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Accounting Policies of Vaishnavi Gold Ltd. Company

Mar 31, 2010

1. Basis of Accounting:

The Financial Statements are prepared under historical cost convention in accordance with generally accepted accounting principles in india and provisions of Companies Act, 1956.

2. Fixed Assets:

Fixed Assets are stated cost less accumulated depreciation, cost comprises purchases price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for the intended use.

3. Depreciation:

Depreciation on Fixed Assets is provided under Straight line Method (SLM) at the rates specified in Schedule XIV of the Companies Act, 1956.

4. Revenue Recognition:

The income from the some is recognised as and when invoices are made and raised on the client.

5. Preliinary Expenditure:

Expenditure incurred for the process of merging is amortised over the period of 5 years from the year in which merger has taken place.

6. Deferred Tax:

Deferred tax is accounted for by computing the tax effect of timing differences, which arise during the period and reverse in subsequent periods.

7. Cash Flow Statement:

Cash Flows are reported using Indirect Method in accordance with AS-3 namely "Cash Flow Statement" issued by ICAI.


Mar 31, 2009

1) Basis of preparation of financial Statements:

The Financial Statements have been prepared under Historical Cost Convention in accordance with generally accepted accounting principles in India and the provisions of Companies Act, 1956.

2) Fixed Assets:

Fixed Assets are stated cost less accumulated depreciation. Cost comprises purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use.

3) Depreciation:

Depreciation on Fixed Assets is provided under Written Down Value (WDV) at the rates specified in Schedule XIV of the Companies Act, 1956. The company has changed its policy of providing the depreciation from WDV method to SLM (Straight Line Method). The effects of change in Accounting Policy for earlier years is depicted below;

4) Revenue recognition:

Revenue from sale of computer hardware is recognized on dispatch of the products from the company for delivery to the customers. Revenue from product sale are shown net of Sales Tax separately charged and discounts as applicable.

Revenue from IT Services consists of earnings from services performed on a ‘time and material’ basis and fixed price contracts. The related revenue is recognized as and when the services are performed and delivered.

Revenue from Annual Maintenance Contracts (AMCs’) is recognized on accrual basis as per the Contracts /Agreements entered with the Clients.

Other income is recognized on accrual basis.

5) Foreign Currency transactions:

a. Foreign currency transactions are recognized in the books at the exchange rates prevailing at the date of transaction.

b. In the case of Current assets /Liabilities the difference (gain or loss) between the actual payment and the amount recognized in the books is accounted as Exchange Gain or Loss. Foreign currency liability and receivables are restated at the rates of exchange prevailing on the date of Balance sheet and the difference on account of exchange variation is adjusted to profit and loss account. Exchange differences in respect of liabilities incurred to acquire fixed assets from outside India are adjusted to the carrying amount of such fixed assets.

6) Retirement Benefits:

Contributions to Provident Fund charged as incurred on accrual basis. The liability for retirement benefits of employees, if arise, will be accounted for on cash basis.

7) Deferred revenue expenditure:

The deferred revenue expenditure is written off in compliance of Accounting Standard.

8) Deferred tax:

Deferred tax is accounted for by computing the tax effect of timing differences, which arise during the period and reverse in subsequent periods.

Fringe Benefit Tax (FBT) payable underthe provisions of section 115WC of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting for Fringe Benefit Tax issued by ICAI regarded as an additional income tax and considered in determination of profits for the year.

9) Cash flow Statement:

Cash flows are reported using Indirect Method in accordance with AS-3, namely Cash Flow Statement issued by ICAI and as per the Clause 32 of the Listing Agreement where by net profit before tax is adjusted for the effects of the transactions of a non- cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular business operations, investment activities and financing activities are classified under the cash flow.