RBZ Jewellers Ltd. कंपली की लेखा नीति

Mar 31, 2025

3. Summary of Material Accounting Policies

3.1. Current versus non-current classification

The Company presents assets and liabilities in
the Balance Sheet based on current/non-current
classification.

An asset is current when it is:

• Expected to be realised or intended to be sold
or consumed in the normal operating cycle;

• Held primarily for the purpose of trading;

• Expected to be realised within twelve months
after the reporting period; or

• Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability
for at least twelve months after the reporting
period.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in the normal
operating cycle;

• It is held primarily for the purpose of trading;

• It is due to be settled within twelve months
after the reporting period; or

• There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.

The Company classifies all other liabilities as
non-current. Deferred tax assets and liabilities are
classified as non-current assets and liabilities.

Operating cycle

Operating cycle of the Company is the time between
the acquisition of assets for processing and their
realisation in cash or cash equivalents. As the
Company''s normal operating cycle is not clearly
identifiable, it is assumed to be twelve months.

3.2. Use of estimates and judgements

The estimates and judgements used in the
preparation of the financial statements are
continuously evaluated by the Company and are
based on historical experience and various other
assumptions and factors (including expectations
of future events) that the Company believes to

be reasonable under the existing circumstances.
Difference between actual results and estimates
are recognised in the period in which the results are
known / materialised.

The said estimates are based on the facts and events,
that existed as at the reporting date, or that occurred
after that date but provide additional evidence about
conditions existing as at the reporting date.

3.3. Foreign currencies

The Company''s functional and presentation currency
is Indian Rupee. Transactions in foreign currencies
are initially recorded by the Company''s functional
currency spot rates at the date the transaction first
qualifies for recognition.

Monetary assets and liabilities denominated in
foreign currencies are translated at the functional
currency spot rates of exchange at the reporting
date. Differences arising on settlement of such
transaction and on translation of monetary assets
and liabilities denominated in foreign currencies
at year end exchange rate are recognised in profit
or loss. They are deferred in equity if they relate to
qualifying cash flow hedges.

Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rates at the dates of the initial
transactions. Non-monetary items measured at fair
value in a foreign currency are translated using the
exchange rates at the date when the fair value is
determined. The gain or loss arising on translation of
non-monetary items measured at fair value is treated
in line with the recognition of the gain or loss on
the change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is
recognised in OCI or profit or loss are also recognised
in OCI or profit or loss, respectively).

3.4. Fair value measurement

Fair value is the price that would be received to sell
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
the asset or transfer the liability takes place either:

• In the principal market for the asset or liability or

• In the absence of a 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.

A 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,
maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is
measured or disclosed in the financial statements are
categorised 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 identical 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 recognised in
the financial statements on a recurring basis, the
Company determines whether transfers have
occurred between levels in the hierarchy by
re-assessing categorisation (based on the lowest
level input that is significant to the fair value
measurement as a whole) at the end of each
reporting period.

The Company''s management determines the
policies and procedures for both recurring fair value
measurement, such as derivative instruments and
for non-recurring measurement, such as asset held
for sale.

External valuers are involved for valuation
of significant assets, such as properties.
Involvement of external valuers is decided upon
annually by the management after discussion with
and approval by the Company''s Audit Committee.
Selection criteria include market knowledge,
reputation, independence and whether professional
standards are maintained. Management decides,
after discussions with the Company''s external
valuers, which valuation techniques and inputs to
use for each case.

At each reporting date, management analyses the
movements in the values of assets and liabilities
which are required to be re-measured or re-assessed
as per the Company''s accounting policies. For this
analysis, management verifies the major inputs
applied in the latest valuation by agreeing the
information in the valuation computation to
contracts and other relevant documents.

Management, in conjunction with the Company''s
external valuers, also compares the change in the
fair value of each asset and liability with relevant
external sources to determine whether the change
is reasonable on yearly basis.

For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of the
fair value hierarchy, as explained above.

This note summarises accounting policy for fair
value. Other fair value related disclosures are given
in the relevant notes.

• Material accounting judgements, estimates and
assumptions

• Quantitative disclosures of fair value
measurement hierarchy

• Property, plant and equipment & Intangible
assets measured at fair value on the date of
transition

• Financial instruments (including those carried
at amortised cost)

3.5. Property, plant and equipment

Property, plant and equipment are stated at cost,
net of accumulated depreciation and accumulated
impairment losses, if any. Such cost includes the cost
of replacing part of the plant and equipment and

borrowing costs for long-term construction projects
if the recognition criteria are met. When significant
parts of Property, plant and equipment are required
to be replaced at intervals, the Company recognises
such parts as individual assets with specific
useful lives and depreciates them accordingly.
Likewise, when a major inspection is performed,
its cost is recognised in the carrying amount of
the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and
maintenance costs are recognised in profit or loss
as incurred. The present value of the expected cost
for the decommissioning of an asset after its use is
included in the cost of the respective asset if the
recognition criteria for a provision are met.

Borrowing cost relating to acquisition / construction
of fixed assets which take substantial period of time
to get ready for its intended use are also included to
the extent they relate to the period till such assets
are ready to be put to use.

Capital work-in-progress comprises cost of fixed
assets that are not yet installed and ready for their
intended use at the balance sheet date.

De-recognition

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected from its use or
disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of
the asset) is included in the Statement of Profit and
Loss when the asset is de-recognised.

Depreciation

Depreciation on property, plant and equipment is
provided so as to write off the cost of assets less
residual values over their useful lives of the assets,
using the straight-line method as prescribed under
Part C of Schedule II to the Companies Act 2013
except for Buildings and Plant and Machinery.

When parts of an item of property, plant and
equipment have different useful life, they are
accounted for as separate items (Major Components)
and are depreciated over their useful life or over
the remaining useful life of the principal assets
whichever is less.

Depreciation on certain Buildings are provided
on straight line method over the useful lives of

The management believes that the useful life as
given above best represent the period over which
management expects to use these assets. Hence the
useful lives for these assets are different from the
useful lives as prescribed under Part C of Schedule
II to the Companies Act 2013.

Depreciation for assets purchased/sold during a
period is proportionately charged for the period of
use.

The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.

3.6. Leases

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: (1)
the contract involves the use of an identified asset (2)
the Company has substantially all of the economic
benefits from use of the asset through the period of
the lease and (3) 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 include 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 the 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.

3.7. Borrowing cost

Borrowing cost includes interest expense as per
Effective Interest Rate (EIR) and exchange differences
arising from foreign currency borrowings to the
extent they are regarded as an adjustment to the
interest cost.

Borrowing costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalised as
part of the cost of the respective asset. Where funds
are borrowed specifically to finance a project, the
amount capitalised represents the actual borrowing
costs incurred. Where surplus funds are available
out of money borrowed specifically to finance a

project, the income generated from such current
investments is deducted from the total capitalized
borrowing cost. Where the funds used to finance a
project form part of general borrowings, the amount
capitalised is calculated using a weighted average
of rates applicable to relevant general borrowings
of the Company during the year. Capitalisation
of borrowing costs is suspended and charged to
profit and loss during the extended periods when
the active development on the qualifying assets is
interrupted.

All other borrowing costs are expensed in the period
in which they occur.

3.8. Intangible Assets

Intangible Assets that the Company controls and
from which it expects future economic benefits are
capitalised upon acquisition and measured initially:

• for assets acquired in a business combination
at fair value on the date of acquisition

• for separately acquired assets, at cost
comprising the purchase price and directly
attributable costs to prepare the asset for its
intended use.

Revenue expenditure pertaining to research
is charged to the Statement of Profit and Loss.
Development costs of products are charged to the
Statement of Profit and Loss unless a product''s
technological and commercial feasibility has been
established, in which case such expenditure is
capitalised.

Following initial recognition, Intangible assets
are carried at cost less accumulated amortisation
and accumulated impairment losses, if any.
Internally generated intangible assets, excluding
capitalised development costs, are not capitalised
and expenditure is recognised in the Statement of
Profit and Loss in the period in which expenditure
is incurred.

The useful lives of intangible assets are assessed as
finite.

Intangible assets with finite lives are amortised
over their useful economic lives and assessed for
impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation
period and the amortisation method for an
intangible asset with a finite useful life are reviewed
at least at the end of each reporting period.

Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and
are treated as changes in accounting estimates.
The amortisation expense on intangible assets with
finite lives is recognised in the Statement of Profit
and Loss.

Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the carrying
amount of the asset and are recognised in the
Statement of Profit and Loss when the asset is
derecognised.

Amortisation

Software is amortized over management estimate of
its useful life of 3 years or License Period whichever
is lower and Patent/Knowhow is amortized over its
useful life of 3 years.

3.9. Inventories

Inventories comprise of Raw Materials, Work in
Progress, Finished Goods and Traded Goods are
stated at the lower of cost or net realizable value.
The gold wastage salvaged during the course of job
work process are recognized at Net realizable value.

The cost of Raw materials and traded goods included
in inventory are determined on a weighted average
cost basis and the cost of finished goods and work
in progress included in inventory is determined on
full absorption cost method basis.

Cost comprises all costs of purchase including
duties and taxes (other than those subsequently
recoverable by the Company), freight inwards and
other expenditure directly attributable to acquisition
and to bring the inventories to their present location
and condition. Cost of finished goods include cost of
materials consumed and cost of conversion.

Net realizable value represents the estimated selling
price for inventories less estimated cost necessary to
make the sale.

3.10. Impairment of non-financial assets

The Company assesses at each reporting date
whether there is an indication that an asset may be
impaired. If any indication exists, or when annual
impairment testing for an asset is required, the
Company estimates the asset''s recoverable amount.

An asset''s recoverable amount is the higher of an
asset''s or cash-generating unit''s (CGU) fair value less
costs to sell and its value in use. It is determined for an
individual asset, unless the asset does not generate
cash inflows that are largely independent of those
from other assets of the Company. When the carrying
amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is
written down to its recoverable amount.

In assessing value in use, the estimated future cash
flows are discounted to their present value using a
pre-tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset. In determining fair value
less costs to sell, recent market transactions are taken
into account, if available. If no such transactions can
be identified, an appropriate valuation model is used.
These calculations are corroborated by valuation
multiples, quoted share prices for publicly traded
subsidiaries or other available fair value indicators.

The Company bases its impairment calculation on
detailed budgets and forecasts which are prepared
separately for each of the Company''s CGU to which
the individual assets are allocated. These budgets
and forecast calculations are generally covering a
period of five years. For longer periods, a long-term
growth rate is calculated and applied to project
future cash flows after the fifth year.

Impairment losses, including impairment on
inventories, are recognised in the Statement of Profit
and Loss in those expense categories consistent
with the function of the impaired asset, except for a
property previously revalued where the revaluation
was taken to other comprehensive income. In this
case, the impairment is also recognised in other
comprehensive income up to the amount of any
previous revaluation.

For assets excluding goodwill, an assessment is made
at each reporting date as to whether there is any
indication that previously recognised impairment
losses may no longer exist or may have decreased.
If such indication exists, the Company estimates the
asset''s or CGU''s recoverable amount. A previously
recognised impairment loss is reversed only if there
has been a change in the assumptions used to
determine the asset''s recoverable amount since the
last impairment loss was recognised. The reversal is
limited so that the carrying amount of the asset does
not exceed its recoverable amount, nor exceed the

carrying amount that would have been determined,
net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal
is recognised in the Statement of Profit and Loss
unless the asset is carried at a revalued amount, in
which case the reversal is treated as a revaluation
increase.

3.11. Revenue Recognition

Revenue from contract with customer is recognized
when control of the goods or services is transferred
to the customer at an amount that reflects the
consideration to which the Company expects to be
entitled in exchange for those goods or services.
Revenue is measured at the fair value of the
consideration received or receivable, taking into
account contractually defined terms of payment and
excluding taxes or duties collected on behalf of the
government. The Company has generally concluded
that it is the principal in its revenue arrangements
because it typically controls the goods or services
before transferring them to the customer.

Sales of Products

Revenue from the sale of products is recognized at
the point in time when control is transferred to the
customer, generally on dispatch/delivery of the goods
or terms as agreed with the customer. The Company
considers whether there are other promises in the
contract that are separate performance obligations
to which a portion of the transaction price needs
to be allocated. In determining the transaction
price for the sale of goods, the Company considers
the effects of customer incentives, discounts,
variable consideration, the existence of significant
financing components, non-cash consideration,
and consideration payable to the customer (if any).
Additionally, revenue excludes taxes collected from
customers, which are subsequently remitted to
governmental authorities.

Variable consideration

If the consideration in a contract includes a
variable amount, the Company estimates the
amount of consideration to which it will be entitled
in exchange for transferring the goods to the
customer. The variable consideration is estimated at
the time of completion of performance obligation
and constrained until it is highly probable that
a significant revenue reversal in the amount of
cumulative revenue recognised will not occur

when the associated uncertainty with the variable
consideration is subsequently resolved.

Sales of Services

Revenue from providing services is recognized in
the accounting period in which the services are
rendered.

Interest Income

Interest income from debt instruments is recorded
using the effective interest rate (EIR) and accrued on
timely basis. The EIR is the rate that exactly discounts
the estimated future cash receipts over the expected
life of the financial instrument or a shorter period,
where appropriate, to the net carrying amount of
the financial asset. When calculating the effective
interest rate, the Company estimates the expected
cash flows by considering all the contractual terms of
the financial instrument (for example, prepayment,
extension, call and similar options) but does not
consider the expected credit losses. Interest income
is included in other income in the statement of profit
or loss.

Insurance claims

Insurance claims are accounted for to the extent
the Company is reasonably certain of their ultimate
collection.

3.12. Financial instruments - initial recognition and
subsequent measurement

Financial assets and financial liabilities are recognised
when a Company becomes a party to the contractual
provisions of the instruments. For recognition and
measurement of financial assets and financial
liabilities, refer policy as mentioned below:

Initial recognition of financial assets and
financial liabilities:

Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted
from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities
at fair value through profit or loss are recognised
immediately in profit or loss.

Subsequent measurement of financial assets:

For purposes of subsequent measurement, financial

assets are classified in four categories:

(a) Financial assets at amortised cost

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

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

(d) Equity instruments measured at fair value
through other comprehensive income (FVTOCI)

(a) Financial assets at amortised cost:

A financial asset is measured at amortised cost
if the financial asset is held within a business
model whose objective is to hold financial
assets in order to collect contractual cash flows,
and the contractual terms of the financial asset
give rise on specified dates to cash flows that
are solely payments of principal and interest
(SPPI) on the principal amount outstanding.

This category is the most relevant to the
Company. After initial measurement, such
financial assets are subsequently measured at
amortised cost using the effective interest rate
(EIR) method. Amortised cost is calculated by
taking into account any discount or premium
on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is
included in finance income in the profit or loss.

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

A financial asset is measured at fair value
through other comprehensive income if the
financial asset is held within a business model
whose objective is achieved by both collecting
contractual cash flows and selling financial
assets, and the contractual terms of the
financial asset give rise on specified dates to
cash flows that are solely payments of principal
and interest (SPPI) on the principal amount
outstanding.

Financial assets included within the FVTOCI
category are measured at each reporting
date at fair value. Fair value movements are
recognized in the other comprehensive income
(OCI). However, the Company recognizes
interest income, impairment losses & reversals
and foreign exchange gain or loss in the

Statement of Profit and Loss. On derecognition
of the asset, cumulative gain or loss previously
recognised in OCI is reclassified from the equity
to P&L. Interest earned whilst holding FVTOCI
financial asset is reported as interest income
using the EIR method.

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

Financial assets are measured at fair value
through profit or loss unless it is measured at
amortised cost or at fair value through other
comprehensive income on initial recognition.
The transaction costs directly attributable of
financial assets at fair value through profit or
loss are immediately recognised profit or loss.

The Company may elect to designate a financial
asset, which otherwise meets amortized cost
or fair value through other comprehensive
income criteria, as at fair value through profit
or loss. However, such election is allowed only if
doing so reduces or eliminates a measurement
or recognition inconsistency (referred to as
''accounting mismatch''). The Company has not
designated any debt instrument as at FVTPL.

Impairment of financial assets

The Company assesses at each reporting
date whether a financial asset (or a group of
financial assets) such as investments, trade
receivables, advances and security deposits
held at amortised cost and financial assets
that are measured at fair value through
other comprehensive income are tested for
impairment based on evidence or information
that is available without undue cost or effort.
Expected credit losses (ECL) are assessed
and loss allowances recognised if the credit
quality of the financial asset has deteriorated
significantly since initial recognition.

Loss allowance for trade receivables with no
significant financing component is measured
at an amount equal to lifetime ECL. For all
other financial assets, ECL are measured at an
amount equal to the 12 months ECL, unless
there has been significant increase in credit
risk from initial recognition in which case these
are measured at lifetime ECL. The amount of
expected credit losses (or reversal) that is
required to adjust the loss allowance at the
reporting date to the amount that is required

to be recognised as an impairment gain or loss
in Statement of Profit and Loss.

Derecognition of financial assets

Financial assets are derecognised when the
right to receive cash flows from the assets
has expired, or has been transferred, and the
Company has transferred substantially all of the
risks and rewards of ownership.

Concomitantly, if the asset is one that is
measured at:

(a) amortised cost, the gain or loss is
recognised in the Statement of Profit and
Loss;

(b) fair value through other comprehensive
income, the cumulative fair value
adjustments previously taken to reserves
are reclassified to the Statement of Profit
and Loss unless the asset represents
an equity investment in which case
the cumulative fair value adjustments
previously taken to reserves is reclassified
within equity.

Reclassification

When and only when the business model
is changed, the Company shall reclassify all
affected financial assets prospectively from the
reclassification date as subsequently measured
at amortised cost, fair value through other
comprehensive income, fair value through
profit or loss without restating the previously
recognised gains, losses or interest and in terms
of the reclassification principles laid down in
the Ind AS relating to Financial Instruments.

Financial liabilities and equity instruments
Classification as debt or equity

Debt and equity instruments issued by a Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial
liability and an equity instrument.

Financial liabilities

All financial liabilities are subsequently measured at
amortised cost using the effective interest method.

Financial liabilities at fair value through profit or
loss

Financial liabilities at fair value through profit or
loss include financial liabilities held for trading

and financial liabilities designated upon initial
recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if
they are incurred for the purpose of repurchasing in
the near term. This category also includes derivative
financial instruments entered into by the Company
that are not designated as hedging instruments in
hedge relationships as defined by Ind-AS 109.

Gains or losses on liabilities held for trading are
recognised in the profit or loss.

Financial liabilities designated upon initial
recognition at fair value through profit or loss
are designated at the initial date of recognition,
and only if the criteria in Ind-AS 109 are satisfied.
For liabilities designated as FVTPL, fair value gains/
losses attributable to changes in own credit risks
are recognized in OCI. These gains/ losses are not
subsequently transferred to Statement of Profit
or Loss. However, the Company may transfer the
cumulative gain or loss within equity. All other
changes in fair value of such liability are recognised
in the statement of profit or loss. The Company has
not designated any financial liability as at fair value
through profit and loss.

Equity instruments

An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments
issued by a Company are recognised at the proceeds
received, net of direct issue costs.

Financial guarantee contracts

A financial guarantee contract is a contract that
requires the issuer to make specified payments to
reimburse the holder for a loss it incurs because a
specified debtor fails to make payments when due
in accordance with the terms of a debt instrument.

Financial guarantee contracts issued by a Company
are initially measured at their fair values and, if not
designated as at FVTPL, are subsequently measured
at the higher of:

• the amount of loss allowance determined in
accordance with impairment requirements of
Ind AS 109; and

• the amount initially recognised less, when
appropriate, the cumulative amount of income
recognised in accordance with the principles of
Ind AS 18.

Derecognition of financial liabilities

The Company derecognises financial liabilities
when, and only when, the Company''s obligations
are discharged, cancelled or have expired.
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. Similarly, a
substantial modification of the terms of an existing
financial liability (whether or not attributable to the
financial difficulty of the debtor) is accounted for as
an extinguishment of the original financial liability
and the recognition of a new financial liability.
The difference between the carrying amount of the
financial liability derecognised and the consideration
paid and payable is recognised in profit or loss.

Offsetting Financial Instruments

Financial assets and liabilities are offset and the net
amount is reported in the balance sheet where there
is a legally enforceable right to offset the recognised
amounts and there is an intention to settle on a
net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must
not be contingent on future events and must be
enforceable in the normal course of business and in
the event of default, insolvency or bankruptcy of the
Company or the counterparty.

3.13. Cash and cash equivalent

Cash and cash equivalent in the balance sheet
includes cash on hand, at banks 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 cash flows statement, cash and
cash equivalents includes cash, short-term deposits,
as defined above, other short-term and highly liquid
investments with original maturities of three months
or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk
of changes in value adjusted for outstanding bank
overdrafts as they are considered an integral part of
the Company''s cash management. Bank Overdrafts
are shown within Borrowings in current liabilities in
the balance sheet.

3.14. Taxes

Tax expense comprises of current income tax and
deferred tax.

Current income tax:

The tax currently payable is based on taxable profit
for the year. Taxable profit differs from ''profit before
tax'' as reported in the statement of profit and loss
because of items of income or expense that are
taxable or deductible in other years and items that
are never taxable or deductible. The tax rates and tax
laws used to compute the amount are those that are
enacted or substantively enacted at the reporting
date. Management periodically evaluates positions
taken in the tax returns with respect to situations
in which applicable tax regulations are subject to
interpretation and establishes provisions where
appropriate.

Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid
to the taxation authorities. Management periodically
evaluates positions taken in the tax returns with
respect to situations in which applicable tax
regulations are subject to interpretation and
establishes provisions where appropriate.

Current tax is recognised in the Statement of Profit
and Loss, except to the extent that it relates to
items recognised in other comprehensive income
or directly in equity. In this case, the tax is also
recognised in other comprehensive income or
directly in equity, respectively.

Deferred tax

Deferred tax is provided using the liability method
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 liabilities are recognised for all taxable
temporary differences, except:

• When the deferred tax liability arises from the
initial recognition of goodwill or an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit or loss;

• In respect of taxable temporary differences
associated with investments in subsidiaries
and interests in joint arrangements, when
the timing of the reversal of the temporary
differences can be controlled and it is probable
that the temporary differences will not reverse
in the foreseeable future.

Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred tax
assets are recognised to the extent that it is probable
that taxable profit will be available against which
the deductible temporary differences, and the carry
forward of unused tax credits and unused tax losses
can be utilised, except:

• When the deferred tax asset relating to the
deductible temporary difference arises from
the initial recognition of an asset or liability in
a transaction that is not a business combination
and, at the time of the transaction, affects
neither the accounting profit nor taxable profit
or loss;

• In respect of deductible temporary differences
associated with investments in subsidiaries,
associates and interests in joint arrangements,
deferred tax assets are recognised only to the
extent that it is probable that the temporary
differences will reverse in the foreseeable
future and taxable profit will be available
against which the temporary differences can
be utilised.

The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit
will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax
assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax
asset to be recovered.

Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on
tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.

Deferred tax is recognised in the Statement of
Profit and Loss, except to the extent that it relates
to items recognised in other comprehensive
income or directly in equity. In this case, the tax is
also recognised in other comprehensive income or
directly in equity, respectively.

Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and

the deferred taxes relate to the same taxable entity
and the same taxation authority.

3.15. Employee Benefits

(a) Short Term Employee Benefits

All employee benefits payable within twelve
months of rendering the service are classified
as short term benefits. Such benefits include
salaries, wages, bonus, short term compensated
absences, awards, ex-gratia, performance pay
etc. and the same are recognised in the period
in which the employee renders the related
service.

(b) Post-Employment Benefits

(i) Defined contribution plan

The Company''s approved provident fund
scheme, and employees'' state insurance
fund scheme are defined contribution
plans. The Company has no obligation,
other than the contribution paid/payable
under such schemes. The contribution
paid/payable under the schemes is
recognised during the period in which
the employee renders the related service.

(ii) Defined benefit plan:

The employee''s gratuity fund scheme and
post-retirement medical benefit schemes
are Company''s defined benefit plans.
The present value of the obligation under
such defined benefit plans is determined
based on the actuarial valuation using
the Projected Unit Credit Method as at
the date of the Balance sheet. In case of
funded plans, the fair value of plan asset is
reduced from the gross obligation under
the defined benefit plans, to recognise
the obligation on the net basis.

Re-measurements, comprising of
actuarial gains and losses, the effect of
the asset ceiling, excluding amounts
included in net interest on the net defined
benefit liability and the return on plan
assets (excluding amounts included in
net interest on the net defined benefit
liability), are recognised immediately in
the Balance Sheet with a corresponding
debit or credit to retained earnings
through OCI in the period in which
they occur. Re-measurements are not

reclassified to Statement of Profit and Loss
in subsequent periods.

(c) Other long term employment benefits:

The employee''s long term compensated
absences are Company''s defined benefit
plans. The present value of the obligation is
determined based on the actuarial valuation
using the Projected Unit Credit Method as at
the date of the Balance sheet. In case of funded
plans, the fair value of plan asset is reduced
from the gross obligation, to recognise the
obligation on the net basis.

(d) Termination Benefits:

Termination benefits such as compensation
under voluntary retirement scheme are
recognised in the year in which termination
benefits become payable.

3.16. Earnings per share (EPS)

Basic EPS is computed by dividing the net profit / loss
for the year attributable to ordinary equity holders of
the Company by the weighted average number of
ordinary shares outstanding during the year.

Diluted EPS is computed by dividing the net profit
/ loss attributable to ordinary equity holders of
the Company by the weighted average number of
ordinary shares outstanding during the year adjusted
for the weighted average number of ordinary shares
that would be issued on conversion of all the dilutive
potential ordinary shares into ordinary shares.

The dilutive potential equity shares are adjusted
for the proceeds receivable had the equity shares
been actually issued at fair value (i.e. the average
market value of the outstanding equity 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. The number of equity shares
and potentially dilutive equity shares are adjusted
retrospectively for all periods presented for any share
splits and bonus shares issues including for changes
effected prior to the approval of the financial
statements by the Board of Directors.

3.17. Dividend

The Company recognises a liability (including tax
thereon) to make cash or non-cash distributions

to equity shareholders of the Company when the
distribution is authorised and the distribution is no
longer at the discretion of the Company.

Non-cash distributions are measured at the fair
value of the assets to be distributed with fair value
re-measurement recognised directly in equity.

Upon distribution of non-cash assets, any difference
between the carrying amount of the liability and
the carrying amount of the assets distributed is
recognised in the Statement of Profit and Loss.

---

Mar 31, 2024

1 General Information

RBZ Jewellers Limited (the ''Company'') is a public company limited by shares, domiciled in India and is initially incorporated as private limited company under the provisions of the Companies Act, 1956 and later converted into public limited company with effect from 20th March, 2023 in accordance with the provisions of Companies Act, 2013 as applicable in India. The registered office of the company is located at ''Block D, Mondeal Retail Park, S.G Highway, Beside Iscon Mall, Ahmedabad, Gujarat.

The Company is primarily engaged in manufacturing, trading and job work of jewelries and other accessories / products. The company sells and trade its manufactured and traded jewelries and other accessories / products through wholesale and retail network.

The financial statements for the year ended 31^st March, 2024 were considered by the Board of Directors and approved for issuance on 14th May, 2024.

1.1 New standards or interpretations issued but not yet effective

(i) New and Amended Standards Adopted by the Company: The Company has applied the following amendments for the first time for their annual reporting period commencing April 1, 2023:

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

The amendments to Ind AS 8 clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. They also clarify how entities use measurement techniques and inputs to develop accounting estimates.

Ind AS 1 - Presentation of Financial Statements

The amendments to Ind AS 1 provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ''significant'' accounting policies with a requirement to disclose their ''material'' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. This amendment does not have any material impact on the Company''s financial statements and disclosures.

Ind AS 12 - Income Taxes

The amendments to Ind AS 12 Income Tax narrow the scope of the initial recognition exception, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases and decommissioning liabilities. The above amendments did not have any material impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

(ii) New Standards/Amendments notified but not yet effective:

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. During the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

2. Basis of Preparation and Material Accounting Policies

These Ind AS financial statements of the company have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) and Companies (Indian Accounting Standards) Amendment Rules, 2016. Accounting Policies have been consistently applied except where newly issued accounting standard is initially adopted or revision to the existing standards requires a change in the accounting policy hitherto in use. Management evaluates all recently issued or revised accounting standards on an on-going basis.

2.1 Statement of Compliance

The Ind AS Financial Statements of the Company have been prepared in accordance with and comply in all material respects with Indian Accounting Standards (“Ind AS”) notified under Section 133 of the Companies Act, 2013 (“the Act”) read with the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act, as amended.

2.2 Basis of measurement

This Ind AS Financial Statements has been prepared on an accrual basis under the historical cost convention except for the following:

- Certain financial assets and liabilities classified as Fair value through Profit and Loss (FVTPL) or Fair value through Other Comprehensive Income (FVTOCI)

- The defined benefit asset/(liability) is recognised as the present value of defined benefit obligation less fair value of plan assets

The above items have been measured at Fair value and methods used to measure fair value are disclosed further in Note 38 (c).

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

2.3 Functional and presentation currency

Items included in the Ind As Financial Statements of the Company is measured using the currency of the primary economic environment in which the Company operates (i.e., the “functional currency”). The Ind As Financial Statements is presented in Indian Rupee, which is the functional as well as presentation currency of the Company.

All amounts in these Ind As Financial Statements and notes have been presented in T Lakhs rounded to two decimals as per the requirement of Schedule III of the Companies Act, 2013, unless otherwise stated. Transactions and balances with values below the rounding off norm adopted by the Company have been reflected as “0” in the relevant notes to this Ind AS Financial Statements.

2.4 Property, Plant and Equipment

All items of property, plant and equipment held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses.

With respect to Ind AS financial statement for the financial year ended 31^st March, 2024, property, plant and equipment had been measured at deemed cost, using the net carrying value as per previous GAAP as at 1st April, 2021.

Capital work in progress is carried at cost, less any recognised impairment loss. Cost includes purchase price, taxes and duties, labour cost and other directly attributable costs incurred upto the date the asset is ready for its intended use. Such Capital work in progress are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.

Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Subsequent costs relating to day-to-day servicing of the item are not recognised in the carrying amount of an item of property, plant and equipment; rather, these costs are recognised in profit or loss as incurred.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

Depreciation methods, estimated useful lives and residual value

Depreciation is recognized so as to write off the cost of assets less their residual values over their useful lives as prescribed under Part C of Schedule II of the Companies Act 2013, using the straight-line method, except in respect of leasehold improvement for which the company has estimated the useful life of nine years based on the initial lease term. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Depreciation for assets purchased / sold during a period is proportionately charged for the period of use.

2.5 Intangible assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses, if any. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from continued use of intangible asset. Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in statement of profit and loss when the asset is de-recognized.

2.6 Impairment

i) Financial assets (other than at fair value)

In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of Financial Assets other than those measured at Fair Value Through Profit and Loss (FVTPL).

Expected Credit Losses are measured through a loss allowance at an amount equal to:

• The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date), if the credit risk on a financial instrument has not increased significantly; or

• Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument),if the credit risk on a financial instrument has increased significantly.

For trade receivables the Company applies ''simplified approach'' which requires expected lifetime losses to be recognized from initial recognition of the receivables.

The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward-looking estimates are analyzed.

For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.

A financial asset is ''credit- impaired'' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit- impaired includes the following observable data:

- significant financial difficulty of the borrower or issuer;

- a breach of contract such as a default or being past due for 90 days or more;

- the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or

- the disappearance of an active market for a security because of financial difficulties.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forward- looking information.

The Company considers a financial asset to be in default when:

- the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held); or

- the financial asset is 90 days or more past due.

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company''s procedures for recovery of amounts due.

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 an 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 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 recognized in the statement of profit and loss.

Reversal of impairment loss

Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists.

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized directly in other comprehensive income and presented within equity.

2.7 Inventories

Inventories comprise of Raw Materials, Work in Progress, Finished Goods and Traded Goods are stated at the lower of cost or net realizable value. The gold wastage salvaged during the course of job work process are recognized at Net realizable value.

The cost of Raw materials and traded goods included in inventory are determined on a weighted average cost basis and the cost of finished goods and work in progress included in inventory is determined on full absorption cost method basis.

Cost comprises all costs of purchase including duties and taxes (other than those subsequently recoverable by the Company), freight inwards and other expenditure directly attributable to acquisition and to bring the inventories to its present location and condition. Cost of finished goods include cost of materials consumed and cost of conversion.

Net realizable value represents the estimated selling price for inventories less estimated cost necessary to make the sale.

2.8 Borrowing cost

Borrowing costs include

a) Interest expense calculated using the effective interest rate method,

b) Finance charges in respect of finance leases, and

c) Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets is substantially ready for their intended use or sale.

Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

All other borrowing costs are recognized in the statement of profit and loss in the period of their accrual.

2.9 Revenue recognition

Revenue from contract with customer is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods or services before transferring them to the customer.

Sale of products:

Revenue from the sale of products is recognized at the point in time when control is transferred to the customer, generally on dispatch/delivery of the goods or terms as agreed with the customer. The company considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of goods, the company considers the effects of customer incentives, discounts, variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any). Additionally, revenue excludes taxes collected from customers, which are subsequently remitted to governmental authorities.

Variable consideration

If the consideration in a contract includes a variable amount, the company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at the time of completion of performance obligation and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved.

Sale of service:

Revenue from providing services is recognized in the accounting period in which the services are rendered.

Other Income:

Other income comprises of interest income and dividend income.

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.

Dividends are recognised in the Standalone Statement of Profit and Loss only when the right to receive payment is established; it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

2.10 Employee benefits

Short-term employee benefits

Employee benefits such as salaries, wages, bonus and performance linked rewards falling due wholly within twelve months of rendering the service are classified as short-term employee benefits and are expensed in the period in which the employee renders the related service. The obligations are presented as current liability in the balance sheet if the entity does not have an unconditional right to defer the settlement for at least 12 months after reporting date.

Defined benefit plan

The liability or asset recognised in the balance sheet in respect of the retirement benefit plan i.e., gratuity plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated by an actuary using projected unit credit method.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligations.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of the plan assets. This cost is included in the employee benefit expense in the statement of profit and loss.

Remeasurements, comprising actuarial gains and losses and the effect of the changes to the asset ceiling (if applicable), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur and consequently recognised in retained earnings and is not reclassified to profit or loss.

The retirement benefit recognised in the balance sheet represents the actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of reductions in future contributions to the plan.

Defined contribution plans

Contributions to retirement benefit plans in the form of provident fund, employee state insurance scheme and pension scheme as per regulations are charged as an expense on an accrual basis when employees have rendered the service. The Company has no further payment obligations once the contributions have been paid.

2.11 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax

a) Current tax

The tax currently payable is based on estimated taxable income for the year in accordance with the provisions of the Income Tax Act, 1961. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

b) Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in Ind As Financial Statements and the corresponding tax bases used in the computation of taxable profit.\

Deferred tax liabilities are generally recognized for all taxable temporary differences. ]

Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences, unused tax losses and unused tax credits can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

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

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax is recognised in profit or loss, except to the extent that is relates to items recognised in other comprehensive income or directly in equity.

c) Current and deferred tax for the year

Current and deferred tax are recognized in the Statement of profit and loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination

2.12 Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre tax rates that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

A provision for onerous contract is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any impairment loss on the assets associated with the contract.

Contingent liabilities are not recognized in the Ind As Financial Statements but are disclosed in notes. A contingent asset is neither recognized nor disclosed in the Ind As Financial Statements.

2.13 Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

a) Financial Assets

Financial Assets comprises of investments in equity instruments, cash and cash equivalents, loans and other financial assets.

Initial Recognition:

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through Profit or Loss, transaction costs that are attributable to the acquisition of financial assets. Purchases or sales of financial assets that requires delivery of assets within a period of time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the company committed to purchase or sell the asset.

Subsequent Measurement:

i) Financial assets measured at amortized Cost:

Financial assets are subsequently measured at amortized cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and where contractual terms of financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

ii) Financial assets at Fair Value through Other Comprehensive Income (FVTOCI):

Financial Assets that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of financial assets 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 FVTOCI. Fair Value movements in financial assets at FVTOCI are recognized in Other Comprehensive Income.

Equity instruments held for trading are classified as at fair value through profit or loss (FVTPL). For other equity instruments the company classifies the same as FVTOCI. The classification is made on initial recognition and is irrevocable. Fair Value changes on equity instruments at FVTOCI, excluding dividends are recognized in Other Comprehensive Income (OCI).

iii) Fair Value through Profit or Loss (FVTPL):

Financial Assets are measured at FVTPL if it does not meet the criteria for classification as measured at amortized cost or at FVTOCI. All fair value changes are recognized in the Statement of Profit and Loss.

De-recognition of Financial Assets:

Financial Assets are derecognized when the contractual rights to cash flows from the financial assets expire or the financial asset is transferred and the transfer qualifies for de-recognition. On de-recognition of the financial assets in its entirety, the difference between the carrying amount (measured at the date of de-recognition) and the consideration received (including any new asset obtained less any new liability assumed) shall be recognized in the Statement of Profit and Loss.

b) Financial Liabilities

The Company''s financial liabilities includes following:

- Borrowing from Banks

- Borrowing from Others

- Trade Payables

- Other Financial Liabilities

Classification

The company''s financial liabilities are measured at amortized cost.

Initial Recognition and Measurement

Financial Liabilities are initially recognized at fair value plus any transaction costs, (if any) which are attributable to acquisition of the financial liabilities.

Subsequent Measurement:

Financial liabilities are subsequently measured at amortised cost using the Effective Interest Rate Method.

The Effective Interest Rate Method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including transaction costs and other premiums or discounts) through the expected life of the financial liability.

De-recognition of Financial Liabilities:

Financial liabilities shall be derecognized when, and only when, it is extinguished i.e. when the obligation specified in the contract is discharged or cancelled or expires.

c) Offsetting of Financial assets and Financial Liabilities:

Financial assets and Financial Liabilities are offset and the net amount is presented in Balance Sheet when, and only when, the Company has legal right to offset the recognized amounts and intends either to settle on the net basis or to realize the assets and liabilities simultaneously.

d) Reclassification of Financial Instruments:

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are categorized as equity instruments at FVTOCI, and financial assets or liabilities that are specifically designated as FVTPL. For financial assets which are debt instruments, a reclassification is made only if there is a change in business model for managing those assets. Changes to the business model are expected to be very infrequent. The management determines the change in a business model as a result of external or internal changes which are significant to the Company''s Operations. A Change in business occurs when the company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively effective from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.

2.14 Share Capital

Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or share options are recognized as a deduction from equity, net of any tax effects.

2.15 Leases

The Company assesses at contract inception whether a contract is, or contains, a lease i.e., if the contract conveys the right to control the use of an identified asset for a period in exchange of consideration.

Company as a lessee:

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Company. Contracts may contain both lease and non-lease components.

Lease liabilities:

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the lease payments.

The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the lessee''s incremental borrowing rate. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets:

Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability and lease payments made before the commencement date.

Right-of-use assets are depreciated over the lease term on a straight-line basis. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, and lease payments made at or before the commencement date less any lease incentives received.

Short term leases and leases of low value assets:

Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise small items of office equipment including IT equipment.

2.16 Fair Value Measurement

A number of Company''s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair value is the price that would be received on sell of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal market or the most advantageous market must be accessible to the Company.

The fair value of an asset or 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.

A 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 Ind As Financial Statements are categorized within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The fair value hierarchy is described as below:

a) Level 1 - unadjusted quoted prices in active markets for identical assets and liabilities.

b) Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

c) Level 3 - unobservable inputs for the asset or liability.

For assets and liabilities that are recognized in the Ind As Financial Statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of fair value hierarchy.

Fair values have been determined for measurement and / or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

a) Investment in equity and debt securities

The fair value is determined by reference to their quoted price at the reporting date. In the absence of quoted price, the fair value of the financial asset is measured using valuation techniques.

b) Trade and other receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. However, in respect of such financial instruments, fair value generally approximates the carrying amount due to short term nature of such assets.

c) 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. For finance leases, the market rate of interest is determined by reference to similar lease agreements.

2.17 Current / non- current classification

An asset is classified as current if:

a) It is expected to be realized or sold or consumed in the Company''s normal operating cycle;

b) It is held primarily for the purpose of trading;

c) It is expected to be realized within twelve months after the reporting period; or

d) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current if:

a) It is expected to be settled in normal operating cycle;

b) It is held primarily for the purpose of trading;

c) It is expected to be settled within twelve months after the reporting period;

d) It has no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between acquisition of assets for processing / trading / assembling and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

2.18 Cash flow statement

Cash flows are reported using indirect method, whereby net profits before tax are adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments and items of income or expenses associated with investing or financing cash flows. The cash flows from regular revenue generating (operating activities), investing and financing activities of the Company are segregated.

3 Critical accounting judgments and key sources of estimation uncertainty

The preparation of Ind As Financial Statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, the disclosures of contingent assets and contingent liabilities at the date of Ind As Financial Statements, income and expense during the period. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. However, uncertainty about these assumptions and estimates

could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the periods in which the estimates are revised and in future periods which are affected.

In the process of applying the Company''s accounting policies, management has made the following judgments and estimates, which have the most significant effect on the amounts recognized in the Ind As Financial Statements.

The following are areas involving critical estimates and judgments:

Judgements:

• Taxes

• Contingencies

• Leases Estimates:

• Property, Plant & Equipment

• Employee benefit plans

• Fair value measurement of financial instruments

• Allowance for uncollectible trade receivables / loans

3.1 Taxes

Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies, including estimates of temporary differences reversing on account of available benefits from the Income Tax Act, 1961.

Deferred tax assets are recognized for unused tax credits to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

3.2 Contingencies:

Contingent liabilities

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential liabilities that are possible but not probable of crystallizing or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not recognised. Potential liabilities that are remote are neither recognized nor disclosed as contingent liability. The management judgement is involved in classification under ''remote'', ''possible'' or ''probable'' which is carried out based on expert advice, past judgements, experiences etc. [Refer note 37].

3.3 Leases

The company recognizes the leased asset as well as a liability equal to the present value of the lease payments. To calculate the present value of the lease payments, the company uses the incremental borrowing rate or the rate of interest that would have been charged if the company had borrowed the funds to purchase the asset. Identifying the incremental borrowing rate requires judgment and may involve assessing factors such as the company''s creditworthiness, market conditions, and the term of the lease.

3.4 Property, Plant & Equipment

a) Impairment

The value in use calculation requires the directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than expected, an impairment loss which is material in nature is accounted for.

b) Useful lives

The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This assessment may result in change in the depreciation expense in future periods.

3.5 Employee benefit plans

Defined benefit plans and other long-term employee benefits

The present value of obligations under defined benefit plan and other long term employment benefits is determined using actuarial valuations. An actuarial valuation involves making various assumptions= that may differ from actual development in the future. These include the determination of the discount rate, future salary escalations, attrition rate and mortality rates Due to the complexities involved in the valuation and its long term nature, these obligations are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Information about the various estimates and assumptions made in determining present value of defined benefit obligation are disclosed in note 38.2.

3.6 Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments.

3.7 Allowance for uncollectible trade receivables / loans

The company has used a practical expedient by computing the expected credit loss allowance for trade receivables / loans based on a provision matrix considering the nature of receivables and the risk characteristics. The provision matrix takes into accounts historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the day of the receivables are due and the rates as given in the provision matrix.