Notes to Accounts of Aro Granite Industries Ltd.

Mar 31, 2018

2. NOTES TO ACCOUNTS :

(a) DETAIL OF SECURITIES AGAINST SHORT TERM & LONG TERM BORROWINGS (Refer Note 12 and 14)

(A) Working Capital From Bank of Baroda Secured by way of the following : -

(i) Charge on the entire Current Assets of the Company.

(ii) Charge on the of Movable Fixed Assets of the Company, both present and future.

(iii) Charge on the Company’s immovable properties including land admeasuring 10.84 acres and building situated at Kamandoddi Village, Hosur Taluk, Distt. Shoolagiri, Tamil Nadu.

(iv) 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. Sunil K.Arora and (2)Mrs. Sujata Arora.

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

(i) Charge over all entire fixed assets of the Company (present and future) including land and building at Nallaganakothapalli village in Hosur Taluk, Krishnagiri District.

(ii) Charge on all current assets of the Company.

(iii) Charge over DSRA to be 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) Charge on the property in the name of company including land admeasuring 10.84 acres and building situated at Kamanadoddi Village, Hosur Taluk, District Shoolagiri, Tamil Nadu.

(b) i. Bills of Exchange discounted Rs.680.13 Lacs (PY.Rs.1,045.53 Lacs)

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

iii. Letter of Credit Rs. 348.06 Lacs (PY. Rs.484.98 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 31^st Mar 2018 with the Balance of Deferred Tax Liability (Net) accruing during the year aggregating to Rs. 42.75 Lacs has been recognized in the Profit and Loss Account.

(e) Related Party Disclosure : As per Accounting Standard 18, the disclosures of transactions with the related parties are given below::

(i) List of related parties where control exists and related parties with whom transactions have taken place and relationships:

Sl. No. Name of the Related Party Relationship

1. Mr. Sunil K Arora Key Managerial Personnel

2 Mr. K. Raghavendra Key Managerial Personnel

3 Mrs. Sujata Arora Key Managerial Personnel

4 Mr. K.L. Arora Key Managerial Personnel

5. Shivani Arora Relative of Key Managerial Personal

6. Sahil Arora Whole Time Director

7. Aro Granite International Inc Relative of Key Managerial Personal

(ii) Transactions during the year with related parties :

(q) Previous year’s figures have been regrouped wherever necessary to confirm to this year’s classification, in terms of our report of even date.

(r) Figures shown in bracket are related to Previous year in the Financial statement and are in INR (In Lacs)

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Mar 31, 2015

(a) DETAIL OF SECURITIES AGAINST SHORT TERM & LONG TERM BORROWINGS

(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 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.1,405.31 Lacs (PY.Rs.1,550.74 Lacs)

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

iii. Letter of Credit Rs. 669.30 Lacs (PY. Rs .650.83 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 upto 31st March 2015 with the Balance of Deferred Tax Liability (Net) accruing during the year aggregating to Rs. (174.53) has been recognized in the Profit and Loss Account.

d. 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.

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

f. Previous years figures have been regrouped wherever necessary to confirm to this years classification, in terms of our report of even date.

g. Unit I sold during the year 2013-14, hence figures shown as NIL

h. Figures shown in bracket are related to Previous year in the Financial statement and are in INR (In Lacs)

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Mar 31, 2014

A.i Bills of Exchange discounted Rs.1550.74 Lacs (P.Y.Rs.1397.98 Lacs)

ii.Guarantee & counter Guarantee Outstanding Rs.21.40 Lacs (P.Y.Rs. 25.85 Lacs )

iii.Letter of Credit Rs 650.83 Lacs (PY. Rs 812.72 lacs)

b. 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 upto 31ST MARCH 2014 with the Balance of Deferred Tax Liability (Net) accruing during the year aggregating to Rs. 131.74/ – has been recognized in the Profit and Loss Account.

c. 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.

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

e. Previous years figures have been regrouped wherever necessary to confirm to this years classification, in terms of our report of even date.

f. Figures shown in bracket are related to Previous year in the Financial statement and are in INR (In Lacs)

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Mar 31, 2013

A. i. Bills of Exchange discounted Rs. 1397.98 Lacs (PY.Rs.1093.14 Lacs)

ii. Guarantee & counter Guarantee Outstanding Rs. 25.85 Lacs (PY.Rs. 50.85 Lacs)

iii. Letter of Credit Rs. 812.72 Lacs (PY. Rs 751.15 lacs)

b. 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 upto 31st March 2013 with the Balance of Deferred Tax Liability (Net) accruing during the year aggregating to Rs.90.39/-has been recognized in the Profit and Loss Account.

c. 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.

d. There are no Small Scale Undertakings to which Company owes, for more than thirty days and exceeding Rupees One Lac. (The Installed Capacity has been certified by a Director of the Company on which the Auditors have placed reliance without verification).

e. Additional Information pursuant to the provisions of paragraphs, 3, 4C and 4D of part II Schedule of the Companies Act, 1956.

f. Previous year''s figures have been regrouped wherever necessary to confirm to this year''s classification, in terms of our report of even date.

g. Figures shown in bracket are related to Previous year in the Financial statement and are in INR (In Lacs)

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Mar 31, 2012

A. i. Bills of Exchange discounted Rs. 1093.14 Lacs (PY.Rs. 1400.40 Lacs)

ii. Guarantee & counter Guarantee Outstanding Rs. 50.85 Lacs (PY.Rs. 50.85 Lacs)

iii. Letter of Credit Rs 751.15 Lacs (PY. Rs 807.88 lacs)

b. 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 2012 with the Balance of Deferred Tax Liability (Net) accruing during the year aggregating to Rs.71.65/- has been recognized in the Profit and Loss Account.

c. 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.

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

e. Previous year's figures have been regrouped wherever necessary to confirm to this year's classification, in terms of our report of even date.

f. Figures shown in bracket are related to Previous year in the Financial statement and are in INR (in Lacs)

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Mar 31, 2011

A. i. Bills of Exchange discounted Rs.1400.40 Lacs (P.Y. Rs.1312.27 Lacs)

ii. Guarantee & counter Guarantee Outstanding Rs. 50.85 Lacs (P.Y. Rs. 28.50 Lacs)

iii. Letter of Credit Rs.807.88 Lacs (PY. Rs.343.33 lacs)

b. 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 upto 31st March 2011 with the Balance of Deferred Ta x Liability (Net) accruing during the year aggregating to Rs.27,64,465/- has been recognized in the Profit and Loss Account.

c. The Deferred Ta x Liability (net) of Rs 27,64,465/- credited to Profit and Loss account includes Rs.38,29,704/- deferred tax liability for Unit-II, which is having tax holiday under Income Ta x Act and provision has been made, based on conservative principles.

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.

q. Previous years figures have been regrouped wherever necessary to confirm to this years classification in terms of our report of even date.

r. Figures shown in bracket are related to Previous year in the Financial statement and are in INR (In Thousand).

s. The buyback scheme announced by the Company on 08.06.2009, was closed on 07.06.2010. During this period the company bought back 8,83,500 Equity Shares of the face value of Rs.10/- each from the open market through electronic trading mechanism of the stock exchange under the SEBI (Buy back of Securities) Regulations 1998 and completed the buy back scheme.

t. The disposal of Unit I of the company, located at 103, Sipcot Industrial Complex, Hosur, engaged in manufacture of granite tiles has been deferred and operations are still continuing there and steps are being taken for the revival of this Unit I.

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Mar 31, 2010

A. i. Bills of Exchange discounted Rs. 1312.27 Lacs (RY.Rs.1941.39 Lacs)

ii. Guarantee & counter Guarantee Outstanding Rs. 28.50 Lacs (RY.Rs. 28.50 Lacs ) iii. Letter of Credit Rs. 343.33 Lacs (PY. Rs 303.82 lacs)

b. 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 upto 31st March 2010 with the Balance of Deferred Tax Liability (Net) accruing during the year aggregating to Rs.83,69,307/- has been recognized in the Profit and Loss Account.

c. The Deferred Tax Liability (net) of Rs 83,69,307/- credited to Profit and Loss account includes Rs.92,09,282/- deferred tax liability for Unit-ll, which is having tax holiday under Income Tax Act and provision has been made, based on conservative principles.

d. 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 companys 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.

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

f. Previous years figures have been regrouped wherever necessary to confirm to this years classification, in terms of our report of even date.

g. Figures shown in bracket are related to Previous Year in the Financial statement are in INR (In Thousand).

h. The company had, in June 2009 announced buy back of its fully paid Equity Shares of the face value of Rs.10/- each from the open market through electronic trading mechanism of the stock exchange under the SEBI (Buy back of securities) Regulations 1998. Under the buy back scheme the company has bought back 7,24,779 Equity Shares, out of which 7,22,779 Equity Shares has been extinguished till 3 1.03.2010.

i. The Company has decider) to dispose off one of its manufacturing unit located at 103, SlfTOT Industrial Complex, Hosur 635 126. (Unit I) engaged in manufacture and export of granite tiles. All the necessary approvals for the same have been obtained.