Notes to Accounts of Sovereign Diamonds Ltd.

Mar 31, 2025

17. Provisions, contingent assets and contingent liabilities

Provisions are recognised only when there is a present obligation (legal or constructive),
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.

18. 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.

19. 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.

Expected Credit Loss (ECL) - The probability-weighted estimate of credit losses over
the expected life of a financial asset, reflecting the present value of all cash shortfalls
the management expects to incur.

20. Operating Segment

An operating segment is a component of the Company:

i. That engages in business activities from which it may earn revenues and incur
expenses,

ii. Whose operating results are regularly reviewed by the Chief Operating Decision
Maker (CODM) to make decisions about resources to be allocated and assess
performance, and

iii. For which discrete financial information is available.

Identification of segments:

Operating segments are identified based on the internal reports reviewed by the CODM
for making strategic decisions. The CODM is the function responsible for allocating
resources and assessing the performance of operating segments.

Measurement of segment results:

The Company measures segment performance based on profit or loss before tax and
interest, consistent with internal financial reporting to the CODM.

Inter-segment transactions:

Transactions between operating segments are conducted on an arm''s length basis and
are eliminated on consolidation.

Reportable segments:

Segments meeting quantitative thresholds prescribed under IND AS 108, individually or
in aggregate, are reported separately. If the total external revenue reported by operating
segments constitutes less than 75% of the Company''s revenue, additional segments
are identified as reportable until at least 75% of external revenue is included.

21. Recent accounting developments

The Ministry of Corporate Affairs vide notification dated 9 September 2024 and 28
September 2024 notified the Companies (Indian Accounting Standards) Second
Amendment Rules, 2024 and Companies (Indian Accounting Standards) Third
Amendment Rules, 2024, respectively, which amended/ notified certain accounting
standards as mentioned below, and are effective for annual reporting periods beginning
on or after 1 April 2024:

i. Lease Liability in Sale and Leaseback - Amendments to Ind AS 116; and

ii. Insurance contracts - Ind AS 117

These amendments did not have any material impact on the amounts recognised in
prior periods and are not expected to significantly affect the current or future periods.

Notes to Standalone Financial Statements for the year ended 31st March, 2025
Estimation of Fair Value

Fair Value of freehold land and building as on 31st March, 2025 and as on 31st March, 2024
is based on fair value determined in 2018.The fair values of the property were performed
by Registered Valuer as defined under rule 2 of the Companies (Registered Valuers and
Valuation) Rules 2017. While in 2018, the valuation was based on the fair value of entire
property as no part of the building was given on lease. For year ended 31st March,2025 and
31st March, 2024 part of the building has been given on lease. Accordingly, the leased portion
has been classified as Investment Property as per Ind AS 40 - Investment Property. The
remaining portion, which is used by the Company for administrative purposes, continues to
be classified under Property, Plant and Equipment.A valuation model used in determination of
investment property fair values is in accordance with the recommended valuation techniques
by the International Valuation Standard Committee.The valuation was done based on market
feedback on values of similar properties and hence considered under “Level 2” of fair value
measurement.Although the last formal valuation was conducted in 2018, management has
assessed that there has been no material change in market conditions affecting the fair value
of the property since then.

The Company is in the process of obtaining an updated valuation from a registered valuer
in the subsequent financial year to ensure continued compliance with Ind AS 40- Investment
Property and Ind AS 113- Fair Value Measurement.

Capital Commitments

The Company has not entered into any contracts for acquisition or construction of Property,
Plant and Equipment, Capital Work-in-Progress, or Investment Property as at 31st March,
2025. Accordingly, no capital commitments are outstanding as at the reporting date.

(ii) Rights, preferences and restrictions attached to equity shares

The Company has only one class of shares referred to as equity shares having a face
value of '' 10 per share. Each shareholder is eligible for one vote per share.

The Company declares and pays dividends in Indian Rupees. The final dividend
proposed by the Board of Directors is subject to the approval of the shareholders in the
ensuing Annual General Meeting. However no such dividend has been declared during
the year.In the event of liquidation of the company, the equity shareholders are eligible
to receive the remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.

Defined Benefit Plan :

The Company makes partly annual contribution to the Employees'' Group Gratuity-cum-Life
Assurance Scheme of the Life Insurance Corporation of India, a funded benefit plan for
qualifying employees. The scheme provides for lump sum payment to vested employees at
retirement, death while in employment or on termination of employment whichever is earlier
of an amount equivalent to 15 days service for each completed year of service or part thereof
depending on the date of joining. The benefit vests after five years of continuous service.The
liability in respect of gratuity benefits being defined benefit schemes, payable in future, are
determined by actuarial valuation as on balance sheet date.

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 Lakhs with Bombay High Court
towards the recovery suit pending against the company. The Company have
provided a sum of Rs. 2.75 Lakhs in the account & balance amount of Rs. 2.85
Lakhs 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.

Notes:

1. The Company has not identified any lease income relating to variable lease
payments that depend on an index or a rate.

2. The Company have not entered into any buy-back agreement or have received
residual value guarantee or variable lease payments for use in excess of specified
limits.

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 31st March,2025 and 31st
March,2024 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.

35 Related Party Disclosures :

As per Ind AS-24 Related Party Disclosures, the related parties of the Company are as
follows:

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, 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

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. For the year ended 31st March,2024, 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.

An impairment analysis is carried out on 31st March 2025, based on the conditions
existing on that date, to identify any expected losses due to the time value of money and
credit risk. The company reviews customer payment history and adjusts the estimates
to account for any possible delays or risk of non-payment.To do this, receivables are
grouped based on their type. Each group is then assessed for potential loss using
the Expected Credit Loss (ECL) model as per Ind AS 109 - Financial Instruments.
The calculation uses a provision matrix that is based on actual past data, adjusted for
future expectations. Even though defaults are uncommon, the provision matrix helps to
identify risks early, even if past losses are low.

The credit risk for cash and cash equivalents, loans and other financial assets is
considered negligible, since the counterparties are reputable organisations with high
quality external credit ratings.

i) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the
obligations associated with its financial liabilities that are proposed to be settled by
delivering cash or other financial asset. 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
Financing arrangements

The Company had access to the following borrowing facilities at the end of the reporting
period:

of risk: interest rate risk, currency risk and other price risk, such as equity price risk.
Financial instruments affected by market risk include foreign currency receivables and
payables, borrowings and trade payables.
i) Market risk - foreign currency

The Company is exposed to foreign exchange risk arising from foreign currency
transactions, primarily with respect to US Dollar or Euro. 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.

Foreign currency sensitivity

As at 31st March 2025 and 31st March 2024, the Company did not have any outstanding
foreign currency denominated monetary assets or liabilities. Accordingly, the Company
has no material foreign currency risk exposure at the reporting date, and a foreign
currency sensitivity analysis has not been presented.

ii) Market risk - Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates. The Company seeks to
mitigate such risk by maintaining an adequate proportion of floating and fixed interest
rate borrowings.

i) Liabilities

The Company''s policy is to minimise interest rate cash flow risk exposures on
long-term financing. At 31st March 2025, 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 31st March, 2025 and 31st March, 2024, financial liabilities of Rs. 886.02
Lakhs and Rs.1113.79 Lakhs 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.4.43 Lakhs and
Rs.5.57 Lakhs for the year ended March 31,2025 and March 31,2024 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.

iii) Market risk -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.99.86 Lakhs (previous year Rs.135.47 Lakhs).

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 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) During financial year 2024-25 and financial year 2023-24, the Company did not
have any transactions with the companies struck off under section 248 of the
Companies Act, 2013 or section 560 of Companies Act, 1956.

(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 any other lender.

(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 has not entered into any Scheme of Arrangement under section 230
to 237 of the Companies Act, 2013.

(xi) The Company is not the holding Company. Hence disclosure requirements
pertaining to number of layers prescribed under clause (87) of section 2 of the
Act read with Companies (Restriction on number of Layers) Rules, 2017 are not
applicable.

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.

45 Note 1 to 44 forms an integral part of Balance Sheet and Statement of Profit &
Loss Account.

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 27, 2025 Company Secretary

UDIN : 25017669BMJABH7202 Membership No. A53737

---

Mar 31, 2024

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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Mar 31, 2015

NOTE : 1 The Company have obtained interest free loans from a director.

NOTE : 2 The company have deposited a sum of Rs. 5.60 Lacs with Bombay High Court towards the recovery suit pending against the company. The Company have provided a sum of Rs. 2.75 Lacs in the account & balance amount of Rs. 2.85 Lacs is kept as deposit with Honourable High Court. This is pending since year 1993.

NOTE : 3 DISCLOSURE SPECIFIED BY THE MSMED ACT

The Company has not received any intimation from Suppliers regarding their status under Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure,if any, relating to amounts unpaid as at year end together with interest paid /payable as required under the said Act have not been given.

NOTE : 4 The figures of previous year have been regrouped/rearranged wherever considered necessary.

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Mar 31, 2014

RELATED PARTY DISCLOSURES

As per Accounting Standard 18, the disclosures of transactions with the related parties are given below :

i) List of related parties where control exists and related parties with whom transactions have taken place and relationships :

Sr. Name of the Related Party Relationship No.

1 Universal Jewellery Ltd.

2 Sovereign Jewellery Ltd. Associates

3 Ras Family Trust

4 R. B. Hotchand Hiranand Foundation

5 Mr. Ramesh H. Gehani Executive Chairman

6 Mr. Ajay R. Gehani Managing Director Key Managerial Personnel and

7 Mr. Sanjay R. Gehani Relative their relatives

8 Mrs. Rani R. Gehani Relative

NOTE : 2 The Company have obtained interest free loans from a directors.

NOTE : 3 The company have deposited a sum of Rs. 5.60 Lacs with Bombay High Court towards the recovery suit pending against the company. The Company have provided a sum of Rs. 2.75 Lacs in the account & balance amount of Rs. 2.85 Lacs is kept as deposit with Honourable High Court. This is pending since year 1993.

NOTE : 4 DISCLOSURE SPECIFIED BY THE MSMED ACT

The Company has not received any intimation from Suppliers regarding their status under Micro, Small and Medium Enterprise Development Act,2006 and hence disclosure, if any, relating to amounts unpaid as at year end together with interest paid /payable as required under the said Act have not been given. NOTE : 28 The fgures of previous year have been regrouped/rearranged wherever considered necessary.

NOTE : 5 Notes 1 to 28 form an integral part of the Financial Statement.

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Mar 31, 2013

NOTE : 1 The Company have obtained interest free loans from associates directors and their relatives.

NOTE : 2 The company have deposited a sum of Rs. 5,59,591.66 with Bombay High Court in 1993 towards the recovery suit pending against the company. The Company have provided a sum of Rs. 2,75,000/- in the account and balance amount of Rs. 2,84,591.66 is kept as deposit with Honourable High Court.

NOTE : 3 DISCLOSURE SPECIFIED BY THE MSMED ACT

The Company has not received any intimation from Suppliers regarding their status under Micro, Small and Medium Enterprise Development Act,2006 and hence disclosure ,if any, relating to amounts unpaid as at year end together with interest paid /payable as required under the said Act have not been given.

NOTE : 4 The figures of previous year have been regrouped/rearranged wherever considered necessary.

NOTE : 5 Notes 1 to 28 form an integral part of the Financial Statement.

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Mar 31, 2012

A) Nature of securities

i) Term Loans obtained from Corporation bank is secured against specific machineries.

ii) Corporate Loans obtained from Corporation bank is secured against Export bills, inventories, book debts, current assets, equitable mortgage of factory land and building situated at Adhere (E) Mumbai. And personal guarantee of directors.

iii) Vehicle loans acquired from bank/financial Services are secured against hypothecation of Vehicles.

Inventories are as taken, valued and certified by the Management. Value of Indigenous and Imported Raw materials Consumed during the year The Company have obtained interest free loans from associates, directors and their relatives.

The company have deposited a sum of Rs. 5.60/-Lacs with Bombay High Court towards the recovery suit pending against the company. The Company have provided a sum of Rs. 2.75/- Lacs in the account and balance amount of Rs. 2.85 Lacs is kept as deposit with Honorable High Court.

DISCLOSURE SPECIFIED BY THE MSMED ACT

The Company has not received any intimation from Suppliers regarding their status under Micro, Small and Medium Enterprise Development Act,2006 and hence disclosure ,if any, relating to amounts unpaid as at year end together with interest paid /payable as required under the said Act have not been given.

Notes 1 to 27 form an integral part of the Financial Statement.

*To be filled by Shareholders holding shares in dematerialized form **To be filled by shareholder holding shares in physical form.

I, hereby record my attendance at the Thirty- Eighth Annual General Meeting to be held on Tuesday, 18th September, 2012 at 10.30 a.m. at Embassy Rooms, 6th Floor, Hotel Tunga Paradise, Central Road, MIDC, Andheri (East), Mumbai: 400 093.

*To be filled by Shareholders holding shares in dematerialized form **To be filled by shareholder holding shares in physical form.

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Mar 31, 2011

1. Segment Reporting :

a) Business Segment :

The Company's main business is manufacturing of Jewellery. All other activities of the company revolve around this main business. There are no separate segments within the company as defined by AS 17 (Segment Reporting) issued by The Institute of Chartered Accountants of India.

b) Geographical Segment :

The geographical segments considered for disclosures are :

(i) Sales within India made to Customers located within India Rs.17,56,68,600/-.

(ii) Sales outside India represents sales made to customers located outside India Rs. 1,97,41,817/-.

The entire activity pertaining to sales outside India is carried out from India.

2. Disclosure in respect of Related Parties pursuant to Accounting Standard 18 :

(a) Associate :

Hotchand Hiranand

Universal Jewellery Ltd.

Sovereign Jewellery Ltd.

Bombay Textiles

Ras Family Trust

R. B. Hotchand Hiranand Foundation

(b) Key Management Personnel and their Relatives :

Mr. Ramesh H. Gehani - Executive Chairman

Mr. Ajay R. Gehani - Managing Director

Mr. Sanjay R. Gehani - Relative

Mrs. Rani R. Gehani - Relative

Mr. Rajender R. Gehani - Relative

3. Impairment of assets :

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairement loss is charged to the profit and loss account in the year in which an asset is identified as impaired.

4. The Company is in the process of working and obtaining gratuity liability certificate from LIC as required under AS 15. On determining the said liability, provision shall be made in the account of following year by adjustment from General Reserve or charge to Profit & Loss Account.

5. The Company have obtained interest free loans from directors and their relatives. Interest of Rs.3,00,826/-(Rs.3,10,590/-) are not provided on the said loans.

6. Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force on 2nd October, 2006, certain disclosures are required to be made relating to dues payable to Micro, Small and Medium Enterprises. The Company is in the process of compiling relevant information from the suppliers regarding their coverage under the said Act. Since the relevant information is not readily available, no disclosure have been made in the Accounts.

7 The Company has not made provision for doubtful debts of Rs. 29.55 lakhs recoverable from foreign customer, as the directors are hopeful to recover the amount in current year.

8 The company have deposited a sum of Rs. 5,59,591.66 with Bombay High Court towards the recovery suit pending against the company. The Company have provided a sum of Rs. 2,75,000/- in the account and balance amount of Rs. 2,84,591.66 is kept as deposit with Honourable High Court.

9 The figures of previous year have been regrouped/rearranged wherever considered necessary.

10 Figure shown in brackets are of previous year.

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Mar 31, 2010

1. Segment Reporting :

a) Business Segment :

The Companys main business is manufacturing of Jewellery. All other activities of the company revolve around this main business. There are no separate segments within the company as defined by AS 17 (Segment Reporting) issued by The Institute of Chartered Accountants of India.

b) Geographical Segment :

The geographical segments considered for disclosures are : (i) Sales within India made to Customers located within India Rs. 10,24,25,460/-. (ii) Sales outside India represents sales made to customers located outside India Rs. 2,41,62,301/-. The entire activity pertaining to sales outside India is carried out from India.

2. Disclosure in respect of Related Parties pursuant to Accounting Standard 18 :

(a) Associate Hotchand Hiranand

Universal Jewellery Ltd.

Sovereign Jewellery Ltd.

Bombay Textiles

Ras Family Trust

R. B. Hotchand Hiranand Foundation

(b) Key Management Personnel and their Relatives Mr. Ramesh H. Gehani - Managing Director

Mr. Ajay R. Gehani - Wholetime Director Mr. Sanjay R. Gehani - Wholetime Director Mrs. Rani R. Gehani - Relative Mr. Rajender R. Gehani - Relative



(c) During the year, the following transactions were carried out with the related parties in the ordinary course of the business.

3. Accounting for Taxes on Income

The significant component and classification of deferred tax assets and liabilities on account of timing differences are :

4. Impairment of assets :

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairement loss is charged to the profit and loss account in the year in which an asset is identified as impaired.

5. The Company is in the process of working and obtaining gratuity liability certificate from LIC as required under AS 15. On determining the said liability, provision shall be made in the account of following year by adjustment from General Reserve or charge to Profit & Loss Account.

6. The Company have obtained interest free loans from directors and their relatives. Interest of Rs.3,10,590/- are not provided on the said loans.

7. Under the Micro, Small and Medium Enterprises Development Act, 2006 which came into force on 2nd October, 2006, certain disclosures are required to be made relating to dues payable to Micro, Small and Medium Enterprises. The Company is in the process of compiling relevant information from the suppliers regarding their coverage under the said Act. Since the relevant information is not readily available, no disclosure have been made in the Accounts.

8 The Company has not made provision for doubtful debts of Rs. 90.30 lakhs recoverable from foreign customer, as the directors are hopeful to recover the amount in current year.

9 The company have deposited a sum of Rs. 5,59,591.66 with Bombay High Court towards the recovery suit pending against the company. The Company have provided a sum of Rs. 2,75,000/- in the account and balance amount of Rs. 2,84,591.66 is kept as deposit with Honourable High Court.

10 The figures of previous year have been regrouped/rearranged wherever considered necessary.

11 Figure shown in brackets are of previous year.