Accounting Policies of Knitworth Exports Ltd. Company

Mar 31, 2013

I Basis of Preparation

(a} The Company has prepared its financial statements as per revised Schedule VI notified under the Companies Act 1956,

(b) Accounting policies not specifically referred to otherwise ire consistent Willi generally accepted accounting principles in India.

b Basts of Accounting

The Company has followed the mercantile system of Accounting and recognizes Income k Expenditure on accrual basis except rates &. taxes beinft accounted for on cash basis.

c Tangible Fixed Assets

Fixed assets are stated at cost, net of accumulated depredation and accumulated impairment losses, if any. The cost comprises purchase price?-borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates am deducted in arriving at the purchase price.

d Depreciation on tangible fixed assets

Depreciation on Fuoed Assets has beer provided for based on rates specified in Schedule XIV to the Companies Act, 1956, on the basis of written down value method.

e Investments

Long-term investments are stated at cost, less provision for other than temporary diminution in value.

t Peferred Tax

As per AS - 22 issued by the lCAlr Provision for Current is made after taking into consideration benefits admissible under the provisions of the Income Tax, 1961. Deferred resulting from "time difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset Ls recognised and carried forward only to the extent that there is a virtual certainty dial tlie assetlfcflT be realised in future.

g MAT Credit

Minimum alternative tax (MAT} credit, Entitlement is recognised as an asset only when and to the extent there is convincing evidence that die Company will pay income las higher than that computed under MAT, during the period under which MAT is permitted to be set off under the applicable tax; laws. In. the period, in which the MAT credit becomes eligible to be recognised as an asset in accordance with tlie recommendations contained in the guidance note issued by tlie ICA1, the said asset is created by way of a credit to tlie statement of profit and loss and shown as MAT credit entitlement, ft is being reviewedat each balance sheet date and accordingly adjustment made, if covincing evidence to the effect that company will not be eligible to utilise the MAT Credit during the specified period.

h Revenue Kecogrdtion

Revenue is being self recognised on Mercantile basis.

i Earning per Share

Basic earning per share is calculated by dividing the net Profit 01 Loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net Profit or Loss for the year attributable to the equity share holder* and weighted average number of share outstanding if any are adjusted for the effects of all dilutive potential etfuity shares.

j Provision &. Contingencies

A provision is recognized when there is a present obligation as a result of past events for which it is probable that an outflow of resources will be required to settle the obligation and ir respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjiisted to reflect the current best estimates. Contingent Liabilities are disclosed after an evaluation of the facts and legal aspects of the matters involved.

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Mar 31, 2012

1 Basis of Preparation

(a) During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

(b) Accounting policies not specifically referred to otherwise are consisitent with generally accepted accounting principles in India.

2 Basis of Accounting

The Company has followed the mercantile system of Accounting and recognizes Income & Expenditure on accrual basis except rates & taxes being accounted for on cash basis.

3 Tangible Fixed Assets '

Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price

4 Depreciation on tangible fixed assets

Depreciation on Fixed Assets has been provided for based on the rates specified in Schedule XIV to the Companies Act, 1956, on the basis of written down value method.

5 Investments

Long-term investments are stated at cost, less provision for other than temporary diminution in value.