NOTE : 01 SIGNIFICANT ACCOUNTING POLICIES

The Significant accounting policies to the extent applicable the companies are as under:

(i) System of Accounting :-

The Financial statements are brpared on historical cost basis and on the accounting principles of going concern in accordance with generally accepted accounting principles comprising of the mandatory accounting standards including the Accounting standards notified under the relevant of the Companies Act, 2013.

Revenue Recognition :-

All known income and expenditure quantifiable till the date of finalization of accounts are accounted on accrual basis when virtual certainty is established.

Sales of products is recognized when property in the goods with all risk rewards and effective control of goods usually associated with ownership are transferred to buyer at price includes insurance, freight etc. but excludes Excise, VAT and Sales Return if any and adjusted for discounts.

The brsentation of financial statements require estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.

Fixed Asset :-Tangible Assets :-

Cost of Fixed assets comprises of its purchase price including import duties and other non refundable taxes or levies, expenditure incurred in the course of construction or acquisition and any directly attributable costs of bringing the asset to its working condition for the purpose of use for the business.

CENVAT Credit available on Capital goods has been reduced from cost of purchases of fixed assets and debrciation thereon has been calculated on the balance amount net off CENVAT credit available.

Capital Work in progress comprises of cost of capital expenditure incurred for the proposed machinery which is yet to put to use. Intangible Assets :-

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

Investments :-

Investments are shown at their cost plus incidental expenses if any. Investments are classified as long term & current investments. Provision for diminution in the value of long-term investment is made only if such decline is other than temporary.

Fuel and Packing materials : At cost or net realizable value whichever is less.

Work-in-progress : At Cost of production

Stock in trade : At lower of cost or estimated realizable value.

The cost of inventory is determined on FIFO cost formula method on relevant categories of inventories after providing for obsolete, slow moving and defective inventories where ever necessary.

CENVAT Credit / VAT Credit:

CENVAT credit / VAT credit available on stores and spares and Raw Materials reduced from cost of purchases and balance has been shown in "Loans & Advances" under Current Assets in the Balance Sheet.

The Excise duty payable on the finished goods is accounted on the clearance of goods from factory brmises.

(vi) Provisions and Contingent liabilities :-

Contingent liabilities are disclosed after careful evaluation of facts and legal aspects of the matter involved.

Provisions and contingent liability are reviewed at each balance sheet date and events occurring after balance sheet date which are adjusted to reflect the current best estimates.

(vii) Retirement and other Employee Benefits :-

Provident fund :-

Retirement benefits in the form of Provident Fund are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. Leave Benefits :-

There is no Unutilized Leave to be encashed hence provision for Leave encashment liability does not arise as on 31st March 2015. Gratuity :-

During the year the Company has a scheme of Retirement Benefit namely 'Group Gratuity Fund' recognized by the Income Tax authorities. This fund is administered through Trustees and the Company's contribution thereto is charged to revenue.

Contributions to Provident fund are made on accrual basis.

(viii) Impairment of Fixed Assets :-

Factors giving rise to any indication of impairment of the carrying amounts of the Company's Assets are appraised at each Balance Sheet date to determine and provide/ reverse an impairment loss. There is no impairment in the carrying amounts of Company's Assets.

(ix) Foreign currency transaction :-

Transactions in foreign Currency are recorded in rupees by applying the exchange rate at the date of the transaction and adjusted appropriately to capital or revenue, with the difference in the rate of exchange arising on actual receipt/payment during the year. Gains or Losses on settlement of the transactions are recognized under the head currency rate difference in the Profit and loss account.

Current Assets and Liabilities (monetary items) are translated at the exchange rate brvailing on the last day of the year.

The Company enters into derivative contracts strictly for hedging purposes and not for trading or speculation. Derivative transactions are being considered as off balance sheet date transactions and accordingly the gains/losses arising there from are recognized under respective heads of accounts as and when the settlement takes place with the terms of the respective contracts.

(x) Provision for Current and Deferred Tax :-

The tax expense comprises of Current Tax & Deferred Tax charged or credited to the profit and loss account for the year. Current Tax is calculated in accordance with the tax laws applicable to the current financial year. The deferred tax charge or credit is recognized using the tax rates applicable as on the date of balance sheet. Deferred Tax assets are recognized only if there is virtual certainty of realization of such assets. At balance sheet date, recognized and unrecognized Deferred Tax assets are reviewed.

(xi) Borrowing Cost :-

Borrowing cost directly attributable and/or funds borrowed generally and used for the purpose of acquisition/construction of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized, at its capitalization rate to expenditure on that assets, for the period, until all activities necessary to brpare qualifying assets for its intended use are complete.

(xii) Branch Accounting :-

Stock transfer at various branches, are done at a rate inclusive of Excise, education cess and freight charges. When the Sales from branches effected, above transfer value is nullified. Sales values of branches are accounted inclusive of VAT / CST charged by respective branches.

Further system of accounting of all branch expenses and C & F expenses are centralized and booked on the basis of vouchers and supporting sent by C & F and branches.

(xiii) Leases :-

Where the Company is the lessee

Leases, wherein the lesser effectively retains substantially all the risks and benefits of ownership of the leases item, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss Account on a straight-line basis over the lease term as per Lease Agreement.

The accompanying Notes are an integral part of the Financial Statements

In terms of our report of even date attached

A. L. Thakkar & Co.

Chartered Accountants FRN: 120116W

[Sanjiv V. Shah]

Partner

Membership No. 42264

Renuka upadhyay

DGM & Company Secretary (Secretarial and Legal)

For and on behalf of

ASIAN GRANITO INDIA LIMITED

[Kamleshbhai B. patel]

Chairman & Managing Director [Din : 00229700]

[Mukeshbhai J. patel]

Managing Director [Din: 00406744]

Place : Ahmedabad

Date : May 30, 2015