Sagar Diamonds Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2024

1 Corporate Information

Diamond* limited (the ''Company'') wai Incorporated on 15 July, 2015. The Company I* engaged In the bunne''x of Rough R Polished diamonds, sale, export and trading of diamond studded Jewellery and gold S. silver items The Company''s shares are listed on the Bombay Stock Exchange (BSE)/ SME platform

2 Basts of preparation

|a) The financial statements of Company have been prepared In accordance with the generally accepted accounting principles In India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified Under Section 133 of Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

|b) Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles. In applying the accounting policies considerations have been given to prudence, substance over form and materiality.

2.1 Summary of significant accounting policies

a. Use of estimates

The presentation 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 statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

b. Property, Plant and Equipment

Property, Plant and Equipment are stated at cost of acquisition and installation, net of credits / GST availed, if any, less accumulated depreciation.

c. Depreciation on Property, Plant and Equipment

Depreciation is provided based on useful life of the Property, Plant and Equipment as prescribed in schedule II to the Companies Act, 2013 on Straight line Method (SLM) method.

d. Employee Benefits:

Short Term Employee Benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, short term compensated absences, etc, and the expected cost of bonus, ex-gratia are recognized in the period in which the employee renders the related service.

Post-Employment Benefits:

i. Defined Contribution Plans:

State Governed Provident Fund scheme and employees state insurance scheme are defined contribution plans. The contribution paid / payable under the scheme Is recognized during the period in which the employees renders the related services.

ii. Defined Benefit Plans:

The employee''s gratuity fund scheme and compensated absences is company''s defined benefit plans. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

The obligation Is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government Securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations. /T< ic

Actuarial gains and losses air recognized Immediately In the profit and loss account.

Gams or losses on the curtailment or settlement of any defined benefits plans are recognized when the curtailment or settlement occurs. Past service cost Is recognized as expense on a straight-line basis over the average period until the benefits become vested.

iii. long term employee benefits:

The obligation for long term employee benefits such as long term compensated absences, is recognized in the same manner as in case of defined benefit plans as mentioned in d) ii) above.

e. Inventories

Inventories are valued as under:

i. Products:

Valued at lower of cost or net realisable value and for this purpose cost is determined on weighted average basis. Due provision for obsolesance is made.

il. Work-in-progress:

At cost or net realisable value, whichever, is lower. Cost is determined using standard cost method which approximates historical cost.

f. Revenue recognition

i. Revenue is recognized when it is earned and resonable certainty exist as to its realization or collection.

ii. Revenue from sales of goods is recognized on delivery of the products, when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks & rewards of ownership are transferred to the customers and no effective ownership is retained.

iii. Sales are net of trade discounts and GST.

g. Foreign currency transactions and balances

i. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

ii. Monetary items denominated in foreign currency at the year end are translated at the exchange rates prevailing at the balance sheet date.

iii. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Profit & loss Account.

iv. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss account.

h. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period In which they occur. Borrowing costs consist of Interest and other costs that an entity 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.

I. Income taxes

Current tax Is determined as tire amount of tax payable In respect of taxablo Income for the year. Deferred tax Is iccognUcd, subject to the consideration of prudence, on timing difference being the difference between taxable Incomes and accounting Income that originate In one period and are capable of reversal In one or more subsequent periods. Where there Is carry forward losses deferred tax assets are recognized only If there Is virtual certainty of realization of such assets. Other deferred tax assets are recognized only to the extent there Is reasonable certainty of realization In future. Such assets are reviewed at each Balance Sheet date to reassess realization. Deferred tax assets on unabsorbed Depreciatlon/Loss are not recognized to the extent there is reasonable uncertainty of realization In future.

). Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when the company has present obligation as a result of past events, for which it Is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.

Contingent Liabilities are disclosed by way of notes of accounts.

Contingent Assets are neither recognised nor disclosed in the financial statements.

k. Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

l. Cash flow statement

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.

n. Amendments to Schedule III of the Companies Act, 2013

Ministry of Corporate Affairs (MCA) issued notifications dated 24th March, 2021 to amend Schedule III of the Companies Act, 2013 to enhance the disclosures required to be made by the Company in its financial statements. These amendments are applicable to the Company for the financial year starting 1st April, 2021 and applied to the standalone financial statements:

a. Additional disclosure for shareholding of promoters.

b. Additional disclosure for ageing schedule of trade receivables, trade payables, capital work-in-progress.

c. Specific disclosure such as compliance with approved schemes of arrangements, compliance with number of layers of companies, title deeds of immovable property not held in the name of the Company, loans and advances to promoters, directors, key managerial personnel (KMP) and related parties etc.

d. Additional disclosures relating to undisclosed income.

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Mar 31, 2023

2.1 Summary of significant accounting policies

a. Use of estimates

The presentation 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 statements and the reported
amount of revenues and expenses during the reporting period. Difference between the actual results
and estimates are recognized in the period in which the results are known / materialized.

b. Property, Plant and Equipment

Property, Plant and Equipment are stated at cost of acquisition and installation, net of credits / GST
availed, if any, less accumulated depreciation.

c. Depreciation on Property, Plant and Equipment

Depreciation is provided based on useful life of the Property, Plant and Equipment as prescribed in
schedule II to the Companies Act, 2013 on Straight line Method (SLM) method.

d. Employee Benefits

Short Term Employee Benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as
short term employee benefits. Benefits such as salaries, wages, short term compensated absences,
etc, and the expected cost of bonus, ex-gratia are recognized in the period in which the employee
renders the related service.

Post-Employment Benefits :

I. Defined Contribution Plans

State Governed Provident Fund scheme and employees state insurance scheme are defined
contribution plans. The contribution paid / payable under the scheme is recognized during the period
in which the employees renders the related services.

II. Defined Benefit Plans:

The employee'' s gratuity fund scheme and compensated absences is company''s defined benefit plans.
The present value of the obligation under such defined benefit plan is determined based on actuarial
valuation using the projected Unit Credit Method, which recognizes each period of service as giving
rise to additional unit of employee benefits entitlement and measures each unit separately to build up
the final obligation. The obligation is measured at the present value of the estimated future cash

flows. The discount rates used for determining the present value of the obligation under defined
benefit plans, is based on the market yields on Government Securities as at the balance sheet date,
having maturity periods approximating to the terms of related obligations.

Actuarial gains and losses are recognized immediately in the profit and loss account.

Gains or losses on the curtailment or settlement of any defined benefits plans are recognized when
the curtailment or settlement occurs. Past service cost is recognized as expense on a straight-line basis
over the average period until the benefits become vested.

III. Long term employee benefits:

The obligation for long term employee benefits such as long term compensated absences, is
recognized in the same manner as in case of defined benefit plans as mentioned in d) ii) above.

e. Inventories

Inventories are valued as under :

I. Products:

Valued at lower of cost or net realisable value and for this purpose cost is determined on weighted
average basis. Due provision for obsolesance is made.

II. Work-in-progress:

At cost or net realisable value, whichever, is lower. Cost is determined using standard cost method
which approximates historical cost.

f. Revenue recognition

I. Revenue is recognized when it is earned and reasonable certainty exist as to its realization or
collection.

II. Revenue from sales of goods is recognized on delivery of the products, when all significant
contractual obligations have been satisfied, the property in the goods is transferred for a price,
significant risks & rewards of ownership are transferred to the customers and no effective
ownership is retained.

III. Sales are net of trade discounts and GST.

g. Foreign currency transactions and balances

I. Transactions denominated in foreign currencies are normally recorded at the exchange rate
prevailing at the time of the transaction.

II. Monetary items denominated in foreign currency at the yearend are translated at the exchange
rates prevailing at the balance sheet date.

III. Gains and losses resulting from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies are recognised in the Profit &
Loss Account.

IV. Any income or expense on account of exchange difference either on settlement or on
translation is recognised in the profit and loss account.

h. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised
as part of the cost of the asset. All other borrowing costs are expensed in the period in which they
occur. Borrowing costs consist of interest and other costs that an entity 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.

i. Income taxes

Current tax is determined as the amount of tax payable in respect of taxable income for the year.
Deferred tax is recognized, subject to the consideration of prudence, on timing difference being the
difference between taxable incomes and accounting income that originate in one period and are
capable of reversal in one or more subsequent periods. Where there is carry forward losses deferred
tax assets are recognized only if there is virtual certainty of realization of such assets. Other deferred
tax assets are recognized only to the extent there is reasonable certainty of realization in future. Such
assets are reviewed at each Balance Sheet date to reassess realization. Deferred tax assets on
unabsorbed Depreciation/Loss are not recognized to the extent there is reasonable uncertainty of
realization in future.