Notes forming the part of the accounts for the year ended 31st March 2015.

1.Company Overview

Kavita Fabrics Limited (the Company) is a public limited company domiciled and headquartered in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on the Bombay Stock Exchange in India. The company is engaged in manufacturing of synthetic fabrics in the form of semi-finished sarees and dress materials.

2.Significant Accounting Policies

i. Method of accounting:

Transactions are generally accounted on mercantile basis. The Company adopts the accrual concept, in the brparation of the accounts.

ii. Fixed Assets:

Fixed Assets are state at cost less accumulated debrciation.

iii. Debrciation:

Debrciation has been taken on WDV method at the rates brscribed in Schedule - II to the Companies Act, 2013.

iv. Inventories:

Cost of inventory includes all cost of purchases and other cost incurred in bringing the inventories to their brsent location and condition. Inventories are valued at cost or net realizable value whichever is less.

v. Revenue Recognition:

Sale of goods is recognized on dispatches to customers, which coincide with the transfer of significant risks and rewards associated with ownership. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

vi. Earning Per Share:

Basic earning per share is computed by dividing the net profit after tax for the period after prior period adjustments attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

vii. Taxation & Deferred Tax:

Provision for Current Tax is made in accordance with the provision of Income Tax Act, 1961. Deferred tax is recognized on timing differences between taxable & accounting income/expenditure that originates in one period and are capable of reversal in one or more subsequent period(s).

viii. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of the asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

ix. Segment Reporting-

The company is brdominantly in the business of "Synthetic Fabrics" and as such there are no separate reportable segments. The company's operations are brdominantly only in India.

x. Contingent Liabilities:

There is no any contingent liability of the company.

xi. Current / Non Current-

All assets and liabilities are brsented as Current or Non Current as per the company's normal operating cycle and other criteria set out in the revised Schedule VI of the Companies Act, 1956. Based upon the nature of products and the time between the acquisition of assets for processing and their realization, the company has ascertained its operating cycle as 12 months for the purpose of current/non - current classification of assets and liabilities.