The cost of Property, plant and equipment
comprises its purchase price/acquisition cost,
net of any trade discounts and rebates, any
import duties and other taxes (other than those
subsequently recoverable from tax authorities),
any directly attributable expenditure on making
the asset ready for its intended use. Subsequent
expenditure on property, plant and equipment
after its purchase/completion is capitalized only
if it is probable that future economic benefit
associated with the expenditure will flow to the
company.
Property, plant and equipment not ready for
the intended use on the date of balance sheet
are disclosed as "Capital work-in-progress".
Capital work in progress is stated at cost, net of
accumulated impairment loss, if any.
If significant parts of an item of property, plant
and equipment have different lives, then they
are accounted for as separate items (major
components) of property, plant and equipment.
Gains or losses arising from disposal or
retirement of property, plant and equipment are
recognised in the Statement of Profit and Loss.
Depreciation on PPE has been provided on the
basis using straight line method over the useful
life of the assets, as prescribed in schedule
II to the Company act 2013. Freehold land is
not depreciated. Leasehold Improvement are
amortised over primary period of lease.
2.2 Material accounting policies
a) Property, plant and Equipment
Property, plant and equipment are carried at cost
less accumulated depreciation and impairment
losses , if any.
Depreciation method, useful lives and residual
values are reviewed at each financial year end
and adjusted, if appropriate.
Depreciation for the year is recognised in the
Statement of Profit and Loss.
b) Intangible assets
Intangible assets are recognised only when it
is probable that the future economic benefits
that are attributable to the assets will flow to
the Company and the cost of such assets can be
measured reliably. Intangible assets are stated
at cost less accumulated amortisation and
impairment loss, if any. All costs relating to the
acquisition are capitalised.
Intangible assets are amortised in the Statement
of Profit and Loss over their estimated useful
lives, from the date that they are available for use
based on the expected pattern of consumption
of economic benefits of the asset.
The Company's intangible assets comprise of
Computer software which are being amortised
on a straight line basis over their estimated
useful life of five years. Amortisation method and
useful lives are reviewed at each reporting date.
If the useful life of an asset is estimated to be
significantly different from previous estimates,
the amortisation period is changed accordingly.
If there has been a significant change in the
expected pattern of economic benefits from the
asset, the amortisation method is changed to
reflect the changed pattern.
c) Impairment of non financial assets
Assessment for impairment is done at each
balance sheet date as to whether there is
any indication that a non-financial asset may
be impaired. For the purpose of assessing
impairment, the smallest identifiable Company
of assets that generates cash inflows from
continuing use that are largely independent of
the cash inflows from other assets or Company's
of assets is considered as a cash generating unit.
If any indication of impairment exists, an estimate
of the recoverable amount of the individual
asset/cash generating unit is made. Asset/cash
generating unit whose carrying value exceeds
their recoverable amount are written down to
the recoverable amount by recognising the
impairment loss as an expense in the Statement
of profit and loss. Recoverable amount is higher
of an asset's or cash generating unit's fair value
less cost of disposal and its value in use. Value in
use is the present value of estimated future cash
flows expected to arise from the continuing use
of an asset or cash generating unit and from its
disposal at the end of its useful life.
For assets excluding goodwill, an assessment
is made at each reporting date to determine
whether there is an indication that previously
recognised impairment losses no longer exist
or have decreased. If such indication exists,
the Company estimates the asset's or CGU's
recoverable amount. A previously recognised
impairment loss is reversed only if there has been
a change in the assumptions used to determine
the asset's recoverable amount since the last
impairment loss was recognised. The reversal is
limited so that the carrying amount of the asset
does not exceed its recoverable amount, nor
exceed the carrying amount that would have
been determined, net of depreciation, had no
impairment loss been recognised for the asset
in prior years. Such reversal is recognised in the
statement of profit and loss unless the asset is
carried at a revalued amount, in which case, the
reversal is treated as a revaluation increase.
d) Investments Property
Investment property is property held either to
earn rental income or for capital appreciation or
for both, but not for sale in the ordinary course
of business, use in the production or supply of
goods or services or for administrative purposes.
Upon initial recognition, an investment property
is measured at cost. Subsequent to initial
recognition, investment property is measured
at cost less accumulated depreciation and
accumulated impairment losses, if any.
The Company depreciates investment properties
over a period of 30 years on a straight-line basis
over its estimated useful life.
Any gain or loss on disposal of an investment
property is recognised in statement of profit and
loss.
The fair values of investment property is disclosed
in the notes. Fair values is determined by an
independent valuer who holds a recognised
and relevant professional qualification and has
recent experience in the location and category
of the investment property being valued.
e) Inventories
Inventories which comprise raw materials,
finished goods, stock-in-trade and packing
materials are carried at the lower of cost or net
realizable value. Cost is determined on weighted
average basis.
Cost of inventories comprises all costs of
purchase and, other duties and taxes (other
than those subsequently recoverable from tax
authorities), costs of conversion and all other
costs incurred in bringing the inventory to
their present location and condition. In respect
of purchase of goods at prices that are yet to
be fixed at the year end, adjustments to the
provisional amounts are recognised based on
the year end closing gold rate.
Diamond finished jewellery is valued at specific
cost.
Net realisable value is the estimated selling
price in the ordinary course of business, less the
estimated costs of completion and the estimated
costs necessary to make the sale. Raw materials
and other supplies held for use in the production
of finished products are not written down below
cost except in cases where material prices have
declined and it is estimated that the cost of the
finished products will exceed their net realisable
value.
f) Borrowing Costs
Borrowing costs consist of interest and other
costs (including exchange differences to the
extent regarded as an adjustment to the interest
costs) incurred in connection with the borrowing
of funds.
Borrowing costs directly attributable to the
acquisition or construction of an asset, as defined
in Ind AS 23, that necessarily takes a substantial
period of time to get ready for its intended use
are capitalized as a part of the cost of such assets.
All other borrowing costs are recognized as an
expense in the period in which they are incurred.
g) Revenue from contract with customer
"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 has generally
concluded that it is the principal in its revenue
arrangements because it typically controls the
goods or services before transferring them to
the customer and sales under sale or return basis
arrangements.
Revenue towards satisfaction of performance
obligation is measured at the amount of
transaction price (net variable consideration)
allocated to that performance obligation. The
transaction price of goods sold and services
rendered is net of variable consideration on
account of various discounts and schemes
offered by the Company as a part of contract."
i) Sale of goods
Revenue from sale of goods is recognised
at the point in time when control of the
goods is transferred to the customer,
generally on delivery of the goods. In
determining the transaction price for the
sale of product, the Company considers the
effects of variable consideration.
(a) Variable consideration
Revenue is measured at fair value of
consideration received or receivable
net of returns, trade and scheme
discounts, volume rebate excluding
taxes or duties collected on behalf of
the government.
If the consideration in a contract
includes a variable amount, the
Company estimates the amount
of consideration to which it will be
entitled in exchange for transferring
the goods to the customer. The
variable consideration is estimated at
contract inception and constrained
until it is highly probable that a
significant revenue reversal in the
amount of cumulative revenue
recognised will not occur when the
associated uncertainty with the
variable consideration is subsequently
resolved. Some contracts for the sale
of product provide customers with
a right of return. The rights of return
give rise to variable consideration.
(b) Rights of return
Certain contracts provide a customer
with a right to return the goods within
a specified period. The Company
uses the expected value method
to estimate the goods that will not
be returned because this method
best predicts the amount of variable
consideration to which the Company
will be entitled. The requirements in
Ind AS 115 on constraining estimates
of variable consideration are also
applied in order to determine the
amount of variable consideration that
can be included in the transaction
price. For goods that are expected
to be returned, instead of revenue,
the Company recognises a refund
liability. A right of return asset and
corresponding adjustment to change
in inventory is also recognised for
the right to recover products from a
customer.
(c ) Assets and liabilities arising from
rights of return
Right of return assets:
Right of return asset represents
the Company's right to recover the
goods expected to be returned by
customers. The asset is measured at
the former carrying amount of the
inventory, less any expected costs
to recover the goods, including any
potential decreases in the value of
the returned goods. The Company
updates the measurement of the
asset recorded for any revisions to its
expected level of returns, as well as
any additional decreases in the value
of the returned products.
Refund liabilities:
A refund liability is the obligation
to refund some or all of the
consideration received (or receivable)
from the customer and is measured at
the amount the Company ultimately
expects it will have to return to the
customer. The Company updates
its estimates of refund liabilities
(and the corresponding change in
the transaction price) at the end
of each reporting period. Refer to
above accounting policy on variable
consideration.
i) In terest Income :
Interest income is recorded using the
Effective Interest Rate (EIR). EIR is the
rate that exactly discounts the estimated
future cash payments or receipts over the
expected life of the financial instrument
or a shorter period, where appropriate, to
the gross carrying amount of the financial
assets or to the amortised cost of a financial
liability.
h) Foreign currency transactions
Foreign currency transactions are recorded at
the exchange rates prevailing on the dates of
the transactions. Exchange differences arising
on foreign currency transactions settled during
the period are recognized in the Statement of
profit and loss.
Monetary assets and liabilities denominated
in foreign currencies at the balance sheet date
are translated into functional currency at the
exchange rates at the reporting date. The
resultant exchange differences are recognized in
the Statement of profit and loss.
i) Employee benefits
Short-term employee benefits
Employee benefits payable wholly within
twelve months of receiving employee services
are classified as short-term employee benefits.
These benefits include salaries and wages,
bonus and ex-gratia. The undiscounted amount
of short-term employee benefits to be paid in
exchange for employee services is recognised as
an expense as the related service is rendered by
employees.
Post-employment benefits
Defined contribution plans
A defined contribution plan is a post-employment
benefit plan under which the Company pays
specified contribution to a Government
administered scheme and has no obligation
to pay any further amounts. The Company
makes specified monthly contributions towards
provident fund and employee state insurance,
which are defined contribution plans, at the
prescribed rates. The Company's contribution is
recognised as an expense in the Statement of
profit and loss during the period in which the
employee renders the related service.
Defined benefit plans
Gratuity
The Company operates a defined benefit
gratuity plan in India. The Company contributes
to a gratuity trust maintained by an independent
insurance company. The Company's liabilities
under the Payment of Gratuity Act are determined
on the basis of actuarial valuation made at the
end of each financial year using the projected
unit credit method. Obligation is measured at
the present value of estimated future cash flows
using a discounted rate that is determined by
reference to market yields at the Balance Sheet
date on Government bonds, where the terms
of the Government bonds are consistent with
the estimated terms of the defined benefit
obligation. The net interest cost is calculated by
applying the discount rate to the net balance of
the defined benefit obligation and fair value of
plan assets. This cost is included in 'Employee
benefits expense' in the Statement of Profit and
Loss. Re-measurement gains or losses and return
on plan assets (excluding amounts included in
net interest on the net defined benefit liability)
arising from changes in actuarial assumptions
are recognised in the period in which they occur,
directly in OCI. They are included in retained
earnings in the Statement of changes in equity
and in the Balance Sheet. Re-measurements are
not reclassified to the Statement of Profit and
Loss in subsequent periods.
Other long-term employee benefits
Compensated absences
The Company provides for encashment of leave
or leave with pay subject to certain rules. The
employees are entitled to accumulate leave
subject to certain limits for future encashment
/ availment. The Company makes provision
for compensated absences based on an
independent actuarial valuation carried out
at the end of the year using the projected unit
credit method. Actuarial gains and losses are
recognised in the Statement of profit and loss.
j) Leases
As per Ind AS 116- Lease, the determination of
whether an arrangement is (or contains) a lease
is based on the substance of the arrangement at
the inception of the lease. The arrangement is, or
contains, a lease if fulfilment of the arrangement
is dependent on the use of a specific asset or
assets and the arrangement conveys a right to
use the asset or assets, even if that right is not
explicitly specified in an arrangement.
Where the Company is the lessee
Finance leases are capitalised at the
commencement of the lease at the inception
date fair value of the leased property or, if lower,
at the present value of the minimum lease
payments. Lease payments are apportioned
between finance charges and reduction of
the lease liability so as to achieve a constant
rate of interest on the remaining balance of
the liability. Finance charges are recognised in
finance costs in the statement of profit and loss,
unless they are directly attributable to qualifying
assets, in which case they are capitalized in
accordance with the company's general policy
on the borrowing costs. Contingent rentals are
recognised as expenses in the periods in which
they are incurred.
A leased asset is depreciated over the useful life
of the asset. However, if there is no reasonable
certainty that the Company will obtain
ownership by the end of the lease term, the asset
is depreciated over the shorter of the estimated
useful life of the asset and the lease term.
Leases in which a significant portion of the risks
and rewards of ownership are retained by the
lessor are classified as operating leases. Payments
made under operating leases are charged to the
Statement of Profit and Loss on a straight-line
basis over the period of the lease unless the
payments are structured to increase in line with
expected general inflation to compensate for
the lessor's expected inflationary cost increases.
Where the Company is the lessor
Leases in which the Company does not transfer
substantially all the risks and rewards of
ownership of an asset are classified as operating
leases. Rental income from operating lease is
recognised on a straight-line basis over the term
of the relevant lease. Initial direct costs incurred
in negotiating and arranging an operating lease
are added to the carrying amount of the leased
asset and recognised over the lease term on
the same basis as rental income. Contingent
rents are recognised as revenue in the period
in which they are earned unless the receipts
are structured to increase in line with expected
general inflation to compensate for the expected
inflationary cost increases.
Leases are classified as finance leases when
substantially all of the risks and rewards of
ownership transfer from the Company to
the lessee. Amounts due from lessees under
finance leases are recorded as receivables at the
Company's net investment in the leases. Finance
lease income is allocated to accounting periods
so as to reflect a constant periodic rate of return
on the net investment outstanding in respect of
the lease.
k) Income taxes
Income tax expense comprises current tax and
deferred tax. It is recognised in the Statement of
profit and loss except to the extent that it relates
to an item recognized directly in equity or in
other comprehensive income.
Current tax
The Income tax expense or credit for the period
is the tax payable on the current period's taxable
income based on the applicable income tax rate
adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences
and to unused tax losses.
Income tax assets and liabilities are measured at
the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and
tax laws used to compute the amount are those
that are enacted or substantively enacted at the
reporting date in India.
Current income tax relating to items recognised
outside the Statement of Profit and Loss is
recognised outside the Statement of Profit and
Loss (either in OCI or in equity). Current tax items
are recognised in correlation to the underlying
transaction either in OCI or directly in equity. The
management periodically evaluates positions
taken in tax returns with respect to situations
in which applicable tax regulation is subject to
interpretation. It establishes provisions, where
appropriate, on the basis of amounts expected
to be paid to the tax authorities.
Deferred tax
Deferred tax is provided using the liability
method on temporary differences between
the tax bases of assets and liabilities and
their carrying amounts for financial reporting
purposes at the reporting date.
Deferred tax liabilities are recognised for all
taxable temporary differences, except:
When the deferred tax liability arises from the
initial recognition of goodwill or an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit or loss.
Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised to
the extent that it is probable that taxable profit
will be available against which the deductible
temporary differences and the carry forward of
unused tax credits and unused tax losses can
be utilised, except when the deferred tax asset
relating to the deductible temporary difference
arises from the initial recognition of an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit or loss.
The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed
at each reporting date, and are recognised to the
extent that it has become probable that future
taxable profits will allow the deferred tax asset
to be recovered.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the
year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at
the reporting date.
Deferred tax assets and deferred tax liabilities
are offset, if a legally enforceable right exists
to set off current tax assets against current tax
liabilities and the deferred taxes relate to the
same taxable entity and the same taxation
authority.
Current tax and deferred tax relating to items
recognised outside the Statement of Profit
and Loss is recognised outside the Statement
of Profit and Loss (either in OCI or in equity).
Deferred tax items are recognised in correlation
to the underlying transaction either in OCI or
directly in equity.
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