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Notes to Accounts of Lypsa Gems & Jewellery Ltd.

Mar 31, 2015

1. Fixed Assets:

Fixed Assets are carried at cost of acquisition or construction including incidental expenses related to acquisition and installation on concerned assets, less accumulated depreciation and amortization. The actual cost capitalized includes material cost, freight, installation cost, duties and taxes and other incidental expenses incurred during the construction / installation stage.

2. Depreciation:

The company has provided depreciation on Straight Line Value Method over the estimated useful lives of assets at the rates specified in Part C of Schedule II of The Companies Act, 2013. Depreciation is charged on pro-rata basis from the date of capitalization. Individual asset costing Rs. 5000/- or less are fully depreciated in the year of acquisition.

3. Investments:

Long Term and Non current investments are valued at Cost. Other investments are valued at lower of cost or fair market value as on the date of Balance Sheet. The group provides for diminution in value of investments, other than temporary in nature. During the year company has provided for diminution in value of investments of Rs. 1,93,954/- (P.Y Rs.34,25,565/-) and the same is reduced from the value of investments as carried on in Balance Sheet.

Current Investments includes Fixed capital with partnership firm M/s Lypsa Gems of Rs. 45,000/- (P.Y. Rs. 45,000/-) and Current capital with partnership firm M/s Lypsa Gems of Rs 2,84,963/- (P.Y. 96,71,979/-) and Investment in 100% subsidiary Lypsa Gems & Jewellery DMCC of Rs. 7,48,720/- (USD $ 14000) (P.Y. Rs. 7,48,720/- (USD $ 14000).

4. Secured Loans:

The company has availed the secured loans amounting to Rs. 3748.78 Lacs (P.Y Rs. 1485.93 Lacs against pledge of fixed deposits receipts) which includes Foreign Currency Loans and Rupee Loans against hypothecation of stocks and receivables

5. Cash and Bank Balances: Fixed Deposits Receipts:

The company has total fixed deposits of Rs. 576.11 Lacs with Bank of India (P Y Rs. 858.59 Lacs with Bank of India).

Current Assets, Loans & Advances and Current Liabilities:

The Deferred premium on export of Rs. 64.12 Lacs (P.Y. 128.13 Lacs) is reflected in Balance Sheet under other current liabilities.

The company has classified Receivable on forward contract against Exports of Rs 148.97 Lacs (P.Y. Rs. 572.02 Lacs) in Balance Sheet under short term loans & advances.

6. Revenue Recognition:

(a) Sales, net of taxes are accounted for when property in the goods are transferred to the customers.

(b) Dividend is recognized, when right to receive the dividend arises.

(c) Items of Income and Expenditure such as Exchange Rate difference, Interest on FDR, Profit on Forward Contract, Forward premium, Interest paid are recognized on accrual basis, unless otherwise stated.

(d) Interest income is recognized on time proportion method.

(e) Amounts received or billed in advance of goods sold are recorded as advances from customers.

(f) Revenue from operations include share of profit from partnership firm M/s Lypsa Gems of Rs. -5.49 Lacs (P Y -7.43 Lacs)

(g) During the year, company has started New manufacturing unit at Chhapi - Gujarat on 12th November, 2014. The commercial production at the new manufacturing unit was also started during the year.

7. Preliminary Expenses:

Preliminary Expenses are amortized over a period of five years.

9. Foreign Currency Transactions:

Transactions in foreign currency are recognized at the prevailing exchange rates on the transaction dates. Realized gain or losses on settlement of foreign currency transactions are recognized in the Profit and Loss account. Foreign currency denominated monetary assets and liabilities at the year end are translated at the year end exchange rates and recognized in the Profit and Loss account. Non monetary foreign currency items are carried at cost.

The company enters into forward exchange contract and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising on the inception of a forward exchange contract (other than a firm commitment or highly probable forecast) or similar instrument is amortised as expense or income over the life of contract. Exchange difference on such a contract are recognized in the Profit and Loss account in the year in which the exchange rates change. Any Profit or Loss arising on cancellation of such a contract is recognized as income or expense for the year. The company uses forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. 10. Taxation:

Current Tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax for timing differences between the income as per financial statement and income as per the Income Tax Act, 1961 is accounted for using the tax rates and laws that have been enacted or substantially enacted as of the Balance sheet date. Deferred tax assets arising from the timing differences are recognized to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

8. Employee Benefits:

Employee benefits such as Provident fund, ESIC and other benefits are provided by the company.

9. Lease Accounting:

Lease Rentals under operating leases are recognized in the Profit and Loss account on Straight Line Method. The company has not taken any equipment on lease.

10. Treatment of contingent Liability:

The company recognizes a provision where there is a present obligation as result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of 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 is remote. As the company does not have any contingent liability, no disclosure as specified in Accounting Standard 29 - "Provisions, Contingent Liabilities and Contingent Assets" is made.

11. Disclosure of Related Parties:

"Related party Disclosures" as required by Accounting Standard 18 is enumerated below:

Transactions with Group Companies: NIL

Transactions with Key Management Personnel and Related Entities:

During the year M/s Lypsa Gems & Jewellery DMCC a 100% foreign subsidiary of M/s Lypsa Gems & Jewellery Ltd has earned a net profit of Rs. 14,35,28,525/-(P Y Rs. 6,30,39,333/-).

The computation of Net Profit for the purpose of calculation of directors remuneration under Section 349 of the Companies Act 1956 is not enumerated, since no commission has been paid to the Directors.

12. Segment Reporting:

In accordance with the requirements of Accounting Standard 17 "Segment Reporting" the Company's Business Segment is "Trading and working in Diamonds". As the company operates in only one segment, Segment Reporting as per Accounting Standard 17 is not applicable.

13. Inventories:

Raw materials are valued at cost or net realizable value whichever is lower. Cost is computed using weighted average method. Work in progress is computed by adding cost of purchase, appropriate share of conversion and other overheads incurred in bringing the inventories to its present location and condition. Finished Goods are valued at weighted average cost. During the year, there is no change in the method of valuation of closing stock. Finished goods includes cost of purchase, cost of conversion and other overheads incurred in bringing the inventories to its present location and condition.

14. Stock and Turnover:

Information pursuant to paragraphs 4C & 4D (C) of Part II of Schedule VI to the Companies Act, 1956 as applicable to the Company doing manufacturing activity is as: Quantitative details of materials:

15. Share Capital:

During the year company has not allotted shares to the public. The company has issued 70,20,000 Bonus shares in the ratio of 1 equity share for every 2 equity shares held by capitalization of Rs. 5,98,00,000/- standing to the credit of the Securities premium Account and a sum of Rs. 1,04,00,000/- standing to the credit of Profit & Loss Account (forming part of Reserves & Surplus Account).

16. Earnings per Share:

Basic earnings per share is computed by dividing the profit/(loss) after tax (including post tax effect of extra ordinary items, if any) by the weighted average number of equity shares outstanding the year. Diluted earnings per share is computed by dividing the profit/(loss) after tax (including post tax effect of extra ordinary items, if any) by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e., average market value of the outstanding shares). Since the bonus shares as stated in note no. 21 hereinabove, is an issue without consideration, the issue is treated as if it has occurred prior to the beginning of the year being the earliest period reported, the earnings per share and the adjusted earnings per share for the year ended March 31st, 2014 is as computed as per Accounting Standard 20 is as:

17. Cash Flow Statement:

Cash flows are reported using the indirect method, whereby profit before 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, investing and financing activities of the company are segregated based on the available information.

18. Partnership Firm operations:

The accounts of the company reflects its Investments and Income & Expenditure from Partnership firm which are accounted on the basis of the accounts of the firm M/s Lypsa Gems on line-by-line basis with similar items in the company's accounts to the extent of the participating interest of the company as per partnership deed. The partnership firm was dissolved on March 31st, 2015. During the year various fixed assets were transferred by the firm to the company towards the outstanding balance dues from them. The company has also invested USD $ 14000 in its 100% foreign subsidiary company Lypsa Gems & Jewellery DMCC (P.Y. US$ 14000).

19. In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known liabilities is adequate and is not in excess of the amounts reasonably necessary.

20. The Balances of Debtors, Creditors, Loans and advances are subject to reconciliation and confirmation.

21. Balance of Unsecured Loans includes interest charged on such loans, wherever applicable.

22. The information required under Section 217 (2A) (b) (ii) of the Companies Act, 1956 read with Companies Employees Amendment Rules, 2011 is not given as there was no employee in receipt of salary exceeding Rs 5,00,000 per month or Rs 60,00,000 or more per annum.

23. As defined in "The Micro, Small and Medium Enterprises Development Act, 2006", there are no amounts payable to any Micro and Small Scale Enterprises / Undertaking.

24. Previous year figures have been regrouped and rearranged wherever necessary to make them comparable with those of current year.

25. There are certain uncollected dues/receivables in foreign currency which are outstanding for a period of more than six months as on Balance sheet date. The amount of foreign currency receivables outstanding for more than six months is Rs. 1,43,72,660/- (P Y Rs. 14,41,745/-). However Rs. 33,00,353/- is received after the balance sheet date.

26. The company has made an investment of USD $ 14000 in its 100% Foreign subsidiary company M/s Lypsa Gems & Jewellery DMCC (P.Y. US$ 14000) and subsidiary has earned profit of Rs. 14,35,28,525/-for the year 2014-15.

The Net profit earned for the year 2014-15 from partnership firm M/s Lypsa Gems of Rs. -5,49,299/- (P.Y. Rs.-7,43,418/-) is debited to share of profit in companies current capital account.

27. The company has outstanding unclaimed dividend of Rs. 7,49,900/- for the year 2009- 10, Rs. 8,27,000/- for the year 2010-11, Rs. 5,61,855/- for the year 2011-12, Rs 4,33,587/-for F.Y. 2012-13 and Rs.15,50,060.50 for 2013-14.


Mar 31, 2014

1. Partnership Firm operations:

The accounts of the company reflects its Investments and Income & Expenditure from Partnership firm which are accounted on the basis of the audited accounts of the firm M/s Lypsa Gems on line-by-line basis with similar items in the company''s accounts to the extent of the participating interest of the company as per partnership deed. The company has also invested USD $ 14000 in its 100% foreign subsidiary company Lypsa Gems & Jewellery DMCC (P.Y. US$ 14000).

2. Short term Borrowings:

Loans and advances from related parties:

Particulars Current Year Previous Year

Unsecured Loans from Directors 596.33 420.80

3. In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known liabilities is adequate and is not in excess of the amounts reasonably necessary.

4. The Balances of Debtors, Creditors, Loans and advances are subject to reconciliation and confirmation.

5. Balance of Unsecured Loans includes interest charged on such loans, wherever applicable.

6. The information required under Section 217 (2A) (b) (ii) of the Companies Act, 1956 read with Companies Employees Amendment Rules, 2011 is not given as there was no employee in receipt of salary exceeding Rs 5,00,000/- per month or Rs 60,00,000/- per annum.

7. As defined in "The Micro, Small and Medium Enterprises Development Act, 2006", there are no amounts payable to any Micro and Small Scale Enterprises / Undertaking.

8. Previous year figures have been regrouped and rearranged wherever necessary to make them comparable with those of current year.

9. There are certain uncollected dues/receivables in foreign currency which are outstanding for a period of more than six months as on Balance sheet date for which the required permission for extension of time has not been obtained from appropriate authorities. The amount of foreign currency receivables outstanding for more than six months is Rs. 14,41,745/- (P Y Rs. 14,41,745/-).

10. The company has made an investment of USD $ 14000 in its 100% Foreign subsidiary company M/s Lypsa Gems & Jewellery DMCC (P.Y. US$ 14000). The Net profit earned for the year 2013-14 from partnership firm M/s Lypsa Gems of Rs. -7,43,418/- (P.Y. 5,32,916/-) is credited to share of profit in companies current capital account.

11. The company has outstanding unclaimed dividend of Rs. 7,49,900/- for the year 2009- 10, Rs. 8,27,000/- for the year 2010-11, Rs. 5,61,855/- for the year 2011-12 and Rs 5,83,137/- for F.Y. 2012-13.

Additional Information pursuant to Part IV of Schedule VI to the Companies Act, 1956 is given in Annexure ''A''

Signature to Schedule 1 to 24 As per our report of even date For M/s. Doshi Maru & Associates Chartered Accountants FRN: 112187W


Mar 31, 2013

1. Fixed Assets:

Fixed Assets are carried at cost of acquisition or construction including incidental expenses related to acquisition and installation on concerned assets, less accumulated depreciation and amortization. The actual cost capitalized includes material cost, freight, installation cost, duties and taxes and other incidental expenses incurred during the construction / installation stage.

2. Depreciation:

The company has provided depreciation on Straight Line Value Method over the estimated useful lives of assets at the rates specified in Schedule XIV of the Companies Act, 1956. Depreciation is charged on pro-rata basis from the date of capitalization. Individual asset costing Rs. 5000/- or less are fully depreciated in the year of acquisition.

3. Investments:

Long Term and Non current investments are valued at Cost. Other investments are valued at lower of cost or fair market value as on the date of Balance Sheet. The group provides for diminution in value of investments, other than temporary in nature. During the year company has provided for dimunition in value of investments of Rs. 24,72,461/- (P.Y Rs.24,72,927/-) and the same is reduced from the value of investments as carried on in Balance Sheet.

Current Investments includes Fixed capital with partnership firm M/s Lypsa Gems of Rs. 45,000/- and Investment in 100% subsidiary Lypsa Gems & Jewellery DMCC of Rs. 7,48,720/- (USD $ 14000).

4. Secured Loans:

The company has availed the secured loans amounting to Rs. 1644.48 Lacs (P.Y Rs. 1722.84 Lacs against pledge of fixed deposits receipts) which includes Foreign Currency Loans and Rupee Loans against hypothecation of stocks and receivables

5. Cash and Bank Balances: Fixed Deposits Receipts:

The company has total fixed deposits of Rs. 793.79 Lacs with Bank of India (P Y Rs. 2060.17 Lacs with various Banks).

Current Assets, Loans & Advances and Current Liabilities:

The Deferred premium on export of Rs. 19.63 Lacs (P.Y. 106.32 Lacs) is reflected in Balance Sheet under other current liabilities.

The company has reflected Receivable on forward contract against Exports of Rs. 51.78 Lacs (P.Y. Rs. 116.59 Lacs) in Balance Sheet under short term loans & advances.

6. Revenue Recognition:

(a) Sales, net of taxes are accounted for when property in the goods are transferred to the customers.

(b) Dividend is recognized, when right to receive the dividend arises.

(c) Items of Income and Expenditure such as Exchange Rate difference, Interest on FDR, Profit on Forward Contract, Forward premium, Interest paid are recognized on accrual basis, unless otherwise stated.

(d) Interest income is recognized on time proportion method.

(e) Amounts received or billed in advance of goods sold are recorded as advances from customers.

(f) Revenue from operations include share of profit from partnership firm M/s Lypsa Gems of Rs. 5.33 Lacs (P Y 36.83 Lacs)

7. Preliminary Expenses:

Preliminary Expenses are amortized over a period of five years.

8. Foreign Currency Transactions:

Transactions in foreign currency are recognized at the prevailing exchange rates on the transaction dates. Realized gain or losses on settlement of foreign currency transactions are recognized in the Profit and Loss account. Foreign current denominated monetary assets and liabilities at the year end are translated at the year end exchange rates and recognized in the Profit and Loss account. Non monetary foreign currency items are carried at cost.

The company enters into forward exchange contract and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising on the inception of a forward exchange contract (other than a firm commitment or highly probable forecast) or similar instrument is amortized as expense or income over the life of contract. Exchange difference on such a contracts are recognized in the Profit and Loss account in the year in which the exchange rates change. Any Profit or Loss arising on cancellation of such a contract is recognized as income or expense for the year. The company uses forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions.

9. Taxation:

Current Tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax for timing differences between the income as per financial statement and income as per the Income Tax Act, 1961 is accounted for using the tax rates and laws that have been enacted or substantially enacted as of the Balance sheet date. Deferred tax assets arising from the timing differences are recognized to the extent there is virtual certainity that sufficient future taxable income will be available against which such deferred tax assets can be realized.

10. Employee Benefits:

Employee benefits such as Provident fund, ESIC and other benefits are provided by the company.

11. Lease Accounting:

Lease Rentals under operating leases are recognized in the Profit and Loss account on Straight Line Method. The company has not taken any equipment on lease.

12. Treatment of contingent Liability:

The company recognizes a provision where there is a present obligation as result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of 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 is remote. As the company does not have any contingent liability, no disclosure as specified in Accounting Standard 29 – "Provisions, Contingent Liabilities and Contingent Assets" is made.

13. Disclosure of Related Parties:

"Related party Disclosures" as required by Accounting Standard 18 is enumerated below:

Transactions with Group Companies: NIL

Transactions with Key Management Personnel and Related Entities:

14. Segment Reporting:

In accordance with the requirements of Accounting Standard 17 "Segment Reporting" the Company''s Business Segment is "Trading and working in Diamonds". As the company operates in only one segment, Segment Reporting as per Accounting Standard 17 is not applicable.

15. Inventories:

Raw materials are valued at cost or net realizable value whichever is lower. Cost is computed using weighted average method. Work in progress is computed by adding cost of purchase, appropriate share of conversion and other overheads incurred in bringing the inventories to its present location and condition. Finished Goods are valued at weighted average cost (Previous year Finished goods were valued at FIFO basis). During the year, due to change in method of valuation of closing stock, the profits are under stated by Rs.16,97,592/- Finished goods includes cost of purchase, cost of conversion and other overheads incurred in bringing the inventories to its present location and condition.

16. Stock and Turnover:

Information pursuant to paragraphs 4C & 4D (C) of Part II of Schedule VI to the Companies Act, 1956 as applicable to the Company doing manufacturing activity is as : Quantitative details of materials:

17. Share Capital:

During the year company has not allotted shares to the public.

18. Earnings per Share:

Basic earnings per share is computed by dividing the profit / (loss) after tax (including post tax effect of extra ordinary items, if any) by the weighted average number of equity shares outstanding the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including post tax effect of extra ordinary items, if any) by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e., average market value of the outstanding shares). The earnings per share as computed as per Accounting Standard 20 is as :

19. Cash Flow Statement:

Cash flows are reported using the indirect method, whereby profit before 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, investing and financing activities of the company are segregated based on the available information.

20. Partnership Firm operations:

The accounts of the company reflects its Investments and Income & Expenditure in Partnership firm which are accounted on the basis of the audited accounts of the firm M/s Lypsa Gems on line-by-line basis with similar items in the company''s accounts to the extent of the participating interest of the company as per partnership deed. During the year, company has also invested USD $ 14000 in its 100% subsidiary company Lypsa Gems & Jewellery DMCC.

21. Details of shares held by each shareholder holding more than 5% shares:

22. In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known liabilities is adequate and is not in excess of the amounts reasonably necessary.

23. The Balances of Debtors, Creditors, Loans and advances are subject to reconciliation and confirmation.

24. Balance of Unsecured Loans includes interest charged on such loans, wherever applicable.

25. The information required under Section 217 (2A) (b) (ii) of the Companies Act, 1956 read with Companies Employees Amendment Rules, 2011 is not given as there was no employee in receipt of salary exceeding the limit specified in the section.

26. As defined in "The Micro, Small and Medium Enterprises Development Act, 2006", there are no amounts payable to any Micro and Small Scale Enterprises / Undertaking.

27. Previous year figures have been regrouped and rearranged wherever necessary to make them comparable with those of current year.

28. There are certain uncollected dues/receivables in foreign currency which are outstanding for a period of more than six months as on Balance sheet date for which the required permission for extension of time has not been obtained from appropriate authorities. The amount of foreign currency receivables outstanding for more than six months is Rs. 14,41,745/- (P Y Rs. 16,41,745/-).

29. During the year, company has made an investment of USD $ 14000 in its 100% subsidiary company M/s Lypsa Gems & Jewellery DMCC. The Net profit earned from partnership firm M/s Lypsa Gems of Rs. 5,32,916/- is credited to share of profit in companies current capital account.

30. The company has outstanding unclaimed dividend of Rs. 7,49,900/- for the year 2009-10, Rs. 8,27,000/- for the year 2010-11 and Rs. 5,61,855/- for the year 2011-12.


Mar 31, 2012

1. Fixed Assets :

Fixed Assets are carried at cost of acquisition or construction including incidental expenses related to acquisition and installation on concerned assets, less accumulated depreciation and amortization. The actual cost capitalized includes material cost, freight, installation cost, duties and taxes and other incidental expenses incurred during the construction / installation stage.

2. Depreciation :

The company has provided depreciation on Straight Line Value Method over the estimated useful lives of assets at the rates specified in Schedule XIV of the Companies Act, 1956. Depreciation is charged on pro-rata basis from the date of capitalization. Individual asset costing Rs. 5000/- or less are fully depreciated in the year of acquisition.

3. Investments :

Long Term and Non current investments are valued at Cost. Other investments are valued at lower of cost or fair market value as on the date of Balance Sheet. The group provides for diminution in value of investments, other than temporary in nature. During the year company has provided for dimunition in value of investments of Rs. 24,72,927/- (P Y Rs.12,64,930.90) and the same is reduced from the value of investments as carried on in Balance Sheet.

4. Secured Loans :

The company has utilized loans against pledge of fixed deposits receipts with Indusind Bank Ltd., Oriental Bank of Commerce, IDBI Bank Ltd and Axis Bank Ltd. The secured loans amounting to Rs. 1722.84 Lacs (P Y Rs. 22233.04 Lacs) has been Netted off against Fixed Deposits with various banks of Rs. 2060.17 Lacs (P Y Rs. 23413.06 Lacs) and Net amount of Rs. 337.33 Lacs (P Y Rs. 1180.02 Lacs) is reflected in Balance sheet under Head of Cash and Cash Equivalents under Current Assets group. Accured Interest of Rs.1,62,63,662/- (P Y Rs. 9,33,80,744/-) is also included in fixed deposits with bank under the Head Cash & Cash Equivalents.

5. Cash and Bank Balances :

Fixed Deposits Receipts :

The company has total fixed deposits of Rs. 2060.17 Lacs (P Y Rs. 23413.06 Lacs) with Indusind Bank Ltd., Oriental Bank of Commerce, IDBI Bank Ltd, Axis Bank Ltd. The company has utilized overdraft facility and /or buyer's credit facility of Rs. 1722.84 Lacs (P Y Rs. 22233.04 Lacs) against 100% cash margin in form of FDR's. The company has in contravention of Disclosures norms as provided by Companies (Accounting Standard) Rules, 2006, has adjusted overdraft and buyer's credit facility against fixed deposits and disclosed net amount in the Balance sheet. The disclosure is in the following manner :

Current Assets, Loans & Advances and Current Liabilites :

The Deferred premium on export of Rs. 106.32 Lacs is reflected in Balance

Sheet under other current liabilities.

The company has reflected Receivable on forward contract against Exports of Rs. 116.59 in Balance Sheet under short term loans & advances.

6. Revenue Recognition :

(a) Sales, net of taxes are accounted for when property in the goods are transferred to the customers.

(b) Dividend is recognized, when right to receive the dividend arises.

(c) Items of Income and Expenditure such as Exchange Rate difference, Interest on FDR, Profit on Forward Contract, Forward premium, Interest paid are recognized on accrual basis, unless otherwise stated.

(d) Interest income is recognized on time proportion method.

(e) Amounts received or billed in advance of goods sold are recorded as advances from customers.

(f) Revenue from operations include share of profit from partnership firm M/s Lypsa Gems of Rs. 36.83 Lacs

7. Preliminary Expenses :

Preliminary Expenses are amortized over a period of five years.

8. Foreign Curreny Transactions :

Transactions in foreign currency are recognized at the prevailing exchange rates on the transaction dates. Realized gain or losses on settlement of foreign currency transactions are recognized in the Profit and Loss account. Foreign current denominated monetary assets and liabilities at the year end are translated at the year end exchange rates and recognized in the Profit and Loss account. Non monetary foreign currency items are carried at cost.

The company enters into forward exchange contract and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising on the inception of a forward exchange contract (other than a firm commitment or highly probable forecast) or similar instrument is amortised as expense or income over the life of contract. Exchange difference on such a contract are recognized in the Profit and Loss account in the year in which the exchange rates change. Any Profit or Loss arising on cancellation of such a contract is recognized as income or expense for the year. The company uses forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions.

9. Taxation :

Current Tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax for timing differences between the income as per financial statement and income as per the Income Tax Act, 1961 is accounted for using the tax rates and laws that have been enacted or substantially enacted as of the Balance sheet date. Deferred tax assets arising from the timing differences are recognized to the extent there is virtual certainity that sufficient future taxable income will be available against which such deferred tax assets can be realized.

10. Employee Benefits :

Presently, employee benefits such as Provident fund, Gratuity or other benefits are not applicable to the company.

11. Lease Accounting :

Lease Rentals under operating leases are recognized in the Profit and Loss account on Straight Line Method. The company has not taken any equipments on lease.

12. Treatment of contingent Liability :

The company recognizes a provision where there is a present obligation as result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of 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 is remote. As the company does not have any contingent liability, no disclosure as specified in Accounting Standard 29 – "Provisions, Contingent Liabilities and Contingent Assets" is made.

13. Disclosure of Related Parties :

"Related party Disclosures" as required by Accounting Standard 18 is enumerated below:

Transactions with Group Companies : NIL

14. Segment Reporting :

In accordance with the requirements of Accounting Standard 17 "Segment Reporting" the Company's Business Segment is "Trading and working in Diamonds". As the company operates in only one segment, Segment Reporting as per Accounting Standard 17 is not applicable.

15. Inventories :

Raw materials are valued at cost or net realizable value whichever is lower. Cost is computed using First in First out method. Work in progress is computed by adding cost of purchase, appropriate share of conversion and other overheads incurred in bringing the inventories to its present location and condition. Finished goods includes cost of purchase, cost of conversion and other overheads incurred in bringing the inventories to its present location and condition.

16. Stock and Turnover :

Information pursuant to paragraphs 4C & 4D (C) of Part II of Schedule VI to the Companies Act, 1956 as applicable to the Company doing manufacturing activity is as :

17. Share Capital :

During the year company has allotted 70,20,000 equity shares of Rs.10 fully paid up as Bonus shares in ratio of 1:1 by capitalizing Securities Premium account for Rs. 7,02,00,000/-.

18. Earnings Per Share :

Basic earnings per share is computed by dividing the profit / (loss) after tax (including post tax effect of extra ordinary items, if any) by the weighted average number of equity shares outstanding the year. Diluted earnings per share is computed by dividing the the profit / (loss) after tax (including post tax effect of extra ordinary items, if any) by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e., average market value of the outstanding shares). The earnings per share as computed as per Accounting Standard 20 is as :

19. Partnership Firm operations :

The accounts of the company reflects its Investments and Income & Expenditure in partnership firm which are accounted on the basis of the audited accounts of the firm M/s Lypsa Gems on line-by-line basis with similar items in the company's accounts to the extent of the participating interest of the company as per partnership deed.

20. In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known liabilities is adequate and is not in excess of the amounts reasonably necessary.

21. The Balances of Debtors, Creditors, Loans and advances are subject to reconciliation and confirmation.

22. Balance of Unsecured Loans includes interest charged on such loans, wherever applicable.

23. The information required under Section 217 (2A) (b) (ii) of the Companies Act, 1956 read with Companies Employees Amendment Rules, 2011 is not given as there was no employee in receipt of salary exceeding the limit specified in the section.

24. As defined in "The Micro, Small and Medium Enterprises Development Act, 2006", there are no amounts payable to any Micro and Small Scale Enterprises / Undertaking.

25. Previous year figures have been regrouped and rearranged wherever necessary to make them comparable with those of current year.

26. There are certain uncollected dues/receivables in foreign currency which are outstanding for a period of more than six months as on Balance sheet date for which the required permission for extension of time has not been obtained from appropriate authorities. The amount of foreign currency receivables outstanding for more than six months is Rs. 1,31,58,023/- (P Y Rs. 1,33,09,095/-) . However the receivables of Rs. 1,15,04,162/- were received during the month of April 2012.

27. During the year, company has made an investment in partnership firm M/s Lypsa Gems of Rs.45000/- as fixed capital and Rs. 1,49,39,352/- as current capital. The Net profit earned from partnership firm M/s Lypsa Gems of Rs. 36,82,528/- is credited to share of profit in companies current capital account.

28. The company has paid an advance for investment in SEZ and the same is transferred to current account of partnership firm M/s Lypsa Gems as investment in partnership firm.

29. The company has outstanding unclaimed dividend of Rs. 7,50,000/- for the year 2009-10 and Rs. 8,27,200/- for the year 2010-11.

Additional Information pursuant to Part IV of Schedule VI to the Companies Act, 1956 is given in Annexure 'A'


Mar 31, 2011

1. Fixed Assets :

Fixed Assets are carried at cost of acquisition or construction including incidental expenses related to acquisition and installation on concerned assets, less accumulated depreciation and amortization. The actual cost capitalized includes material cost, freight, installation cost, duties and taxes and other incidental expenses incurred during the construction / installation stage.

2. Depreciation :

The company has provided depreciation on Straight Line Value Method over the estimated useful lives of assets at the rates specified in Schedule XIV of the Companies Act, 1956. Depreciation is charged on pro-rata basis from the date of capitalization. Individual asset costing Rs. 5000/- or less are fully depreciated in the year of acquisition.

3. Investments :

Long Term investments are valued at Cost. Current investments are valued at lower of cost or fair market value as on the date of Balance Sheet. The group provides for diminution in value of investments, other than temporary in nature. During the year company has provided for dimunition in value of investments of Rs.12,64,930.90 and the same is reduced from the value of investments as carried on in Balance Sheet.

4. Secured Loans :

The company has utilized loans against pledge of fixed deposits receipts with Indusind Bank Ltd., Oriental Bank of Commerce, IDBI Bank Ltd and Axis Bank Ltd. The secured loans amounting to Rs. 22233.04 Lacs (18144.33 Lacs) has been Netted off against Fixed Deposits with various banks of Rs. 23413.06 Lacs (18600.50 Lacs) and Net amount of Rs. 1180.02 Lacs (456.17 Lacs) is reflected in Balance sheet under Head of Cash and Bank Balance under Current Assets group.

5. Cash and Bank Balances :

Fixed Deposits Receipts :

The company has total fixed deposits of Rs. 23413.06 Lacs (18600.50 Lacs) with Indusind Bank Ltd., Oriental Bank of Commerce, IDBI Bank Ltd, Axis Bank Ltd. The company has utilized overdraft facility and buyer's credit facility of Rs. 22233.04 Lacs (18144.33 Lacs) by way of pledge of said FDR's. The company has adjusted overdraft and buyer's credit facility against fixed deposits and disclosed net amount in the Balance sheet. The disclosure is in the following manner :

Current Assets, Loans & Advances and Current Liabilites :

The company has Netted off Deferred premium payable of Rs. 65.16 (217.38 Lacs) against Deferred premium receivable of Rs.502.11(424.23 Lacs) and Net amount of Rs. 436.94) is reflected in Balance sheet under the head Current Assets, Loans & Advances.

The company has Netted off 63.69 (15.79),Foreign Currency Receivable of Rs.23655.55 Lacs (11685.66 Lacs) against Receivable/Payable for forward contract of Rs. 25068.13 Lacs (12448.99 Lacs) and Net amount of Rs. 1348.90 Lacs (747.55 Lacs) is reflected in Balance sheet under the head Other Liabilities.

6. Revenue Recognition :

(a) Sales, net of taxes are accounted for when property in the goods are transferred to the customers.

(b) Dividend is recognized, when right to receive the dividend arises.

(c) Items of Income and Expenditure such as Exchange Rate difference, Interest on FDR, Profit on Forward Contract, Forward premium, Interest paid are recognized on accrual basis, unless otherwise stated.

(d) Interest income is recognized on time proportion method.

(e) Amounts received or billed in advance of goods sold are recorded as advances from customers.

7. Preliminary Expenses :

Preliminary Expenses are amortized over a period of five years.

8. Foreign Curreny Transactions :

Transactions in foreign currency are recognized at the prevailing exchange rates on the transaction dates. Realized gain or losses on settlement of foreign currency transactions are recognized in the Profit and Loss account. Foreign current denominated monetary assets and liabilities at the year end are translated at the year end exchange rates and recognized in the Profit and Loss account. Non monetary foreign currency items are carried at cost.

The company enters into forward exchange contract and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising on the inception of a forward exchange contract (other than a firm commitment or highly probable forecast) or similar instrument is amortised as expense or income over the life of contract. Exchange difference on such a contract are recognized in the Profit and Loss account in the year in which the exchange rates change. Any Profit or Loss arising on cancellation of such a contract is recognized as income or expense for the year. The company uses forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions.

9. Taxation :

Current Tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax for timing differences between the income as per financial statement and income as per the Income Tax Act, 1961 is accounted for using the tax rates and laws that have been enacted or substantially enacted as of the Balance sheet date. Deferred tax assets arising from the timing differences are recognized to the extent there is virtual certainity that sufficient future taxable income will be available against which such deferred tax assets can be realized.

10. Employee Benefits :

Presently, employee benefits such as Provident fund, Gratuity or other benefits are provided by the company.

11. Lease Accounting :

Lease Rentals under operating leases are recognized in the Profit and Loss account on Straight Line Method. The company ahs not taken any equipments on lease.

12. Treatment of contingent Liability :

The company recognizes a provision where there is a present obligation as result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of 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 is remote. As the company does not have any contingent liability, no disclosure as specified in Accounting Standard 29 - "Provisions, Contingent Liabilities and Contingent Assets" is made.

13. Disclosure of Related Parties :

"Related party Disclosures" as required by Accounting Standard 18 is enumerated below:

Transactions with Group Companies : NIL Transactions with Key Management Personnel :

The computation of Net Profit for the purpose of calculation of director's remuneration under Section 349 of the Companies Act 1956 is not enumerated, since no commission has been paid to the Directors.

14. Segment Reporting :

In accordance with the requirements of Accounting Standard 17 "Segment Reporting" the Company's Business Segment is "Trading and working on Diamonds". As the company operates in only one segment, Segment Reporting as per Accounting Standard 17 is not applicable.

15. Inventories :

Raw materials are valued at cost or net realizable value whichever is lower. Cost is computed using First in First out method. Work in progress is computed by adding cost of purchase, appropriate share of conversion and other overheads incurred in bringing the inventories to its present location and condition. Finished goods includes cost of purchase, cost of conversion and other overheads incurred in bringing the inventories to its present location and condition.

16. Share Capital :

During the year company has allotted 20,00,000 equity shares of Rs. 10 fully paid up at a premium of Rs. 65 per share aggregating to Rs. 15,00,00,000.

17. Earnings Per Share :

Basic earnings per share is computed by dividing the profit / (loss) after tax (including post tax effect of extra ordinary items, if any) by the weighted average number of equity shares outstanding the year. Diluted earnings per share is computed by dividing the the profit / (loss) after tax (including post tax effect of extra ordinary items, if any) by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e., average market value of the outstanding shares). The earnings per share as computed as per Accounting Standard 20 is as :

18. Cash Flow Statement :

Cash flows are reported using the indirect method, whereby profit before 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, investing and financing activities of the company are segregated based on the available information.

19.In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known liabilities is adequate and is not in excess of the amounts reasonably necessary.

20. The Balances of Debtors, Creditors, Loans and advances are subject to reconciliation and confirmation.

21. Balance of Unsecured Loans includes interest charged on such loans, wherever applicable.

22. The information required under Section 217 (2A) (b) (ii) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 is not given as there was no employee in receipt of salary exceeding the limit specified in the section.

23. As defined in "The Micro, Small and Medium Enterprises Development Act, 2006", there are no amounts payable to any Micro and Small Scale Enterprises / Undertaking.

24. Previous year figures have been regrouped and rearranged wherever necessary to make them comparable with those of current year.

25.There are certain uncollected dues/receivables in foreign currency which are Outstanding for a period of more than six months as on Balance sheet date for which the required permission for extension of time has not been obtained from appropriate authorities. The amount of foreign currency receivables outstanding for more than six months is Rs. 1,16,67,350/-. However the receivables were received during the Month of April 2011 and May 2011.

26. During the year, an adjudication order under Rule 5 was passed by The Adjudication officer of SEBI and a penalty of Rs. 85,000/- was levied by SEBI and the same is paid by the company.

27. During the year, Company has applied for delisting its shares from Jaipur, Pune and Saurashtra Kutch Stock Exchanges.

28. The company has paid an advance for investment in SEZ and the same is grouped under Loans and Advances.

29. The company has outstanding unclaimed dividend of Rs. 7,50,000/- for the year 2009-10.


Mar 31, 2010

1) OTHER NOTES :

Direct/Indirect Taxes

Represents estimates made for probable liabilities arising out of pending disputes/litigations with Various tax authorities.The timing of the outflow with regard to the said matter depends on the Exhaustion of remedies available to the Company under the law and hence the Company is not Ascertain the timing of the outflow.

Previous year figures have been regrouped wherever considered necessary to make them comparable with those of the current year.


Mar 31, 2009

(1) The Accounts arc prepared on an accrual basis except otherwise stated and under the historical cost conventions, and are in line with the relevant laws as well as the guidelines prescribed by the Department of Company affairs and the Institute of Chartered Accountants of India.

(2) Expenditure in foreign currency : Nil

(3) Income in Foreign Currency : Nil

(4) Balance of Sundry Debtors, Creditors, Loans & Advances given and accepted as agreed by the management, are subject to confirmation.

(5) Previous year's figures are regrouped and rearranged wherever necessary.

(6) Figures in brackets relate to prepares year unless otherwise stated.

(7) In the opinion of the Board of Directors. Current Assets, Loans & Advances are Realizable in the ordinary course of business at the value which they are stated.

(8) Accounting Standard 17 - Segment Reporting

1 here are no identifiable reportable segments in the course of business carried on by the company. The risks and returns are not affected both by the difference in the products and by difference in geographical area.

(9) Accounting Standard 18 - Related party Disclosures

No transaction with related parties

Additional information pursuant to the provisions of paragraphs 3. 4C and 4D of Part II of Schedule VI to the Companies Act. 1956.

a) Production Capacity: The company is not required to obtain License and hence comparison of License capacity and Installed capacity is not given.

b) Employees in receipt of remuneration of not less than Rs.24,00,00/- per annum or Rs. 2,00.00/- per month if employed for part of the year: Nil (Previous Year Nil)

c) Since the company is in process of compiling details of amounts due to SSI units creditors are relevant intonation envisaged by recent government notification is not available.

Company has given interest free loans/ advances to some parties, recovery of which is doubtful. Company has not provided for loss which may arise on account of non recovery of said loan/ advances. Hence profit for the year and reserves & surplus at the year end is overstated by such amount.

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