2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Use of estimates
Preparation of these financial statements in accordance with Ind AS requires management to make
judgments on the basis of certain estimates and assumptions. In addition, the application of accounting
policies requires management judgment. Estimates are based on the managements view on past events
and future development and strategies. Management reviews the estimates and assumptions on a
continuous basis, by reference to past experiences and other factors that can reasonably be used to
assess the book values of assets and liabilities.
b. Presentation of true and fair view
These financial Statements have been prepared by applying Ind AS principles and necessary disclosures
have been made which present a true and fair view of the financial position, financial performance and
cash flows of the Company.
c. Going concern
These financial statements have been prepared on a going concern basis and it is assumed that the
company will continue in operation in the foreseeable future and neither there is an intention nor need to
materially curtail the sale of operations.
d. Accrual basis
These financial statements, except for cash flow information, have been prepared using the accrual basis
of accounting
e. Materiality
Each material class of similar items has been presented separately in these financial Statements.
f. Basis of Measurement
These financial statements have been prepared on an accrual basis, except for certain properties and
financial instruments that have been measured at fair values or revalued amounts as required by the
relevant Ind AS.
g. Offsetting
In preparation of these financial Statements, the Company has not offset assets and liabilities or income
and expenses, unless required or permitted by Ind AS.
h. Functional and Presentation Currency
Ind AS 21 requires that functional currency and presentation currency is determined. Functional currency
is the currency of the primary economic environment in which the entity operates. Presentation currency
is the currency in which the financial statements are presented.
These financial statements are presented in Indian Rupee, which is the functional currency and
presentation currency of the Company.
i. Foreign Currency Transactions
All foreign currency transactions are expressed in the functional currency using the exchange rate at the
transaction date.
Foreign currency balances representing cash or amounts to be received or paid in cash (monetary items)
are re-translated at the end of the year using the exchange rate on that date. Exchange differences on
such monetary items are recognized as income or expense for the year.
Non-monetary balances that are not re measured at fair value and are denominated in a foreign currency
are expressed in the functional currency using the exchange rate at the transaction date. Where a non¬
monetary item is re measured at fair value in the financial statements, the exchange rate at the date when
fair value was determined is used.
j. Tangible fixed assets (PPE)
Property, plant and equipment (PPE) is recognized when the cost of an asset can be reliably measured
and it is probable that the entity will obtain future economic benefits from the asset.
PPE is measured initially at cost. Cost includes the fair value of the consideration given to acquire the
asset (net of discounts and rebates) and any directly attributable cost of bringing the asset to working
condition for its intended use (inclusive of import duties and non-refundable purchase taxes).
k. Depreciation on tangible fixed assets
The depreciable amount of PPE (being the gross carrying value less the estimated residual value) is
depreciated over its useful life as prescribed in Schedule II to the companies Act, 2013 on straight line
basis.
l. Borrowings costs :-
Interest & commitment charges on borrowings granted by the banks and interest on loans obtained from
other parties are recognized in the Statement of Profit & Loss. No amounts of borrowing costs have been
capitalized during the year.
m. Inventories
Stock of Rough & cut and polish diamonds have been valued at cost or net realizable value, whichever
is lower where stock is identified otherwise where stock is mixed it have been valued at technically
evaluated cost or net realizable value, whichever is lower.
Stock of Gold, silver, alloy and consumables were valued at cost. There is no stock laying in Work in
Process at the end of the year. As the physical verification, examination and valuation of diamonds
involving visual appraisal etc. are technical in nature, the same are fully relied upon by us on the
management. According to the management, except where the stock is valued at actual cost the values
assigned are the fairest possible approximations to the cost incurred or its net realizable value. The stock
of Cut and Polished Diamonds are valued using Weighted Average method.
n. Revenue recognition
Revenue from sale of goods is recognized when the significant risks and rewards of ownership have been
transferred to the buyer, recovery of the consideration is probable, the associated cost can be estimated
reliably, there is no continuing effective control or managerial involvement with the goods, and the amount
of revenue can be measured reliably.
Revenue from sale of goods is measured at the fair value of the consideration received or receivable,
taking into account contractually defined terms of payment and excluding taxes or duties collected on
behalf of the government. Any discount or rebate in any form, including cash discounts is recorded as a
reduction from revenues.
Revenue from rendering of services is recognized when the performance of agreed contractual task has
been completed.
O. Government Grants
Grants from government are recognized at their fair value where reasonable assurance that the grant will
be receive, and the company will comply with all attached conditions.
Government grants relating to the purchase of property, plant and equipment are included in non-current
liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected
lives of the related assets and presented within other income.
p. Retirement and other employee benefits
a Short-Term Employee Benefits
Short term employee benefits given or promised by the Company are recognized in the period
during which the service has been rendered.
q. Taxes on income
Current tax expense is based on the taxable and deductible amounts to be used for the computation of
the taxable income for the current year. A liability is recognized in the balance sheet in respect of current
tax expense for the current and prior periods to the extent unpaid. An asset is recognized if current tax
has been overpaid.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected
to be paid to (recovered from) the taxation authorities, using the tax rates and tax laws that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is provided in full for all temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
when the asset is realized or the liability is settled based on tax rates (and tax laws) that have been
enacted or substantively enacted by the balance sheet date.
A deferred tax asset is recognized for deductible temporary differences to the extent that it is probable
that taxable profit will be available against which the deductible temporary difference can be utilized.
Current and deferred tax is recognized in profit or loss for the period, unless the tax arises from a
business combination or a transaction or event that is recognized outside profit or loss, either in other
comprehensive income or directly in equity in the same or different period.
r. Segment reporting: -
Identification of segments
1- Details of Primary Segment are as follows:
Details as per Product and Service Wise are as follows:
s. Earnings per share
Basic EPS is calculated by dividing the profit or loss for the period attributable to the equity holders of the
parent company by the weighted average number of ordinary shares outstanding (including adjustments
for bonus and rights issues).
Diluted EPS is calculated by adjusting the profit or loss and the weighted average number of ordinary
shares by taking into account the conversion of any dilutive potential ordinary shares.
Basic and diluted EPS are presented in the statement of profit and loss for each class of ordinary shares
in accordance with Ind AS 33.
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