17. PROVISIONS
A provision is recognized if, as a result of a past event,
the Company has a present legal or constructive
obligation that is reasonably estimable, and it is
probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are
determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks
specific to the liability.
18. FOREIGN CURRENCY
Functional currency
The functional currency of the Company is the Indian
rupee. These financial statements are presented in
Indian rupees.
Transactions and translations
Foreign-currency-denominated monetary assets
and liabilities are translated into the relevant
functional currency at exchange rates in effect at
the Balance Sheet date. The gains or losses resulting
from such translations are included in net profit in
the Statement of Profit and Loss. Non-monetary
assets and non-monetary liabilities denominated
in a foreign currency and measured at fair value are
translated at the exchange rate prevalent at the date
when the fair value was determined. Non-monetary
assets and non-monetary liabilities denominated in a
foreign currency and measured at historical cost are
translated at the exchange rate prevalent at the date
of the transaction.
Transaction gains or losses realized upon settlement
of foreign currency transactions are included in
determining net profit for the period in which the
transaction is settled. Revenue, expense and cash¬
flow items denominated in foreign currencies are
translated into the relevant functional currencies
using the exchange rate in effect on the date of the
transaction.
19. EARNINGS PER EQUITY SHARE
Basic earnings per equity share are computed by
dividing the net profit attributable to the equity holders
of the Company by the weighted average number of
equity shares outstanding during the period. Diluted
earnings per equity share are computed by dividing
the net profit attributable to the equity holders of
the Company by the weighted average number of
equity shares considered for deriving basic earnings
per equity share and also the weighted average
number of equity shares that could have been issued
upon conversion of all dilutive potential equity shares.
The dilutive potential equity shares are adjusted for
the proceeds receivable had the equity shares been
actually issued at fair value (i.e. the average market
value of the outstanding equity shares). Dilutive
potential equity shares are deemed converted as of
the beginning of the period, unless issued at a later
date. Dilutive potential equity shares are determined
independently for each period presented.
The number of equity shares and potentially dilutive
equity shares are adjusted retrospectively for all
periods presented for any share splits and bonus
shares issues including for changes effected prior to
the approval of the financial statements by the Board
of Directors.
20. EMPLOYEE BENEFITS
Provident fund
Eligible employees of K.P. Energy Limited receive
benefits from a provident fund, if any, which is a
defined benefit plan. Both the eligible employee and
the Company make monthly contributions to the
provident fund plan equal to a specified percentage
of the covered employee’s salary. There are no other
obligation other than contribution payable to the
respective statutory authorities.
No retirement benefits have been paid to any
employee during the year by the company. Retirement
benefits in the form of Gratuity and other long term/
short term employee benefits have not been provided
in the financial statements.
21. CASH FLOW STATEMENT
Cash flows are reported using the indirect method,
whereby profit for the period is adjusted for the effects
of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or
payments and item of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of
the Company are segregated.
22. DIVIDENDS
The final dividend on shares is recorded as a liability on
the date of approval by the shareholders, and interim
dividends are recorded as a liability on the date of
declaration by the Company’s Board of Directors.
23. CONTINGENT LIABILITIES
A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed
by the occurrence or non-occurrence of one or
more uncertain future events beyond the control
of the Company or a present obligation that is not
recognised because it is not probable that an outflow
of resources will be required to settle the obligation. A
contingent liability also arises in extremely rare cases
where there is a liability that cannot be recognised
because it cannot be measured reliably. The Company
does not recognize a contingent liability but discloses
its existence in the financial statements.
24. LEASES
Leases under which the Company assumes
substantially all the risks and rewards of ownership
are classified as finance leases. When acquired, such
assets are capitalized at fair value or present value
of the minimum lease payments at the inception of
the lease, whichever is lower. Lease payments under
operating leases are recognized as an expense on a
straight-line basis in net profit in the Statement of
Profit and Loss over the lease term.
25. SEGMENT REPORTING
Operating segments are reported in a manner
consistent with the internal reporting provided to the
chief operating decision maker.
Identification of segments
In accordance with Ind AS 108- Operating Segment,
the operating segments used to present segment
information are identified on the basis of information
reviewed by the Company’s management to
allocate resources to the segments and assess their
performance. An operating segment is a component of
the Company that engages in business activities from
which it earns revenues and incurs expenses, including
revenues and expenses that relate to transactions
with any of the Company’s other components. Results
of the operating segments are reviewed regularly by
the management team (chairman and chief financial
officer) which has been identified as the chief
operating decision maker (CODM), to make decisions
about resources to be allocated to the segment and
assess its performance and for which discrete financial
information is available.
Allocation of common costs
Common allocable costs are allocated to each
segment accordingly to the relative contribution of
each segment to the total common costs.
Unallocated items
Revenues and expenses, which relate to the Company
as a whole and are not allocable to segments on
a reasonable basis, have been included under
"Unallocated corporate expenses”. Assets and
liabilities, which relate to the Company as a whole and
are not allocable to segments on reasonable basis, are
shown as unallocated corporate assets and liabilities
respectively.
Segment accounting policies
The Company prepares its segment information in
conformity with the accounting policies adopted for
preparing and presenting the financial statements of
the Company as a whole.
26. CASH AND CASH EQUIVALENTS
Cash and cash equivalent in the balance sheet
comprise cash at banks and on hand and short-term
deposits with an original maturity of three months
or less, which are subject to an insignificant risk of
changes in value.
27. SIGNIFICANT MANAGEMENT JUDGEMENT
IN APPLYING ACCOUNTING POLICIES AND
ESTIMATION UNCERTAINTY
The following are the critical judgments and the key
estimates concerning the future that management
has made in the process of applying the Company’s
accounting policies and that may have the most
significant effect on the amounts recognised in the
financial Statements or that have a significant risk
of causing a material adjustment to the carrying
amounts of assets and liabilities within the next
financial year.
a) Evaluation of indicators for impairment of assets
- The evaluation of applicability of indicators of
impairment of assets requires assessment of
several external and internal factors which could
result in deterioration of recoverable amount of
the assets.
b) Recognition of deferred tax liabilities - The
extent to which deferred tax liabilities can be
recognised is based on an assessment of the
probability of the future taxable income against
which the deferred tax assets can be utilised.
28. MAINTENANCE OF AUDIT LOG
The Company has defined process to take full back-up
of books of account maintained electronically on daily
basis and it maintains the daily log of such back-up for
cyclic period of 1 week.
29. SHARE BASED PAYMENTS
The Company operates group based equity-sett led
share-based compensation plans, under which the
Company receives services from employees of the
company as consideration for stock options towards
shares of the company. During the year, equity
shares of the company have also been granted to the
employees of its subsidiary and associate companies
- (i) KP ENERGY OMS LIMITED and (ii) VG DTL
TRANSMISSION PROJECTS PRIVATE LIMITED based
on the group equity settled share based payment
scheme KP Energy - ESOP 2023.
In case of equity-settled awards, the fair value of stock
options (at grant date) is recognized as an expense
in the Statement of Profit and Loss within employee
benefits as employee share-based payment expenses
over the vesting period for the shares granted to
the employees of the company and as increase
in the investment in subsidiaries in case of shares
granted to the employees of the subsidiaries, with
a corresponding increase in share based payment
reserve in other equity.
The expense so determined is recognized over the
requisite vesting period, which is the period over
which all of the specified vesting conditions are to
be satisfied. As at each reporting date, the Company
revises its estimates of the number of options that are
expected to vest, if required.
30. RECENT ACCOUNTING PRONOUNCEMENTS
Ministry of Corporate Affairs ("MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. On August 12, 2024
and September 09, 2024, MCA issued the Companies
(Indian Accounting Standards) Amendment Rules,
2024 and Companies (Indian Accounting Standards)
Second Amendment Rules, 2024 introducing
following changes:
Ind AS 117 - Insurance Contracts: Ind AS 117:
Insurance Contracts was introduced and Ind AS
104: Insurance Contracts was withdrawn. This was
accompanied with consequent amendments in other
standards.
Ind AS 116 - Leases: The amendments clarify
accounting treatment for a seller-lessee involved in
sale and leaseback transactions, and introduced some
related illustrative examples.
The Company has reviewed the new pronouncements
and based on its evaluation has determined that it
does not have any significant impact in its financial
statements.
(b) Terms/rights attached to equity shares:
The Company has only one class of equity shares having par value of Y 5 per share. Each holder of equity shares
is entitled to one vote per share.
During the Year, the company has declared and paid the Interim Dividend of Y 333.45 Lakhs and declared
Final Dividend pertaining to F.Y.2024-25 of Y 66.69 Lakhs in its board meeting held on 14/05/2025 subject to
approval of shareholders in annual general meeting of the company.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining
assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the
number of equity shares held by the shareholders.
D) Financial risk objective and policies:
The Company’s principal financial liabilities, comprise loans and borrowings and trade and other payables.
The main purpose of these financial liabilities is to finance the Company’s operations/projects. The Company’s
principal financial assets include loans, security and other deposits trade and lease receivables, and cash and
cash equivalents that derive directly from its operations.
In the ordinary course of business, the Company is mainly exposed to interest rate risk, credit risk and liquidity
risk.
The Company’s risk management activities are subject to the management, direction and control of Chief
Financial Officer under the framework of Risk Management Policy for Currency and Interest rate risk as approved
by the Board of Directors of the Company. The Company’s central treasury team ensures appropriate financial
risk governance framework for the Company through appropriate policies and procedures and that financial
risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. It is
the Company’s policy that no trading in derivatives for speculative purposes may be undertaken.
(i) Interest rate risk
The Company is exposed to changes in interest rates due to its financing, investing and cash management
activities. The risks arising from interest rate movements arise from borrowings with variable interest rates.
The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and
borrowings.
For Company's floating rate borrowings, the analysis is prepared assuming that the amount of the liability
outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase
or decrease is used, which represents management's assessment of the reasonably possible change in interest
rate.
(ii) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily
trade receivables and other financial assets), including deposits with banks and other financial instruments.
Customer credit risk is managed by the Company’s established policy, procedures and control relating to
customer credit risk management. Credit quality of a customer is assessed based on an extensive evaluation
and individual credit limits are defined in accordance with this assessment.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition,
a large number of minor receivables are grouped into homogenous groups and assessed for impairment
collectively. The calculation is based on historical data.
Credit risk from balances with banks is managed by the Company’s treasury department in accordance with the
Company’s policy.
(iii) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments
associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk
may result from an inability to sell a financial asset quickly at close to its fair value.
The Company has an established liquidity risk management framework for managing its short term, medium
term and long term funding and liquidity management requirements. The Company’s exposure to liquidity risk
arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the
liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit
facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments
in a timely and cost-effective manner.
NOTE 31: EVENT OCCURRED AFTER THE BALANCE SHEET DATE
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to
the approval of financial statements to determine the necessity for recognition and/or reporting of any of these
events and transactions in the financial statements.
The board of directors have proposed dividend after the balance sheet date which are subject to approval by the
shareholders at the annual general meeting. Refer Note 12 for details.
NOTE 32: EMPLOYEE STOCK OPTION PLAN
The KP Energy - ESOP 2023 Plan was adopted pursuant to resolutions passed by the NRC (Nomination and
Remuneration Committee). The company has granted options at an exercise price of %33 which vest 25%, 25%,
35% and 15% respectively at the end of the 1st year, at the end of 2nd year, at the end of 3rd year and end of 4th
year respectively from the date of grant of ESOP.
6. Special Civil Application No. 17093 of 2018 at
High Court of Gujarat.
7. Special Civil Application No. 6832 of 2020 at
High Court of Gujarat.
8. Assessment proceedings with Assessment
Unit, Income tax department for AY 2019-20
amounting to A179.94 Lakhs under section
147 read with Section 144B of the income tax
Act, 1961.
The Company has reviewed all its pending litigations
and proceedings and has not provided as Contingent
liabilities in its standalone financial statements.
The Company does not expect the outcome of these
proceedings to have a material adverse effect on its
standalone financial statements. Hence, no provision
has been made by the company against this litigation
in books of account.
The Company has not given any Bank Guarantees in
respect of Contingent liabilities.
NOTE 35: SEGMENT REPORTING
The Company has presented segment information
in the consolidated financial statements which are
presented in the same financial report. Accordingly,
in terms of Paragraph 3 of Ind AS 108 "Operating
segments", no disclosures related to segments are
presented in these standalone financial statements.
NOTE 36: OTHER STATUTORY INFORMATION
(i) There are no proceedings initiated or pending
against the Company for holding any benami
property under the Benami Transactions
(Prohibitions) Act, 1988 (45 of 1988) and the
rules made thereunder.
(ii) The Company does not have any transactions
with companies struck off.
(iii) The Company does not have any charges or
satisfaction which is yet to be registered with
ROC beyond the statutory period.
(iv) The Company has not traded or invested in
Crypto currency or Virtual Currency during the
financial year.
(v) 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 to or on behalf of the Ultimate
Beneficiaries.
(vi) 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.
(vii) The Company does not have any such
transaction which is not recorded in the books
of accounts that has been surrendered or
disclosed as income during the year in the tax
assessments under the Income Tax Act, 1961
(such as, search or survey or any other relevant
provisions of the Income Tax Act, 1961.
(viii) The Company has sanctioned borrowings/
facilities from banks on the basis of security
of current assets. The quarterly returns or
statements of current assets filed by the
Company with banks and financial institutions
are in agreement with the books of accounts.
(ix) The Company has complied with the number of
layers prescribed under clause (87) of Section 2
of the Act read with the Companies (Restriction
on number of Layers) Rules, 2017.
(x) The Company has not been declared a wilful
defaulter by any bank or financial institution.
(xi) The title deeds of all the immovable properties
are held in the name of the Company.
Note 38: The Company has defined process to take full back-up of books of account maintained electronically
on daily basis and it maintains the daily log of such back-up for cyclic period of 1 week.
NOTE 39: The Company has used accounting software for maintaining its books of account which has a
feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant
transactions recorded in the software. Further, there are no instance of audit trail feature being tampered with.
NOTE 40: The previous year's figures have been re-grouped/re-classified wherever required to confirm to
current year's classification.
For MAAK and Associates For and on behalf of Board of Directors of
Firm Registration No. 135024W K.P. ENERGY LIMITED
Chartered Accountants
CA Kenan Satyawadi Farukbhai Gulambhai Patel Affan Faruk Patel
Partner Managing Director Whole Time Director
Membership No. 139533 DIN: 00414045 DIN: 08576337
Karmit Haribhadrabhai Sheth Shabana Virender Bajari
Company Secretary Chief Financial Officer
Place: Ahmedabad Place: Surat
Date: May 14, 2025 Date: May 14, 2025
UDIN: 25139533BMLCXU5706
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