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Accounting Policies of Relaxo Footwears Ltd. Company

Mar 31, 2016

1. Company Information

Relaxo Footwears Limited (''the Company'') is a Public Limited Company registered in India and is listed at Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Company is one of the leading players in the Footwear Industry engaged in manufacturing and trading of Footwear and related Products. The company has ''state of the art'' manufacturing facilities at Bahadurgarh (Haryana), Bhiwadi (Rajasthan) and Haridwar (Uttarakhand). The selling arrangements are through its Wholesale, Export, Modern Trade and Company operated Retail Network.

(a) Basis of Preparation of Financial Statements

The Financial Statements have been prepared in accordance with the historical cost convention under accrual basis of accounting as per Indian Generally Accepted Accounting Principles (Indian GAAP). All the Accounting Standards (AS) specified in Companies (Accounting Standard) Rules, other pronouncement of ICAI, guidelines issued by SEBI, provisions of the Companies Act, 2013 as applicable are complied.

Use of Estimates

Indian GAAP enjoins management to make estimates and assumptions that affect reported amount of assets, liabilities, revenue, expenses and contingent liabilities pertaining to year, the financial statement relate to. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Presentation and Disclosure of Financial Statements

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current/ non-current classification of assets and liabilities.

(b) Tangible Fixed Assets

Tangible fixed assets are held with the intention of being used for the purpose of producing goods or providing services and is not held for sale in the normal course of business.

Tangible fixed assets are stated at historical cost of acquisition i.e. cost less accumulated depreciation and impairment loss, if any.

The cost of asset comprises its purchase price including import duties and other non-refundable taxes, and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance.

Grant/ subsidy received is reduced from the cost of specific fixed asset.

Project under which assets are not ready for their intended use and other capital work-in-progress, are carried at cost comprising direct cost and directly attributable expenses.

(c) Intangible Assets

Intangible assets are carried at cost less accumulated amortisation and impairment loss, if any. The cost of an intangible asset comprises its purchase price including import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use.

Intangible Assets under development are shown separately and at the cost incurred in bringing the asset to its present condition.

Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in such case such expenditure is added to the cost of the asset.

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product''s technological feasibility has been established, in which case such expenditure is capitalised. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets.

(d) Depreciation and Amortisation

Depreciation is provided pro-rata to the period of use on Straight Line Method (SLM) based on the estimated useful lives of the assets, which have been determined as per Schedule II of Companies Act, 2013, except in case of Plant and Machinery and Moulds wherein the useful life is taken as thirty years and six years respectively. The life of Plant and Machinery and Moulds has been assessed considering the technical study, technological obsolence, actual usage, historical data regarding breakdown, uses and maintenance and industry data available on record. Components having useful lives different from the life of parent assets are depreciated over the useful life of the components.

Leasehold lands are amortized over the period of lease except where the lease is renewable. Cost of leasehold improvements is amortized over the period of lease and any further addition is amortized over the balance lease period.

Intangible assets are amortised on straight line basis. Trade Marks and Technical Know-how are amortised over their useful life, not exceeding ten years. Softwares are being amortised over the period of five years.

(e) Impairment of Assets

Any impairment loss is recognized to the extent, the carrying amount of assets exceed their recoverable amount. Recoverable amount is higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

(f) Investments

Investments which are readily realizable and is intended to be held for not more than one year from the date on which such investment is made, are classified as current investments.

Investments other than current investments are classified as Long Term Investments. Long Term Investments are stated at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. Cost of investment includes acquisition charges such as brokerage, fees and duties.

(g) Valuation of Inventories

Raw Materials, Packing Materials, Consumables, Stores and Spares

These are valued at lower of cost and net realizable value. The costs of inventories comprise all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. The costs of purchase consist of the purchase price including duties and taxes (other than those subsequently recoverable from the taxing authorities), freight inward and other expenditure directly attributable to the acquisition. Trade discounts, rebates and other similar items are deducted in determining the costs of purchase.

However, 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 weighted average basis.

Work- in- Progress and Finished Goods

These are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty wherever applicable.

(h) Cash Flow Statement Cash and Cash Equivalents

Cash and Cash equivalents comprise cash on hand and balances with Banks other than earmarked balances.

Cash Flow Statement

Cash flows are reported using the indirect method, whereby net profit or (loss) before extraordinary items and tax is adjusted for the effects of transactions of a 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.

(i) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured and there exists reasonable certainty of its recovery.

Sale of Goods

Sales are recognised when the substantial risks and rewards of ownership in the goods are transferred to the buyer upon supply of goods and are recognised net of trade discounts, returns, sales taxes and excise duty.

Income from Energy Generation

Revenue from energy generated through Windmills is recognized on the basis of net power delivered as per power purchase agreement signed with Discom(s).

Interest Income

Interest income is accounted on a time proportion basis taking into account the amounts invested and the rate of interest.

Dividend Income

Dividend income is recognised when the right to receive is established.

(j) Government Grants

Government grants in the nature of promoters'' contribution like investment subsidy, where no repayment is ordinarily expected in respect thereof, are treated as capital reserve under shareholders'' fund.

Grant/Subsidy received against specific fixed asset is reduced from the cost of fixed asset.

Export benefits are accounted for in the year of export based on eligibility with certainty in receiving the same.

(10 Foreign Currency Transaction

Initial Recognition

On initial recognition, all foreign currency transactions are recorded by applying the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Subsequent Recognition

Monetary current assets and liabilities at the year-end are translated at the rate prevailing on Balance Sheet date. The difference thereon and also the exchange difference on settlement of foreign currency transactions during the year is recognized as income or expense in Statement of Profit and Loss.

Non-monetary items are carried at historical cost and reported using the exchange rate at the date of transaction.

Forward Exchange Contracts

The premium or discount arising at the inception of forward exchange contract, which is not intended for trading or speculation purposes is amortized and recognized as an expense/income over the life of the contract. Exchange difference on such contracts is recognized in the statement of profit and loss in the period in which the exchange rates change. Any gain or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or expense for the period.

Derivative Transactions

All outstanding derivative contracts in respect of firm commitments are fair valued at every year end, on a mark-to market basis and any loss on valuation is recognised in the statement of profit and loss, on each contract basis. Any gain on mark-to-market valuation on respective contract is not recognised by the Company, keeping in view the principle of prudence as enunciated in AS 1, ''Disclosure of Accounting Policies''. Any reduction in fair value or reversal of such reduction is included in statement of profit and loss.

(I) Employee Benefits

Defined Contribution Plan

Provident Fund and Employee State Insurance

Contribution towards provident fund and employee state insurance for employees is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the company does not carry any further obligations, apart from the contributions made on a monthly basis. Such contributions are charged to the Statement of Profit and Loss for the period of service rendered by the employees.

Defined Benefit Plan

Leave Encashment (Compensated Absences) and Gratuity

Accumulated leaves, which are expected to be availed or encashed within twelve months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating leaves as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

Accumulated leaves, which are expected to be availed or encashed beyond twelve months from the end of the year are treated as other long term employee benefits. The company''s liability is actuarially determined (using the Projected Unit Credit Method) at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.

In case of Gratuity, the company funds the benefits through annual contributions to Life Insurance Corporation of India under its Employee Group Gratuity Scheme. Company''s liabilities towards Gratuity are actuarially determined, at each year end. Actuarial gain or loss is recognised in the statement of profit and loss. Obligation is measured at the present value of estimated future cash flows using a discounted rate by reference to market yields at the Balance Sheet date on Government Bonds.

(m) Employee Share Based Payments

The Company follows Intrinsic Value method for valuation of Employee Stock Option in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share Based Payments, issued by the Institute of Chartered Accountants of India.

(n) Borrowing Costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, are added to the cost of those assets, until such assets are ready for their intended use. All other borrowing costs are recognised in statement of profit and loss in the period in which they are incurred.

(o) Leases

Leases in which a significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are expensed with reference to lease terms and other considerations.

(p) 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 period. The weighted average number of equity shares outstanding during the year is adjusted for events i.e. bonus issue, share splits and further issue of share capital.

Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) for the period attributable to equity shareholders by the weighted-average number of shares outstanding during the period and adjusted for the effects of all dilutive potential equity shares.

(q) Tax on Income

Current tax is determined on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961.

Deferred tax is recognized on timing difference between the book and taxable profit for the year and quantified using the tax rates and law enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forwarded only to the extent that there is a reasonable certainty that asset will be realized in future.

Minimum Alternative Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal Income Tax during the specified period. In the period/year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.

(r) Provisions and Contingent Liabilities

Provisions

Provisions are recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent Liabilities

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from the past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability. Material contingent liabilities are disclosed byway of notes.

Contingent assets are neither recognised nor disclosed in the Financial Statements.

(s) Prior Period Items and Changes in Accounting Estimates

Prior period items as well as changes in accounting estimates having material impact on the current period financial statements of the company are disclosed separately.


Mar 31, 2015

(a) Basis of Preparation of Financial Statements

The Financial Statements have been prepared in accordance with the historical cost convention under accrual basis of accounting as per Indian Generally Accepted Accounting Principles (Indian GAAP). All the Accounting Standards (AS) specified in Companies (Accounting Standard) Rules, other pronouncement of ICAI, guidelines issued by SEBI, provisions of the Companies Act, 2013 as applicable are complied.

Use of Estimates

Indian GAAP enjoins management to make estimates and assumptions that affect reported amount of assets, liabilities, revenue, expenses and contingent liabilities pertaining to year, the financial statement relate to. 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 recognised in the period in which the results are known / materialise.

Presentation and Disclosure of Financial Statements

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/ non-current classification of assets and liabilities.

(b) Tangible Fixed Assets

Tangible fixed assets are held with the intention of being used for the purpose of producing goods or providing services and is not held for sale in the normal course of business.

Tangible fixed assets are stated at historical cost of acquisition i.e. cost less accumulated depreciation and impairment loss, if any.

The cost of asset comprises its purchase price including import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use.

Grant/ subsidy received is reduced from the cost of specific fixed assets.

Project under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and directly attributable expenses.

(c) Intangible Assets

Intangible assets are carried at cost less accumulated amortisation and impairment loss, if any. The cost of an intangible asset comprises its purchase price including import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use.

Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in such case such expenditure is added to the cost of the asset.

Intangible Assets under development are shown separately and at the cost incurred in bringing the asset to its present condition.

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product''s technological feasibility has been established, in which case such expenditure is capitalised. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets.

(d) Depreciation and Amortisation

Company is using Straight Line Method (SLM) of depreciation and the assets are depreciated equally over the useful life of the asset determined as per Schedule II of Companies Act, 2013, except in case of Plant and Machinery and Moulds wherein the useful life is taken as thirty years and six years respectively.The life of Plant and Machinery and Moulds has been assessed considering the technical study, technological obsolence, actual usage, historical data regarding breakdown, uses and maintenance and industry data available on record.

The value of leasehold land granted for longer period is not amortized, except value of leasehold land of windmills, which is amortised over the period of lease. Cost of leasehold improvements are amortised over the period of lease.

Intangible assets are amortised on straight line basis. The Trade Marks are amortised over their useful life or ten years whichever is lower. Softwares are being amortised over the period of five years on straight line basis.

(e) Impairment of Assets

Any impairment loss is recognized to the extent, the carrying amount of assets exceed their recoverable amount. Recoverable amount is higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

(f) Investments

Investments which are readily realizable and is intended to be held for not more than one year from the date on which such investment is made, are classified as current investments.

Investments other than current investments are classified as Long Term Investments. Long Term Investments are stated at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. Cost of investment includes acquisition charges such as brokerage, fees and duties.

(g) Valuation of Inventories

Raw Materials, Packing Materials, Consumables, Spares and Fuel

These are valued at lower of cost and net realizable value. The costs of inventories comprise all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. The costs of purchase consist of the purchase price including duties and taxes (other than those subsequently recoverable from the taxing authorities),freight inward and other expenditure directly attributable to the acquisition.Trade discounts, rebates and other similar items are deducted in determining the costs of purchase.

However, 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 weighted average basis.

Work- in- Progress and Finished Goods

These are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty wherever applicable.

(h) Cash Flow Statement

Cash and Cash Equivalents

Cash and Cash equivalents comprise cash on hand and balances with Banks other than earmarked balances.

Cash Flow Statement

Cash flows are reported using the indirect method, whereby net profit or (loss) before extraordinary items and tax is adjusted for the effects of transactions of a 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.

(i) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured and there exists reasonable certainty of its recovery.

Sale of Goods

Sales are recognised when the substantial risks and rewards of ownership in the goods are transferred to the buyer upon supply of goods and are recognised net of trade discounts, returns, sales taxes and excise duty.

Interest Income

Interest income is accounted on a time proportion basis taking into account the amounts invested and the rate of interest.

Dividend Income

Dividend income is recognised when the right to receive is established.

(j) Government Grants

Government grants in the nature of promoters'' contribution like investment subsidy,where no repayment is ordinarily expected in respect thereof, are treated as capital reserve under shareholders'' fund.

Grant/ Subsidy received against specific fixed assets is reduced from the cost of fixed assets.

Export benefits are accounted for in the year of exports based on eligibility with certainty in receiving the same.

(k) Foreign Currency Transaction

Initial Recognition

On initial recognition, all foreign currency transactions are recorded by applying the exchange rate between the reporting currency and the foreign currency at the date of the transaction, to the foreign currency amount.

Subsequent Recognition

Monetary current assets and liabilities at the year-end are translated at the rate prevailing on Balance Sheet date. The difference thereon and also the exchange difference on settlement of foreign currency transactions during the year are recognized as income or expenses in Statement of Profit and Loss.

Non-monetary items are carried at historical cost and reported using the exchange rate at the date of transaction.

Forward Exchange Contracts

Premium/ discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortized over the period of the contracts if such contracts relate to monetary items as at the Balance Sheet date.

Derivative Transactions

Derivative transactions are considered as off-balance sheet items and cash flows arising thereon are recognized in the books of account on principle of Prudence as prescribed in the Accounting Standard (AS)-1 issued by the Institute of Chartered Accountants of India.

(l) Employee Benefits

Provident Fund, Employee State Insurance and Gratuity

Contribution towards provident fund and employee state insurance for employee is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the company does not carry any further obligations, apart from the contributions made on a monthly basis. Such contributions are charged to the Statement of Profit and Loss for the period of service rendered by the employee.

In case of gratuity, the company funds the benefits through annual contributions to Life Insurance Corporation of India under its Employees Group Gratuity Scheme, where the company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the company does not carry any further obligations, apart from the contributions made on a yearly basis.

Leave Encashment (Compensated Absences)

Accumulated leaves, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating leaves as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

Accumulated leaves, which are expected to be availed or encashed beyond 12 months from the end of the year are treated as other long term employee benefits. The company''s liability is actuarially determined (using the Projected Unit Credit Method) at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.

(m) Employee Share Based Payments

The Company follows Intrinsic Value method for valuation of Employee Stock Option in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share Based Payments, issued by the Institute of Chartered Accountants of India.

(n) Borrowing Costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss in the period in which they are incurred.

Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date, asset is ready for its intended use.

(o) Leases

Leases in which a significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are expensed with reference to lease terms and other considerations.

(p) 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 period.

Diluted earnings per share is computed by dividing the profit/ (loss) after tax (including the post-tax effect of extraordinary items, if any) for the period attributable to equity shareholders by the weighted- average number of shares outstanding during the period and adjusted for the effects of all dilutive potential equity shares.

(q) Tax on Income

Current tax is determined on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961.

Deferred tax is recognized on timing difference between the book and taxable profit for the year and quantified using the tax rates and law enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forwarded only to the extent that there is a reasonable certainty that asset will be realized in future.

Minimum Alternative Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal Income Tax during the specified period. In the period/ year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.

(r) Provisions and Contingent Liabilities Provisions

Provisions are recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent Liabilities

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or present obligation that arises from the past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability. Material contingent liabilities are disclosed by way of notes.

Contingent assets are neither recognised nor disclosed in the Financial Statements.

(s) Prior Period Items and Changes in Accounting Estimates

Prior period items as well as changes in accounting estimates having material impact on the current period financial statements of the company are disclosed separately.


Mar 31, 2014

The Financial Statements have been prepared in accordance with the historical cost convention under accrual basis of accounting as per Indian Generally Accepted Accounting Principles (Indian GAAP). All the Accounting Standards (AS) specified in Companies (Accounting Standard) Rules, other pronouncement of ICAI, guidelines issued by SEBI, provisions of the Companies Act, 1956 and notifed provisions of Companies Act, 2013 as applicable are complied.

Indian GAAP enjoins management to make estimates and

assumptions that affect reported amount of assets, liabilities, revenue, expenses and contingent liabilities pertaining to year, the financial statement relate to. 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 recognised in the period in which the results are known / materialise.

All assets and liabilities have been classifed as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/ non-current classifcation of assets and liabilities.

27.2.2 Valuation of Inventories

Raw Materials, Packing Materials, Consumables, Spares and Fuel

These are valued at lower of cost and net realizable value. The costs of inventories comprise all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. The costs of purchase consist of the

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purchase price including duties and taxes, freight inward and other expenditure directly attributable to the acquisition. Trade discounts, rebates and other similar items are deducted in determining the costs of purchase.

However, materials and other items held for use in the production of inventories are not written down below cost if the fnished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on weighted average basis.

Work- in- Progress and Finished Goods

These are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of fnished goods includes excise duty.

27.2.3 Cash Flow Statements

Cash and Cash Equivalents

Cash and Cash equivalents comprise cash on hand and balances with Banks other than earmarked balances.

Cash Flow Statement

Cash flows are reported using the indirect method, whereby net Profit or (loss) before extraordinary items and tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and fnancing activities of the Company are segregated.

27.2.4 Prior Period Items & Changes in Accounting Estimates

Prior period items as well as changes in accounting estimates having material impact on the current period financial statements of the company are disclosed separately.

27.2.5 Depreciation Accounting

Depreciation has been provided on straight-line method (SLM) at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

The value of leasehold land has been granted for longer period and is therefore, not amortized, except value of leasehold land of Windmill, which is amortised over the period of lease. Cost of leasehold improvements are amortised over the period of lease.

27.2.6 Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will fow to the company and the revenue can be reliably measured and there exists reasonable certainty of its recovery.

Sale of Goods

Sales are recognised when the substantial risks and rewards of ownership in the goods are transferred to the buyer upon supply of goods and are recognised net of trade discounts, returns, sales taxes and including excise duty. It does not include inter-divisional/ inter-unit transfers.

Sale of Services

Revenue from services rendered is recognised when the services are rendered and related costs are incurred.

Interest Income

Interest income is accounted on a time proportion basis taking into account the amounts invested and the rate of interest.

Dividend Income

Dividend income is recognised when the right to receive is established.

27.2.7 Tangible Fixed Assets

Fixed assets are held with the intention of being used for the purpose of producing goods or providing services and is not held for sale in the normal course of business.

Fixed assets are stated at historical cost of acquisition i.e. cost less accumulated depreciation.

All cost including interest relating to qualifying fixed assets till the time, asset is ready for its intended use is capitalized.

Grant/ subsidy received have been reduced from the cost of Specific fixed assets.

Project under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and directly attributable expenses.

27.2.8 Intangible Assets

Intangible assets are carried at cost less accumulated amortisation. The cost of an intangible asset comprises its purchase price including import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use. Intangible assets are amortised on straight line basis.

Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

Intangible Assets under development are shown separately and at the cost incurred in bringing the asset in its present condition.

The Trade Marks are amortized over their useful life or ten years whichever is lower.

Softwares are being amortized over the period of five years on straight line basis.

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product''s technological feasibility has been established, in which case such expenditure is capitalised. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets.

27.2.9 Foreign Currency Transaction

Initial Recognition

On initial recognition, all foreign currency transactions are recorded by applying the exchange rate between the reporting currency and the foreign currency at the date of the transaction, to the foreign currency amount.

Subsequent Recognition

Monetary current assets and liabilities at the year-end are translated at the rate prevailing on Balance Sheet date. The difference thereon and also the exchange difference on settlement of foreign currency transactions during the year are recognized as income or expenses in Statement of Profit and Loss.

Non-monetary items are carried at historical cost and reported using the exchange rate at the date of transaction.

Forward Exchange Contracts

Premium/ discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortized over the period of the contracts if such contracts relate to monetary items as at the Balance Sheet date.

Derivative Transactions

Derivative transactions are considered as off-balance sheet items and cash flows arising thereon are recognized in the books of account on principle of Prudence as prescribed in the Accounting Standard (AS)- 1 issued by the Institute of Chartered Accountants of India.

27.2.10 Government Grants

Government grants in the nature of promoters'' contribution like investment subsidy, where no repayment is ordinarily expected in respect thereof, are treated as capital reserve under shareholders'' fund.

Any Grant/ Subsidy received against Specific fixed assets have been reduced from the cost of fixed assets.

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

27.2.11 Investments

Long Term Investments are stated at cost. Cost of investment includes acquisition charges such as brokerage, fees and duties.

27.2.12 Employee benefits

Provident Fund, Employee State Insurance & Gratuity

Contribution towards provident fund and employee state insurance for employee is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classifed as Defined Contribution Schemes as the company does not carry any further obligations, apart from the contributions made on a monthly basis. Such contributions are charged to the Statement of Profit and Loss for the period of service rendered by the employee.

In case of gratuity, the company funds the benefits through annual contributions to Life Insurance Corporation of India under its Employees Group Gratuity Scheme, where the

company has no further obligations. Such benefits are classifed as Defined Contribution Schemes as the company does not carry any further obligations, apart from the contributions made on a yearly basis.

Leave Encashment (Compensated Absences)

Accumulated leaves, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating leaves as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

Accumulated leaves, which are expected to be availed or encashed beyond 12 months from the end of the year are treated as other long term employee benefits. The company''s liability is actuarially determined (using the Projected Unit Credit Method) at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.

27.2.13 Borrowing Costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss in the period in which they are incurred.

Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date, asset is ready for its intended use.

27.2.14 Leases

Leases in which a significant portion of the risk and rewards of ownership are retained by the lessor are classifed as operating leases. Lease rentals are expensed with reference to lease terms and other considerations.

27.2.15 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 period.

Diluted earnings per share is computed by dividing the Profit/ (loss) after tax (including the post-tax effect of extraordinary items, if any) for the period attributable to equity shareholders by the weighted-average number of shares outstanding during the period.

27.2.16 Tax on Income

Current tax is determined on the basis of estimated taxable income computed in accordance with the provisions of Income Tax Act, 1961.

Deferred tax is recognized on timing difference between the book and taxable Profit for the year and quantifed using the tax rates and law enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forwarded only to the extent that there is a reasonable certainty that asset will be realized in future.

Minimum Alternative Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal Income Tax during the specified period. In the period/ year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.

27.2.17 Impairment of Assets

Any impairment loss is recognized to the extent, the carrying amount of assets exceed their recoverable amount. Recoverable amount is higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

27.2.18 Provisions & Contingent Liabilities

Provisions

Provisions are recognized when there is a present obligation as a result of past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. These estimates are reviewed at each balance sheet date and adjusted to refect the current best estimates.

Contingent Liabilities

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from the past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is termed as a contingent liability. Material contingent liabilities are disclosed by way of notes.


Mar 31, 2013

1. NATURE OF OPERATION

The company is primarily engaged in the business of manufacturing and trading of footwear and accessories through its retail, export and wholesale network.

2. ACCOUNTING CONVENTION

The Financial Statements have been prepared under the historical cost convention and in accordance with generally accepted accounting principles and the provisions of the Companies Act, 1956.

3. 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 recognised in the period in which the results are known / materialise.

4. INVENTORIES

Inventories are valued as under:

– Raw Material, Packing Material, Stock-in- process, Finished goods, Stock-in-Trade, Fuel, Stores, Spares & Tools at cost or net realizable value, whichever is lower. The cost is determined on weighted average basis and includes freight, taxes and duties and is net of credit under VAT and CENVAT schemes, wherever applicable.

- Manufactured Goods at cost or net realizable value, whichever is lower. Cost includes all direct costs and applicable production overheads to bring the goods to the present location and condition.

- Excise duty accrued on the production of manufactured goods is included in the valuation of inventories, wherever applicable.

5. CASH AND CASH EQUIVALENTS

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances, highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

6. 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.

7. PRIOR PERIOD & EXTRA ORDINARY ITEMS

Prior period as well as Extra Ordinary items having material impact on the financial affairs of the company are disclosed separately.

8. DEPRECIATION AND AMORTISATION

Depreciation has been provided on straight-line method (SLM) at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. The value of leasehold land has been granted for long period and is therefore, not amortized, except value of leasehold land of Windmill, which is amortised over the period of lease. Cost of leasehold improvements are amortised over the period of lease or their useful lives whichever is lower. The Trade Marks are amortised over their useful life or ten years whichever is lower. Computer softwares are amortised over the period of five years.

9. REVENUE RECOGNITION

Sales are recognized, net of trade discounts, returns and claims, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax. Sales from services are recognised when the services are rendered and related costs are incurred. Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive is established.

10. TANGIBLE FIXED ASSETS

Fixed assets are stated at historical cost of acquisition / construction less accumulated depreciation. All cost including interest relating to acquisition of fixed assets till the time of commissioning of such assets are capitalized. Grants/ subsidy received have been reduced from the cost of specific fixed assets.

Project under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

Any impairment loss is recognized, whenever carrying value of fixed assets exceeds the market value or value in use, whichever is higher.

11. INTANGIBLE ASSETS

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price including import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

12. RESEARCH AND DEVELOPMENT EXPENSES

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product''s technological feasibility has been established, in which case such expenditure is capitalised. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets.

13. FOREIGN CURRENCY TRANSACTION

Transactions in foreign currency are accounted for at the exchange rates prevailing on the date of the transaction. Monetary current assets and liabilities at the year end are translated at the rate prevailing on last day of financial year. The difference thereon and also the exchange difference on settlement of foreign currency transactions during the year are recognized as income or expenses in Statement of Profit and Loss. Non-monetary items are carried at historical cost.

Derivative transactions are considered as off- balance sheet items and cash flows arising thereon are recognized in the books of account on principle of Prudence as prescribed in the Accounting Standard ( AS-1) issued by the Institute of Chartered Accountants of India. Premium/ discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortised over the period of the contracts if such contracts relate to monetary items as at the Balance Sheet date.

14. GOVERNMENT GRANTS

Government grants in the nature of promoters'' contribution like investment subsidy, where no repayment is ordinarily expected in respect thereof, are treated as capital reserve. Any Grants/ Subsidy received against specific fixed assets have been reduced from the cost of fixed assets.

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

15. INVESTMENTS

Long Term Investments are stated at cost. Cost of investment include acquisition charges such as brokerage, fees and duties.

16. EMPLOYEE BENEFITS

Retirement benefits in the form of Provident Fund & Gratuity are defined contribution plan and the contribution are charged to Statement of Profit and Loss of the year when the contribution to the respective funds are due. In case of Gratuity obligations, company has taken policy from Life Insurance Corporation of India. There are no other obligations other than the contributions payable to the respective authorities. Leave encashment benefit is charged to Statement of Profit and Loss on the basis of actuarial valuation at the end of financial year.

17. BORROWING COSTS

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets.

18. LEASES

Assets acquired under leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are expensed with reference to lease terms and other considerations.

19. 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.

20. TAX ON INCOME

Provision for current Tax is made as per the provision of Income Tax Act, 1961.

Deferred tax is recognized on timing difference between the book and taxable profit for the year and quantified using the tax rates and law enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forwarded only to the extent that there is a reasonable certainty that asset will be realized in future.

Minimum Alternative Tax ( MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal Income Tax during the specified period. In the period/ year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.

21. PROVISIONS & CONTINGENT LIABILITIES

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities, if material, are disclosed by way of notes.


Mar 31, 2012

1. NATURE OF OPERATION

The company is primarily engaged in the business of manufacturing and trading of footwear and accessories through its retail, export and wholesale network.

2. ACCOUNTING CONVENTION

The Financial Statements have been prepared under the historical cost convention and in accordance with generally accepted accounting principles and the provisions of the Companies Act, 1956.

During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosure made in the financial statements. The company has also reclassified previous year figures in accordance with the requirements applicable in the current year.

3. 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 recognised in the period in which the results are known / materialise.

4. INVENTORIES

Inventories are valued as under :

- Raw Material, Packing Material, Stock-in-process, Finished goods, Stock-in-Trade, Fuel, Store, Spare & Tools at cost or net realizable value, whichever is lower. The cost is determined on weighted average basis and includes freight, taxes and duties and is net of credit under VAT and CENVAT schemes, wherever applicable.

- Manufactured Goods at cost or net realizable value, whichever is lower. Cost include all direct costs and applicable production overheads to bring the goods to the present location and condition.

- Excise duty accrued on the production of manufactured goods is included in the valuation of inventories, wherever applicable.

5. CASHANDCASH EQUIVALENTS

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances, highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

6. 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.

7. PRIOR PERIOD & EXTRA ORDINARY ITEMS

Prior period as well as Extra Ordinary items having material impact on the financial affairs of the company are disclosed separately.

8. DEPRECIATION AND AMORTISATION

Depreciation has been provided on straight-line method (SLM) at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. The value of leasehold land has been granted for long period and is therefore, not amortized, except value of leasehold land of Windmill, which is amortised over the period of lease. Cost of leasehold improvements are amortised over the period of lease or their useful lives whichever is lower. The Trade Marks are amortised over their useful life or ten years whichever is lower. Computer softwares are amortised over the period of five years.

9. REVENUE RECOGNITION

Sales are recognized, net of trade discounts, returns and claims, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax. Sales from services are recognised when the services are rendered and related costs are incurred. Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive is established.

10. TANGIBLEFIXED ASSETS

Fixed assets are stated at historical cost of acquisition/ construction less accumulated depreciation. All cost including interest relating to acquisition of fixed assets till the time of commissioning of such assets are capitalized. Grants/ subsidy received have been reduced from the cost of specific fixed assets.

Project under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

Any impairment loss is recognized, whenever carrying value of fixed assets exceeds the market value or value in use, whichever is higher.

11. INTANGIBLE ASSETS

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price including import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

12. RESEARCH AND DEVELOPMENT EXPENSES

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product's technological feasibility has been established, in which case such expenditure is capitalised. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets.

13. FOREIGN CURRENCY TRANSACTION

Transaction in foreign currency are accounted for at the exchange rates prevailing on the date of the transaction. Monetary current assets and liabilities at the year end are translated at the rate prevailing on last day of financial year. The difference thereon and also the exchange difference on settlement of foreign currency transactions during the year are recognized as income or expenses in Statement of Profit and Loss. Non- monetary items are carried at historical cost.

Derivative transactions are considered as off-balance sheet items and cash flows arising thereon are recognized in the books of account on principle of Prudence as prescribed in the Accounting Standard (AS-1) issued by the Institute of Chartered Accountants of India. Premium/ discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortised over the period of the contracts if such contracts relate to monetary items as at the Balance Sheet date.

14. GOVERNMENT GRANTS

Government grants in the nature of promoters' contribution like investment subsidy, where no repayment is ordinarily expected in respect thereof, are treated as capital reserve. Any Grants/Subsidy received against specific fixed assets are reduced from the cost of fixed assets.

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

15. INVESTMENTS

Long Term Investments are stated at cost. Cost of investment include acquisition charges such as brokerage, fees and duties.

16. EMPLOYEE BENEFITS

Retirement benefits in the form of Provident Fund & Gratuity are defined contribution plan and the contribution are charged to Statement of Profit and Loss of the year when the contribution to the respective funds are due. In case of Gratuity obligations, company has taken policy from Life Insurance Corporation of India. There are no other obligations other than the contributions payable to the respective authorities. Leave encashment benefit is charged to Statement of Profit and Loss on the basis of actuarial valuation at the end of financial year.

17. BORROWING COSTS

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction/ development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets.

18. LEASES

Assets acquired under leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are expensed with reference to lease terms and other considerations.

19. 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.

20. TAXON INCOME

Provision for current Tax is made as per the provision of Income Tax Act, 1961.

Deferred tax is recognized on timing difference between the book and taxable profit for the year and quantified using the tax rates and law enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forwarded only to the extent that there is a reasonable certainty that asset will be realized in future.

Minimum Alternative Tax ( MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal Income Tax during the specified period. In the period/ year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.

21. PROVISIONS & CONTINGENT LIABILITIES

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities, if material, are disclosed by way of notes.


Mar 31, 2011

1. ACCOUNTING CONVENTION

The Financial Statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles and the provisions of the Companies Act, 1956.

2. FIXED ASSETS

Fixed assets are stated at historical cost of acquisition / construction less accumulated depreciation. All cost including interest relating to acquisition of fixed assets till the time of commissioning of such assets are capitalized. Grants/ subsidy received have been reduced from the cost of specific fixed assets.

Incidental 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.

Any impairment loss is recognized, whenever carrying value of fixed assets exceeds the market value or value in use, whichever is higher.

3. DEPRECIATION

Depreciation has been provided on straight-line method (SLM) at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. The value of leasehold land has been granted for long period and is therefore, not amortized, except value of leasehold land of Windmill, which is amortised over the period of lease. Cost of leasehold improvements are amortised over the period of lease or their useful lives whichever is lower. The Trade Marks are amortised over their useful life or ten years whichever is lower. Computer softwares are amortised over the period of five years.

4. INVENTORIES

Inventories are valued as under :

- Raw Material, Packing Material, Fuel, Stores, Spares Consumables and Trading Goods at cost or net realizable value, whichever is lower. The cost is determined on weighted average basis and includes freight, taxes and duties and is net of credit under VAT and CENVAT scheme, wherever applicable.

- Manufactured Goods at cost or net realizable value, whichever is lower. Cost include all direct costs and applicable production overheads to bring the goods to the present location and condition.

- Excise duty accrued on the production of manufactured goods is included in the valuation of inventories, wherever applicable.

5. EMPLOYEE BENEFITS

Retirement benefits in the form of Provident Fund & Gratuity are defined contribution plan and the contribution are charged to Profit & Loss Account of the year when the contribution to the respective funds are due. In case of Gratuity obligations, company has taken policy from Life Insurance Corporation of India. There are no other obligations other than the contributions payable to the respective authorities. Leave encashment benefit is charged to Profit & Loss Account on the basis of actuarial valuation at the end of financial year.

6. REVENUE RECOGNITION

Sales are net of trade discounts and claims. Other items of revenue are recognized in accordance with the Accounting Standard (AS-9) issued by the Institute of Chartered Accountants of India.

7. RESEARCH & DEVELOPMENT

Capital expenditure on Research and Development is capitalized under various fixed assets. Revenue expenses are charged to Profit and Loss Account, when incurred.

8. PRIOR PERIOD & EXTRA ORDINARY ITEMS

Prior period as well as Extra Ordinary items having material impact on the financial affairs of the company are disclosed separately.

9. TAX ON INCOME

Provision for current Tax is made as per the provision of Income Tax Act, 1961.

Deferred tax is recognized on timing difference between the book and taxable profit for the year and quantified using the tax rates and law enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forwarded only to the extent that there is a reasonable certainty that asset will be realized in future.

Minimum Alternative Tax ( MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal Income Tax during the specified period. In the period/ year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Profit & Loss Account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.

10. FOREIGN CURRENCY TRANSACTION

Transaction in foreign currency are accounted for at the exchange rates prevailing on the date of the transaction. Monetary current assets and liabilities at the year end are translated at the rate prevailing on last day of financial year. The difference thereon and also the exchange difference on settlement of foreign currency transactions during the year are recognized as income or expenses in Profit & Loss Account. Non-monetary items are carried at historical cost. Derivative transactions are considered as off-balance sheet items and cash flows arising thereon are recognized in the books of account on principle of Prudence as prescribed in the Accounting Standard ( AS-1) issued by the Institute of Chartered Accountants of India.

11. PROVISIONS & CONTINGENT LIABILITIES

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities, if material, are disclosed by way of notes.

12. INVESTMENTS

Long Term Investments are stated at cost.

13. LEASES

Lease rentals in respect of assets taken on 'Operating Lease' are charged to Profit & loss Account on a straight line basis over the lease term.

14. GOVERNMENT GRANTS

Grants in the form of Capital/ Investment subsidy are treated as Capital Reserve. Any Grants/ Subsidy received against specific fixed assets have been reduced from the cost of fixed assets.

15. SEGMENT ACCOUNTING

The generally accepted accounting principles used in the preparation of financial statements are applied to record revenue and expenditure in individual segments.

Expenses that are directly identifiable to segments are considered for determining the segment results. Expenses that are not allocable to segments are included under unallocated corporate expenses.

Segments assets and liabilities include those directly identifiable with the respective segments. Unallocated corporate assets & liabilities represent the assets & liabilities that are not allocable to any segment.


Mar 31, 2010

1. ACCOUNTING CONVENTION

The Financial Statements have been prepared under the historical cost convention in accordance with generally accepted accounting principles and the provisions of the Companies Act, 1956.

2. FIXED ASSETS

Fixed assets are stated at historical cost of acquisition / construction less accumulated depreciation. All cost including interest relating to acquisition of fixed assets till the time of commissioning of such assets are capitalized. Grants/ subsidy received have been reduced from the cost of specific fixed assets.

Incidental 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.

Any impairment loss is recognized, whenever carrying value of fixed assets exceed the market value or value in use, whichever is higher.

3. DEPRECIATION

Depreciation has been provided on straight-line method (SLM) at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. The value of leasehold land has been granted for long period and is therefore, not amortized, except value of leasehold land of Windmill, which is amortised over the period of lease. Cost of leasehold improvements are amortised over the period of lease or their useful lives whichever is lower. Intangible assets are amortized over the period of their useful lives in

accordance with the Accounting Standard on intangible assets (AS-26) issued by the Institute of Chartered Accountants of India.

4. INVENTORIES

Inventories are valued as under :

- Stock in Trade, Raw Material, Packing Material and Fuel at cost, determined on FIFO basis, or net realizable value, whichever is lower.

- Stock in process : Raw material cost as increased by estimated production overheads keeping in account the stage of process.

- Stores, tools and spare parts are treated as consumed during the year of purchase

- Excise duty accrued on the production of finished goods is included in the valuation of inventories.

5. EMPLOYEE BENEFITS

Retirement benefits in the form of Provident Fund & Gratuity are defined contribution plan and the contribution are charged to Profit & Loss Account of the year when the contribution to the respective funds are due. In case of Gratuity obligations, company has taken policy from Life Insurance Corporation of India. There are no other obligations other than the contributions payable to the respective authorities. Leave encashment benefit is charged to Profit & Loss Account on the basis of actuarial valuation at the end of financial year.

6. REVENUE RECOGNITION

Sales are net of trade discounts and claims. Other items of revenue are recognized in accordance with the Accounting Standard (AS-9) issued by the Institute of Chartered Accountants of India.

7. RESEARCH & DEVELOPMENT

Capital expenditure on Research and Development is capitalized under various fixed assets. Revenue expenses are charged to Profit and Loss Account, when incurred.

8. PRIOR PERIOD & EXTRA ORDINARY ITEMS

Prior period as well as Extra Ordinary items having material impact on the financial affairs of the company are disclosed separately.

9. TAX ON INCOME

Provision for current Tax is made as per the provision of Income Tax Act, 1961.

Deferred tax is recognized on timing difference between the book and taxable profit for the year and quantified using the tax rates and law enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forwarded only to the extent that there is a reasonable certainty that asset will be realized in future.

Minimum Alternative Tax ( MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal Income Tax during the specified period. In the period/ year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Profit & Loss Account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.

10. FOREIGN CURRENCY TRANSACTION

Transaction in foreign currency are accounted for at the exchange rates prevailing on the date of the transaction. Monetary current assets and liabilities at the year end are translated at the rate prevailing on last day of financial year. The difference thereon and also the exchange difference on settlement of foreign currency transactions during the year are recognized as income or expenses in Profit & Loss Account. Non-monetary items are carried at historical cost. Derivative transactions are considered as off- balance sheet items and cash flows arising thereon are recognized in the books of account on principle of Prudence as prescribed in the Accounting Standard ( AS-1) issued by the Institute of Chartered Accountants of India.

11. PROVISIONS & CONTINGENT LIABILITIES

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities, if material, are disclosed by way of notes.

12. INVESTMENTS

Long Term Investments are stated at cost.

13. LEASES

Lease rentals in respect of assets taken on Operating Lease are charged to Profit & loss Account on a straight line basis over the lease term.

14. GOVERNMENT GRANTS

Grants in the form of Capital/ Investment subsidy are treated as Capital Reserve. Any Grants/ Subsidy received against specific fixed assets have been reduced from the cost of fixed assets.

15. SEGMENT ACCOUNTING

The generally accepted accounting principles used in the preparation of financial statements are applied to record revenue and expenditure in individual segments.

Expenses that are directly identifiable to segments are considered for determining the segment results. Expenses that are not allocable to segments are included under unallocated corporate expenses.

Segments assets and liabilities include those directly identifiable with the respective segments. Unallocated corporate assets & liabilities represent the assets & liabilities that are not allocable to any segment.

 
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