Accounting Policies of Volant Textile Mills Ltd. Company

Mar 31, 2013

A) ACCOUNTING CONVENTION

i. The Company follows the mercantile system of accounting, except in case of interest receivable, which will be accounted for on receipt basis and recognizes expenditure and income on an accrual basis except those with significant uncertainties.

ii. The accounts are prepared on historical cost basis as going concern and are consistent with generally accepted accounting principles.

b) FIXED ASSETS

Fixed Assets are capitalised at cost of acquisition inclusive of inward freight, duties, taxes and incidental expenses related to acquisition.

c) DEPRECIATION

Depreciation on fixed Assets is provided on pro-rata basis on straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

d) INVENTORIES

The stock is physically verified by the management at the end of the year and is considered for valuation purpose.

i. Stock of raw material is valued at cost on FIFO basis.

ii. Stock of Work-in-progress is valued at cost.

iii.Stock of finished goods is valued at lower of cost or net realisable value. Cost referred to in (ii) and (iii) is arrived at by the direct cost method, including appropriate share of variable cost.

iv. Stock of stores and spare parts is valued at cost.

e) REVENUE RECOGNITION

Revenue from the sale of goods is recognized when the titles to the goods and its significant risks and rewards are passed to the customers.

f) DEFERRED TAX ASSET

Deferred tax asset is not recognised unless there are timing differences and reversal of which will result in sufficient income or there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

g) FOREIGN CURRENCY TRANSLATION

There are no outstanding Foreign exchange dues as on 31st March, 2013.

h) MISCELLNEOUS EXPENDITURE

Expenses incurred on designing, marketing of new product is amortized over a period of five years. 1/5th of the expenses shall be written off every year from the year of first sale of new product.

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Mar 31, 2012

A) ACCOUNTING CONVENTION

i. The Company follows the mercantile system of accounting, except in case of interest receivable, which will be accounted for on receipt basis and recognizes expenditure and income on an accrual basis except those with significant uncertainties.

ii. The accounts are prepared on historical cost basis as going concern and are consistent with generally accepted accounting principles.

b) FIXED ASSETS

Fixed Assets are capitalised at cost of acquisition inclusive of inward freight, duties, taxes and incidental expenses related to acquisition.

c) DEPRECIATION

Depreciation on fixed Assets is provided on pro-rata basis on straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

d) INVENTORIES

The stock is physically verified by the management at the end of the year and is considered for valuation purpose.

i. Stock of raw material is valued at cost on FIFO basis.

ii. Stock of Work-in-progress is valued at cost.

iii. Stock of finished goods is valued at lower of cost or net realisable value. Cost referred to in (ii) and (iii) is arrived at by the direct cost method, including appropriate share of variable cost.

iv. Stock of stores and spare parts is valued at cost.

e) REVENUE RECOGNITION

Revenue from the sale of goods is recognized when the titles to the goods and its significant risks and rewards are passed to the customers.

f) DEFERRED TAX LIABILITY

Deferred tax asset is not recognised unless there are timing differences and reversal of which will result in sufficient income or there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

g) FOREIGN CURRENCY TRANSLATION

There are no outstanding Foreign exchange dues as on 31st March, 2012.

h) MISCELLNEOUS EXPENDITURE

Expenses incurred on designing, marketing of new product is amortized over a period of five years. 1/5th of the expenses shall be written off every year from the year of first sale of new product.

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Mar 31, 2010

A) ACCOUNTING CONVENTION

i. The Company follows the mercantile system of accounting, except in case of interest receivable, which will be accounted for on receipt basis and recognizes expenditure and income on an accrual basis except those with significant uncertainties.

ii. The accounts are prepared on historical cost basis as going concern and are consistent with generally accepted accounting principles.

b) FIXED ASSETS

Fixed Assets are capitalised at cost of acquisition inclusive of inward freight, duties, taxes and incidental expenses related to acquisition.

c) DEPRECIATION

Depreciation on fixed Assets is provided on pro-rata basis on straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

d) INVENTORIES

The stock is physically verified by the management at the end of the year and is considered for valuation purpose.

i. Stock of raw material is valued at cost on FIFO basis.

ii. Stock of Work-in-progress is valued at cost.

iii. Stock of finished goods is valued at lower of cost or net realisable value. Cost referred to in (ii) and (iii) is arrived at by the direct cost method, including appropriate share of variable cost.

iv. Stock of stores and spare parts is valued at cost.

e) REVENUE RECOGNITION

Revenue from the sale of goods is recognized when the titles to the goods and its significant risks and rewards are passed to the customers.

f) DEFERRED TAX LIABILITY

Deferred tax liability is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax asset is not recognised unless there are timing differences and reversal of which will result in sufficient income or there is virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

g) FOREIGN CURRENCY TRANSLATION

Foreign exchange dues are stated in the books as per closing price of 31st March, 2010.