4(n) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event,
it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present
value of those cash flows (when the effect of the time value of money is material). The discount rate used is a pre-tax
rate that reflects current market assessments of the time value of money in that jurisdiction and the risks specific to
the liability.
4(o) Earnings per equity share
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company
by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is
computed by dividing the net profit attributable to the equity holders of the company after adjusting for diluted earning,
by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the
weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity
shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually
issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are
deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are
determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented
for any share splits and bonus shares issues including for changes effected prior to the approval of the financial
statements by the Board of Directors.
4(p) Segment reporting
The Chief Operational Decision Maker (CODM) 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. Operating
segments are reported in a manner consistent with the internal reporting to the CODM.
Accordingly, the Board of Directors of the Company is CODM for the purpose of segment reporting. Refer note 35 for
segment information presented.
4(q) Statement of Cash flows
Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects
of transactions of non cash nature and any deferrals or accruals of past or future cash receipts or payments.
The cash flows from operating, investing and financing activities of the Company are segregated based on the
available information.
4(r) Operating cycle
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. Accordingly, all assets and
liabilities have been classified as current or non-current as per the Company's operating cycle and other criteria
set out in Ind AS 1- 'Presentation of Financial Statements' and Schedule III to the Companies Act,2013.
4(s) Exceptional Items
Exceptional items include income or expense that are considered to be part of ordinary activities, however are
of such significance and nature that separate disclosure enables the user of the financial statements to
understand the impact in a more meaningful manner. Exceptional items are identified by virtue of either their size
or nature so as to facilitate comparison with prior periods and to assess underlying trends in the financial
performance of the Company.
4(t) 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.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term
leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying assets.
(i) Right of use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
amortization and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease incentives received. Right-of-use assets
are amortized on a straight-line basis over the lease term. If the Leasehold assets are being utilised for
construction of other assets, amortization charge of the same during construction phase of the manfucturing
plant is capitalied as a part of Capital Work-in-progress and then transferred to respective heads of Property,
Plant & Equipment upon completion of plant.
(ii) Lease Liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value
of lease payments to be made over the lease term. The lease payments are fixed payments. In calculating the
present value of lease payments, the Company uses the interest rate implicit in the lease. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a
modification due to a change in the lease term, a change in the lease payments (e.g., changes to future payments
resulting from a change in an index or rate used to determine such lease payments) or a change in the
assessment of an option to purchase the underlying asset.
(iii) Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that
have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It
also applies the lease of low-value assets recognition exemption that are considered to be low value.
Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis
over the lease term.
Company as a lessor
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are
classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of
the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying
amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents
are recognised as revenue in the period in which they are earned.
4(u) Use of estimates, critical accounting judgments and key sources Of estimation uncertainty
The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS
requires the management of the Company to make estimates and assumptions that affect:
i. the reported balances of assets and liabilities,
ii. the disclosures relating to contingent liabilities as at the date of the financial statements and,
iii. the reported amounts of income and expense for the periods presented.
The estimates and assumptions used in the accompanying financial statements are based upon management's evaluation
of relevant facts and circumstances as at the date of the financial statements. Management believes that the estimates
used in the preparation of financial statements are prudent and reasonable. Actual results could differ from estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and future periods are affected.
Key source of estimation uncertainty at the date of the financial statements, which may cause a material adjustment to
the carrying amounts of assets and liabilities in coming financial years are specified here-in-after:
(i) Useful lives of property, plant and equipment
Management reviews / reassesses its estimate for the useful lives of depreciable / amortisable assets at each reporting
date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic
obsolescence that may change the utility of the asset. This reassessment may result in change in depreciation expense
in future periods.
(ii) Taxes
The Company calculates income tax expense based on reported income. Deferred income tax expense is calculated
based on the differences between the carrying value of assets and liabilities for financial reporting purposes and their
respective tax basis that are considered temporary in nature. Valuation of deferred tax assets is dependent on
management's assessment of future recoverability of the deferred benefit. Expected recoverability may result from
expected taxable income in the future, planned transactions or planned tax optimizing measures. Economic conditions
may change and lead to a different conclusion regarding recoverability. (Refer Notes 8 and 20)
(iii) Obligation for defined benefit Liability
Liability for defined benefit plan is based on valuation by the actuary which is in turn based on realistic actuarial
assumptions. These assumptions may change with the changes in the applicable law and the economy which can
ultimately affect the liability.
(iv) Contingent assets and liabilities and provisions
The Company assess its liabilities and contingent liabilities based upon the best information available, relevant tax and
other laws, contingencies involved and other appropriate requirements. The Company also provides for certain liabilities
basis of its assessment made.
This assessment require critical management judgment and assumptions, regarding the probability outflow or realization
of economic resources and the timing and amount, or range of amounts, that may ultimately be determined. Such
estimates may vary from the ultimate outcome as a result of differing interpretations of laws and facts, or application
of relevant judicial precedents.
Major provisions recognized in financial statement and related accounting policy are specified as under:
Measurement of defined benefit obligations - Refer Note 4(l), 17, and 33. Allowances for expected credit losses - Refer
Note 4(j) and 11.
(d) Rights, Preferences and Restrictions attached to equity shares
The Company has single class of equity shares of Rs. 2 per share. Accordingly, all equity shares rank equally with regard to
dividend and share in the company's residual assets. The equity shares are entitled to receive dividend as declared from
time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the
paid-up equity capital of the company. Voting rights cannot be exercised in respect of shares which are fully paid. Dividend
proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting
(AGM).
Failure to pay any amount called up on shares may lead to forfeiture of the shares.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the
Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders.
(e) During the year ended March 31, 2024; One (1) fully paid-up equity share having face value of Rs. 10/- (Rupees Ten only)
each in share capital of the company has been sub-divided / split into five (5) fully paid-up equity shares having face value
of Rs. 2/- (Rupees Two Only) each, pursuant to the shareholders' approval received through postal ballot on April 29, 2023.
Other than above, the Company has not alloted any share pursuant to contract(s) without payment being received in Cash
during the period of 5 years immediately preceding the Balance Sheet date.
(f) The Company has issued Nil Bonus Shares or allotted any share on payment being received in cash during the period of
5 years immediately preceding the Balance Sheet date.
(g) The company has not bought back shares during the period of 5 year immediately preceeding the Balance Sheet date.
(h) The Company has not reserved any share for issue under options and contracts or commitments for the sale of shares
or disinvestment.
Terms:
i. Lease Obligation:
Obligation for leasehold showroom is repayable in 107 monthly installments starting from FY 2022-23 till FY 2031-32 as per the terms of
lease deed. The same is secured against the showroom taken under lease.
ii. Metal Loans from Directors:
Loans received from directors in the form of Gold which can be repayable on demand or can be extended as per mutual consent. Usance
Charges - 2% p.a.
iii. Unsecured Loans from Directors:
Unsecured Loans received from directors which can be repayable on demand or can be extended as per mutual consent. Interest rate - 12%
p.a.
iv. Unsecured Loans from Others:
Unsecured Loans received from others includes loans received from Non-Banking Financial Corporation (NBFC) which can be repayable on
demand or can be extended as per mutual consent. Interest rate - 7% p.a. The said loans are fully repaid by the company during the year.
Notes: i) During the year ended March 31, 2025; income tax matter in respect of FY 2016-27 / AY
2017-18 has been resolved as the Company had received the decision of Income Tax Appellate Tribunal
(ITAT) vide its order dated 27th December, 2024 in its favour and the demand was removed.
ii) During the year ended March 31, 2024; search operations were carried out by Income Tax
department at the registered office and branch offices of the company during the period from July 11,
2023 to July 16 2023. Legal proceedings for this matter are still under-going in respect of various
financial years. However following tax demand received from tax department during the quarter ended
March 31, 2025 against which the company is contesting at higher appellate authorities:
In respect of FY 2019-20 / AY 2020-21 : Rs. 4.13 Lacs
In respect of FY 2022-23 / AY 2023-24 : Rs. 108.62 Lacs
Assessement for FY 2022-23 / AY 2023-24 was completed on 26.03.2025 raising a demand of Rs.
108.62 Lacs. The company is in process of filing responses / statements for the information asked by
Income Tax Officials for FY 2023-24 / AY 2024-25 as the aseessessment for the same is pending. Total
tax liability apart from the transactions surrendered by the Company, in respect of this matter is not
confirmed till the date of signing of these financial results.
The company is contesting the all the above demands (Total Rs. 112.75 Lacs - As stated in above table)
and the management including its tax advisors believe that its position will likely be upheld in the
appellate proceedings. The management believes that the ultimate outcome of the proceedings will not
have a material adverse effect on the Company's financial position and results of operations. And hence
no provision in respect of above tax demands are made in the books of account.
33 Details of Employee Benefits:
(a) Defined Contribution Plans
The Company offers its employees benefits under defined contribution plans in the form of provident
fund. Provident fund cover substantially all regular employees which are on payroll of the company. Both
the employees and the Company pay predetermined contributions into the provident fund. The
contributions are normally based on a certain proportion of the employee's salary and are recognised in
the Statement of Profit and Loss as incurred.
A sum of Rs. 18.58 lakhs and Rs. 19.06 lakhs have been charged to the Statement of Profit and Loss in
respect of this plan during year ended March 31, 2025 and March 31, 2024 respectively.
(b) Defined Benefit Plan - Gratuity:
The Company has a defined benefit gratuity plan. Every employee who has completed five years or
more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed
year of service. The scheme is funded with Life Insurance Corporation of India in the form of a
qualifying insurance policy. The fund is managed by Life Insurance Corporation of India. It is
responsible for the administration of the plan assets and for the definition of the investment strategy.
The company provides for the Liability for Gratuity to employees determined on the basis of
actuarial Valuation based on Projected Unit Credit method.
The following table summarizes the components of net benefit expense recognized in the Statement
of Profit and Loss and the amounts recognized in the Balance Sheet for the plan:
F. Characteristics of defined benefit plans and risks associated with them:
Valuation of defined benefit plan are performed on certain basic set of pre-determined assumptions and
other regulatory framework which may vary over time. Thus, the Company is exposed to various risks in
providing the above benefit plans which are as follows:
a. Actuarial Risk:
It is the risk that benefits will cost more than expected. This can arise due to one of the following
reasons:
i. Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation
will result into an increase in Obligation at a rate that is higher than expected.
ii. Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate
assumption than the Gratuity Benefits will be paid earlier than expected. Since there is no condition of
vesting on the death benefit, the acceleration of cashflow will lead to an actuarial loss or gain depending
on the relative values of the assumed salary growth and discount rate.
iii. Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate
assumption than the Gratuity Benefits will be paid earlier than expected. The impact of this will depend
on whether the benefits are vested as at the resignation date.
b. Investment Risk:
For funded plans that rely on insurers for managing the assets, the value of assets certified by the
insurer may not be the fair value of instruments backing the liability. In such cases, the present value of
the assets is independent of the future discount rate. This can result in wide fluctuations in the net
liability or the funded status if there are significant changes in the discount rate during the inter¬
valuation period.
c. Liquidity Risk:
Employees with high salaries and long durations or those higher in hierarchy, accumulate significant
level of benefits. If some of such employees resign/retire from the company there can be strain on the
cashflows.
d. Market Risk:
Market risk is a collective term for risks that are related to the changes and fluctuations of the financial
markets. One actuarial assumption that has a material effect is the discount rate. The discount rate
reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit
Obligation of the plan benefits & vice versa. This assumption depends on the yields on the
corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields
as at the valuation date.
e. Legislative Risk:
Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change
in the legislation/regulation. The government may amend the Payment of Gratuity Act thus requiring the
companies to pay higher benefits to the employees. This will directly affect the present value of the
Defined Benefit Obligation and the same will have to be recognized immediately in the year when any
such amendment is effective.
34 Segment Reporting
The Company's operations pre-dominantly relates to manufacturing and sale of gold & diamond
jewellery. The Company has considered this as the only one reporting segment in accordance with the
requirement of Ind AS 108 - Operating Segments.
The Board of Directors ("BOD") evaluates the Company's performance and allocates resources based on
an analysis of various performance indicators of this single operating segment. The BOD reviews revenue
and gross profit as the performance indicator for this single operating segment. Accordingly, it
constitutes as a single reportable operating segment.
Details of entity wide disclosures for this segment are given as below:
(i) Bifurecation of Revenue from external customers by each group:
Refer note 21 to the financial statements.
(ii) Bifurecation of Net sales to external customers by geographic area on the basis of location of
customers:
Notes:
The below fair value hierarchy explains the judgements and estimates made in determining the fair values of the financial instruments
that are (a) recognised and measured at fair value and (b) measured at amortised cost for which fair values are disclosed in the
financial statements. To provide the indication about the reliability of the inputs used in determining fair value, the Company has
classified its financial instruments in to three levels prescribed is as under:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilties
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liabilty, either directly (i.e. as
prices) or indirectly (i.e. derived from prices)
Level 3 - Inputs for the assets or liabilties that are not based on observable market data (unobservable inputs)
There were no transfers between the levels during the year
Valuation process
The finance department of the Company includes a team that performs the valuations of financial assets and liabilties required for
financial reporting purposes, including level 3 fair values. The fair valuation of level 1 and level 2 classified assets and liabilties are
readily available from the quoted pricies in the open market and rates available in secondary market respectively.
The carrying amount of trade receivable, trade payable, security deposits, cash and bank balances, statutory dues payable / receivable,
and current borrowings and other financial assets / liabilities are considered to be the same as their fair value due to their short-term
nature.
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