q) Provisions, contingent assets and contingent liabilities
Provisions are recognised 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:
• 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 recognised. 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 except for anti-dilutive potential equity shares.
s) Significant management judgement in applying accounting policies and estimation uncertainty
The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of income, expenses, assets and liabilities, and the related disclosures.
Significant management judgements and estimates
The following are significant management judgements 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) Capital Work-in-Progress
Capital work-in-progress represents expenditure incurred in respect of capital projects and are carried at cost. Cost comprises purchase cost, related acquisition expenses, development / construction costs, borrowing costs and other direct expenditure.
u) Investment property
Properties held to earn rentals or / and for capital appreciation or both but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes, are categorized as investment properties. These are measured initially at cost of acquisition, including transaction costs and other direct costs attributable to bringing asset to its working condition for intended use. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. The cost shall also include borrowing cost if the recognition criteria are met. Said assets are depreciated on straight line basis based on expected life span of assets which is in accordance with Schedule II of the Act.
Derecognition:
An investment property is derecognised on disposal or on permanent withdrawal from the use or when no future economic benefits are expected from its disposal. Any gain or loss arising on derecognition of the assets(calculated as the difference between the net disposal proceeds and the carrying amount of the assets) is included in the Standalone Statement of Profitand Loss when the asset is derecognised.
Fair value of investments properties under each category are disclosed under to the standalone financial statements. Fairvalues are determined based on the evaluation performed by an accredited external independent valuer applying a recognized and accepted valuation model or estimation based on available sources of information from market.
Transfers to or from the investment property is made only when there is a change in use and the same is made at the carrying amount of investment property.
31. Contingent Liabilities and Commitments
(i) Contingent Liabilities
a) Other money for which the company is contingently liable.
The company have deposited a sum of Rs. 5.60- Lakh with Bombay High Court towards the recovery suit pending against the company. The Company have provided a sum of Rs. 2.75 Lakh in the account & balance amount of Rs. 2.85 Lakh is kept as deposit with Honourable High Court. This is pending since year 1993.
32. Lease Transactions Company as a lessee
The Company has not entered into any leasing agreement where the company is identified as a lessee.
Company as a Lessor
The Company has leased out building under non-cancellable operating leases. These leases have terms of between 1-5 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The total lease rentals recognised as income during the year is ' 133.01 Lakh. (Year ended 31st March 2023: ' 124.51 Lakh).
The following table sets out a maturity analysis of lease payments, showing the undiscounted Lease payments to be received after the reporting date.
34. Segment Information
The Chief Operating Decision Maker (CODM) of the company examines the performance from the perspective of the company as a whole viz “Jewellery Business” and hence there are no separate reportable segments as per Ind AS 108. There are no material individual markets outside India and hence the same is not disclosed for geographical segments for the segment revenues or results or assets. During the year ended March 31 * 2024 and 31st March, 2023 respectively, revenue from transactions with a single external customer did not amount to 10 percent or more of the company's revenue from the external customers.
a) The carrying value of trade receivables, securities deposits, insurance claim receivable, loans given, cash and bank balances and other financial assets recorded at amortised cost, is considered to be a reasonable approximation of fair value.
b) The carrying value of borrowings, trade payables and other financial liabilities recorded at amortised cost is considered to be a reasonable approximation of fair value.
38. Financial Risk Management i) risk management
The Company's activities expose it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements:
The Company's risk management is carried out by a central treasury department of the Company under policies approved by the Board of Directors. The Board of Directors provide written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, market risk, credit risk and investment of excess liquidity.
A) Credit Risk
Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay amounts due to the Company causing financial loss. It arises from cash and cash equivalents, deposits with banks and financial institutions, security deposits, loans given and principally from credit exposures to customers relating to outstanding receivables. The Company's maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at reporting date.
The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/or reports on customers and other counterparties are obtained and used. The Company's policy is to deal only with creditworthy counterparties.
In respect of trade and other receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any company of counterparties having similar characteristics. Trade receivables consist of a large number of customers in
various geographical areas. The Company has very limited history of customer default, and considers the credit quality of trade receivables that are not past due or impaired to be good.
The credit risk for cash and cash equivalents, mutual funds, bank deposits, loans and derivative financial instruments is considered negligible, since the counterparties are reputable organisations with high quality external credit ratings.
Company provides for expected credit losses on financial assets by assessing individual financial instruments for expectation of any credit losses. Since the assets have very low credit risk, and are for varied natures and purpose, there is no trend that the company can draws to apply consistently to entire population. For such financial assets, the Company's policy is to provides for 12 month expected credit losses upon initial recognition and provides for lifetime expected credit losses upon significant increase in credit risk. The Company does not have any expected loss based impairment recognised on such assets considering their low credit risk nature, though incurred loss provisions are disclosed under each sub-category of such financial assets.
B) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.
Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company's liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
C) Market risk - foreign exchange
The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to US Dollar. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company's functional currency. The Company, as per its overall strategy, uses forward contracts to mitigate its risks associated with fluctuations in foreign currency, and such contracts are not designated as hedges under Ind AS 109. The Company does not use forward contracts and swaps for speculative purposes.
D) Interest rate risk i) Liabilities
The Company's policy is to minimise interest rate cash flow risk exposures on long-term financing. At 31st March 2024, the Company is exposed to changes in market interest rates through bank borrowings at variable interest rates.
Interest rate risk exposure
Below is the overall exposure of the Company to interest rate risk:
Sensitivity
As at March 31,2024 and March 31,2023, financial liabilities of Rs. 1,114 Lakh and Rs. 1,115.27 Lakh respectively, were subject to variable interest rates. Increase/ decrease of 50 basis points in interest rates at the balance sheet date would result in decrease/increase in profit/(loss) before tax of Rs. 6 Lakh - and Rs. 6 Lakh for the year ended March 31,2024 and March 31,2023 respectively.
ii) Assets
The Company's financial assets are carried at amortised cost and are at fixed rate only. They are, therefore, not subject to interest rate risk since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
E) Price risk Sensitivity
The sensitivity to profit or loss in case of an increase in price of the instrument by 5% keeping all other variables constant would have resulted in an impact on profits by Rs. 135.47 Lakh (previous year Rs. 139.04 Lakh).
Exposure from trade payables:
The Company's exposure to price risk also arises from trade payables of the Company that are at unfixed prices, and, therefore, payment is sensitive to changes in gold prices. The option to fix gold prices are classified in the balance sheet as fair value through profit or loss. The option to fix gold prices are at unfixed prices to hedge against potential losses in value of inventory of gold held by the Company.
The Company applies fair value hedge for the gold purchased whose price is to be fixed in future. Therefore, there will no impact of the fluctuation in the price of the gold on the Company's profit for the period.
39. Capital Management
The Company' s capital management objectives are:
- to ensure the Company's ability to continue as a going concern
- to provide an adequate return to shareholders
The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.
The Management assesses the Company's capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company's various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in the economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
40. While verifying the physical stock on 5th July, 2019 the management realized shortage of Gold as compared to stock as per books. The management suspected an old employee of the Company who misappropriated certain quantity of stock. An old employee also confessed before management his misappropriation of Gold. The management lodged police complaint against old employee. The Police Department is inquiring and trying to recover as much as possible from said employee.
The loss arising on account of this misappropriation is at 900 gms of gold value about Rs. 30.00 Lakhs has been charged to profit and loss account during the year 2019-20.
41. Corporate Social Responsibility
Section 135 of The companies Act 2013 is not applicable to the company for current financial year and previous financial year.
42 Other statutory information
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for any Benami property.
(ii) The title deeds of immovable properties are held in the name of the Company.
(iii) The Company does not have any transaction with companies struck off.
(iv) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
(v) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(vi) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(vii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(viii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(ix) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961
(x) The company does not have any undisclosed income in the tax assessments under Income tax Act, 1961.
(xi) The company has not entered into any Scheme of Arrangement under section 230 to 237 of the Companies Act, 2013.
43 Disclosure with respect to ratio, refer Annexure “A”
44 The figures of previous year have been regrouped/rearranged wherever considered necessary. The Company has dislcosed all the additional requirements as per Revised Schedule III to the extent applicable.
This is the balance sheet referred to in our report of even date
ForJ. D. Zatakia & Co. For and on behalf of Board of Directors
Chartered accountants FRN: 111777W
Ajay R. Gehani Arundhati R. Mali
(J.D. Zatakia - Proprietor) Managing Director Director & Chief Financial Officer
Membership No. 017669 DIN-00062989 DIN-08353618
Place : Mumbai Akshay Jain
Date : May 30, 2024 Company Secretary
UDIN : 24017669BKCRSH5202 Membership No. A53737
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