Accounting Policies of Global Stone India Ltd. Company

Mar 31, 2013

1.1 Basis of Accounting:

The Financial statements have been prepared on accrual basis, except wherever otherwise stated, under the historical cost convention, in accordance with the accounting principles generally accepted in India and compiled with the accounting standards referred to in the Company''s Accounting Standards Rules 2006, issued by the Central Government in exercise of the powers conferred under subsection (i)(a) of Section 642 and the relevant provisions of the Companies Act, 1956.

1.2 Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in the current and future periods.

1.3 Inventory

Inventories are valued at lower of the cost or net realizable value. For this purpose cost includes direct material duties and taxes.

1.4 Revenue Recognition

All expenses and revenue are accounted for on accrual basis except wherever stated otherwise.

1.5 Fixed Assets and Depreciation:

Fixed Assets are stated at cost of acquisition / construction less accumulated depreciation and impairment loss. Cost includes related expenditure and Pre-operative and Project expenses for the period up to completion of construction / assets are put to use.

Depreciation on Fixed Assets is provided on Written Down Value Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

1.6 Borrowing Costs

Borrowing costs attributable to the acquisition / construction of a qualifying asset are capitalized as part of the cost of such assets, up to the date the assets are ready for their intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

1.7 Investments

All long term investments are stated at cost, less any diminution in the value, if any, other than temporary.

1.8 Taxation

i) Current tax is determined as the amount of tax payable in respect of taxable incomes for the year based on applicable tax rates and provisions.

ii) Deferred tax is recognised on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal on one or more subsequent periods and is measured using tax rates that have been enacted or substantively enacted as on the Balance Sheet date. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recoginsed only to the extent there is reasonable certainty of realization in future. Deferred tax assets/ liabilities are reviewed on yearly basis to reassess their realization or otherwise.

1.9 Impairment of Assets

The Company identifies Impairable assets based on cash generated unit concept at the year end in terms of paragraphs - 5 to 13 of Accounting Standard - 28 for the purpose of arriving at impairment loss thereon, if any, being the difference between the book value and recoverable value of relevant assets. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. Impairment loss when crystallizes is charged against revenue of the year.

1.10 Contingent Liabilities

Disputed liabilities and claims against the Company including claims raised by various revenue authorities (e.g. Sales Tax, Income Tax, etc.), pending in appeal/court for which no reliable estimate can be made of the amount of the obligation or which are remotely poised for crystallization are not provided for in accounts but disclosed in Notes on Accounts.

However, present obligation as a result of past event with possibility of outflow of resources, when reliably estimable, is recognized in accounts.

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Mar 31, 2012

A. The Company follows Accrual system of accounting except for insurance claims which are accounted on receipt basis.

b. Basis of preparation of Financial Statements:

Financial Statements are prepared under historical cost convention, in accordance with generally accepted accounting principles, the provisions of the Companies Act, 1956 and applicable mandatory accounting standards issued by the ICAI.

c. Fixed Assets and Depreciation:

(i). Fixed assets are stated at cost.

(ii). Depreciation is provided on straight line method as per the rates prescribed in Schedule XIV of the Companies Act, 1956.

(iii) Impairment of Assets- Management periodically assess using external and internal sources whether there is any indication that an Asset is Impaired.

d. Investments are treated as long term & are stated at Cost.

e. Valuation of Inventories: (i). Stores, Spares, Loose Tools, Raw materials and Consumables - at cost (ii). Work-in progress at cost and Finished Goods at lower of cost or net realizable value.

f. Sales: The export sales are accounted for on shipment of goods.

g. Retirement benefits:

(i). The company is contributing to Employees'' Provident Fund and Employees'' State Insurance Scheme. The company contributions made by the company are charged to the Profit & Loss A/c. (ii) The Gratuity covered by the Group Gratuity Insurance Scheme policy with Life Insurance Corporation of India, and the premium paid is charged to Profit & Loss A/c. h. Foreign Exchange Transactions:

(i) Foreign currency transactions are recorded at the exchange rate prevalent as on the date of the transaction. The gains or losses on realisation are accounted for in the Profit & Loss A/c. (ii) The foreign currency availed for foreign travel has been translated at the exchange rate at the time of purchase.

I. Borrowing costs :

Interest cost on qualifying asset, being an asset that necessarily take substantial period of time to get ready for its intended use or sale (as per AS-16) is capitalized on the funds borrowed and utilised for the acquisition of such assets.

j. Treatment of expenditure during construction period :

Expenditure during construction period is included under Capital Work in Progress and the same is allocated to the respective Fixed Asset on completion of construction / erection.

k. Intangible Assets - Intangible Assets are recognised only if :

a) It is probable that the future economic benefits that are attributable to the assets will flow to the company, and

b) The cost / fair value of the assets can be measured reliably.

l. Provision & Contingent Liability - The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources of reliable estimate can be made of the amount of the obligation. The disclosure for Contingent Liability is made when there is a possible obligation or a present obligation but outflow of resources is not probable.

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Mar 31, 2011

A. The Company follows accrual system of accounting except for insurance claims which are accounted on receipt basis.

b. Basis of preparation of Financial Statements:

Financial statements are prepared under historical cost convention, in accordance with generally accepted accounting principles, the provisions of the Companies Act, 1956 and applicable mandatory accounting standards issued by the ICAI.

c. Fixed Assets and Depreciation:

(i). Fixed assets are stated at cost.

(ii). Depreciation is provided on straight line method as per the rates prescribed in Schedule XIV of the Companies Act, 1956

(iii) Impairment of Assets - Management periodically assess using external and internal sources whether there is any indication that an asset is impaired.

d. Investments are treated as long term & are stated at Cost.

e. Valuation of Inventories:

(i). Stores, Spares, Loose Tools, Raw materials and consumables - at cost.

(ii). Work-in-process at cost and Finished Goods at lower of cost or net realisable value.

f. Sales: The export sales are accounted for on shipment of goods.

g. Retirement benefits:

(i). The Company is contributing to Employees'' Provident Fund & Employees'' State Insurance Scheme.

The contributions made by the company are charged to the Profit and Loss account.

(ii) The gratuity covered by the Group Gratuity Insurance Scheme policy with Life Insurance Corporation of India, and the premium paid is charged to profit and loss account. (iii). Provision for leave encashment as at the year end is charged to Profit and Loss account. h. Foreign Exchange Transactions:

(i) Foreign currency transactions are recorded at the exchange rate prevalent as on the date of the transaction. The gains or losses on realisation are accounted for in the Profit & Loss Account.

(ii) The foreign currency availed for foreign travel has been translated at the exchange rate at the time of purchase.

I. Borrowing costs Interest cost on qualifying asset, being an asset that necessarily take substantial period of time to get ready for its intended use or sale (as per AS16) is capitalised on the funds borrowed and utilised for the acquisition of such assets.

j. Treatment of expenditure during construction period Expenditure during construction period is included under Capital Work in Progress and the same is allocated to the respective Fixed Assets on completion of construction / erection.

k. Intangible Assets - Intangible Assets are recognised only if

a) it is probable that the future economic benefits that are attributable to the assets will flow to the company, and

b) the cost / fair value of the assets can be measured reliably.

l. Provision & Contingent Liability - The company recognizes 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. The disclosure for contingent liability is made when there is a possible obligation or a present obligation but outflow of resources is not probable.