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GAIL India
BSE: 532155|NSE: GAIL|ISIN: INE129A01019|SECTOR: Oil Drilling And Exploration
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« Mar 10
Accounting Policy Year : Mar '11
1.  Accounting Convention
 
 The financial statements are prepared on accrual basis of accounting
 under historical cost convention in accordance with generally accepted
 accounting principles in India and the relevant provisions of the
 Companies Act, 1 956 including accounting standards notified there
 under.
 
 2.  Use of Estimates
 
 The preparation of financial statements requires estimates and
 assumptions which affect the reported amount of assets, liabilities,
 revenues and expenses of the reporting period.The difference between
 the actual results and estimates are recognized in the period in which
 the results are known or materialized.
 
 3.  Fixed Assets
 
 Fixed Assets are valued at historical cost on consistent basis and are
 net of refundable taxes & levies wherever applicable. All costs
 relating to acquisition of fixed assets till commissioning of such
 assets are capitalized. In the case of commissioned assets where final
 payment to the Contractors is pending, capitalization is made on
 provisional basis, including provisional liability pending approval of
 Competent Authority, subject to necessary adjustment in cost and
 depreciation in the year of settlement.
 
 4.  Intangible Assets
 
 Intangible assets like software, licenses and right-of-use of land
 including sharing of ROD with other entities which are expected to
 provide future enduring economic benefits are capitalized as intangible
 Assets.
 
 5.  Capital Work in Progress
 
 a.  Crop compensation is accounted for under Capital Work-in- Progress
 on the basis of actual payments/estimated liability, as and when
 work commences where ROD is acquired.
 
 b.  The capital work in progress includes advance for capital goods/
 material in Transit/value of materials /equipment etc. received at site
 for use in the projects
 
 6.  Borrowing Cost
 
 Borrowing cost of the funds specifically borrowed for the purpose of
 obtaining qualifying assets and eligible for capitalization along with
 the cost of the assets, is capitalized up to the date when the asset is
 ready for use after netting off any income earned on temporary
 investment of such funds.
 
 7.  Expenses Incurred During Construction Period
 
 All revenue expenditure incurred during the year, which is exclusively
 attributable to acquisition / construction of fixed assets, is
 capitalized at the time of commissioning of such assets.
 
 8.  Depreciation/Amortisation
 
 I.  Depreciation on Fixed Assets other than those mentioned below is
 provided in accordance with the rates as specified in Schedule XIV of
 the Companies Act, 1956, on straight line method (SLM) on pro-rata
 basis (monthly pro-rata for bought out assets).
 
 a.  Assets costing upto X 5,000/- are depreciated fully in the year of
 capitalisation.
 
 b.  Bunk Houses are amortised on assumption of five years life.
 
 c.  Oil and Gas Pipelines including other related facilities are
 depreciated 
Source : Dion Global Solutions Limited
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