A.  Basis for Preparation of Financial Statements
 
 The financial statements have been prepared using mercantile system of
 accounting under the historical cost convention. It recognises
 significant items of income and expenditure on accrual basis. The
 accounts have been prepared to comply in all material aspects with
 applicable accounting principles in India and the provisions of the
 Companies Act, 1956.
 
 B.  Sales
 
 Income from the sale of diamonds / jewellery is recognised when the
 sale has been completed with the passing of the title.  Income from
 sale of wind energy is recognised on its transmission and delivery.
 
 C.  Other Income Interest
 
 Interest income is recognised on accrual basis.
 
 Income from Investments
 
 Income from investment is accounted in the year in which the
 unconditional right to receive such income is established.
 
 D.  Depreciation
 
 Depreciation on fixed assets has been provided at the rates and in the
 manner prescribed in schedule XIV to the Companies Act, 1956 on
 straight line basis.
 
 E.  Impairment of Assets
 
 An asset is treated as impaired when the carrying cost of assets
 exceeds its recoverable value. An Impairment loss is charged to the
 Profit and Loss account in the year in which the asset is identified as
 impaired. The impairment loss recognised in prior accounting period is
 reversed if there has been a change in the estimate of recoverable
 amount.
 
 F.  Foreign Currency Transactions
 
 F.1 Transactions denominated in foreign currencies are normally
 recorded at the exchange rate prevailing at the time of the
 transaction.
 
 F.2 Monetary items denominated in foreign currencies at the year end
 are translated at year end exchange rate.
 
 F.3 The Company enters into forward / option contracts for hedging
 purpose. In case of forward contracts, the difference between the year
 end rate and rate on the date of contract is recognised as exchange
 difference. The proportionate difference between the forward rate and
 the exchange rate on the date of transaction is recognised over the
 life of the contract. In case of option contracts, the premium paid and
 gain / loss are recognised as exchange difference on the date of
 settlement of the contract. Mark to market loss, if any, is recognised
 as exchange difference at the year end.
 
 F.4 Non monetary foreign currency items are carried at cost.
 
 F.5 Any income or expense on account of exchange difference either on
 settlement or on translation is adjusted to the profit and loss account
 except in cases where they relate to acquisition of fixed assets in
 which case they are adjusted to the carrying cost of such assets.
 
 G.  Fixed Assets
 
 Cost of Fixed Assets comprises of purchase price, duties, levies and
 any cost directly attributable to bringing the asset to its working
 condition for the intended use. Fixed Assets are stated at cost less
 accumulated depreciation.
 
 H. Capital Work in Progress
 
 Capital work in progress comprises of cost of acquisition of assets,
 duties, levies and any cost directly attributable to bringing the asset
 to its working condition for the intended use. Expenditure incurred on
 project under implementation is treated as incidental expenditure
 incurred during construction and is pending allocation to the assets
 which will be allocated/apportioned on completion of the project.
 
 I. Borrowing Costs
 
 All borrowing costs, which are of revenue nature, are charged to Profit
 and Loss Account.
 
 J. Investment
 
 J.1 Long term investments are valued at cost. Provision for diminution
 in value is made only if such diminution is otherwise than temporary in
 the opinion of the management.
 
 J.2 Current Investments -Quoted are valued at cost or market value,
 whichever is lower.
 
 J.3 Investment in Partnership firm is accounted after including share
 of profit thereon as per last available audited information.
 
 K. Inventories
 
 K.1 Stock of raw materials is stated at weighted average cost or net
 realizable value whichever is lower. Stock of polished diamonds (for
 jewellery operations) is valued at technically evaluated cost or net
 realizable value whichever is lower.  Specific items of cost are
 allocated and assigned to inventory wherever practicable.
 
 K.2 Work in Process is valued at technically evaluated cost. Finished
 goods are valued at technically evaluated cost or estimated net
 realizable value, whichever is lower. Cost includes cost of material
 and related conversion cost. In view of the nature of variation in the
 values of individual diamonds and the differential in their processing
 costs, it is not practicable to compute the cost of polished diamonds
 using either FIFO or weighted average cost. In view of the numerous
 grades, it is not practicable to use specific costs. The method of
 valuation is therefore in compliance with AS2 issued by the Institute
 of Chartered Accountants of India to the extent practicable.
 
 K.3 Consumables are valued at cost.
 
 L. Employee Benefits
 
 L1. Short term Employees benefit
 
 Short term employee benefits are recognised in the period during which
 the service has been rendered.
 
 L2. Long Term Employee Benefit
 
 a) Provident Fund Act, Family pension fund & employees State Insurance
 Scheme.
 
 As per Provident Fund Act, 1952 all employees of the Company are
 entitled to receive benefits under the provident fund & family pension
 fund which is a defined contribution plan. These contributions are made
 to the fund administrated and managed by the Government of India. In
 addition some employees of the Company are covered under Employees
 State Insurance Scheme Act, 1948, which are also defined contribution
 schemes recognised and administered by Government of India.
 
 The Company''s contributions to these schemes are recognised as expense
 in Profit and Loss account during the period in which the employee
 renders the related services. The Company has no further obligation
 under these plan beyond its monthly contributions.
 
 b) The Company provides for gratuity obligation through a Defined
 Benefit Retirement Plan (''The Gratuity Plan'') covering it''s employees.
 The present value of the obligation under such Defined plan is
 determined based on actuarial valuation.  Actuarial gains and losses
 are recognised in Profit & Loss Account as and when determined. The
 Company makes annual contribution to LIC for the Gratuity plan in
 respect of employees.
 
 M. Taxation
 
 Current Tax is determined as the amount of tax payable in respect of
 taxable income for the year after considering various reliefs
 admissible under provisions of the Income Tax Act, 1961. The deferred
 tax for timing difference between the book and tax profit for the year
 is accounted for using tax rates and tax laws that have been enacted or
 substantially enacted at the Balance Sheet date. Deferred tax asset
 arising from timing difference are recognised to the extent that there
 is virtual certainty that sufficient future taxable income will be
 available.
 
 N. Provisions, Contingent Liabilities and Contingent Assets
 
 The company creates a provision when there is 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. 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.