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Notes to Accounts of Renaissance Jewellery Ltd.

Mar 31, 2015

1. HEDGE

The Company has recognized exchange differences arising on translation of Forward contract and Exchange Traded Currency Futures Contracts by following an appropriate hedge accounting policy and applying the principles set out in AS-30 "Financial Instrument: Recognition and Measurement". The Company has w.e.f. from April 01, 2013 designated Forward contract and Exchange Traded Currency Futures Contracts as hedge instrument to hedge its foreign currency risks of highly probable forecast transaction (of revenue streams) to be accounted as cash flow hedge. During the current year ended March 31,2015, the net exchange difference loss on Forward contract and Exchange Traded Currency Futures Contracts amounting to Rs. 386.95 Lacs (RY gain of Rs. 1,414.47) has been recognized in Hedging Reserve Account.

2. EMPLOYEE BENEFITS

General Description of Defined Benefit plan:

Gratuity:

The Company operates single type of Gratuity plans wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service depending on the date of joining and eligibility terms. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.

3. SEGMENT INFORMATION

Business Segments:

In accordance with the principles given in Accounting Standard on Segment Reporting (AS-17) notified by Companies (Accounting Standard) Rules 2006, the Company has determined its primary business segment as "Manufacturing and sale of Jewellery"). The Company has no other reportable segment.

Geographical Segments:

The Company's secondary segments are the geographic distribution of activities. Revenue and receivable are specified by location of customers while the other geographic information is specified by location of assets/liabilities. The following table presents Revenue, capital expenditure and certain asset information regarding the Company geographical segments.

4. LEASES

Operating Lease: Company as lessee

The Company has entered into arrangements for taking on leave and license basis certain residential/office premises and warehouses. These leases have average life of between 2 to 5 years with renewal option included in the contract. The specified disclosure in respect of these agreements is given below: (The contingent liabilities, if materialized, shall entirely be borne by the Company, as there is no likely reimbursement from any other party.)

The Company has received a demand of Customs Duty along with the penalty amounting to Rs. 16,754.90 Lacs from the Commissioner of Customs, Chhatrapati Shivaji International Airport, Mumbai (Customs), alleging that the import of finished jewellery for remaking is not a permitted activity for an unit in SEEPZ SEZ and hence chargeable to Customs duty. Further, the Commissioner has also preferred an appeal to CESTAT for levy of interest of Rs. 2,283.67 Lacs along with penalty amounting of Rs. 2,283.67 Lacs on the said Customs Duty considering the issue is currently sub judice ad under litigation in the Bombay High Court, management has disclosed the demand of Rs. 21,322.24 Lacs as a contingent liabilities.

5. Pursuant to the applicability of Schedule II to the Companies Act, 2013 effective April 01, 2014, the Company applied the estimated useful life as per Schedule II. Accordingly the unamortized carrying value is being depreciated/ amortized over the remaining useful lives. In case of fixed assets where useful life as at April 01, 2014 have expired, the Company has adjusted the residual value aggregating to Rs. 127.08 lacs to the opening balance of profit and loss accounts.

6. EMPLOYEE STOCK PURCHASE SCHEME ("ESPS 2008")

A maximum 720,000 options can be granted under the plan. Employees who acquire shares under "ESPS 2008" would not be able to transfer such shares during the lock in period. The shares as per the scheme are issued at market price and hence there is no employee compensation expense. (Market price based on average of the two weeks high and low price of the share preceding the grant date on the Stock Exchange with highest trading volumes in that period).

7. ACCOUNTING FOR GOLD ON LOAN

The Company has taken gold on loan from various banks. The said gold has been alloyed and the jewellery is sold or in the process of manufacture. The value of purchase is initially taken on the basis of the Gold price Index on the date of purchase. The final value of purchase is recorded on the date of repayment of the loan or on final price confirmation of gold loan agreed with the bank with the difference of purchase amount being recorded to gold rate difference account. As at year end the price of unfixed Gold loan and the corresponding inventory of gold is recorded at the closing price as per the Gold price Index. The closing stock of Raw Materials-Gold includes Gold valued at Rs. 377.14 Lacs (March 31, 2014 : Rs. 333.93 Lacs) taken on loan from Banks under the EXIM-Gold Loan Scheme.

8. As required under Section 186(4) of the Companies Act, 2013, the particulars of loans and guarantees and Investments made during the year and which are outstanding as at year-end are as follows:

9. PREVIOUS YEAR FIGURES

Previous year's figures are regrouped/rearranged/recast wherever considered necessary.


Mar 31, 2014

1. CORPORATE INFORMATION

Renaissance Jewellery Limited ("the Company") is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the manufacture of diamond studded jewellery which are majorly exported to countries like USA, Hong Kong, etc.

2. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. HEDGE

The Company has changed its accounting policy with regard to recognition of exchange differences arising on translation of Forward contract and Exchange Traded Currency Futures Contracts by following an appropriate hedge accounting policy and applying the principles set out in AS-30 "Financial Instrument: Recognition and Measurement". The Company has w.e.f. April 01, 2013 designated Forward contract and Exchange Traded Currency Futures Contracts as hedge instrument to hedge its foreign currency risks of highly probable forecast transaction (of revenue streams) to be accounted as cash flow hedge. During the current year ended March 31,2014, the net exchange difference gain on Forward contract and Exchange Traded Currency Futures Contracts amounting to Rs. 1,414.47 Lacs has been recognized in Hedging Reserve Account. Had this accounting treatment been not adopted by the Company, the profit (net of tax) on account of exchange difference gain for the current year would have been higher by Rs. 1,139.17 Lacs and consequently the reserves would have been lower by Rs. 275.30 Lacs.

4. EMPLOYEE BENEFITS

General Description of Defined Benefit plan:

Gratuity:

The Company operates single type of Gratuity plans wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service depending on the date of joining and eligibility terms. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.

The following tables summaries the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the respective plans.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The overall expected rate of return on assets is determined based on the market prices prevailing as on that date, applicable to the period over which the obligation is expected to be settled.

5. SEGMENT INFORMATION

Business Segments:

In accordance with the principles given in Accounting Standard on Segment Reporting (AS-17) notified by Companies (Accounting Standard) Rules 2006, the Company has determined its primary business segment as "Manufacturing and sale of Jewellery"). The Company has no other reportable segment.

Geographical Segments:

The Company''s secondary segments are the geographic distribution of activities. Revenue and receivable are specified by location of customers while the other geographic information is specified by location of assets/liabilities. The following table presents Revenue, capital expenditure and cetain asset information regarding the company geographical segments.

Geographical Segment:

a) For the purpose of geographical segment the sales are divided into two segments - India and outside India.

b) The accounting policies of the segments are the same as those described in Note 2.1.

26. RELATED PARTY DISCLOSURES AS REQUIRED UNDER AS-18, "RELATED PARTY DISCLOSURES", ARE GIVEN BELOW:

a) Names of related parties with whom transactions have taken place during the year:

Subsidiary company:

1) Renaissance Jewelry N.Y. Inc.

2) Verigold Jewellery (UK) Limited

3) Renaissance Jewellery Bangladesh Private Limited

4) N. Kumar Diamond Exports Limited

Indirect subsidiary company:

1) VGJA Inc., - Subsidiary of Renaissance Jewelry N.Y Inc.,

2) Housefull International Limited - Subsidiary of N. Kumar Diamond Exports Limited

3) Housefull Supply Chain Management Limited - Subsidiary of Housefull International Limited

Associate concerns/Companies/trust under control of key management personnel and relatives:

1) Anived Trade Impex Private Limited (formerly known as Fancy Jewellery Private Limited)

2) Vedani Allcomm Impex Private Limited (formerly known as Anika Jewellery Private Limited)

3) Niranjan Holdings Private Limited

4) Renaissance Jewellery Limited - Employee Group Gratuity Trust

5) iAIpha Enterprise

6) RJL - Employee Welfare Trust

7) Renaissance Foundation

8) Aurelle Jewellery LLP

6. RELATED PARTY DISCLOSURES AS REQUIRED UNDER AS-18, "RELATED PARTY DISCLOSURES", ARE GIVEN BELOW (Contd.)

Key Management Personnel:

1) Mr. Niranjan A. Shah

2) Mr. Sumit N. Shah

3) Mr. Hitesh M. Shah

4) Mr. Neville R. Tata

b) Related Party transactions:

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:

7. LEASES

Operating Lease: Company as lessee

The Company has entered into arrangements for taking on leave and license basis certain residential/office premises and warehouses. These leases have average life of bewteen 2 to 5 years with renewal option included in the contract. The specified disclosure in respect of these agreements is given below:

8. CONTINGENT LIABILITIES

March 31,2014 March 31, 2013 Rs In Lacs Rs In Lacs

Claims against the Company not acknowledged as debts:

i) Guarantees given to banks against credit facilities extended to indirect subsidiary company 1,700.00 1,700.00

ii) Penalty levied by the Custom Authorities 3.11 3.11

iii) Income Tax demand disputed in appeal: Disputed by the Department 92.58 92.58

iv) Disputed demand by Custom Authorities 21,322.24 21,322.24

23,117.93 23,117.93

(The contingent liabilities, if materialised, shall entirely be borne by the company, as there is no likely reimbursement from any other party.)

The company has received a demand of Customs Duty along with the penalty amounting to Rs. 16,754.90 Lacs from the Commissioner of Customs, Chhatrapati Shivaji International Airport, Mumbai (Customs), alleging that the import of finished jewellery for remaking is not a permitted activity for an unit in SEEPZ SEZ and hence chargeable to Customs duty. Further, the Commissioner has also preferred an appeal to CESTAT for levy of interest of Rs. 2,283.67 Lacs along with penalty amounting of Rs. 2,283.67 Lacs on the said Customs Duty considering the issue is currently sub-judice and under litigation in the Bombay High Court, management has disclosed the demand of Rs. 21,322.24 Lacs as a contingent liabilities.

9. EMPLOYEE STOCK PURCHASE SCHEME ("ESPS 2008")

A maximum 720,000 options can be granted under the plan. Employees who acquire shares under "ESPS 2008" would not be able to transfer such shares during the lock in period. The shares as per the scheme are issued at market price and hence there is no employee compensation expense. (Market price based on average of the two weeks high and low price of the share preceding the grant date on the Stock Exchange with highest trading volumes in that period).

10. ACCOUNTING FOR GOLD ON LOAN

The Company has taken gold on loan from various banks. The said gold has been alloyed and the jewellery is sold or in the process of manufacture. The value of purchase is initially taken on the basis of the Gold price Index on the date of purchase. The final value of purchase is recorded on the date of repayment of the loan or on final price confirmation of gold loan agreed with the bank with the difference of purchase amount being recorded to gold rate difference account.

As at year end the price of unfixed Gold loan and the corresponding inventory of gold is recorded at the closing price as per the Gold price Index.

The closing stock of Raw Materials-Gold includes Gold valued at Rs. 333.93 Lacs (March 31, 2013 : Rs. 250.13 Lacs) taken on loan from Banks under the EXIM-Gold Loan Scheme.

11. PREVIOUS YEAR FIGURES

Previous year''s figures are regrouped/rearranged/recast wherever considered necessary.


Mar 31, 2013

1. CORPORATE INFORMATION

Renaissance Jewellery Limited ("the company") is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is engaged in the manufacture of diamond studded jewellery which are majorly exported to countries like USA, Hongkong, etc.

2. BASIS OF PREPARATION

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. VALUATION OF DIAMONDS

The company, upto March 31, 2012, was valuing polished diamonds on management''s best technical estimate of respective grades in view of numerous number of assortment and re-assortment to multiple grade. This policy was not complying with the requirement of Accounting Standard (AS) - 2 "Valuation of Inventories". In order to comply with AS-2, during the year, the management ascertained the cost of polished diamonds to lot-wise weighted average. As such, inventories of polished diamonds as at March 31, 2013 is valued at lower of lot-wise weighted average cost or net realizable value. The weighted average cost is certified by the independent cost accountants and net realizable value is certified by the government approved valuer. The estimated cost as at March 31, 2012 has been apportioned to various lot by the management on a rational basis. In the opinion of the management, the impact of the above on the valuation of inventory and profit for the year is not material.

4. SCHEME OF AMALGAMATION

Scheme of Amalgamation ("the Scheme") of CARO FINE JEWELLERY PRIVATE LIMITED (CARO), a wholly owned subsidiary ("the Transferor Companies") with RENAISSANCE JEWELLERY LIMITED (RJL), a Holding Company ("the Transferee Company").

Pursuant to the scheme of amalgamation of the Transferor Company with the Transferee Company with effect from April 01, 2012 (Appointed Date), as approved by the Honorable High Court of Bombay on April 12, 2013 and filed with Registrar of Companies on May 14, 2013, the Assets and Liabilities of the Transferor Company is transferred to and vested with company from April 01, 2012. The Scheme has, accordingly, been given effect to in the financial statement.

The business of CARO was Manufacturing of Studded Jewellery.

The amalgamation has been accounted for under the pooling of interest Sethod as prescribed by the Accounting Standard 14 (AS14) - Accounting for Amalgamation.

Accordingly, the assets and liabilities of CARO have been taken over at their book value. The investments and the inter-corporate loans of RJL with CARO stands cancelled. The reserves of CARO at the close of business of the day immediately preceding the appointed date have been merged with RJL in the same form. The difference between cost of investment of CARO in the books of RJL and share capital of CARO has been adjusted against the general reserve of RJL.

There were no differences in the accounting policies between the Transferor Companies and Transferee Company. In view of the aforesaid amalgamation with effect from April 01, 2012, the Balance Sheet as at March 31, 2013 and Profit and Loss account for the year ended on that date, includes the figures of CARO from the said date. Hence, the figures for the current year are not comparable with those of the previous year.

5. EMPLOYEE BENEFITS

General Description of Defined Benefit plan: Gratuity:

The Company operates single type of Gratuity plans wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service depending on the date of joining and eligibility terms. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.

The following tables summaries the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the respective plans.

6. SEGMENT INFORMATION

Business Segments:

In accordance with the principles given in Accounting Standard on Segment Reporting (AS-17) notified by Companies (Accounting Standard) Rules 2006, the Company has determined its primary business segment as "Manufacturing and sale of Jewellery". The Company has no other reportable segment.

Geographical Segments:

The Company''s secondary segments are the geographic distribution of activities. Revenue and receivable are specified by location of customers while the other geographic information is specified by location of assets/liabilities. The following table presents revenue, capital expenditure and certain asset information regarding the company geographical segments.

7. RELATED PARTY DISCLOSURES AS REQUIRED UNDER AS-18, "RELATED PARTY DISCLOSURES", ARE GIVEN BELOW:

a) Names of related parties: Subsidiary company:

1) Renaissance Jewelry N.Y. Inc.

2) Verigold Jewellery (UK) Limited

3) Renaissance Jewellery Bangladesh Private Limited

4) N. Kumar Diamond Exports Limited

1) Renaissance Adrienne LLc (situated at California) - Subsidiary of Renaissance Jewelry N.Y Inc. (upto Jul 01, 2012)

2) Housefull International Limited - Subsidiary of N. Kumar Diamond Exports Limited

3) Housefull Supply Chain Management Limited - Subsidiary of Housefull International Limited

Associate concerns/Companies/trust under control of key management personnel and relatives:

1) Anived Trade Impex Private Limited (formerly known as Fancy Jewellery Private Limited)

2) Vedani Allcomm Impex Private Limited (formerly known as Anika Jewellery Private Limited)

3) Niranjan Holdings Private Limited

4) Renaissance Jewellery Limited - Employee Group Gratuity Trust

5) iAIpha Enterprise

6) RJL - Employee Welfare Trus

7) Renaissance Foundation

Key Management Personnel:

1) Mr. Niranjan A. Sha

2) Mr. Sumit N. Shah

3) Mr. Hitesh M. Sha

4) Mr. Neville R. Tata

b) Related Party transactions:

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year:

8. LEASES

Operating Lease: company as lessee

The Company has entered into arrangements for taking on leave and license basis certain residential/office premises and warehouses. These leases have average life of between 2 and 5 years with renewal option included in the contract. The specified disclosure in respect of these agreements is given below:

9. EMPLOYEE STOCK PURCHASE SCHEME ("ESPS 2008")

A maximum 720,000 options can be granted under the plan. Employees who acquire shares under "ESPS 2008" would not be able to transfer such shares during the lock in period. The shares as per the scheme are issued at market prices and hence there is no employee compensation expense. (Market price based on average of the two weeks high and low price of the share preceding the grant date on the Stock Exchange with highest trading volumes in that period).

10. ACCOUNTING FOR GOLD ON LOAN

The Company has taken gold on loan from various banks. The said gold has been alloyed and the jewellery is sold or in the process of manufacture. The value of purchase is intially taken on the basis of the Gold price Index on the date of purchase. The final value of purchase is recorded on the date of repayment of the loan or on final price confirmation of gold loan agreed with the bank with the difference of purchase amount being recorded to gold rate difference account.

As at year end the price of unfixed Gold loan and the corresponding inventory of gold is recorded at the closing price as per the Gold price Index.

The closing stock of Raw Materials-Gold includes Gold valued at Rs. 250.13 Lacs (March 31, 2012 : Rs. 348.58 Lacs) taken on loan from Banks under the EXIM-Gold Loan Scheme.

11. PREVIOUS YEAR FIGURES

Previous year''s figures are regrouped/rearranged/recast wherever considered necessary.


Mar 31, 2012

1. CORPORATE INFORMATION

Renaissance Jewellery Limited (the company) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is engaged in the manufacture of diamond studded jewellery which are majorly exported to countries like USA, Hongkong, etc.

2. BASIS OF PREPARATION

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year except change in accounting policy as explained below.

3. CONTINGENT LIABILITIES

Claims against the Company not acknowledged as debts:_

March 31, 2012 March 31, 2011 Rs In Lacs Rs In Lacs

i) Guarantees given to banks against credit facilities extended to indirect subsidiary company 1,500.00 1,500.00

ii) Penalty levied by the Custom Authorities 3.11 3.11

iii) Income Tax demand disputed in appeal:

Disputed by the Company - -

Disputed by the Department 92.58 92.58

iv) Disputed demand by Custom Authorities 21,322.24 21,322.24

22,917.93 22,917.93

(The contingent liabilities, if materialised, shall entirely be borne by the Company, as there is no likely reimbursement from any other party.)

The company has received a demand of Customs Duty along with the penalty amounting to Rs. 16,754.90 Lacs from the Commissioner of Customs, Chhatrapati Shivaji International Airport, Mumbai (Customs), alleging that the import of finished jewellery for remaking is not a permitted activity for an unit in SEEPZ SEZ and hence chargeable to Customs duty. Further, the Commissioner has also preferred an appeal to CESTAT for levy of interest of Rs. 2,283.67 Lacs along with penalty amounting of Rs. 2,283.67 Lacs on the said Customs Duty considering the issue is currently sub-judice and under litigation in the Bombay High Court, management has disclosed the demand of Rs. 21,322.24 Lacs as a contingent liabilities.

4.1 CONVERTIBLE SHARE WARRANTS

The Company has issued total 20 Lacs (March 31, 2011: 10 Lacs) Convertible share warrants to the Promoters, Promoter Group and Strategic investors, on preferential basis after receipt of Rs. 19 each i.e. 25% of the total consideration @ Rs. 76 per warrant. The said issue of Convertible Share Warrants was made in accordance with the SEBI (ICDR) Regulations, 2009, after obtaining approval of members of the Company vide Postal Ballet Resolution dated March 07. 2011.

4.2 EMPLOYEE STOCK PURCHASE SCHEME ("ESPS 2008")

A maximum 720,000 options can be granted under the plan. Employees who acquire shares under "ESPS 2008" would not be able to transfer such shares during the lock in period. The shares as per the scheme are issued at market prices and hence there is no employee compensation expense. (Market price based on average of the two weeks high and low price of the share preceding the grant date on the Stock Exchange with highest trading volumes in that period).

VALUATION OF WORK IN PROGRESS

In the previous year on account of short period of processing and/or manufacturing, difficulty in identifying the stages of process, and the insignificant impact on valuation, work in process was classified as raw materials for the purpose of classification and valuation. With effect from the current year, on account of increased volumes and refinement in the method of identification of the stages of process, management has identified work in progress and has also allocated variable and fixed overheads of Rs. 376.18 Lacs based on the stage of completion. Consequently, the inventory of work in progress is higher by Rs. 376.18 Lacs with equivalent impact on the profit for the year. Further the management has also reclassified Inventory of Raw Material of Rs. 10,314.05 Lacs to work in progress as at the year end with corresponding impact of increased consumption of material by Rs. 10,314.05 Lacs and decrease in Increase/Decrease in Inventory by Rs. 10,314.05 Lacs.

5. ACCOUNTING FOR GOLD ON LOAN

The Company has taken gold on loan from various banks. The said gold has been alloyed and the jewellery is sold or in the process of manufacture. The value of purchase is intially taken on the basis of the Gold price Index on the date of purchase. The final value of purchase is recorded on the date of repayment of the loan or on final price confirmation of gold loan agreed with the bank with the difference of purchase amount being recorded to gold rate difference account.

As at year end the price of unfixed Gold loan and the corresponding inventory of gold is recorded at the closing price as per the Gold price Index.

The closing stock of Raw Materials-Gold includes Gold valued at Rs. 348.58 Lacs (March 31, 2011 : Rs. 351.03 Lacs) taken on loan from Banks under the EXIM-Gold Loan Scheme.

6. VALUATION OF DIAMOND

In respect of the stock of loose polished diamonds numerous number of assortments and re-assortments to multiple grades in view of management it is not practicable to compute the cost of loose polished diamonds using either first in first out, weighted average cost or specific cost. Inventory as at the year end is based on management's best technical estimate of replacement cost of the respective grade of diamonds. The basis of computing cost, is not in accordance with the method prescribed by Accounting Standard (AS)-2 'Valuation of Inventories impact whereof on the profit for the year, reserves and surplus and inventories as at March 31, 2012 could not be ascertained'.

7. PREVIOUS YEAR FIGURES

Till the year ended March 31, 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956 for preparation and presentation of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company. The figures of previous year were audited by a firm of Chartered accountants other than S.R. Batliboi & Associates. The Company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2011

1. Loans and Advances include interest free advances given by the Company to RJL - Employee Welfare Trust aggregating to Rs. 33,800,000/- (Previous year Rs. 36,000,000/-), for the benefit of designated Employees pursuant to the proviso (b) to Section 77(2) of the Companies Act, 1956.

2. In the opinion of the Board, current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business. Provisions for all the known liabilities and depreciation are adequate and not in excess of the amount reasonably necessary.

3. Contingent Liabilities not provided for in respect of: As at As at March 31, 2011 March 31, 2010

i) Guarantees given to banks against credit facilities extended to indirect subsidiary company 150,000,000 Nil

ii) Penalty levied by the Custom Authorities 311,196 311,196

iii) Income Tax demand disputed in appeal:

Disputed by the Company Nil Nil

Disputed by the Department 9,257,560 9,257,560

iv) Estimated amount of contract remaining to be executed on capital account (Net of advances) 5,836,581 25,369,022



4. The Company has received a demand of Customs Duty along with the penalty amounting to Rs. 167.58 Crores from the Commissioner of Customs, Chhatrapati Shivaji International Airport, Mumbai (Customs), alleging that the import of finished jewellery for remaking is not a permitted activity for an unit in SEEPZ SEZ and hence chargeable to Customs duty. Further, the Commissioner has also preferred an appeal to CESTAT for levy of interest of Rs. 22.84 Crores on the said Customs Duty. The aggregate demand of Rs. 190.42 Crores is subject matter of Writ petition filed by the Company in the Hon. Bombay High Court to challenge the Jurisdiction of Customs & correctness of its contention.

5. Share Warrants :

During the year, The Company has issued 2,000,000 (Face Value Rs. 10/- each) convertible warrants (Warrants) on preferential basis to the promoters & Investors against which it has received Rupees 19,000,000/-, Each warrants carries a right to convert the same into one equity share of Rs. 10/- each at a premium of Rs. 66/- as per the formula prescribed under the SEBI (ICDR) Regulation 2009 over a period of 18 months from the date of allotment.

The object of the issue is to meet the long term working capital requirement, enhancement of competitiveness and strengthening of financial position through long term resources.

6. Transaction with related party:

Related party disclosure as required by AS-18, 'Related Party Disclosures' notified by the Companies (Accounting Standard) Rules, 2006 are given below:

a) Key Management Personnel:

1) Mr. Niranjan A. Shah

2) Mr. Sumit N. Shah

3) Mr. Hitesh M. Shah

4) Mr. Neville R. Tata

b) Subsidiary Company:

1) Renaissance Jewelry N.Y Inc.

2) Verigold Jewellery (UK) Limited

3) N. Kumar Diamond Exports Limited

Indirect Subsidiary Companies

1) Renaissance Adrienne LLC (situated at California) (Subsidiary of Renaissance Jewelry N.Y Inc.)

2) House Full International Ltd (Subsidiary of N. Kumar Diamond Exports Limited)

3) Renaissance Realtors Private Limited (Subsidiary of N. Kumar Diamond Exports Limited)

4) House Full Supply Chain Management Limited (Subsidiary of House Full International Limited)

c) Associate Concerns/Companies/Trust under Control of Key Management Personnel and Relatives:

1) Fancy Jewellery Private Limited

2) Anika Jewellery Private Limited

3) Niranjan Holdings Private Limited

4) Renaissance Jewellery Limited - Employee Group Gratuity Trust

5) Sumit Diamonds

7. Segment Reporting:

During the year Company operated in only one segment i.e. 'Jewellery".

8. (a) The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O.301 (E) dated 8th February 2011 issued under section 211 (3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their profit and loss account. The Company being an 'export oriented company' is entitled to the exemption. Accordingly, disclosures mandated by paragraphs 3(i)(a), 3(ii)(a), 3(ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.

(b) The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the condition stipulated in the circular'and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

9. Previous year's figures are regrouped/rearranged, wherever necessary.


Mar 31, 2010

1. Loans and Advances include interest free advances given by the Company to RJL - Employee Welfare Trust aggregating to Rs. 36,000,000/- (Previous year Rs. 36,000,000/-), for the benefit of designated Employees pursuant to the proviso (b) to Section 77 (2) of the Companies Act, 1956.

2. In the opinion of the Board, current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of. business. Provisions for all the known liabilities and depreciation are adequate and not in excess of the amount reasonably necessary.

3. Contingent Liabilities not provided for in respect of: As at As at March 31,2010 March 31,2009 i) Guarantees given by Banks on behalf of the Company to third parties Nil 50,000,000

ii) Guarantees given to banks against credit facilities extended to subsidiary company Nil Nil

111) Penalty levied by the Custom Authorities 311,196 311,196

1v) Income Tax demand disputed in appeal: Disputed by the Company Nil 2,507,877 Disputed by the Department 9,257,560 9,257,560

v) Estimated amount of contract remaining to be executed on capital account (Net of advances) 25,369,022 60,088

4. Transaction with related party:

Related party disclosure as required by AS-18, Related Party Disclosures notified by the Companies (Accounting Standard] Rules, 2006 are given below;,

a) Key Management Personnel:

1) Mr. Niranjan A. Shah

2) Mr. Sumit N. Shah 3) Mr. Hitesh M. Shah

4) Mr. Neville R. Tata

5. Segment Reporting:

During the year Company operated in only one segment i.e. Jewellery".

6. Previous years figures are regrouped/rearranged, wherever necessary. Signatures to Schedules 1 to 18 forming part of the Balance Sheet as at March 31, 2010 and Profit and Loss Account for the year ended March 31, 2010,



 
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