3. Material accounting policies
3.01 Overall consideration
These standalone financial statements have been prepared on going concern basis using the material
accounting policies and measurement bases summarised below.
These accounting policies have been used consistently throughout all periods presented in the
Standalone Financial Statements, unless otherwise stated.
3.02 Statement of compliance
These standalone financial statements have been prepared in accordance with Indian Accounting
Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules, 2015 notified
under Section 133 of the Companies Act, 2013 (‘the Act’) and other relevant provisions of the Act
(as amended).
The standalone financial statements were authorised for issue by the Company’s Board of Directors on
29 May 2025. Revision, if any, to the financial statements is permitted by the Board of Directors after
obtaining necessary approvals or at the instance of regulatory authorities as per provisions of the Act.
3.03 Functional and presentation currency
These standalone financial statements are presented in Indian rupee (?), which is the Company’s
functional currency. All amounts have been rounded off to the nearest million, unless otherwise stated.
3.05 Measurement of fair values
Certain accounting policies and disclosures of the Company require the measurement of fair values,
for both financial and non-financial assets and liabilities.
The Company has an established control framework with respect to the measurement of fair values.
The management has overall responsibility for overseeing all significant fair value measurements and it
regularly reviews significant unobservable inputs and valuation adjustments. If third party information,
such as broker quotes or pricing services, is used to measure fair values, then their valuation team
assesses the evidence obtained from the third parties to support the conclusion that these valuations
meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations
should be classified. Fair values are categorised into different levels in a fair value hierarchy based on
the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or a liability, the Company uses observable market data as
far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different
levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in
the same level of the fair value hierarchy as the lowest level input that is significant to the entire
measurement. The Company recognises transfers between levels of the fair value hierarchy at the
end of the reporting period during which the change has occurred. Further information about the
assumptions made in measuring fair values is included in note 48.
Estimates and judgements are continuously evaluated. They are based on historical experience and
other factors including expectation of future events that may have a financial impact on the Company
and that are believed to be reasonable under the circumstances.
3.06 Operating cycle
Based on the nature of operations, the Company has ascertained its operating cycle for the purpose
of current and non-current classification of assets and liabilities as 12 months. Operating cycle is the
time between the purchase of raw materials for processing or purchase of stock-in-trade and their
realisation in cash or cash equivalents.
3.07 Property, plant and equipment and capital work-in-progress
Recognition and measurement
Property, plant and equipment are carried at cost of acquisition or construction less accumulated
depreciation and impairment losses, if any. The cost of an item of property, plant and equipment
comprises its purchase price and other non-refundable taxes or levies and any directly attributable
cost of bringing the asset to its working condition for its intended use; any trade discounts and
rebates are deducted in arriving at the purchase price.
Depreciation
Depreciation in respect of all the assets is provided on written down value method over their useful lives,
as estimated by the management. Useful lives so estimated are in line with the useful lives indicated
by Schedule II of the Act except for lease hold building and lease hold improvements which have been
depreciated over the useful lives or on the period of underlying lease agreement whichever is lower.
Depreciation is charged on a pro-rata basis for assets purchased/sold during the year.
Depreciation method, useful lives and residual values are reviewed at each financial year-end and
adjusted if appropriate. Based on the management evaluation the useful lives as given below best
represent the period over which management expects to use these assets.
Leasehold improvements are amortised over their useful life or lease term, whichever is lower.
Capital work-in-progress
Expenditure incurred during the period of construction, including all direct and indirect expenses,
incidental and related to construction, is carried forward and on completion, the costs are allocated to
the respective property, plant and equipment. Capital work-in-progress also includes assets pending
installation and not currently available for intended use.
3.08 Intangible assets
Recognition and measurement
Intangible assets that are acquired by the Company are measured initially at cost. After initial
recognition, an intangible asset is carried at its cost less accumulated amortisation and accumulated
impairment loss, if any.
Subsequent expenditure
Subsequent expenditures related to an item of intangible assets are added to its book value only if it
is probable that future economic benefits associated with the item will flow to the enterprise and the
cost of the item can be measured reliably.
Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values
over their estimated useful lives using the straight line method, and is included in depreciation and
amortisation in Statement of Profit and Loss.
Amortisation method, useful lives and residual values are reviewed at each financial year-end and
adjusted if appropriate.
3.09 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Initial recognition and measurement
The Company recognises financial assets and liabilities when it becomes a party to the contractual
provisions of the instrument.
Financial assets are recognised 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 that are not at fair value through profit or loss (‘FVTPL’) are
added to the fair value on initial recognition.
Financial liabilities are classified as measured at amortised cost or (‘FVTPL’). The fair value of a
financial liability at initial recognition is normally the transaction price. A financial liability is classified
as at FVTPL if it is classified as held for trading, it is a derivative or it is designated as such on
initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses,
including any interest expense, are recognised in profit or loss.
The classification depends on the Company’s business model for managing the financial assets and
the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either
be recorded in the Statement of Profit and Loss or Other Comprehensive Income. For investments
in equity instruments, this will depend on whether the Company has made an irrevocable election
at the time of initial recognition to account for the equity investment at fair value through Other
Comprehensive Income (‘FVOCI’).
In accordance with Ind AS 113 ‘Fair Value Measurement’, the fair value of a financial liability with a
demand feature is not less than the amount payable on demand, discounted from the first date that
the amount could be required to be paid.
The Company’s financial liabilities include trade payables, other payables and loans and borrowings
including bank overdrafts.
(i) Non-derivative financial asset
Subsequent measurement
Financial assets at amortised cost
A ‘financial asset’ is measured at the amortised cost if both the following conditions are met:
• The asset is held within a business model whose objective is to hold assets for collecting
contractual cash flows; and
• Contractual terms of the asset give rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost
using the effective interest rate (EIR) method.
Financial assets are measured at ‘Fair value through other comprehensive income’ (FVOCI) if these
financial assets are held within a business model whose objective is to hold these assets in order
to collect contractual cash flows or to sell these 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. Movements in the carrying amounts are taken
through OCI, except for the recognition of impairment gains or losses and interest income and
foreign exchange gains and losses, which are recognised in profit and loss. When the financial
asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from
equity to profit or loss and recognised in other gains/(losses). Interest income from these financial
assets are included in other income using the effective interest rate method.
Financial asset not measured at amortised cost or at fair value through other comprehensive
income is carried at ‘Fair value through the statement of profit and loss’ (FVPL).
Investments in equity instruments of subsidiaries
These are measured at cost in accordance with Ind AS 27 ‘Separate Financial Statements’.
Investments in equity instruments of others
These are measured at fair value through other comprehensive income (‘FVOCI’)
De-recognition of financial assets
A financial asset is de-recognised when the contractual rights to receive cash flows from the asset
have expired or the Company has transferred its rights to receive cash flows from the asset.
(ii) Non-derivative financial liabilities
Subsequent measurement
Subsequent to initial recognition, all non-derivative financial liabilities are measured at amortised
cost using the effective interest method.
De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the de-recognition of the original liability and the
recognition of a new liability. The difference in the respective carrying amounts is recognised in
the Statement of Profit and Loss.
(iii) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance
sheet if there is a currently enforceable legal right to offset the recognised amounts and there is
an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
The legally enforceable right must not be contingent on future events and must be enforceable
in the normal course of business and in the event of default, insolvency or bankruptcy of the
Company or the counterparty.
(iv) Derivative financial instruments and hedge accounting
The Company holds derivative financial instruments to hedge its exposures towards fluctuation
in gold prices.
Fair value hedge
The Company designates non-derivative financial liabilities as hedging instruments to mitigate
the risk of change in fair value of hedged item due to movement in commodity prices. Changes
in the fair value of hedging instruments and hedged items that are designated and qualify as fair
value hedges are recorded in the Statement of Profit and Loss with an adjustment to the carrying
value of the hedged item. The Company has designated the borrowings pertaining to gold taken
on loan from banks (‘unfixed gold’) as a fair value hedge to the corresponding gold inventory
purchased on loan.
3.10 Inventories
Raw material: Lower of cost or net realisable value. Cost is determined on weighted average basis.
Cost of raw material comprises of cost of purchase, hedging gain or loss and other costs incurred in
bringing the inventory to their present condition and location.
Finished goods: Lower of cost or net realisable value. Cost is determined on weight average basis,
includes direct material and labour expenses and appropriate proportion of manufacturing overheads.
Stock-in-trade: Lower of cost or net realisable value. Cost is determined on weight average basis
and comprises of cost of purchase and other costs incurred in bringing the inventory to their present
condition and location.
Net realisable value is the estimated selling price in the ordinary course of business less estimated
costs of completion and estimated costs necessary to make the sale.
3.11 Employee benefits
The Company’s obligations towards various employee benefits have been recognised as follows:
Post employment benefits
(i) Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided. A liability is recognised for the amount expected to
be paid e.g., under short-term cash bonus, if the Company has a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee, and the
amount of obligation can be estimated reliably.
(ii) Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed
contributions into a separate entity and will have no legal or constructive obligation to pay further
amounts. The Company makes specified monthly contributions for employee provident fund
to Government administered provident fund scheme, which are defined contribution plans.
Obligations for contributions to defined contribution plans are recognised as an employee benefit
expense in the Statement of Profit and Loss in the years during which the related services are
rendered by employees.
Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in
future payments is available.
3.12 Revenue recognition
Revenue from sale of goods and rendering of services
Revenue from contracts with customers (including franchisees) includes revenue for sale of goods
and provision of services. Revenue from contracts with customers is recognised when control of the
goods or services are transferred to the customer at an amount that reflects the consideration to
which the Company expects to be entitled in exchange for those goods or services. The Company
determines at contract inception whether each performance obligation will be satisfied (i.e. control
will be transferred) over time or at a point in time.
Revenue from contract with customers is recognised when the Company satisfies performance
obligation by transferring promised goods and services to the customer. Performance obligations
may be satisfied at a point of time or over a period of time. Performance obligations satisfied over
a period of time are recognised as per the term of relevant contractual agreements/ arrangements.
Performance obligations are said to be satisfied at a point of time when the customer obtains controls
of the asset.
Revenue is recognised based on the price specified in the contract, net of the estimated line discounts.
Accumulated experience is used to estimate and provide for the discounts, using the expected value
method, and revenue is only recognised to the extent that it is highly probable that a significant
reversal will not occur. A contract liability is recognised for expected volume discounts payable to
customers in relation to sales made until the end of the reporting period.
A receivable is recognised when the goods are delivered as this is the point in time that the
consideration is unconditional because only the passage of time is required before the payment is
due, which are otherwise recorded as contract assets.
No significant element of financing is deemed present as the sales are made with a credit term only
given to franchisee customers to an extent of 4 months, which is consistent with market practice.
The Company’s obligation to replace/ repair jewelleries under the standard terms is recognised as
contract asset, refer note 13.
Upfront/one time fees/charges received from franchises at the time of entering into such agreement/
contract is recognised as and when earned.
Customer loyalty programme
The Company has a customer loyalty programme for its customers. The Company grants loyalty
points to customers as part of a sales transaction and customer referrals which allows them to
accumulate and redeem those credit points and adjust them in future. The Company allocates a
portion of the consideration received to loyalty points. This allocation is based on the relative stand¬
alone selling prices. The amount allocated to the loyalty programme is deferred, and is recognised
as revenue when loyalty points are redeemed or the likelihood of the customer redeeming the loyalty
points becomes remote.
3.13 Leases
Company as a lessee - Right of use assets and lease liabilities
A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the
underlying asset) for a period of time in exchange for consideration’.
Classification of leases
The Company enters into leasing arrangements for various assets. The assessment of the lease is
based on several factors, including, but not limited to, transfer of ownership of leased asset at end of
lease term, lessee’s option to extend/purchase etc.
Recognition and initial measurement of right of use assets
At lease commencement date, the Company recognises a right-of-use asset and a lease liability
on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial
measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of
any costs to dismantle and remove the asset at the end of the lease (if any), and any lease payments
made in advance of the lease commencement date (net of any incentives received).
Subsequent measurement of right of use assets
The Company depreciates the right-of-use assets on a straight-line basis from the lease
commencement date to the earlier of the end of the useful life of the right-of-use asset or the end
of the lease term. The Company also assesses the right-of-use asset for impairment when such
indicators exist.
Lease liabilities
At lease commencement date, the Company measures the lease liability at the present value of the
lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that
rate is readily available or the Company’s incremental borrowing rate. Lease payments included in
the measurement of the lease liability are made up of fixed payments (including in substance fixed
payments) and variable payments based on an index or rate. Subsequent to initial measurement,
the liability will be reduced for payments made and increased for interest. It is re-measured to
reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is re-measured, the corresponding adjustment is reflected in the right-of-
use asset.
The Company has elected to account for short-term leases using the practical expedients. Instead of
recognising a right-of-use asset and lease liability, the payments in relation to these short-term leases
are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the
lease term.
Further, the Company has also elected to apply another practical expedient whereby it has assessed
all the rent concessions occurring as a direct consequence of the COVID-19 pandemic, basis the
following conditions prescribed under the standard:
- the change in lease payments results in revised consideration for the lease that is substantially the
same as, or less than, the consideration for the lease immediately preceding the change;
- any reduction in lease payments affects only payments originally due on or before the 30 June
2022;and
- there is no substantive change to other terms and conditions of the lease.
If all the rent concessions meet the above conditions, then, the related rent concession has been
recognised in the Statement of Profit and Loss.
3.14 Borrowing cost
Borrowing cost includes interest expense as per effective interest rate (EIR). Borrowing costs directly
attributable to the acquisition, construction or production of a qualifying asset are capitalized during the
period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying
assets are assets that necessarily take a substantial period of time to get ready for its intended use or
sale. All other borrowing costs are expensed in the year they occur.
3.15 Taxes
Tax expense comprises current and deferred tax. Current and deferred tax is recognised in the
Statement of Profit and Loss except to the extent that it relates to items recognised directly in equity
or Other Comprehensive Income (‘OCI’).
The current income-tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period where the Company operates and generates taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation and considers whether it is probable that
a taxation authority will accept an uncertain tax treatment. The Company measures its tax balances
either based on the most likely amount or the expected value, depending on which method provides
a better prediction of the resolution of the uncertainty.
Deferred tax is provided in full, on temporary differences arising between the tax base of assets and
liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax
rates (and laws) that have been enacted or substantially enacted by the end of the reporting period
and are expected to apply when the related deferred income-tax asset is realised or the deferred
tax liability is settled. Deferred tax assets are recognised for all deductible temporary differences and
unused tax losses only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset
and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
3.16 Cash and cash equivalents
Cash and cash equivalents include cash and cash-on-deposit with banks. The Company considers
all highly liquid investments with a remaining maturity at the date of purchase of three months or less
and that are readily convertible to known amounts of cash to be cash equivalents.
3.17 Cash flow statement
Cash flows are reported using the indirect method, whereby profit for the year 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.
3.18 Earnings per equity share
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to
equity shareholders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable
to equity shareholders and the weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
3.19 Operating segment
An operating segment is a component of the Company that engages in business activities from which
it may earn revenues and incur expenses, including revenues and expenses that relate to transactions
with any of the Company’s other components, and for which discrete financial information is available.
All operating segments’ operating results are reviewed regularly by the Chief Operating Decision
Maker (CODM) to make decisions about resources to be allocated to the segments and assess their
performance. Based on such assessment, the Company currently has only one operating segment and
two geographical segments viz. Domestic Market and International Market.
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