Accounting Policies of Sri Jayalakshmi Spinning Mills Ltd. Company

Jun 30, 2009

A) Fixed Assets: Capitalised at acquisition cost including directly attributable cost of bringing the assets to their working condition for intended use and also including an appropriate share os incidental expenditure during construction.

b) Depreciation: Depreciation has been provided on the Straight Line Method in accordance with Schedule XIV to the Companies Act, 1956 on prorata basis from the month of addition of individual assets.

c) Foreign Currency Transaction: Transactions in Foreign Currency are recorded at the Exchange rates prevailing at the time of transaction. Material gain or loss on account of fluctuation in Exchange rate is treated as Income or Expenditure during the year.

d) Inventories:Inventories are valued at cost ao Net Realisable Value whichever is lower. Cost is determined on First in First Out method. Cost of Semi Finished goods includes conversion cost and other cost incurred in bringing the investories to their prese4nt location.

i) Raw Materials At Cost

ii)WIP At lower cost and net realisable value

iii)Finished Goods At lower cost and net realisable value

iv)Consumables Spares & Stores At Cost

e) Sales: Sales is exclusive of VAT

f) Retirement Benifits: Contribution to Provident Fund is charged to revenue on accrual basis. The Company has not provided gratuity to all the employees who had completed the minimum servicw, entitling them for gratuity. The Provision for gratuity is not ascertainable.

g) Investments: Long Term Investments are stated at cost and income there on accounted for on accrual. Provisions towards decline in the value of long Term Investments is made only when such decline is other other than temporary.

i) Treatement of Contigient Liabilities: Liabilities which may or may not arise and not crystalised as at the year end have been taken as contingent liabilities.

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Jun 30, 2008

1 The Accounts are prepared on the Historical Cost Convention and materially comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. The significant Accounting Policies followed by the company are as stated below:

a) Fixed Assets: Capitalised at acquisition cost including directly attributable cost of bringing the assets to their working condition for intended use and also including an appropriate share of incidental expenditure during construction.

b) Depreciation: Depreciation has been provided on the Straight Line Method in accordance with Schedule XIV to the Companies Act, 1956 on prorata basis from the month of addition of individual assets.

c) Foreign Currency Transaction: Transactions in Foreign Currency are recorded at the Exchange rates prevailing at the time of transaction. Material gain or loss on account of fluctuation in Exchange rate is treated as Income or Expenditure during the year.

d) Inventories: Inventories are valued at cost or Net Realisable Value whichever is lower Cost is determined on First in First Out method. Cost of Semi Finished goods includes conversion cost and other cost incurred in bringing the inventories to their present location

i) Raw Materials At Cost

WIP At lower cost and net realisable value

in) Finished Goods At lower cost and net realisable value

iv) Consumables Spares & Stores At Cost

e) Sales : Sales is exclusive of VAT.

f) Retirement Benefits: Contribution to Provident Fund is charged to revenue on accrual basis The Company has not provided gratuity to all the employees who had completed the minimum service, entitling them for gratuity. The Provision for gratuity is not ascertainable

g) Investments: Long Term Investments are stated at cost and Income there on accounted for on accrual. Provisions towards decline in the value of Long Term Investments is made only when such decline is other other than temporary.

i) Treatment of Contingent Liabilities: Liabilities which may or may not arise and not crystalised as at the year end have been taken as contingent liabilities.