Notes to Accounts of Renaissance Global Ltd.

Mar 31, 2018

1. CORPORATE INFORMATION

1.1 Nature of Operations

Renaissance Jewellery Limited (“the company”) is a public limited company domiciled in India and incorporated underthe provisions of the Companies Act, 1956. The company is engaged in the manufacture of diamond studded jewellery. The company’s shares are listed on the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange (BSE).

1.2 General information and statement of compliance with Ind AS

The standalone financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the ‘Act’) read with Companies (Indian Accounting Standards) Rules, 2015; and the other relevant provisions of the Act and Rules there under. For periods up to and including the year ended March 31, 2017, the Company prepared its standalone financial statements in accordance with accounting standards notified under section 133 of the Act read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). Refer Note No. 39 for the explanation of transition from previous GAAP to Ind AS.

The Ministry of “Corporate Affairs” (MCA) has notified a road map to implement Ind AS. As per the said road map, the Company is required to apply Ind AS starting from the financial year beginning April 1, 2017. Accordingly the first Ind AS standalone financial statements shall be for the financial year 2017-18 with comparables for the financial year 2016-17. The Company has adopted all the Ind AS and the adoption was carried out in accordance with Ind AS 101, “First time adoption of Indian Accounting Standards”. The date of transition to Ind AS is April 1, 2016. The transition was carried out from Accounting Principles generally accepted in India (previous GAAP). Reconciliation and descriptions of the effect of the transition have been summarized in note no. 39.

The standalone Ind AS financial statements for the year ended March 31, 2018 were authorised and approved for issue by the Board of Directors on May 28, 2018.

2. STANDARDS ISSUED BUT NOT YET EFFECTIVE

On March 28,2018, the Ministry of Corporate Affairs (MCA) has notified Ind AS 115- Revenue from Contract with Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the Company from April 01, 2018.

2.1 Issue of Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 will supersede the current revenue recognition guidance including Ind AS 18 Revenue, Ind AS 11 Construction Contracts and the related interpretations. Ind AS 115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.

2.2 Amendment to Existing issued Ind AS

The MCA has also carried out amendments of the following accounting standards:

i. Ind AS 21 - The Effects of Changes in Foreign Exchange Rates

ii. Ind AS 40 - Investment Property

iii. Ind AS 12 - Income Taxes

iv. Ind AS 28 - Investments in Associates and Joint Ventures and

v. Ind AS 112 - Disclosure of Interests in Other Entities

Application of above standards are not expected to have any significant impact on the Company’s Ind AS Financial Statements.

3. KEY ACCOUNTING JUDGMENTS’, ESTIMATES AND ASSUMPTIONS

The preparation of the Company’s standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets, liabilities and the accompanying disclosures along with contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require material adjustments to the carrying amount of assets or liabilities affected in future periods. The Company continually evaluates these estimates and assumptions based on the most recently available information.

In particular, information about significant areas of estimates and judgments in applying accounting policies that have the most significant effect on the amounts recognized in the standalone financial statements are as below:

a. Assessment of functional currency;

b. Financial instruments;

c. Estimates of useful lives and residual value of PPE and intangible assets;

d. Impairment of financial and non-financial assets;

e. Valuation of inventories;

f. Measurement of recoverable amounts of cash-generating units;

g. Measurement of Defined Benefit Obligations and actuarial assumptions;

h. Allowances for uncollected trade receivable and advances

i. Provisions;

j. Evaluation of recoverability of deferred tax assets; and k. Contingencies.

Revisions to accounting estimates are recognized prospectively in the Statement of Profit and Loss in the period in which the estimates are revised and in any future periods affected.

b. Terms/rights attached to equity shares

The company has only one class of issued shares having par value of Rs.10/-. Each holder of equity shares is entitled to one vote per share and carries identical right as to dividend. These shares are not subject to any restrictions.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the numbers of equity share held by the shareholders.

As per records of the Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

d. Buy back of equity shares

On May 30, 2017, the Board of Directors approved a buyback proposal for purchase by the Company of up to 2 lakhs shares of Rs.10 each from the shareholders of the Company on a proportionate basis by way of a tender offer at a price of Rs.250 per equity share for an aggregate amount not exceeding Rs.500 lakhs in accordance with the provisions of the Companies Act, 2013 and the SEBI (Buy Back of Securities) Regulations, 1998. The Company extinguished the equity shares bought on September 20, 2017. An amount ofRs.500 Lakhs was utilized from General Reserve to off-set the buy-back offer including the Capital Redemption Reserve of Rs.20 Lakhs created to the extent of Share Capital extinguished.

* The Working Capital Loan is secured by first charge on pari passu basis by way of hypothecation and/or pledge of company’s current assets both present and future, byway of joint equitable mortgage of Company’s factory premises situated at Plot Nos. 36A and 37 (Mumbai), at Plot No. 2302 (Bhavnagar) and office premises situated bearing no CC9081 with car parking situated at Bharat Diamond Bourse and hypothecation of machinery and plant, furniture and fixtures, electrical installations, office equipments, erected and installed therein and by personal guarantee of some of the directors / promoters. The working capital finance is generally having tenure of 180 days. The Foreign currency loans carries interest rate @ LIBOR plus 2% to 4% and Indian currency Loans carries interest rate @ 9% to 10%.

** Inter Corporate Deposit carries Interest Rate of 9% and repayable within six months or earlier at the option borrower company.

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 recognized in the statement of profit and loss and the funded status and amounts recognized in the standalone balance sheet for the respective plans.

The company made annual contribution to the PNB Metlife India Insurance Co. Ltd. (PNB) of an amount advised by the PNB. The company was not informed by PNB ofthe investments made or the break-down ofthe plan assets by investment type.

Fair value of cash and cash equivalents, short term loans, trade receivables, trade payables, other financial assets/liabilities approximate their carrying amounts largely due to the short term maturities of these instruments. Methods and assumptions used to estimate the fair values are consistent with those used for the year ended March 31, 2017.

During the reporting period ended March 31, 2018 and March 31, 2017, there were no transfers between level 1, level 2 and level 3 fair value measurements.

Level 3 fair values Reconciliation of Level 3 fair values

The following table shows a reconciliation of the opening and closing balances for the Level 3 fair values.

A one percentage point change in the unobservable inputs used in fair valuation of level 3 assets or liabilities does not have significant input in its value.

4. FIRST-TIME ADOPTION OF IND AS

These are the Company’s first standalone financial statements prepared in accordance with ind AS.

The accounting policies set out in note 2 have been applied in preparing the standlone financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening ind AS Standalone Balance Sheet at April 01, 2016 (the Company’s date of transition). In preparing its opening ind AS standalone Balance Sheet, the Company has adjusted the amounts reported previously in standalone financial statements prepared in accordance with the Accounting Standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

Ind AS 101 deals with First time adoption of Indian Accounting Standards which allows exemptions from the retrospective application and exemption from application of certain requirements of other Ind AS. On transition, the Company has availed / adopted the following exemptions / exception as per Ind AS 101:

a) Property, Plant and Equipment and Intangible Assets

The Company has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its Property, Plant and Equipment and intangible assets as recognised in the standalone financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (April 01, 2016).

b) Lease

Appendix C of Ind AS 17 requires an entity to assess whether a contract of arrangement contains a lease. This assessment should be carried out at the inception of the contract or arrangement. The company has used Ind AS 101 exemption and assessed all the arrangements for embedded leases based on the conditions in place as at the date of transition.

c) Investment in equity shares other than Subsidiaries and Mutual Fund

The Company has designated its investment in equity shares other than subsidiaries and mutual fund held as at April 01, 2016 as Fair Value through Other Comprehensive Income based on facts and circumstances at the date of transition to Ind AS.

d) Investment in Subsidiaries

The Company has elected to use the exemption to measure all investments in Subsidiaries as recognised in the standalone financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (April 01, 2016).

e) Business combination

The Company has elected not to apply Ind AS 103- Business Combinations, retrospectively to past business combinations that occurred before April 01,2016. Consequent to use of this exemption from retrospective application:

The carrying amounts of assets and liabilities acquired pursuant to past business combinations and recognized in the standalone financial statements prepared under Previous GAAR are considered to be the deemed cost under Ind AS, on the date of acquisition. On the date of transition, measurement of such assets and liabilities is in accordance with respective Ind AS. Also, there is no change in classification of such assets and liabilities;

The company has not recognized assets and liabilities that neither were recognized in the standalone financial statements prepared under Previous GAAP nor qualify for recognition under Ind AS in the Balance Sheet of the acquiree;

The company excluded from its opening Ind AS standalone Balance sheet as at April 01, 2016, those assets and liabilities which were recognized in accordance with Previous GAAP but do not qualify for recognition as an asset or liability under Ind AS.

f) Derecognition of financial assets and financial liabilities

The Company has elected to use the exemption for derecognition of financial assets and liabilities prospectively i.e. after April 01, 2016.

g) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess the classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable. Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of financial assets accounted at amortized cost has been done retrospectively except where the same is impracticable.

h) Hedge accounting

Hedge accounting can only be applied prospectively from the transition date to transactions that satisfy the hedge accounting criteria in Ind AS 109, at that date. Hedging relationships cannot be designated retrospectively, and the supporting documentation cannot be created retrospectively. As a result, only hedging relationships that satisfied the hedge accounting criteria as of April 01, 2016 are reflected as hedges in the Company’s results under Ind AS.

The Company had designated various hedging relationships as cash flow hedges under the previous GAAR On date of transition to Ind AS, the Company had assessed that all the designated hedging relationship qualifies for hedge accounting as per Ind AS 109. Consequently, the Company continues to apply hedge accounting on and after the date of transition to Ind AS.

A. Investment in Mutual Fund and Equity Shares:

Under the previous GAAR investments in mutual funds and equity shares were classified as long-term investments or current investments based on the intended holding period and readability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value and hence the Company has opted to designate these investments at Fair Value through Other Comprehensive Income.

B. Defined Benefit Liabilities:

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under the previous GAAR these remeasurements were forming part of the Statement of Profit and Loss for the year. There is no impact on the total equity.

C. Trade receivables:

Under Indian GAAP, the Company had recognized provision on trade receivables based on the expectation of the Company. Under ind AS, the Company provides loss allowance on receivables based on the Expected Credit Loss (ECL) model which is measured following the “simplified approach” at an amount equal to the lifetime ECL at each reporting date.

D. Financial Guarantee Commission:

Under Indian GAAR the company issued financial guarantee in respect of loan taken by its subsidiary company without charging any fees or commission. Under ind AS, Financial guarantees given or issued on behalf of group companies without charging any fees is recognized at differential interest rate of borrowing had there been no financial guarantee availed by subsidiary company. The derived financial guarantee charges, being in the nature of equity component, the same has been considered as part of investment in Subsidiary.

E. Deferred tax:

Under previous GAAR deferred tax accounting was done using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Under ind AS, accounting of deferred taxes is done using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base.

F. RJL-Employee Welfare Trust For Investment In Shares:

The Company through employee welfare trust (“Trust”), offered Employee Stock Purchase Scheme (ESPS) and 720,000 numbers of equity shares were issued to the Trust in F.Y. 2008-2009 at fair value then for onward offering to the recommended employees. During the F.Y from 2011-12 to 2015-16 the trust issued 73,624 equity shares to its employees under ESPS and in the F.Y. 2017-18, the trust further issued 4,50,000 shares to its employees. Presently the Trust holds 1,96,376 equity shares as on March 31, 2018. To the extent of the face value of the shares held by Trust, the same has been reduced from the Paid up Share capital of the Company and the balance has been reduced from Other Equity under a separate reserve. Accordingly, the income received from the Trust has been recognized directly under Other Equity of the company.

G. Others:

Other adjustments on account of transition to ind AS include reclassification of Land lease classified as Operating Leases from Property, Plant and Equipment to Prepaid rentals, fair valuation of deposits and corresponding adjustments in revenue and expenses.

H. Reclassification:

Other adjustments on account of transition to Ind AS include reclassification of items of assets, liabilities and taxes to appropriate line items of Ind-AS balance sheet prescribed under Schedule III to the Companies Act, 2013.

I. Other comprehensive income:

Under Ind AS, all items of income and expense recognized in a period should be included in the Statement of Profit and Loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the Statement of Profit and Loss as ‘other comprehensive income’ includes fair valuation of investment in equity shares and mutual fund, remeasurements of defined benefit plans, effective portion of gains and losses on cash flow hedging instruments. The concept of other comprehensive income did not exist under previous GAAP

J. Statement of cash flows:

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

5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Risk management framework

Company’s board of directors has overall responsibility for establishment of Company’s risk management framework. Management is responsible for developing and monitoring Company’s risk management policies, under the guidance of Audit Committee. Management identifies, evaluates and analyses the risks to which is company is exposed to and set appropriate risk limits and controls to monitor risks and adherence to limits.

Management periodically reviews its risk policy and systems to assess need for changes in the policies to adapt to the changes in market conditions and align the same to the business of the Company. Management through its interaction and training to concerned employees aims to maintain a disciplined and constructive control environment in which concerned employees understand their roles and obligations. The Audit committee oversees how management monitors compliance with Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks to which Company is exposed. The Audit committee is assisted in its role by the internal auditor wherever required. Internal auditor undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit committee.

The Company has exposure to following risks arising from financial instruments:

a) Credit risk

b) Liquidity risk

c) Market risk

a) Credit risk:

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, mutual funds and financial institutions, foreign exchange transactions and other financial instruments.

The Company has adopted a policy of only dealing with counterparties that have sufficiently high credit standards and financial strength. The Company’s exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions is reasonably spread amongst the several counterparties.

Credit risk arising from derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognized financial institutions with high credit ratings assigned by the reputed credit rating agencies.

As regards, credit risk for investment in equity shares, the Company limits its exposure to credit risk by investing mainly in scrips which are of high credibility. Company monitors changes in credit risk by tracking published external credit ranking. Based on its on-going assessment of counterparty risk, Company adjusts its exposure to various counterparties from time to time.

As regards, credit risk for investment in mutual funds, the Company limits its exposure to credit risk by investing mainly in debt securities issued by mutual funds which are of high credit ranking from rating agency like CRISIL or the equivalent rating agency. Company monitors changes in credit risk by tracking published external credit ranking. Based on its ongoing assessment of counterparty risk, Company adjusts its exposure to various counterparties from time to time.

Credit risk from Trade receivables is managed by the Company’s established policy, procedures and control relating to customer credit risk management. Trade receivables are mainly from reputed debtors and are non-interest bearing. Trade receivables generally ranges from 30 - days to 180- days credit term. Credit limits are established for all customers based on internal criteria and any deviation in credit limit requires approval of Head of the department and / or Directors depending upon the quantum and overall business risk. Majority of the customers have been doing business with the company for more than 3 years and they are being monitored by individual business managers who deals with those customers. Management monitors trade receivables on regular basis and takes suitable action where needed to control the receivables crossing set criteria / limits.

Management does an impairment analysis at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. Further, the Company’s customers base is widely distributed both economically as well as geographically and in view of the same, the quantum risk also gets spread across wide base and hence management considers risk with respect to trade receivable as low.

For trade receivables, as a practical expedient, the Company computes credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.

Expected credit loss for trade receivables under simplified approach as at the end of each reporting period is as follows:

b) Liquidity risk:

Liquidity risk is the risk that Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. Company closely monitors its liquidity position and deploys a robust cash management system.

The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash or cash equivalent available to meet all its normal operating commitments in a timely and cost-effective manner. Working capital requirements are adequately addressed by internally generated funds and through working capital loans available from various banks. Trade receivables are kept within manageable levels. Company aims to maintain the level of its cash and cash equivalents and other highly marketable debt investments at an amount in excess of expected cash outflows on financial liabilities over the next three to six months.

c) Market risk:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risks;

i) Interest rate risk

ii) Currency risk and;

iii) Equity price risk

Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables, loans and derivative financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

i) Interest rate risk

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company’s cash flows as well as costs. The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company’s interest rate exposure is mainly related to debt obligations. The Company has not used any interest rate derivatives.

Based on the composition of debt as at March 31, 2018 and March 31, 2017 a 100 basis points increase in interest rates would increase the Company’s finance costs and thereby consequently reduce net profit before tax by approximately Rs.192.27 Lakhs for the year ended March 31, 2018 (March 31, 2017: Rs.171.14 Lakhs).

ii) Foreign Currency risk

The Company’s foreign exchange risk arises from its foreign operations, foreign currency revenues, foreign currency expenses and foreign currency borrowings. Primarily, the exposure in foreign currencies are denominated in USD. As a result, if the value ofthe Indian rupee appreciates relative to these foreign currencies, the Company’s revenues and expenses measured in Indian rupees may decrease or increase and vice-versa. The exchange rate between the Indian rupee and USD have changed substantially in recent periods and may continue to fluctuate substantially in the future. Consequently, the Company uses foreign exchange forward contracts and foreign currency financial liabilities, to mitigate the risk of changes in foreign currency exchange rates in respect of its highly probable forecasted transactions and recognized assets and liabilities.

Details of Hedged exposure in foreign currency denominated monetary items :

The Company enters into forward exchange contracts to hedge against its foreign currency exposure relating to the underlying transactions and based on past performance. The Company does not enter into any derivative instruments for trading or speculative purpose.

The forward exchange contracts used for hedging foreign currency exposure and outstanding as at reporting date are as under:

The company is mainly exposed to changes in USD. The below table demonstrates the sensitivity to a 1% increase or decrease in the USD against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the company as at the reporting date. 1% represents management’s assessment of reasonably possible change in foreign exchange rate.

Cash Flow Hedged Accounting:

The Company designates its derivative contracts that hedge foreign exchange risk associated with its highly probable forecasted transactions as cash flow hedges and measures them at fair value. The effective portion of such cash flow hedges is recorded as in other comprehensive income, and re-classified in the income statement as revenue in the period corresponding to the occurrence of the forecasted transactions. The ineffective portion of such cash flow hedges is immediately recorded in the statement of profit and loss.

Sensitivity

The following table gives details in respect of the notional amount of outstanding foreign exchange derivative contracts:

iii. Equity Price risk

Equity price risk is related to change in market reference price of investments in equity securities and equity linked mutul funds held by the Company. The fair value of quoted investments held by the Company exposes the Company to equity price risks. In general, these investments are not held for trading purposes.

Sensitivity

The sensitivity to profit or loss in case of an increase in price of the instrument by 5% keeping all other variables constant would have resulted in an impact on profits byRs.139.28 lakhs (March 31, 2017 Rs.227.70 lakhs).

6. CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued equity share capital, share premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the Company’s capital management is to safeguard the company’s ability to remain as a going concern and to maintain and optimal capital structure so as to maximize shareholder’s value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions, annual operating plans and long term and other strategic investment plan. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or buy back of shares. The current capital structure of the company is equity based with low financing through borrowings. The company is not subject to any externally imposed capital requirement.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

7. SEGMENT INFORMATION

In accordance with Ind AS 108 “Operating Segments”, the Company has presented segment information on the basis of consolidated financial statements which form part of this report.

8. RELATED PARTY DISCLOSURES AS REQUIRED UNDER IND-AS 24, “RELATED PARTY DISCLOSURES’, ARE GIVEN BELOW:

a. Name of entities where control exists Subsidiary companies / LLP / Trust

1. Renaissance Jewelry N.Y Inc.

2. Verigold Jewellery (UK) Limited

3. Renaissance Jewellery Bangladesh Private Limited

4. N. Kumar Diamond Exports Limited

5. Verigold Jewellery DMCC

6. Aurelle Jewellery LLP

7. RJL - Employee Welfare Trust

Indirect subsidiary companies

1. Housefull International Limited - Subsidiary of N. Kumar Diamond Exports Limited

2. Housefull Supply Chain Management Limited - Subsidiary of Housefull International Limited

3. The Seabean Dialysis Partners India Trust -100% beneficial interest by Housefull International Limited

4. Renaissance Jewellery DMCC - Subsidiary of Verigold Jewellery DMCC

b. Associate concerns / companies / trust under control of key management personnel and relatives with whom transactions have taken place during the year

1. Anived Portfolio Managers Private Limited

2. Renaissance Jewellery Limited - Employee Group Gratuity Trust

3. Renaissance Foundation

c. Key Management Personnel (KMP) and relative

1. Mr. Niranjan A. Shah

2. Mr. Sumit N. Shah

3. Mr. Hitesh M. Shah

4. Mr. Neville R. Tata

5. Mrs. Leshna S. Shah

d. 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:

* Excludes provision for gratuity liabilities for KMP and relative of KPM, as these liabilities are provided on overall company basis and as not identified separately in actuarial valuation.

9. 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 Lakhs 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 ofRs.2,283.67 Lakhs along with penalty amounting of Rs.2,283.67 Lakhs on the said Customs Duty. Considering the issue is currently sub judice under litigation in the Bombay High Court, management has disclosed the demand of Rs.21,322.24 Lakhs as a contingent liabilities.

* The company has initiated the process of identification of suppliers registered under Micro and Small Enterprise Development Act, 2006, by obtaining confirmations from all suppliers. Information has been collated only to the extent of information received as at standalone balance sheet date.

10. EMPLOYEE STOCK PURCHASE SCHEME (“ESPS 2008”)

As directed by the Compensation Committee and in terms of the Employee Stock Purchase Scheme, 2017 (ESPS 2017), the ESPS Trust has allotted 450,000 Equity Shares (Nominal ValueRs.10) at Rs.40/- per share, which was allotted to the ESPS Trust at Rs.50/-. The difference between the fair value on allotment date / exercise date amounting to Rs.604.01 Lakhs is recognized as Employee Compensation Cost under the head “Employee Benefits Expense” and corresponding effect has been given in Other Equity net off the allotment price and the price at which the same was allotted to the ESPS Trust.

11. 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'' Nil (March 31, 2017 : Rs.443.03 Lakhs) taken on loan from Banks under the EXIM-Gold Loan Scheme.

12. INVESTMENT IN INDIRECT SUBSIDIARY COMPANY

In the meeting of shareholders of Renaissance Jewellery Limited (the Transferee Company) and Housefull International Limited and N. Kumar Diamond Exports Limited (both the Transferor Company) held on February 27, 2018 as directed by the National Company Law Tribunal (NCLT) vide Order dated January 19, 2018, the shareholders of the respective companies have approved the Scheme of Amalgamation (the Scheme). The necessary proceeding documents have been filed with NCLT as required by the Companies Act, 2013 on March 21, 2018. However, the final approval of NCLT is awaited. The effect of the Scheme on the financial statements will be reflected in the period in which the requisite approval is received and the Scheme is effective. In view of the Scheme, no provision for diminution in the value of investment in and Inter Corporate Deposit given to/ trade and other receivable from wholly owned subsidiary Company “House Full International Limited” aggregating to Rs.3,066.31 Lakhs is considered necessary.

13. PROVISION FOR DIMINUITION IN THE VALUE OF INVESTMENT

The Company has invested Rs.1,371.81 Lakhs in Renaissance Jewellery Bangladesh Private Limited (RJBPL) - wholly owned subsidiary company. The net worth of RJBPL as on March 31, 2018 is Rs.843.48 Lakhs. The Company, in principle, had decided to exit out of its operation in Bangladesh and is pursuing appropriate steps in this direction either through divestment of its stake in RJBPL or sale ofthe entire operation as slump sale. The company has taken the write down of Rs.528.33 Lakhs to the extent of the Net worth of RJBPL, being the expected realizable value.

14. RJL-EMPLOYEE WELFARE TRUST FOR INVESTMENT IN SHARES

The Company through employee welfare trust (“Trust”), offered Employee Stock Purchase Scheme (ESPS) and 720,000 numbers of equity shares were issued to the Trust in F.Y. 2008-2009 at fair value then for onward offering to the recommended employees. During the F.Y. from 2011-12 to 2015-16 the trust issued 73,624 equity shares to its employees under ESPS and in the F.Y. 2017-18, the trust further issued 4,50,000 shares to its employees. Presently the Trust holds 1,96,376 equity shares as on March 31, 2018. To the extent of the face value of the shares held by Trust, the same has been reduced from the Paid up Share capital of the Company and the balance has been reduced from Other Equity under a separate reserve. Accordingly, the income received from the Trust has been recognized directly under Other Equity of the company.

15. PREVIOUS YEAR FIGURES

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

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Mar 31, 2016

1. HEDGE

The Company has recognized exchange differences arising on translation of Forward contract by following an appropriate hedge accounting policy and applying the principles set out for hedge accounting in AS-30 "Financial Instrument: Recognition and Measurement". The Company has designated Forward contract 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, 2016, the net exchange difference gain on Forward contract and Exchange Traded Currency Futures Contracts amounting to Rs. 764.96 Lacs (PY Loss of Rs. 386.95) 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 segements.

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

5. 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)

6. 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. 374.42 Lacs (March 31, 2015: Rs. 377.14 Lacs) taken on loan from Banks under the EXIM-Gold Loan Scheme.

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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.

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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.

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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.

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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.

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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.

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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,