1.B.12 Provisions and contingent liabilities

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

A contingent liability is disclosed where there is a possible obligation or present obligations that may, but probably will not, require an outflow of resources. Contingent assets are not recognised. Information on contingent liabilities is disclosed in the notes to standalone financial statements unless the possibility of an outflow of resources embodying economic benefits is remote.

1.B.13 Financial instruments

Financial assets and financial liabilities are recognised when a Company becomes a party to the contractual provisions of the instruments.

Initial Recognition

Financial assets 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 financial assets and financial liabilities at fair value through profit or loss) are adjusted in the carrying amount of such financial assets and financial liabilities. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in Standalone Statement of Profit and Loss.

1.B.14 Financial assets

Classification and subsequent measurement of financial assets 1.B.14.1 Classification of financial assets

The Company classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

• those measured at amortised cost.

The classification is done depending upon the Company's business model for managing the financial assets and the contractual terms of the cash flows. Classification for investments made in debt instruments will depend on the business model in which the investment is held. The Group reclassifies debt investments when and only when its business model for managing those assets changes.

1.B.14.2 Subsequent measurement Debt instruments

Subsequent measurement of debt instruments depends on the Company's business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments:

Amortised cost:

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost e.g. Debentures, Bonds etc. A gain or loss on a debt investment that is subsequently measured at amortised cost is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is included in interest income using the effective interest rate method.

Fair value through other comprehensive income

Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):

• the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Fair value through profit or loss

Assets that do not meet the criteria for amortised cost or fair value through OCI, are measured at fair value through profit or loss e.g. investments in mutual funds. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss is recognised in profit or loss and presented net in the statement of profit and loss within other gains/(losses) in the period in which it arises.

Equity instruments

Investments in equity instruments at FVTPL

Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for equity instruments which are not held for trading. Investments in equity instruments at FVTOCI

On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the reserve for ‘equity instruments through other comprehensive income'. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.

1.B.14.3 Impairment of financial assets

The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, lease receivables, trade receivables, contract assets, other contractual rights to receive cash or other financial asset.

For trade receivables, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables and contract asset, the Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information. The Company assesses on a forward-looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Note 49.8 details how the group determines whether there has been a significant increase in credit risk.

1.B.14.4 Effective interest method

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as FVTPL. Interest income is recognised in the Statement of Profit and Loss.

1.B.14.5 De-recognition of financial assets

A financial asset is derecognised only when Company has transferred the rights to receive cash flows from the financial asset. Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised.

On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.

1.B.15 Financial liabilities and equity instruments Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a Company are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

1.B.15.1 Classification and subsequent measurement

Financial liabilities are measured at amortised cost.

Financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

1.B.15.2 De-recognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled, or have expired. An exchange with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

1.B.15.3 Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in ‘Other income' as ‘Net foreign exchange gains/(losses)'.

1.B.16 Derivative financial instruments

The Company enters into derivative financial instruments viz. foreign exchange forward contracts, interest rate swaps and cross currency swaps to manage its exposure to interest rate, foreign exchange rate risks and commodity prices. The Company does not hold derivative financial instruments for speculative purposes.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately.

1.B.17 Leases:

The Company as lessee:

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the company. Contracts may contain both lease and non-lease components. The Company has elected not to separate lease and non-lease components and instead accounts for these as a single lease component.

1) Lease Liabilities

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the lease payments. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that are initially measured using the index or a rate at the commencement date, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the lessee's incremental borrowing rate (since the interest rate implicit in the lease cannot be easily determined). Incremental borrowing rate is the rate of interest that the Company would have to pay to borrow over a similar term, and a similar security, the funds necessary to obtain an asset of a similar value to the right of-use asset in a similar economic environment.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

2) Right-of-use assets

Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability, lease payments made before the commencement date, any initial direct costs and restorations costs.

Right-of-use assets are depreciated over the lease term on a straight-line basis. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities.

Extension and termination options are included in many of the leases. In determining the lease term the management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option.

Deferred tax on the deductible temporary difference and taxable temporary differences in respect of carrying value of right of use assets and lease liability and their respective tax bases are recognised on a net basis.

3) Short term leases and leases of low value assets

Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straightline basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise assets having value less than ' 350,000.

1.B.18 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) for the year by the weighted average number of equity shares outstanding during the year.

Ordinary shares to be issued upon conversion of a mandatorily convertible instrument are included in the calculation of basic earnings per share from the date the contract is entered into. Diluted earnings per share is computed by dividing the profit / (loss) for the year as adjusted for dividend, interest and other charges to expense or 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 all 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.

1.B.19 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

The board of directors of Afcons Infrastructure Limited assesses the financial performance and position of the Company and makes strategic decisions. The board of directors, which has been identified as being the chief operating decision maker, consists of the key managerial personnel and the directors who are in charge of the corporate planning. Refer note 34 for segment information presented.

1.B.20 Credit Risk

The Company assess on a forward-looking basis the expected credit losses associated with its assets measured at amortised cost which includes lease receivables, trade receivables, other contractual rights to receive cash etc. The impairment methodology applied depends on whether there has been a significant increase in the credit risk since initial recognition of these financial assets. For the evaluation, the Company considers historical credit loss experience and adjusted for forward-looking information. Note 49.80 details how the Company determines whether there has been a significant increase in credit risk.

1.B.21 Government grants, subsidies and export incentives

Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

C. Critical estimates and judgements

a) Revenue recognition

The Company's revenue recognition policy, which is set out in Note 1.B.3, is central to how the Company values the work it has carried out in each financial year.

These policies require forecasts to be made of the outcomes of long-term construction services, which require assessments and judgements to be made on changes in scope of work and claims and variations.

Across construction services there are several long-term and complex projects where the Company has incorporated significant judgements over contractual entitlements. The range of potential outcomes could result in a materially positive or negative change to underlying profitability and cash flow.

Estimates are also required with respect to the below mentioned aspects of the contract.

• Determination of stage of completion;

• Estimation of project completion date;

• Provisions for foreseeable losses; and

• Estimated total revenues and estimated total costs to completion, including claims and variations.

These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Revenue and costs in respect of construction contracts are recognized by reference to the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately.

b) Taxation

The Company is subject to tax in a number of jurisdictions and judgement is required in determining the worldwide provision for income taxes.

The uncertain tax positions are measured at the amount expected to be paid to taxation authorities when the Company determines that the probable outflow of economic resources will occur. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

c) Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. There are certain obligations which managements have concluded based on all available facts and circumstances are not probable of payment or difficult to quantify reliably and such obligations are treated as contingent liabilities and disclosed in the notes but are not provided for in the standalone financial statements. Although there can be no assurance of the final outcome of the legal proceedings in which the Company is involved it is not expected that such contingencies will have material effect on its financial position or profitability.

d) Useful lives of property, plant and equipment

As described in note 1.B.8 above, the Company reviews the estimated useful lives of property, plant and equipment and residual values at the end of each reporting period. There was no change in the useful life and residual values of property, plant and equipment as compared to previous year.

e) Impairment of trade receivables and contract assets

The Company has recognised trade receivables with a carrying value of ' 3,452.94 Crores (as at 31^st March, 2023: ' 2,696.74 Crores). The recoverability of trade receivables is regularly reviewed in the light of the available economic information specific to each receivable and specific provisions are recognised for balances considered to be irrecoverable. The impairment provisions for trade receivables are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company's past history, credit risk, existing market conditions as well as forward looking estimates at the end of each reporting year. The expected credit loss allowance for trade receivables is made based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. Where the actual cash shortfalls vary from those estimated, these could impact the level of profit or loss recognised by the Company. The same policies are followed for contract assets.

f) Retirement benefit obligations

Details of the Company's defined benefit pension schemes are set out in Note 1.B.6, including tables showing the sensitivity of the pension scheme obligations and assets to different actuarial assumptions.

The present value of defined benefit obligations is determined by discounting the estimated future cash outflows by reference to market yields at the end of reporting period that have terms approximating to the terms of the related obligation.

g) Arbitration claims

The forecast profit on contracts includes key judgements over the expected recovery of costs arising from the following: variations to the contract requested by the customer, compensation events, and claims made by the Company for delays or other additional costs for which the customer is liable. These claims could result in disputes that get settled through an arbitration process wherein the outcome of these awards including the timing and the amount (including interest thereon) requires a reasonable degree of estimation. The inclusion of these amounts requires estimation of their recoverability and could impact the level of profit or loss recognized by the Company.

h) Classification of assets / liabilities as Current and Non-current

The balance sheet presents current and non-current assets and current and non-current liabilities, as separate classifications. This classification involves managements estimate on expected realization of assets and settlement of liabilities within 12 months after the reporting year.

i) Classification of Joint Arrangement as a Jointly Controlled Operation/Joint Venture

A Jointly Controlled Operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangements. Joint control is the contractually agreed sharing of control of an arrangement, which exist only when decisions about the relevant activities require unanimous consent of the parties sharing control.

When an entity undertakes its activities under joint operations, the Company as a joint operator recognises in relation to its interest in a joint operation:

a) Its assets, including its share of any assets held jointly;

b) Its liabilities, including its share of any liabilities incurred jointly;

c) Its revenue from the sale of the output arising from the joint operation;

d) Its share of the revenue from the sale of the output by the joint operation and

e) Its expenses, including its share of any expenses incurred jointly.

Accordingly, the Company has evaluated all its joint arrangements on the basis of the contractual arrangements entered into between the parties to the joint arrangements for execution of the project irrespective of the legal form.

D. Recent Indian Accounting Standards (Ind AS)

Ministry of Company Affairs notifies new standards or amendments to the existing standards. There is no such notification which would have been effective from 1^st April, 2024.

12.5. Rights, preferences and restrictions attached to 0.01% Non Cumulative and non profit participatory convertible preference shares:

(a) The Preference Shares issued were non- cumulative and non profit participating convertible Preference Shares which were carrying a fixed rate of dividend of 0.01% per annum to be paid in priority to the holders of any other class of shares.

(b) The terms of these Preference Shares were varied with consent of the Preference Shareholder and the special resolution was passed with requisite majority of the members of the Company vide Postal Ballot effective on 30^th November, 2018 whereby the preference shares shall be deemed to be converted into common equity shares of the Company at a price of ' 68.25/- per equity share (consisting of par of ' 10/- and a premium of ' 58.25/-) immediately, automatically and without any further act of the parties in the event of conversion of the preference shares by Goswami Infratech Private Limited.

(c) Every member of the Company holding preference shares were having right to vote in the general meeting of the Company on resolutions placed before the Company which directly affect the rights attached to this preference shares.

(d) On Mandatory conversion date i.e. 13^th January 2024, pursuant to the resolution passed by the Stakeholders Relationship Committee of the Company on 13^th January 2024 and in terms of the conversion terms stated in 12.4 (b) above, the said Preference shares were converted into equity shares of the Company and the said Preference shareholder (i.e. Floreat Investments Private Limited) was allotted 1,46,52,015 equity shares of ' 10/- each against the conversion of 10,00,00,000 Preference shares of ' 10/- each held by it. Accordingly, the Preference Shares held by Floreat Investments Private Limited stands extinguished. Resultantly, the equity shareholding of Floreat Investments Private Limited as on 31^st March, 2024 stands increased from 1,30,15,929 equity shares to 2,76,67,944 equity shares of face value of ' 10/- each.

(e) The Board of Directors of the Company at its meeting held on 14^th June, 2024 has recommended for approval of the members at the ensuing Annual General Meeting declaration of dividend @ 0.01% for the financial year 2023-24 on the preference shares held by it for the proportionate period of FY 2023-24 (i.e. from 01^st April 2023 until the date of conversion of preference shares into equity shares on 13^th January, 2024).

12.6. Rights, preferences and restrictions attached to 0.01% fully and compulsorily convertible non-cumulative, non participatory

preference shares:

(a) The preference shares issued were entitled to fixed non-cumulative preference dividend at the fixed rate of 0.01% per annum which were be paid in priority to the holder of any other class of shares. According to the terms and conditions, which were approved by the equity shareholders via passing special resolution on 17^th July, 2020, the preference shares had early conversion rights at any time on or after 31^st July, 2020 (“Early conversion date”) prior to 13^th January, 2024 (“Mandatory conversion date”).

(b) Every member of the Company holding preference shares has a right to vote in the general meeting of the Company on resolutions placed before the Company which directly affect the rights attached to this preference shares, in accordance with the provision of section 47 of Companies Act, 2023.

(c) The preference share and all equity shares issued on the conversion of the preference shares shall be freely transferable at the option of the holders of the preference shares. The Company confirms that the Board of Directors of the Company has duly approved the issuance and the terms of the preference share, including the right of the preference share holder to freely transfer the preference shares and the equity shares issued on the conversion of the preference shares and the Board of Directors of the Company shall not raise any objections under Article 37 of the Articles to any such transfer.

(d) On return of capital on a liquidation or otherwise of the assets of the Company, the holder of preference shares were entitled, in priority to any payment to the holders of any other class of shares, to be repaid a sum equal to the capital paid up or credited as paid up on the preference shares held by it and all arrears and accruals (if any) of the preferential dividend calculated up to the date of the commencement of the winding-up (in case of winding-up) or the return of capital (in any other case).The preference shares were not conferred any further right to participate in the profits or assets of the Company except as mentioned above.

(e) The terms and conditions of compulsory convertible preference shares held by Goswami Infratech Private Limited (GIPL) were amended in 2022 by varying / deferring the Early Conversion date ‘on or after 31^st January, 2023' from ‘any date on or after 31 ^st July, 2020' via passing a special resolution. Accordingly the preference shares were carrying rights of automatically and mandatorily be converted into equity shares on 13^th January, 2024 (“mandatory conversion date”) or any early date of conversion at the instruction of the Preference shareholder (“early conversion date”).

(f) As per the terms and conditions, on mandatory conversion date or the early conversion date, as the case maybe, the preference shares were to be converted into such number of equity shares of the Company constituting 74% of the outstanding equity share capital and convertible preference shares of the Company calculated on a fully diluted basis on the date of issue (i.e. 14^th January, 2008) resulting into 24,65,40,258 equity shares of the Company. Such equity shares of the Company shall at all times constitute atleast 72% (seventy-two per cent) of the outstanding equity shares of the Company on a fully diluted basis.

(g) During the year, on mandatory conversion date, pursuant to the resolution passed by the Stakeholders Relationship Committee of the Company on 13^th January 2024 , the said preference shares were converted into equity shares of the Company and the said Preference shareholder (i.e. Goswami Infratech Private Limited) were allotted 24,65,40,258 equity shares of ' 10/- each against the conversion of 25,00,00,000 preference shares of ' 10/- each held by GIPL. Accordingly, the preference shares held by Goswami Infratech Private Limited stands extinguished. Resultantly, the equity shareholding of Goswami Infratech Private Limited as on 31^st March, 2024 was 24,65,40,258 equity shares of face value of ' 10/- each.

(h) The Board of Directors of the Company at its meeting held on 14^th June, 2024 has recommended for approval of the members at the ensuing Annual General Meeting declaration of dividend @ 0.01% for the financial year 2023-24 on the preference shares held by it for the proportionate period of FY 2023-24 (i.e. from 01^st April 2023 until the date of conversion of preference shares into equity shares on 13^th January, 2024).

12.7. Rights, preferences and restrictions attached to 0.01% fully and compulsorily convertible non-cumulative, non participatory

preference shares:

(a) The preference shares issued were entitled to fixed non-cumulative preference dividend at the fixed rate of 0.01% per annum which were be paid in priority to the holder of any other class of shares. According to the terms and conditions, the preference shares had early conversion rights at any time on or after 14^th February, 2024 (“Early conversion Date”) prior to 21^st March, 2024 (“Mandatory conversion date”).

(b) Every member of the Company holding preference shares has a right to vote in the general meeting of the Company on resolutions placed before the Company which directly affect the rights attached to this preference shares.

(c) On return of capital on a liquidation or otherwise of the assets of the Company, the holder of preference shares were entitled, in priority to any payment to the holders of any other class of shares, to be repaid a sum equal to the capital paid up or credited as paid up on the preference shares held by it and all arrears and accruals (if any) of the preferential dividend calculated up to the date of the commencement of the winding-up (in case of winding-up) or the return of capital (in any other case).The preference shares were not conferred any further right to participate in the profits or assets of the Company except as mentioned above.

(d) As per the terms and conditions, on Mandatory Conversion Date or the Early Conversion Date (as the case may be) the preference shares shall be converted into such number of equity shares of the Company at the price of ' 132/- per equity shares (consisting of par of ' 10/- and a premium of ' 122/- per share) provided that in case of any fraction arising on conversion of preference shares into equity shares, such fraction equity shares shall be rounded off to the nearest number.

(e) Pursuant to the consent of the preference shareholder received vide their letter dated 29^th December 2023 and there other class preference shareholder on 1^st January 2024 and 2^nd January, 2024 respectively , the Board of Directors of the Company had pursuant to it resolution taken at its meeting held on 5^th January, 2024 initiated the action to obtain shareholders approval to the variation of the terms of the preference shares held by the preference shareholder (Shapoorji Pallonji and Company Private Limited) to provide for an option to the preference shareholders for exercise of right of an early conversion of the said preference shares on any day on or after 14^th February 2024 but prior to the mandatory conversion date of 21^st March, 2024. Accordingly, the requisite approval of the equity shareholder to the said variation of the terms of the preference shares was accorded on 8^th February, 2024 vide Postal Ballot Process.

(f) Shapoorji Pallonji and Company Private Limited vide its letter date 12^th February, 2024 requested for early conversion of the said preference shares on 14^th February, 2024. Accordingly, pursuant to the resolution passed by the Board of Directors of the Company on 14^th February, 2024, the said preference shares were converted into equity shares of the Company and the said Preference shareholder (i.e.Shapoorji Pallonji and Company Private Limited) was allotted 75,75,758 equity shares of ' 10/-each against the conversion of 10,00,00,000 preference shares of ' 10/- each held by it. Accordingly, the preference shares held by Shapoorji Pallonji and Company Private Limited stands extingushed. Resultantly, the equity shareholding of Shapoorji Pallonji and Company Private Limited as on 31^st March, 2024 stands increased from 4,91,05,652 equity shares to 5,66,81,410 equity shares of face value of ' 10/- each.

(g) The Board of Directors of the Company at its meeting held on 14^th June, 2024 has recommended for approval of the members at the ensuing Annual General Meeting declaration of dividend @ 0.01% for the financial year 2023-24 on the preference shares held by it for the proportionate period of FY 2023-24 (i.e. from 01^st April, 2023 until the date of conversion of preference shares into equity shares on 14^th February, 2024).

Note No 12.10.

For the period of Five years immediately preceding the date as at which the Balance Sheet is prepared:

i) Aggregate number and class of shares allotted as fully paid up pursuant to contract(s) without payment being received in cash: Nil

ii) Aggregate number and class of shares allotted as fully paid up by way of bonus shares: Nil

iii) Aggregate number and class of shares bought back: Nil

Note No 12.11.

The word company used in the Balance Sheet and Statement of Profit & Loss including the accompanying notes to accounts is defined as “Afcons Infrastructure Limited” including all of its branches and Jointly Controlled Operations.

Note No 12.12.

The Board of Directors at its meeting held on 14^th June, 2024 has recommended to the members for approval, at the ensuing Annual General Meeting of the Company, declaration of equity dividend of 25% (i.e. ' 2.50/- per equity share of ' 10/- each) to the equity shareholders of the Company for the financial year 2023-2024. Goswami Infratech Private Limited, Floreat Investments Private Limited and Shapoorji Pallonji & Company Private Limited (erstwhile holders of Preference shares to whom equity shares have been allotted on 13^th January, 2014 and 14^th February, 2014 respectively) shall be paid proportionate equity dividend on the equity shares (allotted against the convertible preference shares) from the date of the allotment of equity shares until the end of the financial year ending 31^st March, 2024.

Nature and purpose of each reserve within other equity Capital reserve

The capital reserve is on account of acquisition of subsidiary companies Capital redemption reserve

As per the provisions of Companies Act, capital redemption reserve is created out of the general reserve for the amount equivalent to the paid up capital of shares bought back by the company.

Securities premium account

Where Company issued shares at a premium, a sum equal to the aggregate amount of the premium received on those shares shall be transferred to a “securities premium account” as per the provisions of applicable Companies Act. This reserve is utilized as per the provisions of the Companies Act.

Contingency reserve

The contingency reserve was created to protect against loss for amounts due from a partnership firm.

General reserve:

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

Foreign currency translation reserve:

Exchange differences relating to the translation of the results and net assets of the foreign operations from their functional currencies to the presentation currency (i.e. ') are recognised directly in other comprehensive income and accumulated in the foreign currency translation reserve. The cumulative amount is reclassified to profit or loss when the net investment is disposed-off.

Retained earning and dividend on equity shares:

This represent the surplus / (deficit) of the profit or loss. The amount that can be distributed by the Company to its equity shareholders is determined considering the requirements of the Companies Act, 2013. Thus, the amount reported above are not distributable in entirety.

Reserve for equity instrument measured through other comprehensive income

This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognized.

a. Defined contribution plan

(i) Provident fund

(ii) Superannuation fund

(iii) State defined contribution plans

The provident fund and the state defined contribution plan are operated by the regional provident fund commissioner and the superannuation fund is administered by the Life Insurance Corporation (LIC). Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

The total expense recognised in statement of profit or loss of ' 64.30 Crores (for the year ended 31^st March, 2023: ' 58.14 Crores) represents contributions payable to these plans by the Company at rates specified in the rules of the plans.

b. Defined benefit plans (i) Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 4 years and 240 days are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service without any ceiling limit as given under Payment of Gratuity Act, 1972.

Whereas on death of an employee the amount of gratuity payable is amount equivalent to one month salary, payable for each completed year of service or part thereof in excess of six months in terms of Gratuity scheme of the Company or as per payment of the Gratuity Act, whichever is higher.

The gratuity plan of the Company is funded and the Company accounts for gratuity benefits payable in future based on an independent external actuarial valuation carried out at the end of the year using Projected Unit Credit Method.

Investment risk

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest risk

A decrease in the bond interest rate will increase the plan liability.

Longevity risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

Salary risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.

The risk relating to benefits to be paid to the dependents of plan members (widow and orphan benefits) is re-insured by an external insurance company.

No other post-retirement benefits are provided to these employees.

In respect of the plan, the most recent actuarial valuation of the present value of the defined benefit obligation were carried out as at 31^st March, 2024 by an actuary. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

(v) Sensitivity Analysis

Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

1) If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by ' 6.82 Crores (increase by ' 7.92 Crores) (as at 31^st March, 2023: decrease by ' 5.43 Crores (increase by ' 6.30 Crores)).

2) If the expected salary growth increases (decreases) by 1%, the defined benefit obligation would increase by ' 7.78 Crores (decrease by ' 6.83 Crores) (as at 31^st March, 2023: increase by ' 6.21 Crores (decrease by ' 5.45 Crores)).

3) If the employee turnover increases (decreases) by one year, the defined benefit obligation would decrease by ' 0.67 Crores (increase by ' 0.73 Crores) (as at 31^st March, 2023: decrease by ' 0.41 Crores (increase by ' 0.45 Crores)).

(vi) Sensitivity analysis method

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

The average duration of the benefit obligation at 31^st March, 2024 is 12 years (as at 31^st March, 2023: 12 years).

The Company expects to make a contribution of ' 12.00 Crores (as at 31^st March, 2023: ' 10.00 Crores) to the defined benefit plans during the next financial year.

Note 36. Afcons Gunanusa Joint Venture (AGJV)

AGJV had submitted claims to ONGC, arising on account of cost overruns due to change orders, in terms of the provisions of the contract. The Joint venture has invoked arbitration in respect of the aforesaid change orders. Claims against change orders and counter claims by ONGC aggregating to approx ' 400.00 Crores is currently being discussed in arbitration and cross examination of Claimant's witness is being carried out in arbitration.

Based on the assessment, historical experience in similar circumstances and technical evaluation of the aforesaid matters related to claims and counter claims, carried out by Joint Venture's management, after considering the current facts and status of proceedings in arbitration as of date, which is supported by legal opinion, management of joint venture is of the view that the “amount due from customer under construction contract” of ' 124.05 Crores as on 31^st March, 2024 is appropriate and no provision is required to be made as these have been considered as good and fully recoverable by the Management. However, considering that the arbitration proceedings are ongoing, the duration and outcome is uncertain.

Note 37. Transtonnelstroy Afcons Joint Venture (TAJV)

The Transtonnelstroy Afcons Joint Venture (“the JV”) had submitted variations to the client for two projects (package UAA-01 and package UAA-05) arising on account of cost overruns, due to unforeseen geological conditions, delays in handing over of land and change in scope of work etc., in terms of the provisions of the contract with the Chennai Metro Rail Limited (“the client”), which the Management believes is attributable to the client.

During Financial Year 2021-22, Arbitration Panel issued a unanimous award in favour of Joint Venture granting extension of time in terms of number of days (the “claim no. 1 and 2”). The Arbitral Awards on Extension of Time matters (Claim No. 1&2) of Contract UAA-01 & UAA-05 were challenged by CMRL before the Ld. Single Judge of Madras High Court and succeeded. The order of the Ld. Single Judge was then challenged by TTA JV before the Hon'ble Division Bench and the same was dismissed vide order dated 01.02.2023. The said order of the Hon'ble Division Bench was challenged before the Hon'ble Supreme Court by TTA JV and the SLP was admitted and registered as Civil Appeal. The matter is listed for hearing on 12^th July, 2024.

Based on the assessment, the orders were not challenged by CMRL on the Merits of the Arbitral Award but on the alleged procedural lapses on part of the Tribunal (i.e., no opportunity provided to CMRL on account of two particular documents sought by the Tribunal from TTA JV). Further, the Ld. Single Judge in its Order has also granted liberty to the Parties to go back to the existing Tribunal to get opportunity on the two documents. Also, the Hon'ble Division bench after hearing prima facie case has sought consent of parties on remanding the matter to the same Tribunal. However, since CMRL did not agree for consenting to the same and also the Hon'ble bench does not have special power to direct the parties to go before the same Tribunal, the Hon'ble bench proceeded to hear the matter and pronounced the order.

Arbitration proceedings related to claims for cost of extension of time granted in claim no. 1 and 2 and related cost i.e. Claim No. 3 and 3A along with EOT claimed beyond Arbitration Award and associated cost, forming part of Claim No 8 have been kept on hold and shall be initiated based on outcome Civil Appeal of the SLP filed with Hon'ble Supreme Court.

Disputes related to release of withheld amount, release of retained amount, refund of amount encashed against Bank Guarantees and issuance of final taking over certificate (the “claim no. 8”) are currently being heard in arbitration award.

In the earlier years, Joint Venture had received favourable arbitration awards in few of the other matters. The Client has challenged these arbitration awards before the Hon'ble High Court, Madras. Pending disposal of these matters in the court, client has, upon submission of the bank guarantee by the Joint Venture, deposited part of the award amount with the Joint Venture, pursuant to an interim stay order from Hon'ble High Court, Madras. The hearing for this is currently in process. The arbitration award amounting to ' 120.81 Crores (' 120.81 Crores as on 31^st March, 2023) and interest on arbitration award of ' 30.63 Crores (' 30.63 Crores as on 31^st March, 2023) has been recognized as “Non-current Trade Receivables” and “Other non-current financial assets - Interest on Trade Receivables as per Arbitration Awards”, respectively, and the amount of ' 79.28 Crores (' 79.28 Crores as on 31^st March, 2023) received against such award has been recognized as “Other Non-current Liabilities -Contract Liabilities- Advances from customers”.

Further, there are counter claims submitted by CMRL amounting ' 1945.81 Crores (' 1945.81 Crores as on 31^st March, 2023). The counterclaims lodged by CMRL arose due to the alleged defective works in the tunnelling i.e. excessive steps and lips in the Tunnel Rings. The Counter claims are mainly towards the contingencies that CMRL may have to incur in future in the form of Rectification works, Loss of revenue and additional maintenance costs during the intended design life due to the said alleged defects in the tunnelling works. In addition, the Counterclaim was not substantiated by any supporting documents either on effect or on Cost. TTA JV has submitted an expert report to the Arbitral Tribunal wherein it states that the excessive stepping and lipping has no impact on either structural stability or on waterproofing systems. The counterclaims of the CMRL are made as an afterthought, which is evident from the fact that the same was filed by CMRL only in 2022, after issuance of substantial taking over certificate for UAA 01 in December 2019 and UAA 05 in June 2018, and both the packages became commercially operative in 2017 (UAA 05) and in 2019 (UAA 01).

Based on the assessment, historical experience in similar circumstances and technical evaluation of the aforesaid matters related to claims and counter claims , carried out by Joint Venture's management, after considering the current status of negotiation/amicable settlement with the client/ proceedings in arbitration, High Court and Supreme Court as of date, which is supported by external legal opinion, management of Joint Venture is of the view that the “amount due from customer under construction contracts” recorded in the books of accounts is based on cost actually incurred and so claimed but not duly compensated. Management of joint venture is confident of getting favourable order/ award and is of that opinion that amount of ' 659.87 Crores (' 659.87 Crores as on 31^st March, 2023) recognized towards such variations/ claims in ‘Amounts due from customers under construction contracts' as Non-Current assets, an amount of ' 120.81 Crores (' 120.81 Crores as on 31^st March, 2023) towards the arbitration award recognized as ‘Non-current Trade Receivables' and an amount of ' 30.63 Crores (' 30.63 Crores as on 31^st March, 2023) interest on arbitration award as “Other non-current financial assets - Interest on Trade Receivables as per Arbitration Awards”, is appropriate and the same is considered as good and fully recoverable. Joint Venture management does not anticipate any loss to be recognized or contingent liability to be disclosed at this stage. However, considering that the negotiations, proceedings in arbitration, High Court and Supreme Court are ongoing, the duration and outcome is uncertain.

Note 38. DAHEJ STANDBY JETTY PROJECT UNDERTAKING (DJPU):

Management of Dahej Standby Jetty Project Undertaking (“DJPU”) has submitted variations towards the amount of claims in terms of the provisions of the contract, which were not approved by the Petronet LNG Limited (“the client”). During the year 2018-19, management has invoked arbitration for settlement of their claims against the client.

During the earlier year, an unfavourable award was granted in Arbitration, towards claims of liquidated damages for delay in completion of works by Joint Venture for ' 79.28 Crores (including interest of ' 20.45 Crores). Client has subsequently encashed the bank guarantees given by a Joint Venturer Partner, Afcons Infrastructure Limited of ' 79.28 Crores and recovered the award amount. The amount of encashed Bank Guarantee has been recorded by the Joint Venture as Other Receivables from customer (Other non-current assets) and Payable to JV Partner (non-current borrowings). Thereafter, the Joint Venture has filed petition at Hon'ble High Court, Delhi for setting aside the unfavourable award and also submitted claims for additional cost incurred w.r.t extended stay and acceleration cost, considering that the delay is attributable to the client and in terms of the contractual provisions. This petition is admitted by Hon'ble High Court, Delhi and hearings is currently in process. The Hon'ble High Court Delhi on 22^nd November 2022 directed client to submit an undertaking signed by President (Finance) of client, to the effect that it shall restitute the entire amount in the event Joint Venture succeeds in its challenge to the award.

Based on the assessment, historical experience in similar circumstances and technical evaluation of the aforesaid matters related to claims, carried out by Joint Venture's management, after considering the current facts and status of proceedings in High Court as of date, which is supported by legal opinion, management of Joint Venture is of the view that the amount recoverable from the client of ' 79.28 Crores disclosed as ‘Other Receivables' and the ‘amount due from customer under construction contract' of ' 11.10 Crores as on 31^st March, 2024 is appropriate and no further provision for aforesaid claims and receivables is required to be made as these have been considered as good and fully recoverable by the Management. However, considering that the proceedings in High Court are ongoing, the duration and outcome is uncertain.

Note 39.

(a) The Company has been legally advised that outstanding interest free advances aggregating to ' 858.14 Crores (As at 31^st March, 2023'852.50 Crores) before elimination made towards financing the unincorporated joint operations do not come under the purview of Section 186 of Companies Act, 2013 as the Company is in the business of constructing and developing infrastructure facilities.

(b) In view of non-applicability of section 186 of the Companies Act, 2013, the details of particulars required to be made thereunder in the financial statements are not applicable in relation to loan made, guarantee given or security provided. For investments made refer to Note no. 4.

Note 40.

Konkan Railway Corporation Limited (“KRCL”) had issued a contract for construction of Steel Arch Bridge across river Chenab on 24^th August 2004. The Designs and the Design Basis Note (“DBN”) submitted by Chenab Bridge Project Undertaking (“CBPU”) during the tender stage, which were in compliance with the tender terms, were revised in 2005 and subsequently in 2006 and 2010 by KRCL. The completion of project got delayed due to various reasons such as changes in design basis note, arch span, finalization of slope stabilization, belated changes in the contract specifications of various materials etc. which the management firmly believes are attributable to the client.

In light of the above, the Company has raised claims in the arbitration proceedings, which are towards reimbursement of additional expenses on account of extended stay, categorization of excavation works, compensation due to loss of productivity, expenses incurred due to change in alignment etc. in terms of the provisions of the contract. Previously, the Company had received unfavourable awards (for the majority of claims) by the Special Arbitral Tribunal for the claims submitted upto June 2013. The awards are challenged before Hon'ble Bombay High Court.

Presently, Company's claims beyond July 2013 are being adjudicated by the Standing Arbitral Tribunal mutually appointed by the parties. Further, the management of the Company was negotiating with KRCL in respect of its claim towards payment, due to increase in structural steel quantities. In this respect, a committee was appointed by KRCL through Railway Board who has given recommendations in favour of the Company. However, KRCL did not agree to implement the recommendations of the report and hence, the matter is now referred for adjudication by the Standing Arbitral Tribunal.

The “amount due from customer under construction contract” recorded in the books of accounts amounting to ' 192.92 Crores as at 31^st March, 2024, includes ' 115.00 Crores on account of increase in steel quantity due to change in design is based on cost actually incurred and so claimed with KRCL, but not compensated.

Based on the assessment, historical experience in similar circumstances and technical evaluation of the aforesaid matters related to claims carried out by the management, after considering the current facts and status of proceedings in arbitration and High Court as of date, which is supported by legal opinion, the management is confident of getting a favourable judgement and recover all the aforementioned amount of ' 192.92 Crores recorded in books as “amount due from customer under construction contract” related to this project. However, considering that the proceedings in arbitration and High Court are ongoing, the duration and outcome is uncertain.

Note 41.

The Company had executed project awarded by the Board of Trustees of the port of Mumbai (MbPT) for Modernization of the existing Marine Oil Terminal and berths/jetties J1, J2 and J3 at the Multi-cargo Marine Oil Terminal of Jawahar Dweep based in Mumbai Harbor. The project had completed in June 2003.

The Company had gone into arbitration with MbPT for compensation for extended stay related to projects and was successful in getting an award of ' 96.02 Crores including interest till the date of award, in its favour on November 2011. However, the Award was challenged by MbPT u/s 34 of Arbitration and Conciliation Act, 1996 to the Single Bench of Bombay High Court. The Single Bench had set aside the award and passed the order in favor of MbPT. The Company filed an appeal with the High Court of Mumbai for a two bench Judge as against order of Single Bench. The appeal was admitted by the High Court for a hearing by a two bench Judge in the month of April 2018. Considering the legal opinion obtained and facts of the matter, the Company is confident of winning the case and recovering the entire amount from MbPT in future.

Note 42.

The Company had executed projects awarded by Uttar Pradesh Expressways Industrial Development Authority for Construction of Six-lane green field Kannauj to Unnao Expressway (package IV) and Firozabad to Etavah (package II). During the execution of these projects the client issued various change orders which required additional deployment of resources. The expressway was inaugurated and put to use in December 2016. These projects were completed 13 months ahead of schedule.

Due to the various change orders, the Company has raised various claims towards additional expenses on account of change of scope, additional works, royalty claim etc. An amount of ' 211.29 Crores is outstanding towards unbilled receivables and disclosed under note no.8 “Contract assets”. The matter is referred to Arbitration. Considering the legal opinion obtained and facts of the matter, the Company is confident of winning the case and recovering the entire amount from Uttar Pradesh Expressways Industrial Development Authority.

Note 43.

(a) The Company has unbilled receivables towards various ongoing and completed projects disclosed under Note no. 8 ‘Contract assets'. This unbilled work also includes variations on account of cost overruns due to unforeseen geological conditions, delays in handling over land, change in scope of work, etc. which are under discussions at various levels including customer, in arbitration, Dispute Adjudication Board etc. Based on the discussions and merits of the claims, the management is confident about the recovery of these pending variations with respect to unbilled receivables disclosed under note no.8 “Contract assets”.

(b) The Company has a total net receivable of ' 1,455.03 Crores (including interest on arbitration awards ' 389.67 Crores) which is a part of Trade Receivables shown under note 5 towards arbitration awards which are won by the Company in past, these arbitration awards have been further challenged by the customers before the session court or higher courts of law. Pending disposal of these matters in the courts, management has recognized the amount as per the arbitration award and part payment has been received by management under Niti Aayog Scheme upon submission of a bank guarantee by the Company, which is disclosed as advances from customers in note no.17 ‘Contract Liability'. Management is confident about the recovery of the amounts involved in the pending matters at various levels.

Note 44.

In the earlier years, the Company has from time to time paid advance aggregating to ' 269.54 Crores to a Subcontractor viz Shapoorji Pallonji and Company Private Limited in connection with undertaking the designing and interior work of the stations for elevated metro projects at Bangalore, Mumbai, Ahmedabad, and Kanpur awarded to it against the security of Letter of Comfort provided by the subcontractor.

However, since the subcontractor could not execute the work for the station work referred to above, the company got this station work done on its own. As per terms of Letter of Comfort, subcontractor was to refund this advance to the Company, however due to certain financial difficulties subcontractor has not been able to refund advance given to it under the subcontract.

Considering the fact that aforesaid projects is nearing completion, said advance has been classified as other current financial assets as advance to vendor recoverable in cash.

Management is following up with the SPCPL for recovery of the aforesaid advance and as confirmed by SPCPL it is expected to be settled by 30^th September, 2024, failing which the company will charge interest @ 12% p.a.

Note 45.

The Jointly Controlled Operations have mentioned in their financial statement that as per the terms of agreement parent is committed to provide additional funds as may be required to meet the working capital requirements of such Jointly Controlled Operations.

Basis management's assessment, parent is committed to provide and can adequately source additional funds as may be required to meet the working capital requirements of these Jointly Controlled Operations.

Note 46.

As on 31^st March, 2024, an amount of ' 558.62 Crores (excluding Jointly Controlled Operations) is receivable towards GST Input Credit which includes unutilised credit of inputs and input service on account of inverted duty structure. The Company has a robust Order book position of more than ' 22,400 Crores across India and there are several projects which are under the pipeline. Further, the Company has initiated Arbitration towards variations and Time related claims with respect to various projects and management expects favourable awards in these claims/ arbitration. Considering the facts as mentioned above, there is no doubt about the utilization of the GST input credit balance against the future liabilities and the same is considered good.

Note 47. Going concern related assessment performed by jointly controlled operations. a) Afcons Sener LNG Constructions Projects Pvt. Ltd.

Material uncertainty related to going concern:

The auditor of Jointly Controlled Operations “Afcons Sener LNG Constructions Projects Private Limited” has given a note to accounts in financial statement relating to going concern assumption used for preparation of financial statements. Basis the Company's assessment company can adequately source the funding required of the mentioned Jointly Controlled Operations.

(iv) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(v) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(vi) Utilisation of borrowings availed from banks and financial institutions

The borrowings obtained by Company from banks and financial institutions have been applied for the purposes for which such loans were taken.

(vii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(viii) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(ix) Valuation of PP&E, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(x) Utilisation of borrowed funds and share premium

A. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

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

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

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries

(xi) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

(xii) The Company is not declared as a wilful defaulter by any bank or financial institution or other lender during any reporting year.

(xiii) The Company does not have any investment property during any reporting period, the disclosure related to fair value of investment property is not applicable.

Note 49. Financial instruments

49.1 Capital management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The capital structure of the Company consists of net debt (borrowings as detailed in notes 14 and 20) offset by cash and bank balances and total equity of the Company.

The Company reviews the capital structure on a regular basis. As part of this review, the Company considers the cost of capital and the risks associated with each class of capital.

49.3 Financial risk management objectives

The Company's corporate treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk assessment and analyses forex exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The risk management is governed by the Company's policy approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, the use of financial derivatives and non-derivative financial instruments. Compliance with policies and exposure limits is reviewed on a continuous basis. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

49.4 Market risk

The Company's activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates.

49.5 Foreign currency risk management

The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions in various countries. Foreign currency risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company's functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The carrying amounts of the Company's unhedged foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

49.6.1 Interest rate sensitivity analysis

The sensitivity analysis below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole period. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the company's profit for the year ended 31^st March, 2024 would decrease/increase by ' 4.17 Crores (As on 31^st March, 2023: decrease/increase by ' 3.94 Crores). This is mainly attributable to the company's exposure to interest rates on its variable rate borrowings.

49.7 Other price risks

The Company is exposed to equity price risks arising from mutual funds and equity investments. Certain of the Company's equity investments are held for strategic rather than trading purposes.

Mutual fund investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments. However, due to the very short tenure of the underlying portfolio in the liquid schemes, these do not hold any significant price risks.

49.7.1 Equity price sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 5% higher/lower:

Other comprehensive income for the year ended 31^st March, 2024 would increase / decrease by ' 0.01 Crores (As on 31^st March, 2023: increase / decrease by ' 0.01 Crores) as a result of the changes in fair value of equity investments measured at FVTOCI.

49.8 Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk arises from investment in debt instruments, loans, trade receivables, other receivables, cash and bank balance and derivate financial instruments.

The Company is exposed to credit risk on its financial assets, which comprise cash and cash equivalents, bank deposits, trade receivables and loan receivables. The exposure to credit risks arises from the potential failure of counterparties to meet their obligations. The maximum exposure to credit risk at the reporting date is the carrying amount of the financial instruments.

Cash and cash equivalents, bank deposits are held with only high rated banks/financial institutions, credit risk on them is therefore insignificant.

Trade receivables and loan receivable

The Company assesses and manages credit risk on an internal credit evaluation system. It is performed by the finance team in conjunction with the relevant business teams depending on whether depending on the nature and type of the financial asset being evaluated.

The customer base of the Company highly comprises of government parties. Further, Company is having certain short term loan receivables from the Group entities. Collateral is generally not obtained from customers. Other customers are subject to credit verification procedures including an assessment of their independent credit rating, financial position, past experience and industry reputation.

(A) To measure the expected credit losses on (a) trade receivables from government parties, and (b) trade receivables and loan receivables from group companies, they have been considered to enjoy the low credit risk as they meet the following criteria:

i) they have a low risk of default,

ii) the counterparty is considered, in the short term, to have a strong capacity to meet its obligations in the near term, and

iii) the Company expect, in the longer term, that adverse changes in economic and business conditions might, but will not necessarily, reduce the ability of the borrower to fulfill its obligations.

(B) Cash and cash equivalents, bank deposits are held with only high rated banks/financial institutions, credit risk on them is therefore insignificant.

(C) For other trade receivables (including contract assets), the Company uses “General Model” for the measurement of expected credit loss (ECL) for trade receivables as well as contract asset

The measurement of ECL under general model depends on whether credit risk has increased significantly since initial recognition. These credit risk is regularly monitored based on historic turnover activity and credit performance of every customer. In addition, overdue receivable balances are monitored and actioned on a regular basis. When the credit risk has not increased significantly after initial recognition, a provision shall be made for the 12-month expected loss, otherwise shall be made for the entire lifetime.

The Company considers the probability of default upon initial recognition of asset and whether there is a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Company compares the risk of default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward-looking information which considers multiple factors such as:

- internal credit rating

- external credit rating (as far as available)

- actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower's ability to meet its obligations

- actual or expected significant changes in the operating results of the borrower

- significant increase in credit risk on other financial instruments of the same borrower

- significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit enhancements

- significant changes in the expected performance and behaviour of the borrower, including changes in the payment status of borrowers in the group and changes in the operating results of the borrower.

The Company has used practical expedient by computing expected credit loss allowance for trade receivable by taking into consideration payment profiles of sales over a period of 60 months before the reporting date and the corresponding historical credit loss experiences within this period. The historical loss rates are adjusted to reflect current and forward looking information on macro economic factors affecting the ability of the customers to settle the receivables. The expected credit loss is based on the Ageing of the days, the receivables due and the expected credit loss rate. In addition, in case of event driven situation as litigations, disputes, change in customer's credit risk history, specific provisions are made after evaluating the relevant facts and expected recovery.

Refer note 5 and note 8 for reconciliation of expected credit loss balance on financial assets.

49.9 Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the management, which has established an appropriate liquidity risk management framework for the management of the Company's short-term, medium-term, and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

49.9.1 Liquidity risk table

The following table details the company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the company can be required to pay. The tables include principal cash flows along with interest. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the company may be required to pay.

(v) Extension and termination options

Extension and termination options are included in a number of Land, Office Premises, Houses and Godowns leases across the Company. These are used to maximise operational flexibility in terms of managing the assets used in the Company's operation. The majority of extension and termination options held are exercisable only by the Company and not by the respective lessor.

(vi) Practical expedients applied :

In applying Ind AS 116, the Company has used the following practical expedients permitted by the standard:

- applying a single discount rate to a portfolio of leases with reasonably similar characteristics

- accounting for operating leases with a remaining lease term of less than 12 months as at 1^st April, 2021 as short-term leases

- using hindsight in determining the lease term where the contract contains option to extend or terminate the lease

- excluding initial direct costs for the measurement of the right-of-use asset at the date of initial application.

(vii) The lessee's range of weighted average incremental borrowing rate applied to the lease liabilities for the entire group was 9.25%.

(viii) Lessor accounting

The Company did not need to make any adjustments to the accounting for assets held as lessor under operating leases as a result of the adoption of Ind AS 116.

** Notional expenses includes Advances written off, Bad / irrecoverable debtors / unbilled revenue written off, Provision for Doubtful Debtors / Advances, Expected credit loss on contract assets and trade receivables, Provision for foreseeable losses for onerous contracts Note 53.

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on 13^th November, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

Note 54.A.

As of 31^st March, 2024 the Company has an outstanding receivables amounting to ' 92.77 Crores from SP Jammu Udhampur Highway Limited (SP Juhi) under the EPC contract for the Jammu Udhampur Road Project of NHAI. SP Jammu Udhampur Highway Limited (SP Juhi) had assigned the same to Shapoorji Pallonji Solar Holdings Pvt Ltd. (SP Solar) vide deed of assignment dated 20^th July, 2022 between SP Juhi and SP Solar, which got subsequently merged with Shapoorji Pallonji Infrastructure Capital Co. Pvt. Ltd.

Note 54.B.

The Company was using accounting software i.e. ‘SAP ECC' as its books of accounts till 20^th November, 2023. The Company has upgraded its accounting software to ‘SAP S/4 Hana with rise' with effect from 21^st November, 2023. While SAP audit logging has been enabled throughout the year and captures all the changes made in the application system through an audit log, the same was not enabled for SAP ECC database for the period 01^st April, 2023 to 20^th November, 2023. However, access to SAP ECC database was restricted solely to IT administrators for essential system maintenance tasks such as operating system and database upgrades as well as patch management. In SAP S/4HANA with rise, database is maintained on cloud with the service provider and hence the management cannot make any changes at database level except by way of raising a ticket with SAP S/4Hana with rise accounting software.

Note 55.

The standalone financial statement is approved and adopted by the Board of Directors in it's meeting held on 14^th June, 2024.

In terms of our report attached For and on behalf of the Board of Directors

For DELOITTE HASKINS & SELLS LLP For HDS & ASSOCIATES LLP K.SUBRAMANIAN S.PARAMASIVAN

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS Executive Vice Chairman Managing Director

Firm Registration No.117366W/W-100018 Firm Registration No. W100144 DIN: 00047592 DIN: 00058445

NILESH SHAH SURESH K. JOSHI RAMESH KUMAR JHA GAURANG M. PAREKH

Partner Partner Chief Financial Officer Company Secretary

Membership No. 049660 Membership No. 030035

Place: Mumbai Place: Mumbai

Date: 24^th June, 2024_Date: 14^th June, 2024_