Accounting Policies of Enchante Jewellery Ltd. Company

Mar 31, 2005

1. Financial statements are prepared under accrual method as per historical cost convention in accordance with applicable accounting standards except as otherwise stated. However, the accounts have been prepared on going concern basis, despite the company being a sick industrial company and incurring operational losses continuously.

2. Fixed assets and depreciation:

2.1 Fixed assets are stated at historical cost less accumulated depreciation, if any.

2.2 The original cost of fixed assets acquired through foreign currency loan is adjusted at the end of each financial year by any change in liability arising out of expressing the outstanding foreign loan at the rate of exchange prevailing at the date of Balance Sheet.

2.3 Depreciation is provided on Straight Line method at the rates specified in Schedule XIV of the Companies Act, 1956 on pro-rata basis from the date of acquisition/commissioning.

2.4 Assets costing up to value of Rs. 5000/- are written off in the first year of purchase.

2.5 Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the companys fixed assets. If any indication exists, an assets recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price arid value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

3 Inventories:

Inventories are stated at lower of cost and net realizable value. The Cost for Raw Materials and work in progress is the purchase cost of raw material arrived at on first in first out basis.The cost of finished goods is arrived on weighted average basis of the material consumed, direct production expenses and depreciation.

4 Preliminary expenses and Public issue expenses are amortized over 10 years and 60 Months respectively.

5 Retirement Benefits:

The provision for gratuity payable under the Payment of Gratuity Act 1972, and the liability for amount payable to the employees in respect of accumulated earned leave, are being provided in the accounts on the assumption that such benefits are payable to all employees at the end of the accounting year.

6 Accounting For Taxation

Provision for current tax is made on the basis of taxable income for the current accounting year in accordance with the Income Tax Act, 1961 The deferred tax on account of timing differences between the book and the tax profits/loss for the year is accounted for using the tax rates and laws that have been substantially enacted as on the balance sheet date. Deferred tax assets arising from the timing differences are recognized to the extent there is virtual certainty that these would be realized in future.

7 Foreign Currency Transactions:

7.1 Foreign currency transactions are recorded at the exchange rates prevailing at the date of the transaction.

7.2 Gains/losses arising out of fluctuation in the exchange rates are recognized in the period in which they arise except in respect of Fixed Assets where exchange variance is adjusted in the carrying amount of the respective Fixed Assets.

7.3 Foreign Currency receivables/payables are translated at the relevant rates of exchange prevailing at the year end.

8 The Company has made the provision, for its liability towards the "diamond accumulation plan" matured during the year but against which the members have not bought the Jewellery by year end. This provision has been made equivalent to the difference of maturity value and the amount paid by the members.

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Mar 31, 2003

1. Financial statements are prepared under accrual method as per historical cost convention in accordance with applicable accounting standards except as otherwise stated. However, the accounts have been prepared on going concern basis, despite the company being a sick industrial company and incurring operational losses continuously.

2. Fixed assets and depreciation:

2.1 Fixed assets are stated at historical cost less accumulated depreciation, if any

2.2 The original cost of fixed assets acquired through foreign currency loan is adjusted at the end of each financial year by any change in liability arising out of expressing the outstanding foreign loan at the rate of exchange prevailing at the date of Balance Sheet.

2.3 Depreciation is provided on Straight Line method at the rates specified in Schedule XIV of the Companies Act, 1956 on pro-rata basis from the date of acquisition/commissioning.

2.4 Assets costing up to value of Rs. 5000/- are written off in the first year of purchase.

3. Inventories:

Inventories are stated at lower of cost and net realizable value. The Cost for Raw Materials and work in progress is the purchase cost of raw material arrived at on first in first out basis. The cost of finished goods is arrived on weighted average basis of the material consumed, direct production expenses and depreciation.

4. Preliminary expenses and Public issue expenses are amortized over 10 years and 60 Months respectively.

5. Retirement Benefits:

The provision for gratuity payable under the Payment of Gratuity Act, 1972 and the liability for amount payable to the employees in respect of accumulated earned leave, are being provided in the accounts on the assumption that such benefits are payable to all employees at the end of the accounting year.

6. Accounting for Taxation:

Provision for current tax is made on the basis of taxable income for the current accounting year in accordance with the Income Tax Act, 1961. The deferred tax on account of timing differences between the book and the tax profits/loss for the year is accounted for using the tax rates and laws that have been substantially enacted as on the balance sheet date. Deferred tax assets arising from the timing differences are recognized to the extent there is virtual certainty that these would be realized in future.

7. Foreign Currency Transactions:

7.1 Foreign currency transactions are recorded at the exchange rates prevailing at the date of the transaction.

7.2 Gains/losses arising out of fluctuation in the exchange rates are recognized in the period in which they arise except in respect of Fixed Assets where exchange variance is adjusted in the carrying amount of the respective Fixed Assets.

7.3 Foreign Currency receivables/payables are translated at the relevant rates of exchange prevailing at the year-end.

8. The Company has made the provision, for its liability towards the "diamond accumulation plan" matured during the year but against which the members have not bought the Jewellery by year end. This provision has been made equivalent to the difference of maturity value and the amountpaid by the members.

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Mar 31, 2002

A. Significant Accounting Policies: 1 Financial statements are prepared under accrual method as per historical cost convention in accordance with applicable accounting standards except as otherwise stated. Companys net worth has been fully eroded due to accumulated losses. However, the accounts have been prepared on going concern basis.

2 Fixed assets and depreciation:

2.1 Fixed assets are stated at historical cost less accumulated depreciation, if any.

2.2 The original cost of fixed assets acquired through foreign currency loan is adjusted at the end of each financial year by any change in liability arising out of expressing the outstanding foreign loan at the rate of exchange prevailing at the date of Balance Sheet.

2.3 Depreciation is provided on Straight Line method at the rates specified in Schedule X!V of the Companies Act, 1956 on pro-rata basis from the date of acquisition / commissioning.

2.4 Assets costing up to value of Rs. 5,000/- are written off in the first year of purchase.

3 Inventories:

Inventories are stated at lower of cost and net realizable value. The Cost for Raw Materials and work in progress is the purchase cost of raw material arrived at on first in first out basis. The cost of finished goods is arrived on weighted average basis of the material consumed, direct production expenses and depreciation.

4 Preliminary expenses and Public issue expenses are amortized over 10 years and 60 Months respectively.

5 Retirement Benefits:

The provision for gratuity payable under the Payment of Gratuity Act, 1972 and the liability for amount payable to the employees in respect of accumulated earned leave, are being provided in the accounts on the assumption that such benefits are payable to all employees at the end of the accounting year.

6 Foreign Currency Transactions:

6.1 Foreign currency transactions are recorded at the exchange rates prevailing at the date of the transaction.

6.2 Gains/losses arising out of fluctuation in the exchange rates are recognized in the period in which they arise except in respect of Fixed Assets where exchange variance is adjusted in the carrying amount of the respective Fixed Assets.

6.3 Foreign Currency receivables / payables are translated at the relevant rates of exchange prevailing at the year-end.

7 The company has made the provision for its liability towards the "diamond accumulation plan" matured during the year but against which the members have not bought the jewellery by year end. This provision has been made equivalent to the difference of maturity value and the amount paid by the members.

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Mar 31, 2001

Significant Accounting Policies

1. Financial statements are prepared under accrual method as per historical cost convention in accordance with applicable accounting standards except as otherwise stated. Company's net worth has been fully eroded due to accumulated losses. However, the accounts have been prepared on going concern basis.

2. Fixed assets and depreciation :

2.1 Fixed assets are stated at historical cost less accumulated depreciation, if any.

2.2 The original cost of fixed assets acquired through foreign currency loans is adjusted at the end of each financial year by any change in liability arising out of expressing the outstanding foreign loan at the rate of exchange prevailing at the date of Balance Sheet.

2.3 Depreciation is provided on Straight Line method at the rates specified in Schedule XIV of the Companies Act, 1956 on pro-rata basis from the date of acquisition/commissioning.

2.4 Assets costing up to value of Rs. 5,000/- are written off in the first year of purchase.

3. Inventories :

Inventories are stated at lower of cost and net realizable value. The Cost for Raw Materials and work in progress is the purchase cost arrived at on first in first out basis. The cost of finished goods is arrived on weighted average basis of the material consumed, direct production expenses and depreciation.

4. Preliminary expenses and Public issue expenses are amortised over 10 years and 60 months respectively.

5. Retirement Benefits :

The provision for gratuity payable under the Payment of Gratuity Act, 1972 and the liability for amount payable to the employees in respect of accumulated earned leave, are being provided in the accounts on the assumption that such benefits are payable to all employees at the end of the accounting year.

6. Foreign Currency Transactions :

6.1 Foreign currency transactions are recorded at the exchange rates prevailing at the date of the transaction.

6.2 Gains/losses arising out of fluctuation in the exchange rates are recognized in the period in which they arise except in respect of Fixed Assets where exchange variance is adjusted in the carrying amount of the respective Fixed Assets.

6.3 Foreign Currency receivables/payables are translated at the relevant rates of exchange prevailing at the year end.

7. The Company has made the provision at the end of the year, for its liability towards the "diamond accumulation plan" matured during the year but against which the members have not bought the Jewellery by year end. This provision has been made equivalent to the difference of maturity value and the amount paid by the members.

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Mar 31, 2000

1. Financial Statements are prepared under accrual method as per historical cost convention in accordance with applicable accounting standards except as otherwise stated. Company's net worth has been fully eroded due to accumulated losses. However, the accounts have been prepared on the going concern basis.

2. Fixed assets and depreciation :

2.1 Fixed assets are stated at historical cost less accumulated depreciation, if any.

2.2 The original cost of fixed assets acquired through foreign currency loans is adjusted at the end of each financial year by any change in liability arising out of foreign exchange fluctuation by expressing the outstanding foreign loan at the rate of exchange prevailing at the date of Balance Sheet.

2.3 Depreciation is provided on Straight Line method at the rates specified in Schedule XIV of the Companies Act, 1956 on pro-rata basis from the date of acquisition /commissioning.

2.4 Assets costing up to value of Rs.5,000/- are written off in the first year of purchase.

3. Inventories :

Inventories are stated at lower of cost and net realizable value. The Cost for Raw Materials and work in progress is the purchase cost arrived at on first in first out basis. The cost of finished goods is arrived on weighted average basis of the material consumed, direct production expenses, interest and depreciation.

4. Preliminary expenses and Public issue expenses are amortised over 10 years and 60 months respectively.

5. Retirement Benefits :

5.1 The provision for gratuity payable under the Payment of Gratuity Act, 1972 is being made on the basis of Actuarial valuation.

5.2 Liability for amount payable to the employees in respect of accumulated earned leave is being provided in the accounts on the assumption that such benefits are payable to all employees at the end of the accounting year.

6. Foreign Currency Transactions :

6.1 Foreign currency transactions are recorded at the exchange rates prevailing at the date of the transaction.

6.2 Gains/losses arising of fluctuation in the exchange rates are recognized in the period of which they arise except in respect of Fixed Assets where exchange variance is adjusted in the carrying amount of the respective Fixed Assets.

6.3 Foreign Currency receivables/payables are translated at the relevant rates of exchange prevailing at the year end.

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Mar 31, 1999

1. Financial statements are prepared under accrual method as per historical cost convention in accordance with applicable accounting standards except as otherwise stated.

2. Fixed assets and depreciation :

2.1 Fixed assets are stated at historical cost less accumulated depreciation, if any.

2.2 The original cost of fixed assets acquired through foreign currency loans is adjusted at the end of each financial year by any change in liability arising out of expressing the outstanding foreign loan at the rate of exchange prevailing at the date of Balance Sheet.

2.3 Depreciation is provided on Straight Line method at the rates specified in Schedule XIV of the Companies Act, 1956 on pro-rata basis from the date of acquisition/commissioning.

2.4 Assets costing up to value of Rs 5,000/- are written off in the first year of purchase.

3. Inventories

Inventories are stated at lower of cost and net realisable value. The Cost for Raw Materials and work in progress is the purchase cost arrived at on first in first out basis. The cost of Finished goods is arrived on weighted average basis of the material consumed, direct production expenses, interest and depreciation.

4. Preliminary expenses and Public issue expenses are amortised over 10 years and 60 months respectively.

5. Retirement Benefits

5.1 The provision for gratuity payable under the Payment of Gratuity Act, 1972 is being made on the basis of Actuarial valuation.

5.2 Liability for amount payable to the employees in respect of accumulated earned leave is being provided in the accounts on the assumption that such benefits are payable to all employees at the end of the accounting year.

6. Foreign Currency Transactions :

6.1 Foreign currency transactions are recorded at the exchange rates prevailing at the date of the transaction.

6.2 Gains/losses arising out of fluctuation in the exchange rates are recognised in the period in which they arise except in respect of Fixed Assets where exchange variance is adjusted in the carrying amount of the respective Fixed Assets.

6.3 Foreign Currency receivables/payables are translated at the relevant rates of exchange prevailing at the year end.

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Mar 31, 1998

1. Financial statements are prepared under accrual method as per historical cost convention in accordance with applicable accounting standards except as otherwise stated.

2. Fixed assets and depreciation:

2.1 Fixed assets are stated at historical cost less accumulated depreciation, if any.

2.2. The original cost of fixed assets acquired through foreign currency loans is adjusted at the end of each financial year by any change in liability arising out of expressing the outstanding foreign loan at the rate of exchange prevailing at the date of Balance Sheet.

2.3 Depreciation is provided on Straight Line method at the rates specified in Schedule XIV of the Companies Act, 1956 on pro-rata basis from the date of acquisition/commissioning.

2.4 Assets costing up to value of Rs. 5,000/- are written off in the first-year of purchase.

3. Inventories:

Inventories are stated at lower of cost and net realisable value. The Cost for flaw Materials and work in progress is the purchase cost arrived at on first in first out basis. The cost of Finished goods is arrived on weighted average basis of the material consumed, direct production expenses, interest and depreciation.

4. Preliminary expenses and Public issue expenses are amortised over 10 years and 60 months respectively.

5. Retirement Benefits:

5.1 The provision for gratuity payable under the Payment of Gratuity Act, 1972 is being made on the basis of Actuarial valuation.

5.2 Liability for amount payable to the employees in respect of accumulated earned leave is being provided in the accounts on the assumption that such benefits are payable to all employees at the end of the accounting year.

6. Foreign Currency Transactions :

6.1 Foreign currency transactions are recorded at the exchange rates prevailing at the date of the transaction.

6.2 Gains/losses arising out of fluctuation in the exchange rates are recognised in the period in which they arise except in respect of Fixed Assets where exchange variance is adjusted in the carrying amount of the respective Fixed Assets.

6.3 Foreign Currency receivables/payables are translated at the relevant rates of exchange prevailing at the year end.

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Mar 31, 1997

Information will not available in annual report 1997-98.

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Mar 31, 1996

(i) Accounting convention

Financial statements are prepared under historical cost convention in accordance with applicable accounting standards except as otherwise stated.

(ii) Fixed assets and depreciation

Fixed assets other than land are stated at cost less depreciation. Cost is inclusive of freight duties, levies and any other directly attributable cost of bringing the assets to its working condition for intended use and capitalisation of interest and other expenses incurred upto the date of commissioning.

The original cost of fixed assets acquired through foreign currency loans is adjusted at the end of each financial year by any change in liability arising out of expressing the outstanding foreign loan at the rate of exchange prevailing at the date of Balance Sheet.

Depreciation is provided on written down value method at the rates specified in Schedule XIV of the Companies Act, 1956 on prorata basis from the date of acquisition/commissioning.

(iii) Inventories

Inventories are stated at lower of cost and net realisable value. Costs are arrived at as follows:

Raw Material : On first in first out basis.

Finished goods:- Taking into account weighted average cost of the material consumed, direct production expenses, interest and depreciation.

(iv) Miscellaneous Expenditure

(To the extent not written off or adjusted during the year)

Expenditure carried forward under this head is being amortised as follows:

- Preliminary expenditure equally over 10 financial years.

- Public issue expenses equally over 60 months

(v) Preoperative Expenditure

Preoperative expenditure during construction has been capitalised over the Factory Building and Plant and Machinery.

vi) Retirement Benefits:

Gratuity

The provision for gratuity payable under the Payment of Gratuity Act, 1972 is being made on the basis of Actuary valuation.

Leave Encashment

Liability for amount payable to the employees in respect of accumulated earned leave is being provided in the accounts on the assumption that such benefits are payable to all employees at the end of the accounting year.

vii) Foreign Currency Transaction:

Foreign currency transactions are recorded at the exchange rates prevailing at the date of the transaction.

Gains/losses arising out of fluctuation in the exchange rates are recognised in the period in which they arise except in respect of Fixed Assets where exchange variance is adjusted in the carrying amount of the respective Fixed Assets.

Foreign Currency receivables/payables are translated at the relevant rates of exchange prevailing at the year end.