Reporting Entity:
Lypsa Gems & Jewellery Limited ("The Company”) is an Indian Public Company and limited by shares. Incorporated under provisions of Companies Act, 1956, the shares of the company traded on the BSE and NSE Limited. The address of the company’s registered office is # Wing A, 2nd Block, 202-302,Orchid Complex, Opp. HDFC Bank, Chhapi-Pirojpura Road, Chhapi, Vadgam, Banaskantha, Gujarat - 385210. The Company is leading Trading of Rough, Cut & Polished Diamonds and Gold Diamond Studded Jewellery. The Company sells its products in whole sale and retail in India.
1. SIGNIFICANT ACCOUNTING POLICIESa) Basis of preparation of financial statements
(i) Statement of Compliances
The standalone financial Statements are prepared on accrual basis of accounting except for the statement of cash flows and comply with the Indian Accounting Standards (Ind AS) notified under the companies (Indian Accounting Standards) Rules and Companies (Indian Accounting Standards) Amendment Rules, 2016, The companies Act 2013 (to the extent notified and applicable), other relevant provisions of the Act and Guidelines issued by the Security Exchange Board of India (SEBI).
The Company has consistently applied accounting policies to all years. Comparative Financial information has been regrouped, wherever necessary, to correspond to the figures of the current year.
(ii) Basis of Measurement:
The Financial statements have been prepared at Historical cost except the following items
• Defined benefit plan - plan assets measured at fair value.
• Certain Financial Assets and Liabilities measured at fair market value.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
(iii) Functional and Presentation Currency
The Financial statements are presented in Indian Rupees (INR), which is the company’s functional currency. All financial information presented in INR has been rounded off to the nearest in Lakhs.
b) Use of estimates
The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provisions for doubtful debts, income taxes and the useful lives of fixed assets and intangible assets.
Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made.
c) Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
d) Employee benefits
Expenses and liabilities in respect of employee benefits are recorded in accordance with the Accounting Standard 15 "Employee Benefits”.
e) Taxation
Tax expense comprises current tax (MAT), deferred tax.
Provision for current tax is ascertained on the basis of the taxable income computed in accordance with the provisions of the Income-tax Act, 1961.
Deferred Tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets relating to timing differences are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
f) Provisions and contingencies
The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may be, but probably will not, require an outflow of resources. These will not charged to the Profit & Loss Account as it is not probable that future events will confirm that an asset has been impaired or a liability has been incurred as at the balance sheet date. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made
2. Fixed Assets:
Fixed Assets are carried at cost of acquisition or construction including incidental expenses related to acquisition and installation on concerned assets, less accumulated depreciation and amortization. The actual cost capitalized includes material cost, freight, installation cost, duties and taxes and other incidental expenses incurred during the construction / installation stage.
Company has identified that there is no material impairment of assets and as such no provision is required as per Indian Accounting Standards.
3. Depreciation:
The company has provided depreciation on Straight Line Value Method over the estimated useful lives of assets at the rates specified in Part C of Schedule II of The Companies Act, 2013. Depreciation is charged on pro-rata basis from the date of capitalization. Individual asset costing Rs. 5000/- or less are fully depreciated in the year of acquisition.
4. Investments:
Long Term and Non-current investments are valued at Cost. Other investments are valued at lower of cost or fair market value as on the date of Balance Sheet. The group provides for diminution in value of investments, other than temporary in nature. During the year company has provided for diminution in value of investments of Rs. NIL P.Y Rs. NIL and the same is reduced from the value of investments as carried on in Balance Sheet.
5. Secured Loans:
The company has not availed any secured loans.
6. Cash and Bank Balances:
Fixed Deposits Receipts:
The company has total fixed deposits of Rs. NIL (P Y Rs. NIL).
Current Assets, Loans & Advances and Current Liabilities:
The Deferred premium on export of Rs. NIL (P.Y. NIL) is reflected in Balance Sheet under other current liabilities.
The company has classified Receivable on forward contract against Exports of Rs NIL (P.Y. Rs. NIL) in Balance Sheet under short term loans & advances.
7. Revenue Recognition:
(a) Sales, net of taxes are accounted for when property in the goods are transferred to the customers.
(b) Dividend is recognized, when right to receive the dividend arises.
(c) Items of Income and Expenditure such as Exchange Rate difference, Interest on FDR, Profit on Forward Contract, Forward premium, Interest paid are recognized on accrual basis, unless otherwise stated.
(d) Interest income is recognized on time proportion method.
(e) Amounts received or billed in advance of goods sold are recorded as advances from customers.
8. Preliminary Expenses:
Preliminary Expenses are NIL.
9. Foreign Currency Transactions:
Transactions in foreign currency are recognized at the prevailing exchange rates on the transaction dates. Realized gain or losses on settlement of foreign currency transactions are recognized in the Profit and Loss account. Foreign currency denominated monetary assets and liabilities at the year end are translated at the year end exchange rates and recognized in the Profit and Loss account. Non monetary foreign currency items are carried at cost.
The company enters into forward exchange contract and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising on the inception of a forward exchange contract (other than a firm commitment or highly probable forecast) or similar instrument is amortized as expense or income over the life of contract. Exchange difference on such a contract are recognized in the Profit and Loss account in the year in which the exchange rates change. Any Profit or Loss arising on cancellation of such a contract is recognized as income or expense for the year. The company uses forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions.
10. Taxation :
(i) Current Tax is determined as the amount of tax payable in respect of taxable income or the year. Deferred tax for timing differences between the income as per financial statement and income as per the Income Tax Act, 1961 is accounted for using the tax rates and laws that have been enacted or substantially enacted as of the Balance sheet date. Deferred tax assets arising from the timing differences are recognized to the extent there is virtual certainity that sufficient future taxable income will be available against which such deferred tax assets can be realized.
(ii) Good and Services Tax (GST )
Expenses and assets are recognised net of the amount of sales/ value added taxes/ goods
and services tax paid, except:
• When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable; and
• When receivables and payables are stated with the amount of tax included. The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
• The company has regularly filed the requisite returns under GST laws. There were certain differences between books and the returns filed which needs to be reconciled. However, in the opinion of the management, the differences were not material and will not have any
major effect on the profit and loss account.
11. Employee Benefits:
Employee benefits such as Provident fund, ESIC and other benefits are not provided by the company.
12. Lease Accounting:
Lease Rentals under operating leases are recognized in the Profit and Loss account on Straight Line Method. The company has not taken any equipment on lease.
13. Treatment of contingent Liability:
The company recognizes a provision where there is a present obligation as result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources is remote.
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