Accounting Policies of Azure Exim Services Ltd. Company

Mar 31, 2015

1. Accounting Convention

The financial statements are prepared to comply in all material aspects with all the applicable accounting principles and applicable accounting standards, notified u/s 211 (3C) of the Companies Act, 1956 read with General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act 2013 and the relevant provisions of the Companies Act, 1956/2013 Act, as applicable. The financial statements have been prepared on accrual basis in accordance with the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year,

2. Use of Estimates

The preparation of the financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to estimates and differences between actual results and estimates are recognized in the periods in which the results are known/materialize.

3. Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity value of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

4. Cash Flow Statement

Cash flows are reported using indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted tor the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the company are segregated based on the available information For the purpose of Cash Flow statement, cash and cash equivalents includes fixed deposits which are freely remissible but excludes interest accrued on fixed deposits.

5. Fixed Assets and Depreciation

Tangible Assets are carried at cost of acquisition including freight, duties, taxes and incidental expenses until the fixed assets are ready to put to use less accumulated depreciation, Impairment loss, if any, ascertained as per the Accounting Standard of the Companies (Accounting Standards) Rules. 2006 is recognized.

Depreciation on Fixed Assets is provided under the Straight Line Method at the rates provided by schedule XIV to the Companies Act. 1956. Depreciation on additions during the year is being calculated on pro rata basis.

6. Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

Dividend income is recognized when the right to receive payment is established.

Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

7. Investments

Investments wherever readily realizable and intended to be held no! more than one year from the date of such investments are made, are qualified as current investments. Current investments are carried at lower of cost and quoted/fair value, computed category- wise.

Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

8. Employee benefits

Employee benefits of short term nature are recognized as expenses as and when it accrues. Gratuity liability is a defined obligation. The company pays gratuity to employees who retire or resign after a minimum period of five years of continuous service.

9. Earnings per share

Basic earnings per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year Diluted earnings per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have issued at a later data.

10. Taxes on Income

Current tax is determined as the amount of lax payable in respect of taxable income for the year Credit in respect of Minimum Alternate Tax paid is recognized only if there is convincing evidence of realization of the same.

Deferred Tax, which is computed on the basis of enacted/ substantively enacted rates, is recognized on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainly of realization of such assets. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future.

11. Impairment

At each Balance Sheet date, the management reviews the carrying amounts of each cash generating unit to determine whether there is any indication that those assets were impaired If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset's net selling price use in the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset Reversal of impairment loss is recognized as income in the statement of profit and loss

12. Provisions

A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

13. Contingent Liabilities

Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence or one or more uncertain future events, not wholly within the control of the company, or where any present obligation cannot be measured in terms of future outflow resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for. Contingent Assets are not recognized in the financial statements.

---

Mar 31, 2013

1. Accounting Convention

The financial statements are prepared to comply in all material aspects with all the applicable accounting principles and applicable accounting standards, notified u/s 211(3C) of the Companies Ad. 1956 and the relevant provisions of the Ad, 1956.The financial siaiementa have been prepared in accordance with the historical chit convention.

The presentation of the accounts is based on the revised Schedule VI of the Companies Ad. 1956. Accordingly previous year figures are realigned to make it comparable with current year AH assets and liabilities are classified into current and non-current generally based on criteria of realisation/settlement month's period from tna Balance Sheet date.

2. Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during tne year. The Management believes that tbo estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to estimates and differences between actual resorts and estimates are recognized in the periods in which the results are known/meterialize.

3. Inventories

Inventories are valued at cost ox net reatzable value whichever is lower. Cost of inventories is computed On the FireMn-Firat-Gul (FIFO) basis.

4. Cash and Caah Equivalents

Cash campuses cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an origins' maturity value of three months or toss from the date of acquisition), highly liquid investments that ere readily convertible inlo known amounts of cash and which ere subject to insignificant risk of changes in value.

5. Cash Flow Statement

Caan flows are reported using indirect method, whereby prcfit/(lMS) before extraordinary Heme and tax is adjusted for the effects of transactions of non-cash nature end any deferrals or accruals of past dr future cash receipts or payments. The cash flows from operating, investing and financing activities ol the company die segregated based on the available mfannalion. For the purpose of Cash Flow statement, cash and cash equivalents includes fixed deposits which are freely remissible hut excludes interest accrued on fixed deposits

6. Fixed Assets end Depreciation

Tangible Assets are carried at cost of acquisition Including freight, duties, taxes arid incidental until the fated assets are ready to put to use less accumulated depreciation. Impairment ascertained as per Hie Accounting Standard of the Companies (Accounting Standards) Rules, 2006 is recognized.

Depreciation on Fixed Assets is provided under the Straight Une Method at the rales provided by schadule XiV to the Companies Act, 1956 Depreciation on additions during the year is being calculated on pro rate basis.

7. Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure an accrual basis.

Dividend income is recognized when the right to receive payment is established.

Interest income is recognized on lime proportion basis taking into account the amount outstanding and rate applicable.

8. Investments

Investments wherever readily realizable and intended to be held not more than one year from the date of such investments are made, are qualified as currant investments. Current investments are earned at lower of cosi and quotod/fair value, computed category- wise.

Long term investments are stated at ctrel. Provision for diminution in the value of king term investments is made only if such a detime is other than temporary.

9. Employee benefits

Employee benefits of short term nature are recognized as expenses as and when it accrues. Gratuity liability is a defined obligation. The company pays gratuity to employees who retire or resign after a minimum period Of five years of continuous service.

10. Earnings per share

Basic earnings per share is computed by dividing thd profit/ (loss) after lax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during Ilia year. Diluted earnings per share is computed by dividing vie profit/ (toss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other change* to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving ba™ earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all diutive potential equity shares.

Potential equity shares are deemed Ip be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations, Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have issued at a later data

11. Taxes on income

Current tax is determined as the amount of tax payable in respect of taxable income for the year. Credit fn respect of Minimum Alternate Tax paid is recognized only if there is convincing evidence of realization of the same.

Deferred Tax, which is computed on the basis of enacted/ substantively enacted rates, is recognized on timing differences, being the difference between taxable incomes and accounting inj^rtfirmSiojioinate in one period and are capable of reversal in one or more subsequent period. WhffMttEeHti^ebwrbad . depreciation or carry forward tosses, deferred tax assets are recognized only itffime/is virtual of realization of such assets, Qlher deferred rax assets are recognized only to the extent there is reasonable certainty of realization in future.

12. Impairment

At eaih Balance Sheet dale, the management reviews the carrying amounts of each cash generating unit to determine whether there is any indication that those assets were impaired. If any such indication exists, Ihe recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an assets net selling price use- In assessing value in use, the estimated future cash flows expected from ihe continuing use of the asset and from its disposal are discounted lo their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and ihe risks specific to the asset.

Reversal of impairment loss is recognized as income In the statement of profit and loss

13. Provisions

A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required lo settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required lo settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted lo reflect the current best estimates.

14, Contingent Liabilities

Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence or one or more uncertain future events, no! wholly with the control of the company, or where any present obligation cannot be measured in terms of future outflow resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely prebeWe outflow of resources are provided for. Contingent Assets are not recognized in the financial statements.

---

Mar 31, 2012

1. Basis of accounting and preparation of financial statements

The financial statements are prepared and presented under the historical cost convention, on the accrual basis of accounting and in accordance with the provisions of the Companies Act, 1956 (''the Act''), and'' the accounting principles generally accepted in India and comply with the accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards, to the extent applicable.

The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

2. Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

3. Inventories

Inventories are valued at cost as per FIFO basis.

4. Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

5. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. For the purpose of Cash Flow Statement, cash and cash equivalents includes fixed deposits which are freely remissible but excludes interest accrued on fixed deposits.

6. Depreciation and; amortization

Depreciation has been provided on die straight-line method as per the rates prescribed in Schedule XTV to the Companies Act, 1956. Depreciation on addition to fixed assets is provided on a pro-rata basis from the date of addition.

7. Revenue recognition

Revenue and cost are generally accounted on accrual basis as they are earned/incurred, except in case of , significant uncertainties.

- Dividend is accounted when the right to receive payment is established.

- Interest and other income is accounted on accrual basis.

8. Fixed assets

Tangible assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed, assets, includes-in treason borrowings attributable-to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and otber incidental expenses incurred up to that date.

9. Investments

Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

10. Employee benefits

Employee benefits of short term nature are recognized as expenses as and when it accrues. Gratuity liability is a defined obligation. The company pays gratuity to employees who retire or resign after a minimum period of five years of continuous service.

11. Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) tax (including the post tax . effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which- could: have been issued on the conversion of all dilutive potential equity shares.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later AtE-

12. Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the. Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company- Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as. at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets r –in Respect of –un aborted Depreoiatiorr and "carry forward of losses are recognized "only if "there is virtual certainty that there will be sufficient future taxable income available to realize such assets. Deferred tax assets are recognized for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their readability.

13. Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount.- The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets.

14. Provision and Contingencies

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

15. Miscellaneous Expenditure

The Company has changed Its policy of amortizing preliminary expenditures. Earlier it had been amortizing preliminary expenditure over a period of ten years, and continued such policy till 4th year. Now it has been amortizing such expenditure over a period of five years and accordingly the rest of the unamortized amount has been amortized in the current financial year i.e., 5th year.

---

Mar 31, 2010

A. Basis of Preparation of Financial Statements

i. The Financial Statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles and provisions of the Companies Act, 1956 and comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956.

ii. Recognition of Income and Expenditure

The Company follows the accrual basis of accounting.

b. Fixed Assets

Fixed Assets are accounted at cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to working condition for its intended use.

c. Depreciation

i. Depreciation on fixed assets is provided on the Straight Line Method at the rates specified in Schedule XIV of the Companies Act, 1956.

ii. Depreciation on additions / deductions of assets during the year is provided on a pro-rata basis.

d. Inventories

Inventories are valued at cost as per FIFO method.

e. Investments

Investments are classified into current and long term investments. Current investments are stated at lower of cost or market value. Long term in vestments are stated at cost, less any provision for permanent diminution in value.

f. Miscellaneous Expenditure

1/10th of Preliminary expenses have been written off every year.

g. Contingent Liabilities

These are disclosed by way of Notes forming part of Accounts. Provision is made in the accounts in respect of those liabilities which are likely to materialise after the period end, till the finalisation of accounts and have material effect on the position stated in the Balance Sheet.

h. Retirement Benefits

The liability of gratuity & other benefits to employees is accounted in the year in which payment is made.

i. Purchases

Purchases are stated net of discounts, VAT and rate difference.

j. Sales

Sales exclude Sales Tax, VAT and adju sted for discounts to the customers.

k. Deferred Taxation

Provision for tax is made by applying the applicable tax rates and the tax laws. Deferred tax assets and liabilities arising on account of timing differences, which are capable of reversal in one or more subsequent periods, are recognized using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred Tax Assets are not recognized unless there is sufficient assurance with respect to the reversal of the same in future years.