Mar 31, 2022
Thangamayil Jewellery Limited (the ''Company'') is a company domiciled in India, with its registered office situated at No.124, Nethaji Road, Madurai - 625 001, Tamilnadu, India. The Company has been incorporated under the provisions of the Indian Companies Act and its equity shares are listed on the National Stock Exchange (NSE) and BSE Limited in India. The Company is primarily involved in manufacturing and sale of Jewellery and other accessories and products.
1) SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
i. Statement of Compliance
The financial statements of the Company have been prepared in accordance with Indian Accounting Standard ("Ind AS") notified under the Companies (Indian Accounting standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 read with section 133 of the Companies Act, 2013.
ii. Basis of preparation and presentation
The financial statements have been prepared on accrual basis under the historical cost convention except for the following that are measured at fair value as required by relevant Ind AS:
a. Defined Employee benefit Plans - Plan assets are measured at fair value.
b. Certain financial assets and liabilities
iii. Use of Estimates and judgement
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management''s evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates.
Estimates and assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
iv. Revenue Recognition
Sales are recognized when goods are supplied and are recorded at net realizable value excluding GST 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.
v. 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.
Packing materials and Gift items are valued at cost on FIFO basis.
vi. Property, Plant and Equipment
Buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated at cost less accumulated depreciation and accumulated impairment losses. Freehold land is not depreciated.
Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any. The cost of property, plant and equipment comprises its purchase price/ acquisition cost, net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying property, plant and equipment up to the date the asset is ready for its intended use.
Machinery spares which can be used only in connection with an item of Property, plant and equipment and
whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of the relevant assets.
Subsequent expenditure on property, plant and equipment after its purchase / completion is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.
Depreciation on Fixed Assets is provided at rates as prescribed under the Companies Act, 2013 on the following basis:
S.No |
Asset Class |
Useful life of assets |
i. |
Straight Line basis - Building - Plant & Machinery - Furniture and Fittings - Office equipment''s |
60 Years 15 years 10 years 15 years |
ii. |
Written Down Value basis Vehicles - Motor Car - Two Wheelers Computers - Hardware - Software |
8 years 10 years 3 years 6 years |
vii. 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.
viii. Borrowing cost
Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets till such time the assets is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognized as an expense in the year in which they are incurred.
ix. 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.
x. Retirement Benefits
a. 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.
b. 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.
c. The company does not provide leave encashment and carry forward of accumulated leave to next year to its employees.
xi. Leases
The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:(i)the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset("ROU")and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less(short-term-leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The sublease is classified as a finance or operating lease by
reference to the right-of-use asset arising from the head lease. For operating leases, rental income is recognized on a straight-line basis over the term of the relevant lease.
Effective April 1, 2019, the Company adopted Ind AS 116"Leases" and applied the standard to all lease contracts existing on April 1,2019 using the modified retrospective method and has taken the cumulative adjustment to retained earnings, on the date of initial application. Consequently, the Company recorded the lease liability at the present value of the lease payments discounted at the incremental borrowing rate and the right of use asset at its carrying amount as if the standard had been applied since the commencement date of the lease, but discounted at the Company''s incremental borrowing rate at the date of initial application.
xii. 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. Intangible assets are amortized over their respective estimated useful lives'' on a Written down value basis, from the date that they are available for use.
xiii. Expenses
a. All expenses including interest and finance charges are accounted for on accrual basis.
b. Prior period items, if material, are disclosed separately.
xiv. 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.
xv. Redemption of Customer Loyalty Points
The unavailed 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.
xvi. 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 from the date of original entry date) 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 realization.
The company is accepting old gold from its customers to be exchanged for new gold ornaments within a period of twelve months without any charges for making such ornaments.
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.
xvii. 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 if any is adjusted to the notional purchase account and the value as on that date is adjusted as cost for inventory valuation consideration.
xviii. Hedging
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 resultant gain or loss as on reporting date is taken to the profit and loss under the head of other income / other expenses appropriately. This treatment is consistently followed as the corresponding value of physical inventory quantity is adopted in the books of accounts as per the generally accepted and adopted valuation. The carried over closing stock as and when sold physically in the market will reflect the actual realization on such sales. Similarly, the hedging position loss or profit as the case may be will be reflected on at the time of closure corresponding to actual realization as and when made in the hedging position.
xix. Taxes on Income
Tax expense comprises 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 tax: Deferred tax is recognized using the balance sheet approach. Deferred tax assets and liabilities are recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be utilized.
xx. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
xxi. Impairment of assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order
to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the assets are also allocated to individual cashgenerating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of profit and loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. A reversal of impairment loss is recognised immediately in the statement of profit and loss.
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.
xxii. Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and liabilities are initially recognised at fair value. Transaction costs that are directly attributable to financial assets and liabilities [other
than financial assets and liabilities measured at fair value through profit and loss (FVTPL)] are added to or deducted from the fair value of the financial assets or liabilities, as appropriate on initial recognition. Transaction costs directly attributable to acquisition of financial assets or liabilities measured at FVTPL are recognised immediately in the statement of profit and loss.
1. Non-derivative Financial assets:
All regular purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in market place.
2. Impairment of financial assets
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to life time ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in the statement of profit and loss.
3. Foreign exchange gains and losses
The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period.
For foreign currency denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognised in statement of profit and loss except for those which are designated as hedging instruments in a hedging relationship.
For the purposes of recognising foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortised cost. Thus, the exchange differences on the amortised cost are recognised in the statement of
profit and loss and other changes in the fair value of FVTOCI financial assets are recognised in other comprehensive income.
1. Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL. However, financial liabilities that arise when a transfer of a financial asset does not qualify for de-recognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
2. Financial liabilities at FVTPL
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognised in statement of profit and loss. The net gain or loss recognised in statement of profit and loss
incorporates any interest paid on the financial liability and is included in the ''Other income/other expenses'' line item.
3. Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in the statement of profit and loss.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in the statement of profit and loss.
Mar 31, 2018
(i) Statement of Compliance
The financial statements of the Company have been prepared in accordance with Indian Accounting Standard ("Ind AS") notified under the Companies (Indian Accounting standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 read with section 133 of the Companies Act, 2013.
Upto the year ended March 31,2017, the company had prepared and presented its financial statements in accordance with the requirements of previous Generally Accepted Accounting Principles (GAAP), which includes Standards notified under the Companies (Accounting Standards) Rules, 2006. These are the Company''s first Ind AS financial statements. The date of transition is April 1, 2016. Refer note 1 for the details of first - time adoption exemptions availed by the Company.
(ii) Basis of preparation and presentation
The financial statements have been prepared on accrual basis under the historical cost convention except for the following that are measured at fair value as required by relevant Ind AS:
a) Defined Employee benefit Plans - Plan assets are measured at fair value.
b) Certain financial assets and liabilities
(iii) Use of Estimates and judgement
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management''s evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates.
Estimates and assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
(iv) Revenue Recognition
Sales are recognized when goods are supplied and are recorded at net realizable value excluding VAT/GST 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
(v) 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.
(vi) Property, Plant and Equipment
For transition to Ind AS, the Company has elected to continue with the carrying value of its property, plant and equipment recognised as at 1st April 2016( transition date) measured as per previous GAAP and use that carrying value as its deemed cost as of the transition date.
Buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated at cost less accumulated depreciation and accumulated impairment losses. Freehold land is not depreciated.
Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any. The cost of property, plant and equipment comprises its purchase price/ acquisition cost, net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying property, plant and equipment up to the date the asset is ready for its intended use.
Machinery spares which can be used only in connection with an item of Property, plant and equipment and whose use is expected to be irregular are capitalised and depreciated over the useful life of the principal item of the relevant assets.
Subsequent expenditure on property, plant and equipment after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.
Depreciation on Fixed Assets is provided at rates as prescribed under the Companies Act, 2013 on the following basis:
(vii) 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.
(viii) Borrowing cost
Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets till such time the assets is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the year in which they are incurred.
(ix) 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.
(x) 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.
(xi) 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
(xii) Intangible Fixed Assets
For transition to Ind AS, the Company has elected to continue with the carrying value of its intangible assets recognised as at 1st April 2016( transition date) measured as per previous GAAP and use that carrying value as its deemed cost as of the transition date.
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. Intangible assets are amortized over their respective estimated useful lives'' on a Written down value basis, from the date that they are available for use.
(xiii) Expenses
a) All expenses including interest and finance charges are accounted for on accrual basis.
b) Prior period items, if material, are disclosed separately.
(xiv) 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.
(xv) 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.
(xvi) 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 from the date of original entry date) 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 ornaments within a period of twelve months without any charges for making such ornaments.
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.
(xvii) 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 inventory valuation consideration.
(xviii) 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.
Minimum alternate tax (MAT) paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that future economic benefit associated with it will flow to the Company and the asset can be measured reliably.
Deferred tax: Deferred tax is recognized using the balance sheet approach. Deferred tax assets and liabilities are recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
(xix) Impairment of assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of profit and loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. A reversal of impairment loss is recognised immediately in the statement of profit and loss.
(xx) 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.
(xxi) Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and liabilities are initially recognised at fair value. Transaction costs that are directly attributable to financial assets and liabilities [other than financial assets and liabilities measured at fair value through profit and loss (FVTPL)] are added to or deducted from the fair value of the financial assets or liabilities, as appropriate on initial recognition. Transaction costs directly attributable to acquisition of financial assets or liabilities measured at FVTPL are recognised immediately in the statement of profit and loss.
1) Non-derivative Financial assets:
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in market place.
2) Impairment of financial assets
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to life time ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in the statement of profit and loss.
3) Foreign exchange gains and losses
The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period.
For foreign currency denominated financial assets measured at amortised cost and FVTPL, the exchange differences are recognised in statement of profit and loss except for those which are designated as hedging instruments in a hedging relationship.
For the purposes of recognising foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortised cost. Thus, the exchange differences on the amortised cost are recognised in the statement of profit and loss and other changes in the fair value of FVTOCI financial assets are recognised in other comprehensive income.
Financial Liabilities
1) Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL. However, financial liabilities that arise when a transfer of a financial asset does not qualify for de-recognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below
2) Financial liabilities at FVTPL
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurment recognised in statement of profit and loss. The net gain or loss recognised in statement of profit and loss incorporates any interest paid on the financial liability and is included in the ''Other income/other expenses'' line item
3) Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in the statement of profit and loss.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in the statement of profit and loss.
Mar 31, 2017
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 confirmed 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 under the Companies Act, 2013 on the following basis:
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 preoperative 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 recognized in the Profit and Loss Account. These are approved/recognized scheme of the Company.
ii. Defined Benefit Plan
Annually 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, and offers in return gold ornaments at the rate prevailing on the date of redemption (which is less than twelve months from 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 realization.
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 in 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 if 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.
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 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.
Minimum alternate tax (MAT) paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the balance sheet when it is probable that future economic benefit associated with it will flow to the Company and the asset can be measured reliably.
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 recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
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 realized. 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, 2016
Significant Accounting Policies
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.
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 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 âLeases"
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 less or, 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, and offers in return gold ornaments at the rate prevailing on the date of redemption (which is less than twelve months from 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 realization.
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 favorable 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.
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 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 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 recognized 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 realized.
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 realized. 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, 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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