Note: 1 - Significant Accounting Policies:1 Company overview:
The Golkunda Diamonds & Jewellery Limited (“the Company”) is public limited company incorporated and domiciled in India and has registered office at G-30, Gems & Jewellery Complex-III, SEEPZ, Andheri (East). It is incorporated under the Indian Companies Act, 1913 and its shares are listed on the Bombay Stock Exchange Limited (BSE) in India. The company is engaged in manufacturing of Studded Jewellery & Dealing in Cut & Polished Diamonds, Precious and Semi Precious stones.
The financial statements are approved for issue by the Company's Board of Directors on 19th May, 2025.
2 Statement of Compliance :
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the Ind AS') as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (‘Act') read with the Companies (Indian Accounting Standards) Rules,2015 as amended and other relevant provisions of the Act.
The accounting policies are applied consistently to all the periods presented in the financial statements.
3 Basis of Accounting :
All financial items of Income and Expenditure having a material bearing on the financial statement are recognised on accrual basis, except income by way of dividend and expense by way of leave encashment which is accounted on cash basis.
4 Presentation of financial statements :
The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III of the Companies Act, 2013 ( the “Act”). The statement of cash flows has been prepared and presented as per the requirements of Ind AS 7 “Statement of Cash flows”. The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.
Rounding off
All amounts disclosed in the financial statements and notes have been rounded off to the nearest Lacs.
5 Sales :
Sales exclude GST, Transportation, Penalty/Late delivery charges and include Insurance, Freight, Sales Returns and Discount.
6 Use of Estimates :
The preparation of Financial Statements in conformity with the Accounting Standards generally accepted in India requires, the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of the financial statements and reported amounts of revenue and expense for the year. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.
7 Property, Plant & Equipment (PPE) :
i) All PPE are valued at cost less depreciation.The cost is inclusive of incidental expenses related to acquisition and put to use. Preoperative expenses including trial run expenses (net of revenue) are capitalised. Interest on borrowings and financing costs during the period of construction is added to cost of fixed assets.
ii) Impairement loss, if any is recognised in the year in which impairement takes place.
iii) Depreciation on PPE is provided on Straight Line Value Method at the rate and in the manner specified in Schedule II of the Companies Act, 2013.
iv) Depreciation on additions / disposals of the PPE during the year is provided on pro-rata basis according to the period during which assets are put to use.
8 Intangible Assets : Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of the asset can be measured reliably.
9 Expenditure during the Construction Period :
The expenditure incidental to the expansion / new projects are allocated to Fixed Assets in the year of commencement of the commercial production.
10 Operating cycle for current and non-current classification :
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of transaction, the Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.
11 Inventories :
Raw Materials, Stores & Spare Parts and Finished Goods are valued at lower of cost and net realisable value.
12 Cash and Bank Balances :
Cash and cash equivalent in balance sheet comprise cash at banks, cash on hand and short term deposits with original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the statement of cashflows, cash and cash equivalents consist of cash and short term deposits.
13 Revenue Recognition :a Sale of goods and services :
The Company is engaged in manufacturing of Studded Jewellery.
The Company recognises revenue from sale of products when significant risk and rewards are transferred to customer, which is usually when control of the products has transferred, when the products are delivered to the customer. Delivery occurs when the products have been shipped or delivered to the specific location as the case may be, the risks of loss has been transferred, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.
Interest income is accounted on acrual basis and Dividend income is recognised when the unconditional right to receive the income is established.
Fixed Deposit interest is accounted as per Certificate / Statement / documents issued by the respective parties inclusive of tax deducted at source.
14 Foreign Currency Transactions :
Initial recognition :
The Company's financial statements are presented in INR, which is also the Company's functional currency. Transactions in foreign currencies are recorded on initial recognition in the functional currency at the exchange rates prevailing on the date of the transaction.
Measurement at the balance sheet date :
Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.
Treatment of exchange difference :
Exchange differences that arise on settlement of monetary items are recognised as income or expenses in the period in which they arise.
15 Post-employment, long term and short term employee benefits :
Defined contribution plans :
Provident fund benefit is a defined contribution plan under which the Company pays fixed contributions into funds established under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, for the eligible employees. The Company has no legal or constructive obligations to pay further contributions after payment of the fixed contribution. The Company's contributions to defined Contributions Plans are charged to the Profit & Loss account.
Defined benefit plans :
The Company has defined Benefit Plan for post-employment benefit in the form of Gratuity for eligible employees, defined under The
Payment of Gratuity Act, 1972. The liability recognised in the financial statements in respect of gratuity is the present value of the defined benefit obligation at the reporting date, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit/obligation is calculated at or near the reporting date by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to the OCI in the year in which such gains or losses are determined.
Other long-term employee benefits :Leave Liability :
The employees of the company are entitled to leave as per the leave policy of the company. The liability on account of accumulated leave as on last day of the accounting year is not recognised.
Short-term employee benefits :
Expense in respect of any other short term benefits, other than above, is recognised on the basis of the amount paid or payable for the period during which services are rendered by the employee.
16 Employee Separation Costs :
The compensation paid to the employees under Voluntary Retirement Scheme is expensed in the year of payment.
17 Provision for Bad and Doubtful Debts / Advances :
Provision, if any, is made in accounts for bad and doubtful debts / advances which in the opinion of the management are considered doubtful of recovery.
18 Dividend distribution to Equity Shareholders :
Dividend distribution to Equity Shareholders is recognised as distribution to owners of capital in the Statement of Changes in Equity, in the period in which it is paid.
19 Deferred Tax :
Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising from temporary timing differences are recognised to the extent there is reasonable certainity that the assests can be realised in future.
20 Provisions, Contingent Liabilities and Contingent Assets :Provisions :
Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimates can be made of the amount of the obligation. The expense relating to a provision is presented in the Statement of Profit and Loss.
Contingent Liabilities :
Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by the future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resourses will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent Assets :
Contingent assets are neither recognised nor disclosed in the financial statements.
21 Rent Income / Expense :
The Company is paying/receiving the rent as per the agreement for lease executed with the respective lessee. The rent is fixed from the date of execution of lease agreements. The payment/receipt for the same is made year after year. Payments/receipts made under operating leases are recognised in profit or loss on a straight line basis over the term of the lease unless such payments/receipts are structured to increase in line with expected general inflation to compensate for the lessor's expected inflationary cost increase.
22 Statement of Cash Flows :
Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the net profit for the effects of:
i. changes during the period in inventories and operating receivables and payables transactions of a non-cash nature;
ii. non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses etc
iii. all other items are considered as either investing or financing cash flows.
23 Derivative contracts and hedge accounting :Other derivatives :
The Company uses foreign exchange forward contracts to hedge its exposure towards foreign currency. These foreign exchange forward contracts are not used for trading or speculation purposes. A derivative contract is not recognised as an asset or a liability on the commitment date. Outstanding derivative contracts as at reporting date are fair valued and recognised as financial asset/financial liability, with the resultant gain/(loss) being recognised in the statement of profit and loss under OCI.
24 Earnings per Share :
Basic Earnings per share is calculated by dividing the net profit for the period attributable to the equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings pershare, the net profit for the period attributable to the equity shareholders and the weighted average number of equity shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
25 The Ministry of Corporate Affairs (“MCA”) has notified the amendements to IndAS 116 “Leases” effective for annual periods beginning on or after April 1,2019. Ind AS 116 ‘Leases' eliminates the classification of leases as either finance leases or operating leases. All leases are required to be reported on an entity's balance sheet as assets and liabilities. Leases are capitalised by recognising the present value of the lease payments and showing them either as right of use of the leased assets or together with property, plant and equipment. If lease payments are made over a period of time financial liability representing the future obligation would be recognised.
As per Ind AS 116, the lessee needs to recognise depreciation on rights of use of assets and finance costs on lease liabilities in the statement of profit and loss. The lease payments made by the lessee under the lease arrangement will be adjusted against the lease liabilities. The Company has not adopted Ind AS 116 ‘'Lease” during the year 2024-25 and is still in the process of evaluating the impact of adoption of the same on its financial statements.
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