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Moneycontrol.com India | Accounting Policy > Diamond Cutting & Jewellery & Precious Metals > Accounting Policy followed by Suashish Diamonds - BSE: 526733, NSE: SUASHDIMON
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Suashish Diamonds

BSE: 526733|NSE: SUASHDIMON|ISIN: INE658A01017|SECTOR: Diamond Cutting & Jewellery & Precious Metals
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Suashish Diamonds is not traded in the last 30 days
Suashish Diamonds is not traded in the last 30 days
Mar 12
Accounting Policy Year : Mar '13
a) Basis of preparation of financial statements:
 
 These financial statements are prepared in accordance with the
 generally accepted accounting principles (GAAP) in India under the
 historical cost convention on the accrual basis, except insurance
 claim, which is accounted when it is finally settled. The financial
 statements have been prepared to comply in all material respects with
 the Accounting Standards notified vide the Companies (Accounting
 Standards) Rules, 2006 except as disclosed in the financial statements
 and the relevant provisions of the Companies Act, 1956.
 
 b) Use of estimates:
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles (GAAP) requires management to make
 estimates and assumptions that affects the reported amounts of assets
 and liabilities and the disclosures of contingent liabilities on the
 date of financial statements and reported amounts of revenue and
 expenses for that period. Although these estimates are based upon
 management''s best knowledge of current events and actions, actual
 results could differ from these estimates.
 
 c) Fixed assets:
 
 Fixed assets are stated at cost of acquisition inclusive of freight,
 duties, taxes and incidental expenses. Borrowing costs directly
 attributable to acquisition or construction of those fixed assets which
 necessarily take a substantial period of time to get ready for their
 intended use are capitalised.
 
 d) Depreciation:
 
 The Company has been charging depreciation on written down value method
 except plant and machinery relating to Windmill, at the rates and in
 the manner specified in Schedule XIV to the Companies Act, 1956.
 Depreciation on Windmill is provided on straight line method.
 
 Leasehold land is amortised over the lease period.
 
 e) Investments:
 
 Investments intended to be held for more than one year are classified
 as long-term investments and other investments are classified as
 current investments. Long-term investments are valued at cost less
 provision, if any, for diminution in value, which is other than
 temporary. Current investments are valued at the lower of cost or
 market value on scrip wise basis.
 
 f) Inventories:
 
 i.  Raw materials - Rough diamonds are valued at the lower of cost or
 net realisable value. The cost is determined considering lot-wise on
 weighted average basis by adding purchase price, commission on
 purchase, cleaving charges and by reducing the sale value of rough
 rejections sold.
 
 ii.  Raw materials - Jewellery (gold, precious stones, alloys and semi
 precious stone, stores and spares and others) is valued at the lower of
 cost or net realisable value. The cost is determined on FIFO/specific
 identification basis.
 
 iii. Finished goods - Polished diamonds are valued at the lower of
 estimated cost as certified by directors or net realizable value.
 
 iv.  Finished goods - Jewellery is valued at the lower of cost or net
 realisable value. The cost of material is determined on FIFO/specific
 identification basis.
 
 v.  Finished goods - Commodity is valued at the lower of cost
 (including brokerage and quantity discounts) or net realizable value.
 The cost of material is determined on FIFO basis.
 
 vi.  Work-in-progress of Jewellery is valued at material cost including
 appropriate production overheads.
 
 vii. Traded goods and stores and spares are valued at the lower of cost
 or net realizable value. Cost is determined on FIFO basis.
 
 viii.  Gold and silver recovered from dust are valued at market rate.
 
 g) Revenue recognition:
 
 i.  Revenue from export sales is recognised when delivery of goods is
 physically given to Customs authorities.  Revenue from domestic sales
 is recognised when goods are delivered to the customer and the title of
 goods passes to the customers.
 
 ii.  Income from sale of wind energy is recognised as per terms of
 agreement with parties.
 
 h) Foreign currency transactions:
 
 i.  Foreign currency transactions are recorded at the exchange rates
 prevailing on the date of such transactions.  Monetary assets and
 liabilities as at the Balance Sheet date are translated at the rates of
 exchange prevailing at the date of the Balance Sheet. Gains and losses
 arising on account of differences in foreign exchange rates on
 settlement/ translation of monetary assets and liabilities are
 recognised in the Statement of profit and loss.  Non-monetary foreign
 currency items are carried at cost.
 
 ii.  The premium or discount arising at the inception of forward
 exchange contract is amortised as expense or income over the life of
 the contract. Exchange differences on such contracts are recognised in
 the Statement of profit and loss in the reporting period in which the
 exchange rates changes. Any profit or loss arising on cancellation or
 renewal of such a forward exchange contract is recognised as income or
 as expense for the period.
 
 iii. Any profit or loss arising on settlement or cancellation of other
 derivative contracts (swaps and currency options) is recognised as
 income or expense for the period.
 
 i) Financial / derivative instruments:
 
 Profit / loss in respect of the contracts for
 equity/commodities/currency futures/options are accounted in the
 Statement of profit and loss on the expiry of the respective contract
 or on the same being squared-off.
 
 In case of unsettled contracts as at the balance sheet date,
 mark-to-market position is recognised in case of losses and ignored in
 case of profits, considering conservative principle.
 
 j) Retirement benefits:
 
 i.  Retirement benefits in the form of provident fund and pension
 schemes are accounted on accrual basis.
 
 ii.  Provision for gratuity liability is made on the basis of actuarial
 valuation at the end of the accounting year.
 
 iii. Liability for encashment of leave is recognised and charged to
 Statement of profit and loss in the year in which it is earned on
 accrual basis.
 
 k) Borrowing costs:
 
 Borrowing costs directly attributable to acquisition or construction of
 fixed assets, which necessarily take substantial year of time to get
 ready for their intended use, are capitalised. Other borrowing costs
 are charged to Statement of profit and loss.
 
 l) Taxation:
 
 Tax expense comprises of current and deferred tax. Current income tax
 are measured at the amount expected to be paid to the tax authorities
 in accordance with the Indian Income Tax Act. Deferred taxes reflects
 the impact of current year timing differences between taxable income
 and accounting income 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/virtual certainty that sufficient future taxable income will
 be available against which such deferred tax assets can be realised. At
 each balance sheet date the Company re-assesses unrecognised deferred
 tax assets.It recognises unrecognized deferred tax assets to the extent
 that it has become reasonably/virtually certain that sufficient future
 taxable income will be available against which such deferred tax assets
 can be realised.
 
 m) Earnings per share:
 
 The basic earnings per share (EPS) is computed by dividing the net
 profit after tax for the year available for the equity shareholders by
 the weighted average number of equity shares outstanding during the
 year. For the purpose of calculating diluted earnings per share, net
 profit after tax for the year available for equity shareholders and the
 weighted average number of shares outstanding during the year are
 adjusted for the effects of all dilutive potential equity shares.
 
 n) Provisions, contingent liabilities and contingent assets:
 
 A provision is made when there is a present obligation as a result of a
 past event that probably requires an outflow of resources and a
 reliable estimate can be made of the amount of the obligation.
 Provisions are not discounted to its present value and are determined
 based on best estimate required to settle the obligation at the balance
 sheet date.  A disclosure for a contingent liability is made when there
 is a possible obligation or a present obligation that may, but probably
 will not, require an outflow of resources. When there is a possible
 obligation or a present obligation in respect of which the likelihood
 of outflow of resources is remote no provision or disclosure is made.
 Contingent assets are neither recognised nor disclosed in the financial
 statements.
 
 o) Credit risk reserve:
 
 The Company is primarily engaged in the business of diamonds and
 jewellery in which it is required to extend prolonged periods of credit
 to its customers. As such, the trade receivables constitute a
 significant part of the assets and are unsecured. Credit Risk Reserve
 is created by the Company to meet exceptional losses on this account as
 a matter of prudence. Based on the activity level, extent of
 receivables, the credit risk perception and other relevant factors,
 further transfers to this reserve are considered.
 
 p) Impairment:
 
 At each balance sheet date, the Company determines whether a provision
 should be made for impairment loss on fixed assets (including
 intangible assets), by considering the indications that an impairment
 loss may have occurred in accordance with Accounting Standard (AS) - 28
 ''Impairment of Assets''. Where the recoverable amount of any fixed
 assets is lower than its carrying amount, a provision for impairment
 loss on fixed assets is made. At the balance sheet date there is an
 indication that previously assessed impairment loss no longer exists,
 the recoverable amount is reassessed and the assets is reflected at the
 recoverable amount subject to a minimum of depreciated historical cost.
Source : Dion Global Solutions Limited
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