1.1 Basis of preparation of financial statements :-
These financial statements are prepared in accordance with Indian
Generally Accepted Ac- counting Principles (GAAP) under the historical
cost convention on the Accrual basis. Ac- counting Policies not
specifically referred to otherwise be consistent and in consonance with
generally accepted accounting principles.
1.2 Use of estimates:-
The preparation of the financial statements are in conformity with GAAP
requires manage- ment to make estimates and assumptions that affect the
reported balances of assets and liabilities, disclosures relating to
contingent li&ility as at the date of financial statements and reported
amounts ofi ncome and expenses during the period.
Accounting estimates could change from period to period. Actual results
could differ from those estimates. Appropriate changes in estimates are
made as the Management becomes aware of the changes in circumstances
surrounding be estimates. Changes in estimates are reflected in the
financial statements in the periodin which changes are made and, if
material, their effects are disclosed in notes to the financial
1.3 Revenue Recognition :-
Revenue is primarily derived from sale of Gems and Jewellery items. In
appropriate circums- tances, revenue is recognized when the significant
risks and rewards of ownership of the goods are transferred to the
customers and no significant uncertainty as to determination or
realization exists.E xpenses and Income considered payable and
receivable respectively are accounting for on accrual basis except
retirement benefits which cannot be determined with certainty during
1.4 Fixed Assets :-
Fixed assets are stated at their original cost of acquisition including
taxes freight and other incidental expenses related to acquisition and
installation of the concerned assets less depre- ciation till date and
impairment if any.
1.5 Depreciation :-
Depreciation on Fixed Assets is provided on written down value method
till date, on the wdv of Fixed Assets as per the rates mentioned below,
as determined appropriate by the man- agement. Further, in case of
addition, depreciation has been provided on pro-rata basis commencing
from the date on which the asset is commissioned.
However no depreciation has been charged during the current period on
fixed assets forming part of SEZ and Daman site as no manufacturing
activity has been undertaken during the period.
1.6 Investments :-
Investments are either classified as current or long term investments
based on Management''s intension at the time of purchase. Long term
Investments are stated at their cost. Current investments are carried
at the lower of cost and fair value of each investment individually.
1.7 Inventories :-
Inventories are valued as under:-
Polished Diamonds : Valued at cost or realizable value whichever is
Gold : Valued at cost or realizable value whichever is less.
1.8 Provision for Current and deferred Tax:-
Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
Tax Act, 1961.
The deferred tax for timing differences between the book and tax
profits for the year is ac- counted for, using the tax rates and laws
that have been substantively enacted as of the bal- ance sheet date.
Deferred tax assets arising from timing differences are recognized to
the extent there is reasonable certainty that these would be realized
in future. Deferred tax assets are reviewed for the appropriateness of
their respective carrying values at each reporting date. Deferred tax
asset arising from carried forward loss and unabsorbed depreciation is
recognised to the extent there is virtual certainty that these would be
realized in future.
1.9 Foreign Currency Transactions:-
Foreign currency transactions are accounted on the rates prevailing on
the date of transac- tions. Balances in the form of current assets and
current liabilities in Foreign Currency, out- standing on the date of
balance sheet are accounted at the rates of exchange prevailing on the
date of balance sheet. The gain or losses resulting from such
translations are included in the statement of profit and loss.
1.10 Retirement Benefits:-
No liabilities towards retirement benefits are accounted in accordance
with AS -15.
1.11 Impairment of Assets:-
An asset is impaired when the carrying cost of assets exceeds its
recoverable value. An im- pairment loss is charged to the statement of
profit and loss in the year in which an asset is determined as
impaired. The impairment loss recognized in prior accounting period is
re- versed if there has been a change in the estimate of recoverable
1.12 Provisions. Contingent Liabilities and Contingent Assets:-
A provision is recognized if, as a result of a past event, the Company
has a present legal obligation that can be estimated reliably, and it
is probable that an outflow of economic bene- fits will be required to
settle the obligation. Provisions are determined by the best estimate
of the outflow of economic benefits required to settle the obligation
at the reporting date. Where no reliable estimate can be made, a
disclosure is made as contingent liability. A disclosure for a
contingent liability is also made when there is a possible obligation
or a present obligation that may, but probably will not, require an
outflow of resources. Where 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.
1.13 Earnings per share:-
Earnings per ordinary share have been calculated by dividing the
profit/ (loss) for the year attributable to equity shareholders of the
parent company by the weighted average number of ordinary shares in
issue during the year.
Diluted earnings per share have been calculated by dividing the net
profit/ (loss) attributable to ordinary equity shareholders by the
diluted weighted average number of ordinary shares outstanding during
1.14 Cash Flow Statement:-
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, in- vesting and financing activities of the Company are
segregated based on the available infor- mation.