1.1 Accounting Concepts
 
 The accounts have been prepared on accrual basis, in accordance with the
 Accounting Standards referred to in Section 211 (3C) of the Companies
 Act, 1956, which have been prescribed by the Companies (Accounting
 Standards) Rules, 2006 and the provisions of the Companies Act 1956, to
 the extent applicable. Accounting policies have been consistently
 applied except where a newly issued accounting standard is initially
 adopted or a revision to the existing accounting standard or a more
 appropriate presentation of the financial statements requires a change
 in the accounting policy hitherto in use.
 
 1.2 Use of estimates
 
 The preparation of financial statements requires estimates and
 assumptions to be made that affect the reported amount of assets and
 iabilities on the date of the financial statement and the reported
 amount of revenue and expenses during the reporting periods. Difference
 between the actual results and estimates are recognised in the period
 in which the results are known / materialised.
 
 1.3 Revenue Recognition
 
 a) Revenue on sale of products is recognised as and when the products
 are dispatched to customers or acknowledged by the customers.  Sales
 are stated net of returns and excluding sales tax.
 
 b) Revenue is recognised only when it is reasonably certain that the
 ultimate collection will be made
 
 1.4 Fixed Assets
 
 Fixed assets are recorded at cost of acquisition inclusive of freight,
 duties, taxes and incidental expenses related to acquisition.
 Expenditure incurred during construction period has been added to the
 cost of assets.
 
 1.5 Leased Assets
 
 a) Assets taken on finance lease, including taken on hire purchase
 arrangements, wherein the Company has an option to acquire the asset,
 are accounted for as fixed assets in accordance with the Accounting
 Standard 19 on Leases, (AS 19).
 
 b) Assets taken on lease under which the lessor effectively retains all
 the risk and rewards of ownership are classified as operating lease.
 Lease payments under operating leases are recognised as expenses on
 accrual basis in accordance with the respective lease agreement.
 
 c) The cost of improvements to lease properties are capitalised and
 disclosed appropriately.
 
 1.6 Impairment of Fixed 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 an asset is identified as
 impaired. The impairment loss recognised in prior accounting periods is
 reversed if there has been a change in the estimate of recoverable
 amount
 
 1.7 Depreciation
 
 Depreciation is charged on the fixed assets under the written down
 value method in accordance with the provisions of Schedule XIV to the
 Companies Act, 1956. The expenditure incurred on improvement of assets
 acquired on lease is written off evenly over the balance period of the
 lease.
 
 1.8 Investment
 
 Long - term investments including investment in Subsidiaries are stated
 at cost. Provision for diminution in the value of long-term nvestments
 is made only if such a decline is other than temporary in the opinion
 of the management.
 
 1.9 Borrowing Costs
 
 Borrowing costs attributable to the acquisition or construction of
 qualifying asset are capitalised as part of the cost of asset. Other
 borrowing costs are recognised as an expense in the period in which
 they are incurred.
 
 1.10 Foreign Currency Transactions
 
 Transactions in foreign currency are recorded at the rate in force on
 the date of transactions.
 
 Foreign currency assets, except investments and liabilities other than
 for financing fixed assets are stated at the rate of exchange
 prevailing at the date of balance sheet and resultant gains/losses are
 charged to the profit and loss account.
 
 Premium or discount arising at the inception of forward foreign
 exchange contracts is amortised as expense or income over the life of
 the contracts. Any profit or loss arising on cancellation or renewal of
 such forward contract is recognised as income or expense for the
 period.
 
 Exchange differences arising on settlement or restatement of foreign
 currency denominated liabilities relating to the acquisition of fixed
 asset are recognised in the Profit and Loss account.
 
 1.11 Inventories
 
 Inventories of raw materials, finished goods, rejections, trading goods
 and stores are valued as under: -
 
 Raw Material Lower of cost and net realisable value
 
 Rough Diamond Rejections At net realisable value
 
 Trading Goods Lower of cost and net realisable value
 
 Finished Goods – Polished Diamonds Lower of cost and net realisable
 value
 
 Work in progress – Jewellery Lower of market value and material cost
 plus proportionate labour and overheads.
 
 Finished Goods – Jewellery Lower of market value and material cost plus
 labour and overheads.
 
 Finished Goods – Gold Lower of cost and market value
 
 Consumable Stores & Tools At cost
 
 1.12 Taxation
 
 The Company is eligible for tax incentives under the Indian Taxation
 Laws. Tese incentives presently includes an exemption from payment of
 Income Tax for operation in Special Economic Zones. The management
 estimates the provisions for current tax after considering such tax
 benefits.
 
 Deferred tax is recognised, subject to prudence, on timing differences,
 being the difference between the taxable income and the accounting
 income that originate in one period and are capable of reversal in one
 or more subsequent periods. Deferred tax assets are recognised for
 unabsorbed depreciation and carry forward losses to the extent there is
 virtual certainty that sufficient future taxable income will be
 available against which deferred tax assets can be realised.
 
 1.13 Employee Benefits
 
 i.  Leave Salary is paid to all employees as per the policy of Company
 every year.
 
 ii.  Defined Contribution Plans :
 
 Contributions payable by the Company to the concerned Government
 authorities in respect of Provident Fund, Family Pension Fund and
 Employees State Insurance are charged to Profit & Loss A/c.
 
 iii.  Defined Benefit Plan :
 
 The Company''s liability towards gratuity is determined on the basis of
 year end actuarial valuations applying the Projected Unit Credit Method
 done by an independent actuary. The actuarial gains or losses determined
 by the actuary are recognised in the Profit and Loss Account as income
 or expense.
 
 1.14 Earning Per Share
 
 Earning per share (EPS) is calculated by dividing the net profit or
 loss for the period attributable to equity shareholders, by the
 weighted average number of equity shares outstanding during the period.
 
 Dilutive EPS is calculated by dividing the net profit or loss for the
 period attributable to equity shareholders, by the weighted average
 number of equity shares considered for deriving the basic EPS and also
 the weighted average number of equity shares that could have been
 issued upon conversion of all dilutive potential equity shares.
 Dilutive potential equity shares are deemed converted at the beginning
 of the year and not issued at a later date.
 
 1.15 Provisions for Contingent Liabilities and Contingent Assets
 
 Contingent liabilities are not provided for and are disclosed by way of
 notes after careful evaluation by the management of the facts and legal
 aspects of the matters involved. Contingent assets are neither
 recognised nor disclosed in the financial statements.