Accounting Policies of Sri Vasavi Industries Ltd. Company

Mar 31, 2011

1. Basis of Financial Statements

a. Financial Statements are prepared under the historical cost convention in accordance with the Generally Accepted Accounting Principles and Provisions of the Companies Act, 1956

b. The company follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

2. Fixed Assets and Depreciation:

a. Fixed Assets are stated at cost. All costs directly attribute to bring the assets to their working conditions for the intended use, including the financing costs and trial run expenses till the com- men cement of commercial production, are capitalized.

b. Depreciation is provided under Straight Line Method (SLM) as per Section 205 read with schedule XIV of the Companies Act, 1956 for actual num per of days the assets were put into use.

3. INVESTMENTS:

Investments are treated as long term and stated at cost.

4. INVENTORIES:

1. Raw material and Stores & Spares are valued at cost.

2. Finished Goods are valued at cost or net realizable value which ever is less.

3. Trading Stocks are valued at cost or net realizable value which ever is less.

5. SALES:

Sales represent the amount realizable for goods sold including Excise Duty thereon and include issues for self-consumption if any.

6. Gratuity is accounted on accrual basis and Leave encashment is accounted on cash basis.

7. Lease Rentals are accounted on accrual basis.

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Mar 31, 2010

1. Basis of Financial Statements

a. Financial Statements are prepared under the historical cost convention in accordance with the Generally Accepted Accounting Principles and Provisions of the Companies Act, 1956

b. The company follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

2. Fixed Assets and Depreciation:

a. Fixed Assets are stated at cost. All costs directly attribute to bring the assets to their working conditions for the intended use, including the financing costs and trial run expenses till the commencement of commercial production, are capitalized.

b. Depreciation is provided under Straight Line Method (SLM) as per Section 205 read with schedule XIV of the Companies Act, 1956 for actual number of days the assets were put into use.

3. INVESTMENTS:

Investments are treated as long term and stated at cost.

4. INVENTORIES:

1. Raw material and Stores & Spares are valued at cost.

2. Finished Goods are valued at cost or net realizable value which ever is less.

3. Trading Stocks are valued at cost or net realizable value which ever is less.

5. SALES:

Sales represent the amount realizable for goods sold including Excise Duty thereon and include issues for self-consumption if any.

6. Gratuity and Leave encashment are accounted on accrual basis.

7. Lease Rentals are accounted on accrual basis.