The Council has not made the following provisions for its employees as required by Accounting Standard 15 "Accounting for Retirement Benefits in the Financial Statements of Employers" issued by the Institute of Chartered Accountants of India.

Provision for Leave Encashment

Provision for Gratuity:
Provision of The Payment of Gratuity Act,1972 have become applicable to the Council from 1st March,2005. However, provision for Gratuity has not been made in the accounts pending the approval of the textile Commissioner and the Staff Committee in respect of the Group Gratuity ( Cash Accumulation) Scheme of the Life Insurance Corporation of India. Contribution to the scheme will be accounted for as and when paid and the amount ascertained.

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 meeting 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.

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.8,20,150/- which has been shown under Current Liabilities.

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

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

Disclosure as required by Accounting Standard AS-19 "Leases" in respect of Indenture of Lease for the Council’s Erode office :-

Lease Rent debited to the Income and Expenditure Account Rs. 47448/-

Interest-free refundable deposit given amounting to Rs. 25,000/- and

Interest shall be payable @ 1% per month by the Lessor to the Lessee commencing from the date of vacation upto the date of final payment of security deposit on the amount due.

The disclosure as required by Accounting Standard AS-19 "Leases" is not given in respect of the Mumbai office as the lease agreement had expired on 15th April, 2001. The same has not been renewed till date. The Council received notice from the Lessor dated 28th of December, 2004 to vacate the premises.

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 :

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.

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.