Notes to Accounts of Gandhinagar Leasing & Finance Ltd.

Mar 31, 2012

NOTE : 1

The Company is engaged in one segment i.e. Hire Purchase, Leasing & Trading and Investment in securities etc which are governed by the same set of risk and returns. The said treatment is in accordance with the guiding principle enunciated in the AS-17 on Segment Reporting.

NOTE : 2

Managerial remuneration paid to Managing Director & Other Directors : Rs Nil (Previous Year : Nil. )

NOTE : 3

Traveling Expenses of Managing Directors & Other Directors : Rs. Nil (Previous Year Rs. Nil )

NOTE : 4

Related Party (As identified by the Company) Disclosures under Accounting Standard 18 :

(a) Associates : 1) Gandhinagar Hotels Ltd.

2) Pragna Finance Pvt. Ltd.

3) Pragna Auto Services

(b) Key Management Personnel : 1) Smt. Pragnaben V Joshi

2) Mr. Pritesh V Joshi

(c) Transactions with related parties :

a) The Company was received Rs. 90,000/- (Previous Year Rs. 90,000) as Lease Rental Deposit from Gandhinagar Hotels Limited – a company in which Directors are interested as Director of both the Company.

b) The Company was invested Rs. 43 Lacs (Previous Year Rs. 43 Lacs) in Redeemable Preference Shares of Gandhinagar Hotels Limited – a company in which Directors are interested as Director of both the Company.

c) The Company has also paid Rs. 0.36 Lacs (Previous Year : 0.36 Lacs) to Gandhinagar Hotels Ltd a Company in which Directors are interested as Director of both the Company, for Office Rent .

d) The loans & advance includes Rs.14,205/- (Previous Year : 16,290/- ) amount due from the concerns in which directors are interested as Directors of both the Companies.

e) The Company holds 4,00,120 (Previous Year No. of shares 4,00,120) shares of Pragna Finance Private Ltd as stock in trade for which no Market quotation is available as said company is not listed at anystock exchange and 3,00,000 shares of Gandhinagar Hotels Limited (Previous Year No of Shares is 3,00,000 ) .

f) The Company has given Rs. 129.81 Lacs as Share Application Money (Previous Year Rs. 129.81 Lacs) to Pragna Finance Pvt Ltd. a Company in which Directors are interested as Director of both the Companies.

g) The Company has earned Lease Rental of Rs. 2,435/- ( Previous Year Rs.2,935/- ) from Gandhinagar Hotels Limited the company in which Directors are interested of said company. The transaction are not prejudicial to the interest of the company as the said transaction are at reasonable rate having regard to the market rate prevailing for such lease transaction.

h) The Company has paid Rs. Nil ( Previous Year Rs. 25 Lacs ) to Charu Anchlia as Advance for purchase of shares of Gandhinagar Hotels Ltd a Company in which Directors are interested as Director of both the Company. Due to nonpayment of Loan given, the said shares are taken away from the party.

i) The Company has given Rs. 48.49 Lacs as Commercial Building Advance (Previous Year Rs. 140.21 Lacs) to Gandhinagar Hotels Ltd. a Company in which Directors are interested as Director of both the Company for the purpose of commercial property at Gandhinagar.

As per AS 22 point No 18 "The existence of unabsorbed or carry forward of losses under tax laws is strong evidence that future taxable income may not be available. Therefore, when an enterprise has a history of recent losses, the enterprise recognizes deferred tax assets only to the extent that is has timing differences the reversal of which will result in sufficient income or there is other convincing evidence that sufficient taxable income will be available against which such deferred tax assets can be realized. In such circumstances, the nature of the evidence supporting its recognition is disclosed."

In view of huge brought forward losses and in absence of sufficient income which result into sufficient taxable income, in near future and on consideration of prudence, the Company has not recognized net deferred tax & / deferred tax assets in the financial statements.

NOTE : 5

a) Previous year''s figures have been regrouped / rearranged wherever necessary to make them comparable with those of the current year.

b) Signature to Notes 1 To 22 of Balance Sheet and Profit and Loss Accounts form an integral part of the Audit Report.

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Mar 31, 2010

1 Considering the nature of operations of the Company, it is not practicable to give quantitative details of turnover and consumption in terms of the requirement under Part II of Schedule VI to the Companies Act, 1956, in view of Leasing , Hire Purchase and Investment Business of the company.

2 Provision of Excise and Modvat are not applicable to the Company.

3 No Provision for Retirement Gratuity has been made in the accounts and the same shall be accounted for as and when it is paid.

4 Expenses / Income in Foreign Currency is Rs. Nil (Previous Year Rs. Nil).

5 Value of Imports on C.I.F. basis : Nil (Previous Year Rs. Nil)

6 The Company does not have any contingent liabilities.

7 The provisions of Licensed Capacity / Installed capacity etc. are not applicable to the company.

8 In the opinion of the Directors, the Current Assets, Loans & Advances are realized at the values stated, if realized in the ordinary course of the business. As account of Sundry Creditors, Current Liabilities, Unsecured Loans, Sundry Debtors and Loan & Advances and other current assets are subject to confirmation / reconciliation and accordingly the same are subject to necessary adjustments or regrouping /classification, if necessary.

9 In the opinion of the Board of Director, the provision for depreciation and all know liabilities are adequate and are not in excess of the amount considered reasonably necessary.

10 The Company is engaged in one segment i.e. Hire Purchase, Leasing & Trading and Investment in securities etc which are governed by the same set of risk and returns. The said treatment is in accordance with the guiding principle enunciated in the AS-17 on Segment Reporting.

11 Managerial remuneration paid to Managing Director & Other Directors : Rs Nil (Previous Year : Nil )

12 Traveling Expenses of Managing Directors & Other Directors : Rs. Nil (Previous Year Rs. Nil ) 14. Related Party (As identified by the Company) Disclosures under Accounting Standards 18 :

(III) Transactions with related parties :

1 The Company has received Rs. 90000/- (Previous Year Rs. 90,000) as Lease Rental Deposit from Gandhinagar Hotels Limited – a company in which Directors are interested as Director of both the Company.

2 The Company has invested Rs. 43 Lacs (Previous Year Rs. 43 Lacs) in Redeemable Preference Shares of Gandhinagar Hotels Limited – a company in which Directors are interested as Director of both the Company.

3 The Company has also paid Rs. 0.36 Lacs ( Previous Year Rs. 57.03 Lacs ) to Gandhinagar Hotels Ltd a Company in which Directors are interested as Director of both the Company, for purchase of commercial property at Gandhinagar.

4 The loans & advance includes Rs.18875/- (Previous Year : 21460/- ) amount due from the concerns in which directors are interested as Directors of both the Companies.

5 The Company holds 400120 (Previous Year No. of shares 400120) shares of Pragna Finance Private Ltd as stock in trade for which no Market quotation is available as said company is not listed at any stock exchange. & hence we are unable to comments for provisions to be made, if any, for fall, if any in market price of the said shares in accounts for the year ending on 31-03-2010.

6. The Company has given Rs. 124.06 Lacs as Share Application Money (Previous Year Rs. 198.06 Lacs) to Pragna Finance Pvt Ltd. a Company in which Directors are interested as Directors of both the Companies.

7. The Company has earned Lease Rental of Rs. 2935/- ( Previous Year Rs.3435/- ) from Gandhinagar Hotels Limited the company in which Directors are interested of said company. The transaction are not prejudicial to the interest of the company as the said transaction are at reasonable rate having regard to the market rate prevailing for such lease transaction.

8 The Company has paid Rs. 25 Lacs ( Previous Year Rs. Nil ) to Charu Anchlia as Advance for purchase of shares of Gandhinagar Hotels Ltd a Company in which Directors are interested as Directors of both the Companies.

9. The Company has given Rs. 139.85 lacs as interest free deposit (Previous Year Rs. 9.60 Lacs) to Gandhinagar Hotels Ltd., a company in which Directors are interested as Directors of both the companies.

13. Previous years figures have been regrouped / rearranged wherever necessary to make them comparable with those of the current year.

14. Signature to Schedule A To G of Balance Sheet and 1 To 3 of Profit and Loss Accounts form an integral part of the Audit Report.