The following discussion is intended to convey management?s perspective on our financial condition and results of operations for Fiscals 2025, 2024 and 2023. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our Restated Financial Information as of and for Fiscals 2025, 2024 and 2023, including the related annexures.
Unless otherwise indicated or context otherwise requires, the financial information for Fiscals 2025, 2024, and 2023 is derived from the Restated Financial Information, included in this Red Herring Prospectus. For further information, see
"Restated Financial Information" and "Summary of Financial Information" on pages 300 and 91. Our Fiscal year ends on March 31 of each year. Accordingly, all references to a particular Fiscal are to the 12-month period ended March 31 of that year.
The industry-related information contained in this section is derived from the industry report titled "Assessment of the infrastructure EPC industry in India" dated July, 2025, prepared by CRISIL (the "CRISIL Report"). We commissioned and paid for the Industry Report for the purposes of confirming our understanding of the industry specifically for the purpose of the Offer, as no report is publicly available which provides a comprehensive industry analysis, particularly for our Company?s services, similar to the CRISIL Report. CRISIL is an independent agency and is not a related party of our Company, its Directors, Promoters, Key Managerial Personnel, Senior Management or the Book Running Lead Managers. A copy of the CRISIL Report is available on the website of our Company at https://www.vikrangroup.com/investors-relation/financials.
We have included certain non-GAAP financial measures and other performance indicators relating to our financial performance and business in this Red Herring Prospectus, each of which is a supplemental measure of our performance and liquidity and not required by, or presented in accordance with, Ind AS, Indian GAAP, IFRS or U.S. GAAP. Furthermore, such measures and indicators are not defined under Ind AS, IFRS, U.S. GAAP or other accounting standards, and therefore should not be viewed as substitutes for performance, liquidity or profitability measures under such accounting standards. In addition, such measures and indicators, are not standardised terms, hence a direct comparison of these measures and indicators between companies may not be possible. Other companies may calculate these measures and indicators differently from us, limiting their usefulness as a comparative measure. Although such measures and indicators are not a measure of performance calculated in accordance with applicable accounting standards, our Company?s management believes that they are useful to an investor in evaluating our operating performance. For risks relating to such non-GAAP measures, see "Risk Factors 70. We have presented certain supplemental information of our performance and liquidity which is not prepared under or required under Ind AS" on page 80.
This discussion contains forward-looking statements that involve risks and uncertainties and reflects our current view with respect to future events and financial performance. Actual results may differ from those anticipated in these forward-looking statements as a result of factors such as those set forth under "Forward-Looking Statements" and "Risk Factors" on pages 21 and 38, respectively.
Overview
For details in relation to our business overview, see "Our Business Overview" on page 208.
Significant Factors Affecting our Financial Condition and Results of Operations
Our results of operations and financial condition are affected by a number of important factors including:
Government policies, macro-economic conditions and performance of the power transmission and distribution sectors
Our business is substantially dependent on co-existence of power transmission and distribution sector in India which is primarily undertaken or awarded by governmental authorities, entities funded by the central and state Governments which is undertaken through tariff based competitive bidding process. We currently derive and, in the future expect to derive a significant portion of our revenue from power transmission and distribution business projects in India which are dependent on budgetary allocations made by central and state Governments, participation from multilateral agency sponsored developments, public bodies as well as significant access through private sector funding. We believe that sustained increase in budgetary allocation for and the participation of public bodies, multilateral agencies in and the development of comprehensive infrastructure policies that encourage greater private sector participation and funding will result in several power transmission and distribution business and other infrastructure projects being launched in India.
Macroeconomic factors like increasing need of power for residential, industrial and commercial purposes, increased usage of electricity in rural economy, creation of green energy corridors higher focus on renewable energy and related governmental policies thereof, Indian government?s specific focus on transmission sector and related policies will have a significant impact on our prospects and results of operations. Other macroeconomic factors like global GDP growth, Indian foreign investment regulations, oil prices, financial stability may impact the economic environment of India and the policies of the government with respect to the infrastructure sector. A change in policy resulting from a change in government (including change in central government and/or state governments of regions where our projects are under construction) may also impact our business.
Diversified Order Book across geographies
Our diversified Order Book impacts our revenues and profitability in a number of ways. In our industry, the Order Book holds significant importance as it represents the estimated contract value of the unexecuted portion of a companys existing assigned EPC contracts and provides visibility on future revenues. Our Order Book is diversified across business verticals including power transmission and distribution, water infrastructure, and railway infrastructure. Although our power sector business vertical forms the largest part of our Order Book, it has different components which ensure that our orderbook continues to remain diversified. For further details, see "- Description of our Business and Operations" on page 225.
Additionally, our ability to leverage our experience in executing projects in diverse geographies provides us with a significant advantage in project execution and timely delivery in India.
The tables below set out details of our Order Book by business verticals and types of customers, as of the dates mentioned:
| As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 | ||||||||||
| Business Vertical | No. of Bids Mad e | No. of Bids Awarde d | Value Of Bids Made | Value of Bids Awarde d | No. of Bids Mad e | No. of Bids Awarde d | Value Of Bids Made | Value of Bids Awarde d | No. of Bids Mad e | No. of Bids Awarde d | Value Of Bids Made | Value of Bids Awarde d |
| Power transmissio n and distribution | 45 | 8 | 72,386.4 0 | 6,995.3 8 | 7 | 3 | 11,213.6 0 | 6,026.29 | 18 | 9 | 22,203.6 0 | 8,485.93 |
| Water infrastructu re | 1 | 1 | 1,395.70 | 13.87 | 21 | 6 | 10,167.2 | 4,249.63 | 14 | 8 | 45,771.9 0 | 12,846.1 1 |
| Railways & Infra | 0 | 0 | - | (0.01) | 0 | 0 | 0 | (8.72) | 11 | 1 | 25,088.6 0 | 380.21 |
| Total | 46 | 9 | 73,782.1 0 | 7,009.2 5 | 28 | 9 | 21,380.8 0 | 10,267.2 0 | 43 | 18 | 93,064.1 0 | 21,712.2 5 |
| Fiscal 2025 | Fiscal 2024 | Fiscal 2023 | ||||||||||
| Types of clients | No. of Bids Mad e | No. of Bids Awarde d | Value Of Bids Made | Value of Bids Awarde d | No. of Bids Mad e | No. of Bids Awarde d | Value Of Bids Made | Value of Bids Awarde d | No. of Bids Mad e | No. of Bids Awarde d | Value Of Bids Made | Value of Bids Awarde d |
| State Governme nt | 25 | 5 | 34,895.5 0 | 5,456.0 0 | 19 | 4 | 10,956.3 5 | 417.74 | 15 | 5 | 51,951.5 0 | 13,899.9 7 |
| Central Governme nt | 0 | 0 | 0 | 46.10 | 4 | 0 | 566.26 | (8.73) | 16 | 2 | 28,745.0 0 | 302.22 |
| Public sector undertakin gs (1) | 21 | 4 | 38,886.6 0 | 1,447.1 6 | 2 | 2 | 3,195.15 | 3,195.1 5 | 5 | 5 | 1,351.10 | 1,351.10 |
| Private sector | 0 | 0 | 0 | 59.99 | 3 | 3 | 6,663.04 | 6,663.0 4 | 7 | 6 | 11,016.5 0 | 6,158.96 |
| Total | 46 | 9 | 73,782.1 0 | 7,009.2 5 | 28 | 9 | 21,380.8 0 | 10,267. 20 | 43 | 18 | 93,064.1 0 | 21,712.2 5 |
Note:
1. Comprises government agencies and government-owned enterprises
The significant growth of our business for the Financial Years ended March 31, 2023, March 31, 2024 and March 31, 2025 has contributed significantly to our financial strength. Our total revenue increased at a CAGR of 32.17 % while our profit for the year increased at a CAGR of 34.78 % between the Financial Year ended March 31, 2023 to the Financial Year ended March 31, 2025.
Our bidding and execution capabilities
Most of our EPC contracts are obtained through a competitive bidding process. In selecting consultants and contractors for major engineering consultancy and EPC projects, customers generally limit the tender to consultants and contractors they have pre-qualified based on several criteria. These criteria include, among other factors, experience, technological capacity and performance, reputation for quality, safety record, financial strength and bonding capacity and size of previous contracts in similar projects, as well as price competitiveness of the bid. Our recent experience and the infrastructure initiatives by the Governments across the world indicate that the customers in the energy industry are expected to develop larger and more technically complex EPC projects. Accordingly, this is resulting into awarding the entire contract to a single EPC contractor in order to avoid lack of synergies between multiple contractors. Therefore, while we are usually eligible to bid for the transmission projects opened in India on the basis of pre-qualification criteria, the execution and completion of such projects is dependent upon factors which may not be foreseeable at the time of bidding.
A significant portion of our revenue and earnings is generated from large project awards. The details of contribution to revenue from operations by each vertical is set out below:
| For the Fiscal 2025 | For the Fiscal 2024 | For the Fiscal 2023 | ||||
| Vertical | Revenue from operations generated | % of total revenue from operations | Revenue from operations generated | % of total revenue from operations | Revenue from operations generated | % of total revenue from operations |
| Power | 6,676.69 | 72.90 | 3,875.83 | 49.31 | 2,530.80 | 48.27 |
| Transmission and Distribution Water | 2,453.25 | 26.79 | 3,873.37 | 49.28 | 2,590.08 | 49.40 |
| Infrastructure Railways & Infra | 28.53 | 0.31 | 110.28 | 1.40 | 122.17 | 2.33 |
| Total | 9,158.47 | 100.00 | 7,859.48 | 100.00 | 5,243.05 | 100.00 |
We are usually qualified to bid for most projects in India. We operate in competitive markets where it is difficult to predict whether and when we will receive awards since these awards and projects often involve complex and lengthy negotiations and bidding processes. These processes can be impacted by a wide variety of factors including governmental approvals, our ability to show experience of working on similar projects, financing contingencies, commodity prices, investment bottlenecks such as environmental clearance and land acquisition issues, and, overall market and economic conditions. During an economic downturn, many of our competitors may be more inclined to take greater or unusual risks or terms and conditions in a contract that we might not deem favourable or standard as per the market practice, since investment in such projects by the Governments or entities may be reduced significantly and be only acceptable if a bidder is accepting the terms prescribed by the employer. Since a significant portion of our revenue is generated from large projects, our results of operations can fluctuate from quarter to quarter and year to year depending on whether and when project awards occur and the commencement and progress of work under awarded contracts.
Nature of contracts and the risks associated therewith
Under our EPC contracts with our customers, we undertake our projects business in an integrated manner as we have the key competencies and in-house resources to deliver a project from its conceptualization to completion. There are two types of EPC contracts namely, (i) Design and Build Contracts ("DBC"); and (ii) Item Rate Contracts. DBCs provide for a single price for the total amount of work, subject to variations pursuant to changes in the customer?s project requirements. In DBCs, the customer supplies conceptual information pertaining to the project and spells out the project requirements and specifications.
Item rate contracts are also known as unit-price contracts or schedule contracts. For item rate contracts, we are required to quote rates for individual items of work on the basis of a schedule of quantities furnished by our customer. The design and drawings are provided by the customer. Typically, our risk is lower in item rate contracts as, other than escalation in the rates of items quoted by us to the customer, we are paid according to the actual amount of work on the basis of the per-unit price quoted.
Additionally, we are typically required to indemnify the customer and its members, officers, and employees against all actions, proceedings, claims, liabilities, damages, losses, and expenses arising from any failure or negligence on our part to fulfil our obligations under an EPC contract. We are also generally required to provide a performance security guarantee equal to a fixed percentage of the contract price, and in certain cases, to furnish unconditional bank guarantees for specific projects. Furthermore, under some EPC contracts, the authorities are obligated to make an interest-bearing advance payment equal to 10% of the contract price, exclusively for mobilization expenses, usually in two instalments. This amount is subsequently adjusted in billings in accordance with the EPC contract terms. However, for internationally funded projects, such advance payments are typically interest-free.
We may also be required to pay liquidated damages if there are delays in completion of project milestones, which are often specified as a fixed percentage of the balance unexecuted works. Our customers are entitled to deduct the amount of damages from the payments due to us
Competition
We operate in a highly competitive environment in the Indian markets and the industry is highly fragmented. Success of our operations depends on our ability to effectively compete, including by continuing to distinguish our brand and products from competition by maintaining our brand perception centred around the values of trust and transparency and by continuing to optimize our product assortment and marketing campaigns to cater to preferences in the markets in which we operate. As a result, to remain competitive in the market we must, in addition, continuing to meet exacting quality standards, continuously strive to reduce our production and distribution costs and improve our operating efficiencies and innovate our products offering. If we fail to do so, it may have an adverse effect on our market share and results of operations. Many of our competitors may be larger than us and may benefit from greater economies of scale and operating efficiencies. There can be no assurance that we can continue to effectively compete with such manufacturers in the future, and failure to compete effectively may have an adverse effect on our business, financial condition, and results of operations. Moreover, the competitive nature of the manufacturing industry may result in lower prices for our products and decreased profit margins, which may materially adversely affect our revenue and profitability.
Cost drivers
Expenses
Our expenses include:
Cost of materials consumed: During Fiscals 2025, 2024, and 2023, our cost of materials consumed (including stores and spares) were 4,836.75 million, 3,849.57 million, and 2,664.83 million, constituting 52.44%, 48.64%, and 50.36%, of our total income, respectively.
Project related expense: Our project related expenses include sub-contracting charges, technical consultancy charges, plant and machinery hire charges, transportation charges, loading and unloading charges, survey costs, warranty expenses and other project expenses. During Fiscals 2025, 2024, and 2023, these expenses were 1,604.22 million, 1,677.68 million, and 961.78 million, constituting 17.39%, 21.20%, and 18.17%, of our total income, respectively.
Employee benefit expenses: During Fiscals 2025, 2024, and 2023 our employee benefit expenses were 676.25 million, 589.63 million, and 405.26 million constituting 7.33%, 7.45%, and 7.66%, of our total income, respectively.
Finance costs: Our finance costs include interest expense on borrowings carried at amortised cost, interest expense on delayed payment of statutory dues, interest expense on lease liabilities, interest expense on delayed payment to micro and small enterprises vendors and other borrowing costs. During Fiscals 2025, 2024, and 2023, these expenses were 535.91 million, 339.77 million, and 282.16 million, constituting 5.81%, 4.29%, and 5.33%, of our total income, respectively.
Depreciation and amortization expenses: During Fiscals 2025, 2024, and 2023 our depreciation and amortization expenses were 29.72 million, 40.51 million, and 36.98 million constituting 0.32%, 0.51%, and 0.70%, of our total income, respectively.
Other expenses
We also incur other expenses such as rent expense, vehicle hire charges, security charges, insurance, rates and taxes, travelling and conveyance, consulting and professional fees and miscellaneous expenses. The total other expenses incurred by us were 438.90 million, 409.65 million, and 414.04 million, constituting 4.76%, 5.18%, and 7.82% of our total income during Fiscals 2025, 2024, and 2023, respectively.
Supply chain management
Our centralized procurement function is committed to optimizing material acquisition for our diverse projects. By centralizing operations at our corporate office, we have implemented a robust strategy that delivers significant cost savings and fosters strong partnerships with suppliers. During the last three Fiscals, we had over 3,500 suppliers and service providers across many states. Our extent of purchases from suppliers in any particular period depends inter alia on the location of our projects, nature of our projects, commercial terms, proximity of suppliers, etc. By diversifying our supply chain network, we endeavour to maintain regular availability of materials and equipments.
Critical accounting policies
The significant accounting policies followed by us in the preparation of our Restated Financial Information are set out below:
a) Revenue Recognition
Revenue is measured based on the transaction price, which is the consideration, adjusted for variable considerations, if any, as specified in the contracts with the customers. Revenue excludes taxes collected from customers on behalf of the government. Accruals for variable considerations are estimated based on accumulated experience and underlying agreements with customers.
The Company satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:
As the entity performs, the customer simultaneously receives and consumes the benefits provided by the entity?s performance.
The entity?s performance creates or enhances an asset (e.g., work in progress) that the customer controls as the asset is created or enhanced.
The entity?s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.
Performance obligations with reference to EPC contracts are satisfied over the period of time, and accordingly, revenue from such contracts is recognized based on progress of performance determined using input method with reference to the cost incurred on contract and their estimated total costs. Margin is not recognised until the outcome of the contract is certain. Transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party. Revenue, measured at transaction price, is adjusted towards liquidated damages, time value of money and price variations, escalation, change in scope etc. wherever, applicable. Variation in contract work and other claims are included to the extent that the amount can be measured reliably, and it is agreed with customer. Margin is not recognised until the outcome of the contract is certain.
The Company evaluates whether each contract consists of a single performance obligation or multiple performance obligations. Due to the nature of the work required to be performed on many of the performance obligations, the estimation of total revenue and cost at completion is subject to many variables and requires significant judgement. The Company considers its experience with similar transactions and expectations regarding the contract in estimating the amount of variable consideration to which it will be entitled and determining whether the estimated variable consideration should be constrained. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved.
Contracts where the performance obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration, is recognised as per the input method, based on the nature of obligations to be performed. The Company determines the input method on the basis of ratio of costs incurred to date to the total estimated costs at completion of performance obligation. Revenue is recognised when the Company satisfies performance obligations by transferring the promised services or goods to its customers. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved.
Contract modifications are accounted for when additions, deletions or changes are approved either to the contract scope or contract price.
Progress billings are generally issued upon completion of certain phases of the work as stipulated in the contract. Billing terms of the over-time contracts vary but are generally based on achieving specified milestones. The difference between the timing of revenue recognised and customer billings result in changes to contract assets (unbilled work in progress) and contract liabilities. Contractual retention amounts billed to customers are generally due upon expiration of the contract period.
The contracts generally result in revenue recognised in excess of billings which are presented as contract assets in the restated statement of assets and liabilities. Amounts billed and due from customers are classified as receivables on the statement of financial position. 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. Contract liabilities represent amounts billed to customers in excess of revenue recognised till date. A liability is recognised for advance payments, 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. The same is presented as contract liability in the restated statement of assets and liabilities.
Estimates of revenue and costs are reviewed periodically and revised, wherever circumstances change, resulting increases or decreases in revenue determination, is recognized in the restated statement of profit and loss in the period in which estimates are revised.
Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in restated statement of profit and loss immediately in the period in which such costs are incurred.
Interest income is accrued on a time proportion basis, by reference to the amount outstanding and at the effective interest rate applicable. Other non-operating income is recognised as and when due or received, whichever is earlier.
b) Taxes
Income tax expense comprises of current tax expense and deferred tax expenses. Current tax and deferred tax are recognized in Restated statement of profit and loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.
(i) Current income tax:
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act of the respective jurisdiction. The current tax is calculated using tax rates that have been enacted or substantively enacted, at the reporting date.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
(ii) Deferred tax:
Deferred tax is recognized using the Balance Sheet approach on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts.
Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority.
The Company recognises deferred tax liability for all taxable temporary differences, except to the extent that both of the following conditions are satisfied:
When the Company can control the timing of the reversal of the temporary difference; and
It is probable that the temporary difference will not reverse in the foreseeable future. c) Property, Plant and Equipment
All items of property, plant and equipment are initially recorded at cost. Cost of property, plant and equipment comprises purchase price, non-refundable taxes, levies and any directly attributable cost of bringing the asset to its working condition for the intended use. Subsequent to initial recognition, property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.
The cost of an item of property, plant and equipment is recognized as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The cost includes the cost of replacing part of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying property, plant and equipment.
Items such as spare parts, stand-by equipment and servicing equipment that meet the definition of property, plant and equipment are capitalized at cost and depreciated over their useful life. Costs in nature of repairs and maintenance are recognized in the Restated statement of profit and loss as and when incurred.
Depreciation on property, plant and equipment is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 as per straight line method.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of transition date, measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
d) Investment properties
Investment properties are held to earn rentals or for capital appreciation, or both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are measured initially at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognised in restated statement of profit and loss as incurred. Subsequent to initial recognition, investment properties are measured at cost less any accumulated impairment losses.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its investment properties recognised as of transition date, measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
e) Intangible assets
Intangible assets such as computer software acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment loss, if any.
Intangible assets such as computer software is amortised over the estimated useful life of 3 years on straight line method and is recognised in the restated statement of profit and loss under the head "Depreciation and Amortisation expense".
The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial year and the amortization period is revised to reflect the changed pattern, if any. On transition to Ind AS, the Company had elected to continue with the carrying value of all of intangible assets recognised and measured as per the previous GAAP and had used that carrying value as the deemed cost of the property, plant and equipment.
f) Inventories
The stock of construction materials, stores, spares is valued at cost or net realisable value, whichever is lower. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. Cost is determined on weighted average basis and includes all applicable cost of bringing the goods to their present location and condition. Revenue from sale of scrap material is presented as reduction from cost of materials consumed in the restated statement of profit and loss.
g) Cash and cash equivalents
Cash and cash equivalents comprises cash in hand and demand deposits with banks, short-term balances (with an original maturity of three months or less) and highly liquid investments, that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. Margin money deposits, earmarked balances with banks and other bank balances which have restrictions are presented as other bank balances. h) Borrowing costs
Borrowing costs consists of interest, ancillary costs and other costs in connection with the borrowing of funds.
Borrowing costs attributable to acquisition and/or construction of qualifying assets are capitalised as a part of the cost of such assets, up to the date such assets are ready for their intended use. All other borrowing costs are charged to the restated statement of profit and loss.
i) Impairment of non-financial assets
The Company assesses at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset?s recoverable amount. An asset?s recoverable amount is the higher of an asset?s or cash-generating unit?s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Groups of assets.
When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses are recognised in the Restated statement of profit and loss.
j) Leases
The Company assesses at contract inception and on reassessment of a contract, whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a lessee
At the commencement date of a lease, the Company recognises a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Right-of-use assets are measured at cost, less any accumulated depreciation, impairment losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized and lease payments made at or before the commencement date. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company. In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification or a change in the lease term. The Company separately recognises the interest expense on the lease liability as finance cost and the depreciation expense on the right-of-use asset.
The Company accounts for a lease modification as a separate lease when both of the following conditions are met:
The modification increases the scope of the lease by adding the right to use one or more underlying assets.
The consideration for the lease increases commensurate with the price for the increase in scope and any adjustments to that stand-alone price reflect the circumstances of the particular contract.
For a lease modification that fully or partially decreases the scope of the lease the Company decreases the carrying amount of the right-of-use asset to reflect partial or full termination of the lease. Any difference between those adjustments is recognized in profit or loss at the effective date of the modification.
The Company has elected to use the exemptions proposed by the standard on lease contracts for which the lease terms end within 12 months as of the date of initial application, and lease contracts for which the underlying asset is of low value. The Company recognises the lease payments associated with such leases as an expense in the restated statement of profit and loss.
k) Financial Instruments and Equity Instruments
Initial recognition and measurement
Financial instruments (assets and liabilities) are recognised when the Company becomes a party to a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets (unless it is a trade receivable without a significant financing component) and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, other than those designated as fair value through profit or loss (FVTPL), are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in restated statement of profit and loss. A trade receivable without a significant financing component is initially measured at the transaction price. The amount of retention money held by the customers is disclosed as part of trade receivables.
i. Financial assets
All regular way purchase or sale of financial assets are recognised and derecognised on a trade date basis. Regular way purchase or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. Subsequent measurement
Subsequent measurement
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets:
a) Financial assets measured at amortised cost b) Financial assets measured at fair value through profit or loss (FVTPL) Financial assets measured at amortised cost
A financial asset is measured at amortised cost if both the following conditions are met:
The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
Contractual terms of the instruments give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. EIR is the rate that exactly discounts estimated future cash receipts (including all fees, transaction costs and other premiums or discounts) through the expected life of the debt instrument or where appropriate, a shorter period, to the net carrying amount on initial recognition.
The EIR amortisation is included in other income in the restated statement of profit and loss. The losses arising from impairment are recognised in the restated statement of profit and loss. This category generally applies to trade and other receivables, loans, etc.
Financial assets measured at FVTPL
Debt instrument
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Financial assets included within the FVTPL category are measured at fair value with all changes recognised in the restated statement of profit and loss.
De-recognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised when:
The rights to receive cash flows from the asset have expired, or
The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass through? arrangement; and either
- the Company has transferred substantially all the risks and rewards of the asset, or
- the Company has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
Debt instruments measured at amortised cost e.g., bank deposits
Trade receivables
Other financial assets not designated as FVTPL
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.
The Company follows ‘simplified approach? for recognition of impairment loss allowance on Trade receivables
(including lease receivables). The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition.
ii. Financial liabilities
Subsequent measurement
All financial liabilities are subsequently measured at amortised cost using the EIR method or at FVTPL.
Financial liabilities at amortised cost
After initial recognition, interest-bearing borrowings and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in restated statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the restated statement of profit and loss.
Financial liabilities at FVTPL
Financial liabilities are classified as FVTPL when the financial liabilities are held for trading or are designated as FVTPL on initial recognition. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the profit or loss.
De-recognition
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires.
iii. Trade receivables
A receivable represents the Company?s right to an amount of consideration under the contract with a customer that is unconditional and realizable on the due date (i.e., only the passage of time is required before payment of the consideration is due). Trade receivable without a significant financing component is initially measured at the transaction price.
iv. Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid as per agreed terms. Trade payables are presented based on the operating cycle of the Company. They are recognised initially at their transaction price and subsequently measured at amortised cost using the effective interest method.
v. Offsetting financial instruments
Financial assets and financial liabilities are offset, and the net amount is reported in the restated statement of assets and liabilities if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis or to realise the assets and settle the liabilities simultaneously.
l) Provisions (other than employee benefits)
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management?s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
m) Provision for warranty
The estimated liability for warranty is recorded at the commencement of defect liability period. These estimates are established using historical information on the nature, frequency and average cost of obligations and management estimates regarding possible future incidence based on corrective actions during the period under warranty phase.
n) Contingencies
Disclosure of contingent liabilities is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Contingent assets are not recognised in the restated financial information. However, contingent assets are assessed continuously and if it is virtually certain that an inflow of economic benefits will arise, the assets and the related income are recognised in the period in which the change occurs. Contingent assets are disclosed where an inflow of economic benefits is probable.
o) Employee Benefits
Liability on account of short-term employee benefits is recognised on an undiscounted and accrual basis during the period when the employee renders service/ vesting period of the benefit.
Defined Contribution Plan:
The Company pays contribution to the provident fund and employee state insurance corporation which is administered by respective Government authorities. The Company has no further payment obligations once the contributions have been paid. The Contributions are recognized as employee benefit expense in the restated statement of profit and loss to the year it pertains.
Defined benefit plan:
(a) Gratuity: The Company?s liability towards gratuity is determined using the projected unit credit method which considers each period of service as giving rise to additional unit of benefit entitlement and measures each unit separately to build up the final obligation. The cost for past services s recognized on a straight-line basis over the average period until the amended benefits become vested.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the restated statement of changes in equity and in the restated statement of assets and liabilities.
Obligation is measured at the present value of estimated future cash flows using a discount rate that is determined by reference to market yields at the reporting date on Government bonds where the currency and the terms of Government bonds are consistent with the currency and estimated term of defined benefit obligation.
(b) Compensated absences: The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the period end. The Company presents the entire compensated absences provision as a current liability in the restated statement of assets and liabilities, since it does not have an unconditional right to defer its settlement for twelve months after the reporting date.
p) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss (excluding OCI) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue and share splits that have changed the number of equity shares outstanding, without a corresponding change in resources.
Diluted earnings per share is computed by dividing the net profit for the period as adjusted for dividend, interest and other changes to expense and income (net of any attributable taxes) relating to the dilutive potential equity shares by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date.
q) Exceptional items
When items of income and expense within profit or loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such material items are disclosed separately as exceptional items.
r) Segment reporting
Operating segments are identified based on the manner in which the Chief Operating Decision Maker (‘CODM?) decides about resource allocation and reviews performance of the Company. The Managing Director and Whole Time Directors are identified as CODM of the Company The CODM regularly monitors and reviews the operating result as one segment of EPC. Thus, as defined in Ind AS 108 "Operating Segments", the Company?s entire business falls under this one operational segment.
s) Debenture Redemption Reserve (DRR)
The Company creates DRR in accordance with the applicable provisions of the Companies Act, 2013, out of profits of the Company available for payment of dividend.
t) Initial Public Offer (IPO) related transaction costs
The expenses pertaining to IPO includes expenses pertaining to fresh issue of equity shares, offer for sale by selling shareholders and listing of equity shares and is accounted for as follows:
Incremental costs that are directly attributable to issuing new shares are deferred until successful consummation of IPO upon which it shall be deducted from equity;
Incremental costs that are not directly attributable to issuing new shares or offer for sale by selling shareholders, are recorded as an expense in the restated statement of profit and loss as and when incurred; and
Costs that relate to fresh issue of equity shares and offer for sale by selling shareholders are allocated between those functions on a rational and consistent basis as per agreed terms.
u) Share issue expenses
Share issue expenses are adjusted against the Securities Premium Account as permissible under Section 52 of the Act, to the extent any balance is available for utilisation in the Securities Premium Account. Share issue expenses in excess of the balance in the Securities Premium Account is expensed in the Restated Statement of Profit and Loss.
Key accounting estimates and judgements
The preparation of the Company?s restated financial information requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Management believes that the estimates used in the preparation of the restated financial information are prudent and reasonable. Estimates and underlying assumptions are reviewed by management at each reporting date. Actual results could differ from these estimates. Any revision of these estimates is recognised prospectively in the current and future periods.
Information about significant areas of estimation and assumptions/uncertainty and judgements in applying accounting policies are as follows:
(i) Deferred tax assets
The assessment of the probability of future taxable profit in which deferred tax assets can be utilized is based on the
Company?s latest forecast, which is adjusted for significant non-taxable profit and expenses and specific limits to the use of any unused tax loss or credit. If a positive forecast of taxable profit indicates the probable use of a deferred tax asset, especially when it can be utilized without a time limit, that deferred tax asset is usually recognized in full.
(ii) Revenue recognition
Determination of revenue under percentage of completion method necessarily involves making estimates, some of which are of a technical nature, concerning, where relevant, the percentage of completion, costs to completion, the expected revenue from the project or activity and foreseeable losses to completion. Estimates of project income, as well as project costs, are reviewed periodically. The effect of changes, if any, to estimates is recognised in the restated financial information in the year in which such changes are determined.
(iii) Current income taxes
The tax jurisdiction for the Company is India. Significant judgments are involved in determining the provision for income taxes including judgment on whether tax positions are probable of being sustained in tax assessments. A tax assessment can involve complex issues, which can only be resolved over extended time periods. The recognition of taxes that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.
(iv) Accounting for defined benefit plans
In accounting for post-retirement benefits, several statistical and other factors that attempt to anticipate future events are used to calculate plan expenses and liabilities. These factors include expected discount rate assumptions and rate of future compensation increases. To estimate these factors, actuarial consultants also use estimates such as withdrawal, turnover, and mortality rates which require significant judgment. The actuarial assumptions used by the Company may differ materially from actual results in future periods due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans.
(v) Impairment
An impairment loss is recognised for the amount by which an asset?s or cash-generating unit?s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each asset or cash generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows, management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary and may cause significant adjustments to the Company?s assets. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.
(vi) Foreseeable losses
In case of contracts, when it is probable that total contract costs will exceed total contract revenue, the expected loss (foreseeable loss) is recognised. Such loss is measured based on management experience of handling similar contract in past and estimates regarding possible future incidence during the contract period.
(vii) Expected credit loss
The measurement of ECL reflects a probability-weighted outcome, the time value of money and the best available forward-looking information. The correlation between historical observed default rates, forecast economic conditions and expected credit loss is a significant estimate. The amount of expected credit loss is sensitive to changes in circumstances and forecasted economic conditions. The Company?s historical credit loss experience and forecast of economic conditions may not be representative of the actual default in the future.
(viii) Fair value of financial instruments
Management uses valuation techniques in measuring the fair value of financial instruments where active market quotes are not available. In applying the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm?s length transaction at the reporting date.
(ix) Provisions and contingent liabilities
A provision is recognised when the Company has a present obligation as result of a past event and it is probable that the outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each reporting date and adjusted to reflect the current best estimates. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgements and the use of estimates regarding the outcome of future events.
(x) Joint arrangements
Based on the requirement of tender issuing authority/prospective customer, the Company has formed joint arrangements which are not body corporate. The Company applies judgment considering the underlying terms agreed with the venturer, substance of transactions and responsibility assumed by the Company including managing operations of such venture. Basis such assessment, if the Company determines that (a) joint control does not exist and (b) in substance it assumes practically all the risk and rewards related to such arrangements, it considers such arrangement as its own extension. Accordingly, as at reporting periods, the Company has included the results and transactions of such arrangements in its restated financial information and has not considered such arrangements as separate component for reporting purpose.
(xi) Leases
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgement. The Company uses judgement in assessing the lease term (including anticipated renewals) and the applicable incremental borrowing rate. The Company revises the lease term if there is a change in non-cancellable period of a lease.
(xii) Business combination
Management applies judgement in determining whether an acquisition/merger constitute a business combination or not. In applying judgement, the Company determines whether the acquisition/merger constitute inputs and when processes are applied to those inputs, it should have the ability to contribute to the creation of outputs. In case such criteria is not met, the acquisition/merger is not considered as business combination.
Information about revenue split by geographical area
There is no reportable geographical segment as our customers are located in India.
Key components of Income and Expenses
We report our income and expenditure in the following manner:
Total income
Our total income comprises our revenue from operations and other income.
Revenue from operations. Our revenue from operations primarily comprises sales of services (i.e., income from engineering, procurement and construction (EPC) services) and other operating revenue.
Other income. Other income primarily comprises interest income bank deposits, interest income on income tax refund, and other non-operating income which include provisions no longer required written back, gain on sale of property, plant and equipment (net), gain on mutual fund investments (on sale and fair value changes), allowance for expected credit loss written back and miscellaneous income.
Expenses
Our total expenses comprise cost of materials consumed, project related expense, employee benefits expense, finance costs, depreciation and amortisation expense and other expenses.
Cost of materials consumed. Our cost of materials consumed include stores and spares.
Project related expense. Our project related expense comprises sub-contracting charges, technical consultancy charges, plant and machinery hire charges, transportation charges, loading and unloading charges, survey costs, warranty expenses and other project expenses.
Employee benefits expense. Our employee benefits expense comprises salaries and bonus (including directors? remuneration), contribution to provident and other funds, staff welfare expenses, gratuity expense and compensated absences expense.
Finance costs. Our finance costs includes interest expense on borrowings carried at amortised cost, interest expense on delayed payment of statutory dues, interest expense on lease liabilities, interest expense on delayed payment to micro and small enterprises vendors and other borrowing costs which primarily includes loan processing charges, guarantee charges and other charges.
Depreciation and amortization expense. Depreciation and amortization expense include depreciation on property, plant and equipment, depreciation of right-of-use assets and amortization of intangible assets.
Other expenses. Our other expenses primarily comprise electricity expenses, rent expense, repairs and maintenance buildings, repairs and maintenance others, security charges, insurance, rates and taxes, vehicle hire charges, auditors remuneration, travelling and conveyance, consulting and professional fees, site expenses, donation, printing and stationary, bank charges, business promotion expenses, provision for foreseeable losses on contracts (net), contribution to political party, corporate social responsibility expenses, allowance for expected credit loss and miscellaneous expenses.
Other comprehensive income
Other comprehensive income / (loss) comprises items that will not be reclassified to profit or loss.
Our results of operations
The following table sets forth select financial data derived from our restated statement of profit and loss for Fiscals 2025, 2024, and 2023 and we have expressed the components of select financial data as a percentage of total income for such years:
| Fiscal | ||||||
| 2025 | 2024 | 2023 | ||||
| Particulars | in million |
% of total income |
in million |
% of total income |
in million |
% of total income |
| Income | ||||||
| Revenue from operations | 9,158.47 | 99.29 | 7,859.48 | 99.31 | 5,243.05 | 99.08 |
| Other income | 65.17 | 0.71 | 54.89 | 0.69 | 48.74 | 0.92 |
| Total Income | 9,223.64 | 100.00 | 7,914.37 | 100.00 | 5,291.79 | 100.00 |
| Expenses | ||||||
| Cost of materials consumed | 4,836.75 | 52.44 | 3,849.57 | 48.64 | 2,664.83 | 50.36 |
| Project related expense | 1,604.22 | 17.39 | 1,677.68 | 21.20 | 961.78 | 18.17 |
| Employee benefits expense | 676.25 | 7.33 | 589.63 | 7.45 | 405.26 | 7.66 |
| Finance costs | 535.91 | 5.81 | 339.77 | 4.29 | 282.16 | 5.33 |
| Depreciation and amortization expense | 29.72 | 0.32 | 40.51 | 0.51 | 36.98 | 0.70 |
| Other expenses | 438.90 | 4.76 | 409.65 | 5.18 | 414.04 | 7.82 |
| Total expenses | 8,121.75 | 88.05 | 6,906.81 | 87.27 | 4,765.05 | 90.05 |
| Profit before exceptional items and tax | 1,101.89 | 11.95 | 1,007.56 | 12.73 | 526.74 | 9.95 |
| Exceptional items - gain (net) | - | - | - | - | 13.04 | 0.25 |
| Profit before tax | 1,101.89 | 11.95 | 1,007.46 | 12.73 | 539.78 | 10.20 |
| Tax expense / (credit) | 323.70 | 3.51 | 259.25 | 3.28 | 111.38 | 2.10 |
| Profit for the year | 778.19 | 8.44 | 748.31 | 9.46 | 428.40 | 8.10 |
Fiscal 2025 compared to Fiscal 2024
Total income
Our total income increased by 16.54 % to 9,223.64 million for Fiscal 2025 from 7,914.37 million for Fiscal 2024. This increase was primarily due to an increase in revenue from operations, which was primarily driven by an increase in income from engineering, procurement and construction (EPC) services. For further details, see "-Revenue from operations" below.
Revenue from operations. Our revenue from operations increased by 16.53% to 9,158.47 million for Fiscal 2025 from
7,859.48 million for Fiscal 2024. This was primarily attributable to an increase in income from engineering, procurement and construction (EPC) services by 17.40% to 9,118.28 million for Fiscal 2025 from 7,766.78 million for Fiscal 2024, primarily due to increase in the number of projects awarded to us;
Other income. Our other income increased by 18.73% to 65.17 million for Fiscal 2025 from 54.89 million for Fiscal 2024, primarily due to an increase in interest income on bank deposits.
Expenses
Cost of materials consumed. The cost of materials consumed increased by 25.64% to 4,836.75 million for Fiscal 2025 from 3,849.57 million for Fiscal 2024, primarily due to an increase in an increase in Revenue from Operations on account of increase in the number of projects awarded to us.
Project related expense. Project related expense decreased by 4.38 % to 1,604.22 million for Fiscal 2025 from
1,677.68 million for Fiscal 2024, primarily due to decrease in technical consultancy charges to 62.87 million for Fiscal 2025 from 281.28 million for Fiscal 2024.
Employee benefits expense. Employee benefits expense increased by 14.69 % to 676.25 million for Fiscal 2025 from
589.63 million for Fiscal 2024, primarily due to an increase in salaries and bonus expenses (including directors? remuneration) to 602.72 million for Fiscal 2025 from 530.35 million for Fiscal 2024 and Staff welfare expenses to 31.26 million for Fiscal 2025 from 18.30 million for Fiscal 2024.
Finance costs. Finance costs increased by 57.73% to 535.91 million for Fiscal 2025 from 339.77 million for Fiscal 2024, primarily due to an increase in the interest expense on borrowings carried at amortised cost to 344.84 million for Fiscal 2025 from 234.07 million for Fiscal 2024 and other borrowing cost to 105.68 million for Fiscal 2025 from 65.70 million for Fiscal 2024. The increase in the interest expense on borrowings carried at amortised cost was primarily attributable to an increase in an increase in cash credit facilities.
Depreciation and amortization expense. Depreciation and amortization expense decreased by 26.64 % to 29.72 million for Fiscal 2025 from 40.51 million for Fiscal 2024, primarily due to decrease in the depreciation of right of use assets to 7.70 million for Fiscal 2025 from 8.63 million for Fiscal 2024 and decrease in depreciation of property, plant, and equipment to 21.04 million for Fiscal 2025 from 24.32 million for Fiscal 2024. The decrease in depreciation of right of use assets and decrease in depreciation of property, plant and equipment was primarily attributable to decrease in additions to Computers, Tools & Tackles.
Other expenses. Our other expenses increased by 7.14 % to 438.9 million for Fiscal 2025 from 409.65 million for Fiscal 2024, primarily due to an increase in:
Rates and taxes to 54.71 million in Fiscal 2025 from 34.19 million in Fiscal 2024, primarily attributable to labour welfare cess deducted by clients;
Bank Charges to 15.79 million in Fiscal 2025 from 9.49 million in Fiscal 2024, primarily attributable to bank guarantee commission charges;
Allowance for expected credit loss to 65.51 million in Fiscal 2025 from 51.80 million in Fiscal 2024, primarily attributable to increase in provision for expected credit loss as per Ind AS.
Restated profit for the year
For the reasons discussed above, the restated profit increased by 3.99% to 778.19 million for Fiscal 2025 from 748.31 million for Fiscal 2024.
Fiscal 2024 compared to Fiscal 2023
Total income
Our total income increased by 49.56 % to 7,914.37 million for Fiscal 2024 from 5,291.79 million for Fiscal 2023. This increase was primarily due to an increase in revenue from operations, which was primarily driven by an increase in income from engineering, procurement and construction (EPC) services. For further details, see "-Revenue from operations" below.
Revenue from operations. Our revenue from operations increased by 49.90 % to 7,859.48 million for Fiscal 2024 from
5,243.05 million for Fiscal 2023. This was primarily attributable to an increase in income from engineering, procurement and construction (EPC) services by 48.13% to 7,766.78 million for Fiscal 2024 from 5,243.05 million for Fiscal 2023, primarily due to increase in the number of projects awarded to us.
Other income. Our other income increased by 12.62 % to 54.89 million for Fiscal 2024 from 48.74 million for Fiscal 2023, primarily due to an increase in interest income on bank deposits.
Expenses
Cost of materials consumed. The cost of materials consumed increased by 44.46 % to 3,849.57 million for Fiscal 2024 from 2,664.83 million for Fiscal 2023, primarily due to an increase in an increase in Revenue from Operations on account of increase in the number of projects awarded to us.
Project related expense. Project related expense increased by 74.43 % to 1,677.68 million for Fiscal 2024 from 961.78 million for Fiscal 2023, primarily due to an increase in sub-contracting charges to 1,278.04 million for Fiscal 2024 from 783.15 million for Fiscal 2023 and technical consultancy charges to 281.28 million for Fiscal 2024 from
77.70 million for Fiscal 2023.
Employee benefits expense. Employee benefits expense increased by 45.49 % to 589.63 million for Fiscal 2024 from 405.26 million for Fiscal 2023, primarily due to an increase in salaries and bonus expenses (including directors? remuneration) to 530.35 million for Fiscal 2024 from 361.97 million for Fiscal 2023 and compensated absences expense to 10.31 million for Fiscal 2024 from 2.83 million for Fiscal 2023.
Finance costs. Finance costs increased by 20.42 % to 339.77 million for Fiscal 2024 from 282.16 million for Fiscal
2023, primarily due to an increase in the interest expense on borrowings carried at amortised cost to 234.07 million for
Fiscal 2024 from 189.61 million for Fiscal 2023. The increase in the interest expense on borrowings carried at amortised cost was primarily attributable to an increase in an increase in cash credit facilities.
Depreciation and amortization expense. Depreciation and amortization expense increased by 9.55 % to 40.51million for Fiscal 2024 from 36.98 million for Fiscal 2023, primarily due to an increase in the depreciation of right of use assets to 8.63 million for Fiscal 2024 from 7.73 million for Fiscal 2023 and an increase in depreciation of property, plant, and equipment to 24.32 million for Fiscal 2024 from 21.73 million for Fiscal 2023. The increase in depreciation of right of use assets and increase in depreciation of property, plant and equipment was primarily attributable to an increase in additions to Computers, Tools & Tackles.
Other expenses. Our other expenses decreased by 1.06 % to 409.65 million for Fiscal 2024 from 414.04 million for
Fiscal 2023, primarily due to a decrease in:
consulting and professional fees to 80.55 million in Fiscal 2024 from 93.64 million in Fiscal 2023, primarily attributable to demobilisation of old project sites;
site expenses to 13.94 million in Fiscal 2024 from 17.94 million in Fiscal 2023, primarily attributable to demobilisation of old project sites;
miscellaneous expenses to 6.52 million in Fiscal 2024 from 9.16 million in Fiscal 2023, primarily attributable to demobilisation of old project sites.
Restated profit for the year
For the reasons discussed above, the restated profit increased by 74.68% to 748.31 million for Fiscal 2024 from 428.40 million for Fiscal 2023.
Non-GAAP measures
This Red Herring Prospectus includes Net Asset Value per Equity Share, EBITDA, EBITDA Margin, Profit After Tax, Profit After Tax Margin, Capital Employed, Return on Equity, Return on Capital Employed, Debt to Equity Ratio, Revenue CAGR, EBITDA CAGR, PAT CAGR, Order Book, Order book to Revenue from Operations and Net Worth
(collectively "Non-GAAP Measures") and certain other industry measures related to our operations and financial performance, which are supplemental measures of our performance and liquidity and are not required by, or presented in accordance with, Ind AS, IFRS or U.S. GAAP. In addition to our results determined in accordance with Ind AS, we believe the following Non-GAAP measures are useful to investors in evaluating our operating performance and liquidity. We use the following Non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that Non-GAAP financial information, when taken collectively with financial measures prepared in accordance with Ind AS, may be helpful to investors because it provides an additional tool for investors to use in evaluating our ongoing operating results and trends and in comparing our financial results with other companies in our industry because it provides consistency and comparability with past financial performance. However, our management does not consider these Non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with Ind AS.
Non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with Ind AS. Non-GAAP financial information may be different from similarly titled Non-GAAP measures used by other companies. Non-GAAP financial measures are not required by, or presented in accordance with, IndAS, IFRS or U.S. GAAP. Our Non-GAAP financial measures are not a measurement of financial performance or liquidity under these accounting standards and should not be construed in isolation or construed as an alternative to restated cash flows, restated loss for the period or any other measures of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated from our operating, investing or financing activities, derived in accordance with Ind AS, IFRS or U.S. GAAP. The principal limitation of these Non-GAAP financial measures is that they exclude significant expenses and income that are required by IndAS to be recorded in our financial statements, as further detailed below. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these Non-GAAP financial measures. A reconciliation is provided below for each Non-GAAP financial measure to the most directly comparable financial measure prepared in accordance with Ind AS. Investors are encouraged to review the related Ind AS financial measures and the reconciliation of Non-GAAP financial measures to their most directly comparable Ind AS financial measures included below and to not rely on any single financial measure to evaluate our business.
Liquidity and Capital Resources
For the Fiscals 2025, 2024, and 2023, we met our funding requirements, including capital expenditure, satisfaction of debt obligations, investments, taxes, working capital requirements and other cash outlays, principally with funds generated from operations and optimization of operating working capital, with the balance principally met using external borrowings and additional equity.
The following table sets forth information on liquidity and capital resources as at the dates indicated:
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Cash and cash equivalents at the end of the year | 24.98 | 0.81 | 1.23 |
| Non-current borrowings | 319.18 | 107.03 | 365.07 |
| Current borrowings | 2410.25 | 1,726.88 | 1,184.18 |
| Non-current lease liabilities | 7.99 | 3.80 | 7.46 |
| Current lease liabilities | 7.20 | 3.56 | 9.47 |
| Bank balances other than cash and cash equivalent | 645.66 | 498.71 | 148.02 |
Cash flows and cash and cash equivalents
The following table sets forth our cash flows and cash and cash equivalents for the years indicated:
| Particulars | Fiscal 2025 | Fiscal 2024 | Fiscal 2023 |
| Net cash flow from/ (used in) Operating Activities | (1,290.86) | (664.77) | 55.51 |
| Net cash flow from/ (used in) Investing Activities | (92.56) | (159.36) | (143.22) |
| Net cash flow from/ (used in) Financing Activities | 1,406.12 | 823.71 | 87.54 |
| Net (decrease) / increase in cash and cash equivalents | 22.70 | (0.42) | (0.17) |
| Cash and cash equivalents at the beginning of the year | 0.81 | 1.23 | 1.40 |
| Cash and cash equivalents acquired pursuant to scheme of amalgamation | 1.47 | - | - |
| Cash and cash equivalents at the end of the year | 24.98 | 0.81 | 1.23 |
Operating activities
Net cash flows used in operating activities aggregated to 1,290.86 million for Fiscal 2025. Our restated profit/loss before tax of 1,101.89 million, was adjusted primarily for depreciation and amortization expense of 29.72 million, finance costs on borrowings and leases of 471.26 million and allowance for expected credit loss of 65.51 million. Our changes in working capital for March 31, 2025 primarily consisted of decrease in other liabilities of 684.50 million and increase in trade payables of 1,819.23 million. This was partially offset by an increase in trade receivables of 1,769.70 million.
Net cash flows used in operating activities aggregated to 664.77 million for Fiscal 2024. Our restated profit before tax of 1,007.56 million, was adjusted primarily for depreciation and amortization expense of 40.51 million, finance costs on borrowings and leases of 300.71 million and allowance for expected credit loss of 51.80 million. Our changes in working capital for Fiscal 2024 primarily consisted of increase in other liabilities of 488.00 million and increase in trade payables of 84.19 million. This was partially offset by an increase in trade receivables of 991.70 million.
Net cash flows from operating activities aggregated to 55.51 million for Fiscal 2023. Our restated profit before tax of 539.78 million, was adjusted primarily for depreciation and amortization expense of 36.98 million and finance costs on borrowings and leases of 254.97 million. Our changes in working capital for Fiscal 2023 primarily consisted of increase in other liabilities of 596.74 million, increase in trade payables of 783.64 million and increase in provisions of 110.66 million. This was partially offset by an increase in contract assets of 1,903.50 million.
Investing activities
Net cash flows used in investing activities aggregated to 92.56 million for Fiscal 2025, primarily due to 97.03 million being increase in fixed deposits and 26.63 million used for payment for purchase of property, plant and equipment and intangible assets (including capital advances and payable for capital goods). This was partially set off by 51.46 million generated from interest received.
Net cash flows used in investing activities aggregated to 159.36 million for Fiscal 2024, primarily due to 171.81 million being increase in fixed deposits and 20.49 million used for payment for purchase of property, plant and equipment and intangible assets (including capital advances and payable for capital goods). This was partially set off by
32.94 million generated from interest received.
Net cash flows used in investing activities aggregated to 143.22 million for Fiscal 2023, primarily due to 151.31 million being increase in fixed deposits and 9.34 million used for payment for purchase of property, plant and equipment and intangible assets (including capital advances and payable for capital goods). This was partially set off by 21.00 million generated from interest received and 0.50 million by proceeds from sale of property, plant and equipment.
Financing activities
Net cash flows from financing activities aggregated to 1,406.12 million for Fiscal 2025, primarily due to finance costs on borrowings paid of 470.16 million, repayment of long-term borrowings of 90.80 million, repayment of short-term borrowings of 183.42 million and dividend paid of 37.80 million. This cash outflow was partially met by proceeds from issue of Equity Shares (including securities premium) of 1,027.36 million, proceeds from short-term borrowings of 657.74 million and proceeds from long-term borrowings of 512.00 million.
Net cash flows from financing activities aggregated to 823.71 million for Fiscal 2024, primarily due to finance costs on borrowings paid of 299.80 million, repayment of long-term borrowings of 193.54 million, repayment of short-term borrowings of 62.57 million and dividend paid of 39.20 million. This cash outflow was partially met by proceeds from issue of Equity Shares (including securities premium) of 815.03 million, proceeds from short-term borrowings of 579.44 million and proceeds from long-term borrowings of 34.76 million.
Net cash flows from financing activities aggregated to 87.54 million for Fiscal 2023, primarily due to finance costs on borrowings paid of 235.90 million, repayment of long-term borrowings of 70.11 million, repayment of short-term borrowings of 40.43 million and dividend paid of 10.16 million. This cash outflow was partially met by proceeds from short-term borrowings of 378.15 million and proceeds from long-term borrowings of 74.04 million.
Indebtedness
The following table sets forth our financial indebtedness as of June 30, 2025:
| Category of borrowing | Sanctioned Amount | Outstanding amount as on June 30, 2025 |
| Secured | ||
| Fund Based | ||
| Cash Credit | 1,429.09 | 1,422.25 |
| Term Loans | 486.43 | 327.53 |
| Vendor Bills Discounting | 633.45 | 580.76 |
| WCDL Banks | 360.91 | 360.91 |
| Debenture | 750.00 | 750.00 |
| Total Fund Based (A) | 3,659.88 | 3441.45 |
| Non-Fund Based | ||
| Bank Guarantees | 3,300.00 | 2,421.90 |
| Letter of Credit | 650.00 | 187.90 |
| Total Non-Fund Based (B) | 3,950.00 | 2,609.80 |
| Total Secured (C) = (A) + (B) | 7,609.88 | 6051.25 |
| Unsecured | ||
| Fund Based | ||
| From Banks | 5.00 | 0.51 |
| From Financial Institutions | 20.24 | 11.28 |
| Total Fund Based (D) | 25.24 | 11.78 |
| Non-Fund Based | ||
| Bank Guarantee | 0.00 | 0.00 |
| Total Non-Fund Based (E) | 0.00 | 0.00 |
| Total Unsecured (F) = (D) + (E) | 25.24 | 11.78 |
| Total (G) = (C) + (F) | 7,635.11 | 6,063.04 |
Certified by M/s Pramodkumar Dad & Associates, Chartered Accountants pursuant to their certificate dated August 18, 2025
For further details of financial indebtedness, see "Financial Indebtedness" on page 382.
Capital expenditure
Capital expenditure primarily relates to addition of property, plant and equipment primarily due to purchase of land, office premise, temporary sheds, plant and machinery, electrical equipment, computers, tools and tackles, furniture and fixtures, vehicles and office equipment. The capital expenditure is primarily funded through cash generated from operations, supplemented by equity contributions by our shareholders and committed credit lines.
In Fiscals 2025, 2024, and 2023, we incurred capital expenditure for addition to property, plant and equipment of 26.63 million, 20.49 million, and 9.34 million, primarily due to purchase of land, office premise, temporary sheds, plant and machinery, electrical equipment, computers, tools and tackles, furniture and fixtures, vehicles and office equipment.
Contingent liabilities
As of March 31, 2025, our contingent liabilities as per Ind AS 37 were as follows:
| Particulars | As at March 31, 2025 |
| Income tax demand in respect of earlier years under dispute* | 40.51 |
| Goods and service tax demand in respect of earlier years under dispute* | 599.29 |
| Claims against the Company not acknowledged as debt | 1.50 |
*Future cash outflows in respect of above matters are determinable only on receipt of judgements / decisions pending at various forums / authorities. The management, based on their assessment, does not expect these claims to succeed and accordingly, no provision has been recognised in the financial statements. These amount represents gross demand raised by the authorities and the amount paid under protest is not charged to the statement of profit and loss by the Company.
Off-balance sheet commitments and arrangements
We do not have any off-balance sheet arrangements, derivative instruments, swap transactions or relationships with affiliates or other unconsolidated entities or financial partnerships that would have been established for the purpose of facilitating off-balance sheet arrangements.
Quantitative and Qualitative Analysis of Market Risks
We are exposed to various types of market risks during the normal course of business. For further details, see "Risk Factors" beginning on page 38:
Credit risk
Credit risk is the risk of financial loss arising from counterparty failure to repay or service dues according to the contractual terms and obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and credit worthiness of the customer on continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. The financial instruments that are subject to concentration of credit risk principally consist of trade receivables and cash and bank equivalents.
Bank deposits are placed with reputed banks / financial institutions. Hence, there is no significant credit risk on such fixed deposits. Mutual fund investments are made in plans of renowned asset management company only. The credit risk associated with bank, security deposits and mutual fund investments is relatively low.
Other financial assets includes deposits receivable, interest accrued on deposits and other receivables. These receivables are monitored on a periodic basis for assessing any significant risk of non-recoverability of dues and provision is created accordingly.
Trade receivables are typically unsecured. Credit risk on trade receivables is limited as the Company?s customer base substantially includes government promoted undertakings and public sector undertakings. Also, generally the company does not enter into sales transaction with customers having credit loss history. In addition, trade receivable balances are monitored on an on-going basis with the result that the Companys exposure to bad debts is not significant. 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. The Company does not require collateral in respect of its trade receivables. An impairment analysis is performed at each reporting date using a provision matrix to measure ECL. The provision rates are based on days past due. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions, if any. In case of disputed trade receivables, the Company performs individual credit risk assessment and creates expected credit loss allowance (ECL) based on internal assessment for such cases.
The following table provides information about the ECL rate for trade receivables:
| Ageing bracket of trade receivables past due date | As at March 31, 2025 | As at March 31, 2024 | As at March 31, 2023 |
| Upto 90 days | 0.10% to 1.00% | 0.10% to 1.00% | 0.10% to 1.00% |
| 91 to 180 days | 2.50% to 4.50% | 2.50% to 4.50% | 2.00% to 4.00% |
| 181 to 365 days | 7.00% to 11.00% | 8.00% to 12.00% | 8.00% to 11.00% |
| More than 365 days | 25.00% to 80.00% | 25.00% to 80.00% | 25.00% to 80.00% |
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding to meet obligations when due. Due to the dynamic nature of the underlying businesses, Company maintains flexibility in funding by maintaining sufficient cash and bank balances available to meet the working capital requirements. Management monitors rolling forecasts of the Companys liquidity position on the basis of expected cash flows.
The Company?s principal sources of liquidity are cash and cash equivalents, and the cash flow that is generated from operations. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived. The Company closely monitors its liquidity position and maintains adequate source of funding.
The Company also participates in supply chain financing arrangement (SCF) which under which suppliers may elect to receive early payment of their invoice from by factoring their receivables.
Market risk
Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the Companys income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant profit and loss item is the effect of the assumed changes in respective market risks.
Interest rate risk
Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in market interest rate risks. The Companys exposure to risk of changes in market interest rates primarily to the Companys long-term debt obligations. For the Company the interest risk arises mainly from interest bearing borrowings which are at floating interest rates. To mitigate interest rate risk, the Company closely monitors market interest and optimise borrowing mix / composition.
Auditor qualifications and emphasis of matter
There are no qualifications of the Statutory Auditors which have not been given effect to in the Restated Financial Information except for reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended) for the year ended March 31, 2025 and 2024, as disclosed in the section "Restated Financial Information" on page 300. Such qualification do not require any adjustments in the Restated Financial Information. Certain emphasis of matter, which do not require any adjustments in the Restated Financial Information are as follows:
Fiscal 2025:
"We draw attention to Note 14.1 to the accompanying financial statements, which describe an uncertainty to the outcome of an ongoing litigation with a customer on recoverability of balance amounting to INR 292.90 million due from such customer, which is currently pending in the Commercial Court, Jaipur. The management based on their internal evaluation and legal advice as obtained, is of the view that the aforesaid amount receivable is good and recoverable and no liability is likely to arise on the aforesaid matter, and accordingly, no adjustments have been made to the financial statements in this respect. Our opinion is not modified in respect of this matter."
Fiscal 2024:
"We draw attention to Note 13.1 to the financial statements, which describe an uncertainty to the outcome of an ongoing litigation with a customer on recoverability of balance amounting to INR 292.90 million due from such customer, which is currently pending in the Commercial Court, Jaipur. The management based on their internal evaluation and legal advice as obtained, is of the view that the aforesaid amount receivable is good and recoverable and no liability is likely to arise on the aforesaid matter, and accordingly, no adjustments have been made to the financial statements in this respect. Our opinion is not modified in respect of this matter."
Fiscal 2023:
" We draw attention to:
"In the FY 2019-20 a survey by the DGGI (GST) department was conducted w.r.t to transaction for the FY 2017-18. Where company had accepted the GST liability of INR 133.60 Millions on pretext to buy peace of mind and started paying GST amount. Upto 31 March, 2022 company had paid GST amounting to INR 86.20 Millions against the same. During the current financial year company has received the SCN from the DGGI department and based on the legal opinion obtained, management is of the view that neither the balance GST amount of INR 47.40 Millions is payable by the company nor there is requirement of making any provision for interest and penalty. Hence company has reversed the GST liability of INR 127.40 Millions during the FY 22-23 and disclosed under exceptional item and recognised assets of INR 80.00 Millions. Presently the matter is under litigation."
"As on 31 March, 2023 company is custodian of customer owned inventory amounting to INR 3901.79 Millions, where execution/handover to customer is pending. Further during the year company has supplied material having sales value of INR 1279.62 Millions, which are yet to be invoiced to the customer, was under certification from respective customers,. As per the management, these inventories are lying at different/ remote locations at various stages of project execution. Hence, physical verification of inventory was not possible."
"We draw attention to Note No. 32 to the financial statements, we had sent positive external confirmation requests through electronic modes. However, there are fewer confirmations received than anticipated. In respect to trade receivable, trade payable and advances are subject to confirmation from respective parties and consequential reconciliation/adjustment arising there from, if any. However, management anticipates that there is no material impact due to such reconciliation and confirmations."
"The Company enters into Engineering Procurement and Construction (EPC) contracts, which are complex in nature and span over a number of reporting periods. AS 7, Contracts Accounts, Revenue from construction contracts is recognised based on the stage of completion determined with reference to the actual costs incurred up to reporting date on the construction contract and the estimated cost to complete the project. Cost estimates involves judgments including those relating to cost escalations; assessment of technical, political, regulatory and other related contract risks and their financial estimation; scope of deliveries and services required for fulfilling the contractually defined obligations and expected delays, it relies on management?s estimates of the final outcome of each contract, and involves management judgement, particularly in forecasting the cost to complete a contract, valuing contract variations, claims and liquidated damages."
"During the year company has accounted the work execution of INR 1786.20 Millions which were under certification by the respective customers as on 31 March 2023. Company has started practice of raising proforma Invoice on uncertified work, where GST liability was not provided. Later as the work get certified, company raises the Tax Invoice including the GST amount. Company has taken a legal opinion according to which, GST liability is applicable only when amount is received or milestone achieve as per the contract terms. However company has reversed the uncertified sale to complied with AS-7."
"At the year end, company has booked unbilled sub-contract services amounting to INR 446.90 Millions based on the proforma invoice and joint measurement sheet between sub-contractor and company. However till signing of the financial statements out of the provision for INR 446.90 Millions, tax invoice has been received for INR 267.40 Millions. Management explain that balance work is under certification from respective customers and tax invoice will be received once the work is certified by the customers"
"As fully explain in Note no 28 of the financial statement, in the month of April 23, one of the client has short closed the ongoing project. The Company has accounted the project loss of INR 160.20 Millions in AS-7 working during the current financial year. Further, Company has taken a legal opinion based on which management is confident that it will get the refund. Hence, no provision against advances received, debtors outstanding and performance liability was made in the current financials statement . However as the matter of abundant precaution the amount is duly disclosed the amount as contingent liability."
"The Company is principally engaged in the EPC business where majority of erection/installation work are carried through various sub-contractors. As a principal contractor company is liable for various labour compliance as per provisions of Employee Provident Fund Act, 1952 and allied labour Act?s. During our course of audit, we found unsatisfactory compliance of labour laws by some sub-contractors. However, management has explained that they have the practice of deducting and retaining five percent amount from the invoices of sub-contractor for the PF
Compliance."
"The Company is principally engaged in the EPC business where majority of erection/installation work are carried through various sub-contractors. Company has a practice of material reconciliation with sub-contractor at the closer of project, whereas it should be done periodically. However, management has explained that they have the practice of deducting and retaining ten percent amount from the invoices of sub-contractor till the material is reconciled."
"We draw attention to Note no 6 of the Financial Statements regarding classification of retention payable to certain vendors as non-current Trade Payable. These retention to vendors are payable only on completion and reconciliation of ongoing project which involves management?s judgement."
Unusual or infrequent events or transactions
There have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.
Known trends or uncertainties
Our business has been subject to significant economic changes arising from the trends identified above in " Significant Factors Affecting our Financial Conditions and Results of Operations" above and the uncertainties described in "Risk Factors" on page 38.
Future relationship between cost and revenue
Other than as described in "Risk Factors" and this section, there are no known factors that might affect the future relationship between cost and revenue.
Related party transactions
We have engaged in the past, and may engage in the future, in transactions with related parties. For details of our related party transactions, see "Other Financial Information Related Party Transactions" on page 380.
Competitive conditions
We operate in a competitive environment. Please refer to "Risk Factors", "Industry Overview" and "Our Business"on pages 38, 157 and 208, respectively, for further information on our industry and competition.
Seasonality and cyclicality of business
Our business is not subject to seasonality.
Extent to which material increases in net sales or revenue are due to increased sales volume, introduction ofnew products or services or increased sales prices
Changes in revenue in the last three Fiscals, are as described in " Fiscal 2025 compared to Fiscal 2024" and " Fiscal 2024 compared to Fiscal 2023" above on pages 402 and 403, respectively.
Significant dependence on single or few customers
For details please refer to "Risk Factors 11. Contribution of our top customers has been diversified over the period. However, a significant portion of our Order Book and revenue from operations is attributable to certain key customers and to projects located in India, and our business and profitability is dependent on our ability to win projects from such customers." On page 47.
New products or business segments
Except as disclosed in "Our Business" on page 208, and products that we announce in the ordinary course of business, we have not announced any new products or business segments.
Significant developments occurring after March 31, 2025
Except as set out in this Red Herring Prospectus, to our knowledge, no circumstances have arisen since the date of the last financial statements as disclosed in this Red Herring Prospectus which materially or adversely affect or are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months.
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