Accounting Policies of Gandhinagar Enterprise Ltd. Company

Mar 31, 2012

1.1 SYSTEM OF ACCOUNTING

The Financial statements of the Company are prepared under the historical cost convention in accordance with Generally Accepted Accounting Principles and Accounting standards issued by the institute of chartered Accountants of India , referred to in section 211 (3C) of the Companies Act, 1956. The Accounts are prepared on the going concern basis and the Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis except in respect of following where the exact quantum cannot be ascertained:

( i ) Claims lodged against and / or by the Company.

( ii ) Discounts allowed to customers on confirmation / settlement.

1.2 FIXED ASSETS

Fixed Assets are stated at cost and is inclusive of Excise duty and applicable taxes & duties less depreciation. Cost represents cost of acquisition inclusive of inward freight and incidental expenses related to acquisition and adjustments arising from foreign exchange rate variations, if any. Cost also includes interest and related expenses during the construction period up to work in progress put to use. Intangible assets (technical knowhow) are stated at cost of acquisition less accumulated amortization. Capital Assets under erection / installation are reflected are in the Balance Sheet as "Capital work in progress".

1.3 DEPRECIATION

Depreciation is provided for as per the Written Down Method at the rates prescribed under Schedule XIV of the Companies Act, 1956.

1.4 INVESTMENTS

Long Term investments are accounted for at Cost. Any decline, other than temporary, in the value of long term investment is adjusted in the carrying cost of such investment.

1.5 INVENTORIES

Inventories are valued at lower of cost or net realizable value.

1.6 REVENUE RECOGNITION :

Revenue (income) is recognized when no significant uncertainty as to the measurability or collect ability exists. Sales are recognized when significant risk and rewards of ownership in the goods are passed on to the customers. Value Added Tax paid are separately shown in profit and loss account.

1.7 BORROWING COSTS:

Borrowing costs are recognizes as expenses in the period in which they are incurred, except to the extent where borrowing costs that are directly attributable to the acquisition, construction, or production of an asset till put for its intended use is capitalized as part of the cost of that asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing cost is charged to revenue.

1.8 DEFERRED REVENUE EXPENDITURE:

Expenditure relating to Preliminary Expenses, Capital issue and Deferred Revenue Expenses is amortized on straight line basis over a period of five years.

1.9 TAXES ON INCOME :

Current taxation:

Current tax is determined as the amount of tax payable in respect of taxable income for the period and the credits computed in accordance with the provisions of the Income Tax, 1961 and based on the expected outcome of the assessment / appeals.

1.10 DEFERRED TAX

Deferred Tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent year. Deferred tax assets are recognized and carried forward to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

1.11 FOREIGN CURRENCY TRANSACTIONS:

a. Income and expenditure in foreign currency is converted into Indian rupees at the rate of exchange prevailing on the date of transaction.

b. Exchange rate difference is charged to the profit and loss account on final payment of the liability.

c. Unsettled transactions at the close of the year are considered taking into account the exchange rate prevailing at the year end and difference is charge to the profit and loss account.

1.12 IMPAIRMENT OF ASSETS:

The company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the assets. If such recoverable amount of the assets is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If any the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

1.13 SEARCH AND DEVELOPMENT

Expenditure relating to capital items is debited to fixed assets and depreciated at applicable rates. Revenue expenditure is charged to profit and loss account of the year in which they are incurred.

1.14 PROVISION AND CONTINGENT LIABILITIES

a) Provisions are recognized when the present obligation of a past event gives rise to a probable outflow, embodying economic benefits on settlement and the amount of obligation can be reliably estimated.

b) Contingent Liabilities are disclosed after a careful evaluation of facts and legal aspects of the matter involved.

c) Provisions and Contingent Liabilities are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

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Mar 31, 2010

1. SYSTEM OF ACCOUNTING

The Financial statements of the Company are prepared under the historical cost convention in accordance with Generally Accepted Accounting Principles and Accounting standards issued by the institute of chartered Accoun- tants of India , referred to in section 211 (3C) of the Companies Act, 1956. The Accounts are prepared on the going concern basis and the Company follows the mercantile system of accounting and recognizes income and expendi- ture on accrual basis except in respect of following where the exact quantum cannot be ascertained :

( i ) Claims lodged against and / or by the Company.

( ii ) Discounts allowed to customers on confirmation / settlement.

2 FIXED ASSETS Fixed Assets are stated at cost and is inclusive of Excise duty and applicable taxes & duties less depreciation. Cost represents cost of acquisition inclusive of inward freight and incidental expenses related to acquisition and adjustments arising from foreign exchange rate variations, if any. Cost also includes interest and related expenses during the construction period upto work in progress put to use. Intangible assets (technical know how) are stated at cost of acquisition less accumulated amortization. Capital Assets under erection / installation are reflected are in the Balance Sheet as "Capital work in progress".

3 DEPRECIATION Depreciation is provided for as per the Written Down Method at the rates prescribed under XIV of the Companies Act, 1956.

4. INVESTMENTS

Long Term investments are accounted for at Cost. Any decline, other than temporary, in the value of long term investment is adjusted in the carrying cost of such investment.

5 INVENTORIES

Inventories are valued at lower of cost or net realizable value.

6. REVENUE RECOGNITION : Revenue (income) is recognized when no significant uncertainty as to the measurability or collect ability exists. Sales are recognized when significant risk and rewards of ownership in the goods are passed on to the customers. Value Added Tax paid are separately shown in profit and loss account.

7. BORROWING COSTS: Borrowing costs are recognizes as expenses in the period in which they are incurred, except to the extent where borrowing costs that are directly attributable to the acquisition, construction, or production of an asset till put for its intended use is capitalized as part of the cost of that asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing cost is charged to revenue.

8 DEFERRED REVENUE EXPENDITURE: Expenditure relating to Preliminary Expenses, Capital issue and Deferred Revenue Expenses is amortized on straight line basis over a period of five years.

9 TAXES ON INCOME : Current taxation:

Current tax is determined as the amount of tax payable in respect of taxable income for the period and the credits computed in accordance with the provisions of the Income Tax, 1961 and based on the expected outcome of the assessment / appeals.

DEFERRED TAX

Deferred Tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent year.

Deferred tax assets are recognized and carried forward to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

10 FOREIGN CURRENCY TRANSACTIONS :

a. Income and expenditure in foreign currency is converted into Indian rupees at the rate of exchange prevailing on the date of transaction.

b. Exchange rate difference is charged to the profit and loss account on final payment of the liability.

c. Unsettled transactions at the close of the year are considered taking into account the exchange rate prevail- ing at the year end and difference is charge to the profit and loss account.

11 IMPAIRMENT OF ASSETS:

The company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the assets. If such recoverable amount of the assets is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If any the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

12 RETIRMENT / POST RETIRMENT BENEFITS:

Contributions to defined contribution schemes such as Employees Provident fund and Family pension fund are charged to the profit & loss account as and when incurred. Provision for gratuity is determined and accounted as and when paid.

13 RESEARCH AND DEVELOPMENT

Expenditure relating to capital items is debited to fixed assets and depreciated at applicable rates. Revenue expenditure is charged to profit and loss account of the year in which they are incurred.

14 PROVISION AND CONTINGENT LIABILITIES

a) Provisions are recognized when the present obligation of a past event gives rise to a probable outflow, embodying economic benefits on settlement and the amount of obligation can be reliably estimated.

b) Contingent Liabilities are disclosed after a careful evaluation of facts and legal aspects of the matter involved.

c) Provisions and Contingent Liabilities are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.