Accounting Policies of Gujarat Bulk Packs Ltd. Company

Mar 31, 2011

A. BASIS OF ACCOUNTING

The Financial Statement are prepared at historical cost convention on accrual basis and materially comply with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India. Income and Expenditure are recognized on Accrual basis.

B. USE OF ESTIMATES

The preparation of Financial Statement in conformity with the General Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affects the reported account of Assets and Liabilities and disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

C. REVENUE RECOGNITION

Sales of products are recognized when the invoiced to customers.

Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exists.

D. FIXED ASSETS/INTANGIBLE ASSETS & DEPRECIATION

a) The Fixed Assets are stated at historical cost less depreciation.

b) The Company is providing depreciation on its assets at the rate prescribed as per Schedule XIV of the Companies Act, 1956 at Straight Line Method. However the depreciation on addition made during the year have been provided on pro-rata basis from the date of their purchase/use.

c) Addition in Fixed Assets is stated at cost net of CENVAT credit (where applicable).

d) Intangible Assets are recognized as per the principle laid down in Accounting Standard 26 of the institute of Chartered Accountant of India.

E. INVENTORIES

a) Raw Material, Packing material. Chemicals, Stores and Consumables are valued at lower of cost and net realizable value.

b) Finished Goods are valued at lower of cost and net realizable value.

c) Cost is ascertained on specific identification method and includes appropriate production overheads in case of Finished Goods.

Note: The Company has change the method of valuation of Raw Material, Packing material, Chemicals, Stores and Consumables and Finished Goods from cost to lower of cost or net realizable value, Due to change in method of valuation there is no impact on Profit & Loss for the year.

F. CONTINGENT LIABILITES

Contingent Liabilities are not provided for in the accounts and are disclosed separately in the notes on accounts.

G. FOREIGN CURRENCY TRANSACTIONS

Realized gains and losses on foreign currency revenue transactions are Recognized in the profit and loss account.

Current assets and liabilities balances denominated in foreign currency at the year end, other than those covered by forward contracts, are translated at the year-end exchange rates, and the resulting exchange difference is recognized in the Fixed Assets.

H. CENVAT CREDIT

CENVAT benefit is accounted for by reducing the purchase cost of material / fixed assets CENVAT CREDIT utilized during the year is accounted in excise duty and utilized Modvat balance at the year end is considered as advances excise duty.

I. INVESTMENT

Investments are valued at their acquisition cost. The company does not provide for temporary diminution in value of long term investment if any.

J. RETIREMENT BENEFITS Gratuity

Provision for gratuity to-Employees is made on the basis of accrual valuation. Provision for gratuity has not been funded.

Provident Fund

Contribution to provident Fund is accounted on accrual basis with corresponding contribution to recognized fund.

K. PROVISION FOR BAD AND DOUBTFUL DEBTS

Provision is made in accounts for Bad Doubtful Debts/Advances which in the opinion of the management are considered irrecoverable.

L. BORROWING COST

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

M. TAXES ON INCOME: Deferred Taxation

In accordance with the Accounting Standard 22 accounting for taxes on income, issued by the institute of chartered accountant of India, the deferred tax for timing difference between the book and the income tax profit for the year us accounted for by using the tax rate and laws that has been enacted and substantively enacted as of the balance sheet date.

Deferred tax assets arising from timing difference are recognized to the extent there is a virtual certainty that the assets can be realized in future.

Net outstanding balance in deferred tax account is recognized as deferred tax liability/assets. The deferred tax account is used solely for reversing timing difference as and when crystallized.

Current taxation

Provision for taxation has been made in accordance with the income tax laws prevailing for the relevant assessment year.

N. IMPAIRMENT OF ASSETS :

The carrying amount for assets other than inventory is reviewed at each balance sheet date to determine whether there is any indication of impairment, if any such indication exist, the assets recoverable amount is estimated.

The impairment loss is recognized whenever the carrying amount of an assets or its cash generation unit exceeds recoverable amount. The recoverable amount is greater of the assets net selling price and the value in the uses which is determined based on the estimated future cash flow discounted to their present value. All the impairment losses are recognized in the profit & Loss account.

An impairment loss is reversed if there has been a change in the estimates used to determined the recoverable amount and is recognized in the profit & loss account

O. RELATED PARTY TRANSACTION :

Disclosure of transaction with related parties, as required by Accounting Standard 18 "RELATED PARTY DISCLOSURE" has been set out in a separate note forming part of the schedule. Related party as defined under clause 3 of the Accounting Standard 18 have been identified on the basis of representation made by key managerial personnel and information available with the company.

P. EARNING PER SHARE :

The Company report basic and diluted earnings per share (EPS.) on the accordance with the Accounting Standard 22 issued by the Institute of Chartered Accountants of India. The basic E.P.S. has been computed by dividing income available to equity share holder by the weight average number of equity shares outstanding during the accounting year. The diluted E.P.S. has been computed using the weight average number of equity shares and dilutive potential equity shares outstanding at the end of the year.

Q. CASH FLOW STATEMENT :

The Cash Flow Statement is being prepared as per Accounting Standard 3 prescribed by the Institute of Chartered Accountants of India .