Notes to Accounts of Kanani Industries Ltd.

Mar 31, 2024

1.13. Provisions and Contingent liabilities and contingent assets

Provisions represent liabilities for which the amount or timing is uncertain. Provisions are recognized when the Company has a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognized in profit or loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefits is probable.

1.14 Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be measured reliably.

Sale of goods:

Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods have been transferred to the buyer either at the time of dispatch or delivery or when the risk of loss transfers. Export sales are generally recognized based on the shipped on board date as per bill of lading, which is when substantial risks and rewards of ownership are passed to the customers.

Revenue from sale of goods is net of taxes and recovery of charges collected from customers like transport, packing etc. are not treated as part of sales. Sales returns are recognised when appropriate. Revenue is measured at the fair value of consideration received or receivable and is net of price discounts, allowance for volume rebates and similar items.

Claims/Refunds not ascertainable with reasonable certainty are accounted for on final settlement and are recognized as revenue on certainty of receipt on prudent basis.

Rendering of services:

Revenue from sale of services are recognized when the services are rendered.

Other Income

Dividend income on investments is recognised when the right to receive the dividend is established.

Interest income is recognized on a time proportionate basis taking into account the amounts invested and the rate of interest on prudent basis.

1.15. EMPLOYEE BENEFITS

Short term employee benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.

(b) Defined contribution plans such as Provident fund & Superannuation fund

Post-employment benefits

Define contrubution Plans

A defined contribution plan is a post-employment benefit plan under which the Company shall pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund, Superannuation Fund and Pension Scheme. The Company''s

contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service., if applicable

Defined benefit Plans

The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is paid @ 15 days salary for every completed year of service as per the Payment of Gratuity Act, 1972.

The management is considering options to value future liability on account of gratuity by a qualified actuarial valuer. On such valuation, the liability shall be recognised in the books of the company. The management will then decide on contribution to be made to an appropriate authority to cover future gratuity liability that may arise.

Empolvee Separation Costs

Compensation to employees who opt for retirement under the voluntary retirement scheme, if any, of the Company is payable in the year of exercise of option by the employee. The Company recognises the employee separation cost when the scheme is announced and the Company is demonstrably committed to it.

1.16. Foreign exchange transactions and translation

The financial statements are presented in Indian rupee (INR), which is Company''s functional and presentation currency.

Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction dates. Realised gains and losses on settlement of foreign currency transactions are recognised in the Statement of Profit and Loss.

Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.

Monetary foreign currency assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognised in the Statement of Profit and Loss.

1.17. TAXES ON INCOME

Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income.

- Current Tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date.

- Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.

Where there is unabsorbed depreciation and carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future.

1.18. Government Grants

Government grants are recognised when there is reasonable assurance that the grant will be received and all attached conditions will be complied with.

Government grants related to revenue are recognised on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs which they are intended to compensate. Such grants are deducted in reporting the related expense. When the grant relates to an asset, it is recognized as income over the expected useful life of the asset.

In case a non-monetary asset is given free of cost, it is recognised at a fair value. When loans or similar assistance are provided by government or related institutions, with an interest rate below the current applicable market rate, the effect of this favourable interest is recognized as government grant. The loan or assistance is initially recognized and measured at fair value and the government grant is measured as the difference between the initial carrying value of the loan and the proceeds received.

1.19. Earning Per Share

The basic earning per share (EPS) is computed by dividing the net profit after tax available to equity share holdong for the year by the weighted average number of equity shares outstanding during the current year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti-dilutive.

22.5 CONTINGENT LIABILITY

(i) The assessee has preferred an appeal before the Commissioner of Income Tax (Appeals) against an order passed by Deputy Commissioner of Income Tax for the Assessment Years 2013-2014 & 2014-2015 raising a demand of Lakhs 68,100/- & Lakhs 2,090/- respectively.

22.6 In the opinion of the management and to the best of their knowledge, the current assets, loans & advances are approximately of the value stated, if realised in the ordinary course of business, unless otherwise stated.

22.7 The Company is trying to ascertain the enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Act.

22.8 The Company has not provided for its gratuity liability for the current year in absence of actuarial valuation. The management has initited efforts to appoint a certified actuarial valuer to estimate the future estimated liability on account of gratuity that may be payable by the Company.

22.10 The company has only one reportable segment i.e. Studded Jewellery, therefore no separate information is being given under Accounting Standard - AS 17 “Segment Reporting”.

22.11 The Company is trying to ascertain the enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Act.

22.12 Forward contracts entered into by the company and outstanding as on 31st March, 2024 : NIL Forward contracts entered into by the company and outstanding as on 31st March, 2023: NIL

22.14 Other Statutory Information

(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company do not have any transactions with companies struck off.

(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,

(iv) The Company has not been declared as a willful defaulter by any lender who has powers to declare a company as a willful defaulter at any time during the financial year or after

(v) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(vi) The Company have 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

(vii) The Company have 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 Company 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,

(viii) The Company have 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

(ix) The provision regarding CSR expenses under Sec 135 of the Companies Act, 2013 are not applicable to company.

22.15 Figures for the previous year have been regrouped/reclassified wherever necessary to conform to current period''s classification.

The financial instruments are categorized into two levels based on the inputs used to arrive at fair value measurements as described below:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities; and

Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the assets or liability, either directly or indirectly.

Liquidity Risk

Liquidity risk is the risk that suitable sources of funding for the company''s business activities may not be available. 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, so that the company is not forced to obtain funds at higher rates. The Company monitors rolling forecasts of the Company''s cash flow position and ensure that the Company is able to meet its financial obligation at all times including contingencies.

Credit Risk

Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay amounts due causing financial loss to the company. It arises from cash and cash equivalents, financial instruments and principally from credit exposures to customers relating to outstanding receivables. The Company deals with highly rated counter parties.

Foreign currency risk:

The company is exposed to foreign exchange risk arising through its sales and purchases denominated in foreign currencies. The risk management strategy on foreign currency exchange fluctuation arising on account of purchase/sale of diamond is covered in Note 17.Foreign currency sensitivity analysis:The Company is exposed to HKD currency. The Company''s sensitivity to a 1% increase and decrease in ‘Rs against the relevant foreign currency is presented below:The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 1% change in foreign currency rates. There is a increase in profit by '' 83 lakhs where '' strengthens by 1% against the relevant currencies.

In term of our report of even date For & on behalf of Board of Directors

For JMMK & Co.

(Earlier known as JMK & Co.) PREMJIBHAI KANANI MEHUL KUNDARIYA

Chartered Accountants Chairman Company Secretary

ICAI Form Registeration No. : 120459W

Jitendra Doshi HARSHIL KANANI DARSHAK PANDYA

Partner Managing Director Chief Finance Officer

Membership No. 0151274

UDIN No.: 24151274BKEXJS4676

Mumbai Mumbai

MAY 30, 2024 MAY 30, 2024

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Mar 31, 2018

(A) Terms/rights attached to equity shares :

The company has only one class of equity shares having a par value of Rs. 1/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

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.

1.1 CONTINGENT LIABILITY

(i) The assessee has preferred an appeal before the Commissioner of Income Tax (Appeals) against an order passed by Deputy Commissioner of Income Tax for the Assessment Years 2013-2014 & 2014-2015 raising a demand of Rs. 68,100/- & Rs. 2,090/- respectively.

1.2 In the opinion of the management and to the best of their knowledge, the current assets, loans & advances are approximately of the value stated, if realised in the ordinary course of business, unless otherwise stated.

1.3 The Company is trying to ascertain the enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Act.

1.4 The Company has not provided for its gratuity liability for the current year in absence of actuarial valuation. The management has initited efforts to appoint a certified actuarial valuer to estimate the future estimated liability on account of gratuity that may be payable by the Company.

1.5 RELATED PARTIES DISCLOSURES

a) Names of related parties and nature of relationship where control exists :

Wholly Owned Subsidiary Company KIL International Limited

Key Management Personnel Harshil P. Kanani Premji D. Kanani

Enterprises where key management personnel have control Kanani Polyfab Pvt. Ltd.

M/s. Star Diam

1.6 The company has only one reportable segment I.e. Studded Jewellery, therefore no separate information is being given under Accounting Standard - AS 17 “Segment Reporting”.

1.7 The Company is trying to ascertain the enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Act.

1.8 Forward contracts entered into by the company and outstanding as on 31st March, 2018 :

The financial instruments are categorized into two levels based on the inputs used to arrive at fair value measurements as described below:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities; and

Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the assets or liability, either directly or indirectly.

Liquidity Risk

Liquidity risk is the risk that suitable sources of funding for the company’s business activities may not be available. 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, so that the company is not forced to obtain funds at higher rates. The Company monitors rolling forecasts of the Company’s cash flow position and ensure that the Company is able to meet its financial obligation at all times including contingencies.

Credit Risk

Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay amounts due causing financial loss to the company. It arises from cash and cash equivalents, financial instruments and principally from credit exposures to customers relating to outstanding receivables. The Company deals with highly rated counter parties.

1.9 FIRST TIME IND AS ADOPTION

The Company has adopted Ind AS with effect from 1st April, 2017 with comparatives being restated. Accordingly the impact of transition has been provided in the Opening Reserves as at 1st April, 2016. The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule III.

Exemptions from retrospective application

Ind As 101allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemption

a. Property, Plant and Equipment

The Company has elected to measure all of its Property, plant and equipment and Intangible assets at their Historical cost less accumulated depreciation.

b. Estimates

The estimate as at April 1, 2016 and as at March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP.

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Mar 31, 2016

1. In the opinion of the management, Current Assets and Loans & Advances are approximately of the value stated if realized in the ordinary course of the business. The provision for all liabilities is, in the opinion of the management, adequate and not in excess of amount reasonably necessary.

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Mar 31, 2015

1. SHARE CAPITAL

(a) Issue of Bonus Shares :

During the year ended March 31,2010 , the company issued 59,96,000 fully paid up bonus shares of Rs. 10/- each by capitalisation of Securities premium account Rs.1,62,60,000/- and Profit and Loss Account Rs. 4,37,00,000/-. and issued 89,94,000 fully paid up bonus share of Re.1/- each by capitalisation of Profit and Loss Account Rs. 89,94,000/- in the year ended 31st March, 2013 .

(b) Terms/rights attached to equity shares :

The company has only one class of equity shares having a par value of Re.1/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject the approval of the shareholders in the ensuing Annual General Meeting.

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.

2. In the opinion of the management, Current Assets and Loans & Advances are approximately of the value stated if realised in the ordinary course of the business. The provision for all liabilities is, in the opinion of the management, adequate and not in excess of amount reasonably necessary.

3. Disclosures as required by Accounting Standard AS-18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows :

a) Names of related parties and nature of relationship where control exists :

Subsidiary Company

KIL International Limited

Key Management Personnel

Harshil P. Kanani

Premji D. Kanani

Enterprises where key management personnel have control

Kanani Polyfab Pvt. Ltd.

M/s. Star Diam

4. The company has only one reportable segment i.e. Studded Jewellery, therefore no separate information is being given under Accounting Standard - AS 17 "Segment Reporting".

2015 2014 Rs. Rs. 5. Contingent Liability

Bank Guarantee 150,000,000 -

6. The Company is trying to ascertain the enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Act.

7. The company has also reclassified the previous year figures in accordance with requirement for the current period.

8. Figures have been rounded off to the nearest of a rupee.

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Mar 31, 2014

(A) Issue of Bonus Shares :

During the year ended March 31, 2009, the company had issued 14,99,000 fully paid bonus shares of Rs.10/- each to the equity shareholders by capitalisation of Securities Premium Account and during the year ending March 31, 2010 , the company issued 59,96,000 fully paid up bonus shares of Rs. 10/- each by capitalisation of Securities premium account Rs. 1,62,60,000/- and Profit and Loss AccountRs. 4,37,00,000/-. and issued 89,94,000 fully paid up bonus share of Rs. 1/- each by capitalisation of Profit and Loss Account Rs. 89,94,000/- in the year ended 31st March, 2013 .

(B) Terms/rights attached to equity shares :

The company has only one class of equity shares having a par value of Rs. 1/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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.

2. In the opinion of the management, Current Assets and Loans & Advances are approximately of the value stated if realised in the ordinary course of the business. The provision for all liabilities is, in the opinion of the management, adequate and not in excess of amount reasonably necessary.

3. The Company is trying to ascertain the enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Act.

4. The company has also reclassified the previous year figures in accordance with requirement for the current period.

5. Figures have been rounded off to the nearest of a rupee.

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Mar 31, 2013

1. In the opinion of the management, Current Assets and Loans & Advances are approximately of the value stated if realised in the ordinary course of the business. The provision for all liabilities is, in the opinion of the management, adequate and not in excess of amount reasonably necessary.

2. Disclosures as required by Accounting Standard AS-18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows :

a) Names of related parties and nature of relationship where control exists :

Subsidiary Company KIL International Limited

Key Management Personnel Harshil P. Kanani Premji D. Kanani

Enterprises where key management personnel have control Kanani Polyfab Pvt. Ltd. M/s. Star Diam

3. The company has only one reportable segment i.e. Studded Jewellery, therefore no separate information is being given under Accounting Standard - AS 17 "Segment Reporting".

4. Contingent Liability

(i) The assessee has preferred an appeal before the Comissioner of Income Tax against an order passed by Income Tax Officer , raising demand of Rs.1,64,47,430/- on the company for the Assessment Year 2010-2011.

5. The Company is trying to ascertain the enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Act.

6. Derivative contracts entered into by the company and outstanding as on 31st March, 2013 : NIL

7. The company has also reclassified the previous year figures in accordance with requirement for the current period.

8. Figures have been rounded off to the nearest of a rupee.

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Mar 31, 2012

1. In the opinion of the management, Current Assets and Loans & Advances are approximately of the value stated if realised in the ordinary course of the business. The provision for all liabilities is, in the opinion of the management, adequate and not in excess of amount reasonably necessary.

2. Disclosures as required by Accounting Standard AS-18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows :

a) Names of related parties and nature of relationship where control exists : Subsidiary Company KIL International Limited

Key Management Personnel Harshil P. Kanani Premji D. Kanani

Enterprises where key management personnel have control M/s. Star Diam

3. The company has only one reportable segment I.e. Studded Jewellery, therefore no separate information is being given under Accounting Standard -AS 17 "Segment Reporting".

4. The Company is trying to ascertain the enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Act.

5. During the year ended 31 st March, 2012, the company has prepared the financial statements as per the format prescribed by the Revised Schedule VI to the Companies Act, 1956 issued by Ministry of Corporate Affairs. The company has also reclassified the previous year figures in accordance with requirement for the current period.

6. Figures have been rounded off to the nearest of a rupee.

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Mar 31, 2011

1. In the opinion of the management, Current Assets and Loans & Advances are approximately of the value stated if realised in the ordinary course of the business. The provision for all the liabilities is, in the opinion of the management, adequate and not in excess of the amount reasonably necessary.

2. Disclosures as required by Accounting Standard AS-18 "Related Parties Disclosure" issued by The Institute of Chartered Accountants of India are as follows :

a) Names of related parties and nature of relationship where control exists : Key Management Personnel

Harshil P. Kanani Premji D. Kanani

Enterprises where key management personnel have control

M/s. Star Diam

3. The company has only one reportable segment i.e. Studded Jewellery, therefore no separate information is being given under Accounting Standard - AS 17 "Segment Reporting".

4. The Company is trying to ascertain the enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Act.

5. Additional information pursuant to Part IV of Schedule VI to the Companies Act, 1956

6. The figures of the previous year have been regrouped/reclassified/recasted to conform to the current year's classification.

7. Figures have been rounded off to the nearest of a rupee.

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Mar 31, 2010

1. In the opinion of the management, Current Assets and Loans & Advances are approximately of the value stated if realised in the ordinary course of the business. The provision for all the liabilities is, in the opinion of the management, adequate and not in excess of the amount reasonably necessary.

2.Disclosures as required by Accounting Standard AS-18 "Related Parties Disclosure"issued by The Institute of Chartered Accountants of India are as follows :

a)Names of related parties and nature of relationship where control exists :

Key Management Personnel

Harshil P.Kanani *

Premji D.Kanani

Enterprises where key management personnel have

control and where transactions have taken place

Star Diam,Kanani Textiles Pvt Ltd,Kanani Infracon Pvt Ltd

3.The company has only one reportable segment I.e.Studded Jewellery, therefore no separate information is being given under Accounting Standard -AS 17 "Segment Reporting".

4.Additional information pursuant to Part IV of Schedule VI to the Companies Act,1956

5.The figures of the previous year have been regrouped/ reclassified/recasted to conform to the current years classification.

6.Figures have been rounded off to the nearest of a rupee.