectively for the year ended March 31,2024.

49 | During the year ended March 31,2025, the Company has received an Arbitration Claim from one of its Associate for an amount

of '' 3,557.12 Lakhs included in Revenue from Operations and '' 10,354.37 Lakhs towards interest on such claim included in the
other income and also expenses related to such claims of '' 129.47 Lakhs included in Other expenses and the resultant tax of
'' 3,468.66 Lakhs included in current tax.

50 | During the year ended March 31,2025, the Company received an Arbitration Claim for an amount of '' 2,775.80 Lakhs included

in Revenue from Operations and '' 4,307.24 Lakhs towards interest on such claim included in the other income and also
expenses related to such claims of '' 93.67 Lakhs included in Other expenses and the resultant tax of '' 1,759.08 Lakhs included
in current tax.

H During year ended March 31,2025, pursuant to the Settlement Agreement dated September 03, 2024 signed by KNR Muzaffarpur
Barauni Tollway Private Limited, one of its subsidiary Company with NHAI-

a) the Company received an amount of '' 14,194.75 Lakhs towards interest on unsecured loan included in the other income
and the resultant tax of '' 3,572.53 Lakhs included in current tax.

b) the Company made a provision towards impairment of equity of '' 5,450.00 Lakhs, towards doubtful advances of
'' 3,279.76 Lakhs and towards doubtful trade receivables of '' 1,014.42 Lakhs, which were included in Other expenses of
the statement of standalone profit and loss for the year ended March 31,2024. The said provision has been reversed and
accounted during the year ended March 31,2025 which is included in Other Income.

52 | During year ended March 31,2025, One of the Associate Company bought back its 32,71,161 shares of '' 10/- each held by the

Company for a consideration of '' 892.38 Lakhs accordingly the resultant profit on such buyback of '' 565.26 Lakhs included in
the exceptional items in the statement of Standalone profit and loss.

53 | During year ended March 31,2025, the Company made a provision of '' 1,405.28 Lakhs and written off '' 661.19 Lakhs aggregating
to '' 2,066.47 Lakhs towards receivables from CUBE Highways and Infrastructure III Pte. Ltd included in the exceptional items in
the statement of Standalone profit and loss due to non fulfilment of some of the conditions of the Share Purchase Agreements
executed between the Company, CUBE Highways and Infrastructure III Pte. Ltd and respective SPV’s i.e. KNR Tirumala Infra Pvt
Ltd, KNR Shankarampet Projects Pvt Ltd and KNR Srirangam Infra Pvt Ltd.

54 | During year ended March 31,2025, the Company received following Arbitration Claim/dividend, which has been included in the

statement of Standalone profit and loss:-

a) From one of Company’s JOs, the Company received claim for an amount of '' 6,088.12 Lakhs which is included in Revenue
from Operations and also expenses related to such claims of '' 441.29 Lakhs included in Other expenses and the resultant
tax of '' 1,421.31 Lakhs included in current tax.

b) Received an amount of '' 1,448.92 Lakhs as Dividend from one of its Associate Company, which is included in Other
Income and the resultant tax of '' 364.69 Lakhs included in current tax.

~| The trade receivables, retention amounts and unbilled amounts includes an amount of '' 1,28,661.28 Lakhs for the year ended
March 31,2025 ('' 77,396.55 Lakhs for March 31,2024) relating to Kaleswaram Package 3 and Kaleswaram Package 4 Irrigation
Projects in Telangana. collections in these projects have been stalled since March 2024 and March 23 respectively. Despite
no collections, the Company is executing the projects to comply with the project execution terms and to demonstrate that the
Company was not at fault in execution of the projects. Management based on internal assessments and discussions with
Authority is confident of recovering it’s present and future dues.

56 | During the year ended March 31, 2025, the Company entered into a Share Purchase Agreement dated October 29, 2024 for
transfer of its entire shareholding in one of its stepdown subsidiary i.e. KNR Muzaffarpur Barauni Tollway Pvt Ltd., for an equity
valuation of '' 45.90 Lakhs.

57 | During the year ended March 31, 2024, the Company received following Arbitration Claims, which has been included in the

statement of Standalone profit and loss:-

a) I n one of the erstwhile Subsidiary Company i.e KNR Walayar Tollways Private Limited (now Walayar Vedakkanchery
Expressway Private Limited) received claims and passed on to the Company as per Share Purchase Agreement & Claim
Management Agreement for an amount of '' 6,106.86 Lakhs and '' 9,491.00 Lakhs, which was recognised as Contract
Receipt included in Revenue from Operations and Interest Income included in other income respectively. Further also
expenses related to such claims of '' 841.63 Lakhs included in Other expenses and the resultant tax of '' 3,713.85 Lakhs
was included in current tax.

b) In one of the Associate Company i.e Patel KNR Infrastructures Ltd., received claims and passed on to the Company for
an amount of '' 830.87 Lakhs, which was set off against existing unbilled revenue of '' 2,095.53 Lakhs and the balance
unbilled revenue has been written off to the tune of '' 1,264.66 Lakhs included in other expenses and also received
'' 1,459.06 Lakhs towards Interest included in other income and the resultant tax of '' 48.93 Lakhs was included in current
tax.

c) In two of Company’s JOs i.e. Patel KNR JV & KNR Patel JV, the Company received claims from the JOs for an amount of

'' 7,411.77 Lakhs included in Revenue from Operations and also expenses related to such claims of '' 588.61 Lakhs

included in Other expenses and the resultant tax of '' 1,717.39 Lakhs included in current tax.

58 | There have been no events after the reporting date that require disclosure in the financial statements.

59 | Contribution to political parties during the 2024-25 is '' Nil (for 2023-24 is '' 1,000.00 Lakhs)

60 | The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company

for holding any Benami property.

61 | The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period

62 | The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

63 | The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the

understanding (whether recorded in writing or otherwise) that the Company shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

64 | The Company has not been declared willful defaulter by any bank or financial institution or government or any government

authority.

65 | The Company has no Loans or Advances in the nature of Loans to specified persons that are Repayable on Demand or without

specifying any terms or period of repayment.

70 | APPROVAL OF FINANCIAL STATEMENTS_

The financial statements were approved for issue by the Board of Directors on May 29, 2025.

71 | Previous year’s figures have been regrouped/reclassified/rearranged wherever considered necessary.

See accompanying notes forming part of the financial statements
As per our report of even date attached

For K. P Rao & Co., For and on behalf of the Board

Chartered Accountants
(Firm Regn. No.003135S)

Mohan R Lavi K.Narsimha Reddy K. Jalandhar Reddy

Partner Managing Director Executive Director & CFO

Membership No: 029340 DIN: 00382412 DIN: 00434911

UDIN: 25029340BMKTLC3521

Place : Hyderabad V.Haritha

Date : May 29, 2025 Company Secretary

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Mar 31, 2024

2.17 Provisions

Provisions are recognised only when:

a) An entity has a present obligation (legal or constructive) as a result of a past event

b) It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

c) A reliable estimate can be made of the amount of the obligation.

Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received.

Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

2.18 Contingent liability, Contingent Assets and Commitments

i) Contingent liability is disclosed in case of

a) A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation

b) A present obligation arising from past events, when no reliable estimate is possible.

ii) Contingent assets are disclosed where an inflow of economic benefits is probable.

iii) Commitments are future liabilities for contractual expenditure. Commitments are classified and disclosed as follows:

a) Estimated amount of contracts remaining to be executed on capital account and not provided for

b) Other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management.

c) Other commitments related to sales/ procurements made in the normal course of business are not disclosed to avoid excessive details.

Contingent liabilities, Contingent assets and Commitments are reviewed at each Balance Sheet date.

2.19 Revenue recognition

Accounting for Construction contracts

The Company constructs infrastructure projects on behalf of clients. Delivering the project as per the contractual terms is the only performance obligation that has been identified. Under the terms of the contracts, the Company will perform its obligations on time to time as per the timing schedule indicated in the contract with the asset having no alternative use to the entity and the Company having an enforceable right to receive payment for the work done. Hence, Revenue is therefore recognized over time on a cost to cost method, i.e. based on the proportion of contract costs incurred for the work performed to date relative to the estimated total contract costs. The management considers that this input method is an appropriate measure of the progress towards complete satisfaction of these performance obligations under Ind AS 115.

Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting date.

As per the contract, when there is a right to consideration in exchange for goods or services that have been transferred to a customer when that right is conditioned on something other than the passage of time, a contract asset is recognised to the extent of the consideration due.

Similarly, when there is an obligation to transfer goods or services to a customer for which the entity has received consideration from the customer, a contract liability is recognised to the extent of the obligation.

Accounting for Claims

Claims are accounted as income in the period of receipt of arbitration award and acceptance by client. Interest awarded, being in the nature of additional compensation under the terms of the contract, is accounted as other Income on receipt of arbitration award and acceptance by client.

Other Income

Interest income: Finance income is accrued on a time proportion basis, by reference to the principal outstanding and the applicable Effective interest rate (EIR). Other

income is accounted for on accrual basis. Where the receipt of income is uncertain, it is accounted for on receipt basis.

Dividend income: Dividends are recognised in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.

Other Items of Income: Other items of income are accounted as and when the right to receive arises and it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.

2.20 Employee benefits

a) Short term employee benefits:

All employee benefits falling due wholly within twelve months of rendering the service are classified as short-term employee benefits. The benefits like salaries, wages, and short term compensated absences etc. Expenses on non-accumulating compensated absences are recognised in the period in which the absences occur.

b) Post-employment benefits:

i. Defined contribution plans: The state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service.

ii. Defined benefit plans: The employees’ group gratuity fund schemes are managed by Life Insurance Corporation of India (L.I.C), and post-retirement provident fund scheme are the Company’s defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method.

The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determining the

present value of the obligation under defined benefit plans, is based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the related obligations at the Balance Sheet date.

Re measurement, comprising actuarial gains and losses, the return on plan assets (excluding net interest) and any change in the effect of asset ceiling (wherever applicable) are recognised in other comprehensive income and is reflected immediately in retained earnings and is not reclassified to profit and loss.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognize the obligation on a net basis.

Gains or losses on the curtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the Company recognizes related restructuring costs or termination benefits.

2.21 Taxes on Income

I ncome tax comprises of current and deferred tax. It is recognized in profit or loss except to the extent that it relates to an item recognized directly in equity or in other comprehensive income.

i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is

measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

ii. Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognised if the temporary differences arise from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

2.22 Foreign currencies

a) The Functional Currency of the Company is Indian Rupees (INR), and these financial statements are presented in Indian rupees (Lakhs).

b) Foreign Currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate on the date of the transaction.

c) At each Balance Sheet date, foreign currency monetary items are reported using the closing rate or at amount likely to be realized from or required to disburse. Exchange differences that arise on settlement of Long Term monetary items or on reporting of Long Term Monetary items at each Balance sheet date, at the closing rate are charged to Statement of Profit and loss.

2.23 Cash Flow Statement

The Cash flow statement is prepared in accordance with Ind AS 7 by using indirect method by segregating as cash flows from operating, investing and financing activities. Under the Cash flow from operating activities, the net profit is adjusted for the effects of Non-cash items, Changes in working capital and other items for which the cash effects are investing or financing cash flows.

Cash and cash equivalents (including bank balances) are reflected as such in the Cash Flow Statement.

Cash comprises cash on hand. Cash equivalents are balances with banks including cheques on hand and short-term balances (with an original maturity of three months or less from the date of acquisition).

2.24 Dividend to equity shareholders

Dividend to equity shareholders is recognised as a liability and deducted from shareholders equity, in period in which the dividends are approved by the equity shareholders in general meeting.

2.25 Earnings per share

a) Basic Earnings per share

Basic earnings per share are calculated by dividing:

• the profit attributable to owners of the Company

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

b) Diluted earnings per share

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

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

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

2.26 Borrowing Costs

Borrowing costs include interest expense calculated using the effective interest method. Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

2.27 Exceptional Items

Exceptional Items represents the nature of transactions which are not in recurring nature during the ordinary course of business but lead to increase / decrease in profit / loss for the year.

2.28 Key accounting estimates and judgements

The preparation of these financial statements in conformity with Ind AS requires the management to make estimates and assumptions considered in the reported amounts of assets, liabilities (including contingent liabilities), income and expenses. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize. Estimates include the property plant and equipment, inventory; future obligations in respect of retirement benefit plans, provisions, fair value measurement and taxes etc.

a) Revenue Recognition

The Company follows the percentage completion method, based on the proportion that contract cost incurred as on reporting date to the total estimated

contract cost including escalations/variations, this method is followed when reasonably dependable estimates of costs applicable to various elements of the contract can be made. Key factors that are reviewed in estimating the future costs to complete include estimates of future labour costs and productivity efficiencies. Because the financial reporting of these contracts depends on estimates that are assessed continually during the term of these contracts, recognized revenue and profit are subject to revisions as the contract progresses to completion. When estimates indicate that a loss will be incurred, the loss is provided for in the period in which the loss becomes probable.

b) Property, plant and equipment

The Company reviews the estimated useful lives of property plant and equipment at the end of each reporting period. During the current year, there has been no change in life considered for the assets.

c) Fair value measurement of financial instruments

When the fair values of financials assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions.

d) Leases

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term including anticipated renewals and the applicable discount rate

The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option.

I n assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease. The discount rate is generally based on the incremental borrowing rate.

e) Provision for employee benefits

The Company uses actuarial assumptions to determine the obligations for employee benefits at each reporting period. These assumptions include the discount rate, expected long-term rate of return on plan assets, rate of increase in compensation levels and mortality rates.

f) Income Taxes

Significant judgments are required in determining the provision for income taxes, including the amount expected to be paid/ recovered for uncertain tax positions.

g) Estimation of net realisable value of inventories

In estimating the net realisable value of Inventories the Company makes an estimate of future selling prices and costs necessary to make the sale.

h) Impairment of trade receivables and advances

Significant estimates are required in ascertaining the provision to be made for impairment of trade receivables and advances.

2.29 Recent accounting pronouncements:

New and amended standards adopted by the Company

The Ministry of Corporate Affairs ("MCA") has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated March 31,2023 to amend the following Ind AS which are effective for annual periods beginning on or after April 01, 2023. The Company has applied these amendments for the first-time in these standalone financial statements.

Amendments to Ind AS 1 - Disclosure of accounting policies: The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ''significant'' accounting policies with a requirement to disclose their ''material'' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The amendments have an impact on the disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the standalone financial statements.

Amendments to Ind AS 12 - Deferred tax related to assets and liabilities arising from a single transaction: The amendments narrow the scope of the initial recognition

exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases. This amendment does not have any material impact on the standalone financial statements.

New Standards (including amendments) issued but not yet effective

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

35. CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company, the Company’s policy is to maintain a strong capital base so as to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and for the future development of the Company. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return on capital to shareholders or issue of new shares.

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

a) credit risk

b) liquidity risk

c) market risk

The Company’s focus is to estimate a vulnerability of financial risk and to address the issue to minimise the potential adverse effects of its financial performance.

a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers; loans and investments in debt securities.

The carrying amounts of financial assets represent the maximum credit risk exposure.

Credit risk on trade receivables, is limited as the customers of the Company mainly consists of the Government promoted entities having a strong credit worthiness.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company uses activity-based costing to cost its products and services, which assists it in monitoring cash flow requirements and optimising its cash return on investments.

c) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

i) Foreign currency risk

Foreign Currency risk is the risk that fair value or future cash flow of a financial instrument will fluctuate because of changes in foreign exchange rate.

The Company is not exposed to foreign currency risk as it has no borrowing or no material payables in foreign currency.

ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has insignificant variable interest bearing borrowings, the exposure to risk of changes in market interest rates is minimal.

iii) Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk).

The Company is exposed to price risk due to investments in mutual funds and classified as fair value through profit and loss.

The Company measures risk through sensitivity analysis.

The Company’s risk management policy is to mitigate the risk by investments in diversified mutual funds.

The Company does not have any closing investments in mutual funds as on March 31,2024 and March 31,2023

42. DISCLOSURE PURSUANT TO IND AS 115 "REVENUE FROM CONTRACTS WITH CUSTOMERS":

The Company constructs infrastructure projects on behalf of clients. Delivering the project as per the contractual terms is the only performance obligation that has been identified. Under the terms of the contracts, the company will perform its obligations on time to time as per the timing schedule indicated in the contract with the asset having no alternative use to the entity and the company having an enforceable right to receive payment for the work done. Hence, Revenue is therefore recognized over time on a cost to cost method, i.e. based on the proportion of contract costs incurred for the work performed to date relative to the estimated total contract costs. The management consider that this input method is an appropriate measure of the progress towards complete satisfaction of these performance obligations under Ind AS 115.

47. SEGMENT INFORMATION

The Company’s operations predominantly consist of "Construction and Engineering activities". Hence there are no reportable segments. During the year under report, substantial part of the Company’s business has been carried out in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary and the segment report is reviewed by Chief Operating Decision Maker, accordingly the Company has considered the business as a whole as a single Operating Segment in accordance with Ind AS 108.

48. ~| With respect to the search operation conducted by the Income Tax Department under Section 132 of the Income-tax Act, 1961

in March 2022, we further disclose that as on the date of issuance of these financial statements , the Assessing Officer has initiated the proceedings for re assessment of income, as is relevant for each of the financial years from 2016-17 to 202122 under the applicable provisions of the Income tax Act, 1961 the re assessment proceedings has been completed by the Assessing Officer for the aforesaid years and based on Assessment Orders, the Company has made an additional provision of '' 845.34 Lakhs towards Income tax and '' 423.78 Lakhs towards interest on Income Tax for the above said years due to corporate additions/adjustments, which has been duly reflected in the Standalone Profit and Loss under the head "tax relating to earlier years" and "finance cost" respectively for the year ended March 31, 2024. The above provision is addition to the provision made in the FY 2022-23 of '' 2,475.26 Lakhs towards Income tax and '' 945.12 Lakhs towards interest on Income Tax for the above said years, which has been duly reflected in the Standalone Profit and Loss under the head "tax relating to earlier years" and "finance cost" respectively for the year ended March 31 2023..

DURING THE YEAR ENDED MARCH 31, 2024, THE COMPANY HAS RECEIVED FOLLOWING ARBITRATION CLAIMS, WHICH . HAS BEEN INCLUDED IN THE STATEMENT OF STANDALONE PROFIT AND LOSS:-

a) I n one of the erstwhile Subsidiary Company i.e KNR Walayar Tollways Private Limited (now Walayar Vedakkanchery Expressway Private Limited) has received claims and passed on to the Company as per Share Purchase Agreement & Claim Management Agreement for an amount of '' 6,106.86 Lakhs and '' 9,491.00 Lakhs, which has been recognised as Contract Receipt included in Revenue from Operations and Interest Income included in other income respectively. Further also expenses related to such claims of '' 841.63 Lakhs included in Other expenses and the resultant tax of '' 3,713.85 Lakhs is included in current tax.

b) In one of the Associate Company i.e Patel KNR Infrastructures Ltd., has received claims and passed on to the Company for an amount of '' 830.87 Lakhs, which was set off against existing unbilled revenue of '' 2,095.53 Lakhs and the balance unbilled revenue has been written off to the tune of '' 1,264.66 Lakhs included in other expenses and also received '' 1,459.06 Lakhs towards Interest included in other income and the resultant tax of '' 48.93 Lakhs is included in current tax.

c) In two of Company’s JOs i.e. Patel KNR JV & KNR Patel JV, the Company has received claims from the JOs for an amount of '' 7,411.77 Lakhs included in Revenue from Operations and also expenses related to such claims of '' 588.61 Lakhs included in Other expenses and the resultant tax of '' 1,717.39 Lakhs included in current tax

50. "| For the quarter and year ended March 31, 2024, the Company has made the provision towards impairment of equity of

'' 5,450.00 Lakhs, towards doubtful advances of '' 3,279.76 Lakhs and towards doubtful trade receivables of '' 1,014.42 Lakhs for one of its Subsidiary Company i.e. KNR Muzaffarpur Barauni Tollways Pvt. Ltd., as the toll collection of the Project is not sufficient to recover the cost of the maintenance and debt obligation, hence management has decided that it is prudent to make such provisions in the books of the account and which is included in Other expenses in the statement of Standalone profit and loss.

51. "| During the year ended March 31, 2023, the Company has divested its balance 51% stake in KNR Tirumala Infra Pvt Ltd and

KNR Shankarampet Projects Pvt Ltd on October 20, 2022 for a value of '' 8,218.54 Lakhs and '' 5,069.53 Lakhs respectively, and 100% stake in KNR Srirangam Infra Pvt Ltd on October 14, 2022 for a value of '' 14,655.20 Lakhs, which includes repayment of 100% sub debt infused by the Company of '' 3,024.41 Lakhs to CUBE Highways and Infrastructure III Pte. Ltd., accordingly profit of '' 13,796.61 Lakhs were shown as exceptional item and tax of '' 2,746.72 Lakhs on above profit under Current tax in the Statement of Standalone Profit and Loss.

52. "| For the year ended March 31,2023, two of Company’s JOs i.e. Patel KNR JV & KNR Patel JV have sold their pending Arbitration

claims through assignment deed, accordingly the Company has recognised share of revenue of '' 2,409.00 Lakhs and '' 52.00 Lakhs respectively and also the resultant tax impact of '' 770.78 Lakhs and '' 19.68 Lakhs respectively in the statement of Standalone profit and loss.

53. "| For the year ended March 31,2023, the Company has received a bonus of '' 725.86 Lakhs from one of the HAM Project i.e. KNR

Tirumala Infra Private Limited for early Completion of the Project, which is included in the statement of Standalone profit and loss.

54. ~| There have been no events after the reporting date that require disclosure in the financial statements.

55. "| Contribution to political parties during the FY 2023-24 is '' 1,000 Lakhs (for FY 2022-23 is '' Nil)

56. "| The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company

for holding any Benami property.

⁵⁷. "| The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period

58. "| The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

59. "| The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the

understanding (whether recorded in writing or otherwise) that the Company shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

66. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved for issue by the Board of Directors on 29th May, 2024.

67~| Previous year’s figures have been regrouped/reclassified/rearranged wherever considered necessary.

As per our report of even date attached For and on behalf of the Board

For K. P Rao & Co.,

Chartered Accountants K. Narsimha Reddy K. Jalandhar Reddy

(Firm Regn. No.003!35S ) Managing Director Executive Director & CFO

DIN: 00382412 DIN: 00434911

Mohan R Lavi

Partner S. Vaikuntanathan V. Haritha

Membership No: 029340 Vice President (F&A) Company Secretary

UDIN: 24029340BKBGBE6305

Place : Hyderabad Date : May 29, 2024

---

Mar 31, 2023

Terms/ Rights attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of '' 2/-. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The Board of Directors has proposed in their meeting held on May 29, 2023 dividend of '' 0.25/- per fully paid equity share of '' 2/-each.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

35. CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company, the Company’s policy is to maintain a strong capital base so as to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and for the future development of the Company. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return on capital to shareholders or issue of new shares.

The management assessed the financial assets and liabilities measured at amortised cost are approximate to the fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

a) credit risk

b) liquidity risk

c) market risk

The Company’s focus is to estimate a vulnerability of financial risk and to address the issue to minimise the potential adverse effects of its financial performance.

a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers; loans and investments in debt securities.

The carrying amounts of financial assets represent the maximum credit risk exposure.

Credit risk on trade receivables, is limited as the customers of the Company mainly consists of the Government promoted entities having a strong credit worthiness.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company

uses activity-based costing to cost its products and services, which assists it in monitoring cash flow requirements and optimising its cash return on investments.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.

c) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

i) Foreign currency risk

Foreign Currency risk is the risk that fair value or future cash flow of a financial instrument will fluctuate because of changes in foreign exchange rate.

The Company is not exposed to foreign currency risk as it has no borrowing or no material payables in foreign currency

ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has insignificant variable interest bearing borrowings, the exposure to risk of changes in market interest rates is minimal.

iii) Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk).

The Company is exposed to price risk due to investments in mutual funds and classified as fair value through profit and loss.

The Company measures risk through sensitivity analysis.

The Company’s risk management policy is to mitigate the risk by investments in diversified mutual funds.

37.	CONTINGENT LIABILITY, COMMITMENTS AND CONTINGENT ASSETS
	('' in Lakhs)
Particulars		As at
		March 31, 2023	March 31, 2022
i)	Contingent Liabilities
a)	Claims against the Company not acknowledged as debt #
	1. Disputed Income tax and Interest on TDS	17,994.95	11,482.50*
	2. Disputed Sales tax/ VAT/ Entry tax/GST	1,312.60	3,032.05
	3. Disputed Service tax	607.05	303.53
	4. Disputed Customs duty	1,509.52	1,509.52
	5. Others (Civil cases)	1,341.69	1,341.69
b)	Guarantees
	Corporate guarantees given to banks and financial institutions for financial assistance extended to Subsidiaries, Associates and Joint Ventures	-
c)	Other money for which the Company is contingently liable
	Joint and several liabilities in respect of joint venture projects and liquidated damages in respect of delays in completion of projects.	Amount not ascertainable	Amount not ascertainable
	Total	22,765.82	17,669.86
* The Company has got benefit of deduction under Section 80 IA (4) on eligible projects under provisions of Income Tax Act, 1961 for an amount of '' 4,422.19 Lakhs, for the A.Y 2006-07 to 2012-13 and A.Y 2014-15 the department has filed appeals against ITAT orders at the High Court of Judicature at Hyderabad for the State of Telangana. The Company considers it appropriate not to create a liability for the above said amount on the basis of assessment made by the management.
ii)	Commitments
a)	Estimated amount of contracts remaining to be executed on capital account and not provided for	215.87	64.75
b)	Other commitments
	Estimated amount of committed funding by way of equity/loans to subsidiary companies	43,651.39	57,815.52
	Total	43,867.26	57,880.27
iii)	Contingent Assets
	Arbitration claims awarded, but client not accepted	51,356.41	49,669.41

40. EMPLOYEE BENEFITS

The disclosure is pursuant to the requirements of Ind AS - 19 Defined Benefit plans:

The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. During the period, the Company has made a contribution to the provident fund for '' 297.08 Lakhs (PY 2021-22 is '' 233.93 Lakhs).

42. DISCLOSURE PURSUANT TO IND AS 115 "REVENUE FROM CONTRACTS WITH CUSTOMERS":

The Company constructs infrastructure projects on behalf of clients. Delivering the project as per the contractual terms is the only performance obligation that has been identified. Under the terms of the contracts, the Company will perform its obligations on time to time as per the timing schedule indicated in the contract with the asset having no alternative use to the entity and the Company having an enforceable right to receive payment for the work done. Hence, Revenue is therefore recognised over time on a cost to cost method, i.e. based on the proportion of contract costs incurred for the work performed to date relative to the estimated total contract costs. The management consider that this input method is an appropriate measure of the progress towards complete satisfaction of these performance obligations under Ind AS 115.

47. SEGMENT INFORMATION

The Company’s operations predominantly consist of "Construction and Engineering activities". Hence there are no reportable segments. During the year under report, substantial part of the Company’s business has been carried out in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary and the segment report is reviewed by Chief Operating Decision Maker, accordingly the Company has considered the business as a whole as a single Operating Segment in accordance with Ind AS 108.

48. ] With respect to the search operation conducted by the Income Tax Department under Section 132 of the Income-tax Act, 1961

in March 2022, we further disclose that as on the date of issuance of these financial results, the Assessing Officer has initiated the proceedings for re assessment of income, as is relevant for each of the financial years from 2016-17 to 2021-22 under the applicable provisions of the Income tax Act, 1961 and further based on the deliberations with the Assessing Officer and as a prudent measure, the Company has made a provision of '' 2,475.26 Lakhs towards Income tax and '' 945.12 Lakhs towards interest on Income Tax for the above said years, which has been duly reflected in the Standalone Profit and Loss under the head "tax relating to earlier years" and "finance cost" respectively for the year ended March 31 2023.

49. ] During the year ended March 31,2023, the Company has divested its balance 51% stake in KNR Tirumala Infra Private Limited

and KNR Shankarampet Projects Private Limited on October 20, 2022 for a value of '' 8,218.54 Lakhs and '' 5,069.53 Lakhs respectively, and 100% stake in KNR Srirangam Infra Private Limited on October 14, 2022 for a value of '' 14,655.20 Lakhs, which includes repayment of 100% sub debt infused by the Company of '' 3,024.41 Lakhs to CUBE Highways and Infrastructure III Pte. LimitedLimited, accordingly profit of '' 13,796.61 Lakhs were shown as exceptional item and tax of '' 2,746.72 Lakhs on above profit under Current tax in the Statement of Standalone Profit and Loss.

50. ] During the year ended March 31,2022 the Company has transferred its 49% stake in two of its 100% wholly owned subsidiaries

i.e. KNR Tirumala Infra Private Limited and KNR Shankarampet Projects PrivatePrivate Limited, to CUBE Highways and Infrastructure III pte.Limited on December 30, 2021 for a value of '' 13,680.97 Lakhs and '' 10,851.23 Lakhs respectively, which includes repayment of 100% sub debt infused by the Company of '' 8,859.50 Lakhs and '' 7,469.50 Lakhs respectively, accordingly profit of '' 2,139.95 Lakhs was shown as exceptional item in the Statement of Standalone Profit and Loss.

51. ] For the year ended March 31,2023, two of Company’s JOs i.e. Patel KNR JV & KNR Patel JV have sold their pending Arbitration

claims through assignment deed, accordingly the Company has recognised share of revenue of '' 2,409.00 Lakhs and '' 52.00 Lakhs respectively and also the resultant tax impact of '' 770.78 Lakhs and '' 19.68 Lakhs respectively in the statement of Standalone profit and loss.

52. ] For the year ended March 31,2023, the Company has received a bonus of '' 725.86 Lakhs from one of the HAM Project i.e. KNR

Tirumala Infra Private Limited for early Completion of the Project, which is included in the statement of Standalone profit and loss.

53. ] During the year ended March 31,2022, the Company has received an arbitration settlement in one of the Joint Venture project,

the Company’s share of Revenue of '' 323.63 Lakhs and Company’s share of Interest Income of '' 759.90 Lakhs included in statement of Standalone Profit and Loss.

54. ] There have been no events after the reporting date that require disclosure in the financial statements

55. ] Contribution to political parties during the 2022-23 is '' Nil (for 2021-22 is '' Nil)

56. ] The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company

for holding any Benami property.

57. ] The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period

58. ] The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

59. ] The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the

understanding (whether recorded in writing or otherwise) that the Company shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

60. ] The Company has not been declared willful defaulter by any bank or financial institution or government or any government

authority.

61. ] The Company has no Loans or Advances in the nature of Loans to specified persons that are Repayable on Demand or without

specifying any terms or period of repayment.

62. ] The Company had no transactions with Companies struck off under section 248 of the Companies Act, 2013 or section 560 of

the Companies Act, 1956 during the year.

66. APPROVAL OF FINANCIAL STTEMENTS

The financial statements were approved for issue by the Board of Directors on May 29, 2023.

67~| Previous year’s figures have been regrouped/reclassified/rearranged wherever considered necessary.

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Mar 31, 2022

4.1 1,44,000 Shares (PY 1,44,000) equity share have been pledged with Punjab National Bank for the term loan availed by KNR Muzaffarpur Barauni Tollway Private Limited

4.2 510 Shares (P.Y. 510) equity share have been pledged with Catalyst Trusteeship Limited for the term loan availed by KNR Somwarpet Infra Project Private Limited

4.3 2,05,173 Shares (P.Y. 300) equity share have been pledged with Axis Trustee services Limited for the term loan availed by KNR Palani Infra Private Limited

4.4 510 Shares (P.Y. Nil) equity share have been pledged with Axis Trustee services Limited for the term loan availed by KNR Guruvayur Infra Private Limited

4.5 510 Shares (P.Y. Nil) equity share have been pledged with Axis Trustee services Limited for the term loan availed by KNR Ramanattukara Infra Private Limited

4.6 2,45,387 Shares (P.Y. 2,45,387) equity share have been pledged with Axis Trustee services Limited for the term loan availed by KNR Srirangam Infra Private Limited

4.7 2,65,787 Shares (P.Y. 2,65,787) equity share have been pledged with Axis Trustee services Limited for the term loan availed by KNR Shankarampet Projects Private Limited

4.8 3,65,288 Shares (P.Y. 3,65,288) equity share have been pledged with Axis Trustee services Limited for the term loan availed by KNR Tirumala Infra Private Limited

Terms/ Rights attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of '' 2/-. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The Board of Directors has proposed in their meeting held on May 30, 2022 dividend of '' 0.25/- per fully paid equity share of '' 2/- each.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

17.1 Working Capital Facilities: Cash Credit facilities from consortium of banks are secured by:

a. Hypothecation of entire current assets on pari passu basis with other participating banks

b. First pari passu charge on equitable mortgage of certain land & buildings

c. Hypothecation of certain movable fixed assets of written down value as on March 31,2021 is '' 110.03 Crores

d. Personal guarantee of Director.

17.2 The interest rate for working capital demand loan and cash credit facilities varies from 7.43% to 8.57 % per annum.

17.3 The quarterly returns of current assets filed by the Company with banks are in agreement with the books of account.

The Company’s focus is to estimate a vulnerability of financial risk and to address the issue to minimise the potential adverse effects of its financial performance.

a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers; loans and investments in debt securities.

The carrying amounts of financial assets represent the maximum credit risk exposure.

Credit risk on trade receivables, is limited as the customers of the Company mainly consists of the Government promoted entities having a strong credit worthiness.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company uses activity-based costing to cost its products and services, which assists it in monitoring cash flow requirements and optimising its cash return on investments.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.

Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

i) Foreign currency risk

Foreign Currency risk is the risk that fair value or future cash flow of a financial instrument will fluctuate because of changes in foreign exchange rate.

The Company is not exposed to foreign currency risk as it has no borrowing or no material payables in foreign currency.

ii) interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has insignificant variable interest bearing borrowings, the exposure to risk of changes in market interest rates is minimal.

iii) Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk).

The Company is exposed to price risk due to investments in mutual funds and classified as fair value through profit and loss.

The Company measures risk through sensitivity analysis.

The Company’s risk management policy is to mitigate the risk by investments in diversified mutual funds.

42."|_DISCLOSURE PURSUANT TO IND AS 115 "REVENUE FROM CONTRACTS WITH CUSTOMERS":

The Company constructs infrastructure projects on behalf of clients. Delivering the project as per the contractual terms is the only performance obligation that has been identified. Under the terms of the contracts, the Company will perform its obligations on time to time as per the timing schedule indicated in the contract with the asset having no alternative use to the entity and the Company having an enforceable right to receive payment for the work done. Hence, Revenue is therefore recognised over time on a cost to cost method, i.e. based on the proportion of contract costs incurred for the work performed to date relative to the estimated total contract costs. The management consider that this input method is an appropriate measure of the progress towards complete satisfaction of these performance obligations under Ind AS 115.

47^_|_SEGMENT INFORMATION

The Company’s operations predominantly consist of construction / project activities. Hence there are no reportable segments under Ind AS 108. During the year under report, substantial part of the Company’s business has been carried out in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

48~| During the year ended March 31, 2022 the Company has transferred its 49% stake in two of its 100% wholly owned subsidiaries i.e. KNR Tirumala Infra Private Limited and KNR Shankarampet Projects Private Limited, to CUBE Highways and Infrastructure III pte.Limited on December 30, 2021 for a value of '' 13,680.97 Lakhs and '' 10,851.23 Lakhs respectively, which includes repayment of 100% sub debt infused by the Company of '' 8,859.50 Lakhs and '' 7,469.50 Lakhs respectively, accordingly profit of '' 2,139.95 Lakhs was shown as exceptional item in the Statement of Standalone Profit and Loss.

49~| During the previous year ended March 31,2021 the Company has transferred its 100% shareholding in one of its subsidiary i.e. KNR Walayar Tollways Private Limited, (KWTPL) to CUBE Highways and Infrastructure III pte. Limited on September 28, 2020 for an equity valuation of '' 38,468.20 Lakhs and accordingly the Company has written off/impaired its investment for an amount of '' 601.30 Lakhs and '' 671.53 Lakhs for the year ended March 31,2020. For the year ended March 31,2021, the Company has also written off advances for an amount of '' 523.40 Lakhs against withhold amounts, which are shown as exceptional items in the Statement of Profit and Loss.

50~| During the year ended March 31,2022, the Company has received an arbitration settlement in one of the Joint Venture project, the Company’s share of Revenue of '' 323.63 Lakhs and Company’s share of Interest Income of '' 759.90 Lakhs included in statement of Standalone Profit and Loss.

51~| During the previous year ended March 31,2021, the Company has received an Arbitration settlement in one of the Joint Venture project, the Company’s share of revenue of '' 1,202.00 Lakhs and Company’s share of profit of '' 785.62 Lakhs included in statement of Profit and Loss.

52~| During previous year ended March 31,2021, the Company has issued Bonus Shares in the ratio of 1:1 on February 05, 2021, with that the Standalone EPS for the year also adjusted accordingly.

53~| The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

54~| The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period

55~| The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

56~| The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

57~| The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

58~| The Company has no Loans or Advances in the nature of Loans to specified persons that are Repayable on Demand or without specifying any terms or period of repayment.

59~| The Company had no transactions with Companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 during the year.

61~| The Income-Tax Department had carried out a search operation at the Company’s various business premises, under Section 132 of the Income-tax Act, 1961 in March 2022. The Company has extended full cooperation to the Income-tax officials during the search and provided all the information sought by them. As on the date of issuance of these financial results, the Company has not received any formal communication from the Income-tax department. Management is of the view that this will not have any impact on the Company’s financial position as at March 31,2022 and the performance for the year ended on that date and hence no provision for any liability has been recognised in these Standalone financial results.

64^_|_APPR0VAL OF FINANCIAL STATEMENTS

The financial statements were approved for issue by the Board of Directors on May 30, 2022.

65~| Previous year’s figures have been regrouped/reclassified/rearranged wherever considered necessary.

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Mar 31, 2018

1. CORPORATE INFORMATION:

KNR Constructions Limited (‘the Company’) is a company domiciled in India with its registered office at C- 125, Anand Niketan, New Delhi. The Company has been incorporated in 1995 under the provisions of Indian Companies Act. The shares of the Company are listed on the both the stock exchanges (BSE & NSE) India in 2008 pursuant to the Public offer of Equity Shares. The Company is engaged in the business of infrastructure sector, primarily in the construction of roads, bridges, flyovers and irrigation projects.

2.1 Un-secured Loans

The company availed un-secured loan from directors, which are repayable on demand and carries interest at 8.25% p.a w.e.f Nov 2017 ( 10% p.a for the period Apr 2016 to Oct 2016, 9.25% p.a for the period Nov 2016 to Dec 2016 and 8.50% p.a for the period Jan 2017 to Oct 2017)

2.2 Working Capital Facilities: Cash Credit facilities from consortium of banks are secured by:

a. Hypothecation of entire current assets on pari passu basis with other participating banks,

b. First pari passu charge on equitable mortgage of land & buildings and equipments valued at Rs.124.94 Crores

c. Hypothecation of certain equipment’s of written down value as on March 31, 2018 is Rs.65.03 Crores

d. Personal guarantee of Director.

2.3 The interest rate for working capital demand loan and cash credit facilities varies from 8.60% to 10.00 % per annum

3.1 There are no Micro, Small and Medium Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes on account of principal amount together with interest and accordingly, no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

4.1 Interest accrued includes interest on un-secured loans received from Directors is Rs.451.94 lakhs (March 31, 2017 Rs.20.79 Lakhs)

4.2 During the current year, an un-paid dividend amount of Rs.57,016 /-relating to FY 2009-10 has been transferred to Investor Education and Protection Fund. The balance un-paid dividend is not due for transfer to the Investor Education and Protection Fund as at Balance Sheet date.

5.1 As per Section 135 of Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities.

A CSR committee has been formed by the company as per the act. The funds were primarily allocated to the corpus and utilised through out the year on these activities in schedule VII of the Companies Act, 2013.

a) Gross amount required to be spent by the company during the year Rs.245.51 Lakhs (PY Rs.175.12 Lakhs)

b) Amount spent during the year on :

6. CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company, the company’s policy is to maintain a strong capital base so as to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and for the future development of the Company. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return on capital to shareholders or issue of new shares.

The Company’s adjusted net debt to equity ratio at March 31, 2018 and March 31, 2017 was as follows

Foot Note : Debt includes Long Term Borrowings (Including Current Maturities) and Interest accrued there on. Cash and cash equivalants includes other bank balances

7. FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT

A. Accounting for fair values classifications and measurement

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.

The management assessed the financial assets and liabilities measured at amortised cost are approximate to the fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

The management assessed the financial assets and liabilities measured at amortised cost are approximate to the fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

a) credit risk

b) liquidity risk

c) market risk

The company’s focus is to estimate a vulnerability of financial risk and to address the issue to minimise the potential adverse effects of its financial performance.

a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers; loans and investments in debt securities.

The carrying amounts of financial assets represent the maximum credit risk exposure. Credit risk on trade receivables, is limited as the customers of the company mainly consists of the Government promoted entities having a strong credit worthiness.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company uses activity-based costing to cost its products and services, which assists it in monitoring cash flow requirements and optimising its cash return on investments.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.

c) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

i) Foreign currency risk

Foreign Currency risk is the risk that fair value or future cash flow of a financial instrument will fluctuate because of changes in foreign exchange rate.

The Company is not exposed to foreign currency risk as it has no borrowing or no material payables in foreign currency

ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has insignificant variable interest bearing borrowings, the exposure to risk of changes in market interest rates is minimal.

iii) Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk).

The company is exposed to price risk due to investments in mutual funds and classified as fair value through profit and loss. The company measures risk through sensitivity analysis.

The company’s risk management policy is to mitigate the risk by investments in diversified mutual funds.

*The Company has got benefit of deduction under Section 80 IA (4) on eligible projects under provisions of Income Tax Act, 1961 for an amount of Rs.4,474.13 lakhs, for the A.Y 2006-07 to 2012-13 the department has filed appeals against ITAT orders at the High Court of Judicature at Hyderabad for the States of Telangana and Andhra Pradesh, and for the AY 2013-14 and AY 2014-15 department filed appeals against CIT(Appeals) atITAT, Hyderabad.

The Company considers it appropriate not to create a liability for the above said amount on the basis of legal opinion and decided cases.

8. EMPLOYEE BENEFITS

The disclosure is pursuant to the requirements of Ind AS - 19 Defined Benefit plans:

The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. During the period, the company has made a contribution to the provident fund for Rs.162.60lakhs (PY 2016-17 is Rs.98.17 lakhs).

9. During the Previous year the company has entered an agreement to sell its share in two Associate BOT (Annuity) projects, for which the company has made an impairment of Rs.1086.64 lakhs towards sale of its investment which is shown under exceptional items in the statement of profit and loss for the FY 2016-17.

During the year the company has called off the deal with prospective investor, accordingly the investment held for sale has been reclassified to non-current investments.

10. SEGMENT INFORMATION

The Company’s operations predominantly consist of construction / project activities. Hence there are no reportable segments under Ind AS 108. During the year under report, substantial part of the Company’s business has been carried out in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

11. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved for issue by the Board of Directors on May 30, 2018.

12. Previous year’s figures have been regrouped/reclassified/rearranged wherever considered necessary.

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Mar 31, 2017

1. Cash Flow Statement

The Cash flow statement is prepared in accordance with Ind AS 7 by using indirect method by segregating as cash flows from operating, investing and financing activities. Under the Cash flow from operating activities, the net profit is adjusted for the effects of Non-cash items, Changes in working capital and other items for which the cash effects are investing or financing cash flows.

Cash and cash equivalents (including bank balances) are reflected as such in the Cash Flow Statement. Those amounts which are not consider in cash and cash equivalents as on date Balance Sheet are included in investing activities.

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition).

2. Dividend to equity shareholders

Dividend to equity shareholders is recognized as a liability and deducted from shareholders equity, in period in which the dividends are approved by the equity shareholders in general meeting.

3. Earnings per share

a) Basic Earnings per share

Basic earnings per share is calculated by dividing:

- the profit attributable to owners of the company

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

b) Diluted earnings per share

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

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

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

4. Borrowing Costs

Borrowing costs include interest expense calculated using the effective interest method. Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized in profit or loss in the period in which they are incurred.

5. Exceptional Items

Exceptional Items represents the nature of transactions which are not in recurring nature during the ordinary course of business but lead to increase / decrease in profit / loss for the year.

6. Key accounting estimates and judgments

The preparation of these financial statements in conformity with Ind AS requires the management to make estimates and assumptions considered in the reported amounts of assets, liabilities (including contingent liabilities), income and expenses. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Actual results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize. Estimates include the property plant and equipment, inventory, future obligations in respect of retirement benefit plans, provisions, fair value measurement and taxes etc.

a) Revenue Recognition

The Company follows the percentage completion method, based on the proportion that contract cost incurred as on reporting date to the total estimated contract cost including escalations/variations, this method is followed when reasonably dependable estimates of costs applicable to various elements of the contract can be made. Key factors that are reviewed in estimating the future costs to complete include estimates of future labor costs and productivity efficiencies. Because the financial reporting of these contracts depends on estimates that are assessed continually during the term of these contracts, recognized revenue and profit are subject to revisions as the contract progresses to completion. When estimates indicate that a loss will be incurred, the loss is provided for in the period in which the loss becomes probable.

b) Property, plant and equipment

The company reviews the estimated useful lives of property plant and equipment at the end of each reporting period. During the current year, there has been no change in life considered for the assets.

c) Fair value measurement of financial instruments

When the fair values of financials assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgments and assumptions.

d) Provision for employee benefits

The Company uses actuarial assumptions to determine the obligations for employee benefits at each reporting period. These assumptions include the discount rate, expected long-term rate of return on plan assets, rate of increase in compensation levels and mortality rates.

e) Income l&xes

Significant judgments are required in determining the provision for income taxes, including the amount expected to be paid/ recovered for uncertain tax positions.

f) Estimation of net realizable value of inventories

In estimating the net realizable value of Inventories the Company makes an estimate of future selling prices and costs necessary to make the sale

7. New standards and interpretations not yet adopted

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’, The amendments are applicable to the Company from April 1,2017.

Amendment to Ind AS 7:

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

Note : Aggregate market value of quoted investments is RS, 4,025.41 Lakhs (March 31, 2016 RS, 25.84 lakhs and April 01,2015 RS, 27.80 lakhs)

43 1,44,000 Shares (R Y. 1,44,000) equity share have been pledged with Punjab National Bank for the term loan availed by KNR Muzaffarpur Barauni Tollway Pvt Ltd.,

4.2 4,59,000 Shares (R Y. 4,59,000) equity share have been pledged with Central Bank of India for the term loan availed by KNR Walayar Tollways Pvt Ltd.,

* The company''s Equity shares has been split on December 14, 2016 (Record date) from face value of RS, 10/- to X2/- each.

Terms/ Rights attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of RS,2/-. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The Board of Directors has proposed in their meeting held on May 30,2017 dividend of RS, 0.50/- per fully paid equity share.

The company''s Equity shares has been split on December 14, 2016 (Record date) from face value of RS, 10/- to RS,2/- each.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Terms of Security From Banks

i) HDFC Bank Ltd.,

- Secured by Hypothecation of specific assets purchased out of the loan, comprising Plant & Machinery

ii) Axis Bank Ltd.,

- Secured by Hypothecation of specific assets purchased out of the loan, comprising Plant & Machinery

iii) ICICI Bank Ltd.,

- Secured by Hypothecation of specific assets purchased out of the loan, comprising Plant & Machinery From Others

L8J Finance Ltd.,

- Secured by Hypothecation of specific free hold Plant & Machinery

8. Un secured Loans

The company availed un-secured loan from directors, which are repayable on demand and carries interest at 8.50% p.a w.e.f Jan''2017 (10% p.a for the period Apr''2016 to Oct''2016 and 9.25% p.a for the period Nov''2016 to Dec''2016)

9. Working Capital Facilities: Cash Credit facilities from consortium of banks are secured by:

a. Hypothecation of entire current assets on pari passu basis with other participating banks,

b. First pari passu charge on equitable mortgage of land & buildings, valued at RS, 99.83 Crores

c. Hypothecation of certain equipment''s of written down value as on March 31,2017 is RS, 45.03 Crores

d. Personal guarantee of Director.

10. The interest rate for working capital demand loan and cash credit facilities varies from 8.60% to 11.90 % per annum

11. There are no Micro, Small and Medium Enterprises as defined in the Micro, Small and Medium Enterprises Deve lo p m e nt Act, 2006towhomtheCompany owes on account of principal amount together within rest and accordingly, no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

12. Interest payable on Term Loans and on un-secured loans received from Directors RS, 20.79 lakhs (March 31,2016 RS, 48.01 Lakhs and April 01,2015 RS, Nil)

13. During this period un-paid dividend amount transferred to IEPF A/c for an amount of RS, 70,786/- for relating to F. Y 2008-09 dividend. The balance un-paid dividend is not due for payment to the Investor Education Protection Fund as at Balance Sheet date.

14.

As per Section 135 of Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities.

A CSR committee has been formed by the company as per the act. The funds were primarily allocated to the corpus and utilized throughout the year on these activities in schedule VII of the Companies Act, 2013.

a) Gross amount required to be spent by the company during the year RS, 175.12 Lakhs (RY RS, 134.87 Lakhs)

15. Capital management

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company, the company’s policy is to maintain a strong capital base so as to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and for the future development of the Company. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return on capital to shareholders or issue of new shares.

The management assessed the financial assets and liabilities measured at amortized cost are approximate to the fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

a) credit risk

b) liquidity risk

c) market risk

The company''s focus is to estimate a vulnerability of financial risk and to address the issue to minimize the potential adverse effects of its financial performance.

a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers; loans and investments in debt securities.

The carrying amounts of financial assets represent the maximum credit risk exposure.

Credit risk on trade receivables, is limited as the customers of the company mainly consists of the Government promoted entities having a strong credit worthiness.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements.

c) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

i) Foreign currency risk

Foreign Currency risk is the risk that fair value or future cash flow of a financial instrument will fluctuate because of changes in foreign exchange rate.

The Company is not exposed to foreign currency risk as it has no borrowing or no material payables in foreign currency

ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has insignificant variable interest bearing borrowings, the exposure to risk of changes in market interest rates are minimal.

iii) Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk).

The company is exposed to price risk due to investments in mutual funds and classified as fair value through profit and loss.

The company measures risk through sensitivity analysis.

The company’s risk management policy is to mitigate the risk by investments in diversified mutual funds.

*During the previous year, Company has got benefit of deduction under Section 80 IA (4) on eligible projects under Income Tax Act for the A.Y2006-07 to 2012-13 against our appeals filed at ITAT for an amount of RS, 4111.56 lakhs. The department has filed appeals against ITAT orders at the High Court of Judicature at Hyderabad for the States of Telangana and Andhra Pradesh. The Company considers it appropriate not to create a liability for the above said amount on the basis of legal opinion and decided cases.

16. Employee Benefits

The disclosure is pursuant to the requirements of Ind AS -19 Defined Benefit plans:

The Company operates gratuity plan through Life Insurance Corporation of India (LIC) wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. During the period, the company has made a contribution to the provident fund for RS, 9817 lakhs (PY2015-16 is RS,81.40 lakhs).

17. During the year the company has entered an agreement to sell its share in two Associate BOT (Annuity) projects, for which the company has made an impairment of RS, 1,086.64 lakhs towards sale of its investment which is shown under exceptional items in the statement of profit and loss.

18. Segment Information

The Company’s operations predominantly consist of construction / project activities. Hence there are no reportable segments under Ind AS 108. During the year under report, substantial part of the Company''s business has been carried out in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

19. Disclosures as required by Indian Accounting standard (Ind AS) 101 First time adoption of Indian accounting standard

As stated in Note 2, these are the Company’s first financial statements prepared in accordance with Ind AS. For the year ended March 31, 2016 the Company had prepared its standalone financial statements in accordance with Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act (‘IGAAP’).

The accounting policies set out in Note 2 have been applied in preparing these financial statements for the year ended March 31, 2017 including the comparative information for the year ended March 31, 2016 and the opening Ind AS balance sheet on the date of transition i.e. April 01,2015.

In preparing Ind AS Financial Statements as at April 01,2015 and in presenting the comparative information for the year ended March 31, 2016 the Company has adjusted amounts reported previously in financial statements prepared in accordance with IGAAR This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with IGAAR and how the transition from IGAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows.

Optional exemptions and mandatory exceptions availed

In preparing these standalone financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.

Optional Exemptions

Property plant and equipment, capital work-in-progress, Investment Property and intangible assets

The company has elected to avail exemption under Ind AS 101, to use Indian GAAP carrying value as deemed cost at the date of transition for all the items of property, plant and equipment, as per the statement of financial position prepared in accordance with previous GAAR

Investments in Subsidiaries, Joint ventures and Associates

The company has elected to continue with the carrying value for all its investments in subsidiaries, joint ventures and associates as of transition date measured under Indian GAAP as Deemed cost as on transition date except certain investments where fair value has been considered as deemed cost.

Mandatory exceptions

Estimates

As per Ind AS 101, an entity''s estimates in accordance with Ind AS at the date of transition shall be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error.

De recognition of financial assets and liabilities

As per Ind AS 101, an entity should apply the de-recognition requirements in Ind AS 109, Financial Instruments, prospectively for transactions occurring on or after the date of transition to Ind AS. However, an entity may apply the de-recognition requirements retrospectively from a date chosen by it if the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition principles oflndASl09prospectivelyfortransactions occurring on or after the date of transition to Ind AS.

Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Notes to Reconciliation

1) Under Ind AS, loans are measured at fair value (Amortized cost) as compared to being carried at cost in the IGAAR This Ind As adjustment includes the difference between the book value and the fair value of an interest free loan given to a subsidiary, which is treated as investment in that subsidiary. The interest on the present value of this loan is recognized over the tenure of the loan using the Effective interest rate (El R) method.

2) Under Ind AS, investments in Mutual funds are carried at fair value through profit and loss as compared to being carried at cost under IGAAR This Ind AS adjustment represents the difference in the fair value (Market value) and the cost of investments in Mutual funds.

3) Under Ind AS, prior period expenses and income need to be restated to the year which it belongs to, the said Ind AS adjustment represents the restatement of prior period expenses, and the outstanding preliminary expenses not written off as per IGAAP has been written off on transition to IndAS.

4) Under Indian GAAFJ dividends on equity shares recommended by the board of directors after the end of the reporting period but before the financial statements were approved for issue, were recognized in the financial statements as a liability, under Ind AS, such dividends along with the dividend distribution tax there on are to be recognized as a liability when approved by the members in a general meeting

5) Deferred tax has been recognized on all the adjustments made on transition to Ind AS.

6) As per Ind As, actuarial gains and losses, return on plan asset and any change in the effect of the asset to be recognized in other comprehensive income. So, during Financial Year 2015-16, the actuarial gain/ (loss) on gratuity has been reclassified to Other Comprehensive Income from gratuity expense.

c) Changes in Statement of cash flow for the year ended March 31,2016

There are no material adjustments in the statement of cash flow due to adoption of Ind As.

20. Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors on May 30,2017

21. Previous year''s figures have been regrouped/reclassified/rearranged wherever considered necessary.

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Mar 31, 2016

1 Term Loans from Banks

i) HDFC Bank Ltd.,

- Secured by Hypothecation of specific assets purchased out of the loan, comprising Plant & Machinery

ii) Axis Bank Ltd.,

- Secured by Hypothecation of specific assets purchased out of the loan, comprising Plant & Machinery

iii) ICICI Bank Ltd.,

- Secured by Hypothecation of specific assets purchased out of the loan, comprising Plant & Machinery The details of rate of interest and repayment terms of term loans are as under

2. In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity covering employees. The liability on account of gratuity is covered partially through a recognized Gratuity Fund managed by Life Insurance Corporation of India (LIC) and balance is provided on the basis of valuation of the liability by an independent actuary as at the year end. The management understands that LIC''s overall portfolio of assets is well diversified and as such, the long term return on the policy is expected to be higher than the rate of return of Central Government bonds.

3. Working Capital Facilities: Cash Credit facilities from consortium of banks are secured by:

1 Hypothecation of entire current assets on pari passu basis with other participating banks,

2 First pari passu charge on equitable mortgage of land & buildings, valued at Rs. 30.38 Crores

3 First pari passu charge on equitable mortgage of industrial factory buildings without machinery, valued at Rs. 25.49 Crores on 09-03-2015

4 Hypothecation of certain equipment''s of written down value as on 31.03.2015 is Rs 45.03 Crores

5 Personal guarantee of Directors.

4. The interest rate for working capital demand loan and cash credit facilities varies from 10.80% to 12.40 % per annum

5 The company availed short term un-secured loans from directors, which are repayable on demand and carries interest at 10.00% to 11% per annum.

6.. There is no impairment Loss on fixed assets on the basis of review earned out by the management in accordance with the Accounting Standard-28 issued by the Institute of Chartered Accountants of India. Further during the review of assets of the company, those assets which are found having no market value have been written off in the accounts.

Debit and credit balances of parties a:e subject to confirinalion by the respective parties.

4 -The Company has taken unsecured advances / loans from its directors, the del alls of which are turn i shed below

Willi The current year’s classification / disclosure.

¹Sri. S.Vaikuntanathan, V.P (F&A) has joined on 07-01-2016.

²Sri. G. Sravana Kumar, CGM (F&A) has resigned on 30-11-2015.

During the period under review, no employee of the Company is employed throughout the financial year and in receipt of Rs.60 lakhs or more, or employed for part of the year and in receipt of Rs.5 lakhs or more a month, under Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

ii) The median remuneration of employees of the Company during the financial year was Rs. 1.48lakhs;

iii) In the financial year, there was decrease of 18.83% in the median remuneration of employees;

iv) There were 854 employees on the rolls of Company as on March 31, 2016

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Mar 31, 2013

1 CORPORATE INFORMATION:

1.1 The shares of the Company are listed on the stock exchanges in India in 2008 pursuant to the Public offer of equity shares. The Company is engaged in the infrastructure sector'' primarily in the construction of roads'' bridges and flyovers'' irrigation projects.

2. The Company has not received any intimation from ''Suppliers'' regarding their status under the Micro'' Small and Medium Enterprises Development Act'' 2006 and hence disclosures'' if any relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.

3. Segmental Reporting

The Company''s operations consists of Construction activities. Hence'' there are no reportable segments under Accounting Standard – 17. During the year under report'' the Company is engaged in business in India only and not in any other Country. The conditions prevailing in India being uniform'' no separate geographical disclosures are considered necessary.

4. In the case of Patel-KNR-JV'' the share of loss for the quarter ended 30th June'' 2012 was accounted for an amount of Rs 87.53 lakhs based on the un-audited financial statements furnished by the said J.V. However'' the share of profit/ loss for the remaining period of the financial year is not accounted as the said JV has not furnished audited/un-audited financial statements for the year ended 31-03-2013. The impact of this on the share of profit/ (loss) of the Company cannot be quantified in the absence of full particulars in this regard.

5. As per the Accounting Standard-27 on "Financial Reporting of Interest in Joint Venture'' issued by the Institute of Chartered Accountants of India'' the particulars of Joint Venture and its interest there in are as follows:

6. There is no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 issued by the Institute of Chartered Accountants of India. Further during the review of assets of the company'' those assets which are found having nil market value have been written off in the accounts.

7. Debit and credit balances of parties are subject to confirmation by the respective parties.

8. The Company has taken unsecured advances / loans from its directors'' the details of which are furnished below:

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

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Mar 31, 2012

The Company has only one class of shares referred to as equity shares having a par value of Rs 10/- . Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting.

The Board of Directors, in their meeting on 28-05-2012 declared dividend of Rs 1/- per equity share. The total dividend appropriation for the year ended March 31 , 2012 amounted to Rs 326.86 Lakhs including corporate dividend tax of Rs 45.62 Lakhs.

1.1 Term Loans availed from banks and others are secured by hypothecation of specific assets comprising plant and equipment and vehicles acquired out of the said loans and personal guarantee of a director.

1.2 All term loans from banks and others are repayable in 35 equal monthly installments

2.1 Working Capital Facilities: Cash Credit facilities from consortium of banks are secured by:

1 Hypothecation of entire current assets on pari passu basis with other participating banks,

2 First pari passu charge on equitable mortgage of land & buildings, the WDV of which is Rs 1.38 crores (Market Value approx. Rs5.25 Crores) as on 31.03.2009 .

3 First pari passu charge on equitable mortgage of 5 acres of agricultural land of approximate value of Rs 6.00 Crores

4 First pari passu charge on equitable mortgage of industrial factory buildings without machinery of approximate value of Rs 25.40 Crores

5 Hypothecation of certain equipment's of written down value as on 31.03.2010 is Rs 45.00 Crores

6 Personal guarantee of Directors.

7 First pari passu charge on equitable mortgage of property in the name of Company and Director of approximate value of Rs 25.40 Crores

3. Contingent Liabilities not pr ovided for

Rs in Lakhs

Sl. Particulars 2011-12 2010-11 No.

a. Bank Guarantees

- for Company 42121.82 31434.05

- for Joint Ventures' 2264.81 3197.36

- for Subsidiaries Nil Nil

- for Associates (SPV's ) 200.00 200.00

- for Tax matters 241.63 241.63

Total 44828.26 35073.04

b. Corporate guarantees given to banks and financial institutions for financial assistance extended to Subsidiaries,

Associates and Joint Ventures 11142.25 13642.25

c. Counter Guarantees to Corporate Nil 280.00

d. Letters of Credit 1164.65 Nil

e. Demands against the Company not acknowledged as debts and not provided for in respect of which the Company has filed appeal.

- Income Tax and Interest on TDS 3106.83 2954.75

- Sales Tax / VAT / Entry Tax 1882.88 1481.99

f. Claims against the Company not acknowledged as debts 176.77 Nil

g. Joint and several liabilities in respect of joint venture projects and liquidated damages in respect of delays in completion of projects - amounts are not ascertainable.

4. Remittance in foreign currencies for dividend

The company has not remitted any amount in foreign currencies on account of dividends during the year and has remitted dividend to the nonresident shareholders in Indian currency during the year ended March 31, 2012 and the details of the same as given below:

5. The Company has not received any intimation from 'Suppliers' regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any relating to amounts unpaid as at the yearend together with interest paid / payable as required under the said Act have not been given.

6. Segmental Reporting

The Company's operations consist of Construction activities. Hence, there are no reportable segments under Accounting Standard - 17. During the year under report, the Company has engaged in business in India only and not in any other Country. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

Note: The amounts mentioned above in the case of 1) M/s. Patel-KNR-JV 2) M/s. KNR-Patel-JV 3) M/s. KNR-BPL-JV and M/s. KNR Constructions LLC are based on the un-audited financial statements of the respective entities.

7. There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 issued by the Institute of Chartered Accountants of India. Further during the review of assets of the company, those assets which are found having nil market value have been written off in the accounts.

8. Debit and credit balances of parties are subject to confirmation by the respective parties.

9. The Revised schedule VI to the Companies Act ,1956 has become effective from 1st April 2011 for the preparation of financial statements. This has significantly impacted the disclosure & presentation made in the financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification /disclosure.

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Mar 31, 2011

1. All amounts in the financial statements are presented in Indian Rupees in lakhs except per share data and as otherwise stated. Figures in brackets represent corresponding previous year figures in respect of Profit & Loss items and in respect of Balance Sheet items as on the Balance Sheet date of the previous year. Figures for the previous year have been regrouped / rearranged wherever considered necessary to confirm to the figures presented in the current year.

During the year ,the company has opened a branch at Dubai on 26-04-2010. This branch operations are controlled by Sri K Jalandhar Reddy, Executive Director of the Company.

During the year, the company purchased all the equity shares in KNRCL FZE, a foreign company, which was owned by Sri K. Narasimha Reddy, M.D of KNR Constructions Ltd., on 29-11-2010. Against this transaction , the company has not paid the purchase consideration of Rs 48,88,337/- to Sri K. Narasimha Reddy as on 31-3-2011 . Sri K. Narasimha Reddy has been appointed as the Director of this company. Five Equity shares, face value of AED 100000 each have been purchased from Sri. K. Narasimha Reddy , M.D of KNR Constructions Ltd and purchase value of each share is AED 78174 as on 29-11-2010.

During the year ,the company purchased all the equity shares in KNR Infra Projects Pvt Ltd., Hyderabad on 28.03.2011 which was promoted by Sri K Jalandhar Reddy and Sri J.V Panindra Reddy. The total purchase consideration of Rs. 1,00,000/- has been paid to the said persons during the financial year .

Additional amount of depreciation has been charged to the Profit & Loss A/c to the tune of Rs 9,44,94,285/-during the financial year on account of the change in accounting policy of providing depreciation on plant and machinery for few projects only from Written Down Value Method to Straight Line Method based on the useful lives estimated by the management .

2. Contingent Liabilities not provided for Rs. in Lakhs

Sl No Particulars 2010-11 2009-10

a. Bank Guarantees

- for Company 31434.05 19338.34

- for Joint Ventures' 3197.36 4086.20

-for Subsidiaries Nil Nil

- for Associates (SPVs) 200.00 622.32

Total 34831.41 24,046.86

b. Corporate guarantees given to banks and financial institutions for financial assistance extended to Subsidiaries, Associates and Joint Ventures 13642.25 52642.25

c. Counter Guarantees to Corporates 280.00 Nil

d. Letters of Credit Nil Nil

e. Demands against the Company not acknowledged as debts and not provided for in respect of which the Company has filed appeal.

- Income Tax 2954.75 4.68

- Sales Tax / VAT / Entry Tax 1481.99 156.50

f. Claims against the Company not acknowledged as debts Nil Nil

g. Joint and several liabilities in respect of joint venture projects and liquidated damages in respect of delays in completion of projects - amounts are not ascertainable.

3. The Company has not received any intimation from ‘Suppliers' regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any relating to amounts unpaid as at the year end together with interest paid /payable as required under the said Act have not been given.

4. Segmental Reporting

The Company's operations consist of Construction activities. Hence, there are no reportable segments under Accounting Standard – 17. During the year under report, the Company has engaged in business in India only and not in any other Country. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

5. Related Party Transactions

A. Following is the list of related parties and relationships:

Sl. No Particulars

A) Subsidiaries

KNR Agrotech Beverages Pvt Ltd.,

KNR Constructions LLC, Oman

KNR – FZE *

KNR Infrastructure Projects Pvt Ltd., **

B) Joint Ventures

KNR – Patel JV

Patel – KNR JV

NCC-KNR JV

KNR – SLEC JV

KNR-BPL JV

KNR-GVR-JV

KNR-JKM-KAMAL-JV

C) Associates

Patel-KNR Infrastructure Ltd.,

Patel-KNR Heavy Infrastructure Ltd.,

D) Key Management Personnel

Sri K Narasimha Reddy , M.D

Sri K Jalandhar Reddy, E.D

Sri JV Panindra Reddy, E.D

Sri M. Rajesh Reddy, E.D

Sri M. V Venaka Rao, CS

Sri G. Sravana Kumar, G.M

E) Relatives of Key Management Personnel

NIL

F) Enterprises owned or significantly influenced by key management personnel or their relatives

Yuvashakthi Enterprises (Firm)

KNR Infrastructure Projects Pvt Ltd.,

Vishnu Publicity Solutions Pvt. Ltd.,

Trapezoid Software Solutions Pvt. Ltd.,

Mesmeric Software Solutions Pvt. Ltd.,

Nag Talent Ventures & Infotech Pvt. Ltd.,

* Has become a subsidiary with effect from 29-11-2010.

** Has become a subsidiary with effect from 28-03-2011.

6. There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 issued by the Institute of Chartered Accountants of India. Further during the review of assets of the company, those assets which are found having nil market value have been written off in the accounts.

7. Debit and credit balances of parties are subject to confirmation by the respective parties.

8. Additional information pursuant to provisions of Para 3, 4C and 4D of Part – II of Schedule VI of Companies Act, 1956 – not applicable.

9. Figures of previous year have been regrouped / rearranged wherever necessary to conform to the current year presentation.

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Mar 31, 2010

1. All amounts in the financial statements are presented in Rupees in lakhs except per share data and as otherwise stated. Figures in brackets represent corresponding previous year figures in respect of Profit & Loss items and in respect of Balance Sheet items as on the Balance Sheet date of the previous year. Figures for the previous year have been regrouped /rearranged wherever considered necessary to confirm to the figures presented in the current year.

2. Contingent Liabilities not provided for Rupees in Lakhs

Sl No Particulars 2009-10 2008-09

a. Bank Guarantees

- for Company 19338.34 9537.22

- for Joint Ventures 4086.20 2699.62

- for SPVs 622.32 1105.92

TOTAL 24,046.86 13,342.76

b. Corporate guarantee 52642.25 52642.25

c. Letter of Credit Nil Nil

d. Demands against the Company not acknowledged as debts and not provided for in respect of which the Company has fled appeal.

- Income Tax 4.68 4.68

- Sales Tax 156.50 165.61

e. Claims against the Company not acknowledged as debts Nil Nil

f. Joint and several liabilities in respect of joint venture projects and liquidated damages in respect of delays in completion of projects - amounts are not ascertainable.

3. Details of utilization of IPO proceeds

The Company raised funds through IPO in the F.Y 2007-08, by issuing its equity shares comprising of 78,74,570 equity shares. In this regard, equity shares of Rs. 10/- each were issued at Rs. 170/- each aggregating to Rs. 13,386.77/- lakhs

4. The Company has not received any intimation from ‘Suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.

5. Segmental Reporting

The Companys operations consist of Construction activities. Hence there are no reportable segments under Accounting Standard – 17. During the year under report, the Company has engaged in business in India only and not in any other Country. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

6. Related Party Transactions

A) Following is the list of related parties and relationships:

Sl. No Particulars

A) Subsidiaries

KNR Agrotech Beverages Pvt Ltd., KNR Constructions LLC, Oman

B) Joint Ventures

KNR – Patel JV Patel – KNR JV NCC-KNR JV KNR – SLEC JV KNR-BPL JV KNR-GVR-JV KNR-JKM-KAMAL-JV

C) Associates

Patel-KNR Infrastructure Ltd., Patel-KNR Heavy Infrastructure Pvt Ltd.,

D) Key Management Personnel

Sri K.Narasimha Reddy Sri K.Jalandhar Reddy Sri J.V.Panindra Reddy Sri M.Rajesh Reddy Sri. M.V.Venkata Rao Sri. G.Sravana Kumar

E) Relatives of Key Management Personnel

Nil

F) Enterprises owned or significantly influenced by key management personnel or their relatives

Yuvashakthi Enterprises (Firm)

KNR Infrastructure Projects Pvt Ltd.,

Vishnu Publicity Solutions Pvt. Ltd.,

Trapezoid Software Solutions Pvt. Ltd.,

Mesmeric Software Solutions Pvt. Ltd.,

Nag Talent Ventures & Infotech Pvt. Ltd.,

7. There was no impairment Loss on fxed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 issued by the Institute of Chartered Accountants of India. Further during the review of assets of the company, those assets which were found to be having nil market value have been written off in the accounts.

8. Debit and credit balances of parties are subject to confrmation by the respective parties.

9. Additional information pursuant to provisions of Para 3, 4C and 4D of Part – II of Schedule VI of Companies Act, 1956 – not applicable.

10. Figures of previous year have been regrouped / rearranged wherever necessary to conform to the current year presentation