Zahidjee Textile Mills Limited

Basis of preparation: The financial statements have been prepared under the historic cost convention except for certain property, plant and equipment carried out at revaluation and short term investments measured at fair value. Property plant and equipment except freehold land and capital work in progress are stated at cost or valuation less accumulated depreciation and impairment in value if any. Depreciation is charged to income applying the reducing balance method at the rates specified in the plant, property and equipment note. Depreciation is charged from the month of acquisition or capitalization and up to the month preceding the disposal. Normal repair and maintenance costs are charged to the income during the period in which they are incurred. Major renewals and improvements are capitalized. Gains or losses on disposal of assets if any are recognized as and when incurred. Stores, spares and tools are valued at moving average cost less allowance for obsolete and slow moving items. Items in transit are valued at invoice value plus other charges incurred thereon. Stock in trade: Raw materials cost is determined using weighted average method and items in transit which are valued at cost accumulated up to the balance sheet date. Work in process and finished goods are evaluated using average manufacturing cost.