1.  Scheme of Amalgamation:
 
 1.1 A Scheme of Amalgamation (the Scheme) between RPG Cables Limited
 (RPGCL) and the Company and their respective Shareholders under Section
 391 to 394 of the Companies Act, 1956 was sanctioned by the Hon’ble
 High Court of Judicature at Bombay on February 26, 2010 and at
 Karnataka, Bangalore on March 17, 2010. The Scheme, which has become
 operative from March 31, 2010 upon fling of the certified copies of the
 Orders of the Hon’ble High Courts with the Registrar of Companies in
 the respective States, is effective from March 1, 2010 (The Appointed
 date).
 
 1.2 Pursuant to the Scheme, with effect from the Appointed date RPGCL
 (Transferor Company) is amalgamated in the Company, as a going concern,
 with all its assets, liabilities, properties, rights, benefits and
 interest therein subject to existing charges thereon in favour of banks
 and financial institutions.
 
 1.3 Also refer Note 2 (c) below.
 
 2.  Share Capital: Share Capital includes:
 
 a) 18,81,79,270 equity shares of Rs. 2/- each (previous year
 3,76,35,854 equity shares of Rs. 10/- each) allotted in an earlier year
 for consideration other than cash for acquisition of Power Transmission
 Business.
 
 b) 5,82,90,010 equity shares of Rs. 2/- each (previous year 1,16,58,002
 equity shares of Rs. 10/- each) allotted in an earlier year for
 consideration other than cash to the shareholders of the erstwhile RPG
 Transmission Limited (RPGT) and the erstwhile National Information
 Technologies Limited.
 
 3,750 fully paid up equity shares of Rs. 2/- each (previous year 750
 equity shares of Rs. 10/- each) were allotted to a trustee against
 1,688 equity shares of RPGT, where rights were kept in abeyance under
 section 206A(b) of the Companies Act, 1956 by RPGT. On settlement of
 the relevant court cases/issues, the equity shares issued to the
 trustee will be transferred.
 
 c) 1,03,65,340 equity shares of Rs. 2/- each (previous year 20,73,068
 equity shares of Rs. 10/- each shown as Equity Share Suspense) allotted
 on April 26, 2010 in consideration for the amalgamation referred to in
 Note 1 above to the shareholders of the erstwhile RPG Cables Limited
 (RPGCL).
 
 3.  Secured Loans:
 
 3.1 Loans and advances from Banks:
 
 a) Rs. 37,997.54 lacs (previous year Rs. 14,153.79 lacs) secured by
 first charge by hypothecation of all the present and future current
 assets of the Company excluding those covered under (g) and (k) and 3.2
 (c) below and second charge on the Company’s fixed asset situated at
 Jaipur, Jabalpur and Butibori factories.
 
 b) Rs. 17,580.12 lacs (previous year Rs. 25,104.69 lacs) guaranteed by
 banks, which in turn is secured by security, stated against (a) above.
 
 c) Rs. 393.33 lacs (previous year Rs. Nil ) secured by assignment of
 certain overseas book debts.
 
 d) Rs. Nil (previous year Rs. 119.00 lacs) secured by a first charge by
 way of hypothecation of specific movable plant and machinery, equipment
 and other assets acquired by the Company under the Asset Credit Scheme
 together with machinery spares, tools and accessories and other
 movables.
 
 e) Rs. 1,161.80 lacs (previous year Rs. 1,907.72 lacs) secured by
 hypothecation of whole of movables (save and except current assets of
 the Company including book debts) [excluding those covered under
 (g),(k) and 3.2 (c) below] and equitable mortgage of the Company’s
 immovable properties at the Company’s factory at Butibori, Nagpur and
 subject to prior charge referred to in (a) above on movable assets.
 
 f) Rs. 891.64 lacs (previous year Rs. 1,426.62 lacs) secured by (i)
 hypothecation of whole movables (save and except current assets of the
 Company including book debts) at Jabalpur and Gurgaon, subject to prior
 charge in respect of loans referred in (a) above (ii) hypothecation of
 whole of movables at Coimbatore and (iii) equitable mortgage of the
 Company’s certain immovable properties at Jabalpur and Coimbatore.
 
 g) Rs. 8,395.50 lacs (previous year Rs. 8,395.50 lacs) secured by first
 charge on moveable assets of Telecom Division including Telecom Towers,
 both present and future.
 
 h) Rs. 10,080.68 lacs (previous year Rs. 10,015.62 lacs) secured by way
 of first charge on fixed assets situated at Thane and Mysore.
 
 i) Rs. 4,400.00 lacs (previous year Rs. 5,000.00 lacs) secured by way
 of first charge on land, building and plant and machinery situated at
 Jaipur.
 
 j) Rs. Nil (previous year Rs. 5,000.00 lacs) being commercial paper
 issued against stand by facilities from certain banks which in turn is
 secured by security stated against (a) above. Maximum balance
 outstanding any time during the year is Rs. 25,000.00 lacs (previous
 year Rs. 20,000.00 lacs).
 
 k) Rs. 858.82 lacs (previous year Rs. 858.82 lacs) secured by way of
 first charge on land and building situated at Raebareli and further
 secured by all tangible movable properties and assets of Raebereli
 unit, both present and future.
 
 l) Rs. 3.77 lacs (previous year Rs. 8.43 lacs) secured by hypothecation
 of vehicles.
 
 m) Rs. 4,000.00 lacs (previous year Rs. Nil) secured by first charge on
 movable fixed assets i.e. construction equipment pertaining to the
 Transmission, Distribution and Railway business situated at various
 project sites in India, both present and future.
 
 3.2 Loans and advances from others:
 
 a) Rs. 3,000.00 lacs (previous year Rs. 2,919.15 lacs) secured by
 security stated against 3.1 (a) above.
 
 b) Rs. 2,000.00 lacs (previous year Rs. Nil) secured by first charge
 over the fixed assets pertaining to Tower Testing Station situated at
 Butibori, Nagpur both present and future.
 
 c) Rs. Nil (previous year Rs. 2,619.95 lacs) secured by way of first
 charge on present and future current assets of Cables division.
 
 d) Rs. 6.62 lacs (previous year Rs. 21.60 lacs) secured by
 hypothecation of vehicles.
 
 4.  Fixed Assets:
 
 a.  A plot of leasehold land stated to measure 41 bighas and 1 biswas
 per deed dated January 17, 1968, was found short by 24 bighas and 18
 biswas on actual measurements, for the possession of which the suit was
 fled on October 19, 1976 in the District Court against the vendors in
 occupation of the adjacent land. On dismissal of the suit, an appeal
 has been preferred in the Rajasthan High Court on December 7, 1998,
 against the order of the District Court.
 
 b.  Buildings at Jaipur, Butibori, Bhopal, Raebareli and Vashi, Navi
 Mumbai are constructed on Leasehold land.
 
 5.  Contingent Liabilities in respect of:
 
 (a) Claims against the Company not acknowledged as debts:
 
 
 Sr.  Nature of Claims    Relating to various years   Current 
 No                                                   Year     Previous
                                                               Year
                          comprise in the period      Rs. in 
                                                      lacs     Rs. in 
                                                               lacs
 
 1    Sales Tax*          1993-2010                2,678.22 
 
      (Tax/Penalty/
      Interest)           1995-2009                            679.06
 
 2    Excise Duty*        1994-2011                1,969.14
 
      (Tax/Penalty/
      Interest)           1994-2010                          1,316.10
 
 3    Service Tax*        2004-2010                   14.84 
 
      (Tax/Penalty/
      Interest)           2006-2008                             24.57
 
 4    Entry Tax           1995-2008                   60.43
 
      (Tax/Penalty/
      Interest)           1995-2005                             32.00
 
 5    (i) Income Tax 
      matters mainly 
      in respect          A.Y.2006-07 to 2009-10   7,241.44
      of disallowance of 
      depreciation etc.   A.Y.2006-07 and 2007-08            5,579.60
      relating to Power
      Transmission 
      Business acquired 
      by the Company
 
      (ii) Income Tax 
      matters at overseas 2002                     1,089.79
      unit/s              2007                               1,104.97
 
 6    Civil Suits         1993-1994                    5.00
 
                          1993-1994                              5.00
 
 7    Demands of 
      employees/
      subcontractors                           Amount not determinable
 
 * These claims mainly relate to the issues of applicability, issue of
 disallowance of cenvat credit and in case of Sales Tax, also relate to
 the issue of submission of ‘C forms.
 
 
 (b) Other matters for which the Company is contingently liable:
 
 
                                          Current Year     Previous Year 
                                          Rs.  in lacs       Rs. in lacs
 
 1 Bills discounted                           3,521.17         16,695.61
 
 2 Guarantees given to banks for credit 
 facilities extended/loans given
 to the wholly owned subsidiary 
 companies Rs. 60,034.21 lacs (previous
 year Rs. 5,135.64 lacs)
 
 Facilities / loans outstanding 
 at the year end                             47,326.57                 -
 
 3 Performance guarantee given to a 
 customer of the wholly
 owned subsidiary Company                    19,671.14         19,817.46
 
 4 Bank guarantees provided by the 
 Company to customers of the wholly
 owned subsidiary companies in 
 connection with the
 respective contracts awarded/bids 
 made                                         2,237.42          1,822.11
 
 5 Performance guarantee provided 
 by a bank to the customer of the
 wholly owned subsidiary Company by 
 utilising the Company’s credit
  facility with that bank                       191.86                 -
 
 6 Contingent liability of Income Tax 
 taken over by the Company in terms
 of the Composite Scheme of Arrangement 
 under which the Power Transmission 
 Business was acquired by the
 Company                                        731.25            752.78
 
 Foot Note for 5 (a) and (b) above:
 
 Future ultimate outflow of resources embodying economic benefits in
 respect of the above matters are
 
 uncertain as it depends on the final outcome of the matters involved.
 
 6.  Estimated amount of contracts remaining to be executed on capital
 account not provided for (net of capital advances) Rs.  8,057.65 lacs
 (previous year Rs. 410.24 lacs)
 
 7.  The amount of interest capitalised during the year Rs. 90.90 lacs
 (previous year Rs. 432.26 lacs) is included in Fixed assets/ capital
 work in progress.
 
 8.  Excise duty shown in Schedule-16 “Other Expenses” includes Rs.
 58.62 lacs (previous year net of Rs. 47.73 lacs) being excise duty
 related to the difference between the closing stock and opening stock
 of the finished goods.
 
 11.  Managerial remuneration:
 
 Notes:
 
 # Excludes provision for gratuity and compensated absences, which is
 determined on the basis of actuarial valuation done on overall basis
 for the Company.
 
 * Excludes sitting fess of Rs. 0.05 lac paid to a director of the
 erstwhile RPG Cables Limited during the period March 1, 2010 (the
 appointed date) to March 31, 2010 (the effective date), borne by the
 Company in terms of the Scheme of Amalgamation referred to in Note 1
 above.
 
 Calculation of Net Profit under Section 349 of the Companies Act, 1956
 
 # Footnote: Members of the Company in the Annual General Meeting held
 on June 27, 2008 and the Central Government vide its letter dated June
 30, 2009 approved payment of commission to Non-Executive Directors up
 to a ceiling of 1% of the net profits of the Company. The Board of
 Directors in its meeting held on May 06, 2011 has approved payment of
 commission up to 5% of the net profits of the Company subject to
 approval of members in the forthcoming Annual General Meeting and of
 the Central Government as required under section 310 of the Companies
 Act, 1956. Accordingly, commission of Rs. 625.81 lacs in excess of 1%
 of the net profits included above, is subject to approval of members
 and of the Central Government as stated above.
 
 16. There is no supplier covered under the Micro, Small and Medium
 Enterprises Development Act, 2006 (the Act). This information and that
 given in Schedule11-“Current Liabilities and Provisions” has been
 determined based on the details regarding the status of the supplier
 obtained by the Company. This has been relied upon by the auditors.
 
 2 Defned Benefit Plan (Funded)
 
 a.  A general description of the Employees Benefit Plan:
 
 The Company has an obligation towards gratuity, a funded defned benefit
 retirement plan covering eligible employees. The plan provides for lump
 sum payment to vested employees at retirement, death while in
 employment or on termination of the employment of an amount equivalent
 to 15 days salary payable for each completed year of service or part
 thereof in excess of six months. Vesting occurs upon completion of five
 years of service.
 
 XI Contribution expected to be paid to the Plan during the year ending
 March 31, 2012 – Rs. 94.58 lacs
 
 20.  Related Party Disclosures:
 
 (a) Name and nature of relationship of the party where Control exists:
 Subsidiaries- wholly owned
 
 (i) RPG Transmission Nigeria Limited
 
 (ii) KEC Global FZ – LLC, Ras UL Khaimah
 
 (iii) Jay Railway Projects Private Limited (formerly known as Jay
 Railway Signaling Private Limited) (w.e.f. September 14, 2010)
 
 (iv) KEC Investment Holdings, Mauritius (w.e.f. August 2, 2010)
 
 (v) KEC International Holdings LLC, USA*
 
 (vi) KEC Brazil LLC, USA*
 
 (vii) KEC Mexico LLC, USA*
 
 (viii) KEC Transmission LLC, USA* (ix) KEC US LLC, USA* 
 
 (x) SAE Towers Holdings, LLC, USA#
 
 (xi) SAE Towers Brazil Subsidiary Company LLC, USA#
 
 (xii) SAE Towers Mexico Subsidiary Holding Company LLC, USA# 
 
 (xiii) SAE Towers Mexico S de RL de CV, Mexico # (xiv) SAE Towers
 Brazil Torres de Transmission Ltda, Brazil # 
 
 (xv) SAE Prestadora de Servicios Mexico, S de RL de CV, Mexico # 
 
 (xvi) SAE Towers 2 Investmentos e Participacoes Ltda, Brazil#
 
 (xvii) SAE Towers Limited, USA # 
 
 (xviii) SAE Towers Panama Holdings LLC, USA #
 
 (xix) SAE Towers Panama S de RL, Panama #
 
 *w.e.f. September 7, 2010
 
 # w.e.f. September 23, 2010
 
 (b) Parties with whom transactions have taken place:
 
 Subsidiaries
 
 (i) RPG Transmission Nigeria Limited
 
 (ii) KEC Global FZ – LLC, Ras UL Khaimah 
 
 (iii) Jay Railway Projects Private Limited
 
 (iv) KEC Investment Holdings, Mauritius
 
 (v) SAE Towers Holdings, LLC, USA
 
 (vi) KEC Transmission LLC, USA
 
 (vii) KEC US LLC, USA
 
 Joint Ventures
 
 (i) Al-Sharif Group and KEC Ltd. Company, Saudi Arabia (formerly known
 as Faiz Abdul Hakim Al-Sharif Group and KEC Company Ltd., Saudi Arabia)
 
 (ii) Hilltop Infrastructure Inc. USA (Upto February 9, 2011)
 
 (iii) KEC Power India Private Limited
 
 (iv) EJP KEC Joint Venture, South Africa
 
 (v) KEC – ASSB JV, Malaysia
 
 (vi) KEC – ASIAKOM – UB JV
 
 (vii) KEC – ASIAKOM JV
 
 (viii) KEC – JEI JV
 
 (ix) KEC – DELCO – VARAHA JV
 
 (x) KEC – VARAHA – KHAZANA JV
 
 (xi) KEC – VALECHA – DELCO JV
 
 (xii) KEC – SIDHARTH JV
 
 (xiii) KEC – TRIVENI – KPIPL JV
 
 (xiv) KEC – UNIVERSAL JV
 
 (xv) KEC – DELCO – DUSTAN JV
 
 (xvi) KEC – ANPR – KPIPL JV
 
 (xvii) KEC – PLR – KPIPL JV
 
 Key Management Personnel: Mr. R. D. Chandak – Managing Director
 
 
 23. Disclosure in respect of Joint Ventures under Accounting Standard
 27 - Financial Reporting of Interests in Joint Ventures
 
 c) In respect of contracts as referred to in Note 2(c) of Schedule 18,
 the Company has recognised sales and services Rs. 29,528.97 lacs
 (previous year Rs. 56,481.61 lacs), total expenditure Rs. 27,059.54
 lacs (previous year Rs. 54,908.79 lacs), total assets aggregating Rs.
 28,098.29 lacs (previous year Rs. 28,857.76 lacs) and total liabilities
 aggregating Rs. 25,636.51 lacs (previous year Rs. 27,378.94 lacs).
 
 24.  Basic/diluted earnings per share has been calculated by dividing
 the profit for the year after taxation of Rs. 14,709.01.lacs (previous
 year Rs. 17,099.12 lacs), by 25,70,88,370 (previous year 24,76,03,375)
 being the weighted average number of equity shares outstanding during
 the year. For this purpose, equity shares allotted on April 26, 2010 in
 consideration for the amalgamation referred to in Note 2(c ) above have
 been considered in the calculation of weighted average number of equity
 shares in the previous year. Further, as during the year each equity
 share of face value of Rs. 10/- has been split/subdivided into face
 value of Rs. 2/-each, the basic/diluted earnings per share for the
 previous year has been adjusted in accordance with Accounting Standard
 -20 “Earnings Per Share”.
 
 25.  The Company is primarily engaged in the business of Engineering,
 Procurement and Construction business (EPC). As such there is no other
 separate reportable segment as defned by Accounting Standard -17
 “Segment Reporting”.
 
 26.  The execution of the construction works under contracts with
 General Electric Company, Libya is disrupted since February, 2011 due
 to civil/political unrest in that country. The net assets [including
 fixed assets, debtors etc] as at March 31, 2011 of the Company relating
 to these contracts aggregate Rs. 6,865 lacs. The Company is hopeful to
 recommence and complete the balance work of the projects on restoration
 of normalcy in Libya.
 
 27.  In view of the matter stated in Note 1 above, the figures of the
 previous year are not directly comparable with those of the current
 year. Further previous year figures have been regrouped where necessary
 to conform to those of the current year.