B. SIGNIFICANT ACCOUNTING POLICIES
This note provides a list of significant accounting policies adopted in the preparation of the
financial statements. These policies have been consistently applied to all the years
presented, unless otherwise stated.
1) BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS
b. Functional and presentation currency
These financial statements are presented in Indian Rupees, which is the company's
functional currency. All amounts have been rounded to nearest Thousand, unless otherwise
stated.
c. Basis of Measurement
These financial statements have been prepared in accordance with the generally accepted
accounting principles in India under the historical cost convention on accrual basis pursuant
to section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts)
Rules, 2014. All assets and liabilities have been classified as current or non-current as per
the Company’s operating cycle and other criteria set out in the Schedule III to the
Companies Act, 2013. Based on the nature of services and the time between the acquisition
of assets for processing and their realization in cash and cash equivalents, the Company has
ascertained its operating cycle as 12 months for the purpose of current - noncurrent
classification of assets and liabilities.
2) APPLICABILITY OF ACCOUNTING STANDARDS
The company is a Medium Sized Company as per “SMC” as defined in the General
Instructions of the Companies (Accounting Standards) Rules, 2006 notified by the Central
Government under the Companies Act, 2013. Accordingly, the Company has complied
with the Accounting Standards as applicable to a Medium Sized company. Further, the
company by virtue of being a SMC, requires to comply with the recognition and
measurement principles prescribed by all accounting standards, but is given a relaxation in
respect of certain disclosure related standards and certain disclosure requirements
prescribed by other accounting standards.
3) USE OF ESTIMATES
The preparation of financial statements requires management to make judgments, estimates
and assumptions, that affect the application of accounting policies and the reported amounts
of assets, liabilities, income, expenses and disclosures of contingent liabilities at the date
of these financial statements. Actual results may differ from these estimates. Estimates and
underlying assumptions are reviewed at each balance sheet date. Revisions to accounting
estimates are recognised in the period in which the estimate is revised and future periods
affected.
4) PROPERTY, PLANT AND EQUIPMENT & INTANGIBLE ASSETS
(a) Property, Plant & Equipment
Property, Plant and Equipment are stated at cost net of recoverable taxes based on
intended outward supplies and furtherance of business, trade discounts and rebates less
accumulated depreciation and impairment loss, if any.
The cost comprises its purchase price, borrowing cost and any other cost directly
attributable in bringing the asset to its working condition for its intended use, net
charges on foreign exchange, contracts and adjustments arising from exchange rate
variations attributable the assets.
Property, Plant and Equipment which are significant to the total cost of that item of
Property, Plant and Equipment and having different useful life are accounted separately.
Subsequent expenditures to an item of asset are added to its book value only if they
increase the future benefits from the existing asset beyond its previously assessed
standard of performance.
(b) Intangible assets
Identifiable intangible assets are recognized when it is probable that future economic
benefits attributed to the asset will flow to the Company and the cost of the asset can
be reliably measured.
Intangible assets are amortised over their respective estimated useful lives on a straight¬
line basis, from the date that they are available for use. Intangible assets are stated at
cost less accumulated amortisation and impairment.
(c) Depreciation / Amortisation
Depreciation/Amortisation on Property, Plant and Equipment is provided based on
Straight Line Method considering the useful life of asset and residual value as
prescribed in Schedule II to the Companies Act, 2013
In respect of additions or extensions forming an integral part of existing asset
depreciation is provided as aforesaid over the residual life of the respective Property,
Plant and Equipment.
Depreciation on assets acquired/sold during the year is recognized on a pro-rata basis
to the statement of profit and loss till the date of acquisition / sale.
5) INVESTMENT
Investments that are readily realizable and intended to be held for not more than a year
from the date on which such investments are made, are classified as current investments.
All other investments are classified as non-current investments. On initial recognition, all
investments are measured at cost. The cost comprises purchase price and directly
attributable acquisition charges such as brokerage, fees and duties.
Current investments are carried at lower of cost and fair value determined on an individual
investment basis.
Non-current investments are carried at cost, less provision for diminution in value other
than temporary. On disposal of investments, the difference between its carrying amount
and net disposal proceeds is charged or credited to the statement of profit and loss.
6) INVENTORIES
Inventories consist of raw materials, finished goods and consumables.
Inventories are valued as under:
a) Raw Material: Polished diamonds (including colour stone) are valued at lower of cost or
net realizable value.
b) Raw Material: Gold is valued at lower of cost or net realisable value.
c) Finished goods: Jewellery is valued at lower of cost or Net realisable value. The cost of
material is determined on FIFO basis. Cost includes cost of conversion and other costs
incurred in bringing the inventory to their present location and condition less input credit
availed.
d) Designs & Moulds: - Designs and Moulds is valued at lower of cost or Net Realisable
value. Cost Includes cost associated with creating and refining designs, Purchase cost, cost
of conversion and other costs.
7) REVENUE RECOGNITION
The Company recognises revenues on the sale of products, net of discounts and sales
incentive. when the products are delivered to the customer or when delivered to the carrier
for export sales, which is when risks and rewards of ownership pass to the dealer / customer.
Sale of products net of other indirect taxes. Revenues are recognised when collectability of
the resulting receivables is reasonably assured.
Dividend from investments is recognized when the right to receive the payment is
established and when no Significant uncertainty as to measurability or collectability exists.
Interest income is recognized on the time basis determined by the amount outstanding and
the rate applicable and where no Signiant uncertainty as to measurability or collectability
exists.
8) EMPLOYEE BENEFITS
Liability in respect of employee benefits is provided for and is charged to profit and loss
account as follows:
(i) Short-term employee benefits: - All employee benefits payable wholly within
twelve months of rendering the services are classified as short-term employee
benefits. These benefits include salaries and wages, bonus, ex-gratia and
compensated absences such as paid annual leave. The undiscounted amount of
short-term employee benefits expected to be paid in exchange for the services
rendered by employees is charged to the Statement of profit and loss in the period
in which such services are rendered.
(ii) Defined contribution plan A defined contribution plan is a post-employment
benefit plan under which the company pays specified contributions to a separate
entity. The Company makes specified monthly contributions towards Provident
Fund. The Company’s contributions to Employees Provident Fund are charged to
statement of profit and loss every year. Provision for gratuity is provided based on
Actuarial Valuation made covering at the year ended 31 March 2025, Short Term
Employee Benefits like leave benefit, if any, are paid along with salary and wages
on a month-to-month basis, bonus to employees is charged to profit and loss account
on the basis of actual payment on year-to-year basis.
9) BORROWING COST
Borrowing costs that are attributable to the acquisition and construction of the asset which
takes substantial period of time to get ready for its intended use are capitalized as part of
cost of such asset.
All other borrowing costs are charged to Statement of Profit and Loss in the period in which
they are incurred or related.
10) ACCOUNTING FOR TAXES
Tax expense comprises current and deferred taxes.
Current tax is the amount of tax payable on the taxable income for the year as determined
in accordance with the provisions of the Income Tax Act, 1961.
Deferred tax is recognised, 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 in respect of unabsorbed depreciation and carry forward of losses are
recognised if there is virtual certainty that there will be sufficient future taxable income
available to realise such losses. Other deferred tax assets are recognised if there is
reasonable certainty that there will be sufficient future taxable income to realize such assets.
Deferred tax assets and liabilities are measured based on the tax rates that are expected to
apply in the period when asset is realised or the liability is settled, based on tax rates and
tax laws that have been enacted or substantively enacted by the balance sheet date.
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