1. SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of Preparation of Financial Statements

The financial statements are brpared under the historical cost convention, except for certain fixed assets which were revalued, on accrual basis of accounting in accordance with the applicable Accounting Standards as brscribed by the Companies (Accounting Standards) Rules, 2006 (AS), Generally Accepted Accounting Principles (GAAP) in India and the relevant provisions of the Companies Act, 1956 (the Act).

1.2 Use of Estimates

The brparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reported period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialised.

1.3 Fixed Assets

Fixed Assets, other than those revalued, are stated at their cost of acquisition or construction as the case may be and including all related acquisition/installation expenses and borrowing cost as per Accounting Standard (AS) 16. Subsidy received on Fixed Assets is credited to the cost of respective fixed assets. Assets revalued are stated at their revalued amount. Cost/revalued amount so ascertained is adjusted for accumulated debrciation/amortization and provision for impairment. Intangible Assets are stated at cost of acquisition less accumulated amortisation/impairment.

1.4 Debrciation

Debrciation on Fixed Assets is provided on 'Straight Line Method' in accordance with the provisions of Schedule XIV to the Companies Act, 1956 except for leasehold land, intangible assets and Shoe moulds. Leasehold Land is amortised over the period of lease. Shoe Moulds are debrciated over economic life of the asset or three years whichever is earlier. Debrciation attributable to apbrciation due to revaluation of fixed assets (other than leasehold land) is provided according to the rates brscribed in Schedule XIV to the Companies Act, 1956 and equivalent amount is withdrawn from Revaluation Reserve and credited to Profit and Loss Account. In case of impaired assets, debrciation is charged on the adjusted cost net of impairment. Intangible Assets are amortised over a period of five years.

1.5 Impairment of assets

The company assesses at each Balance Sheet date, whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the "recoverable amount" of asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than the "carrying amount", the carrying amount is reduced to its recoverable amount. If at the Balance Sheet date there is an indication that a brviously assessed / impaired loss no longer exists, the recoverable amount is reassessed and the asset is reflected at recoverable amount.

1.6 Capital work in progress

Capital work in Progress includes, cost of assets not yet commissioned, borrowing cost and incidental expenses during construction period.

1.7 Investments

Long term Investments (non current) are stated at cost of acquisition less provision for diminution in value, other than temporary. Current Investments are stated as lower of cost and market/fair value.

1.8 Inventories

Raw materials, Chemicals, Components & Spares parts are valued at lower of cost, arrived at on FIFO method (net of CENVAT) or net realisable value. Finished Goods (including stock at port or in transit) and Work in Process are valued at lower of cost or net realisable value. Saleable waste / scrap is valued at estimated realisable value. Inter-unit goods transfers are valued at lower of their respective transfer price or net realisable value. Import entitlements/Licenses are valued at estimated net realizable / utilization value.

1.9 Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered probable. Contingent liabilities are disclosed by way of notes on accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable. Contingent assets are not recognised in the accounts.

1.10 Revenue Recognition

i) Sales are inclusive of excise duty but net of sales tax, returns and discounts. Domestic sales are recognised on dispatch of goods to customers. Export sales are recognised on the issuance of Bill of Lading/ Airway Bill by the carrier.

ii) Revenue is accounted for on accrual basis when its collection or receipt is reasonably certain.

iii) All expenses are accounted for on accrual basis.

1.11 Government Grants

Grants received against specific fixed assets are adjusted to the cost of the assets and those in the nature of promoter's contribution are credited to capital reserve. Revenue grants are recognized in the Statement of Profit and Loss in accordance with the related scheme and in the period in which those are accrued.

1.12 Foreign Currency Translations

i) All foreign currency transactions are recorded at the rates brvailing on the date of the transaction.

ii) All foreign currency assets and liabilities other than investments are restated/reported at the closing exchange rate brvailing on the date of Balance Sheet.

iii) Gains and losses arising out of fluctuations in the exchange rates are recognised in Statement of Profit and Loss.

iv) Investments in wholly owned subsidiaries are carried in Balance sheet at the rates brvailing on the dates of transactions.

1.13 Accounting for Retirement Benefits

i) Provident Fund & Family Pension (PF & FPF) and Employees State Insurance (ESI) are defined contribution obligations and company's contributions to PF and ESI are charged to Statement of Profit and Loss.

ii) Gratuity is a defined benefit obligation. The company has created a trust with Life Insurance Corporation of India under the Group Gratuity Scheme in which actuarial valuation is carried out annually in the month of March. The amount required to be contributed to meet the accrued liability as per the actuarial valuation is charged to Statement of Profit and Loss.

iii) Leave encashment is a defined benefit obligation and provision for the same is done on the basis of leaves accrued as at the end of the

1.14 Excise Duty

Excise Duty is accounted for as and when paid on clearance of goods from bonded brmises. No provision is made for Excise Duty in respect of finished products lying in bonded brmises since major sales comprises of Export Sales.

1.15 Borrowing Cost

Interest and other cost in connection with the borrowing of funds are capitalized up to the date when such qualifying assets are ready for its intended use and other borrowing costs are charged to Statement of Profit and Loss.

1.16 Taxation

Provision for Income Tax is made after considering the various deductions/benefits admissible under the Income Tax Act, 1961. In accordance with AS 22 on 'Accounting for Taxes on Income', the company has recognised Deferred Tax arising out of timing differences between taxable income and accounting income and quantified the same using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

1.17 Prior Period Items

Prior period items, if material, are disclosed separately.

51. Previous Year Figures

Figures of the brvious year have been regrouped/rearranged wherever required in order to make them comparable with those of current year. Figures have been rounded off to the nearest rupee.

As per our report of even date  

For KAPOOR TANDON & CO.,

Chartered Accountants

Firm Reg. No. 000952C   

RAJESH PARASRAMKA

Partner

M. No. 074192

For and on behalf of the BOARD OF DIRECTORS

MUKHTARUL AMIN  

Chairman and Managing Director  

ZAFARUL AMIN

Joint Managing Director

A.K. AGARWAL

Chief Financial Officer   

R.K.AGRAWAL

Company Secretary  

Date : 1st July, 2014

Place : Kanpur