P N Gadgil Jewellers Ltd. के अकाउंट के लिये नोट

2.12 Provisions
General

A provision is recognized when the company has a present
obligation as a result of 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. Provisions are
not discounted to their present value and are determined
based on the best estimate required to settle the obligation
at the reporting date. These estimates are reviewed at
each reporting date and adjusted to reflect the current
best estimates.

Onerous Contracts:

Present obligations arising under onerous contracts are
recognized and measured as provisions. An onerous
contract is considered to exist where the Company has a
contract under which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits
expected to be received from the contract.

2.13 Contingencies
Contingent Liabilities

A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain
future events beyond the control of the Company or a present
obligation that is not recognized because it is not probable
that an outflow of resources will be required to settle the
obligation. A contingent liability also arises in extremely rare
cases where there is a liability that cannot be recognized
because it cannot be measured reliably. Contingent liabilities
are not recognised but are disclosed in notes to accounts.

Contingent Assets:

Contingent Asset is not recognised in standalone financial
statement since this may result in to recognition of income
that may never be realised.

2.14 Financial instruments
Financial assets:

Initial recognition and measurement:

Financial assets are initially measured at fair value.
Transaction costs that are directly attributable to the
acquisition of financial assets (other than financial assets at
fair value through profit or loss) are added to the fair value
of the financial assets on initial recognition. Transaction cost
directly attributable to the acquisition of financial assets at
fair value through profit or loss are recognised immediately
in profit or loss.

Subsequent Measurement:

Debt instruments

Subsequent measurement of debt instruments depends on
the company''s business model for managing the asset and
the cash flow characteristics of the asset. There are three
measurement categories into which the company classifies
its debt instruments:

Financial assets at amortized cost
Financial assets that are held within a business model
whose objective is to hold assets for collecting contractual
cash flows and whose contractual terms give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding
are subsequently measured at amortized cost using the
effective interest rate method. The change in measurements
are recognized as finance income in the statement of profit
and loss.

Effective Interest method:

The effective interest method is a method of calculating the
amortised cost of a debt instrument and of allocating interest
income over the relevant period. The effective interest
rate that exactly discounts estimated future cash receipts
through the expected life of the debt instrument, or, where
appropriate, a shorter period, to the net carrying amount on
initial recognition.

I ncome is recognised on an effective interest basis for
debt instruments other than those financial assets. Interest
income is recognised in profit or loss and is included in the
“Other income” line item.

Financial assets at fair value through other comprehensive
income (FVTOCI)

Financial assets that are held within a business model
whose objective is achieved both by collecting contractual
cash flows and selling the financial assets and the assets''
contractual cash flows represent solely payments of principal
and interest on the principal amount outstanding are
subsequently measured at fair value. Fair value movements
are recognized in other comprehensive income.

Financial assets at fair value through profit or loss (FVTPL)
Any financial asset which does not meet the criteria for
categorization as financial instruments at amortized cost or
as FVTOCI, is classified as financial instrument at FVTPL.
Financial instruments included within the FVTPL category
are subsequently measured at fair value with all changes
recognized in the statement of profit and loss.

Equity instruments

The company subsequently measures all equity investments
at fair value. Where the company''s management has elected
to present fair value gains and losses on equity investments
in other comprehensive income, there is no subsequent
reclassification of fair value gains and losses to profit or loss.

Dividends from such investments are recognised in profit
or loss as other income when the company''s right to
receive payments is established. Changes in the fair value
of financial assets at fair value through profit or loss are
recognised in other gain/ (losses) in the statement of profit
and loss. Impairment losses (and reversal of impairment
losses) on equity investments measured at FVOCI are not
reported separately from other changes in fair value.

Derecognition

The Company derecognizes a financial asset when the
contractual rights to the cash flows from the asset expire, or
retains the contractual rights to receive the cash flows of the
financial asset, but assumes a contractual obligation to pay
the cash flows to one or more recipients, or when it transfers
the financial asset and substantially all the risks and rewards
of ownership of the asset to another party.

Where the entity has neither transferred a financial asset
nor retains substantially all risks and rewards of ownership
of the financial asset, the financial asset is derecognised if
the Company has not retained control of the financial asset.
When the Company retains control of the financial asset,
the asset is continued to be recognised to the extent of
continuing involvement in the financial asset. Any gain or
loss arising from the derecognition of the financial asset is
recognised in the profit and loss statement.

On derecognition of a financial asset in its entirety, the
difference between the asset''s carrying amount and the
sum of the consideration received and receivable and the
cumulative gain or loss that had been recognised in other
comprehensive income and accumulated in equity, if any, is
recognised in profit or loss.

Foreign exchange gains and losses
The fair value of financial assets denominated in a foreign
currency is determined in that foreign currency and translated
at the spot rate at the end of each reporting period.

For foreign currency denominated financial assets measured
at amortised cost and FVTPL, the exchange differences are
recognised in the statement of profit and loss except for

those which are designated as hedging instruments in a
hedging relationship.

For the purposes of recognising foreign exchange gains and
losses, FVTOCI debt instruments are treated as financial
assets measured at amortised cost. Thus, the exchange
differences on the amortised cost are recognised in the
statement of profit and loss and other changes in the fair
value of FVTOCI financial assets are recognised in other
comprehensive income.

Reclassification of financial assets

The Company determines classification of financial assets
and liabilities on initial recognition. After initial recognition,
no reclassification is made for financial assets which are
equity instruments and financial liabilities. For financial
assets which are debt instruments, a reclassification is
made only if there is a change in the business model for
managing those assets. Changes to the business model are
expected to be infrequent.

Financial liabilities:

Initial recognition and measurement
Financial liabilities are recognized initially at fair value and,
in the case of loans and borrowings and payables, net of
directly attributable transaction costs.

Subsequent measurement

F or the purpose of subsequent measurement, financial
liabilities are classified as:

Financial liabilities at amortized cost
Financial liabilities such as loans and borrowings are
subsequently measured at amortized cost using the
effective interest rate method. The change in measurements
are recognized as finance costs in the statement of profit
and loss.

Financial liabilities at fair value through profit or loss
(FVTPL)

Financial liabilities include financial liabilities held for trading
and financial liabilities designated upon initial recognition as
at fair value through profit or loss if the recognition criteria
as per Ind AS 109 - “Financial Instruments” are satisfied.
Gains or losses on liabilities held for trading are recognized
in statement of profit and loss. Fair value gains or losses
on liabilities designated as FVTPL attributable to changes
in own credit risk are recognized in other comprehensive
income. All other changes in fair value of liabilities designated
as FVTPL are recognized in the statement of profit and loss.
The Company has not designated any financial liability as
at FVTPL.

Derecognition

The Company derecognizes financial liabilities when the
Company''s obligations are discharged, cancelled or have
expired. The difference between the carrying amount of the

financial liability derecognized and the consideration paid
and payable is recognised in profit or loss. An exchange with
a lender of debt instruments with substantially different terms
is accounted for as an extinguishment of the original financial
liability and the recognition of a new financial liability.

Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign
currency and are measured at amortised cost at the end
of each reporting period, the foreign exchange gains and
losses are determined based on the amortised cost of the
instruments and are recognised in the statement of profit
and loss.

The fair value of financial liabilities denominated in a
foreign currency is determined in that foreign currency and
translated at the spot rate at the end of the reporting period.
For financial liabilities that are measured as at FVTPL, the
foreign exchange component forms part of the fair value
gains or losses and is recognised in the statement of profit
and loss.

Derivative financial instruments:

Forward contracts not intended for trading or speculation
purposes, classified as derivative financial instruments.
The Company uses derivative financial instruments such as
forward contracts to hedge its risks associated with foreign
currency fluctuations and commodity price fluctuations. Such
derivative contracts are not designated as hedges and are
accounted for at Fair Value through Profit and Loss. There
are no foreign currency derivative financial instruments
outstanding as on year end.

Fair Value Hedge:

The Company has adopted fair value hedge for the derivative
contracts entered into and designated derivative contracts
or nonderivative financial liabilities as hedging instruments
to mitigate the risk of change in fair value of hedged item
due to movement in interest rates, foreign exchange rates
and commodity prices. Changes in the fair value of hedging
instruments and hedged items that are designated and
qualify as fair value hedges are recorded in the Statement
of Profit and Loss with an adjustment to the carrying value
of the hedged item. Hedge accounting is discontinued when
the Company revokes the hedge relationship, the hedging
instrument or hedged item expires or is sold, terminated,
or exercised or no longer meets the criteria for hedge
accounting. The Company designates derivative contracts
as hedging instruments to mitigate the risk of change in
fair value of hedged item i.e. fixed gold inventory due to
movement in gold prices

Offsetting of financial instruments:

Financial assets and financial liabilities are offset and the net
amount is reported in the Balance Sheet if there is currently
enforceable legal right to offset the recognized amounts and
there is an intention to settle on a net basis, to realize the
assets and settle the liabilities simultaneously.

2.15 Impairment

(i) Financial assets (other than at fair value)

The Company assesses at each date of balance sheet
whether a financial asset or a group of financial assets
is impaired.

Ind AS 109 requires expected credit losses to be measured
through a loss allowance. Company performs credit
assessment for customers on an annual basis. Company
recognizes credit risk, on the basis of lifetime expected
losses and where receivables are due for more than six
months. Lifetime ECL are the expected credit losses
resulting from all possible default events over the expected
life of a financial instrument.

For all other financial assets, expected credit losses are
measured at an amount equal to the 12 month expected
credit losses or at an amount equal to the life time expected
credit losses if the credit risk on the financial asset has
increased significantly since initial recognition.

The impairment losses and reversals are recognised in
Statement of Profit and Loss.

(ii) Non-Financial Assets
Tangible and intangible assets

Property, plant and equipment and intangible assets with
finite life are evaluated for recoverability whenever there
is any indication that their carrying amounts may not be
recoverable. If any such indication exists, the recoverable
amount (i.e. higher of the fair value less cost to sell and
the value-in-use) is determined on an individual asset
basis unless the asset does not generate cash flows that
are largely independent of those from other assets. In
such cases, the recoverable amount is determined for the
cash generating unit (CGU) to which the asset belongs. In
assessing value in use, the estimated future cash flows are
discounted to their present value using a pretax discount
rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or CGU) is estimated
to be less than its carrying amount, the carrying amount of
the asset (or CGU) is reduced to its recoverable amount.
An impairment loss is recognised in the statement of profit
and loss.

When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating unit) is
increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had
no impairment loss been recognised for the asset (or cash¬
generating unit) in prior years. A reversal of an impairment
loss is recognised immediately in profit or loss.

2.16 Earnings Per Share

The Company reports basic and diluted earnings per share
in accordance with Ind AS 33 on Earnings per share. Basic
earnings per share is computed by dividing the net profit or
loss for the period by the weighted average number of equity
shares outstanding during the period. Diluted earnings per
share is computed by dividing the net profit or loss for the
period by the weighted average number of equity shares
outstanding during the period as adjusted for the effects of
all diluted potential equity shares except where the results
are anti-dilutive.

2.17 Segmented reporting:

Operating Segments are reported in a manner consistent
with the internal reporting provided to the Chief Operating
Decision Maker. The Company is engaged in the business
of “manufacture and sale of Jewellery”.

Since the entire Company''s business is from manufacture
and sale of jewellery, there are no other primary reportable
segments. Thus, the segment revenue, segment results,
total carrying value of segment assets, total carrying
amount of segment liabilities, total cost incurred to acquire
segment assets, total amount of charge of depreciation
and amortization during the year are all as reflected in the
Financial Statements as at and for the year ended March
31, 2026.

2.18 Cash flow statement

The Cash Flow Statement is prepared by the indirect method
set out in Ind AS 7 on Cash Flow Statements and presents
cash flows by operating, investing and financing activities of
the Company.

2.19 Cash and Cash equivalents

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

For the purpose of presentation in the statement of cash
flows, cash and cash equivalents consist of cash and cash
equivalent, as defined above, net of outstanding bank
overdrafts if they are considered an integral part of the
Company''s cash management.

2.20 Dividends

The final dividend proposed by the Board of Directors is
recognised only on approval by the shareholders in the
general meeting who have the right to decrease but not
increase the amount of dividend recommended by the Board
of Directors. Interim dividends are recognised on declaration
by the Board of Directors.

2.21 Fair Value Measurement

Fair value is the price that would be received from the sale of
an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The

fair value measurement is based on the presumption that
the transaction to sell an asset or transfer the liability takes
place either:

• In the principal market for the asset or liability.

• In the absence of principal market, in the most
advantageous market for the asset or liability.

The principal or the most advantageous market must be
accessible by the Company.

The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in
their economic best interest.

The fair value measurement of a non-financial asset takes
into account a market participant''s ability to generate
economic benefits by using the asset in its highest and best
use or by selling it to another market participant that would
use the asset in its highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximizing the
use of relevant observable inputs and minimizing the use of
unobservable inputs.

All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value
measurement as a whole:

- Level 1 - Quoted (Unadjusted) Market prices in active
markets for incidental assets or liabilities

- Level 2 -Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable

- Level 3 - Valuation Techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable.

For assets and liabilities that are recognized in the financial
statements on a recurring basis, the Company determines
whether transfers that have occurred between levels in
the hierarchy by re-assessing categorization (based on
the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.

Determination of Fair Value

1) Financial Assets

The fair value of financial assets is estimated as the present
value of future cash flows, discounted at the market rate of
interest at the reporting date. This fair value is determined
for disclosure purpose.

2) Non-Derivative financial liabilities

Fair Value, which is determined for disclosure purposes, is
calculated based on the present value of future principal and

interest cash flows, discounted at the market rate of interest
at the reporting date.

2.22 Non-current assets held for sale

Non-current assets and disposal groups are classified
as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through
continuing use. This condition is regarded as met, only when
the sale is highly probable and the non-current asset (or
disposal group) is available for immediate sale in its present
condition. Management must be committed to the sale, which
should be expected to qualify for recognition as a completed
sale within one year from the date of classification.

Non-current assets (and disposal groups) classified as held
for sale are measured at the lower of their previous carrying
amount and fair value less costs to sell.

2.23 Leases:

As a lessee

The Company''s lease asset classes primarily consist of
leases for land and buildings.

The Company assesses whether a contract contains a
lease, at inception of a contract. 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.

To assess whether a contract conveys the right to control the
use of an identified asset, the Company assesses whether:
(i) the contact involves the use of an identified asset (ii) the
Company has substantially all of the economic benefits from
use of the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company
recognizes a right-of-use asset (“ROU”) and a corresponding
lease liability for all lease arrangements in which it is a
lessee, except for leases with a term of twelve months or
less (short-term leases) and low value leases. For these
short-term and low value leases, the Company recognizes
the lease payments as an operating expense on a straight¬
line basis over the term of the lease.

Certain lease arrangements includes the options to extend
or terminate the lease before the end of the lease term. ROU
assets and lease liabilities includes these options when it is
reasonably certain that they will be exercised.

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

Right-of-use assets are depreciated from the commencement
date on a straight-line basis over the shorter of the lease term
and useful life of the underlying asset. Right of use assets
are evaluated for recoverability whenever events or changes

in circumstances indicate that their carrying amounts may not
be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost
to sell and the value-in-use) is determined on an individual
asset basis unless the asset does not generate cash flows
that are largely independent of those from other assets. In
such cases, the recoverable amount is determined for the
Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost
at the present value of the future lease payments. The
lease payments are discounted using the interest rate
implicit in the lease or, if not readily determinable, using
the incremental borrowing rates in the country of domicile
of these leases. Lease liabilities are remeasured with a
corresponding adjustment to the related right of use asset
if the Company changes its assessment if whether it will
exercise an extension or a termination option.

Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments have
been classified as financing cash flows.

As a lessor

Leases for which the Company is a lessor is classified as a
finance or operating lease. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership
to the lessee, the contract is classified as a finance lease.
All other leases are classified as operating leases. When
the Company is an intermediate lessor, it accounts for its
interests in the head lease and the sublease separately. The
sublease is classified as a finance or operating lease by
reference to the right of-use asset arising from the head
lease. For operating leases, rental income is recognized on
a straight line basis over the term of the relevant lease.

b) Rights, preferences and restrictions attached to Equity Shares

The Company has one class of equity shares having a par value of INR 10 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 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) Rights, preferences and restrictions attached to CCNCPS

CCNCPS will pay a preferential non cumulative dividend of 8% (Eight Percent.) per year. After preferential dividends have
been paid to the holders of Investor CCNCPS, the Investor CCNCPS will participate pro rata in any other dividends or
distributions payable to holders of equity shares.

On liquidation, winding up or dissolution of the Company or a sale of the Company through a merger, sale of shares,
sale of assets or other acquisition or change in control of the Company (each a “Liquidation Event”), the holders of
Investor CCNCPS will be entitled to receive before any return to holders of equity shares, a “Liquidation Preference”
equal to the higher of 1X the Purchase Price multiplied by the number of Investor CCNCPS held by them (plus any
accrued but unpaid dividends), or their pro rata proceeds from the distribution proceeds of the Liquidation Event.
Subject to provisions of applicable laws, the Investor CCNCPS will be entitled to that number of votes on all matters
presented to holders of equity shares as if the Investor CCNCPS had already been converted to equity shares.

The CCNCPS are convertible after a completion of 12 years from the date when initially issued or at any date as deemed
fit by the Board into an equivalent number of equity shares. The consequent resolution for conversion of CCNCPS into
equity shares has been passed on December 28, 2023.

d) The company has completed an Initial Public Offer (“IPO”) its equity shares during the year ended December 31, 2024,
and listed its shares on Bombay Stock Exchange and National Stock Exchange on September 17, 2024. Pursuant to
IPO, the company allotted 1,77,08,333 equity shares at Face Value of INR 10 each at an issue price INR 480 per Equity
Share, to the public aggregating to Rs. 8,500 million. Total share premium arising from IPO amounting to INR 8322.92
million has been accounted under securities premium reserve and the IPO related expenses for company amounting to
INR 465.70 million, being company''s share of total IPO expenses, post all settlements, has been adjusted against the
securities premium reserve as of March 31, 2026.

FY 24-25
Gold Loan
HDFC Bank

Sanctioned Loan amount of Rs. 3000 Million

Rate of Interest: International Gold Lease rate (Linked)

Amount Outstanding as on March 31, 2025 is Rs. 2534.36 Million (Current Liability).

Security details : 110% security in the form of BG / SBLC / FD

ICICI Bank

Sanctioned Loan amount of Rs. 2500 Million

Rate of Interest: International Gold Lease rate (Linked)

Amount Outstanding as on March 31, 2025 is Rs. 2344.80 Million (Current Liability).

Security details : 108% security in the form of BG / SBLC / FD

Working Capital Limit:

Janta Sahakari Bank Ltd. (Cash Credit)

Sanctioned Loan amount of Rs. 600 Million.

Rate of Interest: 9.00%

Amount Outstanding as on March 31, 2025 is Rs. 425.31 Million (Current Liability).

Security details : Entire current assets (present and future) stock of raw materials, finished goods, semi-finished materials
and book debts on first pari passu basis.

Collateral : 1. Mortgage of Nanded Store 2. Corporate Security of Unit 108, 109 & 110 Option Primo, Andheri (E) owned by
Gadgil Diamonds Pvt. Ltd.

Kotak Mahindra Bank (Cash Credit/ WCDL)

Sanctioned Loan amount of Rs. 1000 Million.

Rate of Interest: 9.25%

Amount Outstanding as on March 31, 2025 is Rs. 703.62 Million (Current Liability).

Security details : Entire current assets (present and future) stock of raw materials, finished goods, semi-finished materials
and book debts on first pari passu basis.

Collateral : Unsold 32 Unit of “”Anant Srishti”” owned by M/s Landscape Realty

31 Capital Management

Risk management

The Company''s capital comprises equity share capital, retained earnings and other equity attributable to equity holders.

The Company objectives when managing capital are to :

- Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and
for other stakeholders, and

- Maintain an optimal capital structure to reduce the cost of capital.

I n order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders or issue new shares.

The Company monitors capital gearing ratio, which is net debt divided by total capital. Net debt comprises of long term and
short term borrowings less cash and bank balances, equity includes equity share capital and reserves that are managed as
capital. The gearing at the end of the reporting period was as follows.

i The company has received a demand order of assessment for the period 01/01/2017 to 31/03/2017 from Panvel
Municipal Corporation for INR 4.11 million (including interest and penalty) against which the Company has paid INR 1.21
Million on May 18, 2019 and filed appeal petition no. 023 dated May 20, 2019 with Dy. Commissioner and First Appellate
Authority and the matter is sub judice. Out of total demand liability, INR 1.21 million paid off and balance liability of INR
2.91 million treated as contingent liability.

ii Assessing officer has passed the order u/s 272B having demand of INR 22.79 Million. The assessee has appealed
against the penalty order with CIT(A) and deposited 20% of the demand amount. The Company is contesting the above-
mentioned demands and the management including its tax advisors believe that its position will be upheld in the appellate
process. The management believes that the ultimate outcome of the proceedings has 50% winning chances and therefore
contingent liability has been assumed to the extent 50% of INR 22.79 million.

iii The Company has received an assessment order under section 143(3) read with section 147 of the IT Act for the
assessment year (‘AY'') 2020-2021 from the ACIT, Pune. The Company believes that claims/demand made against the
company are not sustainable in the law and are defendable on the facts of the case. The company has filed an appeal
against the order passed under the provisions of the Income Tax Act 1961. The management of the company assumes
the contingent liability to the extent of Rs. 4.73 million in this regard.

iv The honourable DIT (IT) passed an order upholding the applicability of the provisions of section 277 of IT Act and
instructed the AO to launch a prosecution proceeding under the said provision. The assesee has applied for compounding
against the said order with the concerned authority, the said matter is pending and the liability in this regards is not
quantifiable therefore only disclosure has been made.

v The Company has received penalty order u/s. 271AA(1) of the Income Tax Act 1961 for AY 2018-19 passed by the ACIT
dated 31.03.2023 but served on the Company on 05.09.2024 having demand of Rs. 8.85 million. The company has filed
the rectification application for the reduction of liability to the extent Rs. 2.71 million.

vi The Company has received an assessment order under section 143(3) read with section 147 of the IT Act for the
assessment year (‘AY'') 2021-2022 from the Deputy Commissioner of Income Tax, Central Circle 1(3), Pune. The
demand of Rs. 22.6 Million is determined due to non-acceptance of claim of deduction in relation to royalty expenses
and additions u/s. 69A under the provisions of the Income Tax Act 1961. The Company believes that claims/demand
made against the company are not sustainable in the law and are defendable on the facts of the case. The company is
in process of filing an appeal against the order passed under the provisions of the Income Tax Act 1961.

vii The Company has received an assessment order under section 143(3) read with section 147 of the IT Act for the
assessment year (‘AY'') 2022-2023 from the Deputy Commissioner of Income Tax, Central Circle 1(3), Pune. The
demand of Rs. 22.9 Million is determined due to non-acceptance of claim of deduction in relation to royalty expenses,
disallowance u/s. 40(a) and additions u/s. 69A under the provisions of the Income Tax Act 1961. The Company believes
that claims/demand made against the company are not sustainable in the law and are defendable on the facts of the
case. The company is in process of filing an appeal against the order passed under the provisions of the Income Tax Act
1961.

viii The Company has received an assessment order under section 143(3) of the IT Act for the assessment year (‘AY'')
2023-2024 from the Deputy Commissioner of Income Tax, Central Circle 1(3), Pune. The demand of Rs. 20.0 million
is determined due to non-acceptance of claim of deduction in relation to royalty expenses, disallowance u/s. 40(a) and
other additions u/s. 37 under the provisions of the Income Tax Act 1961. The Company believes that claims/demand
made against the company are not sustainable in the law and are defendable on the facts of the case. The company is
in process of filing an appeal against the order passed under the provisions of the Income Tax Act 1961.

35 The Company has a comprehensive system of maintenance of information and documents as required by the transfer pricing
legislation under sections 92-96F of the Income Tax Act 1961. Since the law requires existence of such information and
documentaries to be contemporaneous in nature, the Company appoints independent consultants for conducting a Transfer
Pricing Study to determine whether the transactions with associate enterprises are undertaken on “arms length basis”.

37 On 21 November 2025, the Government of India consolidated 29 existing labour legislations into a unified framework comprising
4 Labour codes. In accordance with the requirements of Ind AS 19 ‘Employee Benefits'', these changes have resulted in an
increase in the past service cost of gratuity by Rs. 33.92 million. Considering that the enactment of the new legislation Is a
non-recurring event, the Company has presented this one-time charge under ‘Exceptional Item'' The Company continues to
monitor the finalisation of Central I State Rules and clarifications from the Government on other aspects of the Labour Code
and would provide appropriate accounting effect on the basis of such developments as needed

38 The business segment have been identified on the basis of the nature of products and services, the risks and returns, internal
organisation and management structure and the internal performance reporting systems.

The Company has identified business segment as its primary segment. In accordance with Indian Accounting Standard 108
- Segment Reporting, the Company has determined its business segment as “manufacture and sale of Jewellery”. Operating
segments are reported in a manner consistent with the internal reporting provided to the board of directors based in India
regarded as the Chief Operating Decision Maker (“CODM”). Since the entire Company''s business is from manufacture and
sale of jewellery, there are no other primary reportable segments. Thus, the segment revenue, segment results, total carrying
value of segment assets, total carrying amount of segment liabilities, total cost incurred to acquire segment assets, total
amount of charge of depreciation and amortisation during the year are all as reflected in the Financial Statements as at and
for the year ended March 31, 2026.

As per CODM, there is no need for a separate segment reporting to be done.

The management assessed that fair values of cash and cash equivalents, trade receivables, other financial assets, trade
payables and other financial liabilities recorded at amortised cost is considered to be a reasonable approximation of fair value.

Following methods and assumptions were used to estimate fair values: Fair values of the Company’s interest-bearing
borrowings are determined by using Effective Interest Rate (EIR) method using discount rate that reflects the issuer’s borrowing
rate as at the end of the reporting period. The own non-performance risk as at reporting date was assessed to be insignificant.

Fair value hierarchy: The Company uses the following hierarchy for determining and/or disclosing the fair value of financial
instruments by valuation techniques. The three levels are defined based on the observability of significant inputs to the
measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.,
as prices) or indirectly (i.e., derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Quantitative disclosures fair value measurement hierarchy: The derivative instruments in designated hedge accounting
relationships is measured at fair value at level 1, with valuation technique being use of market available inputs such as gold
prices and foreign exchange rates.

40A Financial Risk Management

The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s principal financial liabilities
other than derivatives comprise trade payables and borrowings. The main purpose of these financial liabilities is to finance the
Company’s operations and to provide guarantees to support its operations. The Company’s principal financial assets includes
Investment, trade receivables, cash and cash equivalents and other bank balances.

The Company’s senior level management assess these risks and is supported by Treasury department that advises on the
appropriate financial risk governance framework. All derivative activities for risk management purposes are carried out in
line with the policy duly approved by board of directors. The execution of the policy is done by treasury department which
has appropriate skills, experience and supervision. The policy provides that the Company should hedge all possible risks of
foreign currency through natural hedge available and customer arrangements. It also prohibits any hedging for speculative
transactions.”

i. Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Company’s exposures to trade receivables (mainly institutional
customers and credit sales), deposits with landlords for store properties taken on leases and other receivables including
balances with banks.

Trade receivables and other deposits

The Company’s retail business is predominantly on ‘cash and carry’ basis which is largely through cash and credit card
collections. The credit risk on such credit card collections is minimal, since they are primarily owned by customers’ card issuing
banks. The Company has adopted a policy of dealing with only credit worth counterparties in case of institutional customers
and credit sales and the credit risk exposure for institutional customers and credit sales are managed by the Company by credit
worthiness checks. The Company also carries credit risk on lease deposits with landlords for store properties taken on leases,
for which agreements are signed and property possessions timely taken for store operations. The risk relating to refunds of
deposits after store shut down is managed through successful negotiations or appropriate legal actions, where necessary. The
company has adopted simplified approach for impairment of trade receivable as prescribe under IND AS 109.

Other financial assets

The Company maintains exposure in cash and cash equivalents and term deposits with banks. The Cash and cash equivalents
and term deposits are held with the banks with good credit ratings.

Financial instruments that are subject to concentration of credit risk principally consists of trade receivables. None of the
financial instruments of the Company result in material concentration of credit risk.

ii. Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without
incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash
and collateral requirements. Due to the dynamic nature of the underlying business, the Company’s treasury maintains flexibility
in funding by maintaining availability under committed credit lines. The company requires funds both for short term operational
needs as well as for long term investment programs mainly in growth projects. The Company closely monitors its liquidity
position and deploys a robust cash management system. It aims to minimise these risks by generating sufficient cash flows
from its current operations, which in addition to the available cash and cash equivalents and sufficient committed fund facilities,
will provide liquidity.

iii. Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Such changes in the values of financial instruments may result in interest rate risk, price risk and exchange
rate risk. Financial instruments affected by market risk include borrowings, receivables, payables, advances and other
financial instruments.

(a) Interest Rate Risk

I nterest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is
the risk of changes in fair values of fixed interest bearing financial assets or borrowings because of fluctuations in the
interest rates, if such assets/borrowings are measured at fair value through profit or loss. Cash flow interest rate risk
is the risk that the future cash flows of floating interest bearing borrowings will fluctuate because of fluctuations in the
interest rates.

(b) Exchange Rate Risk

The fluctuation in foreign currency exchange rate may have potential impact on the statement of profit or loss and other
comprehensive income and equity, where any transaction references more than one currency or where assets and
liabilities are denominated in a currency other than the functional currency of the company. The Company evaluates the
impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.

The carrying amount of the Company''s foreign currency denominated monetary assets and monetary liabilities at the end
of the reporting period are as follows :

Foreign currency sensitivity

The Company''s currency exposures in respect of monetary items at March 31, 2026 and March 31, 2025 that result in net
currency gains and losses in the income statement and equity arise principally from movement in above exchange rates.

The following tables demonstrate the sensitivity to a reasonably possible change in above exchange rates, with all other
variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary
assets and liabilities . The Company does not have any exposure to foreign currency.

41 Employee benefit obligations

(a) Accounting Policy

P N Gadgil Jewellers Ltd has set up a Gratuity Trust and created a Gratuity Fund scheme in co-ordination with LIC of
India, the contribution to gratuity fund is made by P N Gadgil Jewellers Ltd. The P N Gadgil Jewellers Ltd recognises
its liability in the books of accounts on the basis of Independent Actuarial Valuation Certificate using Projected Unit
Credit Method.

(b) Employee benefits consists of the following:

A Defined contribution plans :

The Company has certain defined contribution plans. Contributions are made to provident fund in India for employees at
the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered
by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual
nor any constructive obligation.

B Defined benefit plan

The Company provides for gratuity to employees in India as per the Payment of Gratuity Act, 1972. Employees who
are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/
termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for
the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to recognised
funds in India. The Company does not fully fund the liability and maintains a target level of funding to be maintained
over a period of time based on estimations of expected gratuity payments. These benefits are funded with an insurance
company in the form of a qualifying insurance policy.

43 Other Statutory Information

i) The Company does not have any Benami property and there are no proceeding initiated or pending
against the Company for holding any benami property under the Benami Transactions (Prohibition)
Act, 1988 (45 of 1988) and the rules made thereunder.

ii) The Company has not traded or invested in crypto currency or virtual currency during the current year and previous year

iii) The Company does not have any transactions which are not recorded in the books of accounts that have been surrendered
or disclosed as income in the tax assessments under the Income Tax Act, 1961 during the current year and previous year

iv) There are no Schemes of Arrangements which are either pending or have been approved by the Competent Authority in
terms of sections 230 to 237 of the Companies Act, 2013 during the current year and previous year

v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall 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 provide
any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the Company shall 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

vii) There are no balance outstanding on account of any transaction with companies struck off under section 248 of the
Companies Act, 2013 or section 560 of Companies Act,1956.

viii) The Company has not been declared a wilful defaulter by any bank or financial institution or other lender (as defined
under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by
the Reserve Bank of India.

ix) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with
Companies (Restriction on number of Layers) Rules, 2017.

x) The Company do not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond
the statutory period.

2.12 Provisions
General

A provision is recognized when the company has
a present obligation as a result of 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. Provisions are not discounted
to their present value and are determined based on
the best estimate required to settle the obligation at
the reporting date. These estimates are reviewed at
each reporting date and adjusted to reflect the current
best estimates.

Onerous Contracts:

Present obligations arising under onerous contracts
are recognized and measured as provisions. An
onerous contract is considered to exist where the
Company has a contract under which the unavoidable
costs of meeting the obligations under the contract
exceed the economic benefits expected to be received
from the contract.

2.13Contingencies

Contingent Liabilities

A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed
by the occurrence or non-occurrence of one or more
uncertain future events beyond the control of the
Company or a present obligation that is not recognized
because it is not probable that an outflow of resources
will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where there
is a liability that cannot be recognized because it
cannot be measured reliably. Contingent liabilities are
not recognised but are disclosed in notes to accounts.

Contingent Assets:

Contingent Asset is not recognised in standalone
financial statement since this may result in to
recognition of income that may never be realised.

2.14 Financial instruments
Financial assets:

Initial recognition and measurement:

Financial assets are initially measured at fair value.
Transaction costs that are directly attributable to the
acquisition of financial assets (other than financial
assets at fair value through profit or loss) are added to
the fair value of the financial assets on initial recognition.
Transaction cost directly attributable to the acquisition
of financial assets at fair value through profit or loss are
recognised immediately in profit or loss.

Subsequent Measurement:

Debt instruments

Subsequent measurement of debt instruments
depends on the company’s business model for
managing the asset and the cash flow characteristics
of the asset. There are three measurement categories
into which the company classifies its debt instruments:

Financial assets at amortized cost

Financial assets that are held within a business
model whose objective is to hold assets for collecting
contractual cash flows and whose contractual terms
give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding are subsequently measured
at amortized cost using the effective interest rate
method. The change in measurements are recognized
as finance income in the statement of profit and loss.

Financial assets at fair value through other
comprehensive income (FVTOCI)

Financial assets that are held within a business
model whose objective is achieved both by collecting
contractual cash flows and selling the financial assets
and the assets’ contractual cash flows represent solely
payments of principal and interest on the principal
amount outstanding are subsequently measured at fair
value. Fair value movements are recognized in other
comprehensive income.

Effective Interest method:

The effective interest method is a method of calculating
the amortised cost of a debt instrument and of allocating
interest income over the relevant period. The effective
interest rate that exactly discounts estimated future
cash receipts through the expected life of the debt
instrument, or, where appropriate, a shorter period, to
the net carrying amount on initial recognition.

I ncome is recognised on an effective interest basis
for debt instruments other than those financial assets.
Interest income is recognised in profit or loss and is
included in the “Other income” line item.

Financial assets at fair value through profit or loss
(FVTPL)

Any financial asset which does not meet the criteria
for categorization as financial instruments at amortized
cost or as FVTOCI, is classified as financial instrument
at FVTPL. Financial instruments included within the
FVTPL category are subsequently measured at fair
value with all changes recognized in the statement of
profit and loss.

Equity instruments

The company subsequently measures all equity
investments at fair value. Where the company’s
management has elected to present fair value gains and
losses on equity investments in other comprehensive
income, there is no subsequent reclassification of fair
value gains and losses to profit or loss.

Dividends from such investments are recognised in
profit or loss as other income when the company’s
right to receive payments is established. Changes in
the fair value of financial assets at fair value through
profit or loss are recognised in other gain/ (losses) in
the statement of profit and loss. Impairment losses (and
reversal of impairment losses) on equity investments
measured at FVOCI are not reported separately from
other changes in fair value.

Derecognition

The Company derecognizes a financial asset when
the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership of
the asset to another party.

On derecognition of a financial asset in its entirety, the
difference between the asset’s carrying amount and the
sum of the consideration received and receivable and
the cumulative gain or loss that had been recognised
in other comprehensive income and accumulated in
equity, if any, is recognised in profit or loss.

Where the entity has neither transferred a financial
asset nor retains substantially all risks and rewards of
ownership of the financial asset, the financial asset is
derecognised if the Company has not retained control
of the financial asset. When the Company retains
control of the financial asset, the asset is continued to
be recognised to the extent of continuing involvement
in the financial asset. Any gain or loss arising from the
derecognition of the financial asset is recognised in the
profit and loss statement.

Foreign exchange gains and losses
The fair value of financial assets denominated in a
foreign currency is determined in that foreign currency
and translated at the spot rate at the end of each
reporting period.

For foreign currency denominated financial assets
measured at amortised cost and FVTPL, the exchange
differences are recognised in the statement of profit
and loss except for those which are designated as
hedging instruments in a hedging relationship.

For the purposes of recognising foreign exchange
gains and losses, FVTOCI debt instruments are treated
as financial assets measured at amortised cost. Thus,
the exchange differences on the amortised cost are
recognised in the statement of profit and loss and other
changes in the fair value of FVTOCI financial assets are
recognised in other comprehensive income.

Reclassification of financial assets

The Company determines classification of financial
assets and liabilities on initial recognition. After
initial recognition, no reclassification is made for
financial assets which are equity instruments and
financial liabilities. For financial assets which are debt
instruments, a reclassification is made only if there is
a change in the business model for managing those
assets. Changes to the business model are expected
to be infrequent.

Financial liabilities:

Initial recognition and measurement

Financial liabilities are recognized initially at fair value
and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.

Subsequent measurement

For the purpose of subsequent measurement, financial
liabilities are classified as:

Financial liabilities at amortized cost

Financial liabilities such as loans and borrowings
are subsequently measured at amortized cost using
the effective interest rate method. The change in
measurements are recognized as finance costs in the
statement of profit and loss.

Financial liabilities at fair value through profit or loss
(FVTPL)

Financial liabilities include financial liabilities held for
trading and financial liabilities designated upon initial
recognition as at fair value through profit or loss if
the recognition criteria as per Ind AS 109 - “Financial
Instruments” are satisfied. Gains or losses on liabilities
held for trading are recognized in statement of profit and
loss. Fair value gains or losses on liabilities designated
as FVTPL attributable to changes in own credit risk are
recognized in other comprehensive income. All other
changes in fair value of liabilities designated as FVTPL
are recognized in the statement of profit and loss. The

Company has not designated any financial liability as
at FVTPL.

Derecognition

The Company derecognizes financial liabilities when
the Company’s obligations are discharged, cancelled
or have expired. The difference between the carrying
amount of the financial liability derecognized and the
consideration paid and payable is recognised in profit
or loss.

Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign
currency and are measured at amortised cost at the
end of each reporting period, the foreign exchange
gains and losses are determined based on the
amortised cost of the instruments and are recognised
in the statement of profit and loss.

The fair value of financial liabilities denominated in a
foreign currency is determined in that foreign currency
and translated at the spot rate at the end of the reporting
period. For financial liabilities that are measured as at
FVTPL, the foreign exchange component forms part of
the fair value gains or losses and is recognised in the
statement of profit and loss.

Derivative financial instruments:

Forward exchange contracts not intended for trading
or speculation purposes, classified as derivative
financial instruments. The Company uses derivative
financial instruments such as forward exchange
contracts to hedge its risks associated with foreign
currency fluctuations. Such derivative contracts are
not designated as hedges and are accounted for at Fair
Value through Profit and Loss. There are no derivative
financial instruments outstanding as on year end.

Fair Value Hedge:

The Company has adopted fair value hedge for the
derivative contracts entered into and designated
derivative contracts or nonderivative financial liabilities
as hedging instruments to mitigate the risk of change
in fair value of hedged item due to movement in interest
rates, foreign exchange rates and commodity prices.
Changes in the fair value of hedging instruments and
hedged items that are designated and qualify as fair
value hedges are recorded in the Statement of Profit
and Loss with an adjustment to the carrying value of
the hedged item. Hedge accounting is discontinued
when the Company revokes the hedge relationship, the
hedging instrument or hedged item expires or is sold,
terminated, or exercised or no longer meets the criteria
for hedge accounting. The Company designates
derivative contracts as hedging instruments to mitigate
the risk of change in fair value of hedged item i.e. fixed
gold inventory due to movement in gold prices

Offsetting of financial instruments:

Financial assets and financial liabilities are offset and
the net amount is reported in the Balance Sheet if
there is currently enforceable legal right to offset the
recognized amounts and there is an intention to settle
on a net basis, to realize the assets and settle the
liabilities simultaneously.

2.15 Impairment

(i) Financial assets (other than at fair value)

The Company assesses at each date of balance sheet
whether a financial asset or a group of financial assets
is impaired.

Ind AS 109 requires expected credit losses to be
measured through a loss allowance. Company performs
credit assessment for customers on an annual basis.
Company recognizes credit risk, on the basis of lifetime
expected losses and where receivables are due for
more than six months. Lifetime ECL are the expected
credit losses resulting from all possible default events
over the expected life of a financial instrument.

For all other financial assets, expected credit losses
are measured at an amount equal to the 12 month
expected credit losses or at an amount equal to the
life time expected credit losses if the credit risk on
the financial asset has increased significantly since
initial recognition.

The impairment losses and reversals are recognised in
Statement of Profit and Loss.

(ii) Non-Financial Assets

Tangible and intangible assets

Property, plant and equipment and intangible assets
with finite life are evaluated for recoverability whenever
there is any indication that their carrying amounts may
not be recoverable. If any such indication exists, the
recoverable amount (i.e. higher of the fair value less
cost to sell and the value-in-use) is determined on
an individual asset basis unless the asset does not
generate cash flows that are largely independent of
those from other assets. In such cases, the recoverable
amount is determined for the cash generating unit
(CGU) to which the asset belongs.

If the recoverable amount of an asset (or CGU) is
estimated to be less than its carrying amount, the
carrying amount of the asset (or CGU) is reduced to its
recoverable amount. An impairment loss is recognised
in the statement of profit and loss.

When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating
unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that

would have been determined had no impairment loss
been recognised for the asset (or cash-generating
unit) in prior years. A reversal of an impairment loss is
recognised immediately in profit or loss.

2.16 Earnings Per Share

The Company reports basic and diluted earnings
per share in accordance with Ind AS 33 on Earnings
per share. Basic earnings per share is computed
by dividing the net profit or loss for the period by
the weighted average number of equity shares
outstanding during the period. Diluted earnings per
share is computed by dividing the net profit or loss for
the period by the weighted average number of equity
shares outstanding during the period as adjusted for
the effects of all diluted potential equity shares except
where the results are anti-dilutive.

2.17 Segmented reporting:

Operating Segments are reported in a manner
consistent with the internal reporting provided to
the Chief Operating Decision Maker. The Company is
engaged in the business of “manufacture and sale of
Jewellery”.

Since the entire Company’s business is from
manufacture and sale of jewellery, there are no other
primary reportable segments. Thus, the segment
revenue, segment results, total carrying value of
segment assets, total carrying amount of segment
liabilities, total cost incurred to acquire segment
assets, total amount of charge of depreciation and
amortization during the year are all as reflected in the
Financial Statements as at and for the year ended
March 31, 2025.

2.18 Cash flow statement

The Cash Flow Statement is prepared by the indirect
method set out in Ind AS 7 on Cash Flow Statements
and presents cash flows by operating, investing and
financing activities of the Company.

2.19 Cash and Cash equivalents

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

For the purpose of presentation in the statement
of cash flows, cash and cash equivalents consist of
cash and cash equivalent, as defined above, net of
outstanding bank overdrafts if they are considered an
integral part of the Company’s cash management.

2.20 Dividends

The final dividend proposed by the Board of Directors is
recognised only on approval by the shareholders in the

general meeting who have the right to decrease but not
increase the amount of dividend recommended by the
Board of Directors. Interim dividends are recognised
on declaration by the Board of Directors

2.21 Fair Value Measurement

Fair value is the price that would be received from
the sale of an asset or paid to transfer a liability in an
orderly transaction between market participants at
the measurement date. The fair value measurement is
based on the presumption that the transaction to sell
an asset or transfer the liability takes place either:

• In the principal market for the asset or liability.

• In the absence of principal market, in the most
advantageous market for the asset or liability.

The principal or the most advantageous market must
be accessible by the Company.

The fair value of an asset or a liability is measured
using the assumptions that market participants would
use when pricing the asset or liability, assuming that
market participants act in their economic best interest.

The fair value measurement of a non-financial asset
takes into account a market participant’s ability to
generate economic benefits by using the asset in its
highest and best use or by selling it to another market
participant that would use the asset in its highest and
best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs and
minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the
fair value measurement as a whole:

• Level 1 - Quoted (Unadjusted) Market prices in active
markets for incidental assets or liabilities

• Level 2 -Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is directly or indirectly observable

• Level 3 - Valuation Techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable.

For assets and liabilities that are recognized in the
financial statements on a recurring basis, the Company
determines whether transfers that have occurred
between levels in the hierarchy by re-assessing
categorization (based on the lowest level input that is
significant to the fair value measurement as a whole) at
the end of each reporting period.

Determination of Fair Value

1) Financial Assets

The fair value of financial assets is estimated as the
present value of future cash flows, discounted at the
market rate of interest at the reporting date. This fair
value is determined for disclosure purpose.

2) Non-Derivative financial liabilities

Fair Value, which is determined for disclosure
purposes, is calculated based on the present value of
future principal and interest cash flows, discounted at
the market rate of interest at the reporting date.

2.22 Non-current assets held for sale

Non-current assets and disposal Company’s are
classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather
than through continuing use. This condition is regarded
as met, only when the sale is highly probable and the
non-current asset (or disposal Company) is available for
immediate sale in its present condition. Management
must be committed to the sale, which should be
expected to qualify for recognition as a completed sale
within one year from the date of classification.

Non-current assets (and disposal Company’s)
classified as held for sale are measured at the lower of
their previous carrying amount and fair value less costs
to sell.

2.23 Leases:

As a lessee

The Company’s lease asset classes primarily consist
of leases for land and buildings.

The Company assesses whether a contract contains
a lease, at inception of a contract. 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.

To assess whether a contract conveys the right to
control the use of an identified asset, the Company
assesses whether: (i) the contact involves the use of an
identified asset (ii) the Company has substantially all of
the economic benefits from use of the asset through
the period of the lease and (iii) the Company has the
right to direct the use of the asset.

At the date of commencement of the lease, the
Company recognizes a right-of-use asset (“ROU”) and a
corresponding lease liability for all lease arrangements
in which it is a lessee, except for leases with a term
of twelve months or less (short-term leases) and low
value leases. For these short-term and low value
leases, the Company recognizes the lease payments
as an operating expense on a straight-line basis over
the term of the lease.

Certain lease arrangements includes the options to
extend or terminate the lease before the end of the
lease term. ROU assets and lease liabilities includes
these options when it is reasonably certain that they
will be exercised.

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

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset. Right of use assets are evaluated
for recoverability whenever events or changes in
circumstances indicate that their carrying amounts
may not be recoverable. For the purpose of
impairment testing, the recoverable amount (i.e. the
higher of the fair value less cost to sell and the value-
in-use) is determined on an individual asset basis
unless the asset does not generate cash flows that
are largely independent of those from other assets.
In such cases, the recoverable amount is determined
for the Cash Generating Unit (CGU) to which the
asset belongs.

The lease liability is initially measured at amortized
cost at the present value of the future lease payments.
The lease payments are discounted using the interest
rate implicit in the lease or, if not readily determinable,
using the incremental borrowing rates in the country
of domicile of these leases. Lease liabilities are
remeasured with a corresponding adjustment to the
related right of use asset if the Company changes its
assessment if whether it will exercise an extension or a
termination option.

Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments have
been classified as financing cash flows.

As a lessor

Leases for which the Company is a lessor is classified
as a finance or operating lease. Whenever the terms of
the lease transfer substantially all the risks and rewards
of ownership to the lessee, the contract is classified
as a finance lease. All other leases are classified as
operating leases. When the Company is an intermediate
lessor, it accounts for its interests in the head lease
and the sublease separately. The sublease is classified
as a finance or operating lease by reference to the right
of-use asset arising from the head lease. For operating
leases, rental income is recognized on a straight line
basis over the term of the relevant lease.