Radix Industries (India)

1.    Corporate information
 
Radix Industries (India) Limited (the company) is a public company domiciled in India and incorporated
under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The
company is engaged in the manufacturing and selling of human hair products. The company caters to both
domestic and international markets.
 
2.    Statement on Accounting Policies
 
a. Basis of Accounting and preparation
 
The financial statements of the company have been prepared in accordance with generally accepted
accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply
in all material respects with the accounting Standards specified under Section 133 of the Companies Act,
2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared
on an accrual basis and under the historical cost convention.
 
The accounting policies adopted in the preparation of financial statements are consisted with those of
previous period.
 
Use of Estimates
 
The preparation of financial statements requires the management of the Company to make judgments,
estimates and assumptions that affect the reported balance of assets and liabilities, revenues and expenses
and disclosures relating to the contingent liabilities and commitments. The management believes that the
estimates used in preparation of the financial statements are prudent and reasonable. The judgments,
estimates and underlying assumptions are made with the management''s best knowledge of the business
environment and are reviewed on an ongoing basis. However, future results could differ from these estimates.
Any revision to these accounting estimates is recognized prospectively in the current and future periods.
 
b.    Tangible fixed assets
 
Fixed assets are stated at cost of acquisition less accumulated depreciation. Cost of acquisition of
fixed assets is inclusive of freight, duties and taxes, borrowing costs, if any, on specific borrowings
utilized for financing the assets up to the date of commissioning, the cost of installation/erection and
other incidental expenses incurred to bring the asset to its present location and condition but exclusive of
duties and taxes that are subsequently recoverable from taxing authorities.
 
c.    Depreciation and Amortization
 
Depreciable amount for assets is the cost of the asset, or other amount substituted for cost, less its
estimated residual value. Depreciation on tangible fixed assets has been provided on the written-down method
as per the useful life prescribed in Schedule II to the Companies Act, 2013
 
In respect of assets sold or disposed off during the year, depreciation / amortization is provided till
the month of sale or disposal of the assets.
 
d. Borrowing Costs
 
Borrowing Costs, that are directly attributable to the acquisition or construction of assets, that
necessarily take a substantial period of time to get ready for its intended use, are capitalized as part of
the cost of qualifying asset when it is possible that they will result in future economic benefits and the
cost can be measured reliably.
 
Other borrowing costs are recognized as an expense in the period in which they are incurred.
 
e. Inventories
 
Valuation of inventories is made as under:
 
i)    Finished goods are valued at lower of cost or net realizable value.
 
ii)    Raw materials, work-in-progress and stores and spares are valued at cost, following the FIFO
Basis.
 
iii)    Work-in-Progress, raw materials, stores, spares are valued at cost except where the net
realizable value of the finished goods they are used in is less than the cost of finished goods and in such
an event, if the replacement cost of such materials etc., is less than their books value, they are valued at
replacement cost.
 
iv)    By-products and scrap are valued at net realizable value.
 
f.    Revenue Recognition
 
i. Sales are accounted for net of discounts and rebates. Export Sales are initially accounted at the
exchange rate prevailing on the date of documentation/invoicing and the same is adjusted with the difference
in the rate of exchange arising on actual receipt of proceeds in foreign exchange.
 
g.    Income Taxes
 
Income tax expense comprises current and deferred taxes.
 
i)    Current tax is the amount of tax payable on the taxable income for the year as determined in
accordance with the provisions of the Income Tax Act, 1961.
 
ii)    Deferred tax is recognized under the liability method, on timing differences, being the difference
between taxable income and accounting income that originate in one period and capable of reversal in one or
more subsequent periods, at the rate of tax enacted or substantively enacted by the balance sheet date.
 
h.    Provisions, Contingent Liabilities and Contingent assets
 
Provisions are recognized only when there is a present obligation as a result of past events and when a
reliable estimate of the amount of obligation can be made. Provisions are not discounted to their present
value and are determined based on the best estimate required to settle the obligation at the reporting date.
These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
 
Contingent liability is disclosed for (i) Possible obligation which will be confirmed only by future
events not wholly within the control of the Company or (ii) Present obligations arising from past events
where it is not probable that an outflow of resources will be required to settle the obligation or a reliable
estimate of the amount of the obligation cannot be made. The company does not recognize contingent liabilities
but the same are disclosed in the Notes.
 
Contingent assets are not recognized in the financial statements since this may result in the recognition
of income that may never be realized.
 
i.    Earnings per share
 
Earnings per share is calculated by dividing the net profit or loss for the year after tax attributable
to equity shareholders by the weighted average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to
equity shareholders and the weighted average number of shares outstanding during the period are adjusted for
the effects of all dilutive potential equity shares.
 
j. Foreign Exchange Transactions
 
i)    Transactions in foreign currency are initially accounted at exchange rate prevailing on the date of
transaction, and adjusted appropriately, with the difference in the rate of exchange arising on actual
receipt/payment during the period under report.
 
ii)    At each Balance Sheet date foreign currency monetary items being receivables/payables are reported
using the rate of exchange on that date and difference is recognized as income or expense. Foreign currency
non-monetary items are reported using the exchange rate at which they were initially recognized.
 
iii)    In respect of forward exchange contracts in the nature of hedges. Premium or discount on the
contract is amortized over the term of the contract. Exchange differences on the contract are recognized as
profit or loss in the period in which they arise.