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Accounting Policies of Aro Granite Industries Ltd. Company

Mar 31, 2016

1. Significant Accounting Policies

a) GENERAL - The accounts are prepared on historical cost basis, and on the accounting principles of going concern. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles

b) FIXED ASSETS - Fixed assets are stated at the cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition.

c) DEPRECIATION - Depreciation on fixed assets has been provided on Straight Line Method (SLM) basis on the rates specified in schedule II of the companies Act, 2013, as applicable on the last date of the accounting period.

d) INVENTORIES - Inventories are valued at the lower of the cost or net realizable value. The cost of the inventories is assigned by using At Cost Method. Raw material, Stores & Spares and Packing Materials have been valued at cost. Process Stock is valued at cost, which is determined by taking direct material, labour cost and certain related Factory Overheads, Finished Goods have been determined on full absorption cost basis which includes all direct cost, depreciation, etc.

e) REVENUE RECOGNITION - The Company follows Mercantile System of Accounting and recognizes income and expenditure on accrual basis.

f) FOREIGN CURRENCY TRANSACTION: Transaction denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transactions.

The outstanding foreign currency assets and liabilities are restated at the year-end rates. The net profit or loss arising on restatement/ settlement is adjusted to the profit & Loss account.

g) BORROWING COSTS: Borrowing cost that are attributable to the acquisition or constructions of qualifying assets are capitalized as a part of the cost of such assets. A qualifying assets is one that takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

h) PROPOSED DIVIDEND: The company provides for the dividend as proposed by the Directors in the books of account, pending approval at the Annual General Meeting.

i) CONTINGENT LIABILITIES: contingent liabilities are not provided and are disclosed by way of notes.

j) RETIREMENT BENEFITS - The Company’s contribution in respect of Provident Fund is charged against revenue every year. In respect of Gratuity, Provision for Gratuity & Leave encashment is made by charging Profit & Loss Account by an amount determined by actuarial valuation.

k) DEFERRED TAXATION - Deferred Tax arising from timing difference between book and tax profit is accounted for under the liability method at the current rate of tax, to the extent that the timing difference are expected to crystallize.

2. NOTES TO ACCOUNTS :

(a) DETAIL OF SECURITIES AGAINST SHORT TERM & LONG TERM BORROEINGS (Refer Note No. 3 and 6)

(A) Working Capital From Bank Of Baroda and The Hongkong and Sanghai Banking Corporation Limited - Secured by Way of following : -

(i) First pari-passu charge on the entire Current Assets of the Company.

(ii) Second Pari Passu charge on the of Movable Fixed Assets of the Company, both present and future.

(iii) First pari-passu charge on the Company’s immovable properties land admeasuring 10.41 acres situated at Kamandoddi Village, Hosur Taluk, Distt. Shoolagiri, Tamil Nadu.

(iv) Second pari-passu charge on the Company’s immovable properties situated at Village: Nallaganakothapalli, Taluk: Hosur, Distt: Krishnagiri, Tamil Nadu.

(v) Pledge of FDR worth Rs.2.50 Crores equivalent to 10% of FBP limit in lieu of waiver of buyer wise ECGC cover; and

(vi) Joint and Several personal guarantees of (1) Mr. Kasturi Lal Arora, (2) Mr. Sunil K.Arora and (3)Mrs. Sujata Arora.

(B) EXTERNAL COMMERCIAL BORROWINGS from Bank of Baroda DIFC Dubai is Secured by Way of following : -

(i) First pari-passu charge with HSBC Limited over all entire fixed assets of the Company (present and future) including land and building at Nallaganakothapalli village in Hosur Taluk, Krishnagiri District.

(ii) Second pari-passu charge on all current assets of the Company with HSBC Limited.

(iii) Charge over DSRA to maintained for one quarter interest and one installment of the facility.

(iv) Pledge of FDR i.e. Rs. 2.50 Crores maintained by Company with Bank of Baroda, International Business Branch, 1st Floor, BOB Building, 16 Sansad Marg, New Delhi 110001.

(v) First pari passu charge on the property in the name of company measuring 10.41 acres situated at Kamanadoddi Village, Hosur Taluk, District Shoolagiri with HSBC Limited.

(b) i. Bills of Exchange discounted Rs. 1117.20 Lacs (PY. Rs. 1,405.31 Lacs)

ii. Guarantee & counter Guarantee Outstanding Rs. 9.61 Lacs (PY. Rs. 21.40 Lacs)

iii. Letter of Credit Rs. 583.60 Lacs (PY. Rs. 669.30 Lacs)

(c) In compliance with Accounting Standard - 22 relating to "Accounting for taxes on Income" issued by the Institute of Chartered Accountants of India, the company has adjusted the deferred tax liability (net) arising out of timing difference for the period up to 31st March 2016 with the Balance of Deferred Tax Liability (Net) accruing during the year aggregating to Rs. 87.97 has been recognized in the Profit and Loss Account.

(g) The Company is into the business of Granite Tiles and Slabs on which company have same degree of risk and return. Their production process is also similar. Further the company’s revenue from domestic market is negligible. Thus the Company does not have more than one reportable segment in line with the Accounting Standard 17 on "Segmental Reporting" issued by the Institute of Chartered Accountants of India.

(h) There are no Small Scale Undertakings to which Company owes, for more than thirty days and exceeding Rupees One Lac.


Mar 31, 2015

A) GENERAL - The accounts are prepared on historical cost basis, and on the accounting principles of going concern. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

b) FIXED ASSETS - Fixed assets are stated at the cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition.

c) DEPRECIATION - Depreciation on fixed assets has been provided on Straight Line Method (SLM) basis on the rates specified in schedule II of the companies Act, 2013, as applicable on the last date of the accounting period. The Company reassessed the useful lives of fixed assets as per Part C of Schedule II of the Companies Act, 2013. Consequently, the useful life of certain asset classes has been revised and depreciation for the year ended March 31, 2015 is higher by Rs. 384.78 lakhs. The depreciation on carrying value of the assets whose useful lives expired as at April 1, 2014 aggregating Rs. 213.43 Lacs has been adjusted against the opening reserves.

d) INVENTORIES - Inventories are valued at the lower of the cost or net realizable value. The cost of the inventories is assigned by using First-in First out (FIFO) Method. Raw material, Stores & Spares and Packing Materials have been valued at cost. Process Stock is valued at cost, which is determined by taking direct material, labour cost and certain related Factory Overheads, Finished Goods have been determined on full absorption cost basis which includes all direct cost, depreciation, etc.

e) REVENUE RECOGNITION - The Company follows Mercantile System of Accounting and recognizes income and expenditure on accrual basis.

f) FOREIGN CURRENCY TRANSACTION: Transaction denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transactions.

The outstanding foreign currency assets and liabilities are restated at the year-end rates. The net profit or loss arising on restatement/ settlement is adjusted to the profit & Loss account.

g) BORROWING COSTS: Borrowing cost that are attributable to the acquisition or constructions of qualifying assets are capitalized as a part of the cost of such assets. A qualifying assets is one that takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

h) PROPOSED DIVIDEND: The company provides for the dividend as proposed by the Directors in the books of account, pending approval at the Annual General Meeting.

i) CONTINGENT LIABILITIES: contingent liabilities are not provided and are disclosed by way of notes.

j) RETIREMENT BENEFITS - The Company's contribution in respect of Provident Fund is charged against revenue every year. In respect of Gratuity, Provision for Gratuity & Leave encashment is made by charging Profit & Loss Account by an amount determined by actuarial valuation.

k) DEFERRED TAXATION - Deferred Tax arising from timing difference between book and tax profit is accounted for under the liability method at the current rate of tax, to the extent that the timing difference are expected to crystallize.


Mar 31, 2014

A) GENERAL – The accounts are prepared on historical cost basis, and on the accounting principles of going concern. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles

b) FIXED ASSETS – Fixed assets are stated at the cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition.

c) DEPRECIATION – Depreciation on fixed assets has been provided on Straight Line Method (SLM) on the basis of useful life of assets for Plant & Machinery and other assets on the rates specified in schedule XIV of the companies Act, 1956, as applicable on the last date of the accounting year.

d) INVENTORIES – Inventories are valued at the lower of the cost or net realizable value. The cost of the inventories is assigned by using First–in First out (FIFO) Method. Raw material, Stores & Spares and Packing Materials have been valued at cost. Process Stock is valued at cost, which is determined by taking direct material, labor cost and certain related Factory Overheads, Finished Goods have been determined on full absorption cost basis which includes all direct cost, depreciation, etc.

e) REVENUE RECOGNITION – The Company follows Mercantile System of Accounting and recognizes income and expenditure on accrual basis.

f) FOREIGN CURRENCY TRANSACTION: Transaction denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transactions.

The outstanding foreign currency assets and liabilities are restated at the year–end rates. The net profit or loss arising on restatement/ settlement is adjusted to the profit & Loss account.

g) BORROWING COSTS: Borrowing cost that are attributable to the acquisition or constructions of qualifying assets are capitalized as a part of the cost of such assets. A qualifying assets is one that takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

h) PROPOSED DIVIDEND: The company provides for the dividend as proposed by the Directors in the books of account, pending approval at the Annual General Meeting.

i) CONTINGENT LIABILITIES: contingent liabilities are not provided and are disclosed by way of notes.

j) RETIREMENT BENEFITS – The Company''s contribution in respect of Provident Fund is charged against revenue every year. In respect of Gratuity, Provision for Gratuity is made by charging Profit & Loss Account by an amount determined by actuarial valuation.

k) EARNING PER SHARE (EPS) – The basic earnings per share and diluted earnings per share (EPS) is computed by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares after the issue of bonus share.

l) DEFERRED TAXATION – Deferred Tax arising from timing difference between book and tax profit is accounted for under the liability method at the current rate of tax, to the extent that the timing difference are expected to crystallize.


Mar 31, 2013

A) GENERAL - The accounts are prepared on historical cost basis, and on the accounting principles of going concern. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

b) FIXED ASSETS - Fixed assets are stated at the cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition.

c) DEPRECIATION - Depreciation on fixed assets has been provided on Straight Line Method (SLM) basis and on pro-rata basis on the rates specified in schedule XIV of the companies Act, 1956, as applicable on the last date of the accounting year.

d) INVENTORIES - Inventories are valued at the lower of the cost or net realizable value. The cost of the inventories is assigned by using First-in First out (FIFO) Method. Raw material, Stores & Spares and Packing Materials have been valued at cost. Process Stock is valued at cost, which is determined by taking direct material, labor cost and certain related Factory Overheads, Finished Goods have been determined on full absorption cost basis which includes all direct cost, depreciation, etc.

e) REVENUE RECOGNITION - The Company follows Mercantile System of Accounting and recognizes income and expenditure on accrual basis.

f) FOREIGN CURRENCY TRANSACTION: Transaction denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transactions.

The outstanding foreign currency assets and liabilities are restated at the year-end rates. The net profit or loss arising on restatement/ settlement is adjusted to the profit & Loss account.

g) BORROWING COSTS: Borrowing cost that are attributable to the acquisition or constructions of qualifying assets are capitalized as a part of the cost of such assets. A qualifying assets is one that takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

h) PROPOSED DIVIDEND: The company provides for the dividend as proposed by the Directors in the books of account, pending approval at the Annual General Meeting.

i) CONTINGENT LIABILITIES: contingent liabilities are not provided and are disclosed by way of notes.

j) RETIREMENT BENEFITS - The Company''s contribution in respect of Provident Fund is charged against revenue every year. In respect of Gratuity, Provision for Gratuity is made by charging Profit & Loss Account by an amount determined by actuarial valuation.

k) DEFERRED TAXATION - Deferred Tax arising from timing difference between book and tax profit is accounted for under the liability method at the current rate of tax, to the extent that the timing difference are expected to crystallize.


Mar 31, 2012

A) GENERAL - The accounts are prepared on historical cost basis, and on the accounting principles of going concern. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles

b) FIXED ASSETS - Fixed assets are stated at the cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition.

c) DEPRECIATION - Depreciation on fixed assets has been provided on Straight Line Method (SLM) basis and on pro-rata basis on the rates specified in schedule XIV of the companies Act, 1956, as applicable on the last date of the accounting year.

d) INVENTORIES - Inventories are valued at the lower of the cost or net realizable value. The cost of the inventories is assigned by using First-in First out (FIFO) Method. Raw material, Stores & Spares and Packing Materials have been valued at cost. Process Stock is valued at cost, which is determined by taking direct material, labor cost and certain related Factory Overheads, Finished Goods have been determined on full absorption cost basis which includes all direct cost, depreciation, etc.

e) REVENUE RECOGNITION - The Company follows Mercantile System of Accounting and recognizes income and expenditure on accrual basis.

f) FOREIGN CURRENCY TRANSACTION: Transaction denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transactions.

Foreign Currency Liabilities incurred for acquisition of Fixed Assets are translated at the exchange rate prevailing on the last working day of the accounting year or forward cover rates, as applicable. The net variation arising out of the said transaction is adjusted to the profit and loss account.

Other outstanding foreign currency assets and liabilities are restated at the year-end rates. The net profit or loss arising on restatement/settlement is adjusted to the profit & Loss account.

g) BORROWING COSTS: Borrowing cost that are attributable to the acquisition or constructions of qualifying assets are capitalized as a part of the cost of such assets. A qualifying assets is one that takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

h) PROPOSED DIVIDEND: The company provides for the dividend as proposed by the Directors in the books of account, pending approval at the Annual General Meeting.

i) CONTINGENT LIABILITIES: contingent liabilities are not provided and are disclosed by way of notes.

j) RETIREMENT BENEFITS - The Company's contribution in respect of Provident Fund is charged against revenue every year. In respect of Gratuity, Provision for Gratuity is made by charging Profit & Loss Account by an amount determined by actuarial valuation.

k) DEFERRED TAXATION - Deferred Tax arising from timing difference between book and tax profit is accounted for under the liability method at the current rate of tax, to the extent that the timing difference are expected to crystallize.


Mar 31, 2011

A) GENERAL - The accounts are prepared on historical cost basis, and on the accounting principles of going concern. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

b) FIXED ASSETS - Fixed assets are stated at the cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition.

c) DEPRECIATION - Depreciation on fixed assets has been provided on Straight Line Method (SLM) basis and on pro-rata basis on the rates specified in schedule XIV of the Companies Act, 1956 as applicable on the last date of the accounting year.

d) INVENTORIES - Inventories are valued at the lower of the cost or net realizable value. The cost of the inventories is assigned by using First-in First out (FIFO) Method. Raw material, Stores & Spares and Packing Materials have been valued at cost. Process Stock is valued at cost, which is determined by taking direct material, labor cost and certain related Factory Overheads. Finished Goods have been determined on full absorption cost basis which includes all direct cost, depreciation, etc.

e) REVENUE RECOGNITION - The Company follows Mercantile System of Accounting and recognizes income and expenditure on accrual basis.

f) FOREIGN CURRENCY TRANSACTION: Transaction denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of transactions.

Foreign Currency Liabilities incurred for acquisition of Fixed Assets are translated at the exchange rate prevailing on the last working day of the accounting year or forward cover rates, as applicable. The net variation arising out of the said transaction is adjusted to the profit and loss account.

Other outstanding foreign currency assets and liabilities are restated at the year-end rates. The net profit or loss arising on restatement/ settlement is adjusted to the profit & Loss account.

g) BORROWING COSTS: Borrowing cost that are attributable to the acquisition or constructions of qualifying assets are capitalized as a part of the cost of such assets. A qualifying assets is one that takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

h) PROPOSED DIVIDEND: The company provides for the dividend as proposed by the Directors in the books of account, pending approval at the Annual General Meeting.

i) CONTINGENT LIABILITIES: contingent liabilities are not provided and are disclosed by way of notes.

j) RETIREMENT BENEFITS - The Company's contribution in respect of Provident Fund is charged against revenue every year. In respect of Gratuity and Leave Encashment, Provision for Gratuity, Leave Encashment is made by charging Profit & Loss Account by an amount determined by actuarial valuvation.

k) DEFERRED TAXATION - Deferred Ta x arising from timing difference between book and tax profit is accounted for under the liability method at the current rate of tax to the extent that the timing difference are expected to crystallize.


Mar 31, 2010

A) GENERAL - The accounts are prepared on historical cost basis and on the accounting principles of going concern. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

b) FIXED ASSETS - Fixed assets are stated at the cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition.

c) DEPRECIATION - Depreciation on fixed assets has been provided on Straight Line Method (SLM) basis and on pro-rata basis on the rates specified in schedule XIV of the companies Act, 1956, as applicable on the last date of the accounting year.

d) INVENTORIES - Inventories are valued at the lower of the cost or net realizable value. The cost of the inventories is assigned by using First-in First out (FIFO) Method. Raw material, Stores & Spares and Packing Materials have been valued at cost. Process Stock is valued at cost, which is determined by taking direct material, labour cost and certain related Factory Overheads, Finished Goods have been determined on full absorption cost basis which includes all direct cost, depreciation, etc.

e) REVENUE RECOGNITION - The Company follows Mercantile System of Accounting and recognizes income and expenditure on accrual basis.

f) FOREIGN CURRENCY TRANSACTION : Transaction denominated in foreign currencies aje normally recorded at the exchange rate prevailing at the time of transactions.

Foreign Currency Liabilities incurred for acquisition of Fixed Assets are translated at the exchange rate prevailing on the last working day of the accounting year or forward cover rates, as applicable. The net variation arising out of the said transaction is adjusted to the profit and loss account.

Other outstanding foreign currency assets and liabilities are restated at the year-end rates. The net profit or loss arising on restatement/ settlement is adjusted to the profit & Loss account.

g) BORROWING COSTS : Borrowing cost that are attributable to the acquisition or constructions of qualifying assets are capitalized as a part of the cost of such assets. A qualifying assets is one that takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

h) PROPOSED DIVIDEND : The company provides for the dividend as proposed by the Directors in the books of account, pending approval at the Annual General Meeting.

i) CONTINGENT LIABILITIES : contingent liabilities are not provided and are disclosed by way of notes.

j) RETIREMENT BENEFITS - The companys contribution in respect of Provident Fund is charged against revenue every year. In respect of Gratuity, Provision for Gratuity is made by charging Profit & Loss Account by an amount based on the assumption that Gratuity is payable to all employees at the year-end.

k) DEFERRED TAXATION - Deferred Tax arising from timing difference between book and tax profit is accounted for under the liability method at the current rate of tax, to the extent that the timing difference are expected to crystallize.

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