Accounting Policies of Gandhinagar Leasing & Finance 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.

1.2 FIXED ASSETS

Fixed Assets are valued at cost.

1.3 DEPRECIATION

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

1.4 INVESTMENTS

Investments are accounted for at Cost.

1.5 INVENTORIES

The Company has valued Stock in Trade at Purchase Price.

1.6 REVENUE RECOGNITION :

Revenue (income) is recognized when no significant uncertainty as to the measurability or collect ability exists. Sales or other Income is recognized when significant risk and rewards of ownership in the goods / shares / services are passed on to the customers.

(A) Income :

(a) Accrual basis of accounting has been adopted in respect income from

(b) Finance Charges on Hire Purchase advances and Lease Rentals on Equipments Leasing to the extent installments have fallen due for payment under the agreement with the respective parties.

(c) Discount charges on Bills Discounted to the extent of the period extent during the year end.

(d) Interest on all other advances by way of loans for the period to the extent such income accrued during the year & expenses are recognized on mercantile basis.

(e) Income from investments in shares has been accounted for in the year in which the dividend is received.

(f ) All other incomes including overdue charges collected from the hire purchase and lease customers, against overdue installments, have been accounted for on cash basis as and when such incomes have been actually collected.

( B ) Expenses :

Accrual basis of accounting has been adopted in respect of :

(a) Interest on Bank Loans, Term Loans from financial Institutions and Public Deposits ;

and

(b) Administrative and other overheads including employee cost.

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.

DEFERRED TAX

Deferred Tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes 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.

1.10 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.

1.11 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 Gener- ally 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.

2 FIXED ASSETS

Fixed Assets are valued at cost.

3 DEPRECIATION

Depreciation is provided for as per the Straight Line Method at the rates prescribed under XIV of the Companies, Act, 1956.

4. INVESTMENTS

Investments are accounted for at Cost.

5 INVENTORIES

The Company has valued Stock in Trade at Purchase Price.

6. REVENUE RECOGNITION :

Revenue (income) is recognized when no significant uncertainty as to the measurability or collect ability exists. Sales or other Income is recognized when significant risk and rewards of ownership in the goods / shares / services are passed on to the customers.

(A) Income :

(a) Accrual basis of accounting has been adopted in respect income from

(1) Finance Charges on Hire Purchase advances and Lease Rentals on Equipments Leasing to the extent installments have fallen due for payment under the agreement with the respective parties.

(2) Discount charges on Bills Discounted to the extent of the period extent during the year and

(3) Interest on all other advances by way of loans for the period to the extent such income accrued during the year & expenses are recognized on mercantile basis.

(b) Income from investments in shares has been accounted for in the year in which the dividend is received.

(c) All other incomes including overdue charges collected from the hire purchase and lease customers, against over due installments, have been accounted for on cash basis as and when such incomes have been actually collected.

( B ) Expenses :

Accrual basis of accounting has been adopted in respect of :

(1) Interest on Bank Loans, Term Loans from financial Institutions and Public Deposits ; and

(2) Administrative and other overheads including employee cost.

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 assess- ment / appeals.

DEFERRED TAX

Deferred Tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes 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 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.

11. 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.