Accounting Policies of Winsome Diamonds and Jewellery Ltd. Company

Mar 31, 2015

Basis of preparation of Financial Statements:

These financial statements have been prepared on accrual basis, under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, the applicable accounting standards notified under section 129 and 133 and the other relevant provision of the Companies Act, 2013 (the Act) read with Rule 7 of the Companies (Accounts) Rules, 2014.

1. The management assumes that the Company will have adequate cash flows from proceeds of export realizations to defray its entire debt obligations in a phased manner. The Company has provided all the required details evidencing receipt of its export consignment by defaulting overseas customers to Honourable Court in Sharjah, UAE. The Honourable Court has appointed expert/s to look into the facts of the matter. The Company is hopeful of a favourable outcome of the legal suit filed against defaulting overseas customers, which is in progress, in UAE and is hopeful of resuming its normal operations once the cash flow improves. Hence the accounts of the Company are prepared on Going Concern basis.

1. System of Accounting and Preparation of Financial Statements:

(a) All income and expenditure items are accounted on accrual basis.

(b) Financial statements are based on historical costs. These costs are not adjusted to reflect the impact of the changing value in the purchasing power of money.

2. Use of Estimates:

The preparation of financial statements are in conformity with generally accepted accounting principles which require estimates and assumptions to be made by the management that affects the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Difference between actual results and estimates are recognized in the year in which the results are known /materialized.

3. Fixed Assets:

(a) All fixed assets are valued at cost of acquisition, construction or manufacturing as the case may be, less depreciation.

(b) Exchange differences relating to the acquisition of fixed assets are taken to the Statement of Profit and Loss.

4. Depreciation:

(a) Depreciation is provided as per the "Written Down Value" based on life assigned to each assets in accordance with Schedule II of The Companies Act 2013. Leasehold Land is amortised over the period of lease.

(b) Depreciation on additions and on sale/disposal of fixed assets is computed pro-rata on day-to-day basis from the date of purchase/put to use and up to the date of sale.

(c) Depreciation on new unit is taken from the date of commissioning of the unit.

(d) Depreciation is also considered on those assets (idle assets) which were not used for whole or part of the year. However for units shut down, no depreciation is charged.

5. Work in Progress:

(a) The cost of fixed assets, acquisition/construction, installations of which are not completed are included under Capital Work-in- Progress and the same are apportioned/transferred to respective fixed assets on installation/completion of the asset/project.

(b) Expenses incurred to set up business premises/factory premises forming part of capital work-in-progress are capitalized under the head Factory Premises.

(c) Similarly, goods which are under production and cannot be termed as finished goods are treated as work-in-progress.

6. Investments:

(a) Current Investments are carried at lower of cost and quoted/fair value.

(b) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made if such diminution is considered other than temporary in nature. Such diminutions in the value of Long Term Investments are taken through the Statement of Profit and Loss.

(c) Application monies for investment in shares are classified as an advance till the allotment of shares is completed.

7. Inventories:

The Company has complied with AS-2 "Valuation of Inventories'' issued by the Institute of Chartered Accountants of India, to the extent practicable keeping in mind the peculiar nature of the industry.

(a) Raw Materials are valued "At Cost" or "Net Realisable Value", whichever is lower. Costs means cost of Raw materials as determined on average, weighted average or FIFO basis as applicable, with proportionate value of freight and clearing charges.

(b) Stock on hand as on the last date which is under processing and not yet converted to finished goods is considered to be a part of stock of raw materials and hence is valued as raw materials as in (a) above.

(c) Finished Goods of Polished Diamonds are valued "At Cost" or "Net Realisable Value", whichever is lower. Cost includes cost of raw materials on weighted average cost basis, labour cost and proportionately allocated other costs related to converting them into finished goods which are technically evaluated keeping in view the wide variety and grades of diamonds.

(d) Finished Goods of Jewellery are valued "At Cost" or "Net Realisable Value", whichever is lower. Cost includes cost of raw materials, labour cost and proportionately allocated other costs related to converting them into finished goods.

(e) Goods procured for trading (Gold, Studded and Plain Jewellery and Diamonds) are valued "At Cost" or "Net Realisable Value", whichever is lower.

(f) Stores and Spares are valued "At Cost".

(g) Closing stock of Goods at Bullion Trading Division are valued "At Cost" or "Net Realisable Value", whichever is lower.

8. Foreign Exchange Transactions:

(a) Transactions in foreign currency are accounted at the exchange rate/average rate prevailing on the date of transaction. Exchange fluctuations between the transaction date and the settlement date in respect of revenue transactions are recognized in the Statement of Profit and Loss.

(b) Monetary Assets and Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Profit/Loss so determined are recognized in the Statement of Profit and Loss for the year.

(c) All foreign exchange derivative transactions are fair valued, wherever applicable, as at the year-end in consonance with (i) Accounting standards notified Under Section 211 of the Companies Act, 1956 (ii) Applicable guidelines issued by RBI and the Institute of Chartered Accountants of India in this regard (iii) Principle of Prudence which requires recognition of expected losses and non recognition of unrealized gains, wherever applicable, and (iv) Risk Management Policy relating to derivative transaction of the Company as approved by the Board with a clause which Allows using Cost Reduction Structures and relevant disclosures as prescribed by ICAI Press Release dated 02.12.2005 are made in the notes.

(d) The Company has adopted AS - 11 of the Institute of Chartered Accountants of India, in relation to its foreign exchange transactions including derivatives and options.

(i) As per the Provisions of the AS - 11 of the Institute of Chartered Accountants of India, the profit/loss on cancellation or renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fluctuation/ price risks are recognised as income/expenses in the Statement of Profit and Loss for the year.

(ii) Option contract open at the year end are recognized at year end rate and the Mark to Market difference, wherever applicable, is taken to the Statement of Profit and Loss.

(iii) Premium or discount at the inception of forward exchange contract is amortized as expenses or income over the life of contract.

9. Employees Retirement Benefits:

(a) Defined Contribution Plans:

The Company has Defined Contribution Plan for post employment benefit in the form of provident fund for eligible employees which is administered by Regional Provident Fund Commissioner. Provident fund is classified as Defined Contribution Plan as the Company has no further obligation beyond making the contributions. The Company's contributions to Defined Contribution Plans are charged to the Statement of Profit and Loss as and when incurred.

(b) Defined Benefit Plans:

The Company has Defined Benefit Plan for post employment benefit in the form of Gratuity for eligible employees which are administered through a Group Gratuity Policy with Life Insurance Corporation of India (LIC). The liability for the above Defined Benefit Plan is provided on the basis of an actuarial valuation as carried out by LIC. The actuarial method used for measuring the liability is the Projected Unit Credit Method.

(c) Termination benefits are recognized as an expense as and when incurred.

(d) The Company has made provision for leave encashment dues as on the last date of the year.

10. Taxation:

(a) Provisions for taxation is made after considering various relief's admissible under the provisions of the Income Tax Act, 1961.

(b) Disputed amounts of tax are considered in contingent liabilities.

(c) The Company has implemented 'Accounting Standard 22'-"Accounting of Taxes on Income", issued by the Institute of Chartered Accountants of India, which is mandatory in nature. The Company has recognized Deferred Taxes which result from the timing difference between the Book Profits and Tax Profits that originate in one period and are capable of reversal in one or more subsequent periods.

11. Borrowing Cost:

Borrowing Costs that are attributable to the acquisition/construction of fixed assets are capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the period in which they are incurred.

12. Impairment of Fixed Assets:

Considering AS-28-Impairment of Assets as specified by the Institute of Chartered Accountants of India, the Company at the end of each year determines whether there are any Assets that require a provision for impairment loss. Impairment loss is charged to the Statement of Profit and Loss in the year in which, an asset is identified as impaired, when the Carrying Rate of the asset exceeds its recoverable value. The impairment loss booked in prior accounting years is reversed if there is a upward change in the estimate of recoverable account.

13. Provisions, Contingent Assets and Contingent Liabilities:

Provisions involving substantial degree of estimation in quantum are recognized when, there is and present, as a result of past events likely obligation with a high probability of an outflow of resources. Contingent Assets are not recognized nor disclosed in the financial statements. Contingent Liabilities, if material, are disclosed in the notes to the accounts.

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Mar 31, 2014

Basis of preparation of Financial Statements:

These financial statements have been prepared on accrual basis and under historical cost convention and in compliance in all material aspects, with the applicable accounting principles in India, the applicable accounting standards notified under section 211 (3C) and the other relevant provision of the Companies Act, 1956.

All the assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the nature of the product and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be less than 12 months.

(i) On the basis of management''s assumption, it is expected that the company will have adequate cash inflows from proceeds of export realisations to defray, in phased manner, its entire debt obligations. As such, although the inward remittances from overseas customers have not been very encouraging for the present owing to losses,as clammed by them. Based essentially on their past track record, documents evidencing receipt of export consignments and confirmation of debts, export receivables are considered as fully realisable and accordingly, amounts payable to banks are considered as fully secured. The Company''s total assets are more than total liabilities. The Company is hopeful of increasing production once the cash flow improves. Hence the accounts of the Company are prepared on Going Concern Basis.

1. System of Accounting and Preparation of Financial Statements:

(a) All income and expenditure items are accounted on accrual basis.

(b) Financial statements are based on historical costs. These costs are not adjusted to reflect the impact of the changing value in the purchasing power of money.

2. Use of Estimates:

The preparation of financial statements are in conformity with generally accepted accounting principles which require estimates and assumptions to be made by the management that affects the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known /materialized.

3. Fixed Assets:

(a) All fixed assets are valued at cost of acquisition, construction or manufacturing as the case may be, less depreciation.

(b) Exchange differences relating to the acquisition of fixed assets are taken to the Statement of Profit and Loss.

4. Depreciation:

(a) Depreciation is provided as per the "Written Down Value" method at rates provided by Schedule XIV to the Companies Act, 1956. Leasehold Land is amortised over the period of lease.

(b) Depreciation on additions and on sale/disposal of fixed assets is computed pro-rata on day-to-day basis from the date of purchase/put to use and up to the date of sale.

(c) Depreciation on new unit is taken from the date of commissioning of the unit.

(d) Depreciation is also considered on those assets (idle assets) which were not used for whole or part of the year. However for units shut down, no depreciation is charged.

5. Work in Progress:

(a) The cost of fixed assets, acquisition/construction, installations of which are not completed are included under Capital Work-in- Progress and the same are apportioned/transferred to respective fixed assets on installation/completion of the asset/project.

(b) Expenses incurred to set up business premises/factory premises forming part of capital work in progress are capitalized under the head Factory Premises.

(c) Similarly, goods which are under production and cannot be termed as finished goods are treated as work in progress.

6. Investments:

(a) Current Investments are carried at lower of cost and quoted/fair value.

(b) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made if such diminution is considered other than temporary in nature. Such diminutions in the value of Long Term Investments are taken through the Statement of Profit and Loss.

(c) Application monies for investment in shares are classified as an advance till the allotment of shares is completed.

7. Inventories:

The Company has complied with AS-2 "Valuation of Inventories" issued by the Institute of Chartered Accountants of India, to the extent practicable keeping in mind the peculiar nature of the industry.

(a) Raw Materials are valued "At Cost" or "Net Realisable Value", whichever is lower. Costs means cost of Raw materials as determined on average, weighted average or FIFO basis as applicable, with proportionate value of freight and clearing charges.

(b) Stock on hand as on the last date which is under processing and not yet converted to finished goods is considered to be a part of stock of raw materials and hence is valued as raw materials as in (a) above.

(c) Finished Goods of Polished Diamonds are valued "At Cost" or "Net Realisable Value", whichever is lower. Cost includes cost of raw materials on weighted average cost basis, labour cost and proportionately allocated other costs related to converting them into finished goods which are technically evaluated keeping in view the wide variety and grades of diamonds.

(d) Finished Goods of Jewellery are valued "At Cost" or "Net Realisable Value", whichever is lower. Cost includes cost of raw materials, labour cost and proportionately allocated other costs related to converting them incto finished goods.

(e) Goods procured for trading (Gold, Studded and Plain Jewellery and Diamonds) are valued "At Cost" or "Net Realisable Value", whichever is lower.

(f) Stores and Spares are valued "At Cost".

(g) Closing stock of Goods at Bullion Trading Division are valued "At Cost" or "Net Realisable Value", whichever is lower.

8. Foreign Exchange Transactions:

(a) Transactions in foreign currency are accounted at the exchange rate/average rate prevailing on the date of transaction. Exchange fluctuations between the transaction date and the settlement date in respect of revenue transactions are recognized in the Statement of Profit and Loss.

(b) Monetary Assets and Liabilities denominated in Foreign Currency are translated at period end exchange rates and the Profit/ Loss so determined are recognized in the Statement of Profit and Loss for the period.

(c) All foreign exchange derivative transactions are fair valued, wherever applicable, as at the year-end in consonance with (i) Accounting standards notified Under Section 211 of the Companies Act, 1956 (ii) Applicable guidelines issued by RBI and the Institute of Chartered Accountants of India in this regard (iii) Principle of Prudence which requires recognition of expected losses and non recognition of unrealized gains, wherever applicable, and (iv) Risk Management Policy relating to derivative transaction of the Company as approved by the Board with a clause which Allows using Cost Reduction Structures and relevant disclosures as prescribed by ICAI Press Release dated 02.12.2005 are made in the notes.

(d) The Company has adopted AS-11 of the Institute of Chartered Accountants of India, in relation to its foreign exchange transactions including derivatives and options.

(i) As per the Provisions of the AS-11 of the Institute of Chartered Accountants of India, the profit/loss on cancellation or renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fluctuation/price risks are recognised as income/expenses in the Statement of Profit and Loss for the year.

(ii) Option contract open at the year end are recognized at year end rate and the Mark to Market difference, wherever applicable, is taken to the Statement of Profit and Loss.

(iii) Premium or discount at the inception of forward exchange contract is amortized as expenses or income over the life of contract.

9. Employees Retirement Benefits:

(a) Defined Contribution Plans:

The Company has Defined Contribution Plan for post employment benefit in the form of provident fund for eligible employees which is administered by Regional Provident Fund Commissioner. Provident fund is classified as Defined Contribution Plan as the Company has no further obligation beyond making the contributions. The Company''s contributions to Defined Contribution Plans are charged to the Statement of Profit and Loss as and when incurred.

(b) Defined Benefit Plans:

The Company has Defined Benefit Plan for post employment benefit in the form of Gratuity for eligible employees which are administered through a Group Gratuity Policy with Life Insurance Corporation of India (LIC). The liability for the above Defined Benefit Plan is provided on the basis of an actuarial valuation as carried out by LIC. The actuarial method used for measuring the liability is the Projected Unit Credit Method.

(c) Termination benefits are recognized as an expense as and when incurred.

(d) The Company has made provision for leave encashment dues as on the last date of the period.

10. Taxation:

(a) Provisions for taxation is made after considering various relief''s admissible under the provisions of the Income Tax Act, 1961.

(b) Disputed amounts of tax are considered in contingent liabilities.

(c) The Company has implemented ''Accounting Standard 22''-"Accounting of Taxes on Income", issued by the Institute of Chartered Accountants of India, which is mandatory in nature. The Company has recognized Deferred Taxes which result from the timing difference between the Book Profits and Tax Profits that originate in one period and are capable of reversal in one or more subsequent periods.

11. Borrowing Cost:

Borrowing Costs that are attributable to the acquisition/construction of fixed assets are capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the period in which they are incurred.

12. Impairment of Fixed Assets:

Considering AS-28-Impairment of Assets as specified by the Institute of Chartered Accountants of India, the Company at the end of each year determines whether there are any Assets that require a provision for impairment loss. Impairment loss is charged to the Statement of Profit and Loss in the year in which, an asset is identified as impaired, when the Carrying Rate of the asset exceeds its recoverable value. The impairment loss booked in prior accounting periods is reversed if there is a upward change in the estimate of recoverable account.

13. Provisions, Contingent Assets and Contingent Liabilities:

Provisions involving substantial degree of estimation in quantum are recognized when, there is and present, as a result of past events likely obligation with a high probability of an outflow of resources. Contingent Assets are not recognized nor disclosed in the financial statements. Contingent Liabilities, if material, are disclosed in the notes to the accounts.

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Sep 30, 2013

Basis of preparation of Financial Statements:

These fnancial statements have been prepared on accrual basis and under historical cost convention and in compliance in all material aspects, with the applicable accounting principles in India, the applicable accounting standards notifed under section 211 (3C) and the other relevant provision of the Companies Act, 1956.

All the assets and liabilities have been classifed as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the nature of the product and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be less than 12 months.

(i) On the basis of management''s assumption, it is expected that the company will have adequate cash infows from proceeds of export realisations to defray, in phased manner, its entire debt obligations. As such, although the inward remittances from overseas customers have not been very encouraging for the present owing to losses as claimed by them. Based essentially on their past track record, documents evidencing receipt of export consignments and confrmation of debts, export receivables are considered as fully realisable and accordingly, amounts payable to banks are considered as fully secured. The Company''s total assets are more than total liabilities. The Company is also exploring raising of additional fnance from promoter apart from realization of its receivables. The Company is hopeful of increasing production once the cash fow improves. Hence the accounts of the Company are prepared on Going Concern Basis.

1. System of Accounting and Preparation of Financial Statements:

(a) All income and expenditure items are accounted on accrual basis.

(b) Financial statements are based on historical costs. These costs are not adjusted to refect the impact of the changing value in the purchasing power of money.

2. Use of Estimates:

The preparation of fnancial statements are in conformity with generally accepted accounting principles which require estimates and assumptions to be made by the management that affects the reported amounts of assets and liabilities on the date of the fnancial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known /materialized.

3. Fixed Assets:

(a) All fxed assets are valued at cost of acquisition, construction or manufacturing as the case may be, less depreciation.

(b) Exchange differences relating to the acquisition of fxed assets are taken to the Statement of Proft and Loss.

4. Depreciation:

(a) Depreciation is provided as per the "Written Down Value" method at rates provided by Schedule XIV to the Companies Act, 1956. Leasehold Land is amortised over the period of lease.

(b) Depreciation on additions and on sale/disposal of fxed assets is computed pro-rata on day-to-day basis from the date of purchase/put to use and up to the date of sale.

(c) Depreciation on new unit is taken from the date of commissioning of the unit.

(d) Depreciation is also considered on those assets (idle assets) which were not used for whole or part of the year. However for units shut down, no depreciation is charged.

5. Work in Progress:

(a) The cost of fxed assets, acquisition/construction, installations of which are not completed are included under Capital Work-in-Progress and the same are apportioned/transferred to respective fxed assets on installation/completion of the asset/project.

(b) Expenses incurred to set up business premises/factory premises forming part of capital work-in-progress are capitalized under the head Factory Premises.

(c) Similarly, goods which are under production and cannot be termed as fnished goods are treated as work-in-progress.

6. Investments:

(a) Current Investments are carried at lower of cost and quoted/fair value.

(b) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made if such diminution is considered other than temporary in nature. Such diminution in the value of Long Term Investments are taken through the Statement of Proft and Loss.

(c) Application monies for investment in shares are classifed as an advance till the allotment of shares is completed.

7. Inventories:

The Company has complied with AS-2 ``Valuation of Inventories'''' issued by the Institute of Chartered Accountants of India, to the extent practicable keeping in mind the peculiar nature of the industry.

(a) Raw Materials are valued "At Cost" or "Net Realisable Value", whichever is lower. Costs means cost of Raw materials as determined on average, weighted average or FIFO basis as applicable, with proportionate value of freight and clearing charges.

(b) Stock on hand as on the last date which is under processing and not yet converted to fnished goods is considered to be a part of stock of raw materials and hence is valued as raw materials as in (a) above. (c) Finished Goods of Polished Diamonds are valued "At Cost" or "Net Realisable Value", whichever is lower. Cost includes cost of raw materials on weighted average cost basis, labour cost and proportionately allocated other costs related to converting them into fnished goods which are technically evaluated keeping in view the wide variety and grades of diamonds.

(d) Finished Goods of Jewellery are valued "At Cost" or "Net Realisable Value", whichever is lower. Cost includes cost of raw materials, labour cost and proportionately allocated other costs related to converting them incto fnished goods.

(e) Goods procured for trading (Gold, Studded and Plain Jewellery and Diamonds) are valued "At Cost" or "Net Realisable Value", whichever is lower.

(f) Stores and Spares are valued "At Cost".

(g) Closing stock of Goods at Bullion Trading Division are valued "At Cost" or "Net Realisable Value", whichever is lower.

8. Foreign Exchange Transactions:

(a) Transactions in foreign currency are accounted at the exchange rate/average rate prevailing on the date of transaction. Exchange fuctuations between the transaction date and the settlement date in respect of revenue transactions are recognized in the Statement of Proft and Loss.

(b) Monetary Assets and Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Proft/Loss so determined are recognized in the Statement of Proft and Loss for the year.

(c) All foreign exchange derivative transactions are fair valued, wherever applicable, as at the year-end in consonance with (i) Accounting standards notifed Under Section 211 of the Companies Act, 1956 (ii) Applicable guidelines issued by RBI and the Institute of Chartered Accountants of India in this regard (iii) Principle of Prudence which requires recognition of expected losses and non recognition of unrealized gains, wherever applicable, and (iv) Risk Management Policy relating to derivative transaction of the Company as approved by the Board with a clause which Allows using Cost Reduction Structures and relevant disclosures as prescribed by ICAI Press Release dated 02.12.2005 are made in the notes.

(d) The Company has adopted AS - 11 of the Institute of Chartered Accountants of Inida, in relation to its foreign exchange transactions including derivatives and options.

(i) As per the Provisions of the AS - 11 of the Institute of Chartered Accountants of India, the proft/loss on cancellation or renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fuctuation/ price risks are recognised as income/expenses in the Statement of Proft and Loss for the year.

(ii) Option contract open at the year end are recognized at year end rate and the Mark to Market difference, wherever applicable, is taken to the Statement of Proft and Loss.

(iii) Premium or discount at the inception of forward exchange contract is amortized as expenses or income over the life of contract.

9. Employees Retirement Benefts:

(a) Defned Contribution Plans:

The Company has Defned Contribution Plan for post employment beneft in the form of provident fund for eligible employees which is administered by Regional Provident Fund Commissioner. Provident fund is classifed as Defned Contribution Plan as the Company has no further obligation beyond making the contributions. The Company''s contributions to Defned Contribution Plans are charged to the Statement of Proft and Loss as and when incurred.

(b) Defned Beneft Plans:

The Company has Defned Beneft Plan for post employment beneft in the form of Gratuity for eligible employees which are administered through a Group Gratuity Policy with Life Insurance Corporation of India (LIC). The liability for the above Defned Beneft Plan is provided on the basis of an actuarial valuation as carried out by LIC. The actuarial method used for measuring the liability is the Projected Unit Credit Method.

(c) Termination benefts are recognized as an expense as and when incurred.

(d) The Company has made provision for leave encashment dues as on the last date of the year.

10. Taxation:

(a) Provisions for taxation is made after considering various relief''s admissible under the provisions of the Income Tax Act, 1961.

(b) Disputed amounts of tax are considered in contingent liabilities.

(c) The Company has implemented `Accounting Standard 22''-"Accounting of Taxes on Income", issued by the Institute of Chartered Accountants of India, which is mandatory in nature. The Company has recognized Deferred Taxes which result from the timing difference between the Book Profts and Tax Profts that originate in one period and are capable of reversal in one or more subsequent periods.

11. Borrowing Cost:

Borrowing Costs that are attributable to the acquisition/construction of fxed assets are capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the year in which they are incurred.

12. Impairment of Fixed Assets:

Considering AS-28-Impairment of Assets as specifed by the Institute of Chartered Accountants of India, the Company at the end of each year determines whether there are any Assets that require a provision for impairment loss. Impairment loss is charged to the Statement of Proft and Loss in the year in which, an asset is identifed as impaired, when the Carrying Rate of the asset exceeds its recoverable value. The impairment loss booked in prior accounting periods is reversed if there is a upward change in the estimate of recoverable account.

13. Provisions, Contingent Assets and Contingent Liabilities:

Provisions involving substantial degree of estimation in quantum are recognized when, there is and present, as a result of past events likely obligation with a high probability of an outfow of resources. Contingent Assets are neither recognized nor disclosed in the fnancial statements. Contingent Liabilities, if material, are disclosed in the notes to the accounts.

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Mar 31, 2012

1. System of Accounting and Preparation of Financial Statements:

(a) All income and expenditure items are accounted on accrual basis.

(b) Financial Statements are based on historical costs. These costs are not adjusted to reflect the impact of the changing value in the purchasing power of money.

2. Use of Estimates:

The preparation of financial statements are in conformity with generally accepted accounting principles which require estimates and assumptions to be made by the management that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/materialized.

3. Fixed Assets:

(a) All fixed assets are valued at cost of acquisition, construction or manufacturing as the case may be, less depreciation.

(b) Exchange differences relating to the acquisition of fixed assets are taken to the Statement of Profit and Loss

4. Depreciation:

(a) Depreciation is provided as per the "Written Down Value" method at rates provided by Schedule XIV to the Companies Act, 1956. Leasehold Land is amortised over the period of lease.

(b) Depreciation on additions and on sale/disposal of fixed assets is computed pro-rata on day-to-day basis from the date of purchase and up to the date of sale.

(c) Depreciation on new unit is taken from the date of commissioning of the unit.

(d) Depreciation is also considered on those assets (idle assets) which were not used for whole or part of the year. However for units shut down, no depreciation is charged.

5. Work in Progress:

(a) The cost of fixed assets, acquisition/construction, installations of which are not completed are included under Capital Work-in-Progress and the same are apportioned/transferred to respective fixed assets on installation/completion of the asset/ project.

(b) Expenses incurred to set up business premises/ factory premises forming part of capital work-in- progress are capitalized under the head office/ factory Premises.

(c) Similarly, goods which are under production and cannot be termed as finished goods are treated as work-in-progress.

6. Investments:

(a) Current investments are carried at lower of cost and quoted/fair value.

(b) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made if such diminution is considered other than temporary in nature.

(c) Application monies for investment in shares are classified as an advance till the allotment of shares is completed.

7. Inventories:

The Company has complied with AS-2 "Valuation of Inventories'' issued by the Institute of Chartered Accountants of India, to the extent practicable keeping in mind the peculiar nature of the industry.

(a) Raw Materials are valued "At Cost" or "Net Realisable Value", whichever is lower. Costs means cost of Raw materials as determined on average, weighted average or FIFO basis as applicable, with proportionate value of freight and clearing charges.

(b) Stock on hand as on the last date which is under processing and not yet converted to finished goods is considered to be a part of stock of raw materials and hence is valued as raw materials as in (a) above.

(c) Finished Goods of Polished Diamonds are valued "At Cost" or "Net Realisable Value", whichever is lower. Cost includes cost of raw materials on weighted average cost basis, labour cost and proportionately allocated other costs related to converting them into finished goods which are technically evaluated keeping in view the wide variety and grades of diamonds.

(d) Finished Goods of Jewellery are valued "At Cost" or "Net Realisable Value", whichever is lower. Cost includes cost of raw materials, labour cost and proportionately allocated other costs related to converting them into finished goods.

(e) Goods procured for trading (Gold, Studded and Plain Jewellery and Diamonds) are valued "At Cost" or "Net Realisable Value", whichever is lower.

(f) Stores and Spares are valued "At Cost".

(g) Closing stock of Goods at Bullion Division are valued "At Cost" or "Net Realisable Value", whichever is lower.

8. Foreign Exchange Transactions:

(a) Transactions in foreign currency are accounted at the exchange rate/average rate prevailing on the date of transaction. Exchange fluctuations between the transaction date and the settlement date in respect of revenue transactions are recognized in Statement of Profit and Loss.

(b) Monetary Assets and Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Profit/Loss so determined are recognized in the Statement of Profit and Loss for the year.

(c) All foreign exchange derivative transactions are fair valued, wherever applicable, as at the year- end in consonance with (i) Accounting standards notified under Section 211 of the Companies Act, 1956 (ii) applicable Guidelines issued by RBI and the Institute of Chartered Accountants of India in this regard (iii) Principles of Prudence which requires recognition of expected losses and non- recognition of unrealized gains, wherever applicable, and (iv) Risk Management Policy of the Company as approved by the Board with a clause which Allows using Cost Reduction Structures and relevant disclosures as prescribed by ICAI Press Release dated 02.12.2005 are made in the Notes.

(d) The Company has adopted AS–11 of the Institute of Chartered Accountants of India, in relation to its foreign exchange transactions including derivatives and options.

(i) As per the Provisions of the AS-11 of the Institute of Chartered Accountants of India. The profit/loss on cancellation or renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fluctuation/price risks are recognised as income/expenses in the Statement of Profit and Loss for the year

ii) Option contracts open at the year end are recognized at year end rate and the Mark to Market difference, wherever applicable, is taken to the Statement of Profit and Loss.

iii) Premium or discount at the inception of forward exchange contract is amortized as expenses or income over the life of contract.

9. Employees Retirement Benefits:

(a) Defined Contribution Plans:

The Company has Defined Contribution Plan for post employment benefit in the form of provident fund for eligible employees which is administered by Regional Provident Fund Commissioner. Provident fund is classified as Defined Contribution Plan as the Company has no further obligation beyond making the contributions. The Company's contributions to Define Contribution Plans are charged to the Statement of Profit and Loss for the year as and when incurred.

(b) Defined Benefit Plans:

The Company has Defined Benefit Plan for post employment benefit in the form of Gratuity for eligible employees which are administered through a Group Gratuity Policy with Life Insurance Corporation of India (LIC). The liability for the above Defined Benefit Plan is provided on the basis of an actuarial valuation as carried out by LIC. The actuarial method used for measuring the liability is the Projected Unit Credit Method.

(c) Termination benefits are recognized as an expense as and when incurred.

(d) The Company has made provision for leave encashment dues as on the last date of the year.

10. Taxation:

(a) Provisions for taxation is made after considering various reliefs admissible under the Provisions of the Income-Tax Act, 1961.

(b) Disputed amounts of tax are considered in contingent liabilities.

(c) The Company has implemented ‘Accounting Standard 22'-"Accounting of Taxes on Income", issued by the Institute of Chartered Accountants of India, which is mandatory in nature. The Company has recognized Deferred Taxes which result from the timing difference between the Book Profits and Ta x Profits that originate in one period and are capable of reversal in one or more subsequent periods.

11. Borrowing Cost:

Borrowing Costs that are attributable to the acquisition/ construction of fixed assets are capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the year in which they are incurred.

12. Impairment of Fixed Assets:

Considering AS-28 Impairment of Assets as specified by the Institute of Chartered Accountants of India, the Company at the end of each year determines whether there are any Assets that require a provision for impairment loss. Impairment loss is charged to the Statement of Profit and Loss in the year in which, an asset is identified as impaired, when the Carrying Rate of the asset exceeds its recoverable value. The impairment loss booked in prior accounting periods is reversed if there is a upward change in the estimate of recoverable account.

13. Provisions, Contingent Assets and Contingent Liabilities:

Provisions involving substantial degree of estimation in quantum are recognized when, there is and present, as a result of past events likely obligation with a high probability of an outflow of resources. Contingent Assets are not recognized nor disclosed in the financial statements. Contingent Liabilities, if material, are disclosed in the notes to the accounts.

---

Mar 31, 2011

1. Basis of Accounting and Preparation of Financial Statements:

(a) All income and expenditure items are accounted on accrual basis.

(b) Financial statements are based on historical costs. These costs are not adjusted to reflect the impact of the changing value in the purchasing power of money.

2. Use of Estimates:

The preparation of financial statements are in conformity with generally accepted accounting principles which require estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known / materialized.

3. Fixed Assets:

(a) All fixed assets are valued at cost less depreciation.

(b) Exchange differences relating to the acquisition of fixed assets are taken to the Profit and Loss account

4. Depreciation:

(a) Depreciation is provided as per the "Written Down Value" method at rates provided by Schedule XIV to the Companies Act, 1956. Leasehold Land is amortised over the period of lease.

(b) Depreciation on additions and on sale/disposal of fixed assets is computed pro-rata on day-to-day basis from the date of purchase and up to the date of sale.

(c) Depreciation on new unit is taken from the date of commissioning of the unit.

(d) Depreciation is also considered on those assets (idle assets) which were not used for whole or part of the year. However for units shut down, no depreciation is charged.

5. Work in Progress:

(a) The cost of fixed assets, acquisition/construction, installations which are not completed are included under Capital Work-in- Progress and the same are apportioned/transferred to respective fixed assets on installation/completion of the asset/ project.

(b) Expenses incurred to set up business premises/factory premises forming part of capital work-in-progress are capitalized under the head Factory Premises.

(c) Similarly, goods which are under production and cannot be termed as finished goods are treated as work-in-progress.

6. Investments:

(a) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made if such diminution is considered other than temporary in nature.

(b) Application monies for investment in shares are classified as an advance till the allotment of shares is completed.

7. Inventories:

The Company has complied with AS-2 "Valuation of Inventories issued by the Institute of Chartered Accountants of India, to the extent practicable keeping in mind the peculiar nature of the industry.

(a) Raw Materials (Rough Diamonds, Precious Stones, Gold, Silver, Alloys, Platinum, Pearls) are valued "At Cost" (i.e. cost of acquisition as on that date) or "Net Realisable Value", whichever is lower.

(b) Closing stock of other Raw Materials is valued "At Cost" or "Net Realisable Value" whichever is lower (Cost means average cost with the proportionate value of freight and clearing charges added to closing stock)

(c) Stock on hand as on the last date which is under processing and not yet converted to finished goods is considered to be a part of stock of raw materials and hence is valued as raw materials as in (a) above.

(d) Finished Goods of Polished Diamonds are valued "At Cost" or "Net Realisable Value", whichever is lower. Cost includes cost of raw materials on weighted average cost basis, labour cost and proportionately allocated other costs related to converting them into finished goods which are technically evaluated keeping in view the wide variety and grades of diamonds.

(e) Finished Goods of Jewellery are valued "At Cost" or "Net Realisable Value", whichever is lower. Cost includes cost of raw materials, labour cost and proportionately allocated other costs related to converting them into finished goods.

(f) Goods procured for trading (Gold, Studded and Plain Jewellery and Diamonds) are valued "At Cost" or "Net Realisable Value", whichever is lower.

(g) Stores and Spares are valued "At Cost".

(h) Closing stock of Goods at Bullion Division are valued "At Cost" or "Net Realisable Value", whichever is lower.

8. Foreign Exchange Transactions:

(a) Transactions in foreign currency are accounted at the exchange rate/average rate prevailing on the date of transaction. Exchange fluctuations between the transaction date and the settlement date in respect of revenue transactions are recognized in Profit and Loss Account.

(b) All export proceeds/import payables not realised at the year- end are restated at the rate prevailing at the year end. The exchange difference arising there from has been recognised as income/expenses in the current years Profit and Loss Account alongwith underlying transaction.

(c) Monetary Assets and Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Profit/Loss so determined are recognized in the Profit and Loss Account for the year.

(d) The Company has adopted AS – 11 in relation to its foreign exchange transactions Including derivatives and options.

(e) (i) As per the Provisions of the AS - 11 of the Institute of Chartered Accountants of India, the profit/loss on cancellation or renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fluctuation/price risks are recognised as income/expenses in the Profit and Loss Account for the year along with the underlying transactions.

(ii) Option contract open at the year end are recognized at year end rate and the Mark to Market difference, where applicable, are taken to revenue account along with the underlying transactions.

(iii) Premium or discount at the inception of forward exchange contract is amortized as expenses or income over the life of contract.

9. Preliminary Expenses:

Preliminary Expenses are treated as Deferred Revenue Expenditure and the same are written off in ten equal installments.

10. Employees Retirement Benefits:

(a) Defined Contribution Plans:

The Company has Defined Contribution Plan for post employment benefit in the form of provident fund for eligible

employees which is administered by Regional Provident Fund Commissioner. Provident fund is classified as Defined Contribution Plan as the Company has no further obligation beyond making the contributions. The Companys contributions to Define Contribution Plans are charged to the Profit and Loss Account as and when incurred.

(b) Defined Benefit Plans:

The Company has Defined Benefit Plan for post employment benefit in the form of Gratuity for eligible employees which are administered through a Group Gratuity Policy with Life Insurance Corporation of India (LIC). The liability for the above Defined Benefit Plan is provided on the basis of an actuarial valuation as carried out by LIC. The actuarial method used for measuring the liability is the Projected Unit Credit Method.

(c) Termination benefits are recognized as an expense as and when incurred.

(d) The Company has made provision for leave encashment dues as on the last date of the year.

11. Taxation:

(a) Provisions for taxation is made after considering various reliefs admissible under the provisions of the Income-tax Act, 1961.

(b) Disputed amounts of tax are considered in contingent liabilities.

(c) The Company has implemented Accounting Standard 22- "Accounting of Taxes on Income", issued by the Institute of Chartered Accountants of India, which is mandatory in nature. The Company has recognized Deferred Taxes which result from the timing difference between the Book Profits and Tax Profits that originate in one period and are capable of reversal in one or more subsequent periods.

12. Borrowing Cost:

Borrowing Costs that are attributable to the acquisition/construction of fixed assets are capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the year in which they are incurred.

13. Impairment of Fixed Assets:

Considering AS-28 Impairment of Assets as specified by the Institute of Chartered Accountants of India, the Company at the end of each year determines whether there are any Assets that require a provision for impairment loss. Impairment loss is charged to the Profit and Loss Account in the year in which, an asset is identified as impaired, when the Carrying Rate of the asset exceeds its recoverable value. The impairment loss booked in prior accounting periods is reversed if there is a upward change in the estimate of recoverable account.

14. Provisions, Contingent Assets and Contingent Liabilities:

Provisions involving substantial degree of estimation in quantum are recognized when, there is and present, as a result of past events likely obligation with a high probability of an outflow of resources. Contingent Assets are not recognized nor disclosed in the financial statements. Contingent Liabilities, if material, are disclosed in the notes to the accounts.

---

Mar 31, 2010

1. Basis of Accounting and Preparation of Financial Statements:

(a) All income and expenditure items are accounted on accrual basis.

(b) Financial statements are based on historical costs. These costs are not adjusted to reflect the impact of the changing value in the purchasing power of money.

2. Use of Estimates :

The preparation of financial statements in conformity with generally accepted accounting principles require estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/materialized.

3. Fixed Assets :

(a) All fixed assets are valued at cost less depreciation.

(b) Exchange differences relating to the acquisition of fixed assets are taken to the Profit and Loss account.

4. Depreciation :

(a) Depreciation is provided as per the “Written Down Value” method at rates provided by Schedule XIV to the Companies Act, 1956. Leasehold Land is amortised over the period of lease.

(b) Depreciation on additions and on sale/disposal of fixed assets is computed pro-rata on day-to-day basis from the date of purchase and up to the date of sale.

(c) Depreciation on new unit is taken from the date of commissioning of the unit.

(d) Depreciation is also considered on those assets (idle assets) which were not used for whole or part of the year. However for units shut down, no depreciation is charged.

5. Work in Progress :

(a) The cost of fixed assets, acquisition/construction, installations of which are not completed are included under capital work-in-progress and the same are apportioned/transferred to respective fixed assets on installation/completion of the asset/ project.

(b) Expenses incurred to set up business premises/factory premises forming part of capital work-in-progress are capitalized under the head Factory Premises.

(c) Similarly, goods which are under production and cannot be termed as finished goods are treated as work in progress.

6. Investments :

(a) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made if such diminution is considered other than temporary in nature.

(b) Application monies for investment in shares are classified as an advance till the allotment of shares is completed.

7. Inventories :

The Company has complied with AS-2 “Valuation of Inventories’’ issued by the Institute of Chartered Accountants of India, to the extent practicable keeping in mind the peculiar nature of the industry.

(a) Raw Materials (Rough Diamonds, Precious Stones, Gold, Silver, Alloys, Platinum, Pearls) are valued “At Cost” (i.e. cost of acquisition as on that date) or “Net Realisable Value”, whichever is lower.

(b) Closing stock of other Raw Materials is valued “At Cost” or “Net Realisable Value” whichever is lower (Cost means average cost with the proportionate value of freight and clearing charges added to closing stock).

(c) Stock on hand as on the last date which is under processing and not yet converted to finished goods is considered to be a part of stock of raw materials and hence is valued as raw materials as in (a) above.

(d) Finished Goods of Polished Diamonds are valued “At Cost” or “Net Realisable Value”, whichever is lower. Cost includes cost of raw materials on weighted average cost basis, labour cost and proportionately allocated other costs related to converting them into finished goods which are technically evaluated keeping in view the wide variety and grades of diamonds.

(e) Finished Goods of Jewellery are valued “At Cost” or “Net Realisable Value”, whichever is lower. Cost includes cost of raw materials, labour cost and proportionately allocated other costs related to converting them into finished goods.

(f) Goods procured for trading (Studded and Plain Jewellery and Diamonds) are valued “At Cost” or “Net Realisable Value”, whichever is lower.

(g) Stores and Spares are valued “At Cost”.

8. Foreign Exchange Transactions :

(a) Transactions in foreign currency are accounted at the exchange rate/average rate prevailing on the date of transaction. Exchange fluctuations between the transaction date and the settlement date in respect of revenue transactions are recognized in Profit and Loss Account.

(b) All export proceeds/import payables not realised at the year-end are restated at the rate prevailing at the year end. The exchange difference arising there from has been recognised as income/expenses in the current year’s Profit and Loss Account alongwith underlying transaction.

(c) Monetary Assets and Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Profit/Loss so determined are recognized in the Profit and Loss Account for the year.

(d) (i) As per the Provisions of the AS - 11 of the Institute of Chartered Accountants of India, the profit/loss on cancellation or renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fluctuation/price risks are recognised as income/expenses in the Profit and Loss Account for the year along with the underlying transactions.

(ii) Option contract open at the year end are recognized at year end rate and the Mark to Market difference taken to revenue account along with the underlying transactions.

(iii) Premium or discount at the inception of forward exchange contract is amortized as expenses or income over the life of contract.

9. Preliminary Expenses :

Preliminary Expenses are treated as Deferred Revenue Expenditure and the same are written off in ten equal installments.

10. Employees Retirement Benefits :

(a) Defined Contribution Plans:

The Company has Defined Contribution Plan for post employment benefit in the form of provident fund for eligible employees which is administered by Regional Provident Fund Commissioner. Provident fund is classified as Defined Contribution Plan as the Company has no further obligation beyond making the contributions. The Company’s contributions to Defined Contribution Plans are charged to the Profit and Loss Account as and when incurred.

(b) Defined Benefit Plans :

The Company has Defined Benefit Plan for post employment benefit in the form of Gratuity for eligible employees which are administered through a Group Gratuity Policy with Life Insurance Corporation of India (LIC). The liability for the above Defined Benefit Plan is provided on the basis of an actuarial valuation as carried out by LIC. The actuarial method used for measuring the liability is the Projected Unit Credit Method.

(c) Termination benefits are recognized as an expense as and when incurred.

(d) The Company has made provision for leave encashment dues as on the last date of the year.

11. Taxation :

(a) Provisions for taxation is made after considering various relief’s admissible under the provisions of the Income Tax Act.

(b) Disputed amounts of tax are considered in contingent liabilities.

(c) The Company has implemented ‘Accounting Standard 22’- “Accounting of Taxes on Income”, issued by the Institute of Chartered Accountants of India, which is mandatory in nature. The Company has recognized Deferred Taxes which result from the timing difference between the Book Profits and Tax Profits that originate in one period and are capable of reversal in one or more subsequent periods.

12. Borrowing Cost :

Borrowing Costs that are attributable to the acquisition/construction of fixed assets are capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the year in which they are incurred.

13. Impairment of Fixed Assets :

Considering AS 28 - Impairment of Assets as specified by the Institute of Chartered Accountants of India, the Company at the end of each year determines whether there are any Assets that require a provision for impairment loss. Impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired when the carrying rate of the asset exceeds its recoverable value. The impairment loss booked in prior accounting period is reversed if there is an upward change in the estimate of recoverable account.

14. Provisions, Contingent Assets and Contingent Liabilities :

Provisions involving substantial degree of estimation in quantum are recognized when, there is and present, as a result of past events likely obligation with a high probability of an outflow of resources. Contingent Assets are not recognized nor disclosed in the financial statements. Contingent Liabilities, if material, are disclosed in the notes to the accounts.