2. MATERIAL ACCOUNTING POLICIES
INFORMATION

I n accordance with the notification issued by the Ministry
of Corporate Affairs, the Company has adopted Indian
Accounting Standards (referred to as “Ind AS”) notified under
the Companies (Indian Accounting Standards) Rules, 2015.

2.1 Basis of accounting preparation and presentation

These financial statements have been prepared on historical
cost basis, except for certain financial assets and liabilities
that are measured at fair value at the end of each reporting
period. The financial statements are presented in “INR” and
all values are rounded to the nearest Million (INR 000,000),
except when otherwise indicated.

Current versus non-current classification

The Company presents assets and liabilities in the balance
sheet based on current/non-current classification.

An asset is current when it is :

• Expected to be realised or intended to be sold or
consumed in the normal operating cycle;

• Held primarily for the purpose of trading;

• Expected to be realised within twelve months after the
reporting period; or

• Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in the normal operating cycle;

• It is held primarily for the purpose of trading;

• It is due to be settled within twelve months after the
reporting period; or There is no unconditional right to
defer the settlement of the liability for at least twelve
months after the reporting period.

• There is no unconditional right to defer the settlement
of the liability for at least 12 months after the
reporting period.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.

Operating cycle of the Company is the time between the
acquisition of assets for processing and their realization
in cash or cash equivalents. Based on the nature of
products and the time between the acquisitions of assets
for processing and their realization in cash and cash
equivalents, the company has ascertained operating cycle
of 12 months for the purpose of current and non-current
classification of assets and liabilities.

Use of estimates and judgements

The preparation of these financial statements in conformity
with the recognition and measurement principles of Ind AS
requires the management of the Company to make estimates
and assumptions that affect the reported balances of assets
and liabilities, disclosures relating to contingent liabilities
as at the date of the financial statements and the reported
amounts of income and expense for the period presented.

Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimates are revised
and future periods are affected.

Key source of estimation of uncertainty at the date of the
financial statements, which may cause a material adjustment
to the carrying amounts of assets and liabilities within the
next financial year, is in respect of, useful lives of property,
plant and equipment, provision for warranty, variable
consideration in revenue, principal v/s agent assessment
and provisions and contingent liabilities. Future results could
differ due to these estimates and the differences between
the actual results and the estimates are recognized in the
periods in which the results are known / materialize.

2.2 Revenue from contracts with Customers

Ind AS 115 Revenue from contracts with customers deals with
revenue recognition and establishes principles for reporting
useful information to users of financial statements about
the nature, amount, timing and uncertainty of revenue and
cash flows arising from an entity’s contracts with customers.
Revenue is recognised when a customer obtains control of
a promised good or service and thus has the ability to direct
the use and obtain the benefits from the good or service
in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods and
services.

A five-step process must be applied before revenue can
be recognised:

(i) identify contracts with customers

(ii) Identify the separate performance obligation

(iii) determine the transaction price of the contract

(iv) allocate the transaction price to each of the separate
performance obligations, and

(v) recognise the revenue as each performance obligation
is satisfied.

Revenue recognition policy

The Company has following stream of revenue:

(i) Revenue from sale of jewellery

Sale of Goods

Revenue from the contracts with customers is recognised
when control of the goods is transferred to the customer
at an amount that reflects the consideration to which the
Company expects to be entitled in exchange for those goods.
Sales, as disclosed, are net of trade allowances, rebates,
goods and service tax and amounts collected on behalf
of third parties. The Company considers the terms of the
contract and its customary business practices to determine
the transaction price. The transaction price is the amount of
consideration to which the Company expects to be entitled
in exchange for transferring promised goods or services to
a customer, excluding amounts collected on behalf of third
parties (for example, indirect taxes).

In respect of contracts with customers that contain a financing
component i.e. when payment by a customer occurs
significantly before performance and the fair value of goods
provided to the customer at the end of the contract term
exceeds the advance payments received, interest expense
is recognized on recognition of a contract liability over the
contract period and is presented under the head finance
costs in statement of profit and loss and total transaction
price including financing component is recognized when
control of the goods is transferred to the customer.

Satisfaction of performance obligations
The Company''s revenue is derived from the single
performance obligation to transfer primarily jewellery under
arrangements in which the transfer of control of the products
and the fulfilment of the Company''s performance obligation
occur at the same time. Revenue from the sale of goods is
recognised when the Company has transferred control of
the goods to the buyer and the buyer obtains the benefits
from the goods, the potential cash flows and the amount of
revenue (the transaction price) can be measured reliably, and
it is probable that the Company will collect the consideration
to which it is entitled to in exchange for the goods.

2.3 Other Income

Interest income

Interest income from a financial asset is recognized when it is
probable that the economic benefits will flow to the company
and the amount of income can be measured reliably.
Interest Income is accrued on a time basis, by reference
to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial
asset''s net carrying amount on initial recognition.

Dividend Income

Dividend income is recognized when the right to receive it
is established.

Rental Income

Rental income arising from operating leases is accounted for
on a straight-line basis over the lease terms and is included
in other income in the statement of profit and loss.

Royalty Income:

Royalty revenue is recognized on the basis of actual external
sales amount of the Franchisee when the subsequent sale
or usage occurs. The Royalty revenue is calculated on the
basis of agreed terms between company and franchisee.

2.4 Foreign Currency

Functional and presentation currency

I tems included in the financial statements of the company
are measured using the currency of the primary economic
environment in which the company operates (‘the functional
currency''). The financial statements are presented in Indian
rupees (INR) and rounded to the nearest million (INR
000,000), which is functional and presentation currency of
the Company

Transactions and balances

Transactions in currencies other than the Company''s
functional currency are recognized at the exchange rate
prevailing on the date of transaction. Monetary assets and
liabilities denominated in foreign currencies are translated
into the functional currency at the closing exchange rate
prevailing as at the reporting date. Non-monetary assets
and liabilities denominated in a foreign currency are
translated using the exchange rate prevailing at the date
of initial recognition (in case measured at historical cost)
or at the rate prevailing at the date when the fair value is
determined (in case measured at fair value).

Foreign exchange differences are recognized in profit or
loss in the period in which they arise except for exchange
difference on foreign currency borrowings relating to assets
under construction for future productive use, which are
included in the cost of those assets when they are regarded
as an adjustment to interest cost on those foreign currency
borrowings and exchange differences on transactions
entered into in order to hedge foreign currency risks.

2.5 Borrowing Costs

Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the
borrowings using the effective interest method. Fees paid
on the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this
case, the fee is deferred until the draw down occurs. To the
extent there is no evidence that it is probable that some or
all of the facility will be drawn down, the fee is capitalised as
a prepayment for liquidity services and amortised over the
period of the facility to which it relates.

Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. Borrowing
costs consist of interest and other costs that the Company
incurs in connection with the borrowing of funds. Borrowing
cost also includes exchange differences to the extent
regarded as an adjustment to the borrowing costs.

All other borrowing costs are recognized in profit or loss in
the period in which they are incurred.

2.6 Employee benefits

Short-term employee benefits

A liability is recognized for benefits accruing to employees
in respect of wages and salaries in the period the related
service is rendered at the undiscounted amount of the benefit
that is expected to be paid in exchange for that service.

Other employee benefits - Compensated Absences

The liability for earned leave is measured as the present
value of expected future payments to be made in respect
of services provided by employees up to the end of the
reporting period using the projected unit credit method with
actuarial valuations being carried out at each balance sheet
date. The benefits are discounted using the market yields at
the end of the reporting period that have terms approximating
to the terms of the related obligation. Re-measurements as
a result of experience adjustments and changes in actuarial
assumptions are recognized in profit or loss.

The Company provides for the encashment of compensated
absences with pay subject to certain rules. The employees
are entitled to accumulate compensated absences subject to
certain limits, for future encashment.

Accumulated leave, which is expected to be utilized within
the next twelve months, is treated as short-term employee
benefit and the accumulated leave expected to be carried
forward beyond twelve month is treated as long-term
employee benefit which are provided based on the number
of days of unutilized compensated absence on the basis of
an independent actuarial valuation.

Post-employment obligations

The Company operates the following post¬
employment schemes:

(a) Defined contribution plans such as provident fund.

(b) Defined benefit plans in the nature of gratuity.

a. Defined Contribution Plan :

The Company''s contribution to provident fund, pension
and employee state insurance scheme are considered as
defined contribution plans and are charged as an expense
based on the amount of contribution required to be made
and when services are rendered by the employees.

b. Defined Benefit Plan :

For defined retirement benefit plans, the cost of providing
benefits is determined using the projected unit credit
method, with actuarial valuations being carried out at the
end of each annual reporting period. Re-measurement,
comprising actuarial gains and losses, the effect of the
changes to the asset ceiling (if applicable) and the return
on plan assets (excluding interest), is reflected immediately
in the statement of financial position with a charge or credit
recognized in other comprehensive income in the period
in which they occur. Re-measurement recognized in other
comprehensive income is reflected immediately in retained
earnings and will not be reclassified to profit or loss. Past
service cost is recognized in profit or loss in the period of
a plan amendment. Net interest is calculated by applying
the discount rate at the beginning of the period to the net
defined benefit liability or asset. Defined benefit costs are
categorized as follows:

• service cost (including current service cost, past service
cost, as well as gains and losses on curtailments and
settlements);

• net interest expense or income; and

• re-measurement.

2.7 Taxation

Income tax expense comprises current tax expense and the
net change in the deferred tax asset or liability during the
year. Current and deferred tax are recognized in profit or loss,
except when they relate to items that are recognized in other
comprehensive income or directly in equity, in which case,
the current and deferred tax are also recognized in other
comprehensive income or directly in equity, respectively.
Income tax expense represents the sum of the tax currently
payable and deferred tax.

Current income tax

The tax currently payable is based on taxable profit for the
year. Taxable profit differs from ‘profit before tax'' as reported
in the statement of profit or loss and other comprehensive
income because of items of income or expense that are
taxable or deductible in other years and items that are never
taxable or deductible.

The Company''s current tax is calculated using tax rates that
have been enacted or substantively enacted by the end of
the reporting period.

Management periodically evaluates positions taken in tax
returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions

where appropriate on the basis of amounts expected to be
paid to the tax authorities.

Advance taxes and provisions for current income taxes are
presented in the balance sheet after off-setting advance
tax paid and income tax provision arising in the same tax
jurisdiction and where the relevant tax paying unit intends to
settle the asset and liability on a net basis.

Deferred income taxes

Deferred tax is recognized using the balance sheet
approach. Deferred tax assets and liabilities are recognized
for deductible and taxable temporary differences arising
between the tax base of assets and liabilities and their
carrying amount.

Deferred income tax asset is recognized to the extent that
it is probable that taxable profit will be available against
which the deductible temporary differences and the carry
forward of unused tax credits and unused tax losses can be
utilized. The carrying amount of deferred income tax assets
is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred income tax
asset to be utilized.

Deferred tax assets and liabilities are measured using
substantively enacted tax rates expected to apply to taxable
income in the years in which the temporary differences are
expected to be received or settled.

Deferred tax assets and liabilities are offset when they relate
to income taxes levied by the same taxation authority and
the relevant entity intends to settle its current tax assets and
liabilities on a net basis.

The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the
reporting period, to recover or settle the carrying amount of
its assets and liabilities.

2.8 Property Plant and Equipment

Freehold land and Capital work in progress are carried
at historical costs. All other items of property, plant and
equipment are stated at historical cost, net of accumulated
depreciation and accumulated impairment losses, if any.
Such historical cost includes the cost of replacing part of
the property, plant and equipment and borrowing costs if the
recognition criteria are met. When significant parts of the
property, plant and equipment are required to be replaced at
intervals, the Company depreciates them separately based on
their specific useful lives. Likewise, when a major inspection
is performed, its cost is recognised in the carrying amount of
the plant and equipment as a replacement if the recognition
criteria are satisfied. All other repair and maintenance costs
are recognised in statement of profit or loss as incurred. No
decommissioning liabilities are expected or be incurred on
the assets of plant and equipment.

Expenditure directly relating to construction activity is
capitalised. Indirect expenditure incurred during construction
period is capitalised as part of the construction costs to the
extent the expenditure can be attributable to construction
activity or is incidental there to. Income earned during
the construction period is deducted from the total of the
indirect expenditure.

Property Plant and Equipment (PPE) are stated at
cost of acquisition or construction where cost includes
amount added/deducted on revaluation less accumulated
depreciation / amortization and impairment loss, if
any. Capital work-in-progress for production, supply of
administrative purposes is carried at cost less accumulated
impairment loss, if any, until construction and installation are
complete and the asset is ready for its intended use.

Depreciation is provided on a pro-rata basis on the straight¬
line method over the estimated useful lives of the assets,
based on technical evaluation done by management’s
expert taking into account the nature of the assets, their
estimated period of use and the operating conditions. Lease
hold improvements are amortised over the lease term. The
depreciation charge for each period is recognised in the
Statement of Profit and Loss, unless it is included in the
carrying amount of any other asset.

Individual assets costing less than or equal to Rs. 5,000 are
depreciated at the rate of 100% in the year of purchase.

The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for on
a prospective basis.

An item of property, plant and equipment is derecognized
upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any
gain or loss arising on the disposal or retirement of an item of
property, plant and equipment, determined as the difference
between the sales proceeds and the carrying amount of the
asset, is recognized in the Statement of Profit or Loss.

2.9 Investment properties

Property that is held for long-term rental yields or for
capital appreciation or both, and that is not occupied by the
Company, is classified as investment property. Investment
property is measured initially at its cost, including related

transaction costs and where applicable borrowing costs.
Subsequent expenditure is capitalised to the asset’s carrying
amount only when it is probable that future economic
benefits associated with the expenditure will flow to the
Company and the cost of the item can be measured reliably.
All other repairs and maintenance costs are expensed when
incurred. When part of an investment property is replaced,
the carrying amount of the replaced part is derecognised.

I nvestment properties are derecognised either when they
have been disposed of or when they are permanently
withdrawn from use and no future economic benefit is
expected from their disposal. The difference between the
net disposal proceeds and the carrying amount of the asset
is recognised in profit or loss in the period of derecognition.

2.10 Intangible Assets

I ntangible assets are recognized at cost. Intangible assets
are amortised on a straight line basis over the estimated
useful economic life so as to reflect the pattern in which the
assets economic benefits are consumed. Internally generated
intangible assets, excluding capitalised development costs,
are not capitalised and the expenditure is recognised in
the Statement of Profit and Loss in the period in which the
expenditure is incurred.

The estimated useful life and amortisation method are
reviewed at the end of each reporting period, with the
effect of any changes in estimate being accounted for on a
prospective basis.

Following summarizes the nature of intangible and the
estimated useful life:

An intangible asset is derecognized on disposal or when
no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of an
intangible asset, measured as the difference between the
net disposal proceeds and the carrying amount of the asset,
and are recognized in the profit or loss when the asset
is derecognized.

2.11 Inventories

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

Cost is determined as follows :

1. Gold, silver and platinum bullion, old ornaments are
considered as finished goods and valued at weighted
average cost.

2. Gold, silver and platinum ornaments are considered as
finished goods at weighted average cost of purchase
plus weighted average cost of labour charges.

3. Stock of diamond, stones, MRP traded goods and NSI
is considered as finished goods and valued as per at
weighted average cost.

Cost comprises all cost of purchases, duties, taxes (other
than those subsequently recoverable from tax authorities)
and all other directly attributable costs incurred in bringing
the inventory to their present location and condition.

Unfixed gold and quantities of gold covered under fair value
hedge is valued at gold prices prevailing on the period
closing date.

Net realisable value is the estimated selling price in the
ordinary course of business, less estimated costs of
completion to make the sale.

2. MATERIAL ACCOUNTING POLICIES
INFORMATION

In accordance with the notification issued by the
Ministry of Corporate Affairs, the Company has
adopted Indian Accounting Standards (referred to
as “Ind AS”) notified under the Companies (Indian
Accounting Standards) Rules, 2015.

2.1 Basis of accounting preparation and
presentation

These financial statements have been prepared on
historical cost basis, except for certain financial assets
and liabilities that are measured at fair value at the
end of each reporting period. The financial statements
are presented in “INR” and all values are rounded
to the nearest Million (INR 000,000), except when
otherwise indicated.

Current versus non-current classification

The Company presents assets and liabilities in
the balance sheet based on current/non-current
classification.

An asset is current when it is :

• Expected to be realised or intended to be sold or
consumed in the normal operating cycle;

• Held primarily for the purpose of trading;

• Expected to be realised within twelve months after
the reporting period; or

• Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in the normal
operating cycle;

• It is held primarily for the purpose of trading;

• It is due to be settled within twelve months after the
reporting period; or There is no unconditional right

to defer the settlement of the liability for at least
twelve months after the reporting period.

• There is no unconditional right to defer the
settlement of the liability for atleast 12 months after
the reporting period. The Company classifies all
other liabilities as non-current.

Deferred tax assets and liabilities are classified as
non-current assets and liabilities.

Operating cycle of the Company is the time between
the acquisition of assets for processing and their
realization in cash or cash equivalents. Based on
the nature of products and the time between the
acquisitions of assets for processing and their
realization in cash and cash equivalents, the company
has ascertained operating cycle of 12 months for the
purpose of current and non-current classification of
assets and liabilities.

Use of estimates and judgements

The preparation of these financial statements in
conformity with the recognition and measurement
principles of Ind AS requires the management of the
Company to make estimates and assumptions that
affect the reported balances of assets and liabilities,
disclosures relating to contingent liabilities as at the date
of the financial statements and the reported amounts
of income and expense for the period presented.

Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimates are
revised and future periods are affected.

Key source of estimation of uncertainty at the date of
the financial statements, which may cause a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, is in respect of,
useful lives of property, plant and equipment, provision
for warranty, variable consideration in revenue,
principal v/s agent assessment and provisions and
contingent liabilities. Future results could differ due
to these estimates and the differences between the
actual results and the estimates are recognized in the
periods in which the results are known / materialize.

2.2 Revenue from contracts with Customers

I nd AS 115 Revenue from contracts with customers
deals with revenue recognition and establishes
principles for reporting useful information to users of
financial statements about the nature, amount, timing
and uncertainty of revenue and cash flows arising
from an entity’s contracts with customers. Revenue
is recognised when a customer obtains control of a
promised good or service and thus has the ability to
direct the use and obtain the benefits from the good or
service in an amount that reflects the consideration to

which the entity expects to be entitled in exchange for
those goods and services.

A five-step process must be applied before revenue
can be recognised:

(i) identify contracts with customers

(ii) identify the separate performance obligation

(iii) determine the transaction price of the contract

(iv) allocate the transaction price to each of the
separate performance obligations, and

(v) recognise the revenue as each performance
obligation is satisfied.

Revenue recognition policy

The Company has following stream of revenue:

(i) Revenue from sale of jewellery

Sale of Goods

Revenue from the contracts with customers is
recognised when control of the goods is transferred
to the customer at an amount that reflects the
consideration to which the Company expects to
be entitled in exchange for those goods. Sales, as
disclosed, are inclusive of excise but are net of trade
allowances, rebates, goods and service tax and
amounts collected on behalf of third parties. The
Company considers the terms of the contract and
its customary business practices to determine the
transaction price. The transaction price is the amount
of consideration to which the Company expects to be
entitled in exchange for transferring promised goods or
services to a customer, excluding amounts collected
on behalf of third parties (for example, indirect taxes).

I n respect of contracts with customers that contain a
financing component i.e. when payment by a customer
occurs significantly before performance and the fair
value of goods provided to the customer at the end
of the contract term exceeds the advance payments
received, interest expense is recognized on recognition
of a contract liability over the contract period and is
presented under the head finance costs in statement
of profit and loss and total transaction price including
financing component is recognized when control of the
goods is transferred to the customer.

Satisfaction of performance obligations

The Company’s revenue is derived from the single
performance obligation to transfer primarily jewellery
under arrangements in which the transfer of control
of the products and the fulfilment of the Company’s
performance obligation occur at the same time.
Revenue from the sale of goods is recognised when
the Company has transferred control of the goods
to the buyer and the buyer obtains the benefits from

the goods, the potential cash flows and the amount
of revenue (the transaction price) can be measured
reliably, and it is probable that the Company will collect
the consideration to which it is entitled to in exchange
for the goods.

2.3 Other Income

Interest income

I nterest income from a financial asset is recognized
when it is probable that the economic benefits will
flow to the company and the amount of income can be
measured reliably. Interest Income is accrued on a time
basis, by reference to the principal outstanding and at
the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset’s net
carrying amount on initial recognition.

Dividend Income

Dividend income is recognized when the right to
receive it is established.

Rental Income

Rental income arising from operating leases is
accounted for on a straight-line basis over the lease
terms and is included in other income in the statement
of profit and loss.

Royalty Income:

Royalty revenue is recognized on the basis of actual
external sales amount of the Franchisee when the
subsequent sale or usage occurs. The Royalty revenue
is calculated on the basis of agreed terms between
company and franchisee.

2.4 Foreign Currency

Functional and presentation currency

Items included in the financial statements of the
company are measured using the currency of the
primary economic environment in which the company
operates (‘the functional currency’). The financial
statements are presented in Indian rupees (INR) and
rounded to the nearest million (INR 000,000), which is
functional and presentation currency of the Company.

Transactions and balances

Transactions in currencies other than the Company’s
functional currency are recognized at the exchange
rate prevailing on the date of transaction. Monetary
assets and liabilities denominated in foreign currencies
are translated into the functional currency at the
closing exchange rate prevailing as at the reporting
date. Non-monetary assets and liabilities denominated
in a foreign currency are translated using the exchange
rate prevailing at the date of initial recognition (in case

measured at historical cost) or at the rate prevailing
at the date when the fair value is determined (in case
measured at fair value).

Foreign exchange differences are recognized in profit
or loss in the period in which they arise except for
exchange difference on foreign currency borrowings
relating to assets under construction for future
productive use, which are included in the cost of those
assets when they are regarded as an adjustment to
interest cost on those foreign currency borrowings and
exchange differences on transactions entered into in
order to hedge foreign currency risks.

2.5 Borrowing Costs

Borrowings are initially recognised at fair value,
net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction
costs) and the redemption amount is recognised
in profit or loss over the period of the borrowings
using the effective interest method. Fees paid on
the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn
down. In this case, the fee is deferred until the draw
down occurs. To the extent there is no evidence that
it is probable that some or all of the facility will be
drawn down, the fee is capitalised as a prepayment for
liquidity services and amortised over the period of the
facility to which it relates.

Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which
are assets that necessarily take a substantial period
of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as
the assets are substantially ready for their intended
use or sale. Borrowing costs consist of interest and
other costs that the Company incurs in connection
with the borrowing of funds. Borrowing cost also
includes exchange differences to the extent regarded
as an adjustment to the borrowing costs.

All other borrowing costs are recognized in profit or
loss in the period in which they are incurred.

2.6 Employee benefits

Short-term employee benefits

A liability is recognized for benefits accruing to
employees in respect of wages and salaries in
the period the related service is rendered at the
undiscounted amount of the benefit that is expected to
be paid in exchange for that service.

Other employee benefits - Compensated
Absences

The liability for earned leave is measured as the
present value of expected future payments to be made
in respect of services provided by employees up to
the end of the reporting period using the projected
unit credit method with actuarial valuations being
carried out at each balance sheet date. The benefits
are discounted using the market yields at the end of
the reporting period that have terms approximating to
the terms of the related obligation. Re-measurements
as a result of experience adjustments and changes in
actuarial assumptions are recognized in profit or loss.

The Company provides for the encashment of
compensated absences with pay subject to certain
rules. The employees are entitled to accumulate
compensated absences subject to certain limits, for
future encashment.

Accumulated leave, which is expected to be utilized
within the next twelve months, is treated as short¬
term employee benefit and the accumulated leave
expected to be carried forward beyond twelve month
is treated as long-term employee benefit which are
provided based on the number of days of unutilized
compensated absence on the basis of an independent
actuarial valuation.

Post-employment obligations

The Company operates the following post¬
employment schemes:

(a) Defined contribution plans such as provident fund.

(b) Defined benefit plans in the nature of gratuity and

A. Defined Contribution Plan :

The Company’s contribution to provident fund, pension
and employee state insurance scheme are considered
as defined contribution plans and are charged as an
expense based on the amount of contribution required
to be made and when services are rendered by
the employees.

B. Defined Benefit Plan :

For defined retirement benefit plans, the cost of
providing benefits is determined using the projected
unit credit method, with actuarial valuations being
carried out at the end of each annual reporting period.
Re-measurement, comprising actuarial gains and
losses, the effect of the changes to the asset ceiling
(if applicable) and the return on plan assets (excluding
interest), is reflected immediately in the statement of
financial position with a charge or credit recognized
in other comprehensive income in the period in which
they occur. Re-measurement recognized in other
comprehensive income is reflected immediately in
retained earnings and will not be reclassified to profit

or loss. Past service cost is recognized in profit or
loss in the period of a plan amendment. Net interest
is calculated by applying the discount rate at the
beginning of the period to the net defined benefit
liability or asset. Defined benefit costs are categorized
as follows:

• service cost (including current service cost,
past service cost, as well as gains and losses
on curtailments and settlements);

• net interest expense or income; and

• re-measurement.

2.7 Taxation

I ncome tax expense comprises current tax expense
and the net change in the deferred tax asset or liability
during the year. Current and deferred tax are recognized
in profit or loss, except when they relate to items that are
recognized in other comprehensive income or directly
in equity, in which case, the current and deferred tax
are also recognized in other comprehensive income
or directly in equity, respectively. Income tax expense
represents the sum of the tax currently payable and
deferred tax.

Current income tax

The tax currently payable is based on taxable profit for
the year. Taxable profit differs from ‘profit before tax’
as reported in the statement of profit or loss and other
comprehensive income because of items of income or
expense that are taxable or deductible in other years
and items that are never taxable or deductible.

The Company’s current tax is calculated using tax
rates that have been enacted or substantively enacted
by the end of the reporting period.

Management periodically evaluates positions taken
in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis
of amounts expected to be paid to the tax authorities.

Advance taxes and provisions for current income taxes
are presented in the balance sheet after off-setting
advance tax paid and income tax provision arising in
the same tax jurisdiction and where the relevant tax
paying unit intends to settle the asset and liability on a
net basis.

Deferred income taxes

Deferred tax is recognized using the balance sheet
approach. Deferred tax assets and liabilities are
recognized for deductible and taxable temporary
differences arising between the tax base of assets and
liabilities and their carrying amount.

Deferred income tax asset is recognized to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences
and the carry forward of unused tax credits and
unused tax losses can be utilized. The carrying amount
of deferred income tax assets is reviewed at each
reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income tax
asset to be utilized.

Deferred tax assets and liabilities are measured using
substantively enacted tax rates expected to apply to
taxable income in the years in which the temporary
differences are expected to be received or settled.

Deferred tax assets and liabilities are offset when they
relate to income taxes levied by the same taxation
authority and the relevant entity intends to settle its
current tax assets and liabilities on a net basis.

The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from
the manner in which the Company expects, at the end
of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.

2.8 Property Plant and Equipment

Freehold land and Capital work in progress are
carried at historical costs. All other items of property,
plant and equipment are stated at historical cost,
net of accumulated depreciation and accumulated
impairment losses, if any. Such historical cost includes
the cost of replacing part of the property, plant and
equipment and borrowing costs if the recognition
criteria are met. When significant parts of the property,
plant and equipment are required to be replaced at
intervals, the Company depreciates them separately
based on their specific useful lives. Likewise, when a
major inspection is performed, its cost is recognised
in the carrying amount of the plant and equipment
as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs are
recognised in statement of profit or loss as incurred.
No decommissioning liabilities are expected or be
incurred on the assets of plant and equipment.

Expenditure directly relating to construction activity
is capitalised. Indirect expenditure incurred during
construction period is capitalised as part of the
construction costs to the extent the expenditure can
be attributable to construction activity or is incidental
there to. Income earned during the construction period
is deducted from the total of the indirect expenditure.

Property Plant and Equipment (PPE) are stated
at cost of acquisition or construction where cost
includes amount added/deducted on revaluation
less accumulated depreciation / amortization and
impairment loss, if any. Capital work-in-progress

for production, supply of administrative purposes is
carried at cost less accumulated impairment loss, if
any, until construction and installation are complete
and the asset is ready for its intended use.

Depreciation is provided on a pro-rata basis on the
straight-line method over the estimated useful lives
of the assets, based on technical evaluation done by
management’s expert taking into account the nature
of the assets, their estimated period of use and the
operating conditions. Lease hold improvements
are amortised over the lease term. The depreciation
charge for each period is recognised in the Statement
of Profit and Loss, unless it is included in the carrying
amount of any other asset.

I ndividual assets costing less than or equal to C 5,000
are depreciated at the rate of 100% in the year
of purchase.

The estimated useful lives, residual values and
depreciation method are reviewed at the end of each
reporting period, with the effect of any changes in
estimate accounted for on a prospective basis.

An item of property, plant and equipment is
derecognized upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising on
the disposal or retirement of an item of property, plant
and equipment, determined as the difference between
the sales proceeds and the carrying amount of the
asset, is recognized in the Statement of Profit or Loss..

2.9 Investment properties

Property that is held for long-term rental yields or for
capital appreciation or both, and that is not occupied
by the Company, is classified as investment property.
Investment property is measured initially at its
cost, including related transaction costs and where
applicable borrowing costs. Subsequent expenditure
is capitalised to the asset’s carrying amount only when
it is probable that future economic benefits associated
with the expenditure will flow to the Company and
the cost of the item can be measured reliably. All
other repairs and maintenance costs are expensed
when incurred. When part of an investment property

is replaced, the carrying amount of the replaced part
is derecognised.

Investment properties are derecognised either
when they have been disposed of or when they
are permanently withdrawn from use and no future
economic benefit is expected from their disposal. The
difference between the net disposal proceeds and the
carrying amount of the asset is recognised in profit or
loss in the period of derecognition.

2.10 Intangible Assets

Intangible assets are recognized at cost. Intangible
assets are amortised on a straight line basis over the
estimated useful economic life so as to reflect the
pattern in which the assets economic benefits are
consumed. Internally generated intangible assets,
excluding capitalised development costs, are not
capitalised and the expenditure is recognised in the
Statement of Profit and Loss in the period in which the
expenditure is incurred.

The estimated useful life and amortisation method are
reviewed at the end of each reporting period, with the
effect of any changes in estimate being accounted for
on a prospective basis.

Following summarizes the nature of intangible and the
estimated useful life:

An intangible asset is derecognized on disposal or
when no future economic benefits are expected
from use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured as the
difference between the net disposal proceeds and the
carrying amount of the asset, and are recognized in the
profit or loss when the asset is derecognized.

2.11 Inventories

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

Cost is determined as follows :

1. Gold, silver and platinum bullion, old ornaments
are considered as finished goods and valued at
weighted average cost.

2. Gold, silver and platinum ornaments are
considered as finished goods at weighted average
cost of purchase plus weighted average cost of
labour charges.

3. Stock of diamond, stones, MRP traded goods and
NSI is considered as finished goods and valued
as per at weighted average cost.

Cost comprises all cost of purchases, duties, taxes
(other than those subsequently recoverable from tax
authorities) and all other directly attributable costs
incurred in bringing the inventory to their present
location and condition.

Unfixed gold and quantities of gold covered under fair
value hedge is valued at gold prices prevailing on the
period closing date.

Net realisable value is the estimated selling price in the
ordinary course of business, less estimated costs of
completion to make the sale.