k e c international ltd Auditors report

To the Members of KEC International Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

OPINION

1. We have audited the accompanying standalone financial statements of KEC International Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information in which are included the Returns for the year ended on that date audited by the branch auditors of the Companys 40 branches located at Abu Dhabi, Afghanistan, Algeria, Bangladesh, Bhutan, Burundi, Burkina Faso, Cameroon, Egypt, Ethiopia, Georgia, Ghana, Guinea, Ivory Coast, Jordan, Kenya, Kuwait, Lebanon, Libya, Malaysia, Mali, Moldova, Morocco, Mozambique, Nepal, Nicaragua, Nigeria, Oman, Papua New Guinea, Philippines, Senegal, Sierra Leone, South Africa, Sri Lanka, Tanzania, Thailand, Togo, Tunisia, Uganda and Zambia and financial statements / financial information of 31 jointly controlled operations consolidated on a proportionate basis (refer Notes 3.3 and 50 to the attached standalone financial statements) (hereinafter referred to as "standalone financial statements").

2. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on audited financial statements / financial information of branches and jointly controlled operations, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.

BASIS FOR OPINION

3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the "Auditors responsibilities for the audit of the standalone financial statements" section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraphs 16 and 17 of the Other Matters Paragraph below, is sufficient and appropriate to provide a basis for our opinion.

EMPHASIS OF MATTER

4. We draw attention to Note 64(a) of the standalone financial statements, regarding the Companys net exposure of

Rs 252 crores (including exposure of Rs 79.20 crores in the Afghanistan branch) after netting off advances, liabilities (including contract liabilities) and proposed settlement with a funding agency from its transmission line projects in Afghanistan as at March 31, 2023, which are currently on hold due to Force Majeure event. The timing of the recovery of the said exposure is dependent upon the geopolitical environment in Afghanistan and negotiations with international funding agencies. Our opinion is not modified in respect of this matter.

5. Audit report on the Financial Statements of the Afghanistan branch issued by an independent firm of chartered accountants vide its report dated April 26, 2023 include an emphasis of matter paragraph which is reproduced by us as under:

‘‘We draw attention to Note xviii of the Financial Statements, regarding Afghanistan Branch net exposure of USD 90,87,881(equivalenttoINR.79.20crores)toitstransmission line Projects as at March, 2023, which are currently on hold due to Force Majeure event. Timeline of the recovery of said exposure is dependent upon the geopolitical environment in Afghanistan and negotiation with international funding agencies. Further, the bank guarantees issued in respect of these ongoing projects are also currently not enforceable due to the force majeure event. Our Conclusion is not modified in respect of this matter.

Note xviii as described above is reproduced as Note 64(b) to the standalone financial statements for the year ended March 31, 2023.

Our opinion is not modified in respect of this matter.

KEY AUDIT MATTERS

6. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter	How our audit addressed the key audit matter
Estimation of contract cost and revenue recognition	Our procedures over the recognition of construction revenue included the following:
(Refer notes 38 and 51 to the standalone financial statements)
Contract revenue amounting to Rs 13,813.01 crores for engineering, procurement and construction contracts which usually extends over a period of 2-3 years, contract prices are fixed / subject to price variance clauses.	• Understood and evaluated the design and tested operating effectiveness of key internal financial controls, including those related to contracted revenue and review and approval of estimated project cost by the authorised representatives.
The contract revenue is measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs.	• For sample of contracts, we obtained the percentage of completion calculations, agreed key contractual terms back to signed contracts, tested the mathematical accuracy of the cost to complete calculations and re-performed the calculation of revenue recognized during the year based on the percentage of completion.
This method requires the Company to perform an initial assessment of total estimated cost and further, reassess the total construction cost at each reporting period to determine the appropriate percentage of completion.	• For costs incurred to date, we tested samples to appropriate supporting documentation and performed cut off procedures.
We considered the estimation of construction contract cost as a key audit matter given the involvement of significant management judgement which has a consequential impact on revenue recognition.	• To test the forecasted cost to complete, for sample of contracts, we obtained the breakdown of forecasted costs and tested elements of the forecast by obtaining executed purchase orders and agreements, evaluating reasonableness of managements judgements / and assumptions using past trends and comparing the estimated costs to the actual costs incurred for the completed projects.
	• Assessed the adequacy of presentation and related disclosures in the standalone financial statements.
	Based on the procedures performed above, we considered manner of estimation of contract cost and recognition of revenue to be reasonable.
Recoverability of Trade Receivables	Our procedures towards recoverability of trade receivables involved the following:
(Refer to Notes 10 and 15 to the standalone financial statement)	• Understood and evaluated the accounting policy of the Company.
Trade receivables amounting to Rs 6,962.91 crores (including retention receivables) is a significant balance in the Companys standalone financial statements as at March 31, 2023 and assumptions used for estimating the credit loss on receivables is an area which is influenced by managements judgment.	• Evaluated the design and tested the operating effectiveness of key controls in relation to determination of estimated credit loss.
	• Inquired with senior management regarding status of collectability of the receivables.
The Company makes an assessment of the estimated credit losses basis credit risk, project status, past history, ongoing litigations and disputes, if any, existing market conditions and forward looking estimates, with the customer.	• Assessed and challenged the information used by the Management to determine the expected credit losses by considering credit risk of the customer, project status, past history, ongoing litigations and disputes, if any, existing market conditions and forward looking estimates, with the customer.
Given the relative significance of these receivables to the standalone financial statements and judgement involved as well as the nature and extent of audit procedures involved to assess the recoverability of receivables, we determined this to be a key audit matter.	Based on the procedures performed above, no significant deviations were observed in respect of managements assessment of recoverability of trade receivables.
Assessment of carrying value of investments in a subsidiary	Our procedures over the assessment of carrying value of investment in a subsidiary included the following:
(Refer to Note 9 to the standalone financial statement)	•Evaluated the design and tested the operating effectiveness of key controls in relation to the assessment of the carrying value of investment.
The Company has an investment of Rs 1,056.49 crores in KEC
Investment Holding, Mauritius, whose wholly owned subsidiary SAE Tower holdings LLC (‘SAE) is making losses over the past few years and the carrying value of the investment is higher than the net assets of SAE.	• Assessed and challenged the information used by Management for assessing impairment if any, in the carrying value of investment.
This is an indicator of a potential impairment of the investment.	• Compared the growth rates used in the Model with historical information, economic and industry forecasts.
The managements assessment of impairment depends on the value in use of SAE derived by business plans, anticipating the future market conditions and cash flows, key assumptions such as estimated long term growth rates, weighted average cost of capital and estimated operating margins.	• Evaluated the competency and capabilities of the managements external valuation expert performing the impairment assessment of the carrying value of investment.
	• Involved auditors valuation expert to assist in assessing the reasonableness of the valuation approach and methodology including the independent assessment of the underlying assumptions relating to weighted average cost of capital and terminal value growth rate.
In addition, there is significant scope for judgement in determining the assumptions underlying the forecasted results.
Given the relative significance of this investment to the standalone financial statements and the nature and extent of audit procedures involved in assessing the carrying value of this investment, we determined this to be a key audit matter.	• Checked the mathematical accuracy of the impairment model.
	• Obtained results of work performed by the component auditor of the subsidiary in their impairment testing including consistency of the future cash flow projections and assumptions used in the components valuation model.
	• Assessed the adequacy of presentation and disclosures made in the financial statements.
	Based on the above procedures performed, we observed the managements impairment assessment related to investments in a subsidiary to be reasonable.
7. The following Key Audit Matters were included in the audit report dated April 17, 2023, issued by an independent firm, containing an unmodified audit opinion on the standalone financial statements of Sri Lanka, a branch of the Parent Company issued by an independent firm of Chartered Accountants reproduced by us as under:
Estimation of Contract Cost and Consequential Revenue Recognition :	For sample of contracts, we obtained the percentage of completion calculations, and we noticed that the manner of estimation of contract cost to be reasonable.
We considered that estimation of construction contract cost is a key audit matter given the involvement of significant management judgement which has consequential impact on revenue recognition.

OTHER INFORMATION

8. The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the annual report but does not include the financial statements and our auditors report thereon. The annual report is expected to be made available to us after the date of this auditors report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE FINANCIAL STATEMENTS

9. The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

10. In preparing the standalone financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

11. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

12. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial statements/financial information of the branches and jointly controlled operations which are included in the Company to express an opinion on the standalone financial statements. We are responsible for the direction, supervision and performance of the audit of financial information of such entities included in the standalone financial statements of which we are the independent auditors. For the other entities included in the standalone financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

13. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant de_ciencies in internal control that we identify during our audit.

14. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

15. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

OTHER MATTERS

16. We did not audit the financial statements/ financial information of 33 branches and 30 jointly controlled operations included in the standalone financial results of the Company, whose financial statements / financial information reflect total assets of Rs 3,896 crores and net assets of Rs 287 crores as at March 31, 2023, total revenues of Rs 3,715 crores, total net loss after tax of Rs 187 crores, total comprehensive loss (comprising of loss and other comprehensive income) of Rs 149 crores for the year ended March 31, 2023 and net cash outflows amounting to

Rs 1 crore for the year ended March 31, 2023. The financial statements / financial information of these branches and jointly controlled operations have been audited by branch auditors and other auditors whose reports have been furnished to us by the Management, and our opinion on the standalone financial results in so far as it relates to the amounts and disclosures included in respect of these branches and jointly controlled operations, is based solely on the reports of such branch auditors and other auditors.

17. The financial statements/ financial information of 7 branches and 1 jointly controlled operation located outside India, included in the standalone financial results, which constitute total assets of Rs 567 crores and net liabilities of Rs 97 crores as at March 31, 2023, total revenue from operations of Rs 325 crores, total net loss after tax of Rs 33 crores, total comprehensive loss (comprising of loss and other comprehensive loss) of Rs 34 crores and net cash outflows amounting to Rs 11 crores for the year then ended, have been prepared in accordance with accounting principles generally accepted in their respective countries and have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Companys management has converted the financial statements/ financial information of such branches/ jointly controlled operation located outside India from the accounting principles generally accepted in their respective countries to the accounting principles generally accepted in India. We have audited the conversion adjustments, if any, made by the Companys management. Our opinion in so far as it relates to the balances and affairs of such branches and jointly controlled operation located outside India, is based on the report of such other auditors and the conversion adjustments prepared by the management of the Company and audited by us. Material uncertainty related to going concern has been reported by two branches and one jointly controlled operation on account of loss incurred during the year by these branches and jointly controlled operation which are not material in relation to the operations of the Company.

Our opinion on the standalone financial statements, and our ‘Report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

18. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure B, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

19. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches.

(c) The reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

(d) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches and the financial information/ financial statements received from the jointly controlled operations.

(e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act.

(f) On the basis of the written representations received from the directors as on April 1, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.

(g) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and its 40 branches, and the operating effectiveness of such controls, refer to our separate Report in "Annexure A".

(h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. The standalone financial statements disclose the impact, if any, of pending litigations on the standalone financial position of the Company, its branches and jointly controlled operations – Refer note 57 to the standalone financial statements.

ii. Provision has been made in the standalone financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer note 36 to the standalone financial statements.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year.

iv. a) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to these standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer note 9 to the standalone financial statements);

(b) The management has represented that, to the best of its knowledge and belief, as disclosed in the notes to these standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer note 9 to the standalone financial statements); and

(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

v. The dividend declared and paid during the year by the Company is in compliance with Section 123 of the Act.

vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (as amended), which provides for books of account to have the feature of audit trail, edit log and related matters in the accounting software used by the Company, is applicable to the Company only with effect from financial year beginning April 1, 2023, the reporting under clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), is currently not applicable.

20. The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N/N500016 Chartered Accountants

	Sarah George
	Partner
Place: Mumbai	Membership Number: 045255
Date: May 03, 2023	UDIN: 23045255BGYVVM1375

Annexure A to Independent Auditors Report

Referred to in paragraph 19 (g) of the Independent Auditors Report of even date to the members of KEC International Limited on the standalone financial statements as of and for the year ended March 31, 2023

REPORT ON THE INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE FINANCIAL STATEMENTS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE ACT

1. We have audited the internal financial controls with reference to standalone financial statements of KEC International Limited ("the Company") as of March 31, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date, which includes the internal financial controls over financial reporting of the Companys 40 branches.

MANAGEMENTS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

2. The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ("the Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

AUDITORS RESPONSIBILITY

3. Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained, and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matter paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system with reference to standalone financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE FINANCIAL STATEMENTS

6. A companys internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE FINANCIAL STATEMENTS

7. Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial controls with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OPINION

8. In our opinion, the Company including 40 branches has, in all material respects, an adequate internal financial controls system with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by ICAI.

OTHER MATTER

9. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls with reference to standalone financial statements insofar as it relates to 40 Branches of the Company, is based on the corresponding reports of the auditors of such Branches of the Company. Our opinion is not modified in respect of this matter.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N/N500016 Chartered Accountants

	Sarah George
	Partner
Place: Mumbai	Membership Number: 045255
Date: May 03, 2023	UDIN: 23045255BGYVVM1375

Annexure B to Independent Auditors Report

Referred to in paragraph 18 of the Independent Auditors Report of even date to the members of KEC International Limited on the standalone financial statements as of and for the year ended March 31, 2023 i. (a) (A) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of Property, Plant and Equipment.

(B) The Company is maintaining proper records showing full particulars of Intangible Assets.

(b) The Property, Plant and Equipment are physically verified by the Management according to a phased programme designed to cover all the items over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the Property, Plant and Equipment has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in Note 5 to the standalone financial statements, are held in the name of the Company, except for the following :

Description of property	Gross carrying value (Rs in Crores)	Held in the name of	Whether promoter, director or their relative or employee	Period held - indicate range, where appropriate	Reason for not being held in the name of the Company
Freehold land at Jabalpur	0.81	SAE (I) Limited	No	October 01, 2007*	The title has been transferred to and vested in the Company pursuant to schemes of amalgamation/arrangement in the earlier years. Third party has claimed title of the property and the said matter is sub judice before the Court.
Freehold land at Mysore	24.24	RPG Telecom Limited	No	March 01, 2010*	The title has been transferred to and vested in the Company, pursuant to the SchemesofAmalgamation/Arrangement in earlier years. The Company has paid property maintenance charges to Karnataka Industrial Area Development Board (KIADB) as per the terms of sale deed and initiated the process for change of name from RPG Telecom Limited to KEC International Limited in their records.
Freehold land at Village Dhanot, Taluka Kalol, Gujarat	-	i. Asian Cables Corporation Limited ii. CETEX Petrochemicals Limited	No No	March 01, 2010* March 31, 2005*	The title has been transferred to and vested in the Company, pursuant to the SchemesofAmalgamation/Arrangement in earlier years. Applications for change of name in the revenue record were rejected by Sub-Divisional Officer (SDO) for want of payment of stamp duty.
					The Company has filed a revision application before the Appropriate Authority challenging the order passed by the SDO.
Building at Bezzola Complex, Chembur	9.72	Harrisons Malayalam Limited	No	July 13, 2016	The title has been transferred to and vested in the Company, pursuant to the agreement for sale in earlier years.
					The registration of the Sale deed is pending on account of certain procedural formalities at the end of Harrisons Malayalam Limiteds Banker.

* The dates stated in column refers to transfer and vesting date pursuant to the appointed date as per the Schemes of Amalgamation/ Arrangement with the companies stated in column "Held in the name of".

(d) The Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year. Consequently, the question of our commenting on whether the revaluation is based on the valuation by a Registered Valuer, or specifying the amount of change, if the change is 10% or more in the aggregate of the net carrying value of each class of Property, Plant and Equipment (including Right of Use assets) or intangible assets does not arise.

(e) Based on the information and explanations furnished to us, no proceedings have been initiated on or are pending against the Company for holding benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) (formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)) and Rules made thereunder, and therefore the question of our commenting on whether the Company has appropriately disclosed the details in its standalone financial statements does not arise.

ii. (a) The physical verification of inventory has been conducted at reasonable intervals by the Management during the year and, in our opinion, the coverage and procedure of such verification by Management is appropriate. The discrepancies noticed on physical verification of inventory as compared to book records were not 10% or more in aggregate for each class of inventory and have been appropriately dealt with in the books of account.

(b) During the year, the Company has been sanctioned working capital limits in excess of Rs 5 crores, in aggregate, from banks on the basis of security of current assets. The Company has filed quarterly returns or statements with such banks, which are in agreement with the unaudited books of account as set out below (Also refer Note 30 to the standalone financial statements).

iii. (a) The Company has made investments in one company, granted unsecured loan to one company and stood guarantee to four companies. The aggregate amount of guarantees during the year, and balance outstanding at the balance sheet date with respect to such loans and guarantees to the subsidiaries and a jointly controlled operation are as per the table given below:

Particulars	Loans (Rs In Crore)	Guarantees* (Rs In Crore)
Aggregate amount provided during the year#
- Subsidiaries	4.00	933.01
- Jointly Controlled Operation	-	1,082.03
Balance outstanding as at balance sheet date in respect of the above
- Subsidiaries	-	933.01
- Jointly Controlled Operation	-	1082.03

# Excludes impact of revaluation of foreign currency loans * converted at closing rate

(Also refer Note 9, 18 and 54 to the standalone financial statements)

(b) In respect of the aforesaid investments/guarantees, the terms and conditions under which such investments were made/guarantees provided are not prejudicial to the Companys interest.

(c) In respect of the aforesaid loans and loans having opening balances, the schedule of repayment of principal and payment of interest has been stipulated, and the parties are repaying the principal amounts, as stipulated, and are also regular in payment of interest as applicable.

(d) In respect of the aforesaid loans and loans having opening balances, there is no amount which is overdue for more than ninety days.

(e) There were no loans which fell due during the year and were renewed or extended. Further, no fresh loans were granted to same parties to settle the existing overdue loans.

(f) Following loans were granted during the year, including to related parties under Section 2(76), which are repayable on demand or where no schedule for repayment of principal [and payment of interest has been stipulated by the Company.

(Rs in Crore)

Particulars	All Parties	Promoters	Related Parties
Aggregate of loans
- Repayable on demand	4.00	-	4.00
Percentage of loans	100%	-	100%

iv. The Company is engaged in providing infrastructural facilities as specified in Schedule VI to the Act and accordingly, the provisions of Section 186, except sub section (1), of the Act are not applicable to the Company. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186(1) of the Act in respect of the loans and investments made and guarantees provided by it.

v. The Company has not accepted any deposits or amounts which are deemed to be deposits referred in Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of

India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing undisputed statutory dues in respect goods and service tax, provident fund, employees state insurance, sales tax, income tax, service tax, duty of customs, duty of excise , value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no statutory dues of provident fund, employees state insurance, cess which have not been deposited on account of any dispute. The particulars of other statutory dues referred to in sub-clause (a) as at March 31, 2023 which have not been deposited on account of a dispute, are as follows:

Name of the statute	Nature of dues	Amount (Rs in Crores)	Period to which the amount relates	Forum where the dispute is pending
The Central Sales Tax Act, 1956 and Local Sales Tax Acts	Sales tax and value added tax	20.95	1999-2000 to 2017-2018	Appellate Authority – up to Commissioners level
		21.23	2006-2007 to 2015-2016	Revisionary Board of Madhya Pradesh & West Bengal
		1.99	2007 -2008 to 2014-2015	Appellate Tribunal
		2.14	1994-1995 to 2014-2015	Rajasthan Tax Board, Ajmer
		2.58	2012 - 2013	Kerala High Court
The Finance Act, 1994	Service Tax	36.48	2014-2015 to 2017-2018	Appellate Authority
		7.31	2007 -2008 t0 2015 -2016	Customs Excise and Service Tax
				Appellate Tribunal (CESTAT)
		145.33	2004-2005 to 2008-2009	Supreme Court
The Customs Act, 1962	Custom Duty	0.60	1995-1996	High Court
The Central Excise Act, 1944	Excise Duty	0.71	2008 -2009 to 2014-2015	Appellate Authority – up to Commissioners level
		8.74	2003 -2004 to 2016-2017	Customs Excise and Service Tax Appellate Tribunal (CESTAT)
		0.13	2008 - 2009	Supreme Court
The Income- Tax Act, 1961	Income Tax	0.38	2016-17	Income Tax Appellate Tribunal
Entry Tax Act, 1976, Madhya Pradesh	Entry Tax	0.20	2009 -2010 to 2015 -2016	Appellate Authority – up to Commissioners level
Entry Tax, Gurgaon	Entry Tax	1.25	2013-14 to 2016-17	West Bengal High Court
Goods and Services Tax	Goods and Services Tax	4.58	2017 -2018 to 2021- 2022	Appellate Authority

viii. According to the information and explanations given to us and the records of the Company examined by us, there are no transactions in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

ix. (a) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest to any lender during the year.

(b) According to the information and explanations given to us and on the basis of our audit procedures, we report that the Company has not been declared Wilful Defaulter by any bank or financial institution or government or any government authority.

(c) In our opinion, and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained. (Also refer Note 76 to the standalone financial statements).

(d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the standalone financial statements of the Company, we report that no funds raised on short-term basis have been used for long-term purposes by the Company.

(e) According to the information and explanations given to us and on an overall examination of the standalone financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries.

(f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries.

x. (a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, the reporting under clause 3(x)(a) of the Order is not applicable to the Company.

(b) The Company has not made any preferential allotment or private placement of shares or fully or partially or optionally convertible debentures during the year. Accordingly, the reporting under clause 3(x)(b) of the Order is not applicable to the Company.

xi. (a) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

(b) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, a report under Section 143(12) of the Act, in Form ADT-4, as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 was not required to be filed with the Central Government. Accordingly, the reporting under clause 3(xi)(b) of the Order is not applicable to the Company.

(c) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, the Company has received whistle-blower complaints during the year, which have been considered by us for any bearing on our audit and reporting under this clause. In respect of certain complaints, for which preliminary findings of the investigations have been provided to us by management, our consideration of the complaints having any bearing on our audit is limited to such preliminary findings. xii. As the Company is not a Nidhi Company and the Nidhi

Rules, 2014 are not applicable to it, the reporting under clause 3(xii) of the Order is not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard 24 "Related Party Disclosures" specified under Section 133 of the Act.

xiv. (a) In our opinion and according to the information and explanation given to us, the Company has an internal audit system commensurate with the size and nature of its business.

(b) Some of the Internal Audit Reports of the Company are in progress and accordingly, we have considered the Internal Audit Reports completed and made available to us for the purpose of our audit.

xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the reporting on compliance with the provisions of Section 192 of the Act under clause 3(xv) of the Order is not applicable to the Company.

xvi. (a) The Company is not required to be registered under

Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the reporting under clause 3(xvi)(a) of the Order is not applicable to the Company.

(b) The Company has not conducted non-banking financial / housing finance activities during the year. Accordingly, the reporting under clause 3(xvi)(b) of the Order is not applicable to the Company.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. Accordingly, the reporting under clause 3(xvi)(c) of the Order is not applicable to the Company.

(d) Based on the information and explanations provided by the management of the Company, the Group has 3 CICs as part of the Group. We have not, however, separately evaluated whether the information provided by the management is accurate and complete.

xvii. The Company has not incurred any cash losses in the financial year or in the immediately preceding financial year

Following matters have been reported by the auditors of the respective components under the report on the matters specified in paragraphs 3 and 4 of the Companies (Auditors Report) Order, 2020 (CARO) on the financial statements of respective components of the Company which have been reproduced under this clause by us as under:

Sr. No.	Name of component	Date of report	Matters reproduced
1	KEC International Limited - Algeria Branch	April 19, 2023	The branch has incurred cash losses of DZD 459,524.58 in the financial year and of DZD 748,563.79 in the immediately preceding financial year.
2	KEC International Limited - Afghanistan Branch	April 26, 2023	The branch has incurred cash losses of USD 29.63 Lakhs in the financial year and of USD 15.74 Lakhs in the immediately preceding financial year.
3	KEC International Limited - Cameroon Branch	April 19, 2023	The branch has incurred cash losses of XAF 6,453,564 in the financial year and of XAF 94,749,766 in the immediately preceding financial year.
4	KEC International Limited - Egypt Branch	April 19, 2023	The branch has not incurred cash losses in the financial year, however incurred cash losses of EGP 2,258,865.23 in the immediately preceding financial year.
5	KEC International Limited - Ethiopia Branch	April 19, 2023	The branch has incurred cash losses of ETB 1,515,922 in the financial year and of ETB 434,927 in the immediately preceding financial year.
6	KEC International Limited - Georgia Branch	April 25, 2023	The branch has incurred cash losses of GEL 1,201,781 in the financial year and of GEL.[0] in the immediately preceding financial year.
7	KEC International Limited - Jordan Branch	April 08, 2023	The branch has incurred cash losses of JoD.(795,084) in the financial year and of JoD. (2,032,729) in the immediately preceding financial year.
8	KEC International Limited - Kenya Branch	April 17, 2023	The branch has incurred cash profits of Kshs. 175,196,540/- in the financial year and cash losses of Kshs. 27,583,665 in the immediately preceding financial year.
9	KEC International Limited - Kuwait Branch	April 19, 2023	The branch has incurred cash losses of KWD 11,682.760 in the financial year and of KWD 56.616 in the immediately preceding financial year.
10	KEC International Limited - Lebanon Branch	April 19, 2023	The branch has incurred cash losses of LBP 2,485,425 in the financial year and no cash losses in the immediately preceding financial year.
11	KEC International Limited - Libya Branch	April 22, 2023	The branch has incurred cash losses of LYD 368,820.022 in the financial year and of LYD 283,643.618 in the immediately preceding financial year.
12	KEC International Limited - Moldova Branch	April 25, 2023	The branch has incurred cash losses of in the financial year and of MDL 117,300 in the immediately preceding financial year.
13	KEC International Limited - Morocco Branch	April 24, 2023	The branch has incurred cash losses of MAD 7,505,585 in the financial year and of MAD 2,223,121 in the immediately preceding financial year.
14	KEC International Limited - Mozambique Branch	April 27, 2023	The branch has incurred cash losses of MZN 646,031,682 in the financial year and of MZN 8,681,671 in the immediately preceding financial year.
15	KEC International Limited - Nepal Branch	April 18, 2023	The branch has not incurred any cash losses in the financial year, however it has incurred cash losses of Rs 56,68,120 in the immediately preceding financial year.
16	KEC International Limited - Nicaragua Branch	April 26, 2023	The branch has incurred cash losses of NIO NIL in the financial year and of NIO 6,90,79,025 in the immediately preceding financial year.
17	KEC International Limited - Senegal Branch	April 25, 2023	The branch has incurred cash losses of XOF [15,88,05,242] in the financial year and of XOF [0] in the immediately preceding financial year.
18	KEC International Limited - South Africa Branch	April 26, 2023	The branch has incurred cash losses of ZAR 2,706,475 in the financial year and of ZAR 131,227,570 in the immediately preceding financial year.
19	KEC International Limited - Togo Branch	April 24, 2023	The branch has incurred cash losses of XOF 2,387,273,503 in the financial year and of XOF 564,729,613 in the immediately preceding financial year.
20	KEC International Limited - Tunisia Branch	April 19, 2023	The branch has incurred cash losses of TND 43,310.188 in the financial year and of TND 55,584.638 in the immediately preceding financial year.
21	KEC International Limited - UAE Branches	April 27, 2023	The Branches have incurred cash losses of AED 67,030,860 during the financial year ended March 31, 2023 and AED 39,191,292 in the immediately preceding financial year.
22	KEC International Limited - Uganda Branch	April 17, 2023	The branch has incurred cash losses of UGX. [5,898,346,676] in the financial year and of UGX. [4,373,373,939] in the immediately preceding financial year.
23	KEC International Limited - Zambia Branch	April 19, 2023	The branch has incurred cash losses of ZMW 13,628.68 in the financial year and of ZMW 15,031,451.48 in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors during the year and accordingly the reporting under clause (xviii) is not applicable.

xix. According to the information and explanations given to us and on the basis of the financial ratios (Also refer Note 65 to the standalone financial statements), ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date will get discharged by the Company as and when they fall due.

xx. (a) In respect of other than ongoing projects, as at balance sheet date, the Company does not have any amount remaining unspent under Section 135(5) of the Act. Accordingly, reporting under clause 3(xx)(a) of the Order is not applicable.

(b) The Company has transferred the amount of Corporate Social Responsibility remaining unspent under sub-section (5) of Section 135 of the Act pursuant to ongoing project/(s) to a special account in compliance with the provision of sub-section (6) of Section 135 of the Act. (Also refer Note 60 to the financial statements)

xxi. The reporting under clause 3(xxi) of the Order is not applicable in respect of audit of Standalone Financial Statements. Accordingly, no comment in respect of the said clause has been included in this report.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N/N500016 Chartered Accountants

	Sarah George
	Partner
Place: Mumbai	Membership Number: 045255
Date: May 03, 2023	UDIN: 23045255BGYVVM1375