We have audited the accompanying Standalone
Financial Statements of K.P. ENERGY LIMITED ("the
Company"), which comprise the Balance Sheet
as at March 31, 2026, the Statement of Profit and
Loss (including Other Comprehensive income), the
Statement of Changes in Equity and the Statement
of Cash Flows for the year ended on that date,
and notes to the Financial Statements, including a
summary of the material accounting policies and
other explanatory information (hereinafter referred to
as "Standalone Financial Statements ").
In our opinion and to the best of our information
and according to the explanations given to us, the
Standalone Financial Statements give the information
required by the Companies Act, 2013 ("the Act") in the
manner so required and give a true and fair view in
conformity with the Indian Accounting Standards
prescribed under section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules,
2015, as amended, ("Ind AS") and other accounting
principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2026, the profit
and total comprehensive income, changes in equity
and its cash flows for the year ended on that date.
BASIS FOR OPINION
We conducted our audit of the Standalone Financial
Statements in accordance with the Standards on
Auditing (SAs) specified under section 143(10) of the
Act. Our responsibilities under those Standards are
further described in the Auditor's Responsibility for the
Audit of the Standalone Financial Statements section
of our report. We are independent of the Company
in accordance with the Code of Ethics issued by the
Institute of Chartered Accountants of India (ICAI)
together with the ethical requirements that are
relevant to our audit of the Standalone Financial
Statements under the provisions of the Act and the
Rules made thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements and the ICAI's Code of Ethics. We believe
that the audit evidence we obtained is sufficient and
appropriate to provide a basis for our audit opinion on
the Standalone Financial Statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the Standalone Financial Statements of the current period. These matters were addressed in the context of
our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. We have determined the matters described below to the Key
Audit Matters to be communicated in our report.
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Sr. No Key Audit Matter (KAM)
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How the matter was addressed in our Audit?
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1 Revenue recognition - Fixed price (EPCC)
development contracts
The Company, inter alia, engages in Fixed-
price (EPCC) development contracts, where,
revenue is recognized using the milestone
computed as per the input method based
on management's estimate of contract
costs.
We have identified revenue recognition
of fixed price development contracts as
a KAM considering there is an inherent risk
around the accuracy of revenues given the
customized and complex nature of these
project development contracts.
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Our audit procedures on revenue recognized from fixed
price contracts include obtaining an understanding of
the systems, processes and controls implemented by
management for recording and calculating revenue.
We have tested that the revenue recognized is in
accordance with the Indian Accounting Standard by
evaluating identification of performance obligations. We
have also tested management's estimation of contract
cost and the obligations, if any. We have observed that
the estimates of cost to complete were reviewed and
approved by the appropriate levels of Management.
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Sr. No
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Key Audit Matter (KAM)
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How the matter was addressed in our Audit?
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2
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Evaluation of procedure for recognizing the
revenue from sale of power
The Company has adopted the procedure
for recognizing the revenue from sale of
power as unbilled revenue at the initial stage
on monthly basis and once the confirmation
is received from the customer and the
regulatory authority in respect of the actual
units of electricity transmitted, the Company
raises invoice to the client and the same
is adjusted against the unbilled revenue
booked earlier.
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We have obtained the actual invoice raised by the
Company after receipt of the confirmation from the
regulatory authority and the customers, certificate of
share of electricity generated by the GETCO - State
Load Dispatch Centre on monthly basis, calculations
of Wheeling Loss on monthly basis issued by the
Electricity Company to the client. We have matched the
documents and correlate the same with the unbilled
revenue booked on monthly basis. The unbilled revenue
appearing as on March 31, 2026 would be offset only
after the receipt of the above documentary evidences
from the respective authorities and the customers
which would be settled in the subsequent F.Y. and to
that extent, there is the possibility that the revenue
booked as unbilled revenue can be varied.
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3
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Right of Way Expenses incurred during the
course of the development of EPC contracts
The Company has, inter alia, incurred
considerable amount on Right of Way
expenses during the course of the
development of EPC contracts. These
costs comprise of the compensation paid
to various individuals on whose lands the
transmission towers are to be erected and
the stringing of transmission lines were
carried out. The compensation was paid to
the individuals for the loss of standing crops
on the respective lands.
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Our audit procedures include the verification of payment
details to various individuals, land records i.e 7/12 of
the land to identify the actual owners or co-owners as
the case may be along with the authorization trails of
the management along with the control mechanism
adopted by the management with its adequate
implementation of the same.
We have obtained the payment vouchers or the
agreements entered into by the Company with these
individuals directly or through any agent as the case
may be. We have verified the payment vouchers and
agreements on test check basis to identify the actual
person to whom the compensation was paid by the
Company and also verified the consent of other co¬
owners where the compensation was paid to one of the
co-owners.
The Company has accounted for all the amounts
which were paid as compensation to these individuals
and charged the same to the revenue, however, in the
case of the compensation paid in the month of March
2026, the payment vouchers with proper authorization
have been produced before us and in such cases, the
agreements were remained to be executed. Till the date
of our audit report, the said agreements are yet to be
executed.
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INFORMATION OTHER THAN THE FINANCIAL
STATEMENTS AND AUDITOR'S REPORT
THEREON
• The Company's Board of Directors is responsible
for the other information. The other information
comprises the information included in the Board's
Report, but does not include Financial Statement,
and our auditor's report thereon.
• Our opinion on the Standalone Financial
Statements does not cover the other information,
and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the Standalone
Financial Statements, our responsibility is to read
the other information and, in doing so, consider
whether the other information is materially
inconsistent with the Standalone Financial
Statements or our knowledge obtained during
the course of our audit or otherwise appears to
be materially misstated.
If, based on the work we have performed, we
conclude that there is a material misstatement
of this other information, we are required to report
that fact. We have nothing to report in this regard.
RESPONSIBILITIES OF MANAGEMENT AND
BOARD OF DIRECTORS FOR THE STANDALONE
FINANCIAL STATEMENTS
The Company's Board of Directors is responsible
for the matters stated in section 134(5) of the Act
with respect to the preparation of these Standalone
Financial Statements that give a true and fair view of
the financial position, financial performance, including
other comprehensive income, changes in equity and
cash flows of the Company in accordance with the
accounting principles generally accepted in India,
including Ind AS specified under section 133 of the
Act. This responsibility also includes maintenance of
adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds
and other irregularities; selection and application of
appropriate accounting policies; making judgments
and estimates that are reasonable and prudent;
and design, implementation and maintenance
of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to
the preparation and presentation of the Standalone
Financial Statements that give a true and fair view
and are free from material misstatement, whether
due to fraud or error.
In preparing the Standalone Financial Statements,
Management and Board of Directors are responsible
for assessing the Company's ability to continue as
a going concern, disclosing, as applicable, matters
related to going concern and using the going concern
basis of accounting unless the Board of Directors
either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Company's Board of Directors is also responsible
for overseeing the Company's financial reporting
process.
AUDITOR'S RESPONSIBILITY FOR THE
AUDIT OF THE STANDALONE FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable assurance
about whether the Standalone Financial Statements
as a whole are free from material misstatement,
whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but it is not a
guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in
the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on
the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material
misstatement of the Standalone Financial
Statements, whether due to fraud or error, design
and perform audit procedures responsive to
those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher
than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal
controls.
• Obtain an understanding of internal financial
control relevant to the audit in order to design
audit procedures that are appropriate in the
circumstances. Under section 143(3)(i) of the Act,
we are also responsible for expressing our opinion
on whether the Company has adequate internal
financial controls with reference to Standalone
Financial Statements in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related disclosures
made by the Management.
• Conclude on the appropriateness of
Management's use of the going concern basis
of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists
related to events or conditions that may cast
significant doubt on the Company's ability to
continue as a going concern. If we conclude that
a material uncertainty exists, we are required
to draw attention in our auditor's report to the
related disclosures in the Standalone Financial
Statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date
of our auditor's report. However, future events or
conditions may cause the Company to cease to
continue as a going concern.
• Evaluate the overall presentation, structure, and
content of the Standalone Financial Statements,
including the disclosures, and whether the
Standalone Financial Statements represent the
underlying transactions and events in a manner
that achieves fair presentation.
We communicate with those charged with
governance regarding, among other matters, the
planned scope and timing of the audit, as well as
significant audit findings, including any significant
deficiencies in internal financial controls that we
identify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and
to communicate with them all relationships and other
matters that may reasonably be thought to bear on
our independence, and where applicable, related
safeguards.
From the matters communicated with those charged
with governance, we determine those matters
that were of most significance in the audit of the
Standalone Financial Statements for the financial year
ended March 31, 2026 and are therefore the key audit
matters. We describe these matters in our auditor's
report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should
not be communicated in our report because the
adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits
of such communication.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
1. As required by Section 143(3) of the Act, based on
our audit, we report that:
A. We have sought and obtained all the
information and explanations that, to the
best of our knowledge and belief were
necessary for the purposes of our audit.
B. In our opinion, proper books of account
as required by law have been kept by the
Company so far as it appears from our
examination of those books.
C. The Balance Sheet, the Statement of Profit
and Loss including Other Comprehensive
Income, Statement of Changes in Equity,
and Cash Flow Statement dealt with by this
Report are in agreement with the books of
account.
D. In our opinion, the aforesaid Standalone
Financial Statements comply with the Indian
Accounting Standards specified under
Section 133 of the Act, read with Companies
(Indian Accounting Standards) Rules, 2015, as
amended.
E. On the basis of the written representations
received from the directors as on March
31, 2026, taken on record by the Board of
Directors, none of the directors is disqualified
as on March 31, 2026, from being appointed
as a director in terms of Section 164(2) of the
Act.
F. With respect to the adequacy of the internal
financial controls over financial reporting of
the Company and operating effectiveness of
such controls, refer to our separate report in
"Annexure B".
G. In our opinion and to the best of our
information and according to the explanation
given to us, the remuneration paid by the
company to its directors during the year is
in accordance with the provisions of section
197 of the Act.
H. With respect to the other matters to be
included in the Auditor's Report in accordance
with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, as amended in our
opinion and to the best of our information
and according to the explanations given to
us:
a) The Company has disclosed the impact
of pending litigations as on March 31, 2026
on its financial position in its Standalone
Financial Statements - Refer Note 35 to
the Standalone Financial Statements.
b) The Company did not have any long¬
term contracts, including derivative
contracts, for which there were any
material foreseeable losses.
c) There were no amounts that were
required to be transferred to the Investor
Education and Protection Fund by the
Company for the financial year FY26.
d) (I) The Management has represented
that, to the best of its knowledge and
belief, no funds have been advanced
or loaned or invested (either from
borrowed funds or share premium
or any other sources or kind of
funds) by the Company to or in any
other persons or entities, including
foreign entities ("Intermediaries"),
with the understanding, whether
recorded in writing or otherwise,
that the Intermediary shall, directly
or indirectly lend or invest in other
persons or entities identified in any
manner whatsoever ("Ultimate
Beneficiaries") by or on behalf of the
Company or provide any guarantee,
security, or the like to or on behalf of
the Ultimate Beneficiaries.
(II) The Management has represented
that, to the best of its knowledge
and belief, no funds have been
received by the Company from
any persons or entities, including
foreign entities ("Funding Parties"),
with the understanding, whether
recorded in writing or otherwise,
that the Company shall, directly
or indirectly, lend or invest in other
persons or entities identified in any
manner whatsoever ("Ultimate
Beneficiaries") by or on behalf of
the Funding Party or provide any
guarantee, security, or the like
from or on behalf of the Ultimate
Beneficiaries; and
(III) Based on such audit procedures
as considered reasonable and
appropriate in the circumstances,
nothing has come to our notice that
has caused us to believe that the
representations under subclause
(d) (i) and (d) (ii) contain any
material misstatement.
e) As stated in Note 12 to the Standalone
Financial Statements;
(a) The final dividend proposed in the
previous year, declared and paid by
the Company during the year, is in
accordance with Section 123 of the
Act, as applicable.
(b) The Interim Dividend declared and
paid by the Company during the
year and until the date of this report
is in compliance with the Section 123
of the Act.
(c) The Board of Directors of the
Company have proposed final
dividend for the year, which is
subject to the approval of the
members at the ensuing Annual
General Meeting. The amount of
dividend proposed is in accordance
with Section 123 of the Act, as
applicable.
f) Based on our examination, which
included test checks, the Company
has used accounting software
systems for maintaining its books
of account for the financial year
ended March 31, 2026 which have
the feature of recording audit trail
(edit log) facility and the same has
operated throughout the year for all
relevant transactions recorded in
the software systems. Further, during
the course of our audit we did not
come across any instance of the
audit trail feature being tampered
with and the audit trail has been
preserved by the Company as
per the statutory requirements for
record retention.
2. Reporting as required by the Companies (Auditor's
Report) Order, 2020 ("the Order") issued by the
Central Government in terms of Section 143(11) of
the Act, we give in Annexure-A, a statement on
the matters specified in paragraphs 3 and 4 of
the Order to the extent applicable.
FOR M A A K and Associates
Chartered Accountants
[Firm Registration No.135024W]
CA Kenan Satyawadi
Partner
Membership No. 139533 Place: Ahmedabad
UDIN: 26139533URVXFS3463 Date: May 07, 2026
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