SCHEDULE ‘E’

      POWERLOOM DEVELOPMENT & EXPORT PROMOTION COUNCIL

      SCHEDULE OF PRINCIPAL ACCOUNTING POLICIES AND NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2003.

      1. 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-rate basis.

        4. Investments are considered long term in nature and carried at cost. Diminution in value of investments other than temporary in nature, is provided for 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 25 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. Retirement Benefits : The Company’s contribution to the Provident Fund and Superannuation Fund are charged to revenue every year . Provision for Gratuity has not been made as the provisions of Gratuity Act, 1972 do not apply. Hitherto Bonus was accounted for as and when paid. However with effect from the current year the same is being accounted on accrual basis. Leave encashment will be accounted for as and when paid.

      2. 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.

          1. 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.

          2. 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.7,98,850/- which has been shown under Current Liabilities.

        6. Investments are considered long term in nature and are carried at cost. Provision is made to recognise a decline in the value of investments, only if assessed to be other than temporary.

        7. The Council classifies its expenditure in accordance with the format suggested by the Ministry of Commerce.

        8. Disclosure as required by Accounting Standard AS-19 “Leases” is not given since the lease agreement in respect of its Erode office has expired on 1st February, 2002, its Mumbai office on 15th April, 2001 and residential premises on 14th November, 2001. The same have not been renewed till date.

        9. Accounting Standard (AS)22-“Accounting for Taxes on Income” applicable to the Council for the accounting periods commencing on or after 01-04-2002 has not been applied in accounting for taxes on income. The Council is of the opinion that there is no deferred tax liability in view of :

          1. The Council being registered under Section 25 of the Companies Act, 1956. It is also registered u/s. 12AA of the Income tax Act, 1961 as a Charitable institution and its income is exempt under Section 11 of the Income-tax Act, 1961.

          2. Its income which has been accumulated under Section 11 of the Income-tax Act, 1961 from year to year to specific reserves shall be applied for the purposes for which it has been set aside i.e. for the objects of the Council.

          3. In the event of non-utilisation of the amount accumulated under Section 11 of the Income-tax Act, 1961, the same would be offered to tax in the year of such non-utilisation as the tax liability will arise only in that year.

        10. Expenditure incurred in Foreign Currency during the year in respect of :

          Sr. No.

          Particulars

          Amount (Rs.)

          a)

          		 Sales cum Study tour to South America  (Previous year Rs.578095.50)

          ----
          b)

          		Sales cum Study tour to West Asia (Previous year Rs. 491585.00) ----
          c)

          		Sales cum Study tour to West Europe (Previous year Rs. NIL) 282074.06
          d)

          		Indian Textile Exhibition, Colombia & Brazil (Previous year Rs. NIL) 185873.00
          e)

          		Delegation to Colombia & Brazil (Previous year Rs. NIL) 132819.20

          f)

          		Intertextile Shanghai, China (Previous year Rs. NIL) 503791.57

          g)

          		Delegation to China & Hong Kong (Previous year Rs.NIL) 186198.50
          h)

          		Heimtextil Frankfurt Fair (Previous year Rs. 231462.50) 127626.19
          i)

          		Techtextil South America (Previous year Rs. 438253.50) ----
          j)

          		Techtextil 2001 (Previous year Rs. 328528.00) ----
          k)

          		Fenit International Textile Trade Fair (Previous year Rs. 419539.50) ----
          l)

          		Asia Global Sourcing Exhibition - 2002 (Previous year Rs. 499465.50) ----
          m)

          		Mexicotextil 2001 (Previous year Rs. 694202.77) ---

          n)

          		International Fashion Fabric Exhibition (Previous year Rs. 451779.50) 231048.43

          o)

          		TCF Melbourne, Australia (Previous year Rs. NIL) 314771.00
          p)

          		Techtextil North America (Previous year Rs. NIL) 315785.00
          q) Textil Hogar 2003 (Previous year Rs. NIL) 229808.50
          r) Membership with other organisation (Previous year Rs. 557850.00) ----
          s)

          		International Textiles Manufacturers Federation Conference (Previous year Rs. 450027.50) ----