ಕಂಪನಿಯ ಅಕೌಂಟಿಗ್ ಪಾಲಿಸಿ Aankit Granites Ltd.

Mar 31, 2012

I. Revenue recognition

a) Export sales are accounted on shipment of goods from its plant at Hosur and does not include sales tax and excise duty since the company is a 100% Export Oriented unit.

b) The Reimbursement of Central Sales Tax is being accounted on accrual basis, where as Duty Draw Back entitlement is accounted on Cash Basis.

c) Sales of Rejected tiles in DTA are accounted on clearance of goods from Plant at Hosur exclusive of sales tax and Excise duty.

d) Processing charges are accounted on completion of the work at agreed value.

ii. Inventories

Raw materials including components, stores and spares are valued at lower of cost and net realisable value. However, raw materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.

Work-in-Progress is valued at cost and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

iii. Fixed assets

Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use, net of refundable taxes.

iv. Impairment of assets

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Profit and Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

v. Depreciation/amortisation Depreciation on fixed assets is provided on the Straight Line method, using the rates specified in Schedule XIV to the Companies, Act, 1956, except that leasehold land is amortized over the lease period on straight line basis.

Assets individually costing less than Rs. 5,000 are fully depreciated in the year of purchase.

vi Investments Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognise a decline, other than temporary, in the value of the investments.

vii. Foreign currency transactions Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are restated at year-end rates. The difference in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions are recognised in the Profit and Loss Account.

Non-monetary items denominated in foreign currency:

(a) which are carried in terms of historical costs are reported using the exchange rate at the date of transaction.

(b) which are carried at fair value or other similar valuation are reported using the exchange rate that existed when the values are determined.

viii. Leases

Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight line basis.

ix. Earnings per share

Basic earnings/(loss) per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends, if any and attributable taxes) by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings/(loss) per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

x. Retirement benefits

a) Provident fund Contributions payable to the Recognised Provident Fund, which is a defined contribution scheme, is recognised as an expense in the period in which services are rendered by the employee.

b) Gratuity Provision towards gratuity is provided at each year as per actuarial valuation. However, the same is not funded. Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions are credited or charged to the Profit and Loss Account in the year in which such gains or losses arises.

c) Leave Encashment The company extends the benefit of encashment of leave entitlements to its employees, while in service as well as on retirement. Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions are credited or charged to the Profit and Loss Account in the year in which such gains or losses arises.

xi. Taxes on income

Current tax

Provision is made for income tax under the tax payable method, based on the liability computed, after taking credit for allowances and exemptions.

Deferred tax

Deferred Income Taxes resulting from timing difference between book and taxable profit is accounted for using the rates and laws that have been enacted or substantially enacted as at the balance Sheet date. The Deffered Tax asset is recognised and carried forward only to the extent there is a reasonally certainity that the asset can be realised in future.

xii. Provisions and contingent liabilities The Company creates a provision when there is a 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 the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.