i. Provisions, Contingent Liability and Contingent Assets:
? Provisions are recognized only when there is a present obligation, as a result of past events and when a
reliable estimate of the amount of obligation can be made at the reporting date. These estimates are
reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions are discounted
to their present values, where the time value of money is material.
? Contingent liability is disclosed for: a. Possible obligations which will be confirmed only by future events
not wholly within the control of the Company; or b. Present obligations arising from past events where it is
not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of
the amount of the obligation cannot be made.
? Contingent assets are neither recognized nor disclosed except when realization of income is virtually
certain, related asset is recognized.
j. Operating Segments:
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief
Operating Decision Maker (‘CODM’) of the Company. The CODM is responsible for allocating resources
and assessing performance of the operating segments of the Company.
k. 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.
For the purpose of calculating diluted earnings per share, the net profit for the period attributed to equity
shareholders and the weighted average number of shares outstanding during the period is adjusted for
the effects of all potentially dilutive equity shares.
l. Cash and Cash Equivalents:
For the purpose of the Standalone Statement of Cash Flows, cash and cash equivalents consist of cash
and cheques in hand, bank balances, demand deposits with banks where the original maturity is three
months or less and other short-term highly liquid investments net of outstanding bank overdrafts and
cash credit facilities as they are considered an integral part of the Company’s cash management.
m. Functional and presentation currency:
Items included in the standalone financial statements of the Company are measured using the currency
of the primary economic environment in which the Company operates (i.e. the “functional currency”).
The standalone financial statements are presented in Indian Rupee, the national currency of India, which
is the functional currency of the Company.
n. Related Party Disclosure:
List of related parties where control exists and also related parties with whom transactions have taken
place and relationships, has been disclosed in Note No. 23 to the Notes to Accounts.
p. As certified by the company that it was received written representation from all the directors, that
companies in which they are directors had not defaulted in terms of section 164(2) of the companies Act,
2013, and the representation from directors taken in Board that Director is disqualified from being
appointed as Director of the company.
q. Expenditure:
Expenses are net of taxes recoverable, where applicable.
r. Other Note:
As per the Ministry of Corporate Affairs (MCA) notification, proviso to Rule 3(1) of the Companies
(Accounts) Rules, 2014, for the financial year commencing April 1, 2023, every company which uses
accounting software for maintaining its books of account, shall use only such accounting software which
has a feature of recording audit trail of each and every transaction, creating an edit log of each change
made in the books of account along with the date when such changes were made and ensuring that the
audit trail cannot be disabled. The interpretation and guidance on what level edit log and audit trail
needs to be maintained evolved during the year and continues to evolve.
In the company, the accounting software has a feature of audit trail, but it was disable at an application
level for maintenance of books of accounts and relevant transactions. However, the global standard ERP
used by the Company has not been enabled with the feature of audit trail log at the database layer to log
direct transactional changes, due to present design of ERP. This is being taken up with the vendor. In the
meanwhile, the Company continues to ensure that direct write access to the database is granted only via
an approved change management process.
S. Equity Share Capital:
As on 9th May 2025, Company is listed on BSE SME stock exchange. Company has issued fresh new
equity shares through initial public offer.
5C. Significant management judgement in applying material and other accounting policies and estimation
uncertainty:
The preparation of the Company’s financial statements requires the management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and
the accompanying disclosures, and the disclosure of contingent liabilities:
• Recoverability of advances / receivables
At each balance sheet date, based on historical default rates observed over expected life, the
management assesses the expected credit losses on outstanding receivables and advances.
• Provisions
At each balance sheet date basis the management judgment, changes in facts and legal aspects, the
Company assesses the requirement of provisions against the outstanding contingent liabilities.
However, the actual future outcome may be different from this judgement.
• Contingencies
Contingent liabilities may arise from the ordinary course of business in relation to claims against the
Company. By their nature, contingencies will be resolved only when one or more uncertain future
events occur or fail to occur. The assessment of the existence, and potential quantum, of
contingencies inherently involves the exercise of significant judgments by management and the use
of estimates regarding the outcome of future events
• Fair value measurements
Management applies valuation techniques to determine the fair value of financial instruments (where
active market quotes are not available) and share based payments. This involves developing
estimates and assumptions consistent with how market participants would price the instrument. The
Company engages third party valuers, where required, to perform the valuation. Information about
the valuation techniques and inputs used in determining the fair value of various assets, liabilities
and share based payments are disclosed in the notes to standalone financial statements.
• Inventories
The Company estimates the net realizable values of inventories, taking into account the most reliable
evidence available at each reporting date. The future realization of these inventories may be affected
by future demand or other market-driven changes that may reduce future selling prices.
• Income taxes
The Company’s tax jurisdiction is India. Significant judgements are involved in estimating budgeted
profits for the purpose of paying advance tax, determining the provision for income taxes, including
amount expected to be paid / recovered for uncertain tax positions. The extent to which deferred tax
assets/minimum alternate tax credit can be recognized is based on management’s assessment of the
probability of the future taxable income against which the deferred tax assets/minimum alternate tax
credit can be utilized.
For and on behalf of the board of directors As per our attached report of even date
For, Kenrik Industries Limited For, V S S B & Associates
Chartered Accountants
Firm No. 121356W
Nitin D. Shah Nihar Shah (Shridhar Shah)
Managing Director Director & CFO (Partner)
(DIN: 07715360) (DIN: 07714540) M No:-138132
UDIN: 25138132BMGCQU2096
Zalak Gajjar
Company Secretary
Mo. No. A31461
Place : Ahmedabad Place : Ahmedabad
Date : 28/05/2025 Date :28/05/2025
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