ಕಂಪನಿಯ ಅಕೌಂಟಿಗ್ ಪಾಲಿಸಿ Shanti Gold International Ltd.

Mar 31, 2024

B. SIGNIFICANT ACCOUNTING POLICIES

This note provides a list of significant accounting policies adopted in the preparation of the
financial statements. These policies have been consistently applied to all the years presented,
unless otherwise stated.

1) BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS

a. Accounting Convention And Method Of Accounting:

The Company has prepared these financial statements to comply, in all material respects,
with the accounting standards notified under section 133 of the Companies Act 2013, read
together with the Companies (Accounts) Rules 2016.

The Financial statements of the Company have been prepared under the historical cost
convention on an accrual basis of accounting in accordance with the Generally Accepted
Accounting Principles in India to comply with the Accounting Standards noticed under Section
133 of Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and
relevant provisions of the Companies Act, 2013 ("the 2013 Act").

b. Functional and presentation currency •

These financial statements are presented in Indian Rupees, which is the company''s functional
currency. All amounts have been rounded to nearest Lakhs, unless otherwise stated. ''

c. Basis of Measurement

These financial statements have been prepared in accordance with the generally accepted

accounting principle in india under the historical cost convention on accrual basis pursuant

to section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts)
Rules, 2014. All assets and liabilities have been classified as current or non-current as per the
Company''s operating cycle and other criteria set out in the Schedule III to the Companies Act
2013. Based on the nature of services and the time between the acquisition of assets for
processing and their realization in cash and cash equivalents, the Company has ascertained
its operating cycle as 12 months for the purpose of current - noncurrent classification of
assets and liabilities. The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year''.

2) APPLICABILITY OF ACCOUNTING STANDARDS

The company is a Medium Sized Company as per "SMC" as defined in the General Instructions
of the Companies (Accounting Standards) Rules, 2006 notified by the Central Government
under the Companies Act, 2013. Accordingly, the Company has complied with the Accounting
Standards as applicable to a Medium Sized company. Further, the company by virtue of being
a SMC, requires to comply with the recognition and measurement principles prescribed by all
accounting standards, but is given a relaxation in respect of certain disclosure related
standards and certain disclosure requirements prescribed by other accounting standards.

3) USE OF ESTIMATES

The preparation of financial statements requires management to make judgments, estimates
and assumptions that affect the application of accounting policies and the reported amounts
o assets, liabilities, income, expenses and disclosures of contingent liabilities at the date of
these financial statements. Actual results may differ from these estimates. Estimates and
underlying assumptions are reviewed at each balance sheet date. Revisions to accounting

estimates are recognised in the period in which the estimate is revised and future periods
affected.

4) PROPERTY, PLANT AND EQUIPMENT & INTANGIBLE ASSETS

a. Property, Plant & Equipment

Property, Plant and Equipment are stated at cost net of recoverable taxes based on intended
outward supplies and furtherance of business, trade discounts and rebates less accumulated
depreciation and impairment loss, if any.

The cost comprises its purchase price, borrowing cost and any other cost directly attributable

m bringing the asset to its working condition for its intended use, net charges on foreign

exchange, contracts and adjustments arising from exchange rate variations attributable the
assets.

Property, Plant and Equipment which are significant to the total cost of that item of Property
Plant and Equipment and having different useful life are accounted separately.

Subsequent expenditures to an item of asset are added to its book value only if they increase

the future benefits from the existing asset beyond its previously assessed standard of
performance.

b. Intangible assets

Identifiable intangible assets are recognized when it is probable that future economic
benefits attributed to the asset will flow to the Company and the cost of the asset can be
reliably measured.

Intangible assets are amortised over their respective estimated useful lives on a straight line
basis, from the date that they are available for use. Intangible assets are stated at cost less
accumulated amortisation and impairment.

c. Depreciation / Amortisation

Depreciation/Amortisation on Property, Plant and Equipment is provided based on Straight
Line Method considering the useful life of asset and residual value as prescribed in Schedule
II to the Companies Act, 2013

In respect of additions or extensions forming an integral part of existing asset depreciation
is provided as aforesaid over the residual life of the respective Property, Plant and
Equipment.

Depreciation on assets acquired/sold during the year is recognized on a pro-rata basis to the
statement of profit and loss till the date of acquisition / sale

d. INVESTMENT

Investments that are readily realizable and intended to be held for not more than a year from
the date on which such investments are made, are classified as current investments. All other
investments are classified as non-current investments. On initial recognition, all investments
are measured at cost. The cost comprises purchase price and directly attributable acquisition
charges such as brokerage, fees and duties.

Current investments are carried at lower of cost and fair value determined on an individual
investment basis.

Non-current investments are carried at cost, less provision for diminution in value other than
temporary. On disposal of investments, the difference between its carrying amount and net
disposal proceeds is charged or credited to the statement of profit and loss.

e. INVENTORIES

Inventories consist of raw materials, finished goods and consumables.

Inventories are valued as under:

a) Raw Material: Polished diamonds (including colour stone) are valued at lower of cost or
net realizable value.

b) Raw Material: Gold is valued at lower of cost or net realisable value.

c) Finished goods: Jewellery is valued at lower of cost or Net realisable value. The cost of
material is determined on FIFO basis. Cost includes cost of conversion and other costs

incurred in bringing the inventory to their present location and condition less input credit
availed.

d) Designs & Moulds:- Designs and Moulds is valued at lower of cost or Net Realisable value.
Cost Includes cost associated with creating and refining designs, Purchase cost, cost of
conversion and other costs.

*

7) REVENUE RECOGNITION

The Company recognises revenues on the sale of products, net of discounts and sales
incentive. When the products are delivered to the customer or when delivered to the carrier
for export sales, which is when risks and rewards of ownership pass to the dealer / customer.
Sale of products net of other indirect taxes. Revenues are recognised when collectability of
the resulting receivables is reasonably assured.

Revenue from services are recognised as and when the services are rendered as per
agreements and completion of services

Dividend from investments is recognized when the right to receive the payment is established
and when no Significant uncertainty as to measurability or collectability exists.

Interest income is recognized on the time basis determined by the amount outstanding and
the rate applicable and where no significant uncertainty as to measurability or collectability
exists.

8) EMPLOYEE BENEFITS

Liability in respect of employee benefits is provided for and is charged to profit and loss
account as follows:

(i) Short-term employee benefits:- All employee benefits payable wholly within twelve months
of rendering the services are classified as short-term employee benefits. These benefits include
salaries and wages, bonus, ex-gratia and compensated absences such as paid annual leave. The
undiscounted amount of short-term employee benefits expected to be paid in exchange for the
services rendered by employees is charged to the Statement of profit and loss in the period in
which such services are rendered.

(ii) Post-employment benefits:-

(a) Defined contribution plan: A defined contribution plan is a post-employment benefit plan
under which the company pays specified contributions to a separate entity. The Company
makes specified monthly contributions towards Provident Fund. The Company''s
contributions to Employees Provident Fund are charged to statement of profit and loss
every year. Provision for gratuity is provided based on Actuarial Valuation made covering
at the year ended 31 March 2024, 31^st March 2023 Short Term Employee Benefits like
leave benefit, if any, are paid along with salary and wages on a month to month basis,
bonus to employees are charged to profit and loss account on the basis of actual payment
on year basis.
a &

(b) Defined Benefit Plan
i) Gratuity

The present value of gratuity obligations is/ are determined based on actuarial
valuations for all qualifying employees except directors. An actuarial valuation
involves making various assumptions that may differ from actual developments in
• the future. These include the determination of the discount rate, future salary
. increases, and attrition and mortality rates. Due to the complexities involved in

the valuation and its long-term nature, these liabilities are highly sensitive to
changes in these assumptions. All assumptions are reviewed at each reporting
date.

The mortality rate is based on publicly available mortality tables. Those mortality
tables tend to change only at interval in response to demographic changes.
Further salary increases and gratuity increases are based on expected future
inflation rates.

ii) Compensated Absences

The Company does not have accrued/carry forward compensated absences policy.

9) BORROWING COST

Borrowing costs that are attributable to the acquisition and construction of the asset which
takes substantial period of time to get ready for its intended use are capitalized as part of cost
of such asset.

All other borrowing costs are charged to Statement of Profit and Loss in the period in which
they are incurred or related.

10) ACCOUNTING FOR TAXES

Tax expense comprises current and deferred taxes.

Current tax is the amount of tax payable on the taxable income for the year as determined in
accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised, on timing differences, being the difference between taxable
incomes and accounting income that originate in one period and are capable of reversal in
one or more subsequent periods.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are
recognised if there is virtual certainty that there will be sufficient future taxable income
available to realise such losses. Other deferred tax assets are recognised if there is reasonable
certainty that there will be sufficient future taxable income to realize such assets.

Deferred tax assets and liabilities are measured based on the tax rates that are expected to
apply in the period when asset is realised or the liability is settled, based on tax rates and tax
laws that have been enacted or substantively enacted by the balance sheet date. •