COMPANY OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES
A.1 Company Overview
Gemstone Investments Limited is a listed company, listed on BSE Limited (BSE), domiciled in India, incorporated
under the provision of the Companies Act. The Company is engaged in the business of financing activities.
A. 2 The financial statements are approved for issue by the Company's Board of Directors on 28th May 2024.
B. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
These financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as
notified by the Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 ('Act') (to the extent
notified) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian
Accounting Standards) Amendment Rules, 2016. Accounting policies have been consistently applied except where a
newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change
in the accounting policy hereto in use.
(1) Historical Cost Convention
The financial statements have been prepared on historical cost basis, except for the following:
a) certain financial assets and liabilities that have been measured at fair value.
b) assets held for sale - measured at lower of carrying amount or fair value less cost to sell.
c) defined benefit plans - plan assets measured at fair value.
(2) Current and Non-Current Classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
An asset is classified as current when:
a) It is expected to be realised or intended to sold or consumed in normal operating cycle.
b) It is held primarily for the purpose of trading
c) It is expected to be realised within twelve months after the reporting period, or
d) It is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when:
a) It is expected to be settled in normal operating cycle
b) It is held primarily for the purpose of trading
c) It is due to be settled within twelve months after the reporting period, or
d) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.
All other liabilities are classified as non-current.
Operating cycle for the business activities of the company covers the duration of the specific project / contract / service
and extends upto the realisation of receivables within the agreed credit period normally applicable to the respective
project
C. 1 REVENUE RECOGNITION
Revenue is recognised as and when the significant risks and rewards are transferred to respective buyer.
a) Revenue from Financing activities / Interest Income
Revenue is recognised as and when the significant risks and rewards are transferred to respective buyer.
b) Dividend Income
Dividend income is recognized when the right to receive the payment is established, it is probable that the economic
benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured
reliably.
c) Others
Revenues / Income and Costs/ Expenditure are generally accounted on accrual, as they are earned or incurred
C.2 PROPERTY PLANT AND EQUIPMENT AND DEPRECIATION / AMMORTISATION
a) Tangible Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation and accumulated
impairment losses, if any.
b) Depreciation is provided on the straight line method on the basis of estimated useful life of the asset in the manner
specified in Schedule II to the Companies Act, 2013. Depreciation on additions to assets or on sale/disposal of assets
is calculated pro-rata from the month of such addition, or upto the month of such sale/disposal, as the case may be.
Asset Category Estimated useful life (in years)
Furniture and Fixture 10
Vehicles 8
Office Equipment 5
Computer server and network system 6
Computer desktops and laptops 3
C.3 INTANGIBLE ASSETS AND AMORTIZATION
Acquired computer software’s are classified as intangible assets and are stated at cost less accumulated amortisation.
These are being amortised over the estimated useful life of five years, as determined by the management.
C.4 INVESTMENTS
Investments are classified into Current and Non-Current / Long Term Investments. Current investments are stated at
lower of cost and fair value. Long term investments are stated at cost. A provision for diminution is made to recognize
decline, other than temporary, in the value of long-term investments.
C.5 FINANCIAL INSTRUMENTS
C.5.1 Initial recognition
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions
of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition except for trade
receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss are added
to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade
date.
C.5.2 Subsequent measurement
a. Non-derivative financial instruments
i. Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is
to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
ii. Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held with in a
business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding. Further, in cases where the Company has made an
irrevocable election based on its business model, for its investments which are classified as equity instruments, the
subsequent changes in fair value are recognized in other comprehensive income.
iii. Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or
loss.
iv. Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for
contingent consideration recognized in a business combination which is subsequently measured at fair value through
profit and loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying
amounts approximate fair value due to the short maturity of these instruments
V. Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that
are based on market conditions and risks existing at each reporting date. The methods used to determine fair value
include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair
value result in general approximation of value and such value may never actually be realized.
C.5.3 De- recognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset
expire or it transfers the financial asset and the transfer qualifies for de-recognition under Ind AS 109. A financial
liability (or a part of a financial liability) is derecognized from the Company's balance sheet when the obligation
specified in the contract is discharged or cancelled or expires.
C.5.4 Impairment
a. Financial Assets
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which
are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component
is measured at an amount equal to life time ECL. For all other financial assets, expected credit losses are measured at
an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition
in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required
to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an
impairment gain or loss in the statement of profit or loss.
b. Non- Financial Assets
Intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual
asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In
such cases, the recoverable amount is determined for the CGU to which the asset belongs.
C.6 TAXATION
i. Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from 'profit before tax' as
reported in the financial statement of profit and loss because of items of income or expense that are taxable or
deductible in other years and items that are never taxable or deductible. The Company's current tax is calculated using
rates that have been enacted or substantively enacted by the end of the reporting period. In case the Company is liable
to pay income tax u/s 115JB of Income Tax Act, 1961 (i.e. MAT), the amount of tax paid in excess of normal income
tax is recognized as an asset (MAT Credit entitlement) only if there is convincing evidence for realization of such
asset during the specified period. MAT credit entitlement is reviewed at each Balance Sheet date.
ii. Deferred Tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities
are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all
deductible temporary differences to the extent that it is probable that taxable profits will be available against which
those deductible temporary differences can be utilized. The carrying amount of deferred tax asset is reviewed at the
end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will
be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted
by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences
that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or
settle the carrying amount of its assets and liabilities.
iii. Current and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other
comprehensive income or directly in equity respectively.
C.7 Inventories
The cost of inventories comprises all cost of purchase, cost of conversion and other costs incurred in bringing the
inventories to their present location and condition. Inventories are valued at cost or net realizable value, whichever is
lower on the basis of first in first out method or specific identification, as the case may be.
C.8 EMPLOYEE BENEFITS
Post-Employment Benefits
Defined benefit plans:
Short-term employee benefits:
Expense in respect of other short term benefits is recognised on the basis of the amount paid or payable for the period
during which services are rendered by the employee.
Other Long Term employee Benefits:
Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance
sheet date is recognised on the basis of discounted value of estimated amount required to be paid or estimated value
of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or
expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation
performed by an independent actuary using the projected unit credit method. Actuarial gains and losses arising from
past experience and changes in actuarial assumptions are charged to statement of profit and loss in the year in which
such gains or losses are determined.
C.9 BORROWINGS AND BORROWING COSTS
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount
is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some
or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent
there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a
prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled
or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred
to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss as other gains/(losses).
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to
extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is
measured as the difference between the carrying amount of the financial liability and the fair value of the equity
instruments issued.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting period.
C.10 CASH FLOW STATEMENT
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and
item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing
and financing activities of the company are segregated.
|