2. Material Accounting Policy Information

2.1 Statcmont of Compliance and basis of preparation of Financial Statements

The financial statements have been proparod in accordance with Indian Accounting Standards (Ind-AS) as
notified under the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments
thereto. Accounting policies have been applied consistently to all periods presented In these financial
statements The Financial Statements are prepared under historical cost convention on going concern basis
Irom lire books of accounts maintained under accrual basis except lor certain financial instruments which are
measured at fair value and in accordance with the Indian Accounting Standards prescribed under the
Companies Act. 2013

2.2 Functional & presentation currency

These financial statementsare presented In Indian rupees, the national currency ol India, which is Iho functional
currency of tire Company All amounts induced in the financial statements are reported in crores of Indian
rupees (uplo two decimal) except number of equity shares and per share data and when otherwise indicated

2.3 Use of estimates and judgmont

The preparation of financial statements requires judgements, estimates and assumptions to be made that affect
the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of financial
statements and the reported amount of revenues nnd expenses during the reporting period Difference between
the actual results and estimates are recognised in the penod in which the results are known/materiaiised

2.4 Rovonuo Recognition

i) Trading Income

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of
vanabie consideration) allocated to that performance obligation. The transaction pnee of goods sold and
services rendered is net of variable consideration on account of various discounts and schemes offered by the
company as part of the contract

Purchases and Sales

a. In case of certain commodities Import of which is canalized through the company. Imported on
'Government Account against authorization letter issued by the Government of India, Purchase/ Sale Is
booked in the name of the Company

b. Products are also traded through the commodity exchanges. Purchase/ Sale is booked in respect of trade
done through different commodity exchanges and Is backed by physical delivery of goods.

c. Gold/Silver kept under deposit: As per the arrangements with the Suppliers of Gold/Silver. the metal Is
kept by the supplier with the company on unfixed price basis for subsequent withdrawal on loan or
outright purchase basis.

(i) Purchases Include getd/sdver withdrawn from consignment deposit of the supplier on outright
purchase basts for sale to exporters, as per the scheme of Foreign Trade Policy being operated by
the Company as a nominated agency

(ii) Purchase of Gold/Silver during the year for domestic sale is accounted for on withdrawal from the
Gold/Silver consignment deposit of the supplier and fixation of price with the suppliers. The stock
held by the company al year end as Gold/ Silver under Deposit is accounted for under current
assets as 'stock towards unbilled purchases' and under current liability as amount payable towards
unbilled purchases' at the bullion price prevailing as at the close of the year. However, customs duty
paid Iri respect of balance in deposits is accounted for as prepaid expenses.

(fli j Gold/silver withdrawn on loan basis from the Gold/Silver under deposit, are booked as loan given to
customers and grouped under financial assets. The corresponding liability towards the stocks
received from foreign suppliers is grouped under Trade Payable. Loan/Trade Payable are adjusted
when purchases and sales are booked

d. In respect of Gold/Silver sourced domestically where price fixation is deferred, purchase is initially
accounted for on the basis of invoice received from the supplier The difference, if any. arising on price
fixation is accounted for through debit / credit note

e In Uie case of gold/ sliver supplied to exporters on replenishment basts, the purchase In respect of
gold/sHver booked by exporter by paying margin money, is booked after "fixing'' the price with the foreign
suppliers However sale is booked when quantity is actually delivered to exporters after completion of
export

f. High Sea Sales

Sale during the course of Import by transfer of documents of title i.e. high seas sale is booked upon
transfer of documents of title to the goods, upon which buyer obtains control over the goods and the
company becomes cntitlo to receivo sales consideration, in favour of buyer before the goods crass the
custom frontiers of India.

ii) Other Operating Rovonue

The income relating to the core activities of the company which are not included In revenue from sales /
services for e.g. dispatch earned, subsidy, claims against losses on trade transactions, interest on credit
salos and trado related advances (other than on ovordue) etc., which are derived based on the terms of
related trade agreements with business associates or schemes on related trado. are accounted for under
’Other Operating Revenue’.

ill) Claims

Claims are recognized in tho Statement of Profit & Loss (Net of any payable) on accrual basis including
receivables from Govt, towards subsidy, cash incentives, reimbursement of losses etc, when its ultimate
realisation is probable. Claims recognized but subsequently becoming doubtful are provided for through
Statement of Profit and Loss. Insurance daims are accounted upon being accepted by the insurance
company. Claims towards shortages/ damages including liquidated damages/ deficiencies in
quality/quantlty etc are accounted for in accordance with the provisions of relevant contracts In case
Ihere is no such provisions in the existing contract, the claim is accounted for on receipt of acceptance by
the party besides collectability of the claim amount being probable. On recognition of such claims the
same will be realised/set off against advance received/ciaims payable etc to the same party.

iv) Service Income

Revenue from services is booked, when performance obllgalion »s satisfied by transferring th* promised
services to the customers, for the consideration to which the company is entitled

v) Dividend and fnterost income

Dividend Income from investments is recognized when the Company's right to receive payment is
established and It is probable that the economic benefits associated with the transactions will flow lo the
Company and the amount of income can be measured reliably.

Interest income Is recognised on a time proportion basis taking Into account the amount outstanding and
the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset lo the gross carrying amount of a financial asset

vi) Revenue Recognition on Actual Realization

Revenue is recognized on accrual basis except in the following items which are accounted for on actual
realization since readability of such items is uncertain. in accordance with the provisions of Ind AS-115:-

a) Duty credit l exemption undor various promotional schemes of Foreign Trade Policy in force, Tax
credit, refund cri custom duty on account of survey shortage, and refund of mcome-tax/service t8x /
sales-tax /VAT/GST and interest tneroon etc

b) Decrees pending tor execution/contested dues and interest thereon, if any:

c) Interest on overdue recoverable whore readability is uncertain.

d) Liquidated damages on suppiiorsfunderwriters

2.5 Property. Plant and Equipments

The cost of an item of property, plant and equipment is recognized as an asset if, and only if it is probable lhai
future economic benefits associated 'with the item will flow to the company and tho cost of tho Item can be
measured reliably. Tho cost of an Item of PPE is tho cash pnee equivalent at tho recognition date. The cost of an
ItomofPPE comprises

I) Purchase price, including import duties and non-refundable purchase taxes, after deducting trade
discounts and rebates.

ii) Costs directly attributable to bringing the PPE to the location and condition necessary for it to be capable
of operating In the manner Intended by management

iii) The Initial estimate of the costs of dismantling and removing the item and restoring the sile on which It is

located, the obligation for which Ihe company incurs either when the PPE is acquired or as a
consequence of having used Ihe PPE during a particular period for purposes other than to produce
inventones during that period.

The company has chosen the cosl model of recognition and this model Is applied to an entire class of PPE. After
recognition as an asset, an item of PPE Is carried at its cost less any accumulated depreciation and any
accumulated impairment losses.

Certain items of small value like calculators, wall clock, kitchen utensils etc . whose useful life is very limited and
Ihe cost of such item Is upto Rs.2000/- in each case, are directly charged to revenue in the year of purchase
Cost of mobile handsets is also charged to revenue irrespective of cost.

2.6 IntangibleAssets

Identifiable intangible assets are recognized when the company controls the asset; it is probable that future
economic benefits expected with the respective assets will flow to the company for more than one economic
period; and the cost of the asset can be measured reliably At initial recognition, intangible assets are
recognized at cost. Intangible assets ore amortized on straight line baste over estimated useful lives from the
dato on which they am available for use. Softwares are amortizod over its useful life subject to 8 maximum
period of 5 years or over the license period as applicable. Intangible assets upto Rs.2,000/* In each case are
directly charged to revenue.

No intangible assets arising from research ts recognised and expense on research directly charged to profit and
loss account when it is Incurred An Intangible assets arising from development is rocognlsod. If the asset fulfils
the cntena for recognition as per Ind AS. Expenditure on an intangible item that was initially recognised as an
expense is not recognised as part of the cost of an intangible asset at a later date

2.7 Non-Current Assets Held for Sale

The company classifies a non-current asset (or disposal group of assets) as held for sale if its carrying amount
will be recovered principally through a sale transaction rather man through continuing use The non-current
asset (or disposal group) classified as hold for sale is measured at the lower of Its carrying amount and the fair
value less costs to sell.

2.8 Depreciation

Depreciation is provided on straight line method as per the useful lives approved by the Board of Directors,
which are equal to those provided under schedule II of the Companies Act, 2013. The useful life of an asset is
reviewed at each financial year-end Each pari of an Item of PPE with a cosl that is significant In relation to Ihe
total cost of the asset and if the useful lifo of that pari is different from remaining part of the asset, such significant
part is depreciated separately. Depreciation on all such items have been provided from Iho dato they are
'Availaole for U3e‘ till the dato of sale / disposal and includes amortization of intangible assels and lease hold
assets Freehold land Is not deprecialod. An item of PPE Is derecognized upon disposal or when no future
economic benefits are expected to anse from the continued use ofthe asset
The residual value of all the assets Is taken as Re 1/- The useful lives of the assets are taken as under-

2.9 Impairment

II the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount.
Ihe carrying amount of the asset (or cash-generating unit) Is reduced to its recoverable amount An impainnent
loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalue amount, in which
case the impairment loss is treated as a revaluation decrease

Recoverable amount is the higher of fair value less costs of disposal and 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 lime value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.

When an impam-nont loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is
increased to tho revised estimate of its recoverable amount, so that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognized for the

asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized Immediately /n profit
or loss, unless the relevant asset Is carried at a revalued amount, in which case die reversal of the impairment
loss ts treated as a revaluation increase.

At the end of each reporting period, the company reviews the carrying amounts of its tangible, intangible assets
to determine whether there is any Indication that those assets have suffered an Impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss (If any). When it is not possible to estimate tho recoverable amount of an individual asset, the
Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Intangible
assets with Indefinite useful lives and intangible assets not yet available for use are teslBd for impairment at least
annually, and whenever there is an indication that the asset may be Impaired.

Impairment of financial assets

Financial assels, other than those at Fair Value through Profit and Loss (FVTPL), are assessed for indicators of
impainnent al the end of each reporting period. Financial assets are considered to be Impaired when there Is
objective evidence that, as a result of one or more events that occurred after the initial recognition of Ihe financial
8ssot, Ihe estimated future cash flows of the investment have boon affected. For Available for Sale (AFS) equity
investments, a significant or prolonged decline in the fair value of the security below its cost is considered lo be
objective evidence of impairment

For all other financial assets, objective ovidonc© of Impairment could include:

• Significant financial difficulty of the issuer or counterparty,

• Breach of contract, such a9 a default or delinquency in Interest or principal payments;

• It becoming probable that the borrower will enter bankruptcy or financial re-organ isation; or the
disappearance of an active market for that financial asset because of financial difficulties

For certain categories of financial assets, such as trade receivables, assets are assessed for impairment on
individual basis Objective evidence of Impairment for a portfolio of receivables could include company's past
experience of collecting payments, an Increase in the number of delayed payments in the portfolio past Ihe
average credit period of zero days, as well as observable changes in national or local economic conditions lliat
correlate with default on receivables,

For financial assets that are earned at cost, the amount of impairment loss is measured as tho difference
between the asset's carrying amount and tho presont value of the estimated fulure cash flows discounted at Ihe
current market rate of return for a similar financial asset Such impairment loss will not be reversed in
subsequent periods

The carrying amount of the financial asset is reduced oy the impairment loss directly for all financial assets with
the exception of trade receivables; such impairment loss is reduced through the use of an allowance account for
respective financial asset When a trade receivable is considered uncollectible, it is written off against Ihe
allowance account Subsequent recoveries of amounts previously written oft are credited against tho allowance
account. Changes in tho carrying amount of the allowance account are recognized in profit or loss.

For financial assets measured at amortised cost, if, in a subsequent period the amount of Ihe impairment loss
decreases and Ihe decrease can be related objectively lo an event occurring after the impainnent was
lecognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the
carrying amount of the investment at the dale the impairment is reversed does not exceed what the amortised
cost would have been had the impairment not been recognized.

De-recognition of financial assets

The Company de-recognises a financial asset when the contractual rights to the cash flows from Ihe asset
expire, or when it transfers Ihe financial asset and substantially all the risks Bnd rewards of ownership of Ihe
asset to another party. If the Company noithor transfers nor retains substantially all the nsks and rewards of
ownership and continues to control the transferred asset. The Company recognises its retained interest in the
asset and an associated liability for amounts it may have lo pay If the Company retains substantially all the risks
and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial
asset and also recognises a collateralised borrowing for the proceeds received

On de-recognition of a financial asset in its entirety, the difference bolweon the asset's carrying amount and Ihe
sum of the consideration received and receivable and the cumulative gam or loss that had been recognized in
other comprehensive Income and accumulated in equity is recognized in profit or loss

2.10 Borrowing Costs

The Company capitalises borrowing costs that are directly attributable to the acquisition, construction or
production of qualifying asset as a part of the cost of ihe asset

The Company recognises other porrowing costs as an expense in the penod in which it incurs them

A qualifying asset is an asset that necessarily takes a substantial period of lime to gel ready for Its intended use
or sale

2.11 Foreign currency translation

Transactions In currencies other than the functtonal currency are recognized at the rates of excliange prevaifing
at the dates of the transactions.

At the end of each reporting period, monetary Items denominated in foreign currencres are retranslated at the
rates prevailing at that dale Non-monotary Items carried at fall value that are denominated In foreign currencies
are re-transtated at the rates prevailing at the date when Die fair value was determined. Non-monelary Items lhat
are measured in terms of histoncal cost in a foreign currency are not retranslated

Foreign currency monetary items (except overdue recoverable where realisability Is uncertain) are converted
usmg the closing rate as dofinod in tho Ind AS-21. Non monetary itoms are reported using the exchange rato at
the date of the transaction. The exchange difference gain/loss is recognized In the Statement of Profit and Loss.

Liability in foreign currency relating to acquisition of fixed assets is converted usmg the closing rale The
difference in exchange is recognized in the Statement of Profit and Loss

2.12 Inventory

Inventories are stated at the lower of cost and net realisable value. Net realisable value represents the
estimated selling price for inventories less ail estimated costs of completion and costs necessary to make the
sale The method of determination of cost and valuation Is as under

a) Exports:

(I) Cost of export stocks is arrived at after including direct expenses incurred up to the point at which
the stocks are lying Similarly the realisable value is derived by deducting from Ihe market pnee Ihe
expenses to be incurred from that point to the stage where they are sold

(ii) In respect of mineral ores the realisable value of ores Is worked out at the minimum of the Fe/Mn
contents of the grade of the ore as per export contract and is compared with the weighted average
cost at weighted average Fe/Mn contents/weighted average moisture contents of the ore The
embedded stocks of Iron ore are excluded from inventory and hence not valued

b) Imports:

(I) The cost of imported stocks is amved at by working out the yearly regional weighted average cost
except for Non-ferrous Metals where weighted average cost of remaining slock after including all
expenses incurred up lo the paint at which they are lying is considered However, where stocks are
specifically identifiable, actual oost of Ihe material including all expenses incurred up to the point at
which they are lying is considered.

(ii) Gold/Silver purchased from foreign suppliers againsl booking by exporters under replenishment
option and not delivered at tho yoar-end are shown as stocks of company and valued at cost.

c) Domestic

(I) The cost of gold/silver medallions and silver articles is arrived at by working out the yearly location-

wise weighted average cost of inatorial and cost of oponing stock. Costs include
manufacturing/fabrication charges, wastages and other direct cost.

(ii) In case of cut & polished stonos and jewellery (fin.shcd/somi-fmishod) where stocks are specifically
idonttfinblo actual cost of tho material including oil exponsos incurred up to tho point at which they
are lying is considered. Costs include wastage and other direct manufacturing costs.

d) Packing material

Packing material is valued ot losver of tho oost or not realisable value.

e) Stocks with fabricators

Stocks with fabricators are taken as the stocks of the company, till adjustments.