Accounting Policies of Sunraj Diamond Exports Ltd. Company

Mar 31, 2024

NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation

a. Statement of compliance with Ind AS

These financial statements are prepared in accordance with Indian Accounting Standards
(Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 and Companies
(Indian Accounting Standards) (Amendment) Rules, 2016 notified under Section 133 of
Companies Act, 2013 (the ‘Act’) and other relevant provisions of the Act.

b. Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is the functional
and reporting currency. Recognition and Measurement of foreign transction have been
disclosed in note 3(t.) below.

c. Basis of Measurement

The company financial statements have been prepared on the historical cost basis.

d. 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 periods presented.

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

Key sources 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 impairment of investments, useful lives
of property, plant and equipment, valuation of deferred tax assets.

i) Impairment of investments

The company reviews its carrying value of investments carried at amortised cost
annually, or more frequently when there is indication for impairment. If the
recoverable amount is less than its carrying amount, the impairment loss is
accounted for.

ii) Useful lives of property, plant and equipment

The company reviews the useful life of property, plant and equipment at the end of
each reporting period. This reassessment may result in change in depreciation
expense in future periods.

iii) Valuation of deferred tax assets

The company reviews the carrying amount of deferred tax assets at the end of
each reporting period.

e. Measurement of Fair Values

The company has established control framework with respect to the measurement of
fair values. The company regularly reviews significant unobservable inputs and valuation
adjustments. If third party information, such as broker quotes or pricing services, is
used to measure fair values, then the company assesses the evidence obtained from
the third parties to support the conclusion that these valuations meet the requirements
of Ind AS, including the level in fair value hierarchy in which the valuations should be
classified.

Significant valuation issues are reported to the Company’s Board of Directors.

Fair values are categorised into different levels in a fair value hierarchy based on the
inputs used in the valuation techniques as follows:

Level 1 - quoted (unadjusted) market prices in active markets for identical assets or
liabilities.

Level 2 - inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e as prices) or indirectly (i.e derived from prices).

Level 3 - inputs for the asset or liability that are not based on observable market data
(unobservable inputs).

When measuring the fair value of an asset or a liability, the company uses observable
market data as far as possible. If the inputs used to measure the fair value of an asset
or a liability fall into different levels of the fair value hierarchy, then the fair value
measurement is categorised in its entirety in the same level of the fair value hierarchy
as the lowest level input that is significant to the entire measurement.

The company recognises transfers between levels of the fair value hierarchy at the end
of the reporting period during which the change has occurred.

f. Revenue Recognition:

Revenue from contracts with customer

Revenue from contracts with customers is recognized on transfer of control of promised
goods or services to a customer at an amount that reflects the consideration to which
the Company is expected to be entitled to in exchange for those goods or services.

Revenue towards satisfaction of a performance obligation is measured at the amount of
transaction price (net of variable consideration) allocated to that performance obligation.
The transaction price of goods sold and services rendered is net of variable consideration
on account of various discounts and schemes offered by the Company as part of the
contract. This variable consideration is estimated based on the expected value of outflow.
Revenue (net of variable consideration) is recognized only to the extent that it is highly
probable that the amount will not be subject to significant reversal when uncertainty
relating to its recognition is resolved.

i) Sale of products

Revenue from sale of products is recognized when the control on the goods have
been transferred to the customer. The performance obligation in case of sale of
product is satisfied at a point in time i.e., when the material is shipped to the
customer or on delivery to the customer, as may be specified in the contract.

ii) Interest Income

Interest income on deposits, securities and loans is recognised at the agreed rate
on time proportionate basis.

iii) Dividend income:

Dividend income on investments is recognised as and when received.

g. Earning per Share :

Basic earnings per share is calculated by dividing the net profit after tax for the year
attributable to equity shareholders of the Company by the weighted average number of
equity shares outstanding during the year. Diluted earnings per share is calculated by
dividing net profit attributable to equity shareholders (after adjustment for diluted
earnings) by average number of weighted equity shares outstanding during the year
plus potential equity shares.

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Mar 31, 2014

1. (a) BASIS OF PREPARATION OF FIANANCIAL STATEMENTS

The financial statements have been prepared in compliance with the mandatory Accounting Standards notified under the companies (Accounting Standards) Rules, 2006 (as amended) and generally accepted Accounting principles applicable in India (GAAP).

The financial statements are prepared under historical cost convention on accrual basis accordance with the requirements of the Companies Act, 1956.

(b) FOREIGN CURRENCY TRANSACTIONS

Foreign transactions that has been entered into by the Company during the year has been accounted as per the exchange rate prevailing as on the date of transaction.

Sales or Purchases accounted during the year are accounted at the rate of exchange as on the date of transaction. Subsequently, when the bills are settled, any gain or loss arising on such transactions are credited or debited to exchange rate fluctuation account.

Closing balances of the foreign parties as on the Balance Sheet date are accounted at the realizable value as on that date. The difference in the account is transferred to exchange rate fluctuation account.

(c) REVENUE RECOGNITION Sale of Goods:

Revenue from sale of goods is recognized when risk and rewards of ownership of the products are passed on to the customers, which is generally on dispatch of goods and is stated net of returns, trade discounts, claims etc.

(d) RELATED PARTY DISCLOSURES Companies in which Directors are interested

- Sunraj Investment & Finanace Pvt. Ltd.

- Gunial Investment & Finance Pvt. Ltd.

- K.D. Shah Investments Pvt. Ltd.

Management / Directors

- Sunil C. Gandhi

- Sunny S. Gandhi

- Nirav K. Shah

Shareholders

- Nirav K. Shah (HUF)

(g) CONTINGENT LIABILITIES:

The Company has a contingent liability of income tax of Rs 8,86,480 in respect for A.Y. 2002-2003.

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Mar 31, 2013

1 .(a) BASIS OF PREPARATION OF FIANANCIAL STATEMENTS

The financial statements have been prepared in compliance with the mandatory Accounting Standards notified under the companies (Accounting Standards) Rules, 2006 (as amended) and generally accepted Accounting principles applicable in India (GAAP).

The financial statements are prepared under historical cost convention on accrual basis accordance with the requirements of the Companies Act, 1956.

(b) FOREIGN CURRENCY TRANSACTIONS

Foreign transactions that has been entered into by the Company during the year has been accounted as per the exchange rate prevailing as on the date of transaction.

Sales or Purchases accounted during the year are accounted at the rate of exchange as on the date of transaction. Subsequently, when the bills are settled, any gain or loss arising on such transactions are credited or debited to exchange rate fluctuation account.

Closing balances of the foreign parties as on the Balance Sheet date are accounted at the realizable value as on that date. The difference in the account is transferred to exchange rate fluctuation account.

(C) Revenue Recognition

Sale of Goods:

Revenue from sale of goods is recognized when risk and rewards of ownership of the products are passed on to the customers, which is generally on dispatch of goods and is stated net of returns, trade discounts, claims etc.

(c) RELATED PARTY DISCLOSURES Companies in which Directors are interested

-Sunraj Investment & Finance Pvt. Ltd.

- Gunial Investment & Finance Pvt. Ltd

- K.D. Shah Investments Pvt. Ltd.

Management / Directors

-Sunil C. Gandhi -SunnyS. Gandhi

- Nirav K. Shah

(e) DEFERRED TAXATION

Deferred Tax Liability fortheyearis Rs. 1,49,510/-

(f) PROPOSED DIVIDEND

The Company at its Board Meeting held on 29,h June, 2013 has proposed to declare dividend @ 10% on its paid up capital. The effect for the same has been provided in the accounts for the relevant year. As per Companies (Transfer of profits to Reserves) Rules, 1975,2.5% of the current years profit aftertax have been transferred to General Reserve Account.

(g) CONTINGENT LIABILITIES:

The company has a contingent liability of income tax of Rs. 8,86,480 in respect for A.Y. 20022003.

(h) MANAGERIAL REMUNERATION:

Managerial Remuneration U/s 198 of the Companies Act, 1956, to the Managing Director.

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Mar 31, 2010

The financial statements are prepared under historical cost convention on accrual basis accordance with the requirements of the Companies Act, 1956.

(b) INVENTORIES

Items of inventory are valued on the basis given below:

(i) Raw Materials - At cost including incidental expenses incurred for its acquisitions.

(ii) Finished Goods - At cost or market value whichever is lower.

(c) DEPRECIATION

Depreciation is provided on Fixed Assets on Straight Line Basis in accordance with Schedule XIV of the Companies Act, 1956.

(d) FIXED ASSETS

All Fixed Assets are valued at cost less Depreciation.

(e) FOREIGN CURRENCY TRANSACTIONS

Foreign transactions that has been entered into by the Company during the year has been accounted as per the exchange rate prevailing as on the date of transaction.

Sales or Purchases accounted during the year are accounted at the rate of exchange as on the date of transaction. Subsequently, when the bills are settled, any gain or loss arising on such transactions are credited or debited to exchange rate fluctuation account.

Closing balances of the foreign parties as on the Balance Sheet date are accounted at the realizable value as on that date. The difference in the account is transferred to exchange rate fluctuation account.

However, the Company has not accounted the exchange rate gain in respect of dues outstanding as on Balance Sheet date of its debtor viz, Marvel Gems BVBA. The principal amount receivable from the debtor is doubtful to be received and hence the gain on valuation of the debtor is not accounted. The Company has followed the policy of substance over form to account the said gain as the principal amount is doubtful to be received then any gain arising on the same cannot be accounted.

(f) INVESTMENTS

Investments are stated at cost of acquisition. During the year, the Company has sold majority of the shares held by them as investment.

During the year F.Y. 2008-09, the Company had made a provision of diminishing in value of investment in case of script of V. B. Desai Financial Services Limited of Rs. 9,78,400 as per the Accounting Standard - 13 issued by the Institute of Chartered

Accountants of India as the market value of the script was much below the original purchase cost. During the year, F.Y. 2009-10, the said script was sold by the Company and it has incurred an actual loss of Rs. 9,51,808. Hence the provision for diminishing in value of investment in respect of the said script that was made last year is now reversed in the current year and actual loss on sale of said script is accounted in the books.