NOTE 1 : FORWARD CONTRACTS

Following are the outstanding forward exchange contracts entered into by the Company Forward contracts EURO INR 31.33 lakhs (42.24 lakhs) Sell Hedging Forward contracts GBP INR 107.40 lakhs (99.61 lakhs) Sell Hedging Forward contracts USD INR 81.69 lakhs (94.18 lakhs) Sell Hedging

NOTE 2 : SIGNIFICANT ACCOUNTING POLICIES

(A) Basis of Accounting

The financial statements have been brpared and brsented under the historical cost convention on the accrual basis of accounting and comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including Accounting Standards notified under the relevant provisions of the Companies Act, 2013 and other pronouncements of the Institute of Chartered Accountants of India (ICAI), and the relevant provisions of the Companies Act, 2013, to the extent applicable.

(B) Use of Estimates

The brparation of financial statements in conformity with generally accepted accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reported period. The estimates and assumptions used in the accompanying financial statements are based upon management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual result could differ from those estimates. Any revision to financial estimates is recognized prospectively in the financial statements when revised.

(C) Fixed Assets

(a) Fixed assets of the Company are valued at cost net of recoverable taxes, trade discounts and rebates less accumulated debrciation and impairment loss, if any. The cost of fixed assets includes purchase price, borrowing cost, allocated / apportioned direct and indirect expenses incurred in relation to bringing the fixed assets to its working condition for its intended life. The said cost is not reduced by specific Grants/ subsidy received against the assets.

(b) Lease hold land is capitalized with the lease brmium paid,direct expenses/interest allocable to it till it is put to use.

(D) Debrciation & Amortization

a) Debrciation on fixed assets is provided to the extent of debrciable amount on the Straight Line Method (SLM). For reaching to the debrciable amount of the assets, useful life of the assets has been taken as per the provisions of Schedule II of the Companies Act, 2013.

b) Lease hold land are amortised over the useful life remaining from the date, it put to use.

(E) Borrowing Cost

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of cost of such assets, all other Borrowing cost are charged to the Statement of Profit & Loss. Borrowing costs comprise of interest and other costs incurred in connection with borrowing of funds.

(F) Leases

a) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and brsent value of the minimum lease payment at the inception of the leased term and disclosed as leased assets. lease payments are apportioned between the finance charges and the reduction of the leased liability so as to achieve a constant rate of interest on the remaining balance of the liability.

b) Operating Leases: Rentals are charges to the Statement of Profit & Loss on a straight line basis with reference to the lease terms and other considerations.

(G) Investments

Long term investments are valued at cost.

The Cost of Investments made in Foreign Currency is translated at rates brvailing on the Balance Sheet date unless temporary in nature and gain/loss if any is accumulated in Foreign Currency Translation Reserve.

Diminution in the value of Long Term Investments is recognized only if the same is, in the opinion of the management, of a permanent nature.

(H) Inventories

Inventories are valued at the lower of Historic cost or the Net Realisable Value. Costs are determined as under :

a. Bought Out Items : On First in First Out (FIFO) method except raw hides (valued at six months average purchase price in case of Indigenous hides and full period weighted average price in case of imported hides). In respect of bought out items where CENVAT CREDIT is permitted excise duty is excluded from purchase price for determining the cost.

b. Goods In Process : At cost plus estimated value addition/cost of conversion at each major stage of production.

c. Finished Goods : At direct cost plus allocation of all overheads (including interest on working capital) other than Marketing, Selling & Distribution Expenses and Interest on Term Loan.

(I) Foreign Currency Transactions

All Foreign Currency Transaction of purchase and sales are recorded at exchange rate brvailing on the date of the transaction. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the statement of Profit & Loss except in case of long term liabilities, where they relates to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

(J) Derivative instruments and hedge accounting

The Company uses foreign exchange forward contracts and options to hedge its exposure to movements in foreign exchange rates. These foreign exchange forward contracts and options are not used for trading or speculation purposes. The Accounting Policies for forwards contracts and options are based on whether they meet the criteria for designation as effective cash flow hedges. To designate a forward contract of option as an effective cash flow hedge, the Company objectively evaluates with appropriate supporting documentation at the inception of the each contract whether the contract is effective in achieving offsetting cash flows attributable to the hedged risk. Effective hedge is generally measured by comparing the cumulative change in the fair value of the hedge contract with a cumulative change in the fair value of the hedged item.

For forward contracts of options that are designated as effective cash flow hedges, the gain or loss from the effective portion of the hedge is recorded and reported directly in the shareholders' fund (under the head "Hedging Reserve" ) and are reclassified into the profit and loss account upon the occurrence of the hedged transactions.

The gain/loss on options designated as effective cash flow hedges are included along with the underlying hedged fore casted transactions. The Company recognizes gains or losses from change in fair values of forward contracts and options that are not designated as effective cash flow hedge for accounting purposes in the profit and loss account in the period the fair value changes occur.

(K) Revenue Recognition :

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. It includes sale of goods, export incentives etc. Revenue arising from the use by others of enterprises resources yielding interest, dividends, are recognized on the following basis :

a) Interest income is recognized on time proportion basis taking in to account the amount outstanding and rate applicable.

b) Dividend for investment is recognized when right to receive is established.

(L) Receivables

Receivables are disclosed in Indian currency equivalent of actually invoiced values. Receivables covered by bills of exchange purchased by the Company's bankers are neither shown as assets nor liabilities. Contingent liability in the event of non payment of the same is reflected in the Notes to the Accounts.

(M) Employee Benefits :

Short Term Employee Benefits

Short term employee benefits expected to be paid in exchange for the services rendered by employees are recognsed as an expense during the period when the employees render services. The Company, as a Policy, doesn't encourage accumulation of earned leave and discharges its liability on a year to year basis.

Post-Employment Benefits

The Company makes regular contributions to Provident Fund and the Company's contribution is recognised as an expense in the Statement of Profit & Loss during the period in which employee renders the related services. The liability of the Company for gratuity is actuarially valued at each year end and based on such year end valuation , the liability for gratuity is provided in the books of the Company.

(N) Income Tax:

Provision for Income Tax comprises of Current Tax, i.e. tax on the taxable income computed for the year as per Tax laws and the net change in the deferred tax assets / liability of the Company during the current year. Deferred tax assets / liabilities are recognized on the basis of timing difference in Tax treatment of Revenue Item. The timing differences are subjected to the extant provision of law and enacted tax rates in force to determine the Deferred Tax Asset / liability. While a deferred tax liability is recognized when computed, the management exercises prudence and conservatism while recognizing deferred Tax Assets.

(O) Earnings Per Share:

Earnings Per Share is calculated in accordance with the procedure laid out in the relevant Accounting Standard (AS-20) issued by The Institute of Chartered Accountants of India.

(P) Provisions, Contingent Liabilities and Contigent Assets:

Provision is recognised in the accounts when there is a brsent obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Contingent losses & / or consequential contingent liabilities are disclosed in the notes to the accounts, where the Company is reasonably assured that no loss / liability will arise but where the possibility of a loss/ liability does exist.

Contingent asset are neither recognised nor disclosed in the financial statements.

(Q) Events Occurring after the Balance Sheet date:

It is the Company's Policy to take in to the account the impact of any significant event that occurs after the Balance Sheet date but before the finalization of accounts.

(R) Government Grants:

Government Grants in respect of Fixed Assets are accounted for as deferred Income by crediting the same to a specific reserve. The reserve to these Grants is diminished every year by a prorate portion of the debrciation of the assets, to amortise the grant over due life of the assets. Where the Grants carry conditions of specific performance, the contingent aspect is disclosed in due notes to the accounts.

(S) Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is increased/ reversed where there has been change in the estimate of recoverable value. The recoverable value is the higher of the assets' net selling price and value in use.

(T) Figures of brvious year have been regrouped/rearranged wherever necessary to make them comparable with the figures of current year.