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Accounting Policies of Thangamayil Jewellery Ltd. Company

Mar 31, 2015

The accounts have been prepared on accrual basis, in accordance with the Accounting Standards referred to in Section 133 of the Companies Act, 2013, which have been prescribed by the Companies (Accounting Standards) Rules, 2006.

Use of Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenue and expenses during the reporting periods. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

The Accounts are prepared under the Historical Cost Convention and materially comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. The significant accounting policies followed by the Company are stated below:

1 .Revenue Recognition

Sales are recognized when goods are supplied and are recorded at net realizable value excluding VAT and other statutory levies.

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Other income is recognized on certain confirm transactions of cessation of old entries liabilities in the case of advances from customer category.

2. Inventories

Inventories including company's stock held with goldsmiths are valued at lower of cost or net realizable value. The cost of raw material inventories is computed on a FIFO basis.The cost of finished goods and work in progress includes cost of conversion and other cost incurred in bringing the Inventories to their present location and condition.

Cost is generally determined on FIFO basis and wherever required, appropriate direct on cost are taken into account. Net Realizable Value is the estimated selling price in the ordinary course of business less the estimated cost necessary to make the sale.

Hedging mechanism of entering into forward contract against appropriate underlying assets is primarily used by the company to hedge the price fluctuation exposure of those underlying assets. The fair value adjustment arising out of such transactions is forming part of cost of assets procured.

Packing materials and Gift items are valued at cost on FIFO basis.

3. Tangible Fixed Assets

a) Fixed Assets are stated at their cost of acquisition or construction as the case may be and including inward freight, incidental expenses related to acquisition/ installation and borrowing cost as per Accounting Standard (AS 16). Depreciation on additions to fixed assets is provided on a pro -rata basis from the date on which acquisition or installation made.

b) Depreciation on Fixed Assets is provided at rates as prescribed underthe Companies Act, 2013 on the following basis:

Assets Class Useful life of assets

Straight Line basis 60 Years 15 Years

- Building , 10 Years

- Plant& Machinery 15 Years

- Furniture and Fittings

- Office equipments

Written Down Value basis 8 years

Vehicles 10 years

- Motor Car

- Two Wheelers

3 years

Computers 6 years

- Flardware

- Software

4. Capital work in progress

Capital work in progress includes, cost of assets not yet commissioned, and incidental expenses during the construction period. Certain directly attributable pre-operative expenses during construction period are included under Capital Work in Progress. These expenses are allocated to the cost of Fixed Assets when the same are ready for intended use.

5. Foreign ExchangeTransactions

Transactions in foreign currency are recorded at the rate prevailing on the date of transactions. Foreign currency Assets and Liabilities are stated at the rate of exchange prevailing at the balance sheet date and the resultant gains/losses are charged to the profit and loss account.

Premium/Discount in respect of foreign exchange contract is amortized as Income/Expense over the

life of the contract .Any profit or loss arising on cancellation or renewal of such forward contracts is recognized as Income/Expense for the period. Exchange difference arising on settlement or restatement of foreign currency denominated liability is recognized in the profit &loss a/c.

6. Retirement Benefits

i. Defined Contribution Plan

Company's contribution paid/payable during the year to Provident Fund etc are recognized in the Profit and Loss Account. These are approved/recognized scheme of the Company.

ii. Defined Benefit Plan

Annual Company's liability towards Gratuity is funded on the basis of actuarial valuation furnished by the Life Insurance Corporation of India underGroupGratuity Scheme.

iii. The company does not provide leave encashment and carryforward of accumulated leave to next year to its employees.

7. Leases

Assets taken on lease on or after April 1,2001 are accounted for as Fixed Assets In accordance with Accounting Standard (AS) 19 on"Leases"

a) Financial Lease

Assets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, are classified as finance leases. Such leases are capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

b) Operating Lease

Assets acquired as leases, where a significant portion of the risk and rewards of ownership are retained by the lessor, are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

8. Intangible Fixed Assets

Intangible Assets are stated at cost less accumulated amortization and impairment loss, if any. Cost includes any directly attributable expenditure on making the asset ready for its intended use.

9. Borrowing Cost

Borrowing costs attributable to the Acquisition/lmprovement of qualifying capital assets and incurred till the commencement of commercial use of the assets is capitalized as the cost of the asset as per Accounting Standard (AS) 16-"Borrowing Costs" and other borrowing costs are charged to profit and loss account.

10. Expenses

a) All expenses including interest and finance charges are accounted for on accrual basis.

b) Prior period items, if material, are disclosed separately.

11. Research and Development

Expenditure incurred during research and development phase is charged to revenue when no intangible asset arises from such research. Assets procured for research and development activities are generally capitalized.

12. Redemption of Customer Loyalty Points

The un availed Customer Loyalty Points lying in the Value card has been provided as a liability and the amount redeemed during the year is charged to Profit & Loss A/c in the respective years of redemption. Redemption of customer loyalty points costs are accrued in the year of sales of products based on past experience.

13. Advance from Customers

Amounts collected as advances from customers have been recognized as a liability in the year of collection. The accumulated amount along with applicable bonus amount is redeemed in the form of jewellery. The bonus or obligations arising out of these transactions are accounted for in books on accrual basis on a consistent basis.

The Company is collecting money from its customers on advance basis by extending easy payment scheme, and offers in return gold ornaments at the rate prevailing on the date of redemption (which is less than twelve months form the date of original entry date) is less than without any charges towards making and wastage cost.The concession if any will be accounted in the year in which it is redeemed as discount to sales realisation.

The company is accepting old gold from its customers to be exchanged for new gold within a period of twelve months without any charges for making the ornaments on a job work basis. No income or loss is considered in the accounts as the transactions are not reflected as purchase or sale and treated only on Job work basis.

b) Operating Lease

Assets acquired as leases, where a significant portion of the risk and rewards of ownership are retained by the lessor, are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

8. Intangible Fixed Assets

Intangible Assets are stated at cost less accumulated amortization and impairment loss, if any. Cost includes any directly attributable expenditure on making the asset ready for its intended use.

9. Borrowing Cost

Borrowing costs attributable to the Acquisition/lmprovement of qualifying capital assets and incurred till the commencement of commercial use of the assets is capitalized as the cost of the asset as per Accounting Standard (AS) 16-"Borrowing Costs" and other borrowing costs are charged to profit and loss account.

10. Expenses

a) All expenses including interest and finance charges are accounted for on accrual basis.

b) Prior period items, if material, are disclosed separately.

11. Research and Development

Expenditure incurred during research and development phase is charged to revenue when no intangible asset arises from such research. Assets procured for research and development activities are generally capitalized.

12. Redemption of Customer Loyalty Points

The un availed Customer Loyalty Points lying in the Value card has been provided as a liability and the amount redeemed during the year is charged to Profit & Loss A/c in the respective years of redemption. Redemption of customer loyalty points costs are accrued in the year of sales of products based on past experience.

13. Advance from Customers

Amounts collected as advances from customers have been recognized as a liability in the year of collection. The accumulated amount along with applicable bonus amount is redeemed in the form of jewellery. The bonus or obligations arising out of these transactions are accounted for in books on accrual basis on a consistent basis.

The Company is collecting money from its customers on advance basis by extending easy payment scheme, and offers in return gold ornaments at the rate prevailing on the date of redemption (which is less than twelve months form the date of original entry date) is less than without any charges towards making and wastage cost.The concession if any will be accounted in the year in which it is redeemed as discount to sales realisation.

The company is accepting old gold from its customers to be exchanged for new gold within a period of twelve months without any charges for making the ornaments on a job work basis. No income or loss is considered in the accounts as the transactions are not reflected as purchase or sale and treated only on Job work basis.

The Company is operating a scheme by which customer fixes the gold price to the extent of amount paid on the date of remittance. The liability that would arise to the company due to adverse price fluctuations if any or the benefits that would arise due to favourable price marked to market as on the last date of financial year will be dealt with accordingly in the books on the year in which such transactions were put through.

14. Gold Metal Loan

The company has an arrangement with its banker for lifting gold under metal loan terms against a limit under "price unfixed basis" and opts to fix the price for gold taken under loan within 180 days at delivery. However, based on business expediencies the company fixes the price within 180 days, whenever the price is favorable and carried the transaction under the forward cover to be settled for payment of money on the specified date. The price difference arising out of such transactions accounted in the head of cost of sales and adjusted accordingly. The interest if any payable to bankers on such outstanding is treated as expenses on accrual basis.

The outstanding metal loan position if any as on reporting date is marked to market and the resulting difference is any is adjusted to the notional purchase account and the value as on that date is adjusted as cost for AS - 2 Inventory valuation consideration.

Derivative accounting: The Company uses derivative financial instruments to manage risks associated with gold price fluctuations relating to certain highly probable forecasted transactions, foreign currency fluctuations relating to certain firm commitments and foreign currency and interest rate exposures relating to foreign currency loan. The Company applies the hedge accounting principles set out in Accounting Standard (AS) 30 - Financial Instruments: Recognition and Measurement and has designated derivative financial instruments taken for gold price fluctuations as'cash flow'hedges relating to highly probable forecasted transactions. All such derivative financial instruments are supported by an underlying transaction and are not for trading or speculative purposes.

The use of derivative financial instruments is governed by the Company's policies approved by the board of directors, which provide written principles on the use of such instruments consistent with the Company's risk management strategy.

Hedging instruments are initially measured at fair value, and are re measured at subsequent reporting dates. Changes in the fair value of these derivatives that are designated and effective as hedges of future cash flows are recognized directly in hedging reserve and the ineffective portion is recognized immediately in the statement of profit and loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting.

The Company is operating a scheme by which customer fixes the gold price to the extent of amount paid on the date of remittance. The liability that would arise to the company due to adverse price fluctuations if any or the benefits that would arise due to favourable price marked to market as on the last date of financial year will be dealt with accordingly in the books on the year in which such transactions were put through.

14. Gold Metal Loan

The company has an arrangement with its banker for lifting gold under metal loan terms against a limit under "price unfixed basis" and opts to fix the price for gold taken under loan within 180 days at delivery. However, based on business expediencies the company fixes the price within 180 days, whenever the price is favorable and carried the transaction under the forward cover to be settled for payment of money on the specified date. The price difference arising out of such transactions accounted in the head of cost of sales and adjusted accordingly. The interest if any payable to bankers on such outstanding is treated as expenses on accrual basis.

The outstanding metal loan position if any as on reporting date is marked to market and the resulting difference is any is adjusted to the notional purchase account and the value as on that date is adjusted as cost for AS - 2 Inventory valuation consideration.

Derivative accounting: The Company uses derivative financial instruments to manage risks associated with gold price fluctuations relating to certain highly probable forecasted transactions, foreign currency fluctuations relating to certain firm commitments and foreign currency and interest rate exposures relating to foreign currency loan. The Company applies the hedge accounting principles set out in Accounting Standard (AS) 30 - Financial Instruments: Recognition and Measurement and has designated derivative financial instruments taken for gold price fluctuations as'cash flow'hedges relating to highly probable forecasted transactions. All such derivative financial instruments are supported by an underlying transaction and are not for trading or speculative purposes.

The use of derivative financial instruments is governed by the Company's policies approved by the board of directors, which provide written principles on the use of such instruments consistent with the Company's risk management strategy.

Hedging instruments are initially measured at fair value, and are re measured at subsequent reporting dates. Changes in the fair value of these derivatives that are designated and effective as hedges of future cash flows are recognized directly in hedging reserve and the ineffective portion is recognized immediately in the statement of profit and loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting.

For forecasted transactions, any cumulative gain or loss on the hedging instrument recognized in hedging reserve is retained until the forecast transaction occurs upon which it is recognized in the statement of profit and loss. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss accumulated in hedging reserve is recognized immediately to the statement of profit and loss.

Changes in the fair value of derivative financial instruments that have not been designated as hedging instruments are recognized in the statement of profit and loss as they arise.

17. Taxes on Income

Tax expense comprises of current income and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.

Deferred taxes reflect the impact of current year's timing differences between taxable income and accounting income for the year and reversal of timing differences of earlieryears.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certain that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer

reasonably certain that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain that sufficient future taxable income will be available.

18. Impairment of assets

The Company reviews the carrying value of assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount as per Accounting Standard (AS) 28- "Impairment of Assets". Impairment loss determined at each balance sheet date is charged to respective Profit & Loss account in the year in which such impairment of assets is identified. In assessing the recoverable amount, the estimated future cash flows are discounted to their present value at appropriate discount rates.

19. It is the Company's Policy to take in to the account the impact of any significant event that occurs after the Balance Sheet date but before the board meeting in which the accounts are adopted.

20. Provisions, Contingent Liabilities

Provisions are recognized in respect of obligations where, based on the evidence available, their existence at the balance sheet date is considered probable. Contingent liabilities are disclosed by way of Notes on accounts in respect of obligation where, based on the evidence available, their existence at the balance sheet date is considered not probable. Contingent assets are not recognized in the accounts.

The Board of Directors, in their meeting on 25th May, 2015, proposed a dividend of Rs.1 per equity share. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on 29th July 2015, and if approved, would result in a cash outflow of approximately Rs. 165 lakhs inclusive of corporate dividend tax. Dividend recognized as distributions toequityshareholdersfortheyearendedMarch31,2014was Rs. 1 per share.

Term Loan from KVB secured by equitable mortgage of company land and building at Oppanakara Street, Coimbatore and land and building at Madurai. The loan is further secured by properties owned by whole time directors and their close relatives and further secured by personal guarantee of whole time of directors of the company .The loan is repayable in 48 monthly installments, commencing from October 2014.

TheTermloan is repayable on demand and carries interest of 12.50%p.a

The above working capital loans extended by consortium bankers are secured by a pari passu charge on stocks and book debts of the company. The loan extended by banks are further collaterally secured by equitable mortgage of Company's properties in the case of State Bank of India, at Madurai, Ramnad Juticorin, and Salem, and in the case of ING Vysya Bank property atTrichy and in the case of KarurVysya Bank property at Oppanakara Street at Coimbatore and with Oriental Bank of Commerce property at Madurai and also further collaterally secured by properties owned by Whole time Directors except for ING Vysya Bank. All the above mentioned collateral securities owned by the company and by the respective whole time directors are given to the respective banks as indicated above are given on exclusive basis and not on a pari passu charge basis and also is in accordance with sanction terms and conditions of the respective banks.

5.66 % (546220 shares) promoters share holding in the company has been pledged as collateral security for IDBIIoan.

3.73 % (360000 shares) promoters share holding in the company has been pledged as collateral security for Indusind bank loan.

3.11 % (300000 shares) promoters share holding in the company has been pledged as collateral security for Yes bank loan.

The cash credit is repayable on demand and carries interestof 11.75% to 14.00% p.a

All the above loans are further secured by personal guarantee of whole time of directors of the company.

Secured Trade Payable

Trade Payables includes a sum of Rs. 1407.45 lakhs (Previous year Rs. Nil) as Gold Metal loan availed from Nova Scotia bank against SBLC guarantee extended by YES and ING Vysya Bankfor whom tangible securities were extended as covered under Note.S

Trade Payables includes a sum ofRs. 1995.64 lakhs (Previousyear Rs. Nil) as Bill Discounted with IDBI bank secured collateraly by 2.07 % (200000 shares) promoters share holding of the Company.

Advances from customers includes an amounts ofRs. 6,124.55 lakhs (PY Rs. 6169.41 lakhs) received towards sale of jewellery products under various sale initiatives / retail customer schemes.

Advance from Customers are redeemable by way of sale alone within 11 Months from the reporting date.

Fixed deposit includes Rs.68.41 lakhs secured by all movable properties such as furniture, fixtures,computers, Fitting excluding plantand machinery ofthecompany.

Fixed Deposits from public are repayable within 12 Months from the reporting date.


Mar 31, 2014

The accounts have been prepared on accrual basis, in accordance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 which have been prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 1956 to the extent applicable.

Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenue and expenses during the reporting periods. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

The Accounts are prepared under the Historical Cost Convention and materially comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. The significant accounting policies followed by the Company are stated below:

1. Revenue Recognition

Sales are recognized when goods are supplied and are recorded at net realizable value excluding VAT and other statutory levies.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

2. Inventories

Inventories including company's stock held with goldsmiths are valued at lower of cost or net realizable value. The cost of raw material inventories is computed on a FIFO basis. The cost of finished goods and work in progress includes cost of conversion and other cost incurred in bringing the Inventories to their present location and condition.

Cost is generally determined on FIFO basis and wherever required, appropriate direct on cost are taken into account. Net Realizable Value is the estimated selling price in the ordinary course of business less the estimated cost necessary to make the sale.

Hedging mechanism of entering into forward contract against appropriate underlying assets is primarily used by the company to hedge the price fluctuation exposure of those underlying assets. The fair value adjustment arising out of such transactions is forming part of cost of assets procured.

Packing materials and Gift items are valued at cost on FIFO basis.

3. Tangible Fixed Assets

a) Fixed Assets are stated at their cost of acquisition or construction as the case may be and including inward freight, incidental expenses related to acquisition/ installation and borrowing cost as per Accounting Standard (AS 16). Depreciation on additions to fixed assets is provided on a pro -rata basis from the date on which acquisition or installation made.

b) Depreciation on Fixed Assets is provided at rates as prescribed under the Companies Act, 1956 on the following basis:

S.No Asset Class Depreciation Method

I * Building Straight Line

* Plant & Machinery

* Furniture and Fittings

* Office equipments

* Vehicles Written Down Value ii. * Computers

c) Lease hold Building is amortized over a period for ten years being the useful life of the asset.

4. Capital work in progress

Capital work in progress includes, cost of assets not yet commissioned and incidental expenses during the construction period. Certain directly attributable pre-operative expenses during construction period are included under Capital Work in Progress. These expenses are allocated to the cost of Fixed Assets when the same are ready for intended use.

5. Foreign Exchange Transactions

Transactions in foreign currency are recorded at the rate prevailing on the date of transactions. Foreign currency Assets and Liabilities are stated at the rate of exchange prevailing at the balance sheet date and the resultant gains/losses are charged to the profit and loss account.

Premium/Discount in respect of foreign exchange contract is amortized as Income/Expense over the life of the contract. Any profit or loss arising on cancellation or renewal of such forward contracts is recognized as Income/Expense for the period. Exchange difference arising on settlement or restatement of foreign currency denominated liability is recognized in the profit &loss a/c.

6. Retirement Benefits

i. Defined Contribution Plan

Company's contribution paid/payable during the year to Provident Fund etc., are recognised in the Profit and Loss Account. These are approved/recognised scheme of the Company.

ii. Defined Benefit Plan

Annual Company's liability towards Gratuity is funded on the basis of actuarial valuation furnished by the Life Insurance Corporation of India under Group Gratuity Scheme.

iii. The company does not provide leave encashment and carry forward of accumulated leave to next

year to its employees.

7. Leases

Assets taken on lease on or after April 1, 2001 are accounted for as Fixed Assets in accordance with Accounting Standard (AS) 19 on "Leases"

a) Financial Lease

Assets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, are classified as finance leases. Such leases are capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

b) Operating Lease

Assets acquired as leases, where a significant portion of the risk and rewards of ownership are retained by the lessor, are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

8. Intangible Fixed Assets

Intangible Assets are stated at cost less accumulated amortization and impairment loss, if any. Cost includes any directly attributable expenditure on making the asset ready for its intended use.

9. Borrowing Cost

Borrowing costs attributable to the Acquisition/Improvement of qualifying capital assets and incurred till the commencement of commercial use of the assets is capitalized as the cost of the asset as per Accounting Standard (AS) 16- "Borrowing Costs" and other borrowing costs are charged to profit and loss account.

10. Expenses

a) All expenses including interest and finance charges are accounted for on accrual basis.

b) Prior period items, if material, are disclosed separately.

11. Research and Development

Expenditure incurred during research and development phase is charged to revenue when no intangible asset arises from such research. Assets procured for research and development activities are generally capitalized.

12. Redemption of Customer Loyalty Points

The un availed Customer Loyalty Points lying in the Value card has been provided as a liability and the amount redeemed during the year is charged to Profit & Loss A/c in the respective years of redemption. Redemption of customer loyalty points costs are accrued in the year of sales of products based on past experience.

13. Advance from Customers

Amounts collected as advances from customers have been recognized as a liability in the year of collection. The accumulated amount along with applicable bonus amount is redeemed in the form of jewellery. The bonus or obligations arising out of these transactions are accounted for in books on accrual basis on a consistent basis.

The Company is collecting money from its customers on advance basis by extending easy payment scheme, for various durations and offers in return gold ornaments at the rate prevailing on the date of redemption without any charges towards making and wastage cost. The concession if any will be accounted in the year in which it is redeemed as discount to sales realisation.

The Company is operating a scheme by which customer fixes the gold price to the extent of amount paid on the date of remittance. The liability that would arise to the company due to adverse price fluctuations if any or the benefits that would arise due to favourable price marked to market as on the last date of financial year will be dealt with accordingly in the books on the year in which such transactions were put through.

14. Gold Metal Loan

The company has an arrangement with its banker for lifting gold under metal loan terms against a limit under "price unfixed basis" and opts to fix the price for gold taken under loan within 180 days at delivery. However, based on business expediencies the company fixes the price within 180 days, whenever the price is favorable and carried the transaction under the forward cover to be settled for payment of money on the specified date. The price difference arising out of such transactions accounted in the head of cost of sales and adjusted accordingly. The interest if any payable to bankers on such outstanding is treated as expenses on accrual basis.

The outstanding metal loan position if any as on reporting date is marked to market and the resulting difference is any is adjusted to the notional purchase account and the value as on that date is adjusted as cost for AS - 2 Inventory valuation consideration.

15. Advertisement costs

Costs incurred on advertisement / publicity has been fully written off in the year of incurrence.

Preliminary Expenses

Expenses incurred on Increase in Share Capital amortized over the period of five equal installments.

16. AS 30 - Financial instruments: Recognition and Measurement

Derivative accounting: The Company uses derivative financial instruments to manage risks associated with gold price fluctuations relating to certain highly probable forecasted transactions, foreign currency fluctuations relating to certain firm commitments and foreign currency and interest rate exposures relating to foreign currency loan. The Company applies the hedge accounting principles set out in Accounting Standard (AS) 30 - Financial Instruments: Recognition and Measurement and has designated derivative financial instruments taken for gold price fluctuations as 'cash flow' hedges relating to highly probable forecasted transactions. All such derivative financial instruments are supported by an underlying transaction and are not for trading or speculative purposes.

The use of derivative financial instruments is governed by the Company's policies approved by the board of directors, which provide written principles on the use of such instruments consistent with the Company's risk management strategy.

Hedging instruments are initially measured at fair value, and are remeasured at subsequent reporting dates. Changes in the fair value of these derivatives that are designated and effective as hedges of future cash flows are recognised directly in hedging reserve and the ineffective portion is recognised immediately in the statement of profit and loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. For forecasted transactions, any cumulative gain or loss on the hedging instrument recognized in hedging reserve is retained until the forecast transaction occurs upon which it is recognized in the statement of profit and loss. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss accumulated in hedging reserve is recognized immediately to the statement of profit and loss.

Changes in the fair value of derivative financial instruments that have not been designated as hedging instruments are recognised in the statement of profit and loss as they arise.

17. Taxes on Income

Tax expense comprises of current income and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred taxes reflect the impact of current year's timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certain that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain that sufficient future taxable income will be available.

18. Impairment of assets

The Company reviews the carrying value of assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount as per Accounting Standard (AS) 28- "Impairment of Assets". Impairment loss determined at each balance sheet date is charged to respective Profit & Loss account in the year in which such impairment of assets is identified. In assessing the recoverable amount, the estimated future cash flows are discounted to their present value at appropriate discount rates.

19. It is the Company's Policy to take in to the account the impact of any significant event that occurs after the Balance Sheet date but before the board meeting in which the accounts are adopted.

20. Provisions, Contingent Liabilities

Provisions are recognized in respect of obligations where, based on the evidence available, their existence at the balance sheet date is considered probable. Contingent liabilities are disclosed by way of Notes on accounts in respect of obligation where, based on the evidence available, their existence at the balance sheet date is considered not probable. Contingent assets are not recognized in the accounts.


Mar 31, 2013

1. Revenue Recognition

Sales are recognized when goods are supplied and are recorded at net realizable value excluding VAT and other statutory levies.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

2. Inventories

Inventories including company''s stock held with goldsmiths are valued at lower of cost or net realizable value. The cost of raw material inventories is computed on a FIFO basis. The cost of finished goods and work in progress includes cost of conversion and other cost incurred in bringing the Inventories to their present location and condition. Packing materials and Gift items are valued at cost on FIFO basis.

3. Tangible Fixed Assets

a) Fixed Assets are stated at their cost of acquisition or construction as the case may be and including inward freight, incidental expenses related to acquisition/ installation and borrowing cost as per Accounting Standard (AS 16). Depreciation on additions to fixed assets is provided on a pro -rata basis from the date on which acquisition or installation made.

b) Depreciation on Fixed Assets is provided at rates as prescribed under the Companies Act, 1956 on the following basis:

c) Lease hold Building is amortized over a period for ten years being the useful life of the asset.

4. Capital work in progress

Capital work in progress includes cost of assets not yet commissioned, and incidental expenses during the construction period.

5. Foreign Exchange Transactions

Transactions in foreign currency are recorded at the rate prevailing on the date of transactions. Foreign currency Assets and Liabilities are stated at the rate of exchange prevailing at the balance sheet date and the resultant gains/ losses are charged to the profit and loss account.

Premium/Discount in respect of foreign exchange contract is amortized as Income/Expense over the life of the contract .Any profit or loss arising on cancellation or renewal of such forward contracts is recognized as Income/Expense for the period. Exchange difference arising on settlement or restatement of foreign currency denominated liability is recognized in the profit &loss a/c.

6. Retirement Benefits

i. Defined Contribution Plan

Company''s contribution paid/payable during the year to Provident Fund etc are recognised in the Profit and Loss Account. These are approved/recognised scheme of the Company.

ii. Defined Benefit Plan

Annual Company''s liability towards Gratuity is funded on the basis of actuarial valuation furnished by the Life Insurance Corporation of India under Group Gratuity Scheme.

iii. The company does not provide leave encashment and carry forward of accumulated leave to next year to its employees.

7. Leases

Assets taken on lease on or after April 1, 2001 are accounted for as Fixed Assets in accordance with Accounting Standard (AS) 19 on "Leases"

a) Financial Lease

Assets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, are classified as finance leases. Such leases are capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

b) Operating Lease

Assets acquired as leases, where a significant portion of the risk and rewards of ownership are retained by the lessor, are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

8. Intangible Fixed Assets

Intangible Assets are recognized only at cost of acquisition.

9. Borrowing Cost

Borrowing costs attributable to the Acquisition/Improvement of qualifying capital assets and incurred till the commencement of commercial use of the assets is capitalized as the cost of the asset as per Accounting Standard (AS) 16- "Borrowing Costs" and other borrowing costs are charged to profit and loss account.

10. Expenses

a) All expenses including interest and finance charges are accounted for on accrual basis.

b) Prior period items, if material, are disclosed separately.

11. Redemption of Customer Loyalty Points

The un availed Customer Loyalty Points lying in the Value card has been provided as a liability and the amount redeemed during the year is charged to Profit & Loss A/c in the respective years of redemption. Redemption of customer loyalty points costs are accrued in the year of sales of products based on past experience.

12. Advance from Customers

Amounts collected as advances from customers have been recognized as a liability in the year of collection. The accumulated amount (along with bonus amount) is redeemed in the form of jewellery. The bonus or obligations arising out of these transactions are accounted for in books on accrual basis.

The Company is collecting money from its customers on advance basis by extending easy payment scheme, for various durations and offers in return gold ornaments at the rate prevailing on the date of redemption without any charges towards making and wastage cost. The concession, if any, will be accounted in the year in which it is redeemed as discount to sales realisation.

The Company is operating a scheme by which customer fixes the gold price to the extent of amount paid on the date of remittance. The liability that would arise to the company due to adverse price fluctuations, if any or the benefits that would arise due to favourable price marked to market as on the last date of financial year will be dealt with accordingly in the books during the year in which such transactions were put through.

13. Gold Metal Loan

The company has an arrangement with its banker for lifting gold under metal loan terms against a limit under "price unfixed basis" and opts to fix the price for gold taken under loan within 180 days at delivery. However, based on business expediencies the company fixes the price within 180 days, whenever the price is favorable and carries the transaction under the forward cover to be settled for payment of money on the specified date. The price difference arising out of such transactions is accounted under cost of sales and adjusted accordingly. The interest, if any payable to bankers on such outstanding is treated as expenses on accrual basis.

The outstanding metal loan position as on reporting date is marked to market and the resulting difference, if any is adjusted to the notional purchase account and the value as on that date is adjusted as cost consideration for AS - 2 Inventory valuation purposes.

14. Advertisement costs

Costs incurred on advertisement / publicity has been fully written off in the year of incurrence.

Preliminary Expenses

Expenses incurred on Increase in Share Capital amortized over the period of five equal installments.

15. AS 30 - Financial instruments: Recognition and Measurement

The Company has chosen to adopt the Accounting Standard 30 "Financial Instruments: Recognition and Measurement" and has applied the hedge accounting principles to the Gold unfix forward contracts and non-derivative financial liability to hedge its risks associated with the Gold rate fluctuations relating to highly probable forecast transactions. Each hedging transaction is fully covered with the underlining assets of the Gold inventory.

Any changes affecting on the date of reporting arising out of such hedging transactions are accounted on the marked to market basis in the books of the company resulting in a gain/ loss will be dealt with accordingly.

16. Taxes on Income

Tax Expenses for the year comprises of Current Income Tax, Deferred Tax.

Provision for income tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961.

Deferred tax is recognized, subject to prudence, on timing differences, being the difference between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised in accordance with Accounting Standard (AS) 22 "Accounting for Taxes on Income", issued by the Institute of Chartered Accountants of India.

17. Impairment of assets

The Company reviews the carrying value of assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount as per Accounting Standard (AS) 28- "Impairment of Assets". Impairment loss determined at each balance sheet date is charged to respective Profit & loss account in the year in which such impairment of assets is identified. In assessing the recoverable amount, the estimated future cash flows are discounted to their present value at appropriate discount rates.

18. It is the Company''s Policy to take in to the account the impact of any significant event that occurs after the Balance Sheet date but before the board meeting in which the accounts are adopted.

19. Provisions, Contingent Liabilities

Provisions are recognized in respect of obligations where, based on the evidence available, their existence at the balance sheet date is considered probable. Contingent liabilities are disclosed by way of Notes on accounts in respect of obligation where, based on the evidence available, their existence at the balance sheet date is considered not probable. Contingent assets are not recognized in the accounts.


Mar 31, 2012

The accounts have been prepared on accrual basis, in accordance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956, which have been prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act 1956, to the extent applicable.

Use of Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenue and expenses during the reporting periods. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized. The Accounts are prepared under the Historical Cost Convention and materially comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. The significant accounting policies followed by the Company are stated below:

1. Revenue Recognition

Sales are recognized when goods are supplied and are recorded at net realizable value excluding VAT and other statutory levies.

2. Inventories

Inventories including company's stock held with goldsmiths are valued at lower of cost or net realizable value. The cost of raw material inventories is computed on a FIFO basis. The cost of finished goods and work in progress includes cost of conversion and other cost incurred in bringing the Inventories to their present location and condition. Packing materials and Gift items are valued at cost on FIFO basis.

3. Tangible Fixed Assets

a) Fixed Assets are stated at their cost of acquisition or construction as the case may be and including inward freight, incidental expenses related to acquisition/ installation and borrowing cost as per Accounting Standard (AS 16). Depreciation on additions to fixed assets is provided on a pro -rata basis from the date on which acquisition or installation made.

c) Lease hold Building is amortized over a period for ten years being the useful life of the asset.

4. Capital work in progress

Capital work in progress includes, cost of assets not yet commissioned, and incidental expenses during the construction period.

5. Foreign Exchange Transactions

Transactions in foreign currency are recorded at the rate prevailing on the date of transactions. Foreign currency Assets and Liabilities are stated at the rate of exchange prevailing at the balance sheet date and the resultant gains / losses are charged to the profit and loss account. Premium/Discount in respect of foreign exchange contract is amortized as Income/Expense over the life of the contract .Any profit or loss arising on cancellation or renewal of such forward contracts is recognized as Income/Expense for the period. Exchange difference arising on settlement or restatement of foreign currency denominated liability is recognized in the profit &loss a/c.

6. Retirement Benefits

i. Defined Contribution Plan

Company's contribution paid/payable during the year to Provident Fund etc are recognized in the Profit and Loss Account. These are approved/recognized scheme of the Company.

ii. Defined Benefit Plan

Annual Company's liability towards Gratuity is funded on the basis of actuarial valuation furnished by the Life Insurance Corporation of India under Group Gratuity Scheme.

iii. The company does not provide leave encashment and carry forward of accumulated leave to next year to its employees.

7. Leases

Assets taken on lease on or after April 1, 2001 are accounted for as Fixed Assets in accordance with Accounting Standard (AS) 19 on "Leases"

a) Financial Lease

Assets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, are classified as finance leases. Such leases are capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

b) Operating Lease

Assets acquired as leases, where a significant portion of the risk and rewards of ownership are retained by the lessor, are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

8. Intangible Fixed Assets

Intangible Assets are recognized only on cost of acquisition.

9. Borrowing Cost

Borrowing costs attributable to the Acquisition/Improvement of qualifying capital assets and incurred till the commencement of commercial use of the assets is capitalized as the cost of the asset as per Accounting Standard (AS) 16- "Borrowing Costs" and other borrowing costs are charged to profit and loss account.

10. Expenses

a) All expenses including interest and finance charges are accounted for on accrual basis.

b) Prior period items, if material, are disclosed separately.

11. Redemption of Customer Loyalty Points

The un availed Customer Loyalty Points lying in the Value card has been provided as a liability and the amount redeemed during the year is charged to Profit & Loss A/c in the respective years of redemption. Redemption of customer loyalty points costs are accrued in the year of sales of products based on past experience.

12. Advance from Customers

Amounts collected as advances from customers have been recognized as a liability in the year of collection. The accumulated amount along with bonus interest is redeemed in the form of jewellery. The bonus or obligations arising out of these transactions are accounted for in books on accrual basis.

The Company is collecting money from its customers on advance basis by extending easy payment scheme, for various durations and offers in return only ornaments at the rate prevailing on the date of redemption together with predetermined bonus amount as may be applicable and such bonus or obligation to the extent not spent is treated on accrual basis in the books of the Company.

13. Deferred Revenue Expenditure Advertisement costs

Costs incurred on advertisement / publicity has been deferred to be amortized as 20% both in the year of incurrence and ensuing year and the balance in equal installment in next two financial years.

Preliminary Expenses

Expenses incurred on Increase in Share Capital amortized over the period of five equal installments.

14. Taxes on Income

Tax Expenses for the year comprises of Current Income Tax, Deferred Tax.

Provision for income tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income T ax Act, 1961.

Deferred tax is recognized, subject to prudence, on timing differences, being the difference between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized in accordance with Accounting Standard (AS) 22 "Accounting for Taxes on Income", issued by the Institute of Chartered Accountants of India.

15. Impairment of assets

The Company reviews the carrying value of assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount as per Accounting Standard (AS) 28- "Impairment of Assets". Impairment loss determined at each balance sheet date is charged to respective Profit & loss account in the year in which such impairment of assets is identified. In assessing the recoverable amount, the estimated future cash flows are discounted to their present value at appropriate discount rates.

16. It is the Company's Policy to take in to the account the impact of any significant event that occurs after the Balance Sheet date but before the finalization of accounts.

17. Provisions, Contingent Liabilities

Provisions are recognized in respect of obligations where, based on the evidence available, their existence at the balance sheet date is considered probable. Contingent liabilities are disclosed by way of Notes on accounts in respect of obligation where, based on the evidence available, their existence at the balance sheet date is considered not probable. Contingent assets are not recognized in the accounts.


Mar 31, 2011

The accounts have been prepared on accrual basis, in accordance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956, which have been prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act 1956, to the extent applicable.

Use of Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenue and expenses during the reporting periods. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

The Accounts are prepared under the Historical Cost Convention and materially comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. The significant accounting policies followed by the Company are stated below:

1. Revenue Recognition

Revenue on sale of products is recognized as and when products are delivered to customers and includes amount recovered towards sales tax and other statutory levies.

2. Inventories

Inventories including companys stock held with goldsmiths are valued at lower of cost or net realizable value. The cost of raw material inventories is computed on a FIFO basis. The cost of finished goods includes cost of conversion and other cost incurred in bringing the Inventories to their present location and condition. Packing materials and Gift items are valued at cost on FIFO basis.

3. Tangible Fixed Assets

a) Fixed Assets are stated at their cost of acquisition or construction as the case may be and including inward freight, incidental expenses related to acquisition/ installation and borrowing cost as per Accounting Standard (AS 16). Depreciation on additions to fixed assets is provided on a pro -rata basis from the date on which acquisition or installation made.

b) Depreciation on Fixed Assets is provided at rates as prescribed under the Companies Act, 1956 on the following basis:

S.No Asset Class Depreciation method

i. - Building Straight Line

Plant & Machinery

Furniture and Fittings

Office equipments

ii. - Vehicles Written Down Value

Computers

c) Lease hold Building is amortized over a period for ten years being the useful life of the asset.

4. Capital work in progress

Capital work in progress includes, cost of assets not yet commissioned, and incidental expenses during the construction period.

5. Foreign Exchange Transactions

Transactions in foreign currency are recorded at the rate prevailing on the date of transactions. Foreign currency Assets and Liabilities are stated at the rate of exchange prevailing at the balance sheet date and the resultant gains/ losses are charged to the profit and loss account.

Premium/Discount in respect of foreign exchange contract is amortized as Income/Expense over the life of the contract .Any profit or loss arising on cancellation or renewal of such forward contracts is recognized as Income/Expense for the period. Exchange difference arising on settlement or restatement of foreign currency denominated liability is recognized in the profit &loss a/c.

6. Retirement Benefits

i. Defined Contribution Plan

Companys contribution paid/payable during the year to Provident Fund etc are recognised in the Profit and Loss Account. These are approved/recognised scheme of the Company.

ii. Defined Benefit Plan

Annual Companys liability towards Gratuity is funded on the basis of actuarial valuation furnished by the Life Insurance Corporation of India under Group Gratuity Scheme.

iii. The company does not provide leave encashment and carry forward of accumulated leave to next year to its employees.

7. Leases

Assets taken on lease on or after April 1,2001 are accounted for as Fixed Assets in accordance with Accounting Standard (AS) 19 on "Leases"

a) Financial Lease

Assets acquired under Leases, where the Company has substantially all the risks and rewards of ownership, are classified as finance leases. Such leases are capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

b) OperatingLease

Assets acquired as leases, where a significant portion of the risk and rewards of ownership are retained by the lessor, are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

8. Intangible Fixed Assets

Intangible Assets are recognized only on cost of acquisition.

9. B orrowing Cost

Borrowing costs attributable to the Acquisition/Improvement of qualifying capital assets and incurred till the commencement of commercial use of the assets is capitalized as the cost of the asset as per Accounting Standard (AS) 16- "Borrowing Costs" and other borrowing costs are charged to profit and loss account.

10. Expenses

a) All expenses including interest and finance charges are accounted for on accrual basis.

b) Prior period items, if material, are disclosed separately.

11. Redemption of Customer Loyalty Points

The un availed Customer Loyalty Points lying in the Value card has been provided as a liability and the amount redeemed during the year is charged to Profit & Loss A/c in the respective years of redemption.

12. Advance from Customers

Amounts collected as advances from customers have been recognized as a liability in the year of collection. The accumulated amount along with bonus interest is redeemed in the form of jewellery. The bonus or obligations arising out of these transactions are accounted for in books on accrual basis.

13. Deferred Revenue Expenditure

Advertisement costs

Costs incurred on advertisement / publicity has been deferred to be amortized as 20% both in the year of incurrence and ensuing year and the balance in equal installment in next two financial years.

Preliminary Expenses

Expenses incurred on Increase in Share Capital amortized over the period of five equal installments.

14. Taxes on Income

Tax Expenses for the year comprises of Current Income Tax, Deferred Tax.

Provision for income tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961.

Deferred tax is recognized, subject to prudence, on timing differences, being the difference between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable / virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised in accordance with Accounting Standard (AS) 22 "Accountingfor Taxes on Income", issued by the Institute of Chartered Accountants of India.

15. Impairment of assets

The Company reviews the carrying value of assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount as per Accounting Standard (AS) 28- "Impairment of Assets". Impairment loss determined at each balance sheet date is charged to respective Profit & loss account in the year in which such impairment of assets is identified. In assessing the recoverable amount, the estimated future cash flows are discounted to their present value at appropriate discount rates.

16. It is the Companys Policy to take in to the account the impact of any significant event that occurs after the Balance Sheet date but before the finalization of accounts.

17. Provisions, Contingent Liabilities

Provisions are recognized in respect of obligations where, based on the evidence available, their existence at the balance sheet date is considered probable. Contingent liabilities are disclosed by way of Notes on accounts in respect of obligation where, based on the evidence available, their existence at the balance sheet date is considered not probable. Contingent assets are not recognized in the accounts.


Mar 31, 2010

The Accounts are prepared under the Historical Cost Convention and materially comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. The significant accounting policies followed by the Company are stated below:

1. Revenue Recognition

Gross turnover is inclusive of VAT and other statutory levies.

2. Inventories

Inventories including companys stock held with goldsmiths are valued at lower of cost or net realizable value. The cost of raw material inventories is computed on a FIFO basis. The cost of finished goods includes cost of conversion and other cost incurred in bringing the Inventories to their present location and condition. Packing materials and Gift items are valued at cost on FIFO basis.

3. Tangible Fixed Assets

a) Fixed Assets are stated at their cost of acquisition or construction as the case may be and including inward freight, incidental expenses related to acquisition/ installation and borrowing cost as per Accounting Standard (AS 16). Depreciation on additions to fixed assets is provided on a pro -rata basis from the date on which acquisition or installation made.

c) Lease hold Building is amortized over the useful life of the asset.

4. Capital work in progress

Capital work in progress includes, cost of assets not yet commissioned, and incidental expenses during the construction period.

5. Foreign Exchange Transactions

Assets and Liabilities arising out of foreign exchange transactions, as translated at the rates of exchange ruling on the date of Balance Sheet and are suitably adjusted to Revenue Account.

In respect of Forward Contract of Exchange, the difference between the forward rate and exchange at the inception contract is recognised as income or expenses over the period of the contract.

The difference between the forward rate and the exchange rate on date of inception- of a forward contract in respect of forward contracts with underlying assets or liabilities is recognised as income or expense and is amortized over the life of the contract.

6. Retirement Benefits

i. Defined Contribution Plan

Companys contribution paid/payable during the year to Provident Fund etc, are recognised in the Profit and Loss Account. These are approved/recognised scheme of the Company.

ii. Defined Benefit Plan

Annual Companys liability towards Gratuity is funded on the basis of actuarial valuation furnished by the Life Insurance Corporation of India under Group Gratuity Scheme.

iii. The company does not provide leave encashment and carry forward of accumulated leave to next year to its employees.

7. Intangible Fixed Assets

Intangible Assets are recognized only on cost of acquisition.

8. Borrowing Cost

Interest and Other cost relating to borrowing of funds are capitalized up to the date when such assets are ready to use and other borrowing costs are charged to profit and loss account.

9. Expenses

a) All expenses including interest and finance charges are accounted for on accrual basis.

b) Prior period items, if material, are disclosed separately.

10. Deferred Revenue Expenditure

Advertisement costs

Costs incurred on advertisement / publicity has been deferred to be amortised as 20% both in the year of incurrence and ensuing year and the balance in equal installment in next two financial years.

Preliminary Expenses

Expenses incurred on Increase in Share Capital are amortized over the period of five equal installments.

11. Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the year.

Timing Differences between accounting income and taxable income capable of being reversed in subsequent years are recognized as deferred tax, in accordance with Accounting Standard - 22 on Taxes on Income, issued by the Institute of Chartered Accountants of India.

12. Impairment of assets

The Company reviews the carrying value of assets for any possible impairment at each balance sheet date. An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. In assessing the recoverable amount, the estimated future cash flows are discounted to their present value at appropriate discount rates.

13. It is the Companys Policy to take in to the account the impact of any significant event that occurs after the Balance Sheet date but before the finalization of accounts.

14. Provisions, Contingent Liabilities

Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the balance sheet date is considered probable. Contingent liabilities are disclosed by way of Notes on accounts in respect of obligation where, based on the evidence available, their existence at the balance sheet date is considered not probable. Contingent assets are not recognised in the accounts.


Mar 31, 2009

The Accounts are prepared under the Historical Cost Convention and materially comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. The significant accounting policies followed by the Company are stated below:

1. Revenue Recognition

Gross turnover is inclusive of VAT and other statutory levies.

2. Inventories

Inventories including companys stock held with goldsmiths are valued at lower of cost or net realizable value. The cost of raw material inventories is computed on a FIFO basis. The cost of finished goods includes cost of conversion and other cost incurred in bringing the Inventories to their present location and condition.

3. Tangible Fixed Assets

a) Fixed Assets are stated at their cost of acquisition or construction as the case may be and including inward freight, incidental expenses related to acquisition/ installation and borrowing cost as per Accounting Standard (AS 16). Depreciation on additions to fixed assets is provided on a pro -rata basis from the date on which acquisition or installation.

4 Capital work in progress

Capital work in progress includes, cost of assets not yet commissioned, and incidental expenses during the construction period.

5. Intangible Fixed Assets

Intangible Assets are recognized only on cost of acquisition.

6. Borrowing Cost

Interest and Other cost relating to borrowing of funds are capitalized up to the date when such assets are ready to use for its production and other borrowing cost are charged to profit and loss account.

7. Expenses

a) All expenses are accounted for on accrual basis except cost of leave encashment and retirement benefits including contribution to the Life Insurance Corporation of India in respect of the Group Gratuity Insurance Policy. These are accounted on cash basis.

b) Interest and finance charges are accounted as follows:

Interest is accounted for on accrual basis.

Prior period items, if material, are disclosed separately.

& Deferred Revenue Expenditure

Advertisement costs

Costs incurred on advertisement / publicity has been deferred to be amortised over a five-year period commencing from the succeeding financial year.

Preliminary Expenses

Expenses incurred on Increase in Share Capital are amortized over the period of five equal installments.

9. Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the year.

Timing Differences between accounting income and taxable income capable of being reversed in subsequent years are recognized as deferred tax, in accordance with Accounting Standard - 22 on Taxes on Income, issued by the Institute of Chartered Accountants of India.

The provision for fringe benefit tax has been made in respect of employee benefits and other specified expenses as determined under Income Tax Act, 1961.

10. Provisions, Contingent liabilities

Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the balance sheet date is considered probable. Contingent liabilities are disclosed by way of Notes on accounts in respect of obligation where, based on the evidence available, their existence at the balance sheet date is considered not probable. Contingent assets are not recognised in the accounts.

 
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