A. PRINCIPAL ACCOUNTING POLICIES :

1. The Council follows the mercantile system of accounting except where stated otherwise.
2. Fixed Assets are stated at historical cost less depreciation.
3. Depreciation is provided on written down value method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956. In respect of additions and deletion to fixed assets, depreciation is provided on Pro-rata basis.
4. Investments are considered long term in nature and carried at cost. Dividend is accounted for as and when received.
5. Preliminary expenses are amortised over 10 years as per Section 35D of the Income Tax Act, 1961.
6. Foreign Exchange transactions are accounted on the basis of rate of exchange applicable on the date of payment/receipt. Receivables, payables and Cash/Traveller's Cheques denominated in foreign currency are re-stated at year end exchange rates, and the resultant gain/loss is considered in revenue.
7. Taxation - The Council is registered Under Section 25A of the Companies Act 1956 and its income is exempt Under section 11 of the Income-tax Act, 1961. Hence no provision for taxation is made in the accounts.
8. Treatment of Retirement Benefits/Leave encashment : Council is in process of devising rules and policies to staff related matters. Hence, no provision for Gratuity/Retirement benefits have been made in the accounts. Leave encashment is accounted for on a cash basis.

B. NOTES :

1. Previous year's figures have been regrouped / recast wherever necessary so as to make them comparable with those of the current year.
2. In the opinion of the Committee of Administration, the Current Assets, Loans and Advances are approximately of the value stated if realised in the ordinary course of business and provision for depreciation and all known liabilities is adequate and not in excess of the amount reasonably necessary.
3. Grant-in-aid is accounted for on cash basis.
4. The Council has not made a provision for leave encashment for its employees as required by Accounting standard 15 issued by the Institute of Chartered Accountants of India. As per the Committee of Administration, the number of Employees is small the same does not warrant a provision and hence would be accounted on cash basis.
5. a) The Council has made a payment of Rs. 10,00,000 towards the Prime Minister's National Relief Fund. The said payment has been discussed in the meetings of the Committee of Administration held on 2nd December, 1999. However, the objects as detailed in the memorandum of Association and Articles of Association of the Council clearly prohibit the council from making such contribution. In the meantime, the Council is pursuing the matter with the Ministry of Textiles, Government of India, New Delhi. In view of the foregoing, the said contribution of Rs. 10,00,000 has been shown under "Other Advances" under the head Loans and Advances.
   b) The Council has consequently also requested its members in the meeting of the Committee of Administration dated 2nd December, 1999 to Voluntarily contribute Rs. 200 per head so as to recover the contribution as mentioned in (a) above. The amount recovered upto the end of the year amounts to Rs. 28,600 which has been shown under Current Liabilities.
6. The Council classifies its expenditure in accordance with the format suggested by the Ministry of Commerce.
7. Expenditure incurred in Foreign Currency during the year in respect of :

   a)   Sales cum Study tour to East Asia                              Rs. 643435.00
       (Previous year Rs. NIL)
   b)   Sales cum Study tour to USA & Canada                    Rs. 607517.50
        (Previous year Rs. NIL)
   c)   Heimtextile Frankfurt Fair                                           Rs. 198941.00
        (Previous year Rs. 146270.00)
   d)   Interstoff Frankfurt Fair                                              Rs. 453241.00
        (Previous year Rs. 147222.00)
   e)   i)   Interstoff Asia Hongkong Fair'98                           Rs. ----
            (Previous year Rs. 133078.60)
        ii)   Interstoff Asia Hongkong Fair'99                           Rs. ----
            (Previous year Rs. 145779.00)
   f)   Publicity Expenses (Abroad)                                        Rs. 79533.00
        (Previous year Rs. 170822.00)
   g)   Sales cum Study tour to LAC                                     Rs. ----
        (Previous year Rs. 279988.00)
   h)   Fenit International Textile Trade Fair                            Rs. 148535.00
        (Previous year Rs. NIL)
   i)   Market Survey in Srilanka                                            Rs. 59222.00
        (Previous year Rs. NIL)
   j)   International Textile Machinery Association Fair           Rs. 88200.00
        (Previous year Rs. NIL)
   k)   International Fashion Fabric Exhibition                        Rs. 385572.00
        (Previous year Rs. NIL)