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Kalpataru Projects International Ltd. Notes to Accounts
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You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (Rs.) 17379.30 Cr. P/BV 3.68 Book Value (Rs.) 290.60
52 Week High/Low (Rs.) 1163/486 FV/ML 2/1 P/E(X) 39.43
Bookclosure 06/07/2023 EPS (Rs.) 27.13 Div Yield (%) 0.65
Year End :2023-03 

6.1 (a) Investment in equity instrument of Shree Shubham Logistics Limited includes H 6.26 Crores arising on initial recognition of investment in 4% redeemable preference shares at fair value and H 4.21 Crores arising on initial recognition of financial guarantee, given by the Company on behalf of Shree Shubham Logistics Limited, at fair value.

(b) 1,44,64,066 (Previous Year - 2,83,71,824) Equity shares of Alipurduar Transmission Limited (ATL) and 1,75,96,055 (Previous Year - 3,73,92,893) shares of Kohima-Mariani Transmission Limited are pledged.

(c) Alipurduar Transmission Limited (“ATL") ceased to be subsidiary of the company w.e.f 25th November, 2020 in accordance with IndAS 110 “Consolidated Financial Statements". However, based on company's equity stake it continued to be subsidiary in terms of section 2 (87) of the Companies Act, 2013. Subsequently, during the current year, the Company has completed transfer of 25% of total equity shares w.e.f 13th October, 2022 and hence ATL ceased to be a subsidiary of the Company in terms of section 2 (87) of the Companies Act, 2013 from the said date.

(d) Kohima-Mariani Transmisssion Limited (“KMTL") ceased to be Joint Venture of the company w.e.f 20th December, 2021 in accordance with IndAS 28 “Investments in Associates and Joint Ventures". However, based on company's equity stake it continued to be subsidiary in terms of section 2 (87) of the Companies Act, 2013. Subsequently, during the current year, the Company has completed transfer of 25% of total equity shares w.e.f 24th February, 2023 and hence KMTL ceased to be a subsidiary of the Company in terms of section 2 (87) of the Companies Act, 2013 from the said date.

(i) During the FY 2020-21, the Company has completed the transfer of 49% stake along with the transfer of control of Alipurduar Transmission Limited (ATL) to the Buyer with effect from 26th November 2020 . Subsequently, during the current year, the Company has completed transfer of additional 25% of total equity shares on 13th October, 2022 and balance 26% stake will be transferred after obtaining requisite approval. Investment in Equity Instruments amounting to H 90.84 Crores (Previous year H 187.11 Crores) represents fair value of retained equity stake in ATL.

(ii) The Company was holding 74% equity stake in Kohima Mariani Transmission Limited (KMTL), a joint venture between the Company and Techno Electric & Engineering Company Limited (TEECL). The Company and TEECL have entered into a Share Purchase and Shareholders Agreement dated 3rd July, 2019 (“the Agreement”) with Apraava Energy Private Limited (formerly known as CLP India Private Limited - “the Buyer”) to sell their respective equity stake in KMTL. Pursuant to the Agreement, the Company has sold 23% stake and transferred the control of KMTL to the Buyer on 20th December, 2021. Subsequently, during the current year, the Company has completed transfer of additional 25% of total equity shares on 24th February, 2023 and balance 26% stake will be transferred after obtaining requisite approvals. Investment in Equity Instruments amounting to H 143.11 Crores (Previous year H 302.46 Crores) represents fair value of retained equity stake in KMTL.

(iii) The Company initiated identification and evaluation of potential buyers for its subsidiary Vindhyachal Expressway Private Limited (“VEPL”) . Accordingly Investment amounting to H 27.50 Crores related to VEPL has been classified under held for sale as management is committed for sale of the asset which is highly probable.

11.2 The contract assets represents amount due from customer, primarily relate to the Company's rights to consideration for work executed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional, that is when invoice is raised on achievement of contractual milestones. This usually occurs when the Company issues an invoice to the customer. The contract liabilities represents amount due to customer, primarily relate to invoice raised on customer on achivement of milestones for which revenue to be recognised over the period of time and it is not considered as a significant financing component since it is used to meet working capital requirements at the time of project mobilization stage.

11.3 Increase in contract assets is mainly due to increase in business activities and in certain contracts on account of contractual milestones not achieved. During the year ended 31st March, 2023 H 2,365.98 Crores (Previous year H 1,886.10 Crores) of contract assets as of 1st April, 2022 has been reclassified to Trade receivables upon billing to customers on completion of milestones.

11.4 In case of EPC contracts, amount in the range of 10-20% of the contract value is paid as an advance and 10-20% amount released at the end of project and balance amount is paid progressively based on the agreed milestones in the contract.

11.5 Revenue recognised for the current year includes H 303.53 Crores (Previous year H 4,17.89 Crores), that was classified as amount due to customers at the beginning of the year.

16.2 The Company has only one class of Equity Shares having par value of H 2 per share. Each holder of Equity Shares is entitled to one vote per share. The dividend is declared and paid on being proposed by the Board of Directors after the approval of the Shareholders in the ensuing Annual General Meeting, except in case of Interim dividend.

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 liabilities. The distribution will be in proportion to the number of Equity Shares held by the shareholders.

16.3 During the financial year 2019-2020, the Company has acquired 19.94% stake in Shree Shubham Logistics Limited (SSL) for a consideration of H 64.66 crores. The consideration is paid through a non-cash equity swap transaction, in which 12,54,900 equity shares of the Company issued at the value of H 515.25 per share.

17.2 Term Loans from Banks and Other Loans

(a) H 0.40 Crores (Previous Year H 1.05 Crores) carries interest in range of 7.4% - 9.25% p.a. and is repayable in range of 1 to 38 equal monthly instalments along with interest. The Loan is secured by hypothecation of specific Vehicles.

(b) H 75.00 Crores (Previous Year H 132.50 Crores) carries interest of 8.95% p.a, linked to RBI repo rate secured by pari passu charges on movable and immovable fixed assets of transmission & distribution and infrastructure division of the Company to the extent of 1.25 times of outstanding facility. It is repayable in 16 quarterly instalments ending on 1st June, 2024.

(c) Term loan from a bank amounting to H 100.00 Crores (Previous Year H NIL) is secured exclusive charge on movable fixed assets funded out of the said facility. Term loan is repayable in 17 unequal quarterly instalments with 29th July, 2027 as maturity date with varying interest rate linked to 3M MCLR of bank from time to time.

(d) Term loan from a bank amounting to H NIL (Previous Year H 39.88 Crores) is secured by first pari passu charge on entire movable Property, plant and equipment excluding assets charged exclusively to the Term Lenders. Term loan is repayable in 16 unequal quarterly instalments to be paid at the end of each financial quarter, with 31st March, 2023 as a date of maturity and interest payable on monthly basis at varying interest rate linked to 1 year MCLR.*

(e) Term loan from a bank amounting to H 100.00 Crores (Previous Year H NIL) is secured exclusively by first charge on movable fixed assets (excluding assets been already charged on specific basis to exiting term lenders). Term loan is repayable in 18 equal quarterly instalments ending in 7th September, 2027 as maturity date with varying interest rate linked to 1 Month T-bill from time to time*

(f) Term loan from a bank amounting to H 1.18 Crores (Previous Year H 3.61 Crores) is secured exclusively by first charge on movable Property, plant and equipment funded out of the said facility. Term loan is repayable in unequal quarterly instalments ending in 30th June, 2025 with fixed interest rate.

(g) Term loan from a bank amounting to H NIL (Previous Year H 14.06 Crores) is secured exclusively by first charge on movable Property, plant and equipment funded out of the said facility. Term loan is repayable in unequal quarterly instalments with 30th November 2022 as maturity date with varying interest rate linked to base rate of bank from time to time.

(h) Term loan from a bank amounting to H 17.50 Crores (Previous Year H 21.25 Crores) is secured by first pari passu charge on entire movable fixed assets to the extent of 1.10 times of security cover of outstanding facility. Term loan is repayable in unequal quarterly instalments with 31st March, 2025 as maturity date with varying interest rate linked to 1 Yr MCLR of bank from time to time.*

(i) Term loan from a bank amounting to H 0.38 Crores (Previous Year H 1.12 Crores) is secured exclusively by first charge on movable equipment funded out of the said facility. Term loan is repayable in unequal monthly instalments with 31st October,

2023 as maturity date with fixed interest rate.

(j) Term loan from a bank amounting to H 5.00 Crores (Previous Yea: H 9.95 Crores) is secured exclusively by first charge on movable fixed assets funded out of the said facility. Term loan is repayable in equal quarterly instalments with 31st March,

2024 as maturity date with varying interest rate linked to 1 Year MCLR rate of bank from time to time.

(k) Term loan from a bank amounting to H NIL (Previous Year H 1.87 Crores) is secured exclusively by first charge on entire current assets and second charge on movable Property, plant and equipment excluding assets charged exclusively to the Term Lenders. Term loan is repayable in equal monthly instalments with 31st July, 2022 as maturity date with varying interest rate linked to base rate of bank from time to time.*

(l) Term loan from a bank amounting to H NIL (Previous Year H 1.07 Crores) is secured exclusively by first charge on entire current assets and second charge on movable Property, plant and equipment excluding assets charged exclusively to the Term Lenders. Term loan is repayable in unequal monthly instalments with 31st August, 2022 as maturity date with varying interest rate linked to base rate of bank from time to time.*

(m) Term loan from a bank amounting to H NIL (Previous Year H 2.28 Crores) is secured exclusively by first charge on entire current assets and second charge on movable Property, plant and equipment excluding assets charged exclusively to the Term Lenders. Term loan is repayable in unequal monthly instalments with 30th June, 2022 as maturity date with varying interest rate linked to base rate of bank from time to time.*

(n) Term loan from a bank amounting to H 2.84 Crores (Previous Year H 3.65 Crores) is secured exclusively by first charge on movable equipment funded out of the said facility. Term loan is repayable in unequal monthly instalments with 28th Feb 2026 as maturity date with fixed interest rate.

(o) Term loan from a bank amounting to H 11.92 Crores (Previous Year H 10.06 Crores) is secured exclusively by first charge on movable equipment funded out of the said facility. Term loan is repayable in unequal monthly instalments with March, 2027 as maturity date with fixed interest rate.

(p) Term loan from a bank amounting to H 47.50 Crores (Previous Year H 49.98 Crores) is secured exclusive charge on specific movable fixed assets funded out of the said facility and DSRA of 10% of facility amount. Term loan is repayable in unequal quarterly instalments with 25th January 2027 as maturity date with varying interest rate linked to 1 Year Banks MCLR of bank from time to time.

(q) Term loan from a bank amounting to H 36.75 Crores (Previous Year H 39.50 Crores) is secured exclusive charge on specific movable fixed assets funded out of the said facility and DSRA 10% of facility amount . Term loan is repayable in unequal quarterly instalments with 30th June, 2026 as maturity date with varying interest rate linked to 1 Year MCLR of bank from time to time.

(r) Term loan from a bank amounting to H 9.19 Crores (Previous Year H 9.88 Crores) is secured exclusive charge on specific movable fixed assets funded out of the said facility and DSRA of 10% of facility amount. Term loan is repayable in unequal quarterly instalments with 30th June, 2026 as maturity date with varying interest rate linked to 1 Year MCLR of bank from time to time.

(s) Term loan from NBFC amounting to H 1.52 Crores (Previous Year H 4.50 Crores) is secured by exclusive charge by way of hypothecation for equipment financed by them. Term loans is repayable in 20 equal quarterly instalments with interest payable quarterly at fixed interest rate.1

(t) Term loan from NBFC amounting to H 6.25 Crores (Previous Year H 12.47 Crores) is secured by first pari passu charge on entire movable fixed assets (excluding capital expenditure assets charged exclusively to corresponding capital expenditure lender) of the borrower providing minimum FACR of 1.25 times . Term loan is repayable in 16 equal quarterly instalments, 31st March, 2024 as a date of maturity and interest payable on monthly basis at varying interest rate linked to long term reference rate of NBFC from time to time.1

(u) Term loan from NBFC amounting to H 6.25 Crores (Previous Year H 12.44 Crores) is secured by first pari passu charge on entire movable fixed assets (excluding capital expenditure assets charged exclusively to corresponding capital expenditure lender) of the borrower providing minimum FACR of 1.25 times . Term loan is repayable in 16 equal quarterly instalments, 31st March, 2024 as a date of maturity and interest payable on monthly basis at varying interest rate linked to long term reference rate of NBFC from time to time.1

(v) Term loan from NBFC amounting to H NIL (Previous Year H 0.21 Crores) is unsecured. Term loans is repayable in 20 unequal quarterly instalments with interest payable monthly at varying interest rate linked to base rate of NBFC from time to time.1

(w) Other Loans of H 233.95 Crores (Previous Year H 489.57 Crores) are interest free and secured by pledge of Equity shares of Alipurduar Transmission Ltd and Kohima Mariani Transmission Ltd. The loans are repayable in 1 to 5 years.

Working Capital Facilities from Banks amounting to H 1,217.98 Crores (Previous year H 722.97) are secured in favour of consortium of bankers by hypothecation of stocks, stores and spares, book debts, bills receivable and all other movable assets on pari passu basis and also secured by movable and immovable fixed assets (including land and building situated at Gandhinagar, Gujarat) of transmission and distribution division and infrastructure division of Company. Working Capital Facilities carries interest in range of 2% to 10%.

Working Capital Facilities from Banks amounting to H 417.74 Crores (Previous year H 421.94) are secured by First charge against hypothecation of stocks, work in progress, cash and cash equivalents, stores and spares, trade receivables, book debts, other current assets and second charge on all movable property, plant and equipments of the Erstwhile JMC Projects (India) Limited.2

29. CONTINGENT LIABILITIES IN RESPECT OF

(Hin Crores)

Particulars

As at

31st March, 2023

As at

31st March, 2022

a. Bank guarantees given by the Company

36.59

20.96

b. Claims against Company not acknowledged as debt

32.29

41.73

c. Demands by Tax/ Stamp Duty/Revenue/Other Statutory authorities,

175.72

213.81

disputed by the Company

d. Corporate Guarantee / Letter of Comfort given for loan to subsidiaries

319.35

223.69

e. Bank Guarantee given on behalf of subsidiaries

744.11

315.60

f. Deed of Indemnity given on behalf of a subsidiary

141.34

144.06

Future ultimate outflow of resources embodying economic benefits in respect of the above matters are uncertain as it depends

on the final outcome of the matters involved.

30. CAPITAL & OTHER COMMITMENTS

(Hin Crores)

Particulars

As at

31st March, 2023

As at

31st March, 2022

Estimated amount of contracts remaining to be executed for Tangible capital Assets and not provided for (Net of advances)

105.38

164.58

37.3 Details of Investments made by the company are given in Note 6 . Details of guarantees provided are given in Note 29. 374 All loans given and guarantees provided are for the purposes of the business.

38. During the financial year 2022-23, UNFCCC has issued Nil, (Previous Year 53,876) CER's (Net of Adoption Fund) on account of generation of electricity from agricultural residues like mustard crop residue and other agricultural crop residue at Tonk Power Plant.

39. DISCLOSURES PURSUANT TO IND AS 19 EMPLOYEE BENEFITS(a) Defined contribution Plans

The Company made contributions towards provident fund, a defined contribution retirement benefit plan for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner. The Company recognized H32.68 Crores (Previous Year H30.85 Crores ) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the company are at rates specified in the rules of the scheme. The Company makes contribution towards Employees State Insurance scheme operated by ESIC Corporation. The Company recognized H 0.26 Crores (Previous Year H 0.41 Crores) for ESIC contribution in the statement of Profit and Loss. The contributions payable to these plans by the company are at rates specified in the rules of the scheme.

(b) Defined benefit plans

The Company offers the following employee benefit schemes to its employees.

(i) Gratuity

The company made annual contributions to the Employee's Group Gratuity cash accumulation scheme's of IRDA approved agencies, a funded defined benefit plan for qualifying employees. The Scheme provides for payment to vested employees at retirement/death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service as per the provisions of the Gratuity Act, 1972.

(ii) Compensated absences

The Scheme is non-funded.

(d) Characteristics of defined benefit plans and risks associated with them:

Valuations of defined benefit plan are performed on certain basic set of pre-determined assumptions and other regulatory

framework which may vary over time. Thus, the Company is exposed to various risks in providing the above benefit plans

which are as follows:

(i) Interest Rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (i.e. value of defined benefit obligation).

(ii) Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.

(iii) Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

(iv) Investment Risk: The Company has funded with well established Govt. of India undertaking & other IRDA approved agency and therefore, there is no material investment risk.

Financial Risk Management Financial Risk factors

The Company's activities expose it to a variety of financial risks : market risk, credit risk and liquidity risk. The Company's focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Company uses derivative financial instruments to mitigate foreign exchange related risk exposures.

Market Risk

The Company operates internationally and a major portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services and purchases from overseas suppliers in various foreign currencies. The company holds derivative financial instruments such as foreign exchange forward and commodity contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The exchange rate between the rupees and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company's operations are affected as the rupee appreciates / depreciates against these currencies.

Sensitivity Analysis

For the year ended March 31, 2023 and March 31, 2022, increase / decrease of 5% in the exchange rate between the Indian rupee and USD/EURO would impact company's profit before tax by approximately 1.03% and 1.96% respectively.

Sensitivity rate of 5% is used while reporting foreign currency risk internally to key management personnel and represent management's assessment of the reasonably possible change in foreign exchange rate.

Derivative Financial Instruments

The Company holds derivative financial instruments such as foreign currency forward contracts and commodity future contracts to mitigate the risk of changes in exchange rates on foreign currency exposures and changes in price of commodities. The counter party for these contracts is generally a multinational banks, financial institution or exchange. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace. Mark to Market gain or loss on derivative instruments is part of other current financial assets or liabilities.

Loan and Borrowings: Financial Covenants

The company is required to comply with the few financial covenants as per terms of respective sanctions. In case of breach of financial covenants, there can be adverse impact.

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, investment securities and other receivables. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

Trade and other receivables

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and investments. Credit risk in respect of other receivables mainly comprises of loan to components which are managed by the Company, by way of assessing financial condition, current economic trends and ageing of other receivables . The Company considers the probability of default and whether there has been a significant increase in the credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk, the Company compares the risk of default occurring on financial assets as on the reporting date.

The portion of the payments retained by the customer until final contract settlement is not considered a significant financing component since it is usually intended to provide customer with a form of security for Company's remaining performance as specified under the contract, which is consistent with the industry practice.

Expected credit loss assessment for customers

Most of customers are PSU and as per past experience, there has been no credit loss on account of customer's inability to pay i.e. there has been no material bad debts in past and therefore, no provision is generally made on this account. Provision for expected delay in realisation of trade receivables beyond contractual terms. The company has used a practical expedient by computing the expected credit loss allowance for trade receivables on a provision matrix. The expected credit loss on the aging of the days the receivables are due and the rates as given in the provision matrix.

The company had undrawn borrowing facilities from banks amounting to H 692.87 Crores (Previous Year H 453.27 Crores), which may be drawn at any time.

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. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations with floating interest rates.

Interest Rate Sensitivity Analysis

For the year ended 31st March, 2023 and 31st March, 2022, a 100 basis point increase / decrease in interest rate on floating rate liabilities would impact company's profit before tax by approximately 2.9% and 3.18 % respectively.

Commodity Price Risk

The Company is affected by the price volatility of certain commodities like Steel, Zinc, Copper and Aluminium. Its operating activities require the on-going purchase or continuous supply of these materials. The Company holds derivative financial instruments such as commodity future contract to mitigate the risk of changes in Zinc, Copper and Aluminium prices.

The sensitivity analysis have been determined based on the exposure to changes in commodity prices. The analysis is prepared assuming the quantity of exposure outstanding at the end of the reporting period was outstanding for the whole year. A 5% increase or decrease is used when reporting commodity price risk internally to key management personnel and represents management's assessment of the reasonable possible changes in commodity prices and the impact of the possible change on the company's profit before tax is 11.84% for FY 2022-23 and 16.49% for FY 2021-22.

The Company has complied with relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and Companies Act 2013 and the transactions are not violative of the Prevention of Money-Laundering act, 2002 (15 of 2003).

b. 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 :

(i) 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

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

51. Company has taken borrowings from banks on the basis of security of current assets and quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts.

52. BUSINESS COMBINATION

The Ahmedabad bench of Hon'ble National Company Law Tribunal (NCLT) has approved the Scheme of amalgamation (‘the Scheme') of JMC Projects (India) Limited (‘JMC'), an engineering, procurement and construction company, with the Company and their respective shareholders vide its Order dated 21st December, 2022. A certified copy of the Order was filed with the Registrar of Companies on 4th January, 2023 and the scheme became effective. The appointed date as per the Scheme is 1st April, 2022.

Post approval of the scheme, on 16th January, 2023, 13,536,944 equity shares have been issued to eligible shareholders with an exchange ratio of 1 (one) equity shares of H 2/- each credited as fully paid up shares of the Company for every 4 (four) equity shares of H 2/- each to shareholders of JMC, except to the Company, whose names are recorded in the register of members on 11th January, 2023 (‘Record date').

As per guidance on accounting for common control transactions contained in Ind AS 103 “Business Combinations" the merger has been accounted for using the pooling of interest method. The previous year figures have therefore been restated to include the impact of the merger. The Company has recorded the assets and liabilities pertaining to amalgamated entity vested in the Company at their respective carrying values appearing in the books. The difference between the net identifiable assets acquired and consideration paid on amalgamation has been accounted as capital reserve.

Pursuant to the Scheme of amalgamation, shares of Kalpataru Power Transmission Limited issued to the public shareholders of JMC, is presented under other equity as shares pending issuance for the comparative period.

52.1 Goodwill

Goodwill is acquired under the scheme of amalgamation of JMC Projects (India) Limited with the Company and their respective shareholders as explained in Note 52.

Goodwill is tested for impairment annually or based on an indicator and provides for impairment if the carrying amount of goodwill exceeds its recoverable amount.

55. The Company is primarily engaged in the business of Engineering, Procurement and Construction (EPC) relating to infrastructure comprising Buildings and Factories, power transmission & distribution, Roads and Bridges, Water pipe lines, railway track laying & electrification, oil & gas pipelines laying, etc. Information reported to and evaluated regularly by the chief operating decision maker (CODM) for the purposes of resource allocation and assessing performance focuses on the business as a whole and accordingly, in the context of Operating Segment as defined under the Indian Accounting Standard 108, there is single reportable segment.

Further, The company operates in Geographical Segment- India (Country of Domicile) and Outside India.

55.1 Revenue from major customers - Public sector undertakings in India, is H 6,372.42 Crores (Previous Year H 4,269.72 Crores). Revenue from other individual customer is less than 10% of total revenue.

56. (i) During the previous year, Kurukshetra Expressway Private Limited (“KEPL" or “Concessionaire"), a Joint venture (49.57%)

of the Company, issued a notice of termination of Concession Agreement (“CA") vide letter dated 7th October, 2021 to the National Highway Authority of India (“NHAI") on account of continuous disruption and blockade of traffic on National Highway-71 due to farmer agitation with stoppage of toll collection. The provisions of Concession Agreement provides for termination where events which are not in control of KEPL, and obliges NHAI paying KEPL for repayment of Debt Due along with Adjusted Equity after necessary adjustments. During the pervious year, the Company had made provision for impairment of H 98.27 Crores against equity investment in KEPL, which was presented as exceptional items and for Expected credit loss of H 179.36 Crores against loans given to KEPL / others. Further, the Promoters of KEPL have, jointly and severally given ‘shortfall undertakings' to the Senior Lenders, should there be any shortfall between amounts received from NHAI and that payable to KEPL's lenders, KEPL has received copy of the letter dated 3rd February, 2022 sent by an independent Engineer (“IE") appointed by NHAI in which the IE has sought to limit the amount payable (net of other deductions) as “Termination Payment". Accordingly, in light of the above the Company has made further provision for Expected Credit Loss of H 47.79 Crores. The Company has also recognized H 39.77 Crores towards their share (49.57%) being a potential shortfall, if any, which is disclosed as an exceptional item in previous year. The Company has made above provisions without prejudice to it's and KEPL legal rights and claims against NHAI and will continue to pursue these amounts against KEPL. Further, the Company will seek KEPL to pursue their claims and termination payment against NHAI notwithstanding the above recognition. During the year KEPL has invoked arbitration proceedings against NHAI in terms of the concession agreement.

(ii) Exceptional gain for the year ended 31st March, 2023 includes

1. H 109 crores (net) in respect of an award obtained by an erstwhile power transmission subsidiary and is contractually receivable by the Company.

2. Provision of H 55 crores towards impairment in value of its investment in two wholly owned subsidiaries namely Kalpataru Power Transmission (Mauritius) Limited and Shree Shubham Logistics Limited due to changes in market conditions and demand forcasts.

(iii) Exceptional gain for the year ended 31st March, 2022, includes gain of H 262.41 Crore (including fair value gain) on sale of stake in Kohima Mariani Transmission Limited and provision of H 60.43 Crores towards impairment in value of its investments in Energylink (India) Limited and Wainganga Expressway Private Limited, wholly owned subsidiaries of the Company.

57. Performance obligations unsatisfied or partially satisfied amounts to H 43,769 crores (Previous Year H 29,323 crores)as at 31st

March, 2023 for which revenue is expected to be recognized in future over the period of 1 to 8 years.

59. Advance taxes paid, including tax deducted at sources are shown as assets net of provision of tax including foreign tax. Provision for tax (including foreign tax) is made after considering depreciation, deductions and allowances as per applicable tax statutes and regulations there under.

60. The Company is executing projects in Afghanistan, which are currently on hold due to Force Majeure event. The Company is closely monitoring the situation and expect to resume work once the geopolitical environment in Afghanistan is resolved. The Company does not expect any material financial impact due to this event as the projects are funded by multilateral funding agencies and the company has covered the exposure of credit risk through insurance cover. Further, the bank guarantee issued for the aforesaid ongoing projects cannot be enforced as per the terms and conditions of the underlying contracts.

61. The Board of Directors have recommended a dividend of H 7.00 per equity share for the financial year 2022-23, subject to approval by shareholders at the Annual General Meeting and if approved, would result in cash outflow of H 113.71 Crores, which has not been included as liability in these standalone financial statements.

1

Securities charged against these loans pertains to Erstwhile JMC Projects (India) Limited. During the year, JMC Project (India) Limited, an Erstwhile subsidiary of the

Company, is merged with the Company as per the terms of the scheme approved by National Company Law Tribunal (NCLT).

2

During the year, JMC Project (India) Limited, an Erstwhile subsidiary of the Company, is merged with the Company as per the terms of the scheme approved by National Company Law Tribunal (NCLT).


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