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Accounting Policies of Golkunda Diamonds & Jewellery Ltd. Company

Mar 31, 2015

1 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

2 Sales :

Sales exclude Sales Tax, Transportation, Insurance, discount, penalty/late delivery charges and include Sales Returns and Discount.

3 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 revenues and expenses for the year. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

4 Fixed Assets and Depreciation :

i) All fixed assets are valued at cost less depreciation.The cost is inclusive of incidental expenses related to acquisition and put to use.Pre-operative 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) Pursuant to the enactment of Companies Act, 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly the unamortised carrying value is being depreciated/ amortised on straight line basis so as to write off the cost of the assets over the revised/remaining useful lives. The written down value of Fixed Assets whose lives have expired as at 1st April 2014 have been adjusted, in the opening balance of Profit and Loss Account amounting to Rs.-83085/-

iv) Depreciation on additions / disposals of the fixed assets during the year is provided on pro-rata basis according to the period during which assets are put to use.

5 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.

6 Inventories :

Raw Materials, Stores & Spare Parts & Finished Goods and are valued at lower of cost and net realisable value

7 Revenue Recognition :

i) Revenue from Sale of goods is recognised when significant risks and rewards of ownership of the goods have been passed to the buyer.

ii) Service income is recognised as per the terms of contracts with the customers when the related services are performed or the agreed milestones are achieved and are net of service tax wherever applicable.

iii) Dividend income is recognised when the unconditional right to receive the income is established.

iv) Revenue in respect of other income is recognised when no significant uncertainty as to its determination or realisation exists.

8 Foreign Currency Transactions :

Monetary assets & liabilities related to foreign currency transaction are settled during the year

9 Retirement Benefits :

i) Gratuity

Gratuity has been provided in accordance with the provisions of Payment of Gratuity Act, 1972.

ii) 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.

10 Employee Separation Costs :

The compensation paid to the employees under Voluntary Retirement Scheme is expensed in the year of payment.

11 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.

12 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.

13 Provisions, Contingent Liabilities and Contingent Assets :

Provision is recognised when the company has a present obligation as a result of past events and it is probable that the outflow of resources will be required to settle the obligation and in respect of which reliable estimates can be made. A disclosure for contingent liability is made when there is a possible obligation, that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision / disclosure is made. Contingent assets are not recognised in the Financial Statements. Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.


Mar 31, 2014

1 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.

2 Sales :

Sales exclude Sales Tax, Transportation, Insurance, discount, penalty/late delivery charges and include Sales Returns and Discount.

3 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 revenues and expenses for the year. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

4 Fixed Assets and Depreciation :

i) All fixed assets are valued at cost less depreciation.The cost is inclusive of incidental expenses related to acquisition and put to use.Pre-operative 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 Fixed Assets is provided on Straight Line Method at the rate and in the manner specified in Schedule

XIV of the Companies Act, 1956.

iv) Depreciation on additions / disposals of the fixed assets during the year is provided on pro-rata basis according to the period during which assets are put to use.

5 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.

6 Inventories :

Raw Materials, Stores & Spare Parts & Finished Goods and are valued at lower of cost and net realisable value

7 Revenue Recognition :

i) Revenue from Sale of goods is recognised when significant risks and rewards of ownership of the goods have been passed to the buyer.

ii) Service income is recognised as per the terms of contracts with the customers when the related services are performed or the agreed milestones are achieved and are net of service tax wherever applicable.

iii) Dividend income is recognised when the unconditional right to receive the income is established.

iii) Revenue in respect of other income is recognised when no significant uncertainty as to its determination or realisation exists.

8 Foreign Currency Transactions :

Monetary assets & liabilities related to foreign currency transaction are settled during the year

9 Retirement Benefits : i) Gratuity

Gratuity has been provided in accordance with the provisions of Payment of Gratuity Act, 1972.

ii) 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.

10 Employee Separation Costs :

The compensation paid to the employees under Voluntary Retirement Scheme is expensed in the year of payment.

11 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.

12 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 moresubsequent 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.

13 Provisions, Contingent Liabilities and Contingent Assets :

Provision is recognised when the company has a present obligation as a result of past events and it is probable that the outflow of resources will be required to settle the obligation and in respect of which reliable estimates can be made. A disclosure for contingent liability is made when there is a possible obligation, that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision / disclosure is made. Contingent assets are not recognised in the Financial Statements. Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.


Mar 31, 2013

1 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.

2 Sales :

Sales exclude Sales Tax, Transportation, Insurance, discount, penalty/late delivery charges and include and but net of Sales Returns and Discount.

3 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 revenues and expenses for the year. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.

4 Fixed Assets and Depreciation :

i) All fixed assets are valued at cost less depreciation.The cost is inclusive of incidental expenses related to acquisition and put to use.Pre-operative 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 Fixed Assets is provided on Straight Line Method at the rate and in the manner specified in Schedule

XIV of the Companies Act, 1956.

iv) Depreciation on additions / disposals of the fixed assets during the year is provided on pro-rata basis according to the period during which assets are put to use.

5 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.

6 Inventories :

Raw Materials, Stores & Spare Parts & Finished Goods and are valued at lower of cost and net realisable value

7 Revenue Recognition :

i) Revenue from Sale of goods is recognised when significant risks and rewards of ownership of the goods have been passed to the buyer.

ii) Service income is recognised as per the terms of contracts with the customers when the related services are performed or the agreed milestones are achieved and are net of service tax wherever applicable.

iii) Dividend income is recognised when the unconditional right to receive the income is established.

iii) Revenue in respect of other income is recognised when no significant uncertainty as to its determination or realisation exists.

8 Foreign Currency Transactions : Monetary assets & liabilities related to foreign currency transaction are settled during the year

9 Retirement Benefits :

i) Gratuity Gratuity has been provided in accordance with the provisions of Payment of Gratuity Act, 1972.

ii) 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.

10 Employee Separation Costs :

The compensation paid to the employees under Voluntary Retirement Scheme is expensed in the year of payment.

11 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.

12 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.

13 Provisions, Contingent Liabilities and Contingent Assets :

Provision is recognised when the company has a present obligation as a result of past events and it is probable that the outflow of resources will be required to settle the obligation and in respect of which reliable estimates can be made. A disclosure for contingent liability is made when there is a possible obligation, that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision / disclosure is made. Contingent assets are not recognised in the financial statements. Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.


Mar 31, 2010

I) Basis of Accounting

The Company Prepares its accounts on accrual basis in accordance with generally accepted accounting principles and under historical cost convention. For recognition of Income & Expenses, Accrual System of Accounting is followed, except as stated otherwise.

II) Fixed Assets:

Fixed assets are stated at cost less depreciation. The cost is inclusive of all direct and incidental expenses related to acquisition and installation.

III) Depreciation:

Depreciation on fixed assets is provided on straight line method at the rate and in the manner specified in Schedule XIV of the Companies Act, 1956.

IV) Inventories:

Inventories are valued at the lower of cost and net realisable value.

V) Share Issue Expenses:

Share Issue Expenses are written off in equal installments over a period of ten accounting years.

VI) Foreign Exchange Transactions:

Monetary assets & Liabilities related to foreign currency transaction settled during the year.

VII) Retirement Benefits:

Gratuity has been provided in accordance with the provisions of Payment of Gratuity Act,1972.

VIII) Deferred Tax

Tax expenses charged to Profit & Loss account is after considering the deferred tax impact for the timing difference between accounting income and tax income, Deferred tax assets are recognized when there is a reasonable certainty that they will be realized. Deferred tax asset relating to unabsorbed business losses are recognized when there is a virtual certainty that there will be sufficient taxable profit to utilize them.

 
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