Accounting Policies of KP Green Engineering Ltd. Company

Mar 31, 2025

2.2 Summary of Material Accounting Policies:

(i) Presentation and disclosure of financial statements:

During the year end 31ST March 2025, the company has presented
the financial statements as per the Schedule III notified under the

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prepared and presented as per requirements of Ind AS 7 "Statement
of Cash Flows". The disclosure requirements with respect to items in the
Balance sheet and Profit & Loss Account, as prescribed in Schedule
III of the Act are presented by way of notes forming part of the
standalone financial statements. The company has also reclassified
the previous figures in accordance with the requirements applicable
in the current year.

Accounting policies have been consistently applied except where
a newly issued Indian Accounting Standard is initially adopted or
a revision to an existing Indian Accounting Standard requires such
change in the accounting policy hitherto in use.

(ii) Property, Plant and Equipment:

a. Recognition and measurement:

Property, plant and equipment represent a significant proportion
of the asset base of the Company. Property, plant and equipment
are stated at acquisition cost less accumulated depreciation and
accumulated impairment losses, if any. All costs, including borrowing
costs incurred up to the date the asset is ready for its intended use, are
capitalized along with the respective asset.

Cost of an item of property, plant and equipment comprises its
purchase price, including import duties and non-refundable purchase
taxes, after deducting trade discounts and rebates, Write back
of creditors over concern of performance of assets, any directly
attributable cost of bringing the item to its working condition for its
intended use. The cost of a self-constructed item of property, plant
and equipment comprises the cost of materials and direct labour,
any other costs directly attributable to bringing the item to working
condition for its intended use, and estimated costs of dismantling and
removing the item and restoring the site on which it is located.

The residual values, useful lives and method of depreciation of
property, plant and equipment are reviewed at each financial year
end and adjusted prospectively, if appropriate.

If significant parts of an item of property, plant and equipment have
different useful lives, then they are accounted for as separate items
(major components) of property, plant and equipment.

The right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which
it is located, less any lease incentives received.

b. Subsequent measurement:

Subsequent expenditure is capitalised only if it is probable that the
future economic benefits associated with the expenditure will flow to
the Company.

c. Impairment:

The Company assesses, at each reporting date, whether there is an
indication that an asset may be impaired. If any indication exists, or

when annual impairment testing for an asset is required, the Company
estimates the asset''s recoverable amount. An asset''s recoverable
amount is the higher of an assets or cash-generating unit''s (CGU) fair
value less costs of disposal and its value in use. Recoverable amount is
determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets
or group of assets.

When the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount.

In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific
to the asset. In determining fair value less costs of disposal, recent
market transactions are taken into account. If no such transactions can
be identified, an appropriate valuation model is used.

Impairment losses of tangible and intangible assets are recognised
in the statement of profit and loss. An impairment loss is reversed in
the Statement of Profit and Loss if there has been a change in the
estimates used to determine the recoverable amount. The carrying
amount of the asset is increased to its revised recoverable amount,
provided that this amount does not exceed the carrying amount that
would have been determined (net of any accumulated amortization
or depreciation) had no impairment loss been recognized for the
asset in prior years.

In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain re-measurements
of the lease liability.

d. Depreciation:

Depreciation commences when an asset is ready for its intended use.
Freehold land and assets held for sale are not depreciated.

Depreciation is recognised on the cost of assets (other than freehold
land and properties under construction) less their residual values over
their estimated useful lives, using the straight-line method.

The estimated useful lives, residual values and depreciation method
are reviewed at the end of each reporting period, with the effect of
any changes in estimate accounted for on a prospective basis. The
Company, based on technical assessment made by technical expert
and management estimate, depreciates certain items of plant and
equipment over estimated useful lives which are different from the
useful life prescribed in Schedule II to the Companies Act, 2013. The
management believes that these estimated useful lives are realistic
and reflect fair approximation of the period over which the assets are
likely to be used.

The right-of-use asset is subsequently depreciated using the straight¬
line method from the commencement date to the end of the lease

term, unless the lease transfers ownership of the underlying asset to
the Company by the end of the lease term or the cost of the right-of-
use asset reflects that the Company will exercise a purchase option. In
that case the right-of-use asset will be depreciated over the useful life
of the underlying asset.

e. Derecognition:

An item of Property, plant and equipment is derecognised upon
disposal or when no future economic benefits are expected to arise
from the continued use of the asset. Any gain or loss arising on the
disposal or retirement of an item of property, plant and equipment
is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in the statement of
profit and loss.

(iii) Intangible Assets:

a. Accounting Policy:

Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation and accumulated
impairment losses, if any.

The residual values, useful lives and method of depreciation of
Intangible Assets are reviewed at each financial year end and
adjusted prospectively, if appropriate.

b. Amortization:

Amortisation is recognised using Straight Line method over their
estimated useful lives. Estimated useful life of the Computer Software
is 10 years.

c. Derecognition:

An intangible asset is derecognised on disposal, or when no future
economic benefits are expected from use or disposal. Gains or
losses arising from derecognition of an intangible asset, measured as
the difference between the net disposal proceeds and the carrying
amount of the asset, are recognised in statement of profit and loss
when the asset is derecognised.

(iv) Capital Work in Progress:

Expenditure related to and incurred during implementation of capital
projects to get the assets ready for intended use is included under
"Capital Work in Progress”. The same is allocated to the respective
items of property plant and equipment on completion of construction/
erection of the capital project/property plant and equipment.

(v) Financial Instruments:

A financial instrument is any contract that gives rise to a financial asset
of one entity and a financial liability or equity instrument of another
entity.

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

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 are added to
or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial
liabilities measured at fair value through profit or loss are recognised
immediately in the statement of profit and loss.

The company offsets a financial asset and a financial liability when
it currently has a legally enforceable right to set off the recognized
amounts and the company intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.

(vi) Financial Assets:

All regular way purchases or sales of financial assets are recognised
and derecognised on a trade date basis. Regular way purchases or
sales are purchases or sales of financial assets that require delivery of
assets within the time frame established by regulation or convention
in the market place. All recognised financial assets are subsequently
measured in their entirety at either amortised cost or fair value,
depending on the classification of the financial assets.

a) Financial Assets at amortised cost:

Financial assets are subsequently measured at amortised cost using
the Effective Interest Rate (EIR) method if these financial assets are
held within a business whose objective is to hold these assets in
order to collect contractual cash flows and the contractual terms of
the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount
outstanding.

Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of
the EIR.

The effective interest method is a method of calculating the amortised
cost of financial assets and of allocating interest income over the
relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash receipts (including all fees and
transaction costs and other premiums or discounts) through the
expected life of the financial assets, or where appropriate, a shorter
period, to the net carrying amount on initial recognition. Interest is
recognised on an effective interest basis for debt instruments other
than those financial assets classified as at Fair Value through Profit
and Loss (FVTPL).

b) Financial Assets at fair value through other
comprehensive income (FVTOCI):

A financial asset is measured at FVOCI if it meets both of the following
conditions and is not designated as at FVTPL:

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

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

c) Financial Assets at fair value through profit or loss
(FVTPL):

All financial assets not classified as measured at amortised cost or
FVOCI as described above are measured at FVTPL. This includes
all derivative financial assets. On initial recognition, the Company
may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortised cost or at FVOCI as at
FVTPL if doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.

Fair value changes related to such financial assets including derivative
contracts are recognised in the Statement of Profit and Loss.

Financial assets at FVTPL are measured at fair value at the end of each
reporting period, with any gains or losses arising on remeasurement
recognised in profit or loss. The net gain or loss. recognised in profit
or loss incorporates any dividend or interest earned on the financial
asset.

d) Business Model Assessment:

The Company makes an assessment of the objectives of the business
model in which a financial asset is held at portfolio level because it
best reflects the way business is managed and information is provided
to management.

The assessment of business model comprises the stated policies and
objectives of the financial assets, management strategy for holding
the financial assets, the risk that affects the performance etc.

e) Derecognition:

The Company derecognises a financial asset when the contractual
rights to the cash flows from the financial asset expire, or it transfers
the rights to receive the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership of the financial
asset are transferred or in which the Company neither transfers nor
retains substantially all of the risks and rewards of ownership and
does not retain control of the financial asset.

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 the Statement of Profit and Loss if such gain or
loss would have otherwise been recognised in the Statement of Profit
and Loss on disposal of that financial asset.

f) Impairment:

The Company assesses at each date of balance sheet whether
a financial asset or a group of financial assets is impaired. Ind AS
109 requires expected credit losses to be measured through a loss
allowance. The Company recognises lifetime expected losses for all
contract assets and/or all trade receivables that do not constitute a
financing transaction. For all other financial assets, expected credit
losses are measured at an amount equal to the 12 month expected
credit losses or at an amount equal to the life time expected credit
losses if the credit risk on the financial asset has increased significantly
since initial recognition.

(vii) Financial Liabilities and equity instruments:

a) 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.

b) 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 the Company are recognised at the proceeds
received, net of direct issue costs.

c) Financial Liabilities:

All financial liabilities are measured at amortised cost using the
effective interest method or at FVTPL.

Financial liabilities at amortised cost

Financial liabilities that are not held-for-trading and are not designated
as at FVTPL are measured at amortised cost at the end of subsequent
accounting periods. The carrying amounts of financial liabilities that
are subsequently measured at amortised cost are determined based
on the effective interest method. Interest expense that is not capitalised
as part of costs of an asset is included in the ''Finance costs'' line item
in the Statement of Profit and Loss.

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.

Trade and other payables are recognised at the transaction cost,
which is its fair value, and subsequently measured at amortised cost.

Financial liabilities at FVTPL

A financial liability may be designated as at FVTPL upon initial
recognition if:

i) such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise
arise;

ii) the financial liability whose performance is evaluated on a fair
value basis, in accordance with the Company''s documented
risk management;

Fair value changes related to such financial liabilities including
derivative contracts like forward currency contracts and options
to hedge the Company''s foreign currency risks are recognised
in the Statement of Profit and Loss.

Financial liabilities at fair value through profit or loss include
financial liabilities held for trading and financial liabilities
designated upon initial recognition as FVTPL. Financial liabilities
are classified as held for trading if these are incurred for the
purpose of repurchasing in the near term. Financial liabilities at
FVTPL are stated at fair value, with any gains or losses arising on
remeasurement recognised in the statement of profit and loss.

d) De-recognition:

A financial liability is derecognised when the obligation under the
liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated
as the derecognition of the original liability and the recognition of
a new liability. The difference in the respective carrying amounts is
recognised in the statement of profit and loss.

(viii) Fair value of financial instruments:

In determining the fair value of its financial instruments, the Company
uses a variety of methods and assumptions that are based on market
conditions and risks existing at each reporting date. The methods
used to determine fair value include discounted cash flow analysis,
available quoted market prices and dealer quotes. All methods of
assessing fair value result in general approximation of value, and
such value may never actually be realized.

For financial assets and liabilities maturing within one year from
the Balance Sheet date and which are not carried at fair value, the
carrying amounts being approximate fair value due to the short
maturity of these instruments.

(ix) Fair Value Measurement:

The Company measures financial instruments at fair value at each
balance sheet date.

Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement
is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either:

In the principal market for the asset or liability, or in the absence of
a principal market, in the most advantageous market for the asset or
liability.

The principal or the most advantageous market must be accessible
by the Company.

The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account
a market participant''s ability to generate economic benefits by using
the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure
fair value, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed
in the financial statements are categorised within the fair value
hierarchy, based on the lowest level input that is significant to the fair
value measurement as a whole.

For assets and liabilities that are recognised in the financial statements
on a recurring basis, the Company determines whether transfers
have occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant to
the fair value measurement as a whole) at the end of each reporting
period.

External valuers are involved for valuation of significant assets, such
as unquoted financial assets and financial liabilities and derivatives.

For the purpose of fair value disclosures, the Company has
determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of the asset or liability and the level of the fair
value hierarchy as explained below.

(x) Borrowing Costs:

Borrowing costs are interest and other costs incurred in connection
with the borrowing of funds. Borrowing costs directly attributable to the
acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready
for their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their intended
use or sale. Interest income earned on the temporary investment of
specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in the Statement of Profit and
Loss in the period in which they are incurred.

(xi) Inventories:

Inventories are stated at the lower of cost and net realisable value by
following weighted average method. Cost of Inventories comprises all
cost of purchase of raw materials, other items and other cost incurred
in bringing inventories to their present location and condition. Cost
in case of work in progress is determined on the basis of the actual
expenditure attributable to the said work till the end of the reporting
period.

Net realisable value represents the estimated selling price for
inventories less all estimated costs of completion and costs necessary
to make the sale.

(xii) Translation of Foreign Currency Transactions:

In preparing the financial statements of the company, transactions
in currencies other than the entity''s functional currency (foreign
currencies) are recognized at the rates of exchange prevailing at
the dates of the transactions. At the end of each reporting period,
monetary items denominated in foreign currencies are retranslated at
the rates prevailing at that date. Non-monetary items carried at fair
value that are denominated in foreign currencies are retranslated at
the rates prevailing at the date when the fair value was determined.
Non-monetary items that are measured in terms of historical cost in
a foreign currency are not retranslated. Exchange differences on
monetary items are recognized in profit or loss in the period in which
they arise.

(xiii) Revenue recognition:

Revenue from contracts with customers is recognised when control of
the goods or services are transferred to the customer at an amount
that reflects the consideration to which the Company expects to be
entitled in exchange for those goods or services.

Revenue is measured based on the transaction price, which is the
consideration, adjusted for discounts and other incentives, if any, as
specified in the contract with the customer. Revenue also excludes
taxes or other amounts collected from customers in its capacity as an
agent. If the consideration in a contract includes a variable amount,
the Company estimates the amount of consideration to which it will
be entitled in exchange for transferring the goods to the customer.
The variable consideration is estimated at contract inception and
constrained until it is highly probable that a significant revenue

reversal in the amount of cumulative revenue recognised will not
occur when the associated uncertainty with the variable consideration
is subsequently resolved.

The accounting policies for the specific revenue streams of the
Company are summarised below:

a) Revenue comprises sale of materials, service income and
interest. Revenue is recognised to the extent it is probable that
the economic benefits will flow to the Company and that the
revenue can be reliably measured. The Company collects
Goods and Services Tax (GST) as applicable on behalf of the
government and therefore, this is not economic benefits flowing
to the Company. Hence, this is excluded from revenue.

Revenue from sale of goods is recognised in the statement of
profit and loss when the significant risks and rewards in respect
of ownership of goods has been transferred to the buyer as per
the terms of the respective sales order, and the income can be
measured reliably and is expected to be received.

b) Contracts to patrolling the Optical Fiber Cables through various
Fault Rectification Team (FRT) (turnkey service provider to
mobile and renewable energy Industry) and Fabrication and
Galvanizing work are recognised in the consolidated statement
of profit and loss based on the proportion of service completed
and invoice for that is raised.

c) The company''s contracts with customers for sale of power
generally include one performance obligation. Revenue from
sale of power is recognized when there is actual transmission
of power and considerable certainty for recoverability of the
revenue exists once the electricity is supplied to the customers.
The Company recognises the revenue from sale of power as
unbilled revenue on monthly basis and the same is settled
after the Company receives the confirmation from regulatory
authorities and the customer in respect of the actual units
transmitted and thereafter the actual Invoice is raised to the
customer and the same is settled against the unbilled revenue
recognised for the said customer. Revenue from the end of the
last billing to the Balance Sheet date is recognized as unbilled
revenues.

d) The Company''s contracts with customers for the sale of goods
generally include one performance obligation. Revenue from
the sale of goods is recognised at the point in time when control
of the asset is transferred to the customers, which generally
coincide with the delivery of the goods. The transaction price
has been adjusted for significant financing component, if any
and the adjustment is accounted as finance cost. The difference
between the revenue recognised and amount invoiced has
been presented as deferred revenue/unbilled revenue.

e) Revenue from services (net of reversals/credits) is recognised
over a period of time on completion of performance obligation
under the contract with the customer.

f) Export incentives are recognized when the right to receive
payment/credit is established and no significant uncertainty as
to measurability or collectability exists.

g) Interest Income is accrued on a time basis at Effective Interest
Rate (EIR). Interest income is included in other income in the
Statement of Profit and Loss.

Contract Balances:

Contract assets

A contract asset is the right to consideration in exchange for goods
or services transferred to the customer. If the Company performs by
transferring goods or services to a customer before the customer pays
consideration or before payment is due, a contract asset is recognised
for the earned consideration that is conditional.

Trade receivables

A receivable represents the Company''s right to an amount of
consideration that is unconditional i.e. only the passage of time is
required before payment of consideration is due.

Contract liabilities

A contract liability is the obligation to transfer goods or services to a
customer for which the Company has received consideration (or an
amount of consideration is due) from the customer. Contract liabilities
are recognised as revenue when the Company performs obligations
under the contract.

(xiv) Employee Benefit Plan:

a) Defined Benefit Plan:

The Company operates a defined benefit gratuity plan in India, which
requires contributions to be made to a separately administered fund.
However, the company has made some contributions during the year.
The cost of providing benefits under the defined benefit plan is based
on an independent actuarial valuation carried out using the projected
unit credit method.

Defined benefit costs in the nature of current and past service cost
and net interest expense or income are recognised in the Statement of
Profit and Loss in the period in which they occur.

Re-measurements, comprising of actuarial gains and losses, the effect
of the asset ceiling, excluding amounts included in net interest on the
net defined benefit liability and the return on plan assets (excluding
amounts included in net interest on the net defined benefit liability),
are recognised immediately in the balance sheet with a corresponding
debit or credit to retained earnings through OCI in the period in which
they occur. Re-measurements are not reclassified to profit and loss in
subsequent periods. Past service cost is recognised in statement of
profit and loss in the period of a plan amendment.

Net interest is calculated by applying the discount rate to the net
defined benefit liability or asset.

The Company recognises the following changes in the net defined
benefit obligation as a charge to the capital work-in-progress till the
capitalisation of the projects otherwise the same is charged to the
Statement of Profit and Loss.

- Service costs comprising current service costs, past-service costs,
gains and losses on curtailments and non-routine settlements;
and

- Net interest expense or income.

b) Defined Contribution Plan:

Retirement benefit in the form of Provident Fund is a defined
contribution scheme. The Company has no obligation, other than the
contribution payable to the provident fund. The Company recognizes
contribution payable to the provident fund scheme as a charge to the
Statement of Profit and Loss for the period in which the contributions
to the respective funds accrue.

c) Short Term Employee benefits:

Short-term employee benefits obligations, if any are recognised at an
undiscounted amount is charged to the Statement of Profit and Loss for
the period in which the related services are received.

(xv) Current and Non-Current Classification:

The Company presents assets and liabilities in the balance sheet
based on current/non-current classification. An asset is treated as
current when it is:

a. Expected to be realised or intended to be sold or consumed in
normal operating cycle or

b. Held primarily for the purpose of trading or

c. Expected to be realised within twelve months after the reporting
period, or

d. Cash or cash equivalent unless restricted from being exchanged
or used to settle a liability for at least twelve months after the
reporting period.

All other assets are classified as non-current.

A liability is current when:

a. It is expected to be settled in normal operating cycle or

b. It is held primarily for the purpose of trading or

c. It is due to be settled within twelve months after the reporting
period, or

d. There is no unconditional right to defer the settlement of the
liability for at least twelve months after the reporting period.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets
and liabilities respectively. The operating cycle is the time between
the acquisition of assets for processing and their realisation in cash
and cash equivalents. The Company has identified twelve months as
its operating cycle.

(xvi) Taxation:

Tax on Income comprises current and deferred tax. It is recognised
in the Statement of Profit and Loss except to the extent that it relates
to a business combination, or items recognised directly in equity or in
other comprehensive income.

Current Tax:

Current tax comprises the expected tax payable or receivable on the
taxable income or loss for the reporting period and any adjustment to
the tax payable or receivable in respect of previous years. The amount
of current tax reflects the best estimate of the tax amount expected to
be paid or received after considering the uncertainty, if any, related
to income taxes. It is measured using tax rates (and tax laws) enacted
or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if there is
a legally enforceable right to set off the recognised amounts, and it
is intended to realise the asset and settle the liability on a net basis or
simultaneously.

Deferred Tax:

Deferred tax is recognised on temporary differences between the
carrying amounts of assets and liabilities in the Standalone financial
statements and the corresponding tax bases used in the computation
of taxable profit. Deferred tax liabilities are recognised for all taxable
temporary differences. Deferred tax assets are generally recognised
for all deductible temporary differences to the extent that it is probable
that taxable profits will be available against which those deductible
temporary differences can be utilised. Such deferred tax assets and
liabilities are not recognised if the temporary difference arises from
the initial recognition of assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of
the deferred tax asset to be utilised. Unrecognised deferred tax assets
are re-assessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will
allow the deferred tax asset to be recovered. Significant management
judgement is required to determine the amount of deferred tax assets
that can be recognised, based upon the likely timing and the level of
future taxable profits together with future tax planning strategies.

Deferred tax liabilities and assets are measured at the tax rates that
are expected to apply in the period in which the liability is settled or
the asset realised, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.

Deferred tax relating to items recognised outside profit or loss is
recognised outside profit or loss (either in other comprehensive
income or in equity). Deferred tax items are recognised in correlation
to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally
enforceable right exists to set off current tax assets against current tax

liabilities and the deferred taxes relate to the same taxable entity and
the same taxation authority.

(xvii) Leases:

The Company assesses at contract inception whether a contract is, or
contains, a lease. That is, if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for
consideration.

The Company as a lessee

The Company recognises a right-of-use asset and a lease liability at
the lease commencement date except for leases with a term of twelve
months or less (short-term leases) and low value assets. For these
short-term and low value leases, the lease payments associated with
these leases are recognised as an expense on a straight-line basis
over the lease term.

The Company applies the available practical expedients wherein it:

a) Used a single discount rate to a portfolio of leases with
reasonably similar characteristics

b) Relies on its assessment of whether leases are onerous
immediately before the date of initial application

c) Applies the short-term leases exemptions to leases with lease
term that ends within 12 months at the date of initial application

d) Includes the initial direct costs from the measurement of the right-
of-use asset at the date of initial application

e) Uses hindsight in determining the lease term where the contract
contains options to extend or terminate the lease

Right of use assets

The right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on which
it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight¬
line method from the commencement date to the end of the lease
term, unless the lease transfers ownership of the underlying asset to
the Company by the end of the lease term or the cost of the right-
of-use asset reflects that the Company will exercise a purchase
option. In that case the right-of-use asset will be depreciated over the
useful life of the underlying asset. In addition, the right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liability.

Lease Liability

The Company recognise the lease liability at the present value of
the lease payments discounted at the incremental borrowing rate
at the date of initial application. The lease payments include fixed
payments (including in substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an
index or a rate, 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 (unless they are incurred to produce
inventories) in the period in which the event or condition that triggers
the payment occurs. For a lease modification that is not a separate
lease, at the effective date of the modification, the lessee accounts
for the lease modification by remeasuring the lease liability using
a discount rate determined at that date and the lessee makes a
corresponding adjustment to the right-of-use asset. Low value Asset
covers all leases which are short term in nature.

Subsequent measurement of lease liability

The lease liability is remeasured when there is change in future lease
payments arising from a change in an index or a rate, or a change
in the estimate of the guaranteed residual value, or a change in the
assessment of purchase, extension or termination option. When the
lease liability is measured, the corresponding adjustment is reflected
in the right-of-use asset.

Subsequently, the lease liability is measured at amortised cost using
the effective interest method.

The Company as a lessor

The determination of whether an arrangement is (or contains) a lease
is based on the substance of the arrangement at the inception of the
lease. The arrangement is, or contains, a lease if fulfilment of the
arrangement is dependent on the use of a specific asset or assets and
the arrangement conveys a right to use the asset or assets, even if that
right is not explicitly specified in an arrangement.

Leases for which the Company is a lessor is classified as a finance or
operating lease. Whenever the terms of the lease transfer substantially
all the risks and rewards of ownership to the lessee, the contract is
classified as a finance lease. All other leases are classified as
operating leases.

Amounts due from lessees under finance leases are recorded as
receivables classified under Financial Asset at the Company''s
net investment in the leases. Finance lease income is allocated to
accounting periods so as to reflect a constant periodic rate of return
on the net investment outstanding in respect of the lease.

Rental income from operating leases is generally recognised on
a straight-line basis over the term of the relevant lease. Where the
rentals are structured solely to increase in line with expected general
inflation to compensate for the Company''s expected inflationary
cost increases, such increases are recognised in the year in which
such benefits accrue. Initial direct costs incurred in negotiating and
arranging an operating lease are added to the carrying amount of the
leased asset and recognised on a straight-line basis over the lease.

When the Company is an intermediate lessor, it accounts for its
interests in the head lease and the sublease separately. The sublease
is classified as a finance or operating lease by reference to the right-
of-use asset arising from the head lease.

---

Mar 31, 2024

1. Corporate Information

KP GREEN ENGINEERING LIMITED (formerly known as K P Buildcon Private Limited) ("the Company”) was incorporated on July 10, 2001 as a Private Limited Company domiciled in India. During the year under reporting, the Company listed its securities on BSE SME platform with effect from March 22, 2024. The Company is primarily engaged in the business of Fabrication, Galvanizing, Fault Rectification Team, Patrolling of Optical Fiber Cables, Site Clearance Work, Solar Roof-top installation, Sale of solar electricity, EPC, Mobile tower Manufacturing and Turnkey Service Provider to Mobile and Renewable Energy Industry.

2. Summary of Significant Accounting Policies

(i) Basis of preparation of Standalone Financial Statements:

These Standalone Financial Statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (''Indian GAAP'') to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The Standalone Financial Statements have been prepared under the historical cost convention on accrual basis, except in case of assets for which provision for impairment for certain financial instruments which are measured at fair value.

All amounts included in the Standalone Financial Statements are reported in lakhs and 2 decimals thereof in Indian Rupees except for Number of shares and EPS wherever disclosed in these financial statements.

(ii) Presentation and disclosure of Standalone Financial Statements:

During the year end March 31, 2024, the Company has presented the Standalone Financial Statements as per the Schedule III notified under the Companies Act, 2013. The statement of Cash Flows has been prepared and presented as per requirements of As 3 "Cash Flow Statements". The disclosure requirements with respect to items in the Balance sheet and Profit & Loss Account, as prescribed in Schedule III of the Act are presented by way of notes forming part of the Standalone Financial Statements. The Company has also reclassified the previous figures in accordance with the requirements applicable in the current year.

Accounting policies have been consistently applied from year on year basis.

(iii) Use of Estimates:

In the application of the Company''s accounting policies, management of the Company is required to make

judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation for each affected line item in the Standalone Financial Statements.

(iv) Property, Plant & Equipment:

Property, Plant & Equipment are carried at cost of acquisition and other applicable costs less accumulated depreciation and accumulated impairment loss, if any. The cost of fixed assets includes cost of acquisition plus, any freight, taxes, duties and other incidental expenses that are directly attributable to bring the assets to their working conditions for their intended use. Borrowing costs directly attributable to the qualifying assets are capitalized as part of the cost. The costs of internally generated assets comprise direct costs attributed to the generation of the assets.

Capital work-in-progress, if any comprises of the cost of fixed assets that are not yet ready for their intended use at the balance sheet date. Assets held for disposal, if any are stated at the lower of net book value and the estimated net realizable value.

When parts of the items of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent expenditure relating to the property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably.

Gain/loss arising from de-recognition/sale/disposal of fixed assets are measured as the difference between the net disposal/sale proceeds and the carrying amount of the assets and are recognized in the statement of profit or loss when the asset is derecognized/disposed off.

Advances paid towards the acquisition of fixed assets, if any outstanding as of balance sheet date is disclosed under long term loans and advances.

No assets have been revalued during the year.

(v) Intangible Assets:

Intangible assets are stated at the consideration paid for acquisition less accumulated amortization and accumulated impairment losses, if any.

(vi) Borrowing Costs:

Loan processing charges and interest expenses paid to Bank for CC facilities and Term Loans have been charged to revenue account since the same are not attributable to the acquisition of qualifying assets as per the requirements of AS 16.

Borrowing cost primarily includes interest and amortisation of ancillary costs incurred in connection with the arrangement of borrowings.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset.

(vii) Depreciation/Amortization:

Depreciation on tangible fixed assets is calculated on the Straight Line Method (SLM) based on the useful lives and residual values estimated by the management in accordance with Schedule II to the Companies Act, 2013. The identified components are depreciated separately over their useful lives; the remaining components are depreciated over the life of the principal asset.

Intangible assets, if any are amortized on basis of the economic benefits consumed by the Company over the projected useful life and if the pattern of economic benefits cannot be identify reliably then the straight line method is used.

No assets have been revalued during the year.

The Company has used the following useful lives to provide depreciation on its tangible assets and intangible assets.

Type of assets	Useful lives (in years)
Factory Building	30
Office Building	60
Computers	03
Electrical Installation	10
Furniture and Fixtures	10
Motor Vehicles and Heavy Vehicles	08
Vehicles (2 wheelers)	10
Office Equipment''s	05

Type of assets	Useful lives (in years)
Plant and Machinery	15
Intangible Assets	10

(viii) Impairment of Tangible and Intangible Assets:

As per the estimates made by the management and as per the various assessments made by the management, there were no indicators whether internal or external (as provided in para 8 of AS 28) which has led to the impairment loss to any assets. Since there are no such indicators which suggest that the net value of the assets would fall significantly by passage of time and normal use, the Company has not provided for any impairment loss for any assets during the current financial period. The Company has chosen the "value in use” technique and as per the measurement of future cash flow, the management is of the opinion that the future cash flow and the terminal value of the assets would not be significantly less than the carrying value and hence no impairment for any assets has been provided for in the financial statements.

No reversal of impairment loss has been recognized in the Profit & Loss Account.

Since the Company has not carried out the activities in segments, the impairment loss or reversal of the impairment loss has not been provided for the segments.

In the opinion of the Board of Directors and to the best of their knowledge and belief the aggregate value of the current assets, loans and advances on realization in the ordinary course of business, will not be less than the amount at which they are stated in the Balance Sheet.

(ix) Investments:

Investments which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as longterm investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued.

Current investments are carried in the Standalone Financial Statements at lower of cost and fair value determined in respect of each category of the investments. Long-term investments are carried at cost. However, provision for diminution in value, if any is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, if any, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

(x) Government Grants and Subsidies:

Grants and subsidies from the government are recognised when there is reasonable assurance that:

i. The Company will comply with the conditions attached to them; and

ii. The grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognised as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognised as deferred income and released to income in equal amounts over the expected useful life of the related asset.

During the FY 2021-22, Company has received the non-refundable government grant of ''40,00,000/- on capital assets i.e., machinery. The said machinery was purchase in FY 2020-21. The management of the Company has decided to recognize the grant as deferred income, the same is recognized as income in the profit & loss account on systematic basis considering the useful life of the respective machinery. During the year management of Company has recognized the amount of proportionate deferred government grant to profit and loss account pertaining to FY 2023-24. Further, ''26,66,667/- is recognized as non-current liability since the management of the Company has expected not to recognize this amount within next 12 months after end of the reporting period and ''2,66,667/-is recognized as current liability which the Company has expected to recognize within 12 months from the end of the reporting period.

(xi) Inventories:

Inventories are stated at the lower of cost and net realisable value by following weighted average method. Cost of Inventories comprises all cost of purchase and other cost incurred in bringing inventories to their present location and condition. Cost in case of work in progress is determined on the basis of the actual expenditure attributable to the said work till the end of the reporting period.

Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

(xii) Revenue Recognition:

Revenue comprises sale of materials, service income and interest. Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and

that the revenue can be reliably measured. The Company collects Goods and Services Tax (GST) as applicable on behalf of the government and therefore, this is not economic benefits flowing to the Company. Hence, this is excluded from revenue.

Sales:

Revenue from sale of goods is recognised in the statement of profit and loss when the significant risks and rewards in respect of ownership of goods has been transferred to the buyer as per the terms of the respective sales order, and the income can be measured reliably and is expected to be received.

Revenue from sales of Services:

Contracts to patrolling the Optical Fiber Cables through various Fault Rectification Team (FRT) (turnkey service provider to mobile and renewable energy Industry) and Fabrication and Galvanizing work are recognised in the consolidated statement of profit and loss based on the proportion of service completed and invoice for that is raised.

Interest Income:

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(xiii) GST:

GST credit available on purchase of materials, purchase of capital goods and input services is not charged to cost of material, capital goods and services. GST Credit availed is accounted by way of adjustment against GST payable on dispatch of finished goods & rendering of services.

(xiv) Retirement and other Employee benefits: Short Term Employee Benefits:

Short term benefits including salaries, bonus, social security contributions, and non-monetary benefits (such as medical care) for current employees are estimated and measured on an undiscounted basis and charged to the profit and loss account.

Long Term Employee Benefits:

Defined Contribution Plan:

All eligible employees of the Company are entitled to receive benefits under the provident fund, a defined contribution plan in which both the employee and the Company contribute monthly at a stipulated percentage of the covered employee''s salary. Contributions are made to Employees Provident Fund Organization in respect of Provident Fund, Pension Fund and Employees Deposit Linked Insurance Scheme, as applicable at the prescribed

rates and are charged to Statement of Profit and Loss at actuals. The Company has no liability for future provident fund benefits other than its annual contribution.

Defined Benefit Plan:

The Company operates a defined benefit gratuity plan in India, which requires contributions to be made to a separately administered fund. However, the Company has not made any such contributions during the year. The cost of providing benefits under the defined benefit plan is based on an independent actuarial valuation carried out using the projected unit credit method.

Actuarial gain/loss is directly credited/debited to the Profit and loss account.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.

(xv) Foreign Exchange Transactions:

The Company has not entered into any Foreign Exchange Transactions during the year under consideration.

The Company has not entered into any forward exchange contracts during the year.

(xvi) Taxation:

Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and loss. The amount of current tax actually determined at the time of filing of IT return for the Assessment Year determined the final self-assessment tax liability and accordingly the Company has reversed the excess provision of current tax charged to statement of profit and loss in earlier period or made additional provision for current tax not charged to statement of profit & loss, in current reporting period as the case may be.

Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and loss.

Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each reporting date, the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

Separate and detailed calculation of deferred tax is appended in these notes.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognises MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognises MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income Tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT credit entitlement" The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period in future. Separate and detailed calculation of deferred tax is appended in these notes on accounts.

(xvii) Provisions and Contingent Liabilities, Contingent Assets:

A provision is recognised when the Company has a present obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made of the amount of obligation. Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Provisions of various expenses are recognized in the financial statements since there exists present obligations as a result of event and the expenses are accrued and incurred during the year.

The opening balance of provisions is used during the year against the payments during the year. The closing balances of provisions are the expenses accrued during the year and provided.

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 recognise a contingent liability but discloses its existence in the Standalone Financial Statements unless the possibility of an outflow is remote.

A contingent asset is not recognized in the Standalone Financial Statements and hence not disclosed.

(xviii) Earnings/(loss) per share:

Basic earnings/(loss) per share are calculated by dividing the net profit/(loss) for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for any bonus shares issued during the year and also after the balance sheet date but before the date the Standalone Financial Statements are approved by the board of directors for the purpose of calculating diluted earnings/(loss) per share. The net profit/(loss) for the period attributable to equity shareholders and the weighted average number of shares outstanding during

the period are adjusted for the effects of all dilutive potential equity shares.

The number of equity shares and potentially dilutive equity shares are adjusted for bonus and right issue as appropriate. The dilutive potential equity shares are adjusted for the proceeds receivable, had the shares been issued at fair value. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date.

(xix) 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.

(xx) Cash and Cash Equivalents:

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand, cheques on hand and short-term investments with an original maturity of three months or less.

(xxi) Operating Leases:

As a Lessee:

Finance leases, which effectively transfers to the Entity substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized as finance costs in the Profit and Loss Account. Lease management fees, legal charges and other initial direct costs of lease are capitalized.

A leased asset is depreciated on a straight-line basis over the useful life of the asset assessed by the management. However, if there is no reasonable certainty that the Entity will obtain the ownership by the end of the lease term, the capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset.

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss Account on a straight-line basis over the lease term.

As a Lessor:

Leases in which the Entity transfers substantially all the risks and benefits of ownership of the asset are classified as finance leases. Assets given under finance lease are recognized as a receivable at an amount equal to the net investment in the lease. After initial recognition, the Entity apportions lease rentals between the principal repayment and interest income so as to achieve a constant periodic rate of return on the net investment outstanding in respect of the finance lease. The interest income is recognized in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the Profit and Loss Account.

Leases in which the Entity does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in property, plant and equipment assets. Lease income on an operating lease is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation, are recognized as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the Profit and Loss Account.