1. The Financial Statement have been prepared in accordance with the
standards of accounting specified by the Institute of Chartered
Accountants of India. The Company has been consistently following the
accrual method in accounting its income and expenditure, except bonus,
gratuity, interest on bank and financial institution, hire purchase
loan and interest on others. The accounting is on the basis of a going
concern concept only.
2. Revenue from sale transactions is recognised as and when the
property in the goods sold is transferred to the buyer for a definite
consideration. Revenue from service transactions and other sources is
recognised on the completion of the contract and there is no
uncertainty regarding the amount of consideration of collectability.
3. a) Domestic sales as reported is exclusive of Excise Duty, Sales
Tax, Insurance and Transport charges.
b) Export Sales are accounted for at the rate prevailing on the date on
which the transaction takes place. Gain or loss arising out of exchange
rate fluctuation is recognised and accounted for the date of
4. Inventories: Raw Materials valued at cost or market value whichever
is lower, mixing and process stock valued at cost, finished goods at
cost or net realisable value whichever is lower and waste at residual
5. The cost of Fixed Assets is shown at historical cost.
6. Depreciation has been calculated on the rate specified in Schedule
XIV of the said act as amended by the Circular No. 14 dt. 16.12.1993 by
the Department of Company affairs on straight line method on all
a) Written down value method all assets upto 31/3/1990 and straight
line method all assets from 1/4/1990 and onwards.
b) For Machinery and Electrical Machinery depreciation has been
provided at the rate applicable to continuous process plant as per
Schedule XIV of the Companies Act, 1956.
c) In respect of all assets purchased during the year, depreciation has
been provided on the above rates on Prorata basis from date of
d) In respect of all assets sold during the year depreciation has not
been provided at the above rates on Prorata basis upto date of sale.
7. In regard to Research and Development activities, being a member of
South India Textile Research Association, the Company avails the
services of the Association on need basis.
a) The value of CENVAT benefits eligible is being reduced from the
value of purchase of materials, consumption of materials is arrived at
b) The value of CENVAT benefits eligible in respect of Capital items is
being reduced from the value of purchase.
9. Investments are shown at cost less any permanent diminution in
value. Interest received on investment and dividend will be accounted
on receipt basis.
10. The Company's liability towards Gratuity to Employees is covered by
a Group Gratuity Scheme with Life Insurance Corporation of India.
11. It is the policy of the Company to amortise expenditure incurred on
public issue expenses for a period of over 5 years.
12. Borrowing Cost: Borrowing cost attributable to acquisition and
construction of assets are capitalised as a part of the cost of such
assets upto the date when such asset is ready for its intended use.
Other borrowing costs are charged to Profit and Loss account.