Notes to Accounts of Vaibhav Global Ltd.

Mar 31, 2025

i. Provision (other than for employee benefits)

Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the
amount of the obligation. When the Company expects
some or all of a provision to be reimbursed, for example,
under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the
reimbursement is virtually certain. The expense relating
to a provision is presented in the Statement of Profit and
Loss net of any reimbursement.

If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the
liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as
a finance cost.

j. Revenue

Sale of products

Revenue is recognized on satisfaction of performance
obligation upon transfer of control of promised products
to customers for an amount that reflects the consideration
the Company expects to receive in exchange for those
products. The control of goods is transferred to the
customer depending upon agreed terms with customer.
Control is considered to be transferred to the customer
when the customer has ability to direct the use of such
products and obtain substantially all the benefits from it.

Revenue is measured based on the transaction price,
which is the consideration as specified in the contract
with the customer. Additionally, revenue excludes taxes
collected from customers, which are subsequently
remitted to governmental authorities.

Sale of services

The Company recognises revenue from sale of services
over time because the customer simultaneously receives
and consumes the benefits provided by the Company.
Revenue from service-related activities is recognised
as and when services are rendered and on the basis of
contractual terms with the parties.

Other operating revenues

Duty benefits are recognized on accrual basis and when
the right to entitlement has been established.

k. Recognition of dividend income, interest income or
expense

Dividend income is recognised in the Statement of Profit
and Loss on the date on which the Company''s right to
receive payment is established.

Interest income or expense is recognised using the
effective interest method.

The ‘effective interest rate'' is the rate that exactly
discounts estimated future cash payments or receipts
through the expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- the amortised cost of the financial liability.

In calculating interest income and expense, the effective
interest rate is applied to the gross carrying amount of
the asset (when the asset is not credit-impaired) or to
the amortised cost of the liability. However, for financial
assets that have become credit-impaired subsequent
to initial recognition, interest income is calculated by
applying the effective interest rate to the amortised cost
of the financial asset. If the asset is no longer credit-
impaired, then the calculation of interest income reverts
to the gross basis.

l. Leases

The Company evaluates if an arrangement qualifies
to be a lease as per the requirements of Ind AS 116.
Identification of a lease requires significant judgment.
The Company uses significant judgement in assessing
the lease term (including anticipated renewals) and the
applicable discount rate.

The Company determines the lease term as the non¬
cancellable period of a lease, together with both periods
covered by an option to extend the lease if the Company
is reasonably certain to exercise that option; and periods
covered by an option to terminate the lease if the Company
is reasonably certain not to exercise that option. In

assessing whether the Company is reasonably certain to
exercise an option to extend a lease, or not to exercise an
option to terminate a lease, it considers all relevant facts
and circumstances that create an economic incentive for
the Company to exercise the option to extend the lease,
or not to exercise the option to terminate the lease. The
Company revises the lease term if there is a change in the
non-cancellable period of a lease.

The discount rate is generally based on the incremental
borrowing rate specific to the lease being evaluated or
for a portfolio of leases with similar characteristics. A
contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a
period of time in exchange for consideration.

Company as a lessee

The Company accounts for each lease component
within the contract as a lease separately from non¬
lease components of the contract and allocates the
consideration in the contract to each lease component
on the basis of the relative stand-alone price of the lease
component and the aggregate stand-alone price of the
non-lease components.

The Company recognises right-of-use asset representing
its right to use the underlying asset for the lease term
at the lease commencement date. The cost of the right-
of-use asset measured at inception shall comprise of the
amount of the initial measurement of the lease liability
adjusted for any lease payments made at or before the
commencement date less any lease incentives received,
plus any initial direct costs incurred and an estimate of
costs to be incurred by the lessee in dismantling and
removing the underlying asset or restoring the underlying
asset or site on which it is located. The right-of-use assets
is subsequently measured at cost less any accumulated
depreciation, accumulated impairment losses, if any and
adjusted for any remeasurement of the lease liability. The
right-of-use assets is depreciated using the straight-line
method from the commencement date over the shorter
of lease term or useful life of right-of-use asset unless
the lease transfers ownership of the underlying asset to
the Group by the end of the lease term or the cost of the
right-of-use asset reflects that the Group will exercise a
purchase option. In that case the right-of-use asset will
be depreciated over the useful life of the underlying
asset, which is determined on the same basis as those
of property and equipment. The estimated useful lives
of right-of-use assets are determined on the same basis
as those of property, plant and equipment. Right-of-
use assets are tested for impairment whenever there is
any indication that their carrying amounts may not be
recoverable. Impairment loss, if any, is recognised in the
Statement of Profit and Loss.

The Company measures the lease liability at the present
value of the lease payments that are not paid at the
commencement date of the lease. The lease payments
are discounted using the interest rate implicit in the
leases if that rate can be readily determined. If that
rate cannot be readily determined, the Company uses
incremental borrowing rate. For leases with reasonably
similar characteristics, the Company, on a lease-by-lease
basis, may adopt either the incremental borrowing rate
specific to the lease or the incremental borrowing rate for
the portfolio as a whole. The lease payments shall include
fixed payments, variable lease payments that depend on
an index or a rate, initially measured using the index or rate
as at the commencement date, amounts expected to be
payable under a residual value guarantee, exercise price
of a purchase option where the Company is reasonably
certain to exercise that option and payments of penalties
for terminating the lease, if the lease term reflects the
lessee exercising an option to terminate the lease. The
lease liability is subsequently remeasured by increasing
the carrying amount to reflect interest on the lease
liability, reducing the carrying amount to reflect the lease
payments made and remeasuring the carrying amount
to reflect any reassessment or lease modifications or to
reflect revised in-substance fixed lease payments. The
company recognises the amount of the re-measurement
of lease liability due to modification as an adjustment to
the right-of-use asset and Statement of Profit and Loss
depending upon the nature of modification. Where the
carrying amount of the right-of-use asset is reduced to
zero and there is a further reduction in the measurement
of the lease liability, the Company recognises any
remaining amount of the re-measurement in Statement
of Profit and Loss.

The Company has elected not to recognise the right-of-
use assets and lease liabilities for leases of low-value
assets and short-term leases, including IT equipment''s.
The Company recognises the lease payments associated
with these leases as an expense in profit or loss on a
straight-line basis over the lease term.

m. Tax Expense

Tax expenses comprise current and deferred tax.
i. Current tax

Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable
in respect of previous years. The amount of current
tax reflects the best estimate of the tax amount
expected to be paid or received after considering
the uncertainty, if any, related to income taxes. It is
measured using tax rates (and tax laws) enacted or
substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset
only if there is a legally enforceable right to set off
the recognised amounts, and it is intended to realise
the asset and settle the liability on a net basis or
simultaneously.

ii. Deferred tax

Deferred tax is provided using the balance sheet
approach on temporary differences between the
tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes at the
reporting date.

Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
corresponding amounts used for taxation purposes.
Deferred tax is also recognised in respect of carried
forward tax losses and tax credits.

Deferred tax assets are recognised to the extent
that it is probable that future taxable profits will
be available against which they can be used. The
existence of unused tax losses is strong evidence
that future taxable profit may not be available.
Therefore, in case of a history of recent losses, the
Company recognises a deferred tax asset only to
the extent that it has sufficient taxable temporary
differences or there is convincing other evidence
that sufficient taxable profit will be available against
which such deferred tax asset can be realised.
Deferred tax assets - unrecognised or recognised,
are reviewed at each reporting date and are
recognised/ reduced to the extent that it is probable/
no longer probable respectively that the related tax
benefit will be realised.

Deferred tax is measured at the tax rates that are
expected to apply to the period when the asset is
realised or the liability is settled, based on the laws
that have been enacted or substantively enacted by
the reporting date.

Deferred tax items are recognised in correlation to
the underlying transaction either in OCI or directly in
equity. The measurement of deferred tax reflects the
tax consequences that would follow from the manner
in which the Company expects, at the reporting date,
to recover or settle the carrying amount of its assets
and liabilities.

Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes

levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend
to settle current tax liabilities and assets on a net
basis or their tax assets and liabilities will be realised
simultaneously.

iii. Minimum Alternative Tax (MAT)

Minimum Alternative Tax (MAT) is recognized as an
asset only when and to the extent there is convincing
evidence that the Company will pay normal income
tax during the specified period. In the year in which
the MAT credit becomes eligible to be recognized as
an asset the said asset is created by way of credit
to the Statement of Profit and Loss and included in
deferred tax assets. The Company reviews the same
at each balance sheet date and writes down the
carrying amount of MAT entitlement to the extent
there is no longer convincing evidence to the effect
that Company will pay normal income tax during the
specified period.

Section 115BAA of the Income Tax Act, 1961 as
introduced by the Taxation Laws (Amendment)
Ordinance, 2019 with effect from fiscal year 2019
- 20, allows any domestic company to pay availing
income tax at the rate of 25.17% subject to condition
they will not avail any incentive or exemptions. The
lower rate is an option, and companies can continue
to account based on the old rates. The Company will
be shifting under new tax regime once the Company
is able to utilise MAT credit entitlement. Hence, the
Company decided not to opt for lower rate.

n. Goods and services tax (GST)

Expenses and assets are recognised net of the amount
of sales/value added taxes/goods and services
tax paid, except:

• When the tax incurred on a purchase of assets
or services is not recoverable from the taxation
authority, in which case, the tax paid is recognised as
part of the cost of acquisition of the asset or as part
of the expense item, as applicable; and

• When receivables and payables are stated with the
amount of tax included.

The net amount of tax recoverable from, or payable to,
the taxation authority is included as part of receivables
or payables in the balance sheet.

o. Borrowing cost

Borrowing costs are interest and other costs (including
exchange differences relating to foreign currency

borrowings to the extent that they are regarded as an
adjustment to interest costs) incurred in connection with
the borrowing of funds. The borrowing cost includes
interest expense accrued on gold on loan taken from
banks. Other borrowing costs are recognised as an
expense in the period in which they are incurred.

p. Treasury shares

The Company has created an Employee Benefit
Trust (EBT) for providing share-based payment to its
employees. The Company uses EBT as a vehicle for
distributing shares to employees under the employee
remuneration schemes. Company issues shares to
EBT for allotting them to the employees. EBT is treated
as an extension of the Company, and accordingly,
shares held by EBT are netted off from the total share
capital. Consequently, all the assets, liabilities, income
and expenses of the trust are accounted for as assets,
liabilities, income and expenses of the Company, except
for profit / loss on issue of shares to the employees and
the dividend earned by the trust which are directly taken
to the Share Based Payment Reserve.

q. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise
cash at banks and on hand and short-term deposits with
a maturity of three months or less, which are subject to an
insignificant risk of changes in value.

r. Dividend

Final dividends proposed by the Board of Directors are
recognized upon approval by the shareholders who
have the right to decrease but not increase the amount
of dividend recommended by the Board of Directors.
Interim dividends are recognized on declaration by the
Board of Directors.

s. Earnings per share (EPS)

Basic EPS amounts are computed by dividing the net
profit attributable to the equity holders of the parent
company by the weighted average number of equity
shares outstanding during the period.

Diluted EPS amounts are computed by dividing the net
profit attributable to the equity holders of the parent
company by the weighted average number of equity
shares considered for deriving basic earnings per share
and also the weighted average number of equity shares
that could have been issued upon conversion of all
dilutive potential equity shares. The diluted potential
equity shares are adjusted for the proceeds receivable
had the shares been actually issued at fair value (i.e.
the average market value of the outstanding shares).
Dilutive potential equity shares are deemed converted

as of the beginning of the period, unless issued at a later
date. Dilutive potential equity shares are determined
independently for each period presented.

t. Exceptional items

When an item of income or expense within statement of
profit and loss from ordinary activity is of such size, nature
and incidence that its disclosure is relevant to explain
more meaningfully the performance of the Company for
the year, the nature and amount of such items is disclosed
as exceptional items.

u. Significant accounting estimates and assumptions

The preparation of the Company''s standalone financial
statements requires management to make estimates
and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities, and
the accompanying disclosures, and the disclosure
of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of
assets or liabilities affected in future periods. The key
assumptions concerning the future and other key sources
of estimation uncertainty at the reporting date, that have
a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the
next financial year, are described below. The Company
based its assumptions and estimates on parameters
available when the standalone financial statements
were prepared. Existing circumstances and assumptions
about future developments, however, may change due to
market changes or circumstances arising that are beyond
the control of the Company. Such changes are reflected
in the assumptions when they occur.

v. Contingent liability

Contingent liability is a possible obligation arising from
past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of
the entity or a present obligation that arises from past
events but is not recognised because it is not probable
that an outflow of resources embodying economic
benefits will be required to settle the obligation or the
amount of the obligation cannot be measured with
sufficient reliability. The Company does not recognize
a contingent liability but discloses its existence in the
standalone financial statements.

Contingent assets

Contingent asset is not recognised in consolidated
financial statements since this may result in the
recognition of income that may not never be realised.

However, when the realization of income is virtually
certain, then the related asset is not a contingent asset
and is recognised.

Provisions, contingent liabilities, contingent assets and
commitments are reviewed at each balance sheet date.

w. Segment reporting

As per Ind AS - 108, ‘Operating Segments'', if a
financial report contains both the consolidated financial
statements of a parent that is within the scope of Ind
AS - 108, as well as the parent''s separate financial
statements, segment information is required only in
the consolidated financial statements. Accordingly,
information required to be presented under Ind AS -
108, Operating Segments is given in the consolidated
financial statements.

x. Recent pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. For the year ended 31 March
2025, MCA has notified Ind AS - 117 Insurance Contracts
and amendments to Ind AS 116 - Leases, relating to sale
and leaseback transactions, applicable to the Company
w.e.f. 01 April 2024. The Company has reviewed the
new pronouncements and based on its evaluation has
determined that it does not have any significant impact
in its standalone financial statements.

b) Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having a par value of '' 2 per share (31 March 2024 of '' 2 per share).
Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim
dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the
Company after distribution of all preferential amounts, in proportion to their shareholding.

c) Employee stock options

Terms attached to stock options granted to employees are described in Note 39 regarding share-based payments.

20 OTHER EQUITY - RESERVES AND SURPLUS (Contd..)

B. Nature of reserve

i. Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilized in accordance
with the provision of the Companies Act, 2013.

ii. Share based payment reserve

Share based payment reserve is used to recognize the grant date fair value of options issued to employees under the
Employees Stock Option Schemes. Refer note 39 for further details of the plan.

iii. Capital redemption reserve

As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of
free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to
capital redemption reserve.

iv. Capital reserve

The Company recognises profit and loss on purchase, sale, issue or cancellation of the Company''s own equity
instruments to capital reserve.

v. General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.
As the general reserve is created by a transfer from one component of equity to another and is not an item of other
comprehensive income, items included in the general reserve will not be reclassified subsequently to statement of
profit and loss.

vi. Retained earnings

Retained earnings comprises of undistributed earnings after taxes.

^A Nature of security:-

(i) Secured by charge on all the current assets viz inventory, bill receivable, book debts and all other current assets.

(ii) Further Secured, on pari-passu basis, by :-

a) Equitable mortgage of land and building situated at K-6A & K-6B, Adarsh Nagar, E-68 & E-69, EPIP Zone, Sitapura, E-1
& E-2, SEZ-II, Sitapura, Jaipur and negative lien on Office No. HW4070, BKC Mumbai

b) First charge on block of assets of the company (excluding land & building and vehicles) situated at K-6A & K-6B, Adarsh
Nagar and E-68, E-69 Sitapura Industrial Area, and E-1 & E-2, SEZ-II, Sitapura, Jaipur

(iii) Pledge against fixed deposits with HDFC Bank and Yes Bank.

(iv) Personal guarantee of Mr. Sunil Agrawal, Managing Director of the Company.

Notes

Information about company exposure to interest rate, foreign currency and liquidity risk is given in note 49

^A Nature of security:-

(i) First pari passu charge on all current assets and movable fixed assets of the Company.

(ii) First pari passu charge by way of equitable mortgage on collateral properties located as mentioned below :-

Land and building situated at K-6A & K-6B, Adarsh Nagar, E-68 & E-69, EPIP Zone, Sitapura, E-1 & E-2, SEZ-II, Sitapura,
Jaipur and negative lien on Office No. HW4070, BKC Mumbai.

(iii) Unconditional and irrevocable personal guarantee of Mr. Sunil Agrawal, Managing Director of the Company.

The Company has benefited from certain tax incentives that the Government of India has provided for the units situated in
Special Economic Zones (SEZs) under the Special Economic Zone Act, 2005, which began providing services on or after 1
April 2005. The eligible units are eligible for a deduction of 100% of profits or gains derived from the export of services for
the first five years from commencement of provision of services and 50% of such profits and gains for a further five years.
Certain tax benefits are also available for a further five years subject to the unit meeting defined conditions.

The Company is subject to Minimum Alternate Tax (MAT) on its book profits, which gives rise to future economic benefits in
the form of adjustment of future income tax liability. MAT paid for a year can be set-off against the normal tax liability within
fifteen subsequent years, expiring between the years 2029 to 2038.

B) Defined benefit plan

(i) Gratuity

The Company has a defined benefit gratuity plan. Every employee gets a gratuity on retirement/termination/resig nation
at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance
company in the form of a qualifying insurance policy. The following tables summarize the components of net benefit
expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance
sheet for the respective plans:

39 SHARE-BASED PAYMENTS

A. Description of share-based payment arrangements

a) Vaibhav Global Limited, Employee Stock Options Plan - 2006

Under the Vaibhav Global Limited, Employee Stock Options Plan (As amended) - 2006 (herein referred as ''ESOP Plan''),
the Nomination and Remuneration Committee decides upon the employees who qualify under the ESOP Plan and
the number of options to be issued to such employees. The exercise price of the share options shall be the market
price which would be the latest available closing price of the shares on the stock exchange, which records the highest
trading volume of the Company''s shares on the date prior to date of meeting of the Compensation committee at which
the options are granted, unless otherwise determined by the Board / Committee. Out of stock option granted, 20%
stock option will vest at the end of one year from the date of Grant, 30% at the end of the second year and balance
50% at the end of third year. The Company has constituted “ Vaibhav Global Employee Stock Option Welfare Trust” to
administer & implement various ESOP Plan. The fair value of the share options is estimated at the grant date using a
Black-Scholes pricing model, taking into account the terms and conditions upon which the share options were granted.
However, the above performance condition is only considered in determining the number of instruments that will
ultimately vest. The exercise period for all the options under various tranches is 7 years from the date of vesting.

The weighted average remaining contractual life for the share options outstanding as at 31 March 2025 was 3.35
years (31 March 2024: 4.09 years)

The weighted average fair value of options granted during the year was '' NIL (31 March 2024: '' 294.09).

The range of exercise prices for options outstanding at the end of the year was '' 62.31 to '' 761.38 (31 March 2023:
'' 4.13 to '' 528.80)

b) Vaibhav Global Limited Restricted Stock Unit Plan - 2019

During the previous financial year, the shareholders have approved the Vaibhav Global Limited Restricted Stock Unit
Plan - 2019 (herein referred as ‘RSU Plan'') through postal ballot resolution dated 30 March 2019. According to RSU
Plan, the Nomination and Remuneration Committee decides upon the employees who qualify under the Plan and the
number of Restricted Stock Unit (RSU) to be issued to such employees. The exercise price of the RSU shall be the face
value of the equity shares as on date of exercise unless otherwise determined by the Board / Committee. The exercise
price shall not be less than the face value of equity share of the Company. Out of RSU granted, 20% RSU will vest at
the end of one year from the date of grant, 30% at the end of the second year and balance 50% at the end of third
year. The Company has constituted “ Vaibhav Global Employee Stock Option Welfare Trust” to administer & implement
RSU Plan. The fair value of the RSU will be estimated at the grant date using a Black-Scholes pricing model, taking into
account the terms and conditions upon which the RSU were granted. However, the above performance condition is
only considered in determining the number of instruments that will ultimately vest. The exercise period for all the RSU
will be 3 months from the date of respective vesting. During the year, the Nomination and Remuneration Committee
has granted 677,768 RSU (previous year: 819,945).

The weighted average remaining contractual life for the share options outstanding as at 31 March 2025 was 1.31 years
(31 March 2024: 0.12 years)

The weighted average fair value of options granted during the year was '' 368.58 (31 March 2024: '' 303.63).

The exercise prices for options outstanding at the end of the year was '' 2 (31 March 2024: '' 2)

c) Vaibhav Global Limited Employee Stock Options Plan - 2021

During the previous financial year, the shareholders have approved the Vaibhav Global Limited Employee Stock
Option Plan - 2021 (herein referred as ‘ESOP Plan 2021'') through postal ballot resolution dated 21 March 2022.
According to ESOP Plan 2021, the Nomination and Remuneration Committee (hereinafter referred as “Committee”)
decides upon the employees who qualify under the ESOP Plan 2021 and the number of stock options to be issued to
such employees. The exercise price of the stock options shall be determined by the Committee / Board of Directors
from time to time as on the date of grant, which shall not be less than the face value of the equity share and not
more than the market price. Out of ESOP granted, vesting period shall be determined by the Committee / Board of
Directors at the time of grant of stock options ranging between one to three years from the date of grant of option. The
Company has constituted “ Vaibhav Global Employee Stock Option Welfare Trust” to administer and implement the
plans. The fair value of the stock option will be estimated at the grant date using a Black-Scholes pricing model taking
into account the terms and conditions upon which the stock options were granted. However, the above performance
condition is only considered in determining the number of instruments that will ultimately vest. The exercise period
for all such stock option will be 7 years from the date of respective vesting. During the year, the Company has granted
60,507 options (previous year: 56,475) under the ESOP Plan 2021.

d) Vaibhav Global Limited Management Stock Options Plan - 2021

During the previous financial year, the shareholders have approved the Vaibhav Global Limited Management Stock
Option Plan - 2021 (herein referred as ‘MSOP Plan'') through postal ballot resolution dated 21 March 2022. According
to MSOP Plan, the Nomination and Remuneration Committee (hereinafter referred as “Committee”) decides upon the
employees who qualify under the MSOP Plan and the number of stock options to be issued to such employees. The
exercise price of the such stock optionns shall be the face value of the equity shares as on date of exercise. For stock
options granted, the vesting period shall be determined by the Committee / Board of Directors at the time of grant
of stock option ranging between one to three years from the date of grant of options. The Company has constituted
“Vaibhav Global Employee Stock Option Welfare Trust” to administer and implement MSOP Plan. The fair value of the
stock options will be estimated at the grant date using a Black-Scholes pricing model taking into account the terms and
conditions upon which the stock options were granted. However, the above performance condition is only considered
in determining the number of instruments that will ultimately vest. The exercise period for all such stock options will
be 7 years from the date of respective vesting. During the year, the Nomination and Remuneration Committee has
granted 88,224 (previous year: 63,594) stock options.

A. I n earlier years, the Company received notices from the Income Tax Department (“ITD”) under Section 148 of the
Act for Assessment Year 2012-13 to Assessment Year 2015-16. During the current quarter, the Honorable High
Court of Rajasthan has quashed the proceedings for Assessment Year 2013 - 14 to Assessment 2015 - 16 on
technical grounds. During the previous year, the Honorable High Court of Rajasthan has quashed the proceedings for
Assessment Year 2013 - 14 to Assessment 2015 - 16 on technical grounds and during the current year, the Honorable
High Court of Rajasthan has quashed the proceedings for Assessment Year 2012 - 13. Based upon the nature and
external expert opinion obtained by the Company, the management does not expect any liability to arise out of these
proceedings.

B. I n earlier year, The Income Tax Department (“the ITD”) conducted a Survey proceeding under section 133A of the
Act at the premises of the Company in November 2021. Subsequently, the Company is providing all cooperation and
necessary data/documents/information. During previous year, the Company received notices under Section 142(1) for
Assessment Year 2019 - 20 to Assessment Year 2022 - 23 requiring further information. As on date, based upon the
nature, the management does not expect any liability to arise out of these proceedings.

C. During the financial year 2019-20, pursuant to the shareholder''s approval, the Company has bought back and
extinguished a total of 865,675 equity shares at an average buyback price of '' 831.72 per equity share. Basis external
opinion obtained by the Company, the Company believes that provisions of Section 115QA of Income Tax Act 1961 is
not applicable to the Company.

D. The Company is required to comply with the transfer pricing regulations, which are contemporaneous in nature. The
Company appoints independent consultant annually for conducting transfer pricing studies to determine whether
transactions with associate enterprises undertaken during the financial year, are on an arm''s length basis. Adjustments,
if any, arising from the transfer pricing studies will be accounted for when the study is completed for the current
financial year. The management is of the opinion that its transactions with associates are at arm''s length so that the
outcome of the studies to corroborate compliance with legislation will not have any material adverse impact on these
standalone financial statements.

E. The Company has certain pending litigations and claims filed by various forums/ authorities and third parties in the
normal course of business. The Company has reviewed all pending litigations and claims files by various forums/
authorities and has adequately provided, wherever provisions are required and disclosed as contingent liabilities, as
applicable. In the opinion of management and legal advice obtained, the claims filed by third parties are speculative
and frivolous and amount is unquantifiable at this point of time. The Company also believes that the above issues,
when finally settled, are not likely to have any significant impact on the financial position of the Company.

43 SEGMENT REPORTING

As per Ind AS 108 ‘Operating Segments'', the Company has disclosed the segment information only as part of the
consolidated financial statements.

44 CAPITAL MANAGEMENT

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and the market confidence
and to sustain future development of the business. Management monitors the return on capital, as well as the level of
dividends to equity shareholders.

The board of directors seeks to maintain a balance between the higher returns that might be possible with the higher
level of borrowings and the advantages and security afforded by a sound capital position. The Company monitors capital
using a ratio of ‘adjusted net debt'' to ‘adjusted equity''. For this purpose, adjusted net debt is defined as total liabilities,
comprising interest-bearing short term borrowing less cash and cash equivalents. Gold on loan as disclosed in the
standalone financial statements represents amounts due to banks for the procurement of gold under ‘Gold (Metal) loan
scheme'' by the Company. Adjusted equity comprises of all components of equity. The Company''s adjusted net debt to
equity ratio as at 31 March 2025 is as follows:

45 OTHER REGULATORY INFORMATION (Contd..)

(vii) 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)

(viii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any
government authority.

(ix) The Company does not have any charges or satisfaction which are yet to be registered with Registrar of Companies
(‘ROC'') beyond the statutory period.

(x) The Company does not have any immovable property whose title deeds are not held in the name of the Company.

(xi) As per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016, the Company is not a Core
Investment Company (CIC) and the group does not have any CIC.

45 OTHER REGULATORY INFORMATION

(i) The Company does not have any benami property where any proceedings have been initiated or pending against the
Company for holding such benami property.

(ii) The Company doesn''t have any transactions with companies that have been struck off.

(iii) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or
both during the current or previous year.

(iv) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

(v) 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

(vi) 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 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,

(ii) Fair value hierarchy

The table shown below analysis financial instruments carried at fair value, by valuation method. The different levels have
been defined below:

a) Level 1:

Level 1 hierarchy includes financial instrument measured using quoted prices. This includes listed equity instruments
that have a quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued
using the closing price as at the reporting period end.

48 FAIR VALUE MEASUREMENTS (Contd..)

b) Level 2:

If inputs required to fair value an instrument other than quoted prices included within Level 1 are observable, either directly
(i.e., as prices) or indirectly (i.e., derived from prices), the instruments are included in Level 2.

c) Level 3:

If one or more of the significant inputs is not based on observable market data, the instruments is included in level 3.

The fair value of the financial assets and liabilities are included at the amount that would be received to sell an asset
and paid to transfer a liability in an orderly transaction between market participants. The following methods and
assumptions were used to estimate the fair values:

• Other non-current financial assets and liabilities: Fair value is calculated using a discounted cash flow model with
income approach, unless the carrying value is considered to approximate to fair value.

• Trade receivables, cash and cash equivalents, other bank balances, loans, other current financial assets, current
borrowings, gold on loan, trade payables and other current financial liabilities: Approximate their carrying amounts
largely due to the short-term maturities of these instruments.

49 FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

This section gives an overview of the significance of financial instruments for the Company and provides additional
information on the balance sheet. Details of significant accounting policies, including the criteria for recognition, the basis
of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in these financial statements.

Risk management framework

Company is being driven by the market forces, its businesses are subject to several risks and uncertainties including
financial risks. The Company''s documented risk management policies act as an effective tool in mitigating the various
financial risks to which the business is exposed to, in the course of their daily operations.

The risk management policies cover areas around all identified business risks including commodity price risk, foreign
exchange risk etc., Risks are identified through a formal risk management programme with active involvement of senior

49 FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (Contd..)

management personnel and business managers. The Company has in place risk management processes in line with the
Company''s policy. Each significant risk has an owner, who coordinates the risk management process.

The risk management framework aims to:

• Better understand our risk profile;

• Understand and better manage the uncertainties which impact our performance;

• Contribute to safeguarding Company value and interest of various stakeholders;

• Ensure that sound business opportunities are identified and pursued without exposing the business to an unacceptable
level of risk;

• Improve compliance with good corporate governance guidelines and practices as well as laws & regulations; and

• Improve financial returns
Treasury management

The Company''s treasury function provides services to the business, co-ordinates access to domestic and international
financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk
reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency
risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

Treasury management focuses on capital protection, liquidity maintenance and yield maximization. The treasury operates
as per the delegation of authority from the Board. Day-to-day treasury operations are managed by Company''s finance
team. Long-term fund raising including strategic treasury initiatives are handled by a Treasury team. A monthly reporting
system exists to inform senior management of investments, debt, currency and interest rate derivatives. The Company has
a strong system of internal control which enables effective monitoring of adherence to Company''s policies.

Commodity price risk

Fluctuation in commodity price in market affects directly or indirectly the price of raw material and components used by
the Company. The Company is exposed to fluctuations in gold price (including fluctuations in foreign currency) arising
on purchase/sale of gold. The risk management strategy against gold price fluctuation includes procuring gold on loan
basis, with a flexibility to fix price of gold at any time during the tenor of the loan. The Company sells its products mainly
to its Group Companies, whereby there is a regular negotiation/adjustment of prices on the basis of changes in the
commodity prices.

Financial risk

The Company''s Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk. The
Company does not engage in speculative treasury activity but seeks to manage risk and optimize interest through proven
financial instruments.

(a) Liquidity

The Company requires funds both for short-term operational needs as well as for long-term investment programmes
mainly in growth projects. The Company generates sufficient cash flows from the current operations which together
with the available cash and cash equivalents and short-term investments provide liquidity both in the short-term as
well as in the long-term. The Company has been rated by Care Ratings Ltd (CARE) for its banking facilities in line norms.

The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening
balance sheet. The maturity profile of the Company''s financial liabilities based on the remaining period from the
date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual
undiscounted cash obligation of the Company.

Foreign currency sensitivity

The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange rate exposure
with a simultaneous parallel foreign exchange rates shift in the currencies by 5% against the functional currency of
the Company. A 5% appreciation / depreciation of the respective foreign currencies with respect to the functional
currency would result in net decrease / increase in the Company''s profit and equity for the fiscal year 2025 and 2024
by '' 1,006.96 lacs and '' 384.30 lacs respectively.

(c) Interest rate risk

The Company is exposed to interest rate risk on short-term rate instruments. The borrowings of the Company are
principally denominated in US Dollars and GBP with floating rates of interest. The debt is of floating rates linked to
LIBOR. These exposures are reviewed by appropriate levels of management on a monthly basis.

Collateral

The Company has hypothecated its trade receivables, inventory, advances, bank deposits and other current assets
in order to fulfil the collateral requirements for the financial facilities in place. There are no other significant terms and
conditions associated with the use of collateral.

(b) Foreign exchange risk

The Company operates internationally and exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to US dollar, GBP and EURO. The Company is subject to the risk that changes in foreign currency
values impact the Company exports revenue and purchases from overseas suppliers in foreign currency and foreign
currency denominated borrowings.

The exchange rate between Indian Rupee and foreign currencies has impact on results of the Company''s operations.
Consequently, the results of the Company''s operations get effected as the Rupee appreciates/depreciates against
these foreign currencies.

(d) Counterparty and concentration of credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the
Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables), deposits with
banks, short term investments, foreign exchange transactions and other financial assets. The Company has adopted
a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a
means of mitigating the risk of financial loss from defaults.

Trade Receivable

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures
and control relating to customer credit risk management. In monitoring customer credit risk, customers are grouped
according to their credit characteristics, including whether they are wholesale or end-user customer, their geographic
location, trade history with the Company. An impairment analysis is performed quarterly. The calculation is based on
historical experience/ current facts available in relation to default and delays in collection thereof. The management
historical experience of collecting receivables is that credit risk is low. Hence, trade receivables are considered to be
a single class of financial assets.

49 FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (Contd..)

Financial assets other than trade receivables

With regards to other financial assets with contractual cash flows other than trade receivable, management believes
these to be high quality assets with negligible credit risk. The management believes that the parties from which
these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is
negligible and accordingly no provision for excepted credit loss has been provided on these financial assets. Defined
limits are in place for exposure to individual counterparties in case of mutual funds schemes. The carrying value of
other financial assets other than cash and cash equivalents represents the maximum credit exposure. The Company''s
maximum exposure to credit risk at 31 March 2025 is '' 26,304.69 lacs (31 March 2024 is '' 15,129.36 lacs).

Derivative financial instruments

The Company is exposed to foreign currency fluctuations on foreign currency assets / liabilities and forecast cash
flows denominated in foreign currency. The use of derivatives to hedge United States of Dollar and Great Britain Point
forecasted cash flows is governed by the Company''s strategy, which provides principles on the use of such forward
contracts consistent with the Company''s Risk Management Policy. The counterparty in these derivative instruments is
a bank and the Company considers the risks of non-performance by the counterparty as insignificant. The Company
has entered into a series of foreign exchange forward contracts that are designated as fair value hedges. The Company
does not use forward covers and currency options for speculative purposes.

During the current year, the Company has earned profits on account of cash flow hedging derivatives. The above
profit is included in foreign exchange gain (net) in the Statement of Profit and Loss. All the foreign exchange forward
contracts designated as fair value flow hedges along with related forecasted transactions will be matured within the
next financial year.

50 EXCEPTIONAL ITEMS (Contd..)

During the year ended 31 March 2025, the Company reassessed the recoverable amount of its investment in, loan given
and receivable from subsidiaries in accordance with Ind AS 36 - Impairment of Assets. Based on improved financial
performance and updated projections, the recoverable amount was determined to be higher than the carrying amount.

As a result, an impairment loss of '' 4,688.23 lacs, previously recognized, has been reversed in the current year and is
included under “Exceptional items” in the Statement of Profit and Loss.

51 D uring current year, the Company''s registered office is shifted from K-6B, Fateh Tiba, Adarsh Nagar, Jaipur, 302004,
Rajasthan to E-69, EPIP, Sitapura Industrial Area, Jaipur - 302022, Rajasthan to carry on business of the Company more
efficiently and with better operational convenience.

Signatures to notes 1 to 51

As per our attached report of even date

For B S R & Co. LLP For and on behalf of the Board of Directors of

Chartered Accountants Vaibhav Global Limited

ICAI Firm''s Registration No.: 101248W/W-100022

Gaurav Mahajan Sunil Agrawal Sheela Agarwal

Partner Managing Director Director

Membership No. : 507857 DIN: 00061142 DIN: 00178548

Place: Jaipur Place: Dusseldorf, Germany Place: Jaipur

Date: 21 May 2025 Date: 21 May 2025 Date: 21 May 2025

Nitin Panwad Yashasvi Pareek

Group CFO Company Secretary

ICSI Membership No: A39220
Place: Jaipur Place: Jaipur

Date: 21 May 2025 Date: 21 May 2025

---

Mar 31, 2024

h. Provision (other than for employee benefits)

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

i. Revenue Sale of products

Revenue is recognized on satisfaction of performance obligation upon transfer of control of promised products to customers for an amount that reflects the consideration the Company expects to receive in exchange for those products. The control of goods is transferred to the customer depending upon agreed terms with customer. Control is considered to be transferred to the customer when the customer has ability to direct the use of such products and obtain substantially all the benefits from it.

Revenue is measured based on the transaction price, which is the consideration, net of customer incentives, discounts, variable considerations, payments made to customers, other similar charges, as specified in the contract with the customer. Additionally, revenue excludes taxes collected from customers, which are subsequently remitted to governmental authorities.

Sale of services

The Company recognises revenue from sale of services over time because the customer simultaneously receives

and consumes the benefits provided by the Company. Revenue from service-related activities is recognised as and when services are rendered and on the basis of contractual terms with the parties.

Other operating revenues

Duty benefits are recognized on accrual basis and when the right to entitlement has been established.

j. Recognition of dividend income, interest income or expense

Dividend income is recognised in the Statement of Profit and Loss on the date on which the Company''s right to receive payment is established.

Interest income or expense is recognised using the effective interest method.

The ‘effective interest rate'' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

k. Leases

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.

The Company determines the lease term as the noncancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not

to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease.

The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Company as a lessee

The Company accounts for each lease component within the contract as a lease separately from nonlease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may

not be recoverable. Impairment loss, if any, is recognised in the Statement of Profit and Loss.

The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the leases if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease-bylease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date, amounts expected to be payable under a residual value guarantee, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The company recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and Statement of Profit and Loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in Statement of Profit and Loss.

The Company has elected not to recognise the right-of-use assets and lease liabilities for leases of low- value assets and short-term leases, including IT equipment''s. The Company recognises the lease payments associated with these leases as an expense in profit or loss on a straight-line basis over the lease term.

l. Tax Expense

Tax expenses comprises current and deferred tax. i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

ii. Deferred tax

Deferred tax is provided using the balance sheet approach on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case of a history of recent losses, the Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised. Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

iii. Minimum Alternative Tax (MAT)

Minimum Alternative Tax (MAT) is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset the said asset is created by way of credit to the Statement of Profit and Loss and included in deferred tax assets. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

Section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019 with effect from fiscal year 201920, allows any domestic company to pay availing income tax at the rate of 25.17% subject to condition they will not avail any incentive or exemptions. The lower rate is an option and companies can continue to account based on the old rates. The Company will be shifting under new tax regime once the Company is able to utilise MAT credit entitlement. Hence, the Company decided not to opt for lower rate.

n. Goods and services tax (GST)

Expenses and assets are recognised net of the amount of sales/ value added taxes/ goods and services tax paid, except:

• When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable; and

• When receivables and payables are stated with the amount of tax included.

The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

n. Borrowing cost

Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. The borrowing cost includes interest expense accrued on gold on loan taken from banks. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

o. Treasury shares

The Company has created an Employee Benefit Trust (EBT) for providing share-based payment to its employees. The Company uses EBT as a vehicle for distributing shares to employees under the employee remuneration schemes. Company issues shares to EBT for allotting them to the employees. EBT is treated as an extension of the Company, and accordingly, shares held by EBT are netted off from the total share capital. Consequently, all the assets, liabilities, income and expenses of the trust are accounted for as assets, liabilities, income and expenses of the Company, except for profit / loss on issue of shares to the employees and the dividend earned by the trust which are directly taken to the Share Based Payment Reserve.

p. Cash and short-term deposits

Cash and short-term deposits in the balance sheet comprise cash at banks and on hand and short-term deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management, if any.

q. Dividend

Final dividends proposed by the Board of Directors are recognized upon approval by the shareholders who have the right to decrease but not increase the amount of dividend recommended by the Board of Directors. Interim dividends are recognized on declaration by the Board of Directors.

r. Earnings per share (EPS)

Basic EPS amounts are computed by dividing the net profit attributable to the equity holders of the parent company by the weighted average number of equity shares outstanding during the period.

Diluted EPS amounts are computed by dividing the net profit attributable to the equity holders of the parent company by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. the average market value of the outstanding shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

s. Exceptional items

When an item of income or expense within statement of profit and loss from ordinary activity is of such size, nature and incidence that its disclosure is relevant to explain more meaningfully the performance of the Company for the year, the nature and amount of such items is disclosed as exceptional items.

t. Significant accounting estimates and assumptions

The preparation of the Company''s standalone financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the standalone financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

u. Contingent liability

Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only

by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. The Company does not recognize a contingent liability but discloses its existence in the standalone financial statements.

Contingent assets

Contingent asset is not recognised in consolidated financial statements since this may result in the recognition of income that may not never be realised. However, when the realization of income is virtually certain, then the related asset is not a contingent asset and is recognised.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

v. Segment reporting

As per Ind AS - 108, ‘Operating Segments'', if a financial report contains both the consolidated financial statements of a parent that is within the scope of Ind AS - 108, as well as the parent''s separate financial statements, segment information is required only in the consolidated financial statements. Accordingly, information required to be presented under Ind AS -108, Operating Segments is given in the consolidated financial statements.

w. Material accounting policy information

The Company adopted Disclosure of Accounting Policies (Amendments to Ind AS 1) from 1 April 2023, Although the amendments did not result in any changes in the accounting policies themselves, they impacted the accounting policy information disclosed in the financial statements.

The amendments require the disclosure of ‘material'' rather than ‘significant'' accounting policies. The amendments also provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to provide useful, entity-specific accounting policy information that users need to understand other information in the standalone financial statements.

x. Recent pronouncements

As on 31 March 2024, there are no new standards or amendments to the existing standards applicable to the Company which has been notified by Ministry of Corporate Affairs.

19 EQUITY SHARE CAPITAL (Contd..)

b) Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having a par value of '' 2 per share (31 March 2023 of '' 2 per share). Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

g) Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

The Company bought back 865,675 equity shares at an average buyback price of '' 831.72 per equity share, comprising 2.63% of the pre-buyback paid-up equity share capital of the Company for an aggregate amount of '' 7,199.99 lacs. The buyback of equity shares through the stock exchange commenced on 20 August 2019 and was completed on 25 November 2019.

20 OTHER EQUITY - RESERVES AND SURPLUS (Contd..)

iv. Capital reserve

The Company recognises profit and loss on purchase, sale, issue or cancellation of the Company''s own equity instruments to capital reserve.

v. General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to statement of profit and loss.

B) Defined benefit plan

(i) Gratuity

The Company has a defined benefit gratuity plan. Every employee gets a gratuity on retirement/termination/ resignation at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. The following tables summarize the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

39 SHARE-BASED PAYMENTS

A. Description of share-based payment arrangements

a) Vaibhav Global Limited, Employee Stock Options Plan - 2006

Under the Vaibhav Global Limited, Employee Stock Options Plan (As amended) - 2006 (herein referred as ‘ESOP Plan''), the Nomination and Remuneration Committee decides upon the employees who qualify under the ESOP Plan and the number of options to be issued to such employees. The exercise price of the share options shall be the market price which would be the latest available closing price of the shares on the stock exchange, which records the highest trading volume of the Company''s shares on the date prior to date of meeting of the Compensation committee at which the options are granted, unless otherwise determined by the Board / Committee. Out of stock option granted, 20% stock option will vest at the end of one year from the date of Grant, 30% at the end of the second year and balance 50% at the end of third year. The Company has constituted “ Vaibhav Global Employee Stock Option Welfare Trust” to administer & implement various ESOP Plan. The fair value of the share options is estimated at the grant date using a Black-Scholes pricing model, taking into account the terms and conditions upon which the share options were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all the options under various tranches is 7 years from the date of vesting.

b) Vaibhav Global Limited Restricted Stock Unit Plan - 2019

The shareholders have approved the Vaibhav Global Limited Restricted Stock Unit Plan - 2019 (herein referred as ‘RSU Plan'') through postal ballot resolution dated 30 March 2019. According to RSU Plan, the Nomination and Remuneration Committee decides upon the employees who qualify under the Plan and the number of Restricted Stock Unit (RSU) to be issued to such employees. The exercise price of the RSU shall be the face value of the equity shares as on date of exercise unless otherwise determined by the Board / Committee. The exercise price shall not be less than the face value of equity share of the Company. Out of RSU granted, 20% RSU will vest at the end of one year from the date of grant, 30% at the end of the second year and balance 50% at the end of third year. The Company has constituted “ Vaibhav Global Employee Stock Option Welfare Trust” to administer & implement RSU Plan. The fair value of the RSU will be estimated at the grant date using a Black-Scholes pricing model, taking into account the terms and conditions upon which the RSU were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all the RSU will be 3 months from the date of respective vesting. During the year, the Nomination and Remuneration Committee has granted 819,945 RSU (31 March 2023: 579,055).

c) Vaibhav Global Limited Employee Stock Options Plan - 2021

The shareholders have approved the Vaibhav Global Limited Employee Stock Option Plan - 2021 (herein referred as ‘ESOP Plan 2021'') through postal ballot resolution dated 21 March 2022. According to ESOP Plan 2021, the Nomination and Remuneration Committee (hereinafter referred as “Committee”) decides upon the employees who qualify under the ESOP Plan 2021 and the number of stock options to be issued to such employees. The exercise price of the stock options shall be determined by the Committee / Board of Directors from time to time as on the date of grant, which shall not be less than the face value of the equity share and not more than the market price. Out of ESOP granted, vesting period shall be determined by the Committee / Board of Directors at the time of grant of stock options ranging between one to three years from the date of grant of option. The Company has constituted “ Vaibhav Global Employee Stock Option Welfare Trust” to administer and implement the plans. The fair value of the stock option will be estimated at the grant date using a Black-Scholes pricing model taking into account the terms and conditions upon which the stock options were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all such stock option will be 7 years from the date of respective vesting. During the year, the Company has granted 56,475 (31 March 2023: 121,970) options under the ESOP Plan 2021.

d) Vaibhav Global Limited Management Stock Options Plan - 2021

The shareholders have approved the Vaibhav Global Limited Management Stock Option Plan - 2021 (herein referred as ‘MSOP Plan'') through postal ballot resolution dated 21 March 2022. According to MSOP Plan, the Nomination and

39 SHARE-BASED PAYMENTS(Contd..)

Remuneration Committee (hereinafter referred as “Committee”) decides upon the employees who qualify under the MSOP Plan and the number of stock options to be issued to such employees. The exercise price of the such stock optionns shall be the face value of the equity shares as on date of exercise. For stock options granted, the vesting period shall be determined by the Committee / Board of Directors at the time of grant of stock option ranging between one to three years from the date of grant of options. The Company has constituted “Vaibhav Global Employee Stock Option Welfare Trust” to administer and implement MSOP Plan. The fair value of the stock options will be estimated at the grant date using a Black-Scholes pricing model taking into account the terms and conditions upon which the stock options were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all such stock options will be 7 years from the date of respective vesting. During the year, the Nomination and Remuneration Committee has granted 63,594 (31 March 2023: 25,374) stock options.

A. In earlier years, the Company received notices from the Income Tax Department (“ITD”) under Section 148 of the Act for Assessment Year 2012-13 to Assessment Year 2015-16. During the current quarter, the Honorable High Court of Rajasthan has quashed the proceedings for Assessment Year 2013 - 14 to Assessment 2015 - 16 on technical grounds. For Assessment Year 2012 - 13, the Honorable High Court of Rajasthan has granted stay order on the Company''s petition. Based upon the nature and external expert opinion obtained by the Company, the management does not expect any liability to arise out of these proceedings. Amount is not quantifiable at this point in time.

B. In earlier year, the Income Tax Department (“the ITD”) conducted a Survey proceeding under section 133A of the Act at the premises of the Company. Subsequently, the Company provided all cooperation and necessary data, documents and information, as requested by the ITD or otherwise. The ITD issued further queries post the conclusion of survey to which the Company has subsequently replied with. As on date, based upon the nature, the management does not expect any liability to arise out of these proceedings.

C. During the financial year 2019-20, pursuant to the shareholder''s approval, the Company has bought back and extinguished a total of 865,675 equity shares at an average buyback price of '' 831.72 per equity share. Basis external opinion obtained by the Company, the Company believes that provisions of Section 115QA of Income Tax Act 1961 is not applicable to the Company.

D. The Company is required to comply with the transfer pricing regulations, which are contemporaneous in nature. The Company appoints independent consultant annually for conducting transfer pricing studies to determine whether transactions with associate enterprises undertaken during the financial year, are on an arm''s length basis. Adjustments, if any, arising from the transfer pricing studies will be accounted for when the study is completed for the current financial year. The management is of the opinion that its transactions with associates are at arm''s length so that the outcome of the studies to corroborate compliance with legislation will not have any material adverse impact on these standalone financial statements.

E. The Company has certain pending litigations and claims filed by various forums/ authorities and third parties in the normal course of business. The Company has reviewed all pending litigations and claims files by various forums/ authorities and has adequately provided, wherever provisions are required and disclosed as contingent liabilities, as applicable. In the opinion of management and legal advice obtained, the claims filed by third parties are speculative and frivolous and amount is unquantifiable at this point of time. The Company also believes that the above issues, when finally settled, are not likely to have any significant impact on the financial position of the Company.

44 CAPITAL MANAGEMENT

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and the market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

The board of directors seeks to maintain a balance between the higher returns that might be possible with the higher level of borrowings and the advantages and security afforded by a sound capital position. The Company monitors capital using a ratio of ‘adjusted net debt'' to ‘adjusted equity''. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing short term borrowing less cash and cash equivalents. Gold on loan as disclosed in the standalone financial statements represents amounts due to banks for the procurement of gold under ‘Gold (Metal) loan scheme'' by the Company. Adjusted equity comprises of all components of equity. The Company''s adjusted net debt to equity ratio as at 31 March 2024 is as follows:

45 OTHER REGULATORY INFORMATION

(i) The Company does not have any benami property where any proceedings have been initiated or pending against the Company for holding such benami property.

(ii) The Company doesn''t have any transactions with companies that have been struck off.

(iii) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(iv) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

(v) 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

(vi) 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 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,

45 OTHER REGULATORY INFORMATION (Contd..)

(vii) 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)

(viii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(ix) The Company does not have any charges or satisfaction which are yet to be registered with Registrar of Companies (‘ROC'') beyond the statutory period.

(x) The Company does not have any immovable property whose title deeds are not held in the name of the Company.

(xi) As per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016, the Company is not a Core Investment Company (CIC) and the group does not have any CIC.

(xii) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

48 FAIR VALUE MEASUREMENTS (Contd..)

b) Level 2:

If inputs required to fair value an instrument other than quoted prices included within Level 1 are observable, either directly (i.e., as prices) or indirectly (i.e., derived from prices), the instruments are included in Level 2.

c) Level 3:

If one or more of the significant inputs is not based on observable market data, the instruments is included in level 3.

The fair value of the financial assets and liabilities are included at the amount that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants. The following methods and assumptions were used to estimate the fair values:

• Other non-current financial assets and liabilities: Fair value is calculated using a discounted cash flow model with income approach, unless the carrying value is considered to approximate to fair value.

• Trade receivables, cash and cash equivalents, other bank balances, loans, other current financial assets, current borrowings, gold on loan, trade payables and other current financial liabilities: Approximate their carrying amounts largely due to the short-term maturities of these instruments.

49 FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

This section gives an overview of the significance of financial instruments for the Company and provides additional information on the balance sheet. Details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in these financial statements.

Risk management framework

Company is being driven by the market forces, its businesses are subject to several risks and uncertainties including financial risks. The Company''s documented risk management policies act as an effective tool in mitigating the various financial risks to which the business is exposed to, in the course of their daily operations.

The risk management policies cover areas around all identified business risks including commodity price risk, foreign exchange risk etc., Risks are identified through a formal risk management programme with active involvement of senior management personnel and business managers. The Company has in place risk management processes in line with the Company''s policy. Each significant risk has an owner, who coordinates the risk management process.

The risk management framework aims to:

• Better understand our risk profile;

• Understand and better manage the uncertainties which impact our performance;

• Contribute to safeguarding Company value and interest of various stakeholders;

49 FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (Contd..)

• Ensure that sound business opportunities are identified and pursued without exposing the business to an unacceptable level of risk;

• Improve compliance with good corporate governance guidelines and practices as well as laws & regulations; and

• Improve financial returns Treasury management

The Company''s treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

Treasury management focuses on capital protection, liquidity maintenance and yield maximization. The treasury operates as per the delegation of authority from the Board. Day-to-day treasury operations are managed by Company''s finance team. Long-term fund raising including strategic treasury initiatives are handled by a Treasury team. A monthly reporting system exists to inform senior management of investments, debt, currency and interest rate derivatives. The Company has a strong system of internal control which enables effective monitoring of adherence to Company''s policies.

Commodity price risk

Fluctuation in commodity price in market affects directly or indirectly the price of raw material and components used by the Company. The Company is exposed to fluctuations in gold price (including fluctuations in foreign currency) arising on purchase/sale of gold. The risk management strategy against gold price fluctuation includes procuring gold on loan basis, with a flexibility to fix price of gold at any time during the tenor of the loan. The Company sells its products mainly to its Group Companies, whereby there is a regular negotiation/adjustment of prices on the basis of changes in the commodity prices.

Financial risk

The Company''s Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk. The Company does not engage in speculative treasury activity but seeks to manage risk and optimize interest through proven financial instruments.

(a) Liquidity

The Company requires funds both for short-term operational needs as well as for long-term investment programmes mainly in growth projects. The Company generates sufficient cash flows from the current operations which together with the available cash and cash equivalents and short-term investments provide liquidity both in the short-term as well as in the long-term. The Company has been rated by Care Ratings Ltd (CARE) for its banking facilities in line norms.

The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening balance sheet. The maturity profile of the Company''s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.

Collateral

The Company has hypothecated its trade receivables, inventory, advances, bank deposits and other current assets in order to fulfil the collateral requirements for the financial facilities in place. There are no other significant terms and conditions associated with the use of collateral.

(b) Foreign exchange risk

The Company operates internationally and exposed to foreign exchange risk arising from various currency exposures, primarily with respect to US dollar, GBP and EURO. The Company is subject to the risk that changes in foreign currency values impact the Company exports revenue and purchases from overseas suppliers in foreign currency and foreign currency denominated borrowings.

The exchange rate between Indian Rupee and foreign currencies has impact on results of the Company''s operations. Consequently, the results of the Company''s operations get effected as the Rupee appreciates/depreciates against these foreign currencies.

Foreign currency sensitivity

The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange rate exposure with a simultaneous parallel foreign exchange rates shift in the currencies by 5% against the functional currency of the Company. A 5% appreciation / depreciation of the respective foreign currencies with respect to the functional currency would result in net decrease / increase in the Company''s profit and equity for the fiscal year 2024 and 2023 by '' 384.30 lacs and '' 540.96 lacs respectively.

(c) Interest rate risk

The Company is exposed to interest rate risk on short-term rate instruments. The borrowings of the Company are principally denominated in US Dollars and GBP with floating rates of interest. The debt is of floating rates linked to LIBOR. These exposures are reviewed by appropriate levels of management on a monthly basis.

(d) Counterparty and concentration of credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables), deposits with banks, short term investments, foreign exchange transactions and other financial assets. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

Trade Receivable

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are wholesale or end-user customer, their geographic location, trade history with the Company. An impairment analysis is performed quarterly. The calculation is based on historical experience/ current facts available in relation to default and delays in collection thereof. The management historical experience of collecting receivables is that credit risk is low. Hence, trade receivables are considered to be a single class of financial assets.

Financial assets other than trade receivables

With regards to other financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from which these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for excepted credit loss has been provided on these financial assets. Defined limits are in place for exposure to individual counterparties in case of mutual funds schemes. The carrying value of other financial assets other than cash and cash equivalents represents the maximum credit exposure. The Company''s maximum exposure to credit risk at 31 March 2024 is '' 15,129.36 lacs (31 March 2023 is '' 19,777.80 lacs).

Derivative financial instruments

The Company is exposed to foreign currency fluctuations on foreign currency assets / liabilities and forecast cash flows denominated in foreign currency. The use of derivatives to hedge United States of Dollar and Great Britain Point forecasted cash flows is governed by the Company''s strategy, which provides principles on the use of such forward contracts consistent with the Company''s Risk Management Policy. The counterparty in these derivative instruments is a bank and the Company considers the risks of non-performance by the counterparty as insignificant. The Company has entered into a series of foreign exchange forward contracts that are designated as fair value hedges. The Company does not use forward covers and currency options for speculative purposes.

During the current year, the Company has earned profits on account of cash flow hedging derivatives. The above profit is included in foreign exchange gain (net) in the Statement of Profit and Loss. All the foreign exchange forward contracts designated as fair value flow hedges along with related forecasted transactions will be matured within the next financial year.

51 During previous year, there was a cyber-attack on some of Information Technology (IT) infrastructure of the Company and some of its subsidiaries. Management took steps to retrieve and restore the systems. All critical operational systems are functioning, however as a measure of abundant precaution, restricted access and preventive checks are put in place. Management through an IT service provider also completed the process of investigation to ascertain the nature, extent, and cause of possible data breach, If any. Basis the procedures performed, management did not identify any instance of data breach. Basis the legal opinion obtained from the independent solicitors of the respective impacted countries, the Company and its subsidiaries are in compliance with applicable legal and regulatory requirements. Management believes that there is no impact on these financial statements on account of this incident. The business operations of the Company and its subsidiaries are continuing in the normal manner post the cyber incident.

52 The Ministry of Corporate Affairs introduced Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, which requires the Company to have a feature of recording audit trail (edit log) facility for its accounting softwares used for maintaining its books of account and the same has operated throughout the year for all relevant transactions recorded in the respective softwares. The Company is in process of enabling the audit trail (edit log) feature for its accounting softwares. The Company will also ensure that audit trail (edit log) once enabled can not be changed.

53 As per Rule 3(5) of Companies (Accounts) Fourth Amendment Rules, 2022, Company is required to maintain backup of the books of accounts and other relevant books and papers in an electronic mode on servers physically located in India on a daily basis, even in cases where such backups are maintained at a place outside India. The Company is maintaining proper backup as required by law, however, due to certain connectivity issues, the daily backup got disable for a few days, which was subsequently corrected.

54 Subsequent to the year end, the Board of Directors of the Company at its meeting held on 23 May 2024 has inter-alia considered and approved the scheme of amalgamation of Vaibhav Lifestyle Limited (“Transferor Company”), a wholly-owned subsidiary of the Company, with Vaibhav Vistar Limited (“Transferee Company”), a wholly-owned subsidiary of the Company on a going concern basis under the provisions of Section 230 to 232 of the Companies Act, 2013 and the rules made thereunder. The above scheme of arrangement shall be subject to the approval of the National Company Law Tribunal (NCLT) of relevant jurisdiction, creditors etc. of the Subsidiary Companies and other regulatory authorities, if any. Accounting effect of proposed scheme will be given post receipt of requisite approvals.

Signatures to notes 1 to 54

As per our attached report of even date

For B S R & Co. LLP For and on behalf of the Board of Directors of

Chartered Accountants Vaibhav Global Limited

ICAI Firm''s Registration No.: 101248W/W-100022

Rajiv Goyal Sunil Agrawal Sheela Agarwal

Partner Managing Director Director

Membership No. : 094549 DIN: 00061142 DIN: 00178548

Place: Gurugram Place: Jaipur Place: Jaipur

Date: 23 May 2024 Date: 23 May 2024 Date: 23 May 2024

Nitin Panwad Sushil Sharma

Group CFO Company Secretary

ICSI Membership No: F6535 Place: Jaipur Place: Jaipur

Date: 23 May 2024 Date: 23 May 2024

---

Mar 31, 2023

a) Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having a par value of '' 2 per share (31 March 2022 of '' 2 per share). Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

b) Employee stock options

Terms attached to stock options granted to employees are described in Note 38 regarding share-based payments.

c) Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

The Company bought back 865,675 equity shares at an average buyback price of '' 831.72 per equity share, comprising 2.63% of the pre-buyback paid-up equity share capital of the Company for an aggregate amount of '' 7,199.99 lacs. The buyback of equity shares through the stock exchange commenced on 20 August 2019 and was completed on 25 November 2019.

d) On 22 March 2021, the Board of directors approved, subject to approval of shareholders, the sub-division of equity shares of '' 10 each (fully paid up) into five equity shares of '' 2 each (fully paid up). The shareholders have approved the sub-division of equity shares through postal ballot resolution dated 24 April 2021. The record date for sub-division was 10 May 2021.

B. Nature of reserve

i. Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilized in accordance with the provision of the Companies Act, 2013.

ii. Share based payment reserve

Share based payment reserve is used to recognize the grant date fair value of options issued to employees under the Employees Stock Option Schemes. Refer note 38 for further details of the plan.

iii. Capital redemption reserve

As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve.

iv. Capital reserve

The Company recognises profit and loss on purchase, sale, issue or cancellation of the Company''s own equity instruments to capital reserve.

v. General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to statement of profit and loss.

vi. Retained earnings

Retained earnings comprises of undistributed earnings after taxes.

The Company has benefited from certain tax incentives that the Government of India has provided for the units situated in Special Economic Zones (SEZs) under the Special Economic Zone Act, 2005, which began providing services on or after 1 April 2005. The eligible units are eligible for a deduction of 100% of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50% of such profits and gains for a further five years till Financial Year 2023 - 24. Certain tax benefits are also available for a further five years subject to the unit meeting defined conditions.

The Company is subject to Minimum Alternate Tax (MAT) on its book profits, which gives rise to future economic benefits in the form of adjustment of future income tax liability. MAT paid for a year can be set-off against the normal tax liability within fifteen subsequent years, expiring between the years 2029 to 2037.

B) Defined benefit plan

(i) Gratuity

The Company has a defined benefit gratuity plan. Every employee gets a gratuity on retirement/termination/resignation at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. The following tables summarize the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

Details of actuarial valuation carried out on balance sheet date is as under:

The weigahted average duration of the defined benefit plan obligation at the end of the reporting period is of 3 years (31 March 2022: 4 years).

(ii) Leave obligations

The amount of the provision of '' 324.62 lacs (31 March 2022: '' 295.22 lacs) is presented as current and non current. The Company has provided for the liability on the basis of actuarial valuation.

38 SHARE-BASED PAYMENTS

A. Description of share-based payment arrangements

a) Vaibhav Global Limited, Employee Stock Options Plan - 2006

Under the Vaibhav Global Limited, Employee Stock Options Plan (As amended) - 2006 (herein referred as ‘ESOP Plan''), the Nomination and Remuneration Committee decides upon the employees who qualify under the ESOP Plan and the number of options to be issued to such employees. The exercise price of the share options shall be the market price which would be the latest available closing price of the shares on the stock exchange, which records the highest trading volume of the Company''s shares on the date prior to date of meeting of the Compensation committee at which the options are granted, unless otherwise determined by the Board / Committee. Out of stock option granted, 20% stock option will vest at the end of one year from the date of Grant, 30% at the end of the second year and balance 50% at the end of third year. The Company has constituted “ Vaibhav Global Employee Stock Option Welfare Trust” to administer & implement various ESOP Plan. The fair value of the share options is estimated at the grant date using a Black-Scholes pricing model, taking into account the terms and conditions upon which the share options were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all the options under various tranches is 7 years from the date of vesting.

b) Vaibhav Global Limited Restricted Stock Unit Plan - 2019

During the previous financial year, the shareholders have approved the Vaibhav Global Limited Restricted Stock Unit Plan - 2019 (herein referred as ‘RSU Plan'') through postal ballot resolution dated 30 March 2019. According to RSU Plan, the Nomination and Remuneration Committee decides upon the employees who qualify under the Plan and the number of Restricted Stock Unit (RSU) to be issued to such employees. The exercise price of the RSU shall be the face value of the equity shares as on date of exercise unless otherwise determined by the Board / Committee. The exercise price shall not be less than the face value of equity share of the Company. Out of RSU granted, 20% RSU will vest at the end of one year from the date of grant, 30% at the end of the second year and balance 50% at the end of third year. The Company has constituted “ Vaibhav Global Employee Stock Option Welfare Trust” to administer & implement RSU Plan. The fair value of the RSU will be estimated at the grant date using a Black-Scholes pricing model, taking into account the terms and conditions upon which the RSU were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all the RSU will be 3 months from the date of respective vesting. During the year, the Nomination and Remuneration Committee has granted 579,055 RSU (previous year: 276,541).

c) Vaibhav Global Limited Employee Stock Options Plan - 2021

During the current financial year, the shareholders have approved the Vaibhav Global Limited Employee Stock Option Plan - 2021 (herein referred as ‘ESOP Plan 2021'') through postal ballot resolution dated 21 March 2022. According to ESOP Plan 2021, the Nomination and Remuneration Committee (hereinafter referred as “Committee”) decides upon the employees who qualify under the ESOP Plan 2021 and the number of stock options to be issued to such employees. The exercise price of the stock options shall be determined by the Committee / Board of Directors from time to time as on the date of grant, which shall not be less than the face value of the equity share and not more than the market price. Out of ESOP granted, vesting period shall be determined by the Committee / Board of Directors at the time of grant of stock options ranging between one to three years from the date of grant of option. The Company has constituted “ Vaibhav Global Employee Stock Option Welfare Trust” to administer and implement the plans. The fair value of the stock option will be estimated at the grant date using a Black-Scholes pricing model taking into account the terms and conditions upon which the stock options were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all such stock option will be 7 years from the date of respective vesting. During the year, the Company has granted 121,970 (previous year: 82,816) options under the ESOP Plan 2021.

d) Vaibhav Global Limited Management Stock Options Plan - 2021

During the current financial year, the shareholders have approved the Vaibhav Global Limited Management Stock Option Plan - 2021 (herein referred as ‘MSOP Plan'') through postal ballot resolution dated 21 March 2022. According to MSOP Plan, the Nomination and Remuneration Committee (hereinafter referred as “Committee”) decides upon the employees who qualify under the MSOP Plan and the number of stock options to be issued to such employees. The exercise price of the such stock optionns shall be the face value of the equity shares as on date of exercise. For stock options granted, the vesting period shall be determined by the Committee / Board of Directors at the time of grant of stock option ranging between one to three years from the date of grant of options. The Company has constituted “Vaibhav Global Employee Stock Option Welfare Trust” to administer and implement MSOP Plan. The fair value of the stock options will be estimated at the grant date using a Black-Scholes pricing model taking into account the terms and conditions upon which the stock options were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all such stock options will be 7 years from the date of respective vesting. During the year, the Nomination and Remuneration Committee has granted 25,374 (previous year: 23,187) stock options.

A. In earlier years, the Company received notice from the Income Tax Department under Section 148 of the Act for Assessment Year 2012-13. Subsequently the Company has also received similar notices for Assessment Year 2013-14 to Assessment Year 2015-16. The Honorable High Court of Rajasthan had granted stay order on the Company''s petition for these Assessment Years mentioned above. Based upon the nature and external expert opinion obtained by the Company, the management does not expect any liability to arise out of it. Amount is not quantifiable at this point in time.

B. In previous year, the Income Tax Department (“the ITD”) conducted a Survey proceeding under section 133A of the Act at the premises of the Company. Subsequently, the Company provided all cooperation and necessary data, documents and information, as requested by the ITD or otherwise. The ITD issued further queries post the conclusion of survey to which the Company has subsequently replied with. As on date, based upon the nature, the management does not expect any liability to arise out of these proceedings.

C. During the financial year 2019-20, pursuant to the shareholder''s approval, the Company has bought back and extinguished a total of 865,675 equity shares at an average buyback price of '' 831.72 per equity share. Basis external opinion obtained by the Company, the Company believes that provisions of Section 115QA of Income Tax Act 1961 is not applicable to the Company.

D. The Company is required to comply with the transfer pricing regulations, which are contemporaneous in nature. The Company appoints independent consultant annually for conducting transfer pricing studies to determine whether transactions with associate enterprises undertaken during the financial year, are on an arm''s length basis. Adjustments, if any, arising from the transfer pricing studies will be accounted for when the study is completed for the current financial year. The management is of the opinion that its transactions with associates are at arm''s length so that the outcome of the studies to corroborate compliance with legislation will not have any material adverse impact on these financial statements.

E. The Company has certain pending litigations and claims filed by various forums/ authorities and third parties in the normal course of business. The Company has reviewed all pending litigations and claims files by various forums/ authorities and has adequately provided, wherever provisions are required and disclosed as contingent liabilities, as applicable. In the opinion of management and legal advice obtained, the claims filed by third parties are speculative and frivolous and amount is unquantifiable at this point of time. The Company also believes that the above issues, when finally settled, are not likely to have any significant impact on the financial position of the Company.

42 Segment reporting

As per Ind AS 108 ‘Operating Segments'', the Company has disclosed the segment information only as part of the consolidated financial statements.

43 Capital management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and the market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

The board of directors seeks to maintain a balance between the higher returns that might be possible with the higher level of borrowings and the advantages and security afforded by a sound capital position. The Company monitors capital using a ratio of ‘adjusted net debt'' to ‘adjusted equity''. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing short term borrowing less cash and cash equivalents. Adjusted equity comprises of all components of equity. The Company''s adjusted net debt to equity ratio as at 31 March 2023 is as follows:

44 OTHER REGULATORY INFORMATION

(i) The Company does not have any benami property where any proceedings have been initiated or pending against the Company for holding such benami property.

(ii) The Company doesn''t have any transactions with companies that have been struck off.

(iii) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(iv) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

(v) 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

(vi) 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 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,

(vii) 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

(viii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(ix) The Company does not have any charges or satisfaction which are yet to be registered with Registrar of Companies (‘ROC'') beyond the statutory period.

(x) The Company does not have any immovable property whose title deeds are not held in the name of the Company.

(xi) As per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016, the Company is not a Core Investment Company (CIC) and the group does not have any CIC.

(ii) Fair value hierarchy

The table shown below analysis financial instruments carried at fair value, by valuation method. The different levels have been defined below:

a) Level 1:

Level 1 hierarchy includes financial instrument measured using quoted prices. This includes listed equity instruments that have a quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period end.

b) Level 2:

I f inputs required to fair value an instrument other than quoted prices included within Level 1 are observable, either directly (i.e., as prices) or indirectly (i.e., derived from prices), the instruments are included in Level 2.

c) Level 3:

If one or more of the significant inputs is not based on observable market data, the instruments is included in level 3.

The fair value of the financial assets and liabilities are included at the amount that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants. The following methods and assumptions were used to estimate the fair values:

• Other non-current financial assets and liabilities: Fair value is calculated using a discounted cash flow model with income approach, unless the carrying value is considered to approximate to fair value.

• Trade receivables, cash and cash equivalents, other bank balances, loans, other current financial assets, current borrowings, trade payables and other current financial liabilities: Approximate their carrying amounts largely due to the short-term maturities of these instruments.

48 FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

This section gives an overview of the significance of financial instruments for the Company and provides additional information on the balance sheet. Details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in these financial statements.

Risk management framework

Company is being driven by the market forces, its businesses are subject to several risks and uncertainties including financial risks. The Company''s documented risk management policies act as an effective tool in mitigating the various financial risks to which the business is exposed to, in the course of their daily operations.

The risk management policies cover areas around all identified business risks including commodity price risk, foreign exchange risk etc., Risks are identified through a formal risk management programme with active involvement of senior management personnel and business managers. The Company has in place risk management processes in line with the Company''s policy. Each significant risk has an owner, who coordinates the risk management process.

The risk management framework aims to:

• Better understand our risk profile;

• Understand and better manage the uncertainties which impact our performance;

• Contribute to safeguarding Company value and interest of various stakeholders;

• Ensure that sound business opportunities are identified and pursued without exposing the business to an unacceptable level of risk;

• Improve compliance with good corporate governance guidelines and practices as well as laws & regulations; and

• Improve financial returns Treasury management

The Company''s treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

Treasury management focuses on capital protection, liquidity maintenance and yield maximization. The treasury operates as per the delegation of authority from the Board. Day-to-day treasury operations are managed by Company''s finance team. Long-term fund raising including strategic treasury initiatives are handled by a Treasury team. A monthly reporting system exists to inform senior management of investments, debt, currency and interest rate derivatives. The Company has a strong system of internal control which enables effective monitoring of adherence to Company''s policies.

Commodity price risk

Fluctuation in commodity price in market affects directly or indirectly the price of raw material and components used by the Company. The Company sells its products mainly to its Group Companies, whereby there is a regular negotiation/adjustment of prices on the basis of changes in the commodity prices.

Financial risk

The Company''s Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk. The Company does not engage in speculative treasury activity but seeks to manage risk and optimize interest through proven financial instruments.

(a) Liquidity

The Company requires funds both for short-term operational needs as well as for long-term investment programmes mainly in growth projects. The Company generates sufficient cash flows from the current operations which together with the available cash and cash equivalents and short-term investments provide liquidity both in the short-term as well as in the long-term. The Company has been rated by Care Ratings Ltd (CARE) for its banking facilities in line norms.

The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening balance sheet. The maturity profile of the Company''s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.

Collateral

The Company has hypothecated its trade receivables, inventory, advances and other current assets in order to fulfil the collateral requirements for the financial facilities in place. There are no other significant terms and conditions associated with the use of collateral.

(b) Foreign exchange risk

The Company operates internationally and exposed to foreign exchange risk arising from various currency exposures, primarily with respect to US dollar and GBP. The Company is subject to the risk that changes in foreign currency values impact the Company exports revenue and purchases from overseas suppliers in foreign currency and foreign currency denominated borrowings.

Foreign currency sensitivity

The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange rate exposure with a simultaneous parallel foreign exchange rates shift in the currencies by 5% against the functional currency of the Company. A 5% appreciation / depreciation of the respective foreign currencies with respect to the functional currency would result in net decrease / increase in the Company''s profit and equity for the fiscal year 2023 and 2022 by '' 540.96 lacs and '' 1,745.25 lacs respectively.

(c) Interest rate risk

The Company is exposed to interest rate risk on short-term rate instruments. The borrowings of the Company are principally denominated in US Dollars and GBP with floating rates of interest. The debt is of floating rates linked to LIBOR. These exposures are reviewed by appropriate levels of management on a monthly basis.

(d) Counterparty and concentration of credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables), deposits with banks, short term investments, foreign exchange transactions and other financial assets. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

Trade Receivable

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are wholesale or end-user customer, their geographic location, trade history with the Company. An impairment analysis is performed quarterly. The calculation is based on historical experience/ current facts available in relation to default and delays in collection thereof. The management historical experience of collecting receivables is that credit risk is low. Hence, trade receivables are considered to be a single class of financial assets.

Financial assets other than trade receivables

With regards to other financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from which these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for excepted credit loss has been provided on these financial assets. Defined limits are in place for exposure to individual counterparties in case of mutual funds schemes. The carrying value of other financial assets other than cash and cash equivalents represents the maximum credit exposure. The Company''s maximum exposure to credit risk at 31 March 2023 is '' 19,777.80 lacs (31 March 2022 is '' 18,168.74 lacs)

Derivative financial instruments

The Company is exposed to foreign currency fluctuations on foreign currency assets / liabilities and forecast cash flows denominated in foreign currency. The use of derivatives to hedge United States of Dollar and Great Britain Point forecasted cash flows is governed by the Company''s strategy, which provides principles on the use of such forward contracts consistent with the Company''s Risk Management Policy. The counterparty in these derivative instruments is a bank and the Company considers the risks of non-performance by the counterparty as insignificant. The Company has entered into a series of foreign exchange forward contracts that are designated as fair value hedges. The Company does not use forward covers and currency options for speculative purposes.

During the current year, the Company has earned profits on account of cash flow hedging derivatives. The above profit is included in foreign exchange gain (net) in the Statement of Profit and Loss. All the foreign exchange forward contracts designated as fair value flow hedges along with related forecasted transactions will be matured within the next financial year.

50 CYBER INCIDENT

During current year, there is a cyber-attack on some of Information Technology (IT) infrastructure of the Company and some of its subsidiaries. Management took steps to retrieve and restore the systems. All critical operational systems are functioning, however as a measure of abundant precaution, restricted access and preventive checks are put in place. Management through an IT service provider also completed the process of investigation to ascertain the nature, extent, and cause of possible data breach. Basis the procedures performed, management did not identify any instance of data breach. Basis the legal opinion obtained from the independent solicitors of the respective impacted countries, the Company and its impacted subsidiaries are in compliance with applicable legal and regulatory requirements. Management believes that there is no impact on these financial statements on account of this incident. The business operations of the Company and its subsidiaries are continuing in the normal manner post the cyber incident.

---

Mar 31, 2022

Equity shares movement during the five years preceeding 31 March 2022:

The Company bought back 865,675 equity shares at an average buyback price of '' 831.72 per equity share, comprising 2.63% of the pre-buyback paid-up equity share capital of the Company for an aggregate amount of '' 7,199.99 lacs. The buyback of equity shares through the stock exchange commenced on 20 August 2019 and was completed on 25 November 2019.

On 22 March 2021, the Board of directors approved, subject to approval of shareholders, the sub-division of equity shares of '' 10 each (fully paid up) into five equity shares of '' 2 each (fully paid up). The shareholders had approved the sub-division of equity shares through postal ballot resolution dated 24 April 2021. The record date for sub-division was 10 May 2021.

15C NATURE OF RESERVES

a Capital reserve

The Company recognises profit and loss on purchase, sale, issue or cancellation of the Company''s own equity instruments to capital reserve.

b Capital redemption reserve

As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve.

c Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilized in accordance with the provision of the Companies Act, 2013.

d Share based payment reserve

Share based payment reserve is used to recognize the grant date fair value of options issued to employees under the Employees Stock Option Schemes. Refer note 33 for further details of the plan.

e General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to statement of profit and loss.

^A Nature of security:-

(i) Secured by charge on all the current assets viz inventory, bill receivable, book debts and all other current assets.

(ii) Further Secured, on pari-passu basis, by :-

a) Equitable mortgage of land and building situated at K-6A & K-6B, Adarsh Nagar, E-68 & E-69, EPIP Zone, Sitapura, E-1 & E-2, SEZ-II, Sitapura, Jaipur and Office No. HW4070, BKC Mumbai.

b) First charge on block of assets of the company (excluding land & building and vehicles) situated at K-6A & K-6B, Adarsh Nagar and E-68, Sitapura, Jaipur.

(iii) Pledge of 200 common shares with no par value of STS Jewels Inc., USA.*

(iv) Pledge of 87,500 ordinary shares of HK $100 each of STS Global Limited, Hongkong (formerly STS Gems Limited).*

(v) Pledge of 12,576,633 equity shares of US $ 1 each of VGL Retail Ventures Limited, Mauritius (formerly Genoa Jewelers Limited).*

(vi) Personal guarantee of Mr. Sunil Agrawal, Managing Director of the Company. (refer note 42)

*During the year, the Company has received an approval from the lead bankers for releasing the securities pledged with bank subject to further approval by consortium bankers in their upcoming meeting.

* During the current year, the Company has reassessed tax benefits under section 91 of the Income tax Act, 1961 (‘Act''), based on which incremental minimum alternate tax credit of '' 605.62 lacs is recognized for the financial year 2020-21.

** In earlier years, the Company had claimed losses incurred by its overseas subsidiary as business expenditure upto the extent of its investment in such overseas subsidiary. The Company''s appeal on this issue was allowed by the Income-tax Appellate Tribunal (‘ITAT'') in earlier years, and the Honorable High Court (Rajasthan) dismissed the appeal filed by the Income-tax Department (‘ITD'') on this issue during the current year. Accordingly, the Company has recognised income-tax credit of '' 671.17 lacs under current tax and MAT credit of '' 976.37 lacs in current year.

The Company has benefited from certain tax incentives that the Government of India has provided for the units situated in Special Economic Zones (SEZs) under the Special Economic Zone Act, 2005, which began providing services on or after 1 April 2005. The eligible units are eligible for a deduction of 100% of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50% of such profits and gains for a further five years. Certain tax benefits are also available for a further five years subject to the unit meeting defined conditions. The aforesaid tax benefits are not available to units commencing operations on or after 1 April 2020.

The Company is subject to Minimum Alternate Tax (MAT) on its book profits, which gives rise to future economic benefits in the form of adjustment of future income tax liability. MAT paid for a year can be set-off against the normal tax liability within fifteen subsequent years, expiring between the years 2029 to 2036.

B Defined benefit plan

(i) Gratuity

The Company has a defined benefit gratuity plan. Every employee gets a gratuity on retirement/termination/resig nation at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. The following tables summarize the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

Sensitivities due to mortality & withdrawals are insignificant. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement. In presenting the above sensitivity analysis, the present value of defined benefit obligation has been calculated using the projected unit credit method at the end of reporting period, which is the same as that applied in calculating the defined obligation liability recognized in the balance sheet.

(ii) Leave obligations

The amount of the provision of '' 295.22 lacs (31 March 2021: '' 254.91 lacs) is presented as current and non current.

The Company has provided for the liability on the basis of actuarial valuation.

33 SHARE-BASED PAYMENTS

a) Vaibhav Global Limited, Employee Stock Options Plan (As amended) - 2006

Under the Vaibhav Global Limited, Employee Stock Options Plan (As amended) - 2006 (herein referred as ‘ESOP Plan''), the Nomination and Remuneration Committee decides upon the employees who qualify under the ESOP Plan and the number of options to be issued to such employees. The exercise price of the share options shall be the market price which would be the latest available closing price of the shares on the stock exchange, which records the highest trading volume of the Company''s shares on the date prior to date of meeting of the Compensation committee at which the options are granted, unless otherwise determined by the Board / Committee. Out of stock option granted, 20% stock option will vest at the end of one year from the date of Grant, 30% at the end of the second year and balance 50% at the end of third year. The Company has constituted “ Vaibhav Global Employee Stock Option Welfare Trust” to administer & implement various ESOP Plan. The fair value of the share options is estimated at the grant date using a Black-Scholes pricing model, taking into account the terms and conditions upon which the share options were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all the options under various tranches is 7 years from the date of vesting.

b) Vaibhav Global Limited Restricted Stock Unit Plan - 2019

During the previous financial year, the shareholders have approved the Vaibhav Global Limited Restricted Stock Unit Plan - 2019 (herein referred as ‘RSU Plan'') through postal ballot resolution dated 30 March 2019. According to RSU Plan, the Nomination and Remuneration Committee decides upon the employees who qualify under the Plan and the number of Restricted Stock Unit (RSU) to be issued to such employees. The exercise price of the RSU shall be the face value of the equity shares as on date of exercise unless otherwise determined by the Board / Committee. The exercise price shall not be less than the face value of equity share of the Company. Out of RSU granted, 20% RSU will vest at the end of one year from the date of grant, 30% at the end of the second year and balance 50% at the end of third year. The Company has constituted “ Vaibhav Global Employee Stock Option Welfare Trust” to administer & implement RSU Plan. The fair value of the RSU will be estimated at the grant date using a Black-Scholes pricing model, taking into account the terms and conditions upon which the RSU were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all the RSU will be 3 months from the date of respective vesting. During the year, the Nomination and Remuneration Committee has granted 276,541 RSU.

c) Vaibhav Global Limited, Employee Stock Options Plan - 2021

During the previous financial year, the shareholders have approved the Vaibhav Global Limited Employee Stock Option Plan - 2021 (herein referred as ‘ESOP Plan 2021'') through postal ballot resolution dated 21 March 2021. According to ESOP Plan 2021, the Nomination and Remuneration Committee (hereinafter referred as “Committee”) decides upon the employees who qualify under the ESOP Plan 2021 and the number of stock options to be issued to such employees. The exercise price of the stock options shall be determined by the Committee / Board of Directors from time to time as on the date of grant, which shall not be less than the face value of the equity share and not more than the market price. Out of ESOP granted, vesting period shall be determined by the Committee / Board of Directors at the time of grant of stock options ranging between one to three years from the date of grant of option. The Company has constituted “ Vaibhav Global Employee Stock Option Welfare Trust” to administer and implement the plans. The fair value of the stock option will be estimated at the grant date using a Black-Scholes pricing model taking into account the terms and conditions upon which the stock options were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all such stock option will be 7 years from the date of respective vesting. During the year, the Company has granted 82,816 options under the ESOP Plan 2021.

d) Vaibhav Global Limited, Management Stock Options Plan - 2021

During the previous financial year, the shareholders have approved the Vaibhav Global Limited Management Stock Option Plan - 2021 (herein referred as ‘MSOP Plan'') through postal ballot resolution dated 21 March 2021. According to MSOP Plan, the Nomination and Remuneration Committee (hereinafter referred as “Committee”) decides upon the employees who qualify under the MSOP Plan and the number of stock options to be issued to such employees. The exercise price of the such stock optionns shall be the face value of the equity shares as on date of exercise. For stock options granted, the vesting period shall be determined by the Committee / Board of Directors at the time of grant of stock option ranging between one to three years from the date of grant of options. The Company has constituted “Vaibhav Global Employee Stock Option Welfare Trust” to administer and implement MSOP Plan. The fair value of the stock options will be estimated at the grant date using a Black-Scholes pricing model taking into account the terms and conditions upon which the stock options were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all such stock options will be 7 years from the date of respective vesting. During the year, the Nomination and Remuneration Committee has granted 23,187 stock options.

The weighted average remaining contractual life for the share options outstanding as at 31 March 2022 was 5.81 years (31 March 2021: 6.82 years)

The weighted average fair value of options granted during the year was '' 740.51 (31 March 2021: '' 423.00).

The range of exercise prices for options outstanding at the end of the year was '' 9.06 to '' 263.56 (31 March 2021: '' 45.30 to '' 3,806.91)

35 CONTINGENT LIABILITIES AND COMMITMENTS a) Contingent liabilities:
Particulars	31 March 2022 31 March 2021
(a) Demand / show cause notices received from Government authorities
- Demand / show cause notice received under Income Tax Act	149.58 149.58
- Demand / show cause notice received under Customs Act	4.80 -
- Demand / show cause notice received under Goods and services Act	333.90 20.99
- Demand / show cause notice received under Services Tax Act	- 30.20
(b) Guarantees provided by the Company
- Guarantee given by the bank on behalf of the Company	785.00 580.60
- Corporate guarantee to bank against borrowing taken by subsidiary	500.00 -
(c) Claims against the Company, not acknowledged as debt	Not quantifiable Not quantifiable

A In earlier years, the Company received notice from the Income Tax Department under Section 148 of the Act for Assessment Year 2012-13. Subsequently the Company has also received similar notices for Assessment Year 2013-14 to Assessment Year 2015-16. The Honorable High Court of Rajasthan has granted stay order on the Company''s petition for these Assessment Years mentioned above. Based upon the nature and external expert opinion obtained by the Company, the management does not expect any liability to arise out of it. Amount is not quantifiable at this point in time.

B The Income Tax Department (“the ITD”) conducted a Survey proceeding under section 133A of the Act at the premises of the Company in November 2021. Subsequently, the Company provided all cooperation and necessary data / documents/ information, as requested by the ITD or otherwise. The ITD issued further queries post the conclusion of survey to which the Company has subsequently replied with. As on date, Based upon the nature and external expert opinion obtained by the Company, the management does not expect any liability to arise out of these proceedings.

34 DUES TO MICRO AND SMALL SUPPLIERS

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with their customers the Entrepreneurs Memorandum number as allocated after filing of the said Memorandum. Accordingly, the disclosures in below respect of the amounts payable to such enterprises as at the year-end has been made based on information received and available with the Company.

C During the financial year 2019-20, pursuant to the shareholder''s approval, the Company has bought back and extinguished a total of 865,675 equity shares at an average buyback price of '' 831.72 per equity share. Basis external opinion obtained by the Company, the Company believes that provisions of Section 115QA of Income Tax Act 1961 is not applicable to the Company.

D The Company is required to comply with the transfer pricing regulations, which are contemporaneous in nature. The Company appoints independent consultant annually for conducting transfer pricing studies to determine whether transactions with associate enterprises undertaken during the financial year, are on an arm''s length basis. Adjustments, if any, arising from the transfer pricing studies will be accounted for when the study is completed for the current financial year. The management is of the opinion that its transactions with associates are at arm''s length so that the outcome of the studies to corroborate compliance with legislation will not have any material adverse impact on the financial statements.

E The Company has certain pending litigations and claims filed by various forums/ authorities and third parties in the normal course of business. The Company has reviewed all pending litigations and claims files by various forums/ authorities and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable. In the opinion of management and legal advice obtained, the claims filed by third parties are speculative and frivolous and amount is unquantifiable at this point of time. The Company also believes that the above issues, when finally settled, are not likely to have any significant impact on the financial position of the Company.

b)	Commitments:
	Particulars	31 March 2022	31 March 2021
A	Estimated amount of contracts remaining to be executed on capital account {net of advances '' 42.76 lacs (31 March 2021: '' 503.93 lacs)} and not provided for	3.57	110.13

B The Company has issued letter of support for financial assistance to its subsidiaries (Vaibhav Lifestyle Limited, Vaibhav Vistar Limited and Shop LC GmbH, Germany) for ongoing projects and operations for a period of not less than 12 months from the date of financial closure of accounts of the subsidiaries Companies for the year ended 31 March 2022.

38 CAPITAL MANAGEMENT

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and the market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

(iii) The Company does not have any charges or satisfaction which are yet to be registered with ROC beyond the statutory period.

(iv) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

*The Company submits provisional drawing power (DP) statements on monthly basis to Punjab National Bank (PNB) being the lead bank latest by15^th of the next month and also to other member banks, in which DP limit is computed as per the terms and conditions of the sanction letter. The difference between DP statement and financial statement arise since DP statements are prepared on a provisional basis after exclusion of certain items of inventory, debtors, creditors and valuation of inventories is done as per the bank sanction letter. Further, the Company submit Quarterly Review Statements (QRS) to PNB which is tallied with the books of accounts and which could be different from DP statement submitted provisionally. In financial year 2021-22, the actual utilization of working capital remained within the bank sanction/DP limits.

37 SEGMENT REPORTING

As per Ind AS 108 ‘Operating Segments'', the Company has disclosed the segment information only as part of the consolidated financial statements.

(v) 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 Group (Ultimate Beneficiaries); or

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) 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 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,

(vii) The Company does not 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

(viii) The Company does not have any immovable property whose title deeds are not held in the name of the Company.

(ix) As per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016, the Company is not a Core Investment Company (CIC) and the group does not have any CIC.

40 DIVIDENDS

Dividends paid during the year ended 31 March 2022 include an amount of '' 1.5/- per equity share towards final dividend for the year ended 31 March 2021 and an amount of '' 4.5/- ('' 1.5/- per quarter) per equity share towards interim dividends for the year ended 31 March 2022.

Dividends paid during the year ended 31 March 2021 include an amount of '' 7/- per equity share towards final dividend for the year ended 31 March 2020 and an amount of '' 17.5/- per equity share towards interim dividends for the year ended 31 March 2021. Dividends declared by the Company are based on the profit available for distribution.

On 23 May 2022, the Board of Directors of the Company have proposed a final dividend of '' 1.5/- per share in respect of the year ended 31 March 2022 subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately '' 2,459.90 lacs.

(ii) Fair value hierarchy

The table shown below analysis financial instruments carried at fair value, by valuation method. The different levels have been defined below:

a) Level 1:

Level 1 hierarchy includes financial instrument measured using quoted prices. This includes listed equity instruments that have a quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period end.

b) Level 2:

If inputs required to fair value an instrument other than quoted prices included within Level 1 are observable, either directly (i.e., as prices) or indirectly (i.e., derived from prices), the instruments are included in Level 2.

c) Level 3:

If one or more of the significant inputs is not based on observable market data, the instruments is included in level 3.

The fair value of the financial assets and liabilities are included at the amount that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants. The following methods and assumptions were used to estimate the fair values:

• Other non-current financial assets and liabilities: Fair value is calculated using a discounted cash flow model with income approach, unless the carrying value is considered to approximate to fair value.

• Trade receivables, cash and cash equivalents, other bank balances, loans, other current financial assets, current borrowings, trade payables and other current financial liabilities: Approximate their carrying amounts largely due to the short-term maturities of these instruments.

44 FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

This section gives an overview of the significance of financial instruments for the Company and provides additional information on the balance sheet. Details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 6, 7, 11, 12, 13, 17, 18 and 19.

Risk management framework

Company is being driven by the market forces, its businesses are subject to several risks and uncertainties including financial risks. The Company''s documented risk management policies act as an effective tool in mitigating the various financial risks to which the business is exposed to, in the course of their daily operations.

The risk management policies cover areas around all identified business risks including commodity price risk, foreign exchange risk etc., Risks are identified through a formal risk management programme with active involvement of senior management personnel and business managers. The Company has in place risk management processes in line with the Company''s policy. Each significant risk has an owner, who coordinates the risk management process.

The risk management framework aims to:

• Better understand our risk profile;

• Understand and better manage the uncertainties which impact our performance;

• Contribute to safeguarding Company value and interest of various stakeholders;

• Ensure that sound business opportunities are identified and pursued without exposing the business to an unacceptable level of risk;

• Improve compliance with good corporate governance guidelines and practices as well as laws & regulations; and

• Improve financial returns

Treasury management

The Company''s treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

Treasury management focuses on capital protection, liquidity maintenance and yield maximization. The treasury operates as per the delegation of authority from the Board. Day-to-day treasury operations are managed by Company''s finance team. Long-term fund raising including strategic treasury initiatives are handled by a Treasury team. A monthly reporting system exists to inform senior management of investments, debt, currency and interest rate derivatives. The Company has a strong system of internal control which enables effective monitoring of adherence to Company''s policies.

Commodity price risk

Fluctuation in commodity price in market affects directly or indirectly the price of raw material and components used by the Company. The Company sells its products mainly to its Group Companies whereby there is a regular negotiation / adjustment of prices on the basis of changes in the commodity prices.

Financial Risk

The Company''s Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk. The Company does not engage in speculative treasury activity but seeks to manage risk and optimize interest through proven financial instruments.

(a) Liquidity

The Company requires funds both for short-term operational needs as well as for long-term investment programmes mainly in growth projects. The Company generates sufficient cash flows from the current operations which together with the available cash and cash equivalents and short-term investments provide liquidity both in the short-term as well as in the long-term. The Company has been rated by Care Ratings Ltd (CARE) for its banking facilities in line norms.

The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening balance sheet. The maturity profile of the Company''s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.

(b) Foreign exchange risk

The Company operates internationally and exposed to foreign exchange risk arising from various currency exposures, primarily with respect to US dollar and GBP. The Company is subject to the risk that changes in foreign currency values impact the Company exports revenue and purchases from overseas suppliers in foreign currency and foreign currency denominated borrowings.

The exchange rate between Indian Rupee and foreign currencies has impact on results of the Company''s operations. Consequently, the results of the Company''s operations get effected as the Rupee appreciates/depreciates against these foreign currencies.

Foreign currency sensitivity

The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange rate exposure with a simultaneous parallel foreign exchange rates shift in the currencies by 5% against the functional currency of the Company. A 5% appreciation / depreciation of the respective foreign currencies with respect to the functional currency would result in net decrease / increase in the Company''s profit and equity for the fiscal year 2022 and 2021 by 1,745.25 lacs and '' 1,757.81 lacs respectively.

(c) Interest rate risk

The Company is exposed to interest rate risk on short-term rate instruments. The borrowings of the Company are principally denominated in US dollars and GBP with floating rates of interest. The debt is of floating rates linked to LIBOR. These exposures are reviewed by appropriate levels of management on a monthly basis.

Collateral

The Group has hypothecated its trade receivables, inventory, advances and other current assets in order to fulfil the collateral requirements for the financial facilities in place. There are no other significant terms and conditions associated with the use of collateral.

(d) Counterparty and concentration of credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables), deposits with banks, short term investments, foreign exchange transactions and other financial assets. The Company has adopted a

policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

Trade receivable

* The Company has done functional restructuring, in its pursuit of bringing in more efficiency. This primarily involved reduction in manpower and hence resulted in a one-time cost of '' 56.22 lacs.

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are wholesale or end-user customer, their geographic location, trade history with the Company. An impairment analysis is performed quarterly. The calculation is based on historical experience/ current facts available in relation to default and delays in collection thereof. The management historical experience of collecting receivables is that credit risk is low. Hence, trade receivables are considered to be a single class of financial assets. Refer note 11 for exposure to trade receivables and note 3 for accounting policy on financial instruments

Financial assets other than trade receivables

With regards to other financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from which these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for excepted credit loss has been provided on these financial assets. Defined limits are in place for exposure to individual counterparties in case of mutual funds schemes. The carrying value of other financial assets other than cash and bank represents the maximum credit exposure. The Company''s maximum exposure to credit risk at 31 March 2022 is '' 18,168.74 lacs (31 March 2021 is '' 8,825.09 lacs)

Derivative financial instruments

The Company is exposed to foreign currency fluctuations on foreign currency assets / liabilities and forecast cash flows denominated in foreign currency. The use of derivatives to hedge United States of Dollar and Great Britain Point forecasted cash flows is governed by the Company''s strategy, which provides principles on the use of such forward contracts consistent with the Company''s Risk Management Policy. The counterparty in these derivative instruments is a bank and the Company considers the risks of non-performance by the counterparty as insignificant. The Company has entered into a series of foreign exchange forward contracts that are designated as fair value hedges. The Company does not use forward covers and currency options for speculative purposes.

During the current year, the Company has earned profits on account of cash flow hedging derivatives amounting to '' 38.55 Lacs. The above profit is included in foreign exchange gain (net) in the statement of profit and loss. All the foreign exchange forward contracts designated as fair value flow hedges along with related forecasted transactions will be matured within the next financial year.

The limits, authorities and monitoring systems are periodically reviewed by management and the Board. The market risk on derivatives is mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes.

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Mar 31, 2018

* The Board at its meeting held on 28 July, 2015 had approved a scheme of Capital Reduction under section 100 to 104 of the Companies Act 1956 read with section 52 of the Companies Act 2013 for setting off of accumulated losses as on 31 March, 2015 of H26,427.19 lacs against the Security Premium Account. The shareholder approved Scheme via postal ballot on 16 January 2016 & the Scheme is sanctioned by the Hon’ble High Court, Rajasthan (Jaipur) vide order dated 18 November 2016. The effect of such reduction of capital is taken in the financial statements of the previous year.

Nature of reserve

1 Share premium

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provision of the Companies Act, 2013.

2 Share based payment reserve

The share option outstanding account is used to recognise the grant date fair value of options issued to employees under the Employees Stock Option Schemes. Refer to note 41 for further details of the plan.

3 Capital redemption reserve

As per Companies Act, 2013, capital redemption reserve is created when company purchases its own shares out of free reserves or securities premium. A sum equal to the nominal value of the shares so purchased is transferred to capital redemption reserve.

4 Capital reserve

The Company recognises profit and loss on purchase, sale, issue or cancellation of the Company’s own equity instruments to capital reserve.

5 General reserve

The general reserve is used from time to time to transfer profit from retained earnings for appropriation purposes. As the general reserve is created by transfer from one component of equity to another and is not an item of other comprehensive income items included in the general reserve will not be reclassified subsequently to statement of profit and loss.

6 Retained earning

Retained earnings comprises of undistributed earnings after taxes.

^A Nature of security

(i) Secured by charge on all the current assets viz inventory, bill receivable, book debts and all other movable assets.

(ii) Further secured, on parri-passu basis, by :-

a. Equitable Mortgage of Land and Buildings situated at K-6A & K-6B, Adarsh Nagar, E-68 & E-69, EPIP Zone, Sitapura, E-1 & E-2, SEZ-II, Sitapura, Jaipur and Office No. HW4070, BKC Mumbai.

b. First charge on block of assets of the company (excluding Land & Building) situated at K-6A & K-6B, Adarsh Nagar and E-68, Sitapura, Jaipur

(iii) Pledge of 200 common shares with no par value of STS Jewels Inc.

(iv) Pledge of 87,500 Ordinary Shares of HK $100 each of STS Gems Limited, HKK.

(v) Pledge of 1,25,76,633 equity shares of US $1 each of Genoa Jewelers Ltd .

(vi) Personal Guarantee of Mr. Sunil Agrawal, Chairman and managing director of the Company.

* Investment excludes investment in subsidiaries which are accounted at historical cost.

(ii) Fair value hierarchy

The table shown below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined below:

a) Level 1: Level 1 hierarchy includes financial instrument measured using quoted prices. This includes listed equity instruments that have a quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period end.

b) Level 2: If inputs required to fair value an instrument other than quoted prices included within Level 1 are observable, either directly (i.e., as prices) or indirectly (i.e., derived from prices), the instruments are included in Level 2.

c) Level 3: If one or more of the significant inputs is not based on observable market data, the instruments is included in level 3.

The fair value of the financial assets and liabilities are included at the amount that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants. The following methods and assumptions were used to estimate the fair values:

- Derivative instruments: Fair value of foreign exchange contracts is determined using forward exchange rate at the balance sheet date.

- Other non-current financial assets and liabilities: Fair value is calculated using a discounted cash flow model with income approach, unless the carrying value is considered to approximate to fair value.

- Trade receivables, cash and cash equivalents, other bank balances, loans, other current financial assets, current borrowings, trade payables and other current financial liabilities: Approximate their carrying amounts largely due to the short-term maturities of these instruments.

7. Financial risk management objective and policies

This section gives an overview of the significance of financial instruments for the Company and provides additional information on the balance sheet. Details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 5, 6, 10, 11, 12, 16, 17 and 18.

Note referencing pertaining to financial assets to be given here.

Risk management framework

Companies being driven by the market forces, its businesses are subject to several risks and uncertainties including financial risks. The Company’s documented risk management policies act as an effective tool in mitigating the various financial risks to which the business is exposed to, in the course of their daily operations.

The risk management policies cover areas around all identified business risks including commodity price risk, foreign exchange risk etc., Risks are identified through a formal risk management programme with active involvement of senior management personnel and business managers. The Company has in place risk management processes in line with the Company’s policy. Each significant risk has an owner, who coordinates the Risk Management Process.

The risk management framework aims to:

- Better understand our risk profile;

- Understand and better manage the uncertainties which impact our performance;

- Contribute to safeguarding Company value and interest of various stakeholders;

- Ensure that sound business opportunities are identified and pursued without exposing the business to an unacceptable level of risk, and

- Improve compliance with good corporate governance guidelines and practices as well as laws & regulations.

- Improve financial returns

Treasury management

The Company’s treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

Treasury management focuses on capital protection, liquidity maintenance and yield maximization. The treasury operates as per the delegation of authority from the Board. Day-to-day treasury operations are managed by Company’s finance team. Long-term fund raising including strategic treasury initiatives are handled by a Treasury team. A monthly reporting system exists to inform senior management of investments, debt, currency and interest rate derivatives. The Company has a strong system of internal control which enables effective monitoring of adherence to Company’s policies.

The Company uses derivative instruments to manage its foreign currency exposure. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. Treasury transactions are normally in the form of forward contracts and these are subject to the Company guidelines and policies.

Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the on-going purchase and continuous. Due to the volatility of the price of the raw material (i.e. gold, silver etc.). The Company maintains a steady mix of domestic and international suppliers to cater to its requirement.

The commodity price for all the imported and domestic purchases are periodically reviewed and renegotiated depending upon the market situation. Currency risk is hedged using forwards to mitigate currency risk and hence the price risk on commodities.

The activities are conducted within the approved delegation of authority and adhere to a strictly defined internal control and monitoring mechanism. Decisions relating to price changes of commodities etc. are discussed and approved by the appropriate authority, as per rules laid down in the delegation of authority.

Financial risk

The Company’s Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk. The Company does not engage in speculative treasury activity but seeks to manage risk and optimise interest through proven financial instruments.

(a) Liquidity

The Company requires funds both for short-term operational needs as well as for long-term investment programmes mainly in growth projects. The Company generates sufficient cash flows from the current operations which together with the available cash and cash equivalents and short-term investments provide liquidity both in the short-term as well as in the long-term. The rating for the long term bank facilities have been upgraded by one notch up from CARE BBB to CARE A- which denotes adequate degree of safety regarding timely servicing of financial obligations . The rating for the short term bank facilities have been upgraded by one notch up from CARE A2 to CARE A2 which denotes strong degree of safety regarding timely servicing of financial obligations.

The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening balance sheet. The maturity profile of the Company’s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.

Collateral

The Company has hypothecated its trade receivables, inventory, advances and other current assets in order to fulfil the collateral requirements for the financial facilities in place. There are no other significant terms and conditions associated with the use of collateral.

(b) Foreign exchange risk

The Company operates internationally and exposed to foreign exchange risk arising from various currency exposures, primarily with respect to US Dollar and GBP. The Company is subject to the risk that changes in foreign currency values impact the Company exports revenue and purchases from overseas suppliers in foreign currency and foreign currency denominated borrowings.

The Company uses forward exchange contracts to hedge the effects of movements in exchange rates on foreign currency denominated assets and liabilities. Exposures on foreign currency are managed through the Company’s hedging policy, which is reviewed periodically to ensure that the results from fluctuating currency exchange rates are appropriately managed. The Company strives to achieve asset liability offset of foreign currency exposures and only the net position is hedged.

The exchange rate between Indian Rupee and foreign currencies has impact on results of the Company’s operations. Consequently, the results of the Company’s operations get affected as the Rupee appreciates/depreciates against these foreign currencies.

Foreign currency sensitivity

The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange rate exposure with a simultaneous parallel foreign exchange rates shift in the currencies by 5% against the functional currency of the Company.

A 5% appreciation/depreciation of the respective foreign currencies with respect to the functional currency would result in net decrease/increase in the Company’s profit or loss and equity for the fiscal year 2018, 2017 and 01 April 2016 by H1,669.68 lacs, H1,740.78 lacs and H1,470.62 lacs respectively.

(c) Interest rate risk

The Company is exposed to interest rate risk on short-term rate instruments. The borrowings of the Company are principally denominated in US dollars with floating rates of interest. The US dollar debt is of floating rates (linked to US dollar LIBOR). These exposures are reviewed by appropriate levels of management on a monthly basis.

(d) Counterparty and concentration of credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables), deposits with banks, short-term investments, foreign exchange transactions and other financial assets. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

Trade Receivable

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are wholesale or end-user customer, their geographic location, trade history with the Company. An impairment analysis is performed quarterly on an individual basis for wholesale customers and collectively for large number of end-user customers. The calculation is based on historical experience/ current facts available in relation to default and delays in collection thereof.

Concentration of credit risk with respect to trade receivables are limited, due to the Company’s customer base being large and diverse. The management historical experience of collecting receivables is that credit risk is low. Hence, trade receivables are considered to be a single class of financial assets. Refer note 11 for exposure to trade receivables and note 3 for accounting policy on Financial Instruments.

Financial assets other than trade receivables and derivative financial instruments

With regards to other financial assets with contractual cash flows other than trade receivable and derivative financial instruments, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from which these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for excepted credit loss has been provided on these financial assets. Defined limits are in place for exposure to individual counterparties in case of mutual funds schemes. The carrying value of other financial assets other than cash and bank represents the maximum credit exposure. The Company’s maximum exposure to credit risk at 31 March 2018 is RS,15,111.63 lacs; 31 March 2017 is RS,16,915.93 lacs.

Derivative financial instruments

The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency exchange rates and interest rates . The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. Treasury derivative transactions are normally in the form of forward contracts and these are subject to the Company guidelines and policies.

All derivative financial instruments are recognized as assets or liabilities on the balance sheet and measured at fair value through statement of profit and loss, generally based on quotations obtained from bankers. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation.

The limits, authorities and monitoring systems are periodically reviewed by management and the Board. The market risk on derivatives is mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes.

Non-qualifying/economic hedge

The Company enters into derivative contracts which are not designated as hedges for accounting purposes, but provide an economic hedge of a particular transaction risk or a risk component of a transaction. Hedging instruments include forward contracts . Fair value changes on such derivative instruments are recognized in the statements of profit and loss.

* Merged into The Jewelry Channel Inc., USA w.e.f. 28 February 2018.

Enterprises in which Key management personnels are interested :

1. VGL Softech Limited 3. Sony Mikes Holdings Limited

2. Brett Plastic Pvt. Limited

Key Management Personnel (KMP) :

1. Mr. Sunil Agrawal - Chairman & Managing Director

2. Mr. Shri Rahimullah - Whole time Director

Non-Executive & Non-Independent Directors

1. Mr. Nirmal Kumar Bardiya 3. Mr. Pulak Chandan Prasad

2. Mrs. Sheela Agarwal

Non-Executive & Independent Directors

1. Mr. Purushottam Agarwal4. Mr. Sunil Goyal

2. Mr. James Patrick Clarke 5. Mr. Santiago Roces Moran

3. Mr. Harsh Bahadur

8. Share-based payments

a.) VGL ESOP (As Amended) - 2006

Under the VGL ESOP (As Amended) - 2006 (herein referred as ''Plan’), the Compensation Committee decides upon the employees who qualify under the Plan and the no. of options to be issued to such employees. The exercise price of the share options shall be the market price which would be the latest available closing price of the shares on the stock exchange, which records the highest trading volume of the Company’s shares on the date prior to date of meeting of the Compensation committee at which the options are granted. Out of stock option granted, 20% stock option will vest at the end of one year from the date of grant, 30% at the end of the second year and balance 50% at the end of third year. The Company has constituted "Vaibhav Global Employee Stock Option Welfare Trust" to administer & implement various VGL ESOP schemes. The fair value of the share options is estimated at the grant date using a Black-Scholes pricing model, taking into account the terms and conditions upon which the share options were granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest. The exercise period for all the options under various tranches is 7 years from the date of vesting.

The weighted average remaining contractual life for the share options outstanding as at 31 March 2018 was 7.99 years (31 March 2017: 8.45 years, 31 March 2016: 8.18 years)

The weighted average fair value of options granted during the year was H294.62 (31 March 2017: H174.89).

The range of exercise prices for options outstanding at the end of the year was H45.30 to H773.20 (31 March 2017: H26.75 to H752.60, 31 March 2016: H26.75 to H752.60)

The following tables list the inputs to the models used for the three plans for the years ended 31 March 2018 and 31 March 2017, respectively:

9. Explanation of transition to Ind AS

As stated in note 2(a) these are the first financial statements prepared in accordance with Ind AS. For the year ended 31 March 2017, the Company had prepared its financial statements in accordance with Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act (''previous GAAP’).

The accounting policies set out in note 2 have been applied in preparing these financial statements for the year ended 31 March 2016 including the comparative information for the year ended 31 March 2017 and the opening Ind AS balance sheet on the date of transition i.e. 01 April 2016.

In preparing its opening Ind AS balance sheet as at 01 April 2016 and in presenting the comparative information for the year ended 31 March 2017, the Company has adjusted amounts reported previously in financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP and how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows.

Optional exemptions availed and mandatory exceptions

In preparing the financial statements, the Company has applied the below mentioned optional exemption and mandatory exemptions.

A. Optional exemptions availed

1. Business combinations

Ind AS 103 Business Combinations has not been applied to acquisitions of subsidiaries, which are considered businesses under Ind AS that occurred before 01 April 2016. Use of this exemption means that the Indian GAAP carrying amounts of assets and liabilities, that are required to be recognised under Ind AS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with respective Ind AS. The Company recognises all assets acquired and liabilities assumed in a past business combination. Assets and liabilities that do not qualify for recognition under Ind AS are excluded from the opening Ind AS balance sheet. The Company did not recognise or exclude any previously recognised amounts as a result of Ind AS recognition requirements.

The Company has not applied Ind AS 21 The Effects of Changes in Foreign Exchange Rates, retrospectively to fair value adjustments that occurred before the date of transition to Ind AS. Such fair value adjustments are treated as assets and liabilities of the parent rather than as assets and liabilities of the acquiree. Therefore, those assets and liabilities are already expressed in the functional currency of the parent or are non-monetary foreign currency items and no further translation differences occur.

2. Property plant and equipment and intangible assets

As per Ind AS 101 an entity may elect to use carrying values of property, plant and equipment and intangible assets as on the date of transition to Ind AS (which are measured in accordance with previous GAAP and after making adjustments relating to decommissioning liabilities prescribed under Ind AS 101) if there has been no change in its functional currency on the date of transition.

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of intangible assets also. The carrying values of property, plant and equipment as aforesaid are after making adjustments relating to decommissioning liabilities, if any.

3. Cumulative translation differences

As per Ind AS 101, an entity may deem that the cumulative translation differences for all foreign operations to be zero as at the date of transition by transferring any such cumulative differences to retained earnings.

The Company has elected to avail of the above exemption.

4. Determining whether an arrangement contains a lease

Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind AS 17 for determining whether an arrangement existing at the date of transition contains a lease by considering the facts and circumstances existing at the date of transition (rather than at the inception of the arrangement).

The Company has elected to avail of the above exemption.

5. Designation of previously recognised financial instruments

Ind AS 101 permits an entity to designate particular investments (other than equity investments in subsidiaries) as at fair value through profit and loss (FVTPL). Accordingly Company have recognised certain investments as FVTPL on the date of transition.

B. Mandatory exceptions applied

The following mandatory exceptions have been applied in accordance with Ind AS 101 in preparing the financial statements:

1. Estimates

The Company’s estimates in accordance with Ind AS at the transition date to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 01 April 2016 and at 31 March 2017 are consistent with the estimates as at the same date made in conformity with previous GAAP.

As per Ind AS 101, where application of Ind AS, requires an entity to make certain estimates that were not required under previous GAAP those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

The Company’s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the financial statements that were not required under the previous GAAP are listed below:

- Fair value of financial instrument carried at FVTPL.

- Determination of the discounted value for financial instruments carried at amortized cost.

2. Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of the facts and circumstances existing as on the date of transition. Further the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at

vii. Other comprehensive income

Under Indian GAAP the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

viii. Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

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Mar 31, 2017

1. Related Party Disclosures:

A. List of related parties :

Subsidiaries (Direct and Step down)

1. Jewel Gem USA Inc.;(Step down) 2. STS Gems Japan Limited;

3. STS Gems Limited, Hong Kong; 4. STS Jewels Inc., USA;

5. STS Gems Thai Limited, Thailand; 6. Genoa Jewelers Limited, BVI;

7. The Jewellery Channel Inc., USA (Step down) 8. The Jewellery Channel Ltd., United Kingdom; (Step down)

9. PT STS Bali (Step down)

Enterprises in which Key management personnels are interested :

1. VGL Softech Limited 2 Brett Plastics Pvt. Limited

3. Sonymike’s Holdings Ltd. 4. Ganpati Chambers Pvt Ltd.

5. Jaipur Gem Bourse Limited

Key Management Personnel (KMP):

1. Shri Sunil Agrawal -Chairman & Managing Director 2. Shri Rahimullah - Whole time Director Relative of Key Management Personnel

I. Smt. Deepti Agrawal 2. Shri Ghanshyam Agarwal

3. Smt. Sheela Agarwal 4. Shri Hursh Agrawal

5. Master Neil Agrawal 6. Smt. Fatima Be

7. Smt. Batool Begum 8. Shri Arifullah

9. Shri Inamullah 10. Shri Imranullah

II. Shri Rizwanullah 12. Shri Asifullah

13. Smt. Amrin 14. Shri Ikramullah

15. Smt. Renu Raniwala 16. Shri Sanjeev Agrawal

Notes :

a Loans to subsidiaries are given for general business purpose and have been utilized for the same.

b Guarantee provided to the lenders of subsidiary is for availing term loans and working capital facility from the lender bank. c The working capital borrowings are secured by personal guarantee of Mr. Sunil Agrawal, Chairman and Managing Director of the Company (Refer Note No. 5).

2. Segment Reporting

The Company on standalone basis is engaged in manufacturing/ trading and wholesale of “’fashion and lifestyle products’ as downstream manufacturing facility. Thus, the Company has only one reportable segment. Accordingly, the segment information as required by Accounting Standard -17 on “Segment Reporting” is not required to be disclosed.

3. Lease Commitments

The Company has taken office and other premises on cancellable and non-cancellable operating lease. The lease rental recognized in the Statement of Profit and Loss for the year ended 31st March,2017 are H56,96,061 (Previous Year- H72,02,600).

4. The Board at its meeting held on 28th July,2015 had approved a Scheme of Capital Reduction under section 100 to 104 of the Companies Act 1956 read with section 52 of the Companies Act 2013 for setting off of accumulated losses as on 31st March, 2015 of H2,64,27,18,509 against the Security Premium Account. The Shareholder approved Scheme via postal ballot on 16th January, 2016 & the Scheme is sanctioned by the Hon''ble High Court, Rajasthan (Jaipur) vide order dated 18th November,2016. The effect of such reduction of capital has been taken in the financial statements during the year.

5. Corporate Social Responsibility

(a) Gross amount required to be spent by the company during the year is H81,43,763

6. The Company has established a comprehensive system of maintenance of information and documents are required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by due date as required under the law. The management is of the opinion that its transactions with the associated enterprises are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

7. Previous year’s figure have been regrouped/ reclassified wherever necessary to conform to the current year classification.

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Mar 31, 2016

Note No.1 Significant Accounting Policies 1. Basis of Preparation of Financial Statements

a. The financial statements have been prepared in compliance with the applicable Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and other pronouncement of Institute of Chartered Accountant of India, with relevant provisions of Companies Act, 2013; applicable guidelines issued by the Securities Exchange Board of India (SEBI) and generally accepted accounting principles applicable in India (GAAP). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires changes in the accounting policy hitherto in use.

b. The financial statements have been prepared under historical cost convention on an accrual basis.

c. All the assets and liabilities have been classified as current or noncurrent as per Company''s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of product and time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be 12 months for the purpose of current - noncurrent classification of assets & liabilities.

1. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management believes the assumption used in the estimates is prudent and reasonable. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized.

2. Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation and impairment losses. Cost includes capital cost, freight, duties, taxes and other incidental expense incurred during the construction / installation stage attributable to bringing the asset to working condition for its intended use.

3. Depreciation and Amortization

a. Depreciation on Fixed Assets, other than assets acquired on lease, is being provided over the useful life of an asset on written down value method and in the manner specified in Schedule II of the Companies Act, 2013.

b. Assets acquired on lease are amortized over the period of lease in equal installments.

c. Intangible Assets are amortized over their respective individual estimated useful lives on WDV basis.

4. Intangible Assets

Intangible assets are recognized if it is probable that future economic benefits that are attributable to the asset will flow to the company and the cost of the assets can be measured reliably.

5. Impairment of Assets

As at each balance sheet date, the carrying amount of assets is tested for impairment so as to determine

a. the provision for impairment loss, if any, required or

b. the reversal, if any, required for impairment loss recognized in previous periods.

Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined

a. in the case of an individual asset, at the higher of net selling price and the value in use.

b. in the case of a cash-generating unit (a group of assets that generates identified independent cash flows), at the higher of the cash generating unit’s selling price and the value in use.

Value in use is determined as the present value of estimated future cash flow from the continuing use of an asset and from its disposal at the end of its useful life.

6. Borrowing Cost

Borrowing Costs attributable to the acquisition or construction of qualifying assets are capitalized as a part of the cost of such assets. All other borrowing costs are charged to revenue.

7. Inventories

a. Inventories are valued at lower of cost and estimated net realizable value. Cost is determined on ‘First-in First-out’, ‘Specific Identification’, or “Weighted Averages’ basis as applicable. Cost of Inventories Comprises of all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of semi finished and finished goods are determined on absorption costing method.

b. All raw materials purchased are simultaneously issued for production. Accordingly material-in-process includes such raw materials as well. Semi Finished Goods are goods manufactured and pending for pre-shipment inspection. Materials consumed are materials used in production of semi finished and finished goods only.

c. Identification of a specific item and determination of estimated net realizable value involve technical judgment of the management. The valuation is further supported by certificate from an independent approved value, which has been relied upon by the Auditors.

8. Investments

Long-term investments including those held through nominees are stated at cost. Provision for diminution in the value of long-term investments (including Loans and Advances to Subsidiaries considered as a part of net investment) is made only if such a decline is other than temporary in the opinion of the management.

Current investments are carried at lower of cost and fair value.

9. Revenue Recognition Sale of Goods:

Revenue from sales of goods is recognized when risk and rewards of ownership of the products are passed on to the customers, which is generally on dispatch of goods and is stated net of returns, trade discounts, claims etc.

Dividend on Investment:

Revenue is recognized when the right to receive payment is established.

Interest Income:

Interest Income is recognized on time proportionate basis.

Export Incentives:

Export Incentive including duty drawback is recognized on accrual basis in the year of export.

10. Foreign Currency Transactions:

a. Initial Recognition:

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

b. Conversion:

Monetary items denominated in foreign currencies at the year-end are translated at closing rates. Non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction and investment in foreign companies are recorded at the exchange rates prevailing on the date of making the investments. Contingent Liabilities are translated at closing rate.

Exchange difference arising on translation of Loan and Advances to non — integral wholly owned subsidiaries and forming part of net investment, are recognized in foreign currency translation reserve. Such accumulated exchange differences are taken to statement of profit and loss account on liquidation or on proportionate basis on partial liquidation of such loans and advances.

c. Exchange Differences:

Exchange differences arising on the settlement of monetary items or on restatement of monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

d. Forward Exchange Contract not intended for trading or speculation purposes:

The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of contract. Exchange differences on such contract are recognized in the statement of profit and loss in the year in which the exchange rate changes. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense.

11. Employee Benefits

a Short term and other long term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

b. Employee’s Retirement benefits and long term Compensated Absences are recognized as an expense in the statement of profit and loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable, determined using actuarial valuation by an independent actuary using the projected unit credit method. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the statement of profit and loss.

c. In respect of Employee Stock Options, the excess of market price of shares as at the date of grant of option granted to employee (including certain employees’ of subsidiaries) over the exercise price is treated as Employee Compensation Cost and amortized on a straight — line basis over the vesting period.

12. Provision for Current and Deferred Taxation

a. Income tax expense for the year, comprising current tax and deferred tax is included in determining the net profit for the Year.

b. A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and Tax laws. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future Taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable Income will be available against which such deferred tax assets can be realized.

c. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

13. Earnings per Share

The basic earnings per share is computed by dividing the net profit after tax for the year by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per shares, net profit after tax for the year and weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. the average market value of the outstanding shares)

14. Cash and Cash Equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

15. Lease

Leases in which a significant portion of the risks and rewards of ownership are retained by the less or are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease or other systematic basis more representative of the time pattern of the user’s benefits.

16. Provision, Contingent Liabilities and Contingent Assets

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a. the Company has a present obligation as a result of past event,

b. a probable outflow of resources is expected to settle the obligation and

c. the amount of the obligation can be reliably estimated Contingent Liability is disclosed in case of

a. a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation

b. a possible obligation, unless the probability of outflow of resources is remote.

Contingent Assets are neither recognized, nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet Date.

c The Company has one class of equity shares having a par value of H10 per share. Each shareholder is eligible for one vote per share held except those held as underlying for GDR. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

e Employee Stock Option Scheme:

For details of Employee Stock Options Plan (ESOP) Scheme, refer to note no. 32

f There are no bonus shares, shares issued for consideration other than cash or shares bought back during the period of five years immediately preceding the reporting date.

17 Employee Stock Option Scheme: a VGL ESOP (As amended)-2006

The Company has constituted ” Vaibhav Global Employee Stock Option Welfare Trust” to administer & implement various VGL ESOP schemes . Out of stock option granted, 20% stock option will vest at the end of one year from the date of Grant, 30% at the end of the second year and balance 50% at the end of third year. The exercise period for all the options under various tranches has been increased to 7 years from the date of vesting as approved by the shareholders in the AGM held on 25th July,2014.

The details of the Grant under the aforesaid schemes are as under:-

18 Segment Reporting

The Company, on standalone basis, operates in only one business segment — “Wholesale Business”- as a downstream manufacturing facilities. In view of this, no further disclosure is required as per Accounting Standard “AS-17”.

19 The Board in its meeting held on 28th July, 2015 had approved a Scheme of Capital Reduction under section 100 to 104 of the Companies Act 1956 read with section 52 of the Companies Act 2013 for setting off of accumulated losses as on 31st March, 2015 of H264.3 crores against the Share Premium Account. The Shareholder have approved Scheme via postal ballot on 16th Jan, 2016 & Scheme is filled with High Court for its approval.

20 Previous year’s figure have been regrouped/ rearranged wherever necessary.

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Mar 31, 2015

Employee Stock Option Scheme:

For details of Employee Stock Options Plan (ESOP) Scheme, refer to note no. 35

There are no bonus shares, shares issued for consideration other than cash or shares bought back during the period of five years immediately preceding the reporting date.

1. Contingent Liabilities and Commitments

Year ended Particulars 31st March, 2015 (RS.)

(a) Capital Commitment:

Estimated amount of contracts remaining to be executed on capital account and not provided for: 41,952,663

(b) Contingent Liabilities:

Guarantees given by bank on behalf of the 57,100,000 Company

Guarantees given to bank & others by the 298,183,500 Company

Disputed Tax Matters:

Excise Duty 198,326,582

Income tax * 3,880,370



Year ended Particulars 31st March, 2014 (RS.)

(a) Capital Commitment:

Estimated amount of contracts remaining to be executed on capital account and not provided for: 15,100,000

(b) Contingent Liabilities:

Guarantees given by bank on behalf of the 25,000,000 Company

Guarantees given to bank & others by the 239,726,400 Company

Disputed Tax Matters:

Excise Duty 198,326,582

Income tax * 165,415,902

*Income tax demand for assessment year 2010-11 of H144,908,800 has been decided in favor of the company vide ITAT, Jaipur Order dated 30th April, 2015

2.The Company has classified various benefits provided to employees as under:

A. Defined Contribution Plans

a. Provident Fund

b. State Defined Contribution Plan

i. Employers'' Contribution to Employees'' State Insurance

3. Employee Stock Option Scheme: a. VGL ESOP (As amended)-2006

During the year the company has constituted " Vaibhav Global Employee Stock Option Welfare Trust" to administer & implement various VGL ESOP schemes . Out of stock option granted, 20% stock option will vest at the end of one year from the date of Grant, 30% at the end of the second year and balance 50% at the end of third year. The exercise period for all the options under various tranches has been increased to 7 years from the date of vesting as approved by the shareholders in the AGM held on 25th July,2014.

4. Related Party Disclosures:

A. List of related parties with whom transactions have taken place and relationships:

Subsidiaries (Direct and Step down)

1. Jewel Gem USA Inc.;(Step down)

2. STS Gems Japan Limited;

3. STS Gems Limited, Hong Kong;

4. STS Jewels Inc., USA;

5. STS Gems Thai Limited, Thailand;

6. Genoa Jewelers Limited, BVI;

7. The Jewellery Channel Inc., USA (Step down)

8. The Jewellery Channel Ltd., United Kingdom; (Step down)

9. PT STS Bali (Step down)

Enterprises in which Key Managerial Personnels are interested :

1. VGL Softech Limited

2. Brett Plastics Pvt. Limited

3. Shivram Global Pvt. Ltd.

4. Emerald Creation Inc.

5. Anubhav Gems (P) Ltd.

6. Reengus Exim Private Limited

7. STP Exim Private Limited

8. Surawell Pacific Limited

9. STS Holdings Ltd.

10. Sonymike''s Holdings Ltd

Key Managerial Personnel (KMP):

1. Shri Sunil Agrawal -Chairman & Managing Director

2. Shri Rahimullah - Whole Time Director

Relative of Key Managerial Personnel

1. Smt. Deepti Agrawal

2. Shri Ghanshyam Agarwal

3. Smt. Sheela Agarwal

4. Hursh Agrawal

5. Neil Agrawal

6. Smt.Fatima Be

7. Shri Azizullah

8. Smt.Batool Begum

9. Shri Inamullah

10. Shri Imranullah

II. Shri Rizwanullah

12. Shri Arifullah

13. Shri Asifullah

14. Ms.Amrin

5. Segment Reporting

The Company, on standalone basis, operates in only one business segment - "Wholesale Business" - as a downstream manufacturing facilities In view of this, no further disclosure is required as per Accounting Standard "AS-17".

6. Previous years figure have been regrouped/ rearranged wherever necessary.

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Mar 31, 2014

Contingent Liability is disclosed in case of

a. a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation

b. a possible obligation, unless the probability of outflow of resources is remote.

Contingent Assets are neither recognized, nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet Date.

c. The company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held except those held as underlying for GDR. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

d. The company had issued 44,00,000 non Convertible 1% Redeemable Cumulative Preference shares in the year of 2006-07. These Preference Shares have been entirely redeemed during the current year in accordance with the terms and conditions on which they were issued.

f. Employee Stock Option Scheme:

The company during the year granted 98,537, 43,329 and 64,029 stock options as approved by Compensation Committee Meeting at price of Rs. 119.05, Rs. 126.35 and Rs. 418.40 respectively to the eligible employees of the company and its subsidiaries.

Out of stock option granted, 20% stock option will vest at the end of one year from the date of Grant, 30% stock option at the end of the second year and balance 50% stock option at the end of third year. The exercise period for the options under tranche A,D, E, I is four years and under tranche F ,G, H, I is one year from the date of vesting.

b Nature of Security

A. Corporate Loan :- (i ) Above Corporate Loan is secured by second charges on Current Assets as well as Fixed Assets of the Company (ii) Pledge of 2,300,000 equity shares of Rs. 10 each of Vaibhav Global limited by Brett Plastic Private Limited and; (iii) Pledge of 21,800,000 equity shares of US $ 1 each of Genoa Jewelers Limited, BVI

B. Working Capital Term Loan

(i) Above WCTL Loan is secured by first pari pasu charge on block of assets (including Land & Building)

C. Working Capital Term Loan & Corporate Loan is further secured by ( on pari pasu basis) :-

(i) Pledge of 254,332 equity shares of Rs. 10 each of Vaibhav Global limited by Brett Plastic Private Limited.

(ii) Pledge of 200 common shares with no par value of STS Jewels Inc.

(iii) Pledge of 87,500 Ordinary Shares of HK $100 in STS Gems Limited, HKK.

(iv) Pledge of 12,576,633 equity shares of US $ 1 each and assignment of loan worth USD 14.55 million to Genoa Jewelers Limited, BVI and;

(v) Personal Guarantee of Mr. Sunil Agrawal, Chairman and Managing Director of the Company & pledge of 28140 shares in his name.

c Terms of Repayment of Term Loans

A. Corporate Loan

IDBI: Term Loan of Rs.40.74 Crore with a moratorium period of 30 months and repayable in equal monthly for installment over a period of 60 months commencing July 2011 carrying interest @ 8% p.a. upto June 2011 , 10 % from July 2011 to Mar 13 and there after @ 13.75 % p.a.Company has repaid entire Loan in the month of April,14 and accordingly shown under current maturity of long term Debt.

B. Working Capital Term Loan

Punjab National Bank : WCTL of Rs.36 Crore with a moratorium period of 30 months and repayable in equal monthly 60 instalment commencing July 2011 carrying interest @ 8% p.a. upto June 2011, from July 2011 to July 2012 @ 10 %, from August 2012 to Mar 13 10.5 % and @ 14.5 % p.a. there after

State Bank of Bikaner & Jaipur: WCTL of Rs.18 Crore with a moratorium period of 30 months and repayable in equal monthly 60 instalment commencing July 2011 carrying interest @ 8% p.a. upto June 2011 from July 2011 to July 2012 @ 10 %, from August 2012 to Mar 13 10.5 % and @ 14.5 % p.a. there after

Union Bank of India: WCTL of Rs.18 Crore with a moratorium period of 30 months and repayable in equal monthly 60 instalment commencing July 2011 carrying interest @ 8% p.a. upto June 2011 from July 2011 to July 2012 @ 10 %, from August 2012 to Mar 13 @ 10.5 %.

Working Capital Facilities :-

(i ) Above Loans are secured by hypothecation of Stock-in-trade and Book Debts on pari-passu basis.

(ii) Further Secured, on parri-passu basis, by :- a. Equitable Mortgage of Land and Buildings situated at K-6A & K-6B, Adarsh Nagar and E-68 & E-69 EPIP, Sitapura, Jaipur b. First charge on block of asset of the company (excluding Land & Building and vehicles)

(iii) Pledge of 254,332 equity shares of Rs. 10 each of Vaibhav Global limited by Brett Plastic Private Limited.

(iv) Pledge of 200 common shares with no par value of STS Jewels Inc.

(v) Pledge of 87,500 Ordinary Shares of HK $100 each of STS Gems Limited, HKK.

(vi) Pledge of 12,576,633 equity shares of US $ 1 each and assignment of loan worth USD 14.55 million to Genoa Jewelers Limited, BVI and;

(vii) Personal Guarantee of Mr. Sunil Agrawal, Chairman and Managing Director of the Company & pledge of 28140 shares in his name.

1 Two Wholly owned subsidiaries of the company, namely Genoa Jewellers Ltd and STS Gems Thai Ltd. are having negative net worth as per the Audited financials of these companies. The company has exposure of Rs. 2,593,749,275 (Previous year Rs. 3,120,839,275) Rs. 1,054,450,991 (Previous year Rs. 16,021,845 ) & Rs. 540,992,949 (Previous year Rs. 757,997,632) in these companies towards investments, loans and advances and Trade receivables respectively against which aggregate provision of Rs. 1,112,599,043 (Previous year Rs. 1,653,791,336) has been made in the accounts of earlier year. The management of the company does not foresee any further requirement of provision in respect of these subsidiaries. Since the investment in these subsidiaries are long term in nature and all of the subsidiaries are having substantial carrying business value.

2 The share application money of Rs. 424158 has been received under VGL (ESOP) Scheme from employees of the company and its subsidiaries. Total Number of shares to be allotted are 13266 out of which 3266 shares are to be allotted at premium of Rs. 35.30 per share and 10000 shares are to be allotted at a premium of Rs. 16.75 per share. The company has sufficient authorised capital to cover the share capital amount on allotment of shares out of share application money. No share application money is due for refund and has not remained pending beyond the period of allotment as mentioned in the share application form. These shares have been allotted on May 14, 2014.

3 Related Party Disclosures:

A. List of related parties with whom transactions have taken place and relationships: Subsidiaries (Direct and Step down)

1. Jewel Gem USA Inc.;

2. STS Gems Japan Limited;

3. STS Gems Limited, Hong Kong;

4. STS Jewels Inc., USA;

5. STS Gems Thai Limited, Thailand;

6. Genoa Jewellers Limited, BVI;

7. The Jewellery Channel Inc., USA (Step down)

8. The Jewellery Channel Ltd., United Kingdom; (Step down)

Enterprises in which Key management personnel''s are interested :

1. VGL Softech Limited

2. Surawell Pacific Limited

3. Brett Plastic Pvt. Limited

4. Shivram Global Private Limited

5. Emerald Creation Inc.

6. Anubhav Gems (P) Ltd

7. Reengus Exim Private Limited

8. STP Exim Private Limited

9. Heartiford Ltd.

10. STS Holdings Ltd.

11. Sony Mikes holdings Ltd

12. Punag Ltd.

Key Management Personnel (KMP):

1. Shri Sunil Agarwal –Chairman & Managing Director w.e.f.1st Feb,2014

2. Shri Rahimullah – Whole time Director w.e.f.1st Feb,2014 (MD till 31st Jan,2014)

3. Shri Hemant Sultania – Group CFO w.e.f.1st Dec,2013

4. Shri Brahm Prakash – Company Secretary

Relative of Key Management Personnel

1. Mr. Asifullah;

2. Mr. Arifullah,

4 Segment Reporting

Due to change in organizational structure as well as business focus of company consequent upon acquisition/setting up of various Overseas Corporate Bodies, differential risk and rewards are now more identifiable and associated with the methods of distribution of products and hence, Company has identified business segment with respect to methods of distribution as Primary Segment for its Consolidated Operation. The Company on standalone basis, operates in only one business segment – "Wholesale Business" In view of this, no further disclosure is required as per Accounting Standard "AS-17".

5. Contingent Liabilities and Commitments

1(a). Capital Commitment:

Commitments 15,100,000 Nil

1(b). Contingent Liabilities:

Guarantees given by bank on behalf of the Company 25,000,000 91,560,000

Guarantees given to bank & others by the Company 239,726,400 1,530,850,386

Disputed Tax Matters:

Custom Duty 18,33,26,582 64,226,582

Income tax * 165,415,902 3,880,370

* In respect of income tax liability for Assessment Year 2010-2011, for which reference has been made by the Company to Dispute Resolution Panel (DRP) against Draft Assessment Order. Pending final outcome of the DRP order amount in not ascertainable.

Dividend on Cumulative Preference Share* - 24,566,667

(*Arrears pertaining to 2007-08, 2008-09 ,2009-10, 2010-11, 2011-12 & 2012-13)

6 Previous year''s figure have been regrouped/ rearranged wherever necessary.

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Mar 31, 2013

1 Three subsidiaries of the company are having negative net worth. The company has exposure of Rs 312,08,39,275,(Previous year Rs.4,003,319,864) Rs. 160,21,31,845 (Previous year Rs.1,201,671,493 )& Rs. 75,79,97,632(Previous year Rs. 1,099,953,990) in these companies towards investments, loans and advances and Trade receivables respectively against which aggregate provision of Rs 165,37,91,336 (Previous year Rs.2,253,800,190) has been made in the accounts of earlier year. The management of the company does not foresee any further requirement of provision in respect of these subsidiaries. Since the investment in these subsidiaries are long term in nature and all of the subsidiaries are having substantial carrying business value.

2 During the year the Company has written off its Investment in equity shares of one of the Subsidiary STS Creation Thai Limited, Thailand amounting to Rs. 62,031,574. An equivalent amount of provision for permanent diminution in such investment made in earlier years have been written back.

3 Related Party Disclosures:

A. List of related parties with whom transactions have taken place and relationships:

Subsidiaries (Direct and Step down)

1. Jewel Gem USA Inc.;

2. STS Gems Japan Limited;

3. STS Gems Limited, Hong Kong;

4. STS Jewels Inc., USA;

5. STS Creations Thai Limited, Thailand;

6. STS Gems Thai Limited, Thailand;

7. Genoa Jewelers Limited, BVI;

8. STS Gems USA Inc.;

9. The Jewellery Channel Ltd., United Kingdom; (Step down)

10. The Jewellery Channel Inc., USA (Step down)

Enterprises in which Key management personels are interested :

1. VGL Softech Limited

2. Shivram Properties Private Limited

3. Surawell Pacific Limited

4. Emerald Creation Inc.

5. Brett Plastic Pvt. Limited

6. Anubhav Gems (P) Ltd

7. Reengus Exim Private Limited 8. STP Exim Private Limited

Key Management Personnel (KMP):

1. Shri Rahimullah - Managing Director Relative of Key Management Personnel

1. Mr. Asifullah; 2. Mr. Arifullah,

4 Segment Reporting

Due to change in organizational structure as well as business focus of company consequent upon acquisition/setting up of various Overseas Corporate Bodies, differential risk and rewards are, now, more identifiable and associated with the method of distribution of product and hence, Company has identified business segment with respect to method of distribution as Primary Segment for its Consolidated Operation. The Company, on standalone basis, operates in only one business segment - "Wholesale Business" In view of this, no further disclosure is required as per Accounting Standard "AS-17".

5 In the opinion of the Board, all assets other than fixed assets and non current investments have a value on realisation in the ordinary course of business at least equal to the amount stated.

6 Previous year''s figure have been regrouped/ rearranged wherever necessary.

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Mar 31, 2012

A. The company has one class or equity shares having a per value of Rs. 10 per share Each shareholder is eligible for one vote per share held expect those held as underlying for GDR. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting, except in case of interim dividend. In the event of Liquidation, the equity shareholders are eligible to receive the remaining assets of the Company of the after distribution of all preferential amounts, in proportion to their shareholding.

b. Company has issued 44,00,000 Convertible 1% Redeemable Preference shares in the year 2006-07. Those Preference Shares are redeemable at the end of seven years from the data of allotment i.e. 31st Oct, 2006 or before at the discretion of the Board.

c. Employee Stock Option Scheme:

The Company has issued Employees' Stock Option Scheme (VGL ESOP - 2006) to its employees, (including certain employees of the Subsidiaries).

Out of stock option granted, 20% stock option will vest at the end of one year from the dale of Grant, 90% stock option at the end of the second year and balance 50% stock option at the end of third year. The exercise period for the options is four years horn the date of vesting.

* Partially granted out of lapsed option

The excess of market price per share as on date of grant of option, over the exercise price for the Stock Option granted to employees (including certain employees of the Subsidiaries), is amortized by the Company over the vesting period. The amortized value for the pertaining to its employees (including certain employees of the Subsidiaries) amounting to Rs. 3145 (Previous year (Rs. 424,325)) has been charged/credited under Employee Cost.

NON CURRENT LIABILITIES

1. Long Term Borrowings

b. Nature of security

A.Corporate Loan:-

(i) Above Corporate Loan is secured by second charges on Current Assets as well as Fixed Assets of the Company.

(ii) Pledge of 2,300,000 equity shares of Rs. 10 each of Vaibhav Gems Limited by Brett Plastic Private Limited and;

(iii) Pledge of 21,8000,000 equity shares of US $ 1 each or Genoa Jewelers Limited, BVI

B. Working Capital Term Loan

(i) Above WCTL Loan is secured by first pari pasu charge on block of assets (including Land & Building)

C. Working Capital Term Loan & Corporate Loan is further secured (on pari passu basis) by :-

(i) Pledge of 254,332 equity shares of Rs. 10 each of Vaibhav Gems Limited by Brett Plastic Private Limited.

(ii) Pledge of 200 common shares with no par value of STS Jewels Inc.

(iii) Pledge of 87.500 Ordinary Shares of HK $ 100 each & assignment of loan worth Rs. 2.42 Crores af STS Gems Limited, HKK.

(iv) Pledge of 12,576,633 equity shares of US $ 1each and assignment of loan worth Rs.43.63 Crores of Genoa Jawelers Limited, BVI and;

(v) Assignment of Loan to 2 subsidiaries of Rs. 46.05 Crores

(vi) Personal Guarantee of Mr. Sunil Agarwal, Chairman of the Company & pledge of 28.140 shares in his name.

c. Terms of Repayment of Term Loans

A. Corporate Loan

IDBI Term Loan of Rs.40.74 Crore with a moratorium period of 30 months and repayable In equal monthly Installment over a period of months commencing July 2011 carrying interest @ 8% p.a. upto June 2011 and @ 10 % p.a. thereafter

B. Working capital Term Loan

Punjab National Bank : WCTL of Rs. 36 crore with a moratorium period of 30 months and repayable in equal monthly 60 installments commencing July 2011 carrying interest @ 8 % p.a. upto June 2011 and @ 10 % p.a. threrafter.

State Bank of Bikaner & Jaipur: WCTL of Rs. 18 Crore with a moratorium period of 30 months and repayable in equal monthly 60 installments commencing July 2011 carrying interest @ 8% p.a. upto June 2011 and @ 10% p.a. thereafter.

Union Bank of India: WCTL of Rs.18 Crore with a moratorium period of 30 months and repayable in equal monthly 60 installments commencing July 2011 carrying interest @ 8% p.a. upto June 2011 and @ 10 % p.a. thereafter.

2. Short Term Borrowings

b. Nature of Security

Working Capital Facilities :-

(i) Above Loans are secured by hypothecation of Stock-in-trade and Book Debts on pari-passu basis.

(ii) Further Secured, on pari-passu basis by:-

a. Equitable Mortgage of Land and Buildings situated at K-6A & K-6B, Adarsh Nagar and E-68 & E-69 EPIP, Sitapura, Jaipur.

b. First charge on block or asset of the company (excluding Land & Building and vehicles)

(iii) Pledge of 200 common shares with no par value of STS Jewels Inc.

(iv) Pledge of 87,500 Ordinary Shares of HK $100 each & assignment of loan worth Rs. 2.42 Crores of STS Gems Limited, HKK.

(v) Pledge of 12,576,633 equity shares of US $1 each and assignment of loan worth Rs. 43.63 Crores of Genoa Jewelers Limted, BVI and;

(vi) Personal Guarantee of Mr. Sunil Agarwal, Chairman of the Company & pledge of 28,140 shares in his name.

3. Three subsidiaries of the company are having negative net worth. The company has exposure of Rs. 4,003,319,064, Rs.1,201,671,493 & Rs. 1,099,953,990. In these companies towards investments, loans and advance and Trade receivables respectively against which aggregate provision of Rs. 2,253,800,190 has been made in the accounts of earlier year. The management of the company does not foresee any further requirement of provision in respect off those subsidiaries. Since the investment in these subsidiaries are long term in nature and all of the subsidiaries are having substantial carrying business value.

4. During the year the Company has written off its investment in equity shares or one of the Subsidiary Indo Mexico Co. S. De R.L. De C. V., Mexico, Mexico amounting to Rs. 41,02,27,250. Equivalent amounts of provision for permanent diminution in such investment made in earlier years have been written back.

5. Related Party Disclosures:

A. List of related parties with whom transactions have taken place and relationships:

Subsidiaries (Direct and Step down)

1. Jewel Gem USA Inc.;

2. STS Gems Japan Limited;

3. STS Gems Limited, Hong Kong;

4. STS Gems Inc., USA;

5. STS Creations Thai Limited, Thailand;

6. STS Gems Thai Limited, Thailand;

7. Indo Mexico Co. S. De R.L. De C. V., Mexico;

8. Genoa Jewellers Limited, BVI;

9. STS Gems USA Inc.,;

10. The Jewellery Channel Ltd., United Kingdom

11. Genoa Jewelers (ST. Kitts) Limited, West Indies;

12. The Jewellery Channel Inc., USA

Enterprises in which Key management personnel are interested:

1. VGL Softech Limited

2. Emerald Creation Inc.

3. Anubhav Gems (P) Ltd.

Key Management Personnel (KMP):

1. Mr. Rahimullah - Managing Director

Relative of Key Management Personnel

1. Mr. Asifullah

2. Mr. Arifullah

6. Segment Reporting

Due to change in organizational structure as well as business focus of company consequent upon acquisition/setting up of various Oversees Corporate Bodies, differential risk and rewards are now more identifiable and associated with the method of distribution of product and hence, Company has identified business segment with respect to method of distribution as Primary Segment for its Consolidated Operation. The Company, on standalone basis, operates in only one business segment - "Wholesale Business" in view of this, no further disclosure is required as per Accounting Standard "AS-17".

7. In the opinion of the Board, all assess other than fixed assets and non current investments have a value on realization in the ordinary course of business at least equal to the amount stated.

8. As notified by Ministry of Corporate Affairs, Revised Schedule VI under the Companies Act, 1956 is applicable to the Financial Statements for the financial year commencing on or after 1st April, 2011. Accordingly, the financial statements for the year ended March 31, 2012 are prepared in accordance with the Revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to confirm to the requirements of Revised Schedule VI.

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Mar 31, 2011

Particulars As At 31.03.2011 As at 31.03.2010

Rupees Rupees

1(b) Contingent Liabilities:

- Guarantees given by bank on behalf of the Company 8,09,30,000 7,70,32,800

- Guarantees given to bank & others by the Company 30,50,90,000 31,78,51,200

- Disputed Tax Matters Income Tax 40,96,403 2,51,31,306

Service Tax NIL 20,90,209

Custom Duty NIL NIL

- Dividend on Cumulative Preference Share* 1,76,00,000 1,32,00,000

( Arrears pertaining to 2007-08,2008-09,2009-10 & 2010-11)

c. Deferred Tax Liability /(Assets)(Net)

Net deferred tax charge/(credit) for the year of (Rs. 10,86,460) (Previous year Rs. 17,57,168) has been recognized in the Profitand Loss Account for the year.

2. The Company has classified various benefits provided to employees as under:

A. Defined Contribution Plans

a. Provident Fund

b. State Defined Contribution Plans

i. Employers' Contribution to Employees' State Insurance

B. Defined Benefit Plans

a. Contribution to Gratuity Fund (Funded Scheme)

- All the funds underthe plan assets are managed by insurer

VI. Actual Return on Plan Assets

The 100% Plan Assets of the Company as on balance sheet date are invested with Life Insurance Corporation through Group Gratuity Policy.

The expected rate of return on plan assets is based on market expectations at the beginning of the period. The rate of return on long-term government bonds is taken as reference for this purpose.

b. Leave Encashment (Non Funded Scheme)

Leave Encashment has been provided based on valuation , as at the balance sheet date, made by independent actuaries.

3. Sundry Creditors include overdue amounts (mainly unclaimed) of Rs. Nil (Previous Year Rs. Nil) including interest of Rs. Nil (Previous Year Rs. Nil) payable to Micro, Small & Medium enterprises. The company does not owe any amount to Micro, Small & Medium enterprises. These enterprises have been identified on the basis of information available to the Company.

4. Non Convertible Redeemable Cumulative Preference Share are redeemable at the end of seven years from the date of allotment i.e. 31st Oct 2006 or before at the discretion of the Board.

5. Employee Stock Option Scheme:

The Company has issued Employees' Stock Option Scheme (VOL ESOP- 2006) to its employees (including certain employees of the Subsidiaries).

Out of stock option granted, 20% stock option will vest at the end of one yearfrom the date of Grant, 30% stockoption at the end of the second year and balance 50% stock option at the end of third year The exercise period for the options is four year from the date of vesting.

The excess of market price per share as on the date of grant of option, over the exercise price for the Stock Option granted to employees (including certain employees of the Subsidiaries), is amortized by the Company over the vesting period. The amortized value for the year pertaining to its employees (including certain employees of the Subsidiaries) amounting to Rs. (4,24,325) [Last Year (Rs.141,131)] has been charged under Employee Cost.

6. Three subsidiaries of the company are having negative net worth. The company has exposure of Rs 4,003,319,864, Rs 1,131,641,158, Rs 163,025,979. in these companies towards investments, loans and advance and sundry debtors respectively against which aggregate provision of Rs 2,228,800,190 has been made in the accounts of earlier year. Out of this a provision of Rs 100,000,000 has been written back during the year towards loan. The management of the company does not foresee any further requirement of provision in respect of these subsidiaries. Since the investment in these subsidiaries are long term in nature and all of the subsidiaries are having substantial carrying business value.

Further during the year on account of recoveries excess provision for doubtful debts amounting to Rs.188,966,964 has been appropriated againstthe investment held in subsidiary company.

7. Donation paid Rs.1,361,000 for which consent of shareholder under section 293(1)(e) of the Companies Act, 1956 is yet to be obtained.

8. Related Party Disclosures:

A. List of related parties with whom transactions have taken place and relationships:

Subsidiaries (Direct and Step down)

1. Jewel Gem USA Inc.; 2. STS Gems Japan Limited; 3. STS Gems Limited, Hong Kong; 4. STS Jewels Inc., USA; 5. STS Creations Thai Limited, Thailand; 6. STS Gems Thai Limited, Thailand; 7. Indo Mexico Co. S. De R.L. De C.V., Mexico; 8. Genoa Jewelers Limited, BVI; 9. STS Jewels Canada INC.; 10. STS Gems USA Inc.; 11. The Jewellery Channel Ltd., United Kingdom; 12. Genoa Jewelers STT (St. Thomas) Limited, USVI; 13. Genoa Jewelers (St. Kitts) Limited, West Indies; 14. Genoa Jewelers (SXM) N.V., St. Maarten. 15. Der Schmuckkanal Deutschland GmbH; Germany 16. Liquidation Channel, Austin (formerly known as The Jewellery Channel Inc., USA).

Enterprises in which Directors are interested :

1. VGL Softech Limited; 2. Shivram Properties Private Limited. 3. Surawell Pacific Limited. 4. Emerald Creation Inc. 5 Brett Plastic Pvt. Limited

Key Management Personnel (KMP)

L Shri Rahimullah Managing Director;

Relative of Key Management Personnel

1.Mr.Asifullah;

2.Mr.Arifullah

9. Segment Reporting:

Due to change in organizational structure as well as business focus of company consequent upon acquisition/setting up of various Overseas Corporate Bodies, differential risk and rewards are, now, more identifiable and associated with the method of distribution of product and hence, Company has identified business segment with respect to method of distribution as Primary Segment for its Consolidated Operation. The Company, on standalone basis, operates in only one business segment "Wholesale Business" In view of this, no further disclosure is required as per Accounting Standard "AS-17".

10. Previous year figures have been reworked, regrouped, rearranged and reclassified wherever considered necessary, to make them comparable to those of the current year.

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Mar 31, 2010

31st March, 2010 31st March, 2009

Particulars Rupees Rupees Rupees Rupees

1(b). Contingent Liabilities:

a. Guarantees given by bank on

behalf of Company 77,032,800 81,861,000

b. Guarantees given to bank &

others by the Company 317,851,200 1,693,851,500

c. Disputed Tax Matters

Income Tax 25,131,306 11,099,221

Service Tax 2,090,209 1,436,380

Custom Duty Nil Nil

d. Dividend on Cumulative Preference

Share 13,200,000 8,800,000

(*Arrears pertaining to 2007 08, 2008 09 & 2009 10)

2. Sundry Creditors include overdue amounts (mainly unclaimed) of Rs. Nil (Previous Year Rs. Nil) including interest of Rs. Nil (Previous Year Rs. Nil) payable to Micro, Small & Medium enterprises. The company does not owe any amount to Micro, Small & Medium enterprises. These enterprises have been identified on the basis of information available to the Company.

3. Non Convertible Redeemable Cumulative Preference Share are redeemable at the end of seven years from the date of allotment i.e. 31st Oct 2006 or before at the discretion of the Board.

4. Employee Stock Option Scheme:

The Company has issued Stock Option under the VGLs Employee Stock Option Scheme (VGL ESOP – 2006) to its employees (including certain employees of the Subsidiaries).

5. The company had applied for restructuring of its working capital and term loan under CDR Mechanism and accordingly honorable CDR Cell had approved the restructuring of debts of the company in the month of June, 2009. Out of the total working capital limit of Rs 132 Crore, Rs. 72 Crore has been converted into Working Capital Term Loan and Rs. 60 Crore continues as working Capital Limits.

6. Exceptional items represent provision made against investments/ receivables from subsidiaries or its subsequent reversal.

7. Un-hedged foreign currency exposures as at March 31,2010 are as under:

Particulars Rs. in Crore

Receivables 160.56

Payables 41.29

8. Three subsidaries of the company are having negative net worth where the company has exposure of Rs. 261.48 crores, Rs. 48.56 Crore and Rs. 99.22 Crores. In these companies towards the investment, loans and advances and sundry debtors respectively. The management of the company does not foresee any further requirment of provision in respect of these subsidries, since the investment in these subsidiaries are long term in nature and all of the subsidiaries are having substantial currying business value.

9. Related Party Disclosures:

A. List of related parties with whom transactions have taken place and relationships:

Subsidiaries (Direct and Step down)

1. Jewel Gem USA Inc.; 2. STS Gems Japan Limited; 3. STS Gems Limited, Hong Kong; 4. STS Jewels Inc., USA; 5. STS Creations Thai Limited, Thailand; 6. STS Gems Thai Limited, Thailand; 7. Indo Mexico Co. S. De R.L. De C.V., Mexico; 8. Genoa Jewelers Limited, BVI; 9. STS Jewels Canada INC.; 10. STS Gems USA Inc.; 11. The Jewellery Channel Ltd., United Kingdom; 12. Genoa Jewelers STT (St. Thomas) Limited, USVI; 13. Genoa Jewelers (St. Kitts) Limited, West Indies; 14. Genoa Jewelers (SXM) N.V., St. Maarten. 15. Der Schmuckkanal Deutschland GmbH; Germany 16. The Jewellery Channel Inc. ( also known as Liquidation Channel, Austin)

10. Segment Reporting:

Based on a reconsideration of relevant factors †especially the nature of risks and returns, the Company is considered to be a single segment company "Wholesale Business". As per AS 17 Segment Reporting if a single financial report contains both consolidated financial statements and the separate financial statement of the parent, segment information need be presented only on the basis of the consolidated financial statements. Accordingly, information required to be presented under AS 17 Segment Reporting has been given in the consolidated financial statements.

11. Previous year figures have been reworked, regrouped, rearranged and reclassified wherever considered necessary, to make them comparable to those of the current year.