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, 2006.
 

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.

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.

Preliminary expenses are amortized over 10 years as per Section 35D of the Income tax Act, 1961.

Foreign Exchange transactions are accounted on the basis of the 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.

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.

Retirement Benefits: The Council’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 The Payment of Gratuity Act, 1972 have become applicable only from 1st March,2005. The same will be accounted for on approval of the Group Gratuity(Cash Accumulation) Scheme. Bonus is accounted for as and when paid. Payment of Bonus is approved as per the discretion of the Staff Committee as envisaged by the Staff Recruitment and Service Rules of the Council. Leave Encashment will be accounted for as and when paid.

Contingent Liability: The provisions of The Payment of Gratuity Act,1972 have become applicable to the Council with effect from 1st March,2005. The Council has applied to the Life Insurance Corporation of India under the Group Gratuity ( Cash Accumulation) Scheme. The Life Insurance Corporation of India has carried out an Actuarial Valuation of Cost and Benefit under the proposed Scheme. However, the said Scheme is pending before the Textile Commissioner for his approval after which the same would be approved by the Staff Committee of the Council. Liability on account of Gratuity will be accounted in the year in which the approvals are granted.