e) Provisions, Contingent liabilities, Contingent assets and Commitments
General

Provisions are recognized when the company has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the
company expects some or all of a provision to be reimbursed, for example, under an insurance contract,
the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually
certain. The expense relating to a provision is presented in the statement of profit and loss net of any
reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase
in the provision due to the passage of time is recognized as a finance cost.

Contingent liability is disclosed in the case of:

1. A present obligation arising from the past events, when it is not probable that an outflow of
resources will be required to settle the obligation;

2. A present obligation arising from the past events, when no reliable estimate is possible;

3. A possible obligation arising from the past events, unless the probability of outflow of resources is
remote.

Commitments include the amount of purchase order (net of advances) issued to parties for completion
of assets.

The company provides for the expenses to reclaim the quarries used for mining. The total estimate of
reclamation expenses is apportioned over the estimate of mineral reserves and a provision is made
based on the minerals extracted during the year. Mines reclamation expenses are incurred on an
ongoing basis and until the closure of the mine. The actual expenses may vary based on the nature of
reclamation and the estimate of reclamation expenditure

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet
date.

f) Current and Deferred Taxes

The tax expenses for the period comprise of current tax and deferred tax.

Current income tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities, based on the rates and tax laws enacted or substantively enacted, at the
reporting date in the country where the entity operates and generates taxable income. Current tax items
are recognized in correlation to the underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax is provided using the balance sheet approach on temporary differences at the reporting
date between the tax bases of assets and liabilities and their corresponding carrying amounts for the
financial reporting purposes.

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 utilized. Unrecognized deferred tax assets are re-assessed at each reporting date
and are recognized to the extent that it has become probable that future taxable profits will allow the
deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date. 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.

Minimum Alternative Tax (MAT) credit is recognized as an asset only when and to the extent there is
convincing evidence that the company will pay normal income tax during the specified period. In the
year in which the MAT credit becomes eligible to be recognized an asset in accordance with
recommendations contained in Guidance Note issued by ICAI, the said asset is created by way of a credit
to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The company reviews the
same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to an
extent there is no longer convincing evidence to the effect that the company will pay normal Income Tax
during the specified period.

g) Revenue recognition

Revenue from contract with customers Revenue from contracts with customers is recognized upon
transfer of control of promised goods/ products to customers at an amount that reflects the
consideration to which the Company expect to be entitled for those goods/ products. To recognize
revenues, the Company applies the following five-step approach:

• Identify the contract with a customer,

• Identify the performance obligations in the contract,

• Determine the transaction price,

• Allocate the transaction price to the performance obligations in the contract, and

• Recognize revenues when a performance obligation is satisfied.

Sale of goods

Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the
goods have passed to the buyer and no significant uncertainty exists regarding the amount of the
consideration that will be derived from the sale of goods. Revenue from the sale of goods is measured at
the fair value of the consideration received or receivable, net of returns and allowances, related
discounts & incentives and volume rebates. It includes excise duty and excludes value added tax/ sales
tax/goods and service tax.

Sale of goods - non-cash incentive schemes (deferred revenue)

The company operates a non-cash incentive scheme program where dealers / agents are entitled to non¬
cash incentives on achievement of sales targets. Revenue related to the non-cash schemes is deferred
and recognized when the targets are achieved. The amount of revenue is based on the realization of the
sales targets to the period of scheme defined.

h) Borrowing costs

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 capitalized as
part of the cost of the asset. Qualifying assets are assets that necessarily take a substantial period of time
to get ready for their intended use or sale. All other borrowing costs are expensed in the period in which
they occur. Borrowing costs consist of interest and other costs that a company incurs in connection with
the borrowing of funds.

Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying asset is deducted from the borrowing costs eligible for capitalization.

i) Employee Benefits

All employee benefits payable wholly within twelve months of rendering services are classified as short¬
term employee benefits. Benefits such as salaries, wages, short-term compensated absences,
performance incentives etc., and the expected cost of bonus, ex-gratia are recognized during the period
in which the employee renders related service.

Payments to defined contribution retirement benefit plans are recognized as an expense when
employees have rendered the service entitling them to the contribution.

No benefits have been provided by the Company under the defined benefits plan. Thus, no re
measurement 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 recognized in the balance sheet
with a corresponding debit or credit to retained earnings through OCI in the period in which they occur
No net defined benefit obligation as an expense has been recognized in the statement of profit and loss:

1. Long-term employee benefits

Post-employment and other employee benefits are recognized as an expense in the statement of
profit and loss for the period in which the employee has rendered services. A liability is recognized
for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in
the period the related service is rendered at the undiscounted amount of the benefits expected to
be paid in exchange for that service.

2. Defined contribution plans

The company pays provident fund contributions to publicly administered provident funds as per local
regulations. The company has no further payment obligations once the contributions have been
paid. Company as not comply with the provisions of Gratuity Plan as required as per INDAS 19.

j) Investment properties

Property that is held for long-term rental yields or for capital appreciation or both, and that is not
occupied by the company, is classified as investment property. Investment property is measured initially
at its cost, including related transaction costs and where applicable borrowing costs. Subsequent
expenditure is capitalized to the asset's carrying amount only when it is probable that future economic
benefits associated with the expenditure will flow to the company and the cost of the item can be
measure reliably. All other repairs and maintenance costs are expensed when incurred. When part of an
investment property is replaced, the carrying amount of the replaced part is derecognized.

There are no Investment Properties in name of Company.

k) Other Investments

The Company carries certain Liquid funds which are registered under SEBI and traded on Stock Market,
the said funds are not held for trading. The company has recorded its investment in equity instruments
at its acquisition cost.

l) Investment in subsidiaries, joint ventures and associates

Investments in subsidiaries, joint ventures and associates are recognized at cost as per Ind AS 27. Except
where investments accounted for at cost shall be accounted for in accordance with Ind AS 105, Non¬
current Assets Held for Sale and Discontinued Operations, when they are classified as held for sale.
Company has wholly owned subsidiary.

m) Impairment of non-financial assets

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
asset's 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 company's 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.

Recoverable amount is determined:

i. In case of individual asset, at higher of the fair value less cost to sell and value in use; and

ii. In case of cash-generating unit (a company of assets that generates identified, independent cash
flows), at the higher of the cash-generating unit's fair value less cost to sell and the value in use.

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. These
calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies
or other available fair value indicators.

The company bases its impairment calculation on detailed budgets and forecast calculations, which are
prepared separately for each of the company's CGUs to which the individual assets are allocated. These
budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term
growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the
statement of profit and loss, except for properties previously revalued with the revaluation surplus taken
to OCI. For such properties, the impairment is recognized in OCI up to the amount of any previous
revaluation surplus.

n) 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. For the purpose of the statement of cash flows, cash and cash equivalents consist of
cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are
considered an integral part of the company's cash management.

o) Segment accounting

The Chief Operational Decision Maker monitors the operating results of its business Segments separately
for the purpose of making decisions about resource allocation and performance assessment. Segment
performance is evaluated based on profit or loss and is measured consistently with profit or loss in the
financial statements.

The Operating segments have been identified on the basis of the nature of products/services.

The accounting policies adopted for segment reporting are in line with the accounting policies of the
company. Segment revenue, segment expenses, segment assets and segment liabilities have been
identified to segments on the basis of their relationship to the operating activities of the segment. Inter
Segment revenue is accounted on the basis of transactions which are primarily determined based on
market/fair value factors. Revenue, expenses, assets and liabilities which relate to the company as a
whole and are not allocated to segments on a reasonable basis have been included under "unallocated
revenue / expenses / assets / liabilities".

p) Dividend

The final dividend on shares is recorded as a liability on the date of approval by the shareholders. Interim
dividends are recorded as a liability on the date of declaration by the Company's Board. Income tax
consequences of dividends on financial instruments classified as equity will be recognized according to
where the entity originally recognized those past transactions or events that generated distributable
profits.

The Company declares and pays dividends in Indian Rupees. Companies are required to pay / distribute
dividend after deducting applicable taxes. The remittance of dividends outside India is governed by
Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

q) Earnings per share

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period. Earnings
considered in ascertaining the company's earnings per share is the net profit for the period after
deducting preference dividends and any attributable tax thereto for the period. The weighted average
number of equity shares outstanding during the period and for all periods presented is adjusted for
events, such as bonus shares, other than the conversion of potential equity shares that have changed the
number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the profit or loss for the period attributable to
equity shareholders and the weighted average number of shares outstanding during the period is
adjusted for the effects of all dilutive potential equity shares. Dilutive potential equity shares are deemed
converted as of the beginning of the period, unless they have been issued at a later date. The diluted
potential equity shares have been arrived at, assuming that the proceeds receivable were based on
shares having been issued at the average market value of the outstanding shares. In computing dilutive
earnings per share, only potential equity shares that are dilutive and that would, if issued, either reduce
future earnings per share or increase loss per share, are included.

r) Financial Instruments

a) Financial Assets

Purchase and sale of Financial Assets are recognised using trade date accounting. Trade receivables
that do not contain a significant financing component are measured at transaction price.

The Company has elected to account for its investments in subsidiaries, associates and joint venture
at cost less impairment loss (if any).

All other equity investments are measured at fair value, with value changes recognised in Statement
of Profit and Loss, except for those equity investments for which the Company has elected to
present the value changes in 'Other Comprehensive Income'. However, dividend on such equity
investments are recognised in Statement of Profit and loss when the Company's right to receive
payment is established. Further investment in equity instruments that do not have a quoted market
price in an active market and whose fair value cannot be measured are quoted at Cost.

Other Financial Assets are generally measured at Fair Value Through Profit or Loss (FVTPL) except
where the Company, based on the business model objectives, measures these at Amortized Cost or
Fair Value Through Other Comprehensive Income (FVTOCI). Company has made disclosure of
measurement method in notes to account.

The Company uses 'Expected Credit Loss' (ECL) model, for evaluating impairment of Financial Assets
other than those measured at Fair Value Through Profit or Loss (FVTPL). For Trade Receivables, the
Company applies 'simplified approach' which requires expected lifetime losses to be recognised from
initial recognition of the receivables. The Company uses historical default rates to determine
impairment loss on the portfolio of trade receivables. At every reporting date these historical default
rates are reviewed and changes in the forward-looking estimates are analysed. For other assets, the
Company uses 12-month ECL to provide for impairment loss where there is no significant increase in
credit risk.

b) Financial Liabilities:

For trade and other payables maturing within one year from the balance sheet date, the carrying
amounts are determined to approximate fair value due to the short maturity of these instruments.

c) Offsetting:

Financial Assets and Financial Liabilities are offset and the net amount is presented in the balance
sheet when, and only when, the Company has a legally enforceable right to set off the amount and it
intends, either to settle them on a net basis or to realise the asset and settle the liability
simultaneously.

C. Use of estimates and judgements

The preparation of the Company's Financial Statements requires management to make judgement,
estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and
the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of assets or liabilities affected in next financial
years.

In the assessment of the Company, the most significant effects of use of judgments and/or estimates on
the amounts recognized in the financial statements are in respect of the following:

• Useful lives of property, plant & equipment;

• Valuation of inventories;

• Measurement of recoverable amounts of assets / cash-generating units;

• Assets and obligations relating to employee benefits;

• Evaluation of recoverability of deferred tax assets; and

• Provisions and Contingencies

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting
estimates are recognized in the period in which the estimates are revised and in any future periods affected.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash
and cash equivalents. The company has identified twelve months as its operating cycle translation
differences on items whose fair value gain or loss is recognized in OCI or profit or loss are also recognized in
OCI or profit or loss, respectively).

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a
material adjustment within the next financial year are included in the following notes:

• Current tax

• Fair valuation of unlisted securitie

For estimates relating to fair value of financial instruments refer note to financial statement.

D. Functional and presentation currency:

These standalone financial statements are presented in Indian Rupees (INR), which is the Company's
functional currency. All financial information presented in INR has been rounded to the nearest lakhs, except
as stated otherwise.

E. Rounding off

All amounts disclosed in the financial statements and notes have been rounded off to the nearest Lakhs as
per the requirements of Schedule III, unless otherwise stated.

Recent accounting pronouncements

Recent pronouncements Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the
existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March
31, 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies
(Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below:

Ind AS 1 - Presentation of Financial Statements The amendments require companies to disclose their material
accounting policies rather than their significant accounting policies. Accounting policy information, together with
other information, is material when it can reasonably be expected to influence decisions of primary users of
general-purpose financial statements. The Group does not expect this amendment to have any significant impact
in its financial statements.

Ind AS 12 - Income Taxes The amendments clarify how companies account for deferred tax on transactions such
as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption
in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on
initial recognition, give rise to equal taxable and deductible temporary differences. The Group is evaluating the
impact, if any, in its financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors The amendments will help entities to
distinguish between accounting policies and accounting estimates. The definition of a change in accounting
estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting
estimates are "monetary amounts in financial statements that are subject to measurement uncertainty". Entities
develop accounting estimates if accounting policies require items in financial statements to be measured in a
way that involves measurement uncertainty.

The Group does not expect this amendment to have any significant impact in its financial statements.

Significant Accounting Policies For and on behalf of the Board of Directors

See accompanying notes to the Financial Statements KANEL INDUSTRIES LTD

As per our report of even date attached

For N. S. Nanavati & Co.

Chartered Accountants Dhiren Thakkar Hitesh Thakkar

Firm Regn. No. 134235W (MD & CFO) (Non-Executive Director)

(DIN- 00610001) (DIN- 01987053)

(CA. NITESH NANAVATI)

Proprietor Prashant Patel

Resolution Professional

M.No. 143769 IBBI/IPA-002/IP- No. 0827 /2019-2020/12627

UDIN: 24143769BKFPCC4481 Place: Ahmedabad

Place: Ahmedabad Date: 27.05.2024

Date: 27.05.2024