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Notes to Accounts of Rajesh Exports Ltd.

Mar 31, 2023

Provisions and Contingent Liabilities

Provisions are recognized when the company has a present legal and constructive obligations
arising from past events, outflow of future economic benefits should be probable and it
should be measured in a reliable manner.

Provisions for onerous contracts i.e., contract where the expected unavoidable cost of meeting
the obligation under the contract exceed the economic benefits expected to be received under
it, are recognized when it is probable that an outflow of resources embodying economic
benefits will be required to settle a present obligation as result of an obligating event based
on a reliable estimate of such obligations

Provisions are measured at the present value of management best estimates. Expenditure
will be required to settle the present obligation at the end of the reporting period.

Disclosures of contingent liability is present obligation as a result of past obligation events-on
the basis of the evidence available, there is present obligation and an outflow of resources
embodying economic benefits where settlement is probable.

xii. Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents
includes cash on hand, deposits held at call with financial institutions, other short- term,
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, and bank overdrafts. Bank overdrafts are shown within borrowings in
current liabilities in the balance sheet.

Statement of cash flow is prepared in accordance with the indirect method prescribed in
Ind AS-7 ‘Statement of cash flows.

xiii. Earning Per Share :

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the
post-tax effect of extraordinary items, if any) by the weighted average number of equity
shares outstanding during the period. Diluted earnings per share is computed by dividing
the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any)
as adjusted for dividend, interest and other charges to expense or income relating to the
dilutive potential equity shares, by the weighted average number of equity shares considered
for deriving basic earnings per share and the weighted average number of equity shares
which could have been issued on the conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive only if their conversion to equity shares
would decrease the net profit per share from continuing ordinary operations. Potential
dilutive equity shares are deemed to be converted as at the beginning of the period, unless
they have been issued at a later date. The dilutive potential equity shares are adjusted
for the proceeds receivable had the shares been actually issued at fair value (i.e. average
market value of the outstanding shares). Dilutive potential equity shares are determined
independently for each period presented.


Mar 31, 2022

Earnings and Expenditure in foreign currency

Major part of foreign exchange impact is notional, being arisen from consolidation of subsidiaries’ financials in parent entity, without real conversion of currency. For the export receivables, arisen from exports from manufacturing and sourcing entities to the selling entities, there is a natural hedge available due to import of raw materials.

Further, the Company has managed the Foreign Exchange risk with appropriate hedging activities in accordance with the policies of the Company. The Company used Forward Exchange Contracts to hedge against its Foreign Currency exposures relating to firm commitments. There were no materially uncovered exchange rate risks in the context of the Company’s Foreign Exchange exposures. For more detail, please refer Management Discussion and Analysis Report, form a part of this report.

i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date. Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

ii. Deferred tax

Deferred tax is provided using the balance sheet approach on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case of a history of recent losses, the Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised. Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised. Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

iii. Minimum Alternative Tax (MAT)

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

In Accordance with the Accounting Standards on “Income Taxes” issued by the Institute of Chartered Accountant of India, The Company has recognized the Deferred tax liabilities on account of timing differences of Rs. 413.21 lakhs as on 31st March 2022 (Previous Year Rs. 418.82 lakhs) as there is no virtual certainty that such deferred assets can be realized against future taxable profits. The breakup of deferred tax liabilities not recognized is furnished here under:

8. Good and Services Tax ( GST )

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

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

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

9. Leases Operating lease:

The Company has let-out and taken premises under cancellable operating lease agreements, which the Company intends to renew in the normal course of its business. The lessee cannot sublease these properties. Total lease rentals recognized as income (on cash basis) in the Profit and Loss Account for the year with respect to above is Rs.74.64 lakhs (Previous year Rs.49.32 lakhs) and total lease rentals paid recognized as expenditure is Rs.37.15 lakhs (Previous year Rs.18.41 lakhs).

i. Capital and other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for is NIL (Previous Year is NIL).

ii. Micro and Small Enterprises dues

Based on the information / Documents available with the Company, amounts due to micro and small enterprises are NIL.

10. Brief Particulars of Employees who were entitled to receive or were in receipt of emoluments aggregating to Rs.60 lakhs or more per annum and/or Rs.5 lakhs or more per month, if employed, for a part of the year is Nil (Previous Year Nil)

11. As on date of the balance sheet the company has ongoing litigation with IDBI Bank, wherein the matter is pending before the DRT, however the company has disclosed the entire litigated balance as payable. It would be pertinent to note that the litigation as on the date of this report has been settled and cleared. The company has an ongoing litigation with Canara Bank, with regard to the correct balance payable/receivable, the matter is pending before the Hon’ble High Court of Karnataka and the DRT, however the company has disclosed the entire balance and the interest in the balance sheet, for accounting purpose which is not an admission of the balance by the company.

12. Segment reporting policies:

The Company is mainly engaged in the business of gold and gold products. These, in the context of Ind AS 108 on segment reporting, issued by The Institute of Chartered Accountants of India are considered to constitute one single primary segment.

13. Company has identified that there is no material impairment of assets and as such no provision is required as per Accounting Standards issued by the ICAI.

14. In the opinion of the management, no provision is required against contingent liabilities.

15. Financial risk management

The Company’s financial assets majorly comprise of trade receivables, current investments, bank deposits and cash & cash equivalents. The Company’s financial liabilities majorly comprises of borrowings, trade payables and other commitments.

The Company is primarily exposed to market risk, credit risk and liquidity risk arising out of operations and the use of financial instruments. The Board of Directors have overall responsibility for establishment and review of the Company’s risk management framework.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions affecting business operations and the Company’s activities.

a. Market risk

Market risk is that risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three type of risk: interest rate risk, currency risk and other price risk, such as commodity risk. The exposure to currency risk and interest risk is given below:

(a) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company’s exposure to the risk of changes in interest rates relates to short term borrowing / working capital in nature and hence are not exposed to significant interest rate risk.

(b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expenses is denominated in a foreign currency) and the Company’s net investment in foreign subsidiaries.

b. Credit risk

Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument or customer contract leading to financial loss. The Company’s exposure to credit risk arises from its operating and financing activities. The credit risk arises primarily from trade receivables, and the maximum exposure to credit risk is equal to the carrying value of financial assets.

In order to mitigate the credit risk on receivables, credit quality of the customer is assessed based on the credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding receivables are monitored on an ongoing basis to ensure timely collections and to mitigate the risk of bad debts.

An impairment analysis is performed at each reporting date for the outstanding trade receivables and expected credit loss if any are provided for. The Company’s maximum exposure to counterparty credit risk at the reporting date is the carrying value of financial assets.

c. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Company’s exposure to liquidity risk arises primarily from mismatches of the maturities in financial assets and liabilities. The Company’s objective is to maintain a balance between continuity of funding and flexibility. The Company’s treasury management team monitors on a daily basis the fund positions/requirements and identifies future mismatches in funds availability and reports the planned and current liquidity position to the top management and board of directors of the Company.

The table below summarises the maturity profile of the Company’s financial assets and liabilities at the end of the reporting period based on contractual undiscounted cash flows:

The Company has imported gold from its associate enterprise within the meaning of section 92BA and 92A of the Income Tax Act, 1961 respectively. The gold has been imported based on international price and the price has been assessed and verified by the customs authorities, which clearly demonstrates that the transaction is at arms length.

(b) Diluted

For the purpose of calculating diluted earnings per share, the profit attributable to equity holders of the parent and the weighted average number of ordinary shares outstanding during the financial year have been adjusted for the dilutive effects of all potential ordinary shares, warrants and share options granted to employees. The dilutive earning per share is calculated by dividing the profit attributable to equity holders of the parent company by the weighted average number of shares that would have been in issue upon full exercise of the remaining warrants, adjusted by the number of such shares that would have been issued at fair value

18. Management Discussion and analysis

A Management discussion and analysis report forms a part of the annual report and includes on various matters.

19. Reconciliation of Share Capital Audit

A qualified Practicing Company Secretary carried out a share capital audit quarterly reconciled and confirmed that the total admitted equity share capital with the National Securities Depository Limited (“NSDL”), the Central Depository Services (India) Limited (“CDSL”) and shares in physical forms are in agreement with the total issued and listed equity share capital.

20. Covid Pandemic

The year ended 31/03/2022 had the COVID pandemic effect on the standalone business of the company, because the company had exercised caution before starting off with the business, to assess the effect of the pandemic on its buyers.

22. The previous year’s figure have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2021

Earnings and Expenditure in foreign currency

Major part of foreign exchange impact is notional, being arisen from consolidation of subsidiaries’ financials in parent entity, without real conversion of currency. For the export receivables, arisen from exports from manufacturing and sourcing entities to the selling entities, there is a natural hedge available due to import of raw materials. Further, working capital from banks in foreign currencies also provides a natural hedge against export receivables.

Further, the Company has managed the Foreign Exchange risk with appropriate hedging activities in accordance with the policies of the Company. The Company used Forward Exchange Contracts to hedge against its Foreign Currency exposures relating to firm commitments. There were no materially uncovered exchange rate risks in the context of the Company’s Foreign Exchange exposures. For more detail, please refer Management Discussion and Analysis Report, form a part of this report.

. Tax Expenses

i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date. Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously

ii. Deferred tax

Deferred tax is provided using the balance sheet approach on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case of a history of recent losses, the Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised. Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised. Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

iii. Minimum Alternative Tax (MAT)

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

In Accordance with the Accounting Standards on “Income Taxes” issued by the Institute of Chartered Accountant of India, The Company has recognized the Deferred tax liabilities on account of timing differences of Rs. 418.82 lakhs as on 31st March 2020 (Previous Year Rs. 423.03 lakhs) as there is no virtual certainty that such deferred assets can be realized against future taxable profits. The breakup of deferred tax liabilities not recognized is furnished here under:

8. Good and Services Tax ( GST )

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

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

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

9. Leases Operating lease:

The Company has let-out and taken premises under cancellable operating lease agreements, which the Company intends to renew in the normal course of its business. The lessee cannot sublease these properties. Total lease rentals recognized as income (on cash basis) in the Profit and Loss Account for the year with respect to above is Rs.49.32 lakhs (Previous year Rs.96.92 lakhs) and total lease rentals paid recognized as expenditure is Rs.18.41 lakhs (Previous year Rs.32.10 lakhs).

i. Capital and other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for is NIL (Previous Year is NIL).

ii. Micro and Small Enterprises dues

Based on the information / Documents available with the Company, amounts due to micro and small enterprises are NIL

10. Brief Particulars of Employees who were entitled to receive or were in receipt of emoluments aggregating to Rs.60 lakhs or more per annum and/or Rs.5 lakhs or more per month, if employed, for a part of the year is Nil (Previous Year Nil)

11. The Company has filed the case against IDBI in the Hon’ble High court of Karnataka, for deciding the incorrect accounting done by IDBI Bank, the Hon’ble High Court has directed the DRT to decide the accounts, the DRT process is in progress and based on the decision of the DRT, the exact amount payable or receivable will be accounted through Profit and Loss Account.

12. Segment reporting policies:

The Company is mainly engaged in the business of gold and gold products. These, in the context of Ind AS 108 on segment reporting, issued by The Institute of Chartered Accountants of India are considered to constitute one single primary segment.

13. Company has identified that there is no material impairment of assets and as such no provision is required as per Accounting Standards issued by the ICAI.

14. In opinion of the management, no provision is required against contingent liabilities.

15. Financial risk management

The Company’s financial assets majorly comprise of trade receivables, current investments, deposits banks and cash & cash equivalents. The Company’s financial liabilities majorly comprises of borrowings, trade payables and other commitments.

The Company is primarily exposed to market risk, credit risk and liquidity risk arising out of operations and the use of financial instruments. The Board of Directors have overall responsibility for establishment and review of the Company’s risk management framework.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions affecting business operations and the Company’s activities.

a. Market risk

Market risk is that risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three type of risk: interest rate risk, currency risk and other price risk, such as commodity risk. The expose to currency risk and interest risk is given below:

(a) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company’s exposure to the risk of changes in interest rates relates to short term borrowing / working capital in nature and hence are not exposed to significant interest rate risk.

(b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expenses is denominated in a foreign currency) and the Company’s net investment in foreign subsidiaries.

b. Credit risk

Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument or customer contract leading to financial loss. The Company’s exposure to credit

risk arises from its operating and financing activities. The credit risk arises primarily from trade receivables, and the maximum exposure to credit risk is equal to the carrying value of financial assets.

In order to mitigate the credit risk on receivables, credit quality of the customer is assessed based on the credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding receivables are monitored on an ongoing basis to ensure timely collections and to mitigate the risk of bad debts.

An impairment analysis is performed at each reporting date for the outstanding trade receivables and expected credit loss if any are provided for. The Company’s maximum exposure to counterparty credit risk at the reporting date is the carrying value of financial assets.

c. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Company’s exposure to liquidity risk arises primarily from mismatches of the maturities in financial assets and liabilities. The Company’s objective is to maintain a balance between continuity of funding and flexibility. The Company’s treasury management team monitors on a daily basis the fund positions/requirements and identifies future mismatches in funds availability and reports the planned and current liquidity position to the top management and board of directors of the Company.

The table below summarises the maturity profile of the Company’s financial assets and liabilities at the end of the reporting period based on contractual undiscounted cash flows:

> Diluted

For the purpose of calculating diluted earnings per share, the profit attributable to equity holders of the parent and the weighted average number of ordinary shares outstanding during the financial year have been adjusted for the dilutive effects of all potential ordinary shares, warrants and share options granted to employees. The dilutive earning per share is calculated by dividing the profit attributable to equity holders of the parent company by the weighted average number of shares that would have been in issue upon full exercise of the remaining warrants, adjusted by the number of such shares that would have been issued at fair value as follows:

18. Management Discussion and analysis

A Management discussion and analysis report forms a part of the annual report and includes on various matters

19. Reconciliation of Share Capital Audit

A qualified Practicing Company Secretary carried out a share capital audit quarterly reconciled and confirmed that the total admitted equity share capital with the National Securities Depository Limited (“NSDL”), the Central Depository Services (India) Limited (“CDSL”) and shares in physical forms are in agreement with the total issued and listed equity share capital.

20. Covid Pandamic

Covid 19 has been an unprecedented phenomenon in human history. Due to the national lockdown and also due to lockdown in various international markets, business was at a total standstill during that period in our Indian operations. Our business is primarily dependent on international passenger flights as all the Imports and Exports are carried on international passenger flights in high value and high security vaults. Due to the suspension of international passenger flights from India, there was a major impediment in Imports and Exports from the Indian operations. However, the refining business of Valcambi achieved record sales during the Pandemic. As a Company we have been prudent to survive the Pandemic without any adverse impact except for temporary loss of Export Sales from our Indian operations. We are confident that the Export sales from India will bounce back once the situation normalizes.

21. The previous year’s figure have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2019

26 NOTES TO FINANCIAL STATEMENT

1. Related Party Disclosure

(Rs. in lakhs)

Loans and advances

Current Year Previous Year Balance Balance

Max. Balance at any time during the year current year

Relationship

Laabh Jewels Gold Pvt Ltd

18.25

18.25

18.25

Associate Entity

Shubhlaabh Housing Pvt Ltd

379.00

379.00

379.00

Associate entity

REL Singapore Re Ltd

186,893.33

186,893.33

186,893.33

Subsidiary Entity

Global Gold Refineries

167.58

167.58

167.58

Step Down Subsidiary

Valcambi SA

150,694.72

190,471.02

190,471.02

Step Down Subsidiary

2. Transactions with related parties

(Rs. in lakhs)

Name of the related party

Description of the nature of relation

Description of the nature of transaction

31.03.2019

31.03.2018

Rajesh. J. Mehta

Chairman

Remuneration

1.20

1.20

Prashanth.J. Mehta

Managing Director

Remuneration

1.20

1.20

Bhavesh B Mehta

Relative of Director

Remuneration

1.80

1.80

Rajesh. J. Mehta

Chairman

Loan

1,403.95

1,829.11

Prashanth.J.Mehta

Managing Director

Loan

946.74

725.35

3. Contingent Liabilities

(Rs. in lakhs)

Name of Nature of the Statute the due

Amount

Period to which the amount relates

Forum where dispute is pending

ESI of Karnataka ESI

89.27

2000-03

The Appeals Authority ESI, Karnataka

ESI of Karnataka ESI

37.78

2006-07

The Appeals Authority ESI, Karnataka

Service Tax Service Tax

367.25

2006-07

The Appellate Tribunal Service tax

4. Earnings and Expenditure in foreign currency

(Rs. in lakhs)

Particulars

As on 31.03.2019

As on 31.03.2018

Foreign Exchange Earnings

4,171,174.67

2,836,631.35

Foreign Exchange Outgo

4,111,201.23

3,233,762.68

5. Employee Benefits:

(Rs. in lakhs)

Particulars

As at 31st March 2019

As at 31st March 2018

Opening defined Benefit Obligation

58.93

48.72

Add:

Current Service Cost

18.18

16.69

Interest Cost

3.80

3.04

Components of actuarial gains/losses on obligations

a) Due to Change in financial assumptions

(12.29)

(1.35)

b) Due to experience adjustments

(1.34)

(7.11)

c) Due to change in demographic assumptions

Less:

Benefits Paid

-

(1.06)

Closing Defined benefit obligation

67.28

58.93

6. In Accordance with the Accounting Standards on "Income Taxes" issued by the Institute of Chartered Accountant of India, The Company has recognized the Deferred tax liabilities on account of timing differences of Rs. 408.63 lakhs as on 31st March 2019 (Previous Year Rs. 461.67 lakhs) as there is no virtual certainty that such deferred assets can be realized against future taxable profits. The breakup of deferred tax liabilities not recognized is furnished here under: (Rs. in lakhs)

Particulars

Current Year

Previous Year

Deferred Tax Liability

Time Difference on account of Depreciation & Other Inadmissible Expenditure

53.02

1.02

Less: Deferred tax asset accounted Previously

(461.67)

(462.69)

Net Deferred tax liability Recognized during the year

(408.65)

(461.67)

7. Leases Operating lease:

The Company has let-out and taken premises under cancellable operating lease agreements, which the Company intends to renew in the normal course of its business. The lessee cannot sublease these properties. Total lease rentals recognized as income ( on cash basis) in the Profit and Loss Account for the year with respect to above is Rs.36.47 lakhs (Previous year Rs. 9.23 lakhs) and total lease rentals paid recognized as expenditure is Rs.40.64 lakhs (Previous year Rs. 34.56 lakhs).

i. Capital and other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for is NIL (Previous Year is NIL).

ii. Micro and Small Enterprises dues

Based on the information / Documents available with the Company, amounts due to micro and small enterprises are NIL.

8. Brief Particulars of Employees who were entitled to receive or were in receipt of emoluments aggregating to Rs.60 lakhs or more per annum and/or Rs.5 lakhs or more per month, if employed, for a part of the year is Nil (Previous Year Nil)

9. The Company has filed the case against IDBI in the high court of karnataka which is still pending, once the case is decided, the exact amount of payable or receivable to be known and be accounted through Profit and loss account.

10. The Company has not provided the income tax liability towards dividend payable, since management is in the view of dividends are paid out of profits from exempted income of SEZ Operations.

11. Segment reporting policies:

The Company and other Companies in the group are mainly engaged in the business of gold and gold products. These, in the context of Ind AS 108 on segment reporting, issued by The Institute of Chartered Accountants of India are considered to constitute one single primary segment.

12. Company has identified that there is no material impairment of assets and as such no provision is required as per Accounting Standards issued by the ICAI.

13. In the opinion of the management, no provision is required against contingent liabilities.

14. Additional information required pursuant to Part II of Schedule III of the Companies Act 2013:-

Particulars

Unit

Quantity

Rs. in lakhs

A.

OPENING STOCK

Gold and Gold Products

Kgs

3,662.8011

101,037.31

(1889.0277)

(48,894.41)

Diamond

Cts

372,307

1,675.36

(372,850)

(1,678.73)

Silver

Kgs

5,880.5730

1,999.40

(5863.4820)

(2,228.12)

B.

PURCHASES

Gold and Gold Products

Kgs

154,058.2736

4,115,023.97

(127,545.5591)

(3,219,960.94)

Diamond

Cts

522

-

(-)

(-)

Silver

Kgs

1.3100

-

(26.3070)

(-)

Alloys

Kgs

(-)

(-)

C.

SALES TURNOVER

Gold and Gold Products

Kgs

155,666.1343

4,177,719.11

(125,685.9120)

(3,330,470.28)

Diamond

Cts

305

1.65

(543)

(2.93)

Silver

Kgs

5.7850

1.86

(7.58)

(2.75)

D.

CLOSING STOCK

Gold and Gold Products

Kgs

2,039.3904

58,468.67

(3662.8011)

(101,03,7.31)

Diamond

Cts

372,524

1,676.36

(372,307)

(1,675.36)

Silver

Kgs

5,876.0980

1,981.20

(5880.573)

(1,999.40)

E.

WASTAGE

Gold and Gold Products

Kgs

15.5500

-

(85.8737)

(-)

Silver

Kgs

Note:

(i). Previous Year''s figures are furnished in brackets.

(ii). The previous year''s figures are regrouped / rearranged wherever deemed necessary.

15. Financial risk management

The Company''s financial assets majorly comprise of trade receivables, current investments, deposits with banks and cash & cash equivalents. The Company''s financial liabilities majorly comprises of borrowings, trade payables and other commitments.

The Company is primarily exposed to market risk, credit risk and liquidity risk arising out of operations and the use of financial instruments. The Board of Directors have overall responsibility for establishment and review of the Company''s risk management framework.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions affecting business operations and the Company''s activities.

a. Market risk

Market risk is that risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three type of risk: interest rate risk, currency risk and other price risk, such as commodity risk. The expose to currency risk and interest risk is given below:

(a) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company''s exposure to the risk of changes in interest rates relates primarily to the Company''s debt obligations with floating interest rates. The Company does not have any debt and its borrowings are short term / working capital in nature and hence are not exposed to significant interest rate risk.

(b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expenses is denominated in a foreign currency) and the Company''s net investment in foreign subsidiaries. The Company has hedged all its foreign exchange risk.

b. Credit risk

Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument or customer contract leading to financial loss. The Company''s exposure to credit risk arises from its operating and financing activities. The credit risk arises primarily from trade receivables, and the maximum exposure to credit risk is equal to the carrying value of financial assets.

In order to mitigate the credit risk on receivables, credit quality of the customer is assessed based on the credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding receivables are monitored on an ongoing basis to ensure timely collections and to mitigate the risk of bad debts.

An impairment analysis is performed at each reporting date for the outstanding trade receivables and expected credit loss if any are provided for. The Company''s maximum exposure to counterparty credit risk at the reporting date is the carrying value of financial assets.

c. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Company''s exposure to liquidity risk arises primarily from mismatches of the maturities in financial assets and liabilities. The Company''s objective is to maintain a balance between continuity of funding and flexibility. The Company''s treasury management team monitors on a daily basis the fund positions/requirements and identifies future mismatches in funds availability and reports the planned and current liquidity position to the top management and board of directors of the Company.

The table below summarises the maturity profile of the Company''s financial assets and liabilities at the end of the reporting period based on contractual undiscounted cash flows:

As at 31 March 2019 (Rs. In Lakhs)

Particulars

One Year or Less

One to five years

Over five Total years

Financial Assets

Investments(Non Current)

24,856.82

48,476.36

73,333.18

Loans (Current and

Non Current)

44,212.53

191,872.03

236,084.56

Trade Receivables

235,311.57

-

235,311.57

Cash and Cash Equivalents

1,447,034.53

-

- 1,447,034.53

Other Financial Assets

56,294.07

-

56,294.07

Financial Liabilities

Borrowings

607,232.36

-

607,232.36

Trade Payables

1,047,504.30

-

- 1,047,504.30

Other Financial Liabilities

(Current and Non current)

-

2,248.08

2,248.08

16. Transfer pricing

The Company has imported gold from its associate enterprise within the meaning of section 92BA and 92A of the Income Tax Act, 1961 respectively. The gold has been imported based on international price and the price has been assessed and verified by the customs authorities, which clearly demonstrates that the transaction is at arms length.

17. Earning Per Share (a) Basic

Basic earnings per share is calculated by dividing the net profit for the year by the weighted average number of ordinary shares outstanding during the financial year held by the Company.

Particulars

2019 Rs. in lakhs

Group 2018 Rs. in lakhs

Profit attributable to equity holders of the parent company

44,206.19

44,118.38

Number of shares in issue (net of treasury shares)

as at beginning of year

2,952.60

2,952.60

Effect of treasury shares

-

-

Effect of rights shares

-

-

Effect of warrants

-

-

Effect of share options

-

-

Weighted average number of ordinary shares in issue

2,952.60

2,952.60

Basic earnings per share (s)

14.97

14.94

(b) Diluted

For the purpose of calculating diluted earnings per share, the profit attributable to equity holders of the parent and the weighted average number of ordinary shares outstanding during the financial year have been adjusted for the dilutive effects of all potential ordinary shares, warrants and share options granted to employees. The dilutive earning per share is calculated by dividing the profit attributable to equity holders of the parent company by the weighted average number of shares that would have been in issue upon full exercise of the remaining warrants, adjusted by the number of such shares that would have been issued at fair value as follows:

Group

Particulars

2019

2018

Rs. in lakhs

Rs. in lakhs

Profit attributable to equity holders of the parent company

44,206.19

44,118.38

Weighted average number of ordinary shares in issue

2,952.60

2,952.60

Effect of dilution due to warrants

-

-

Adjusted weighted average number of ordinary shares

2,952.60

2,952.60

Diluted earnings per share (s)

14.97

14.94

18. The previous year''s figures are regrouped / rearranged wherever deemed necessary.

For and on behalf of the Board

As per our Report of even date

For P V RAMANA REDDY & CO

RAJESH MEHTA

PRASHANT MEHTA

AADYA OJHA

Chartered Accountants,

Chairman

Managing Director

Company Secretary

Firm Regn. No. 007156S

DIN : 00336457

DIN : 00336417

M.No. A50340

Sd/-

VIJAYA LAKSHMI

(CA. P V RAMANA REDDY)

Place: Bengaluru

Independent Director

B. VIJENDRA RAO

Proprietor

Date : May 29, 2019

DIN : 071460

Chief Financial Officer

M.No. 204588


Mar 31, 2018

1. Leases

Operating lease:

The Company has let-out and taken premises under cancelable operating lease agreements, which the Company intends to renew in the normal course of its business. The lessee cannot sublease these properties. Total lease rentals recognized as income ( on cash basis) in the Profit and Loss Account for the year with respect to above is Rs. 9.23 lakhs (Previous year Rs. 8.17 lakhs) and total lease rentals paid recognized as expenditure is Rs. 34.56 lakhs (Previous year Rs. 44.04 lakhs).

i. Capital and other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for is NIL (Previous Year is NIL).

ii. Micro and Small Enterprises dues

Based on the information / Documents available with the Company, amounts due to micro and small enterprises are NIL.

2. Brief Particulars of Employees who were entitled to receive or were in receipt of emoluments aggregating to Rs.60 lakhs or more per annum and/or Rs.5 lakhs or more per month, if employed, for a part of the year is Nil (Previous Year Nil)

3. Segment reporting policies:

The Company and other Companies in the group are mainly engaged in the business of gold and gold products. These, in the context of accounting standard 17 on segment reporting, issued by The Institute of Chartered Accountants of India are considered to constitute one single primary segment.

4. Company has identified that there is no material impairment of assets and as such no provision is required as per Accounting Standards issued by the ICAI.

5. In the opinion of the management, no provision is required against contingent liabilities.

6. Additional information required pursuant of the Part II of Schedule III of the Companies Act 2013: -_

7. Previous Year’s figures are furnished in brackets.

8. The previous year’s figures are regrouped / rearranged wherever deemed necessary.


Mar 31, 2015

1. Leases Operating lease:

The Company has let-out and taken premises under cancelable operating lease agreements, which the Company intends to renew in the normal course of its business. The lessee cannot sublease these properties. Total lease rentals recognized as income in the Profit and Loss Account for the year with respect to above is Rs. 1049168 /- (Previous year Rs.1032627/-) and total lease rentals recognized as expenditure is Rs.7533174/-(Previous year Rs. 3276619/-).

2. Capital and other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for is NIL (Previous Year is NIL ).

3. Micro and Small Enterprises dues

Based on the information / Documents available with the Company, amounts due to micro and small enterprises are NIL.

4. Contingent Liabilities

Contingent liabilities not provided for:

a. Sales tax and entry tax demands of Rs.4,79,057/- (Previous year Rs.4,79,057/-) are disputed by the Company.

b. The Company had an order from the Income Tax authorities dated December 27, 2006 for the period April 1, 2003 to March 31, 2004 demanding a tax payment of Rs. 9,99,60,890 /- The Commissioner of Income Tax (Appeals) has passed an adverse order confirming the order of assessing authority. The Company has appealed against the said order before the Income Tax Appellate Tribunal, and the income Tax Appellate Tribunal has passed an order in favor of the company, allowing the deduction under section 10B of the Income Tax Act, which is the major portion of the demand raised by the department. However, the Tribunal did not allow expenses of Rs. 200 lakhs. Against the order of the Income Tax Appellate Tribunal, the company and the Income Tax Department both have appealed before the Hon'ble High Court of Karnataka and the Company firmly believes that the issue will be settled in its favor. Further, the Company had received an order from the tax authorities dated November 13, 2009, (rectified by order dated December 31, 2009) for the period April 1, 2006 to March 31, 2007 demanding an additional tax payment of Rs. 36,99,89,925/-. The Company has appealed before the Commissioner of Income Tax (Appeals) against the said order and the Company firmly believes that the issue will be settled in its favour.

Further, the Company had received an order from the tax authorities dated December 30, 2010, ( rectified by order dated January 19, 2011 and order dated January 27, 2011) for the period April 1, 2007 to March 31, 2008 demanding an additional tax payment of Rs. 88,23,82,070. The Company has appealed before the Commissioner of Income Tax (Appeals) against the said order and the Company firmly believes that the issue will be settled in its favour.

c. The Company has received a demand notice from Employees State Insurance Corporation, Karnataka Region for the period from April 2000 to March 2003 demanding Rs. 11903054/- Company has appealed against the order and paid Rs. 29,75,764 /- under protest and Appellate Authority has reduced the tax to Rs 33,93,286/- & currently the matter is in Employees State Insurance Court. The management firmly believes that the issue will be settled in its favour.

The Company has also appealed against the order of Notice from Employees State Insurance Corporation, Karnataka Region for the period from April 2006 to September 2007 demanding Rs. 47,22,209 /- ( including interest etc) and paid Rs. 9,43,800 /- under protest, which is pending decision before Appellate Authority. The management firmly believes that the issue will be settled in its favour.

d. The company has appealed against the order of Show cause Notice from Commissioner of Central Excise( Service Tax ) Bangalore demanding Service Tax of Rs. 2,44,83,060/- before the CESTAT and paid Rs. 1,22,41,530 /- under protest, The CESTAT has passed orders on the matter and directed the service tax commissioner to review the order in the light of its findings. The management firmly believes that the issue will be settled in its favor.

5. Directors remuneration includes remuneration payable to Executive chairman and Managing director of Rs. 2,39,976/- (Previous Year Rs. 2,39,976/-)

6. Brief Particulars of Employees who were entitled to receive or were in receipt of emoluments aggregating to Rs. 60,00,000/- or more per annum and/or Rs.500,000/- or more per month, if employed, for a part of the year is Nil (Previous Year Nil)

7. In Accordance with the Accounting Standard 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountant of India, The Company has not recognized the Deferred tax liabilities on account of timing differences of Rs. 18,37,87,608/- as on 31st March 2015 (Previous Year Rs. 184110505/-) as there is no virtual certainty that such deferred assets can be realized against future taxable profits. The breakup of deferred tax liabilities not recognised is furnished here under:

8. Company has identified that there is no material impairment of assets and as such no provision is required as per AS-28 issued by the ICAI.

9. In the opinion of the management, no provision is required against contingent liabilities.

10. Unclaimed dividend accounts are subject to reconciliation.

11. Previous year figures have been regrouped or reclassified wherever necessary to conform to the current year's grouping or classification


Mar 31, 2014

I. Leases

Operating lease:

The Company has let-out and taken premises under cancelable operating lease agreements, which the Company intends to renew in the normal course of its business. The lessees cannot sublease these properties. Total lease rentals recognized as income in the Profit and Loss Account for the year with respect to above is Rs. 1032627 /- ( Previous year Rs. 1629961 /- ) and total lease rentals recognized as expenditure is Rs.3276619/- ( Previous year Rs. 3826660/- ).

ii. Capital and other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for is NIL (Previous Year is NIL ).

iii. Contingent Liabilities

Contingent liabilities not provided for :

(a) Sales tax and entry tax demands of Rs.479057/- (Previous year Rs. 4,79,057/-) are disputed by the Company

(b) The Company had an order from the Income Tax authorities dated December 27, 2006 for the period April 1, 2003 to March 31, 2004 demanding a tax payment of Rs.9,99,60,890/- The Commissioner of Income Tax (Appeals) has passed an adverse order confirming the order of assessing authority. The Company has appealed against the said order before the Income Tax Appellate Tribunal, and the income Tax Appellate Tribunal has passed an order in favor of the company, allowing the deduction under section 10B of the Income Tax Act, which is the major portion of the demand raised by the department. However, the Tribunal did not allow expenses of Rs. 200 lakhs. Against the order of the Income Tax Appellate Tribunal, the company and the Income Tax Department both have appealed before the Hon’ble High Court of Karnataka and the Company firmly believes that the issue will be settled in its favor. Further, the Company had received an order from the tax authorities dated November 13, 2009, (rectified by order dated December 31, 2009) for the period April 1, 2006 to March 31, 2007 demanding an additional tax payment of Rs. 36,99,89,925/-. The Company has appealed before the Commissioner of Income Tax (Appeals) against the said order and the Company firmly believes that the issue will be settled in its favour.

Further, the Company had received an order from the tax authorities dated December 30, 2010, ( rectified by order dated January 19, 2011 and order dated January 27, 2011) for the period April 1, 2007 to March 31, 2008 demanding an additional tax payment of Rs.88,23,82,070. The Company has appealed before the Commissioner of Income Tax (Appeals) against the said order and the Company firmly believes that the issue will be settled in its favour.

(c) The Company has appealed against the order of Demand Notice from Employees State Insurance Corporation, Karnataka Region for the period from April 2000 to March 2003 and paid Rs. 29,75,764 /- under protest and Appellate Authority has reduced the tax to Rs 33,93,286/- & currently the matter is in Employees State Insurance Court. The management firmly believes that the issue will be settled in its favour.

The Company has also appealed against the order of Notice from Employees State Insurance Corporation, Karnataka Region for the period from April 2006 to September 2007 demanding for Rs. 47,22,209 /- ( including interest etc) and paid Rs. 9,43,800 /- under protest, which is pending decision before Appellate Authority. The management firmly believes that the issue will be settled in its favour.

(d) The company has appealed against the order of Show cause Notice from Commissioner of Central Excise( Service Tax ) Bangalore demanding Service Tax of Rs. 2,44,83,060/- before the CESTAT and paid Rs. 1,22,41,530 /- under protest, The CESTAT has passed orders on the matter and directed the service tax commissioner to review the order in the light of its findings. The management firmly believes that the issue will be settled in its favor.

iv. Directors remuneration includes remuneration payable to Executive chairman and Managing director of Rs. 2,39,976/- (Previous Year Rs. 2,39,976/-)

v. Brief Particulars of Employees who were entitled to receive or were in receipt of emoluments aggregating to Rs.60,00,000/- or more per annum and/or Rs.500,000/- or more per month, if employed, for a part of the year is Nil (Previous Year Nil)

vi.In Accordance with the Accounting Standandard 22 on " Accounting for Taxes on Income" issued by the Institute of Chartered Accountant of India, The Company has not recognized the Deferred tax liabilities (on account of fixed assets etc. on account of timing differences).

vii. Company has identified that there is no material impairment of assets and as such no provision is required as per AS-28 issued by the ICAI.

viii. In opinion of the management, no provision is required against contingent liabilities.

ix. Unclaimed dividend accounts are subject to reconciliation.

x. Additional information required pursuant to paragraph 3 and 4 of the Part II of Schedule VI of the Companies Act 1956.


Mar 31, 2013

I. Leases Operating lease:

The Company has let out and taken premises under cancelable operating lease agreements, which the Company intends to renew in the normal course of its business. The lessees cannot sublease these properties. Total lease rentals recognized as income in the Profit and Loss Account for the year with respect to above is Rs.1629961/- ( Previous year Rs. 2187115/- ) and total lease rentals recognized as expenditure is Rs.3826660/- ( Previous year Rs. 5668024/- ).

ii. Capital and other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for is NIL (Previous Year is NIL).

iii. Contingent Liabilities

2. Contingent liabilities not provided for :

(a) Sales tax and entry tax demands of Rs.479057/- ( Previous year Rs. 479057/- ) are disputed by the Company.

(b) The Company had received an order from the tax authorities dated December 27, 2006 for the period April 1, 2003 to March 31, 2004 demanding a tax payment of Rs.99960890/- The Commissioner of Income Tax (Appeals) has passed an adverse order confirming the order of assessing authority. The Company has appealed against the said order before the Income Tax Appellate Tribunal, and the income Tax Appellate Tribunal has passed an order in favor of the company, allowing the deduction under section 10B of the Income Tax Act, which is the major portion of the demand raised by the department. However, the Tribunal did not allow expenses of Rs. 200 lakhs. Against the order of the Income Tax Appellate Tribunal, the company and the Income Tax Department both have appealed before the Hon''ble High Court of Karnataka and the Company firmly believes that the issue will be settled in its favor. Further, the Company had received an order from the tax authorities dated November 13, 2009, (rectified by order dated December 31, 2009) for the period April 1, 2006 to march 31, 2007 demanding an additional tax payment of Rs. 369989925/-. The Company has appealed before the Commissioner of Income Tax (Appeals) against the said order and the Company firmly believes that the issue will be settled in its favour. Further, the Company had received an order from the tax authorities dated December 30, 2010, (rectified by order dated January 19, 2011 and order dated January 27, 2011) for the period April 1, 2007 to March 31, 2008 demanding an additional tax payment of Rs. 882382070. The Company has appealed before the Commissioner of Income Tax (Appeals) against the said order and the Company firmly believes that the issue will be settled in its favour.

(c) The Company has received a Demand Notice from Employees State Insurance Corporation, Karnataka Region for the period from April 2000 to March 2003. The Company has appealed against the order and paid Rs. 2975764 /- under protest and Appellate Authority has reduced the tax to Rs 3393286/-, currently the matter is in Employees State Insurance Court, The management firmly believes that the issue will be settled in its favour.

During the year Company has received a Demand Notice from Employees State Insurance Corporation, Karnataka Region for the period from April 2006 to September 2007 demanding for Rs. 4722209 /- ( including interest etc) . The Company has appealed against the order and paid Rs. 943800 /-. Under protest, which is pending decision before Appellate Authority. The management firmly believes that the issue will be settled in its favour.

(d) The Company has received Show cause Notice from the Commissioner of Central Excise( Service Tax ) Bangalore demanding Service Tax of Rs. 24483060/-. The company has appealed against the order before the CESTAT and paid Rs. 12241530 /- under protest, The CESTAT has passed orders on the matter and directed the service tax commissioner to review the order in the light of it''s findings. The management firmly believes that the issue will be settled in its favor .

iv. Directors remuneration includes remuneration payable to Executive chairman and Managing director of Rs.2,39,976/- (Previous Year Rs.2,39,976/-)

v. Brief Particulars of Employees who were entitled to receive or were in receipt of emoluments aggregating to Rs.60,00,000/- or more per annum and/or Rs.500,000/- or more per month, if employed, for a part of the year is Nil (Previous Year Nil)

vi. In accordance with the Accounting Standard 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has not recognized the Deferred tax assets (on account of unabsorbed losses etc. on account of timing differences) of Rs.62911262/- as on 31st March 2013, (Previous Year Rs. 438705067/-) as there is no virtual certainty that such deferred tax assets can be realized against future taxable profits.

vii. Company has identified that there is no material impairment of assets and as such no provision is required as per AS-28 issued by the ICAI.

viii. In the opinion of the management, no provision is required against contingent liabilities.

ix. Unclaimed dividend accounts are subject to reconciliation.

x. The company has reclassified the previous year figures in accordance with the requirements applicable in the current period.

xi. Additional information required pursuant to paragraph 3 and 4 of the Part II of Schedule VI of the Companies Act 1956.


Mar 31, 2012

I. Leases

Operating lease:

The Company has let out and taken premises under cancelable operating lease agreements, which the Company intends to renew in the normal course of its business. The lessees cannot sublease these properties. Total lease rentals recognized as income in the Profit and Loss Account for the year with respect to above is Rs. 2187115 /- ( Previous year Rs. 640151 /- ) and total lease rentals recognized as expenditure is Rs.5668024/- ( Previous year Rs. 4926749/- ).

ii. Capital and other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for is NIL (Previous Year is NIL ).

iii. Contingent Liabilities

1. Contingent liabilities not provided for :

(a) Sales tax and entry tax demands of Rs. 479057/- (Previous year Rs. 831901/-) are disputed by the Company

(b) The Company had received an order from the tax authorities dated December 27, 2006 for the period April 1, 2003 to March 31, 2004 demanding a tax payment of Rs. 99960890 /- The Commissioner of Income Tax (Appeals) has passed an adverse order confirming the order of assessing authority. The Company has appealed against the said order before the Income Tax Appellate Tribunal, and the income Tax Appellate Tribunal has passed an order in favor of the company, allowing the deduction under section 10B of the Income Tax Act, which is the major portion of the demand raised by the department. However, the Tribunal did not allow expenses of Rs. 200 lakhs. Against the order of the Income Tax Appellate Tribunal, the company and the Income Tax Department both have appealed before the Hon'ble High Court of Karnataka and the Company firmly believes that the issue will be settled in its favor. Further, the Company had received an order from the tax authorities dated November 13, 2009, (rectified by order dated December 31, 2009) for the period April 1, 2006 to march 31, 2007 demanding an additional tax payment of Rs. 369989925/-. The Company has appealed before the Commissioner of Income Tax (Appeals) against the said order and the Company firmly believes that the issue will be settled in its favour. Further, the Company had received an order from the tax authorities dated December 30, 2010, (rectified by order dated January 19, 2011 and order dated January 27, 2011) for the period April 1, 2007 to March 31, 2008 demanding an additional tax payment of Rs. 882382070. The Company has appealed before the Commissioner of Income Tax (Appeals) against the said order and the Company firmly believes that the issue will be settled in its favour.

(c) The Company has received a Demand Notice from Employees State Insurance Corporation, Karnataka Region for the period from April 2000 to March 2003. The Company has appealed against the order and paid Rs. 2975764 /- under protest and Appellate Authority has reduced the tax to Rs 3393286/-, currently the matter is in Employees State Insurance Court, The management firmly believes that the issue will be settled in its favour.

During the year Company has received a Demand Notice from Employees State Insurance Corporation, Karnataka Region for the period from April 2006 to September 2007 demanding for Rs. 4722209 /- ( including interest etc) . The Company has appealed against the order and paid Rs. 943800 /-. Under protest, which is pending decision before Appellate Authority. The management firmly believes that the issue will be settled in its favour.

(d) The Company has received Show cause Notice from the Commissioner of Central Excise( Service Tax ) Bangalore demanding Service Tax of Rs. 24483060/-. The company has appealed against the order before the CESTAT and paid Rs. 12241530 /- under protest, The CESTAT has passed orders on the matter and directed the service tax commissioner to review the order in the light of it's findings. The management firmly believes that the issue will be settled in its favor .

iv. Directors remuneration includes remuneration payable to Executive chairman and Managing director of Rs. 2,39,976/- (Previous Year Rs. 2,39,976/-)

v. Brief Particulars of Employees who were entitled to receive or were in receipt of emoluments aggregating to Rs.60,00,000/- or more per annum and/or Rs.500,000/- or more per month, if employed, for a part of the year is Nil (Previous Year Nil)

vi. In accordance with the Accounting Standard 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has not recognized the Deferred tax assets (on account of unabsorbed losses etc. on account of timing differences) of Rs.43 87 05 067/- as on 31st March 2012, (Previous Year Rs. 77 27 66 850 /-) as there is no virtual certainty that such deferred tax assets can be realized against future taxable Profits.

vii. Company has identified that there is no material impairment of assets and as such no provision is required as per AS-28 issued by the ICAI.

viii. In the opinion of the management, no provision is required against contingent liabilities.

ix. Unclaimed dividend accounts are subject to reconciliation.

x. The company has reclassified the previous year figures in accordance with the requirements applicable in the current period. xiii. Additional information required pursuant to paragraph 3 and 4 of the Part II of Schedule VI of the Companies Act 1956.


Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for is Nil (Previous year - Nil)

2. Contingent liabilities not provided for:

(a) Sales tax and entry tax demands are disputed by the Company Rs. 4,79,057/- (Previous year Rs 8,31,901/-)

(b) The Company had received an order from the tax authorities dated December 27, 2006 for the period April 1, 2003 to March 31, 2004 demanding a tax payment of Rs 9,99,60,890. The Commissioner of Income Tax (Appeals) has passed an adverse order confirming the order of assessing authority. The Company has appealed against the said order before the Income Tax Appellate Tribunal, and the Income Tax Appellate Tribunal has passed an order in favour of the company, allowing the deduction under section 10B of the Income Tax Act, which is the major portion of the demand raised by the department. However,the Tribunal did not allow an expense of Rs. 200 lakhs. Against the order of the Income Tax Appellate Tribunal, the company and the Income Tax Department both have appealed before the Hon'ble High Court of Karnataka and the Company firmly believes that the issue will be settled in its favour. Further, the Company had received an order from the tax authorities dated November 13, 2009,( rectified by order dated December 31, 2009) for the period April 1, 2006 to March 31, 2007 demanding an additional tax payment of Rs 36,99,89,925. The Company has appealed before the Commissioner of Income Tax (Appeals) against the said order and the Company firmly believes that the issue will be settled in its favour.

Further, the Company had received an order from the tax authorities dated December 30, 2010,( rectified by order dated January 19, 2011 and order dated January 27, 2011) for the period April 1, 2007 to March 31, 2008 demanding an additional tax payment of Rs 88,23,82,070. The Company has appealed before the Commissioner of Income Tax (Appeals) against the said order and the Company firmly believes that the issue will be settled in its favour.

(c) The Company has received a Demand Notice from Employees State Insurance Corporation, Karnataka Region for the period from April 2000 to March 2003 demanding for Rs. 1,19,03,054/- The Company has appealed against the order and paid Rs. 29,75,764/- under protest, which is pending decision before Appellate Authority. The management firmly believes that the issue will be settled in its favour.

During the year Company has received a Demand Notice from Employees State Insurance Corporation, Karnataka Region for the period from April 2006 to September 2007 demanding for Rs. 47,22,209/-. The Company has appealed against the order and paid Rs. 9,43,800/- under protest, which is pending decision before Appellate Authority. The management firmly believes that the issue will be settled in its favour.

(d) The Company has received an order from the Commissioner of Central Excise, Bangalore demanding Service Tax of Rs.2,44,83,060/- with the equal amount as penalty for the period from April 2006 to March 2007. The Company has appealed against the order before the Appellate Tribunal and paid Rs.1,22,41,530/- under protest, which is pending decision before Appellate Authority. The management firmly believes that the issue will be settled in its favour.

4. Directors remuneration includes remuneration payable to Executive chairman and Managing director of Rs.2,39,976/- ( Previous Year Rs.2,39,976/- )

5. Brief particulars of Employees who were entitled to receive or were in receipt of emoluments aggregating to Rs.60,00,000/- or more per annum and/or Rs.500,000/- or more per month, if employed, for a part of the year is Nil ( Previous Year Nil).

6. The company has taken a key man's insurance policy from Life Insurance Corporation of India on the life of Mr. Rajesh Mehta, Executive chairman for a sum assured of Rs 300 lakhs with ten year term and paid annual premium of Rs.30,29,175/- during the year which has been accounted under administrative & selling expenses. Amount receivable on maturity or otherwise shall be accounted as income in the year of receipt.

7. Income from operations includes bank interest earned Rs. 4,886,033,210/-; (Previous Year Rs. 516,38,47,252/-). Interest earned on fixed deposits with banks is recognized as income from operations since these deposits are utilized for the business of the company.

9. Zero coupon FCCB were issued on 17th February 2007 for US $ 150 millions (Rs. 661.35 crores at issue).The Bond holders have an option to convert FCCB into Equity shares at an initial conversion price of Rs.575/- per equity share of Rs.2/- each of the company at a fixed exchange rate of conversion at Rs.44.09 equal to US$ 1, between 19.02.2007 to 10.02.2012. The conversion price is subject to adjustment in circumstances as described in the offering letter. The company may redeem the bonds in whole, but not in part, at any time at the accreted principle amount in the event of certain changes relating to taxation in India, and subject to the receipt of regulatory approval. Unless previously converted redeemed or re-purchased and cancelled, the bonds will mature on 21.02.2012 @ 148.22% of their principle amount subject to the receipt of regulatory approval, the company will, at the option of bond holder, redeem any outstanding bonds upon their occurrence of a de-listing of the shares from the NSE or BSE, at the accreted principle amount. During the year, some of the Bond holders have exercised their options to convert FCCB into equity shares and consequent to this 29,444,587 (Previous Year 8,807,085) equity shares of Re 1/- each have been allotted by the Company.

10. Related party disclosures

(In term of Accounting Standard - 18)

A. Relationship:

a) Related parties where control exists: Rajesh Global Solutions Limited Rajesh Jewels

Laabh Jewel Gold Pvt Ltd

b) Directors and their relatives:

Mr. Rajesh Mehta - Executive Chairman

Mr. Prashant Mehta - Managing Director

Mr. Mahesh Mehta

c) Key Management personnel:

Mr. Rajesh Mehta - Executive Chairman

Mr. Prashant Mehta - Managing Director

Mr. Bhavesh Mehta - Executive Officer

11. Accounting Standard 19-Leases:

The company has let out and taken premises under cancelable operating lease agreements, which the company intends to renew in the normal course of its business. The Lessees cannot sublease these properties. Total lease rentals recognized as income in the Profit & Loss Account for the year with respect to above is Rs 6,40,151/- ( Previous Year Rs.7,26,353/-) and total Lease rentals recognized as expenditure is Rs 49,26,749/- (Previous Year Rs 61,63,414/-).

12. Company has identified that there is no material impairment of assets and as such no provision is required as per AS-28 issued by the ICAI.

13. In the opinion of the management, no provision is required against contingent liabilities referred to in Schedule 'S' Para B Point 2.

14. Based on the information/documents available with the Company, the amount due to small-scale industries is nil.

15. Unclaimed dividend accounts are subject to reconciliation.

16. The previous year's figures are regrouped / rearranged wherever deemed necessary.


Mar 31, 2000

1 Estimated amount of contracts remaining to be executed on Capital Accounts net of advances not provided for Rs. NIL( Previous year - Nil)

2. Contingent liabilities not provided for in respect of:

i Bank guarantees - Rs.NIL (Previous Year - NIL)

ii. Letter of credit - Rs. NIL (Previous year Rs. 35,70,55,208)

iii. Allotment money of Rs.25.000/- due on 2500 shares of Merbank Financial Services Limited with interest.

iv. Corporate guarantee given to Bankers on behalf of M/s. Rajesh Jewels Ltd. a 100% subsidiary Rs. 3500 Lacs.

3. Certain balances under the heads debtors, creditors, outstanding liabilities, advances from customers, advances and deposits are subject to confirmation.

4. Directors Remuneration includes Executive chairman and Managing Directors remuneration Rs. 2,39,526/-.

5. Brief particulars of employees who were entitled to receive or were in respect of emoluments aggregating to Rs. 6,00,000/- or more per annum and or Rs. 50,000/-or more per month if employed for part of the year - Nil.

6. The company is registered under chapter IX of the Companies act, 1956 and the the Register of Companies has issued certificate of incorporation and commencement of business on 1st February 1995. Before the registration of the Company, the business was carried on by "M/s, Rajesh Exports" in partnership as joint stock company

7. Investment includes 500170 equity shares of Rs.10/- each fully paid in Rajesh Jewels Ltd , 100% Subsidiary of the company and 4899980 equity shares of Rs. 10/- each fully paid in Rajesh Global Solutions Ltd.

8. FOREIGN CURRENCY TRANSACTIONS

Year end balances of assets & liabilities denominated in foreign currency are translated at the inter-bank rates prevailing in the country at the end of accounting year or nearest date.

9. Interest demand of Rs. 5,71,289/- raised by MMTC Limited is being disputed by the company before the honble high court of Karnataka. Pending decision of the honble high court of Karnataka payment of Rs. 5,71,289/- made is shown under loans and advances.

10. The amount due to small scale industries is Nil.

11. The Interim Dividend declared is on Equity Capital of Rs.198.82 Lakhs.

12. The previous years figures are regrouped / rearranged wherever deemed necessary.

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