A) Basis of Preparation:
 
 The financial statements of Gujarat Natural Resources Limited (the
 Company) have been prepared under the historical cost convention on
 accrual basis of accounting in accordance with the Indian Generally
 Accepted Accounting Principles (GAAP) and mandatory accounting
 standards as specified in the Companies (Accounting Standards) Rules,
 2006, to the extent applicable and relevant provisions of the Companies
 Act, 1956.
 
 All assets and liabilities have been classified as current or
 non-current as per the company''s normal operating cycle and other
 criteria set out in the Revised Schedule VI to the Companies Act, 1956.
 Based on the nature of product and the time between the acquisition of
 assets for processing and their realization in cash and cash
 equivalents, the Company has ascertained its operating cycle as 12
 months for the purpose of current -non current classification of assets
 and liabilities.
 
 B) Fixed Assets:
 
 (i) Fixed Assets:
 
 Fixed Assets are stated at cost of acquisition less accumulated
 depreciation. All costs, including financing cost till commencement of
 commercial production are capitalised/ to be capitalised.
 
 (ii) Depreciation:
 
 Depreciation on fixed assets is charged on the Straight Line Method at
 the rates prescribed in Schedule XIV to the Companies Act, 1956.
 
 C) Borrowing Costs:
 
 Borrowing cost attributable to acquisition, construction or production
 of qualifying assets are capitalised as part of the cost of that asset,
 till the asset is ready for use. Other borrowing costs are recognized
 as an expense in the period in which these are incurred.
 
 D) Investments:
 
 Investments are valued at cost.
 
 E) Revenue Recognition:
 
 All income and expenditure items having material bearing on the
 financial statements are recognised on accrual basis.
 
 Sales and Purchase of Commodity are mainly executed on MCX
 
 F) Employee Benefits (AS -15):
 
 As informed to us and explained to us there are no employees who are
 eligible for such benefits and hence not applicable
 
 G) Foreign Exchange Transactions (AS-11):
 
 This accounting standard is not applicable
 
 H) Amortization of Miscellaneous Expenditure:
 
 Preliminary expenses and Pre-operative expenses has not been amortized.
 
 I) Deferred tax
 
 Deferred Tax charge or credit reflects the tax effects of timing
 differences between accounting Income and taxable income for the
 period. The deferred tax charge or credit and the corresponding
 deferred tax liabilities or assets are recognized using the tax rates
 that have been enacted or substantially enacted by the Balance Sheet
 date as per the Accounting Standard - 22.
 
 In view of negligible difference in taxable profit and book profit, the
 impact of deferred tax assets/ liability is not considered.
 
 J) Impairment of assets:
 
 An assets is treated as impaired when the carrying cost of assets
 exceeds its recoverable value. An impairment loss is charged to the
 Profit and Loss Account in the year in which assets is identified as
 impaired. The impairment loss recognized in prior accounting period is
 reversed if there has been change in the estimate of recoverable
 amount.
 
 K) Prior Period Adjustment :
 
 Expenses and income pertaining to earlier/previous years are accounted
 as prior period items.
 
 L) Earning Per Share:
 
 Disclosure is made in the Profit and Loss Account as per the
 requirements of the standard.
 
 M) Consolidated financial statements
 
 Consolidated financial statements of the Company and its subsidiaries
 are enclosed.
 
 N) Provisions, Contingent Liabilities and Contingent Assts:
 
 The Company creates a provision when there is present obligation as a
 result of a past event that probably requires an outflow of resources
 and a reliable estimate can be made of the amount of that obligation.
 Contingent Liabilities which are considered significant and material by
 the company are disclosed in the Notes to Accounts.  Contingent Assets
 are neither recognized nor disclosed.