Provisions, contingent assets and contingent liabilities

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be
reliably estimated. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle
the present obligation at the end of the reporting period. The discount rate used to determine the present value is a
pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
The increase in the provision due to the passage of time is recognised as interest expense.

Contingent liability is disclosed for:

• Possible obligations which will be confirmed only by future events not wholly within the control of the Company
or

• 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 not recognized. However, when inflow of economic benefit is probable, related asset is
disclosed.

r) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders
(after deducting 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 is adjusted for events including a
bonus issue.

For the purpose of calculating diluted earnings per share, the net profit or 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.

s) Significant management judgment in applying accounting policies and estimation uncertainty

The preparation of the Company’s financial statements requires management to make judgments, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the related
disclosures.

Significant management judgments and estimates

The following are significant management judgments and estimates in applying the accounting policies of the
Company that have the most significant effect on the financial statements.

Recognition of deferred tax assets - The extent to which deferred tax assets can be recognised is based on an
assessment of the probability of the future taxable income against which the deferred tax assets can be utilised.

Evaluation of indicators for impairment of assets - The evaluation of applicability of indicators of impairment of
assets requires assessment of several external and internal factors which could result in deterioration of recoverable
amount of the assets.

Recoverability of advances/receivables - At each balance sheet date, based on historical default rates observed
over expected life, the management assesses the expected credit loss on outstanding receivables and advances.

Defined benefit obligation (DBO) - Management’s estimate of the DBO is based on a number of critical underlying
assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of
future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual
defined benefit expenses.

Fair value measurements - Management applies valuation techniques to determine the fair value of financial
instruments (where active market quotes are not available). This involves developing estimates and assumptions
consistent with how market participants would price the instrument. Management uses the best information available.
Estimated fair values may vary from the actual prices that would be achieved in an arm’s length transaction at the
reporting date

Useful lives of depreciable/amortizable assets - Management reviews its estimate of the useful lives of depreciable/
amortizable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these
estimates relate to technical and economic obsolescence.

t) Revenue recognition

The Company derives revenues primarily from sale of manufactured goods, traded goods and related services.

The core principle of Ind AS 115 is that an entity should recognise revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be
entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue
recognition:

Revenue is recognized on satisfaction of performance obligation upon transfer of control of products to customers
in an amount that reflects the consideration the Company expects to receive in exchange for those products.

Step 1: Identify the contract(s) with a customer

Step 2: Identify the performance obligation in contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

The Company evaluates the arrangement with customers, considering underlying substance and terms and
conditions of the arrangements. Revenue is accounted either on gross or net basis based on the expected discounts
to be offered to customers.

Interest Income

Interest income is recognised on an accrual basis using the effective interest method.

Dividend

Dividends are recognised at the time the right to receive the payment is established.

u) Accounting policy for Lease :

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.

The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term
at the lease commencement date. The cost of the rightof- use asset measured at inception shall comprise of the
amount of the initial measurement 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 be incurred by the lessee in
dismantling and removing the underlying asset or restoring the underlying asset which it is located. The right-of-
use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses,
if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the
straight-line method from the commencement date over the shorter of lease term or useful life of rightof- use asset.
The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant
and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying
amounts may not be recoverable. Impairment loss, if any, is recognised in the Statement of Profit and Loss.

Leases where the lessor effectively retains substantially all the rights and benefits of ownership of the leased assets
are classified as operating leases. At the date of commencement of lease the Company recognizes a right-of-use
asset (ROU) and a corresponding lease liability for all lease arrangements in which it is a lease except for leases
with a term of twelve months or less and low value leases. For these short term and low value leases the Company
recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

The right to use assets are initially recognized at cost which comprises initial amount of the lease liability adjusted for
any lease payment made at or prior to the date of the commencement date of the lease plus any initial direct costs
less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment
losses.

Right-to- use assets are depreciated from the commencement date on straight line basis over lesser of the lease
period or the useful life of the asset.

Lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit in the lease or, if not readily determinable using the
incremental borrowing rate for the Company.

The Company measures the lease liability at the present value of the lease payments that are not paid at the
commencement date of the lease. The lease payments are discounted using the interest rate implicit in the leases
if that rate can be readily determined.

Company as a lessor:

Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of
an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the
lease terms. 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.

v) Operating Segment

The managing committee is considered to be the ‘Chief Operating Decision Maker’ (CODM) as defined in IND AS
108. The Operating Segment is the level at which discrete financial information is available. The CODM allocates
resources and assess performance at this level. The Company has identified the below operating segments:

a) Jewellery Manufacturing Activity.

b) Investment Activity.