Accounting Policies of Yarn Syndicate Ltd. Company

2. Material Accounting Policies

This note provides a list of the material accounting policies adopted in the preparation of these financial
statements. These policies have been consistently applied to all the years presented, unless otherwise
stated.

Statement of Compliance

These financial statements have been prepared in accordance with Ind-AS as prescribed under section 133
of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 as amended
from time to time.

Basis of preparation

The financial statements have been prepared on the historical cost basis, except for certain financial
instruments which are measured at fair values at the end of each reporting period, as required by the
applicable accounting standards.

The financial statements are presented in Indian rupees (INR) and all amounts are rounded to the nearest
lakhs, except otherwise indicated. Amount less than Rs. 500 are indicated as "0.00" in the financial
statements.

All the assets and liabilities have been classified as current or non-current as per the Company''s normal
operating cycle. Based on the nature of the products and the time between the acquisition of assets for
processing and their realization 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.

Use of estimates and judgments

The estimates and judgments used in the preparation of the financial statements are continuously evaluated
by the Company and are based on historical experience and various other assumptions and factors (including
expectations of future events) that the Company believes to be reasonable under the existing circumstances.
Differences between actual results and estimates are recognised in the period in which the results are
known/materialised.

The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred
after that date but provide additional evidence about conditions existing as at the reporting date.

The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised and future periods affected.
Significant judgments and estimates about the carrying amount of assets and liabilities include useful lives
of tangible and intangible assets, impairment of tangible assets, intangible assets including goodwill,
investments, employee benefits and other provisions and recoverability of deferred tax assets.

Investments

Long term investments are stated at cost less provision for diminution in value other than temporary, If
any. Current investments are valued at lower of cost and fair value determined on an individual
investment basis.

Fair Value Measurement

The Company classifies its financial assets in the following measurement categories:

i) Those to be measured subsequently at fair value (either through Other Comprehensive Income, or through
profit or loss).

ii) Those measured at amortised cost.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on
the presumption that the transaction to sell the asset or transfer the liability takes place either:

a) In the principal market for the asset or liability, or

b) In the absence of a principal market, in the most advantageous market for the asset or liability

A fair value measurement of a non-financial asset takes into account a market participant''s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use. The Company uses valuation techniques that
are appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

At each reporting date, the Company analyses the movements in the values of assets and liabilities which
are required to be remeasured or re-assessed as per The Company''s accounting policies. For this analysis,
the Company verifies the major inputs applied in the latest valuation by agreeing the information in the
valuation computation to contracts and other relevant documents. For the purpose of fair value disclosures,
the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and
risks of the asset or liability and the level of the fair value hierarchy as explained above.

Revenue Recognition

Revenue from contract with customer is recognised upon transfer of control of promised products or
services to customers on complete satisfaction of performance obligations for an amount that reflects
the consideration which the Company expects to receive in exchange for those products or services.
Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts
and other incentives, if any, as per contracts with the customers. However, Goods and Services tax (GST)
are not received by the Company on its own account. Rather, it is tax collected on value added to the
commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue.

Sales of Goods

Revenue from the sale of goods is recognized when all significant risks and rewards of ownership of the
goods have passed to the buyer, which generally coincides with delivery. Revenue from the sale of
goods is measured at the fair value of the consideration received or receivable, net of returns and
allowances, trade discounts and volume rebates.

Rendering of Services

Revenue from services rendered is recognised when the work is performed as per the performance
obligations specified in the customer agreements.

Interest Income

Interest income is included in other income in the statement of profit and loss. Interest income is
recognized on a time proportion basis taking into account the amount outstanding and the applicable
interest rate when there is a reasonable certainty as to realization.

Property, Plant and Equipment

All items of property, plant and equipment are stated at acquisition cost net of accumulated depreciation
and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable
to the acquisition of the items. Subsequent costs are included in the carrying amount of asset or recognized
as a separate asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and
maintenance expenses are charged to the Statement of Profit and Loss during the period in which they are
incurred. Gains or losses arising on retirement or disposal of assets are recognized in the Statement of Profit
and Loss.

Depreciation methods, estimated useful lives and residual value

Depreciation on Property, Plant & Equipment is charged on Written Down Value Method. Depreciations are
charged over the estimated useful lives of the assets as specified in Schedule II of the Companies Act, 2013.
Depreciation in respect of additions to/and deletion from assets has been charged on pro-rata basis from/till
the date they are put to commercial use. The residual values, useful lives and methods of depreciation of
property, plant and equipment are reviewed at regular intervals and adjusted prospectively, if appropriate.

Depreciation on additions/deletions to Property plant and equipment during the year is provided for on a
pro-rata basis with reference to the date of additions/deletions.

Inventories

Cost of Inventories is arrived at on First-In First-Out (FIFO) basis and valued at cost or net realizable value
whichever is lower. Cost comprises all costs of purchase, costs of conversion and other costs incurred in
bringing the inventory to the present location and condition. Net realizable value is the estimated selling
price in the ordinary course of business, less estimated costs of completion and estimated costs necessary
to make the sale.

Income Taxes

Tax on Income comprises current tax and deferred tax. These are recognized in Statement of Profit and Loss
except to the extent that it relates to items recognized directly in equity or in other comprehensive income.

Tax on income for the current period is determined on the basis on estimated taxable income and tax credits
computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of
assessments / appeals. Current income tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted, at the reporting date. Management periodically
evaluates positions taken in the tax returns with respect to situations for which applicable tax regulations
are subject to interpretation and revises the provisions where appropriate.

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are
generally recognized for all deductible temporary differences to the extent that it is probable that taxable
profits will be available against which those deductible temporary differences can be utilized.

Earnings Per Share(EPS)

Earnings per share (EPS) is calculated by dividing the net profit or loss for the period attributable to Equity
Shareholders by the weighted average number of Equity shares outstanding during the period. Earnings
considered in ascertaining the EPS is the net profit for the period and any attributable tax thereto for the
period.

Diluted earnings per share is computed by adjusting the profit or loss attributable to the ordinary equity
shareholders and the weighted average number of equity shares, for the effects of all diluted potential
equity shares.

Changes in Accounting Estimates and Errors

The financial statements have been prepared in accordance with Ind AS 8. The Company selects and applies
accounting policies consistently for similar transactions to ensure comparability. Changes in accounting
policies are applied retrospectively unless specified otherwise. Changes in estimates are recognized
prospectively. Prior period errors, if any, are corrected retrospectively in the financial statements.

As per records of the Company as at 31 March 2023 no calls remain unpaid by the directors and officers of the Company.

Rights preference and restrictions attached to the class of shares.

Equity Shares

Each equity shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts in proportion to their shareholding.

Note: The shareholding of the company has been transferred to another promoter group due to sale of majority shares of the company following the SEBI guidelines. Mr. K Chhabria is no more in continuation of Board of Directors and Mr. Nandish Shaileshbhai Jani has been included in the Board of Directors.

(i) The average credit period on purchases of goods and services are within 90 days. The trade and other payables are non interest bearing.

(ii) There are no micro, small and medium enterprises identified to whom payment is due.

19. Contingent Liabilities & Contingent Assets and Committments

The Company does not have any Contingent Liabilities NIL NIL

& Contingent Assets and Committments at the Balance Sheet date

B) The disclosure as per the Indian Accounting Standard 19 (Ind AS 19) "Employee Benefits" are given below:

I. Gratuity Plan

The Company has defined benefit plan comprising of gratuity. The present value of obligation is determined on the basis of Actuarial valuation using the Projected Unit Credit (PUC) actuarial method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measure each unit seperately to build up the final obligation.

Company is exposed to a number of risk in the defined benefit plans. Most significant risk pertaining to defined benfit plans and management''s estimation of the impact of these risk''s are as follows:

i) Interest Risk

A decrease in the interest risk on Plan Assets will increase the plan Liability.

ii) Longetivity Risk:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the Mortality of plan participants both during and at the end of the

iii) Salary Growth Risk:

The Present value of the defined benefit plan liability is calculated by reference to the future salaries of Plan participants. An increase in the salary of the plan participants will increase the plan liability.

iv) Investment Risk:

The Present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on Government Bonds.

21: Segment Reporting

An Operating Segment is component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. The Company is engaged in the business of exporting yarn and fabric and any other activities incidental thereto. Board of Directors are Chief Operating Decision Maker (CODM) of the Company. Further, there are no export sales and hence there is no reportable secondary segment. Accordingly, these financial statements are not reflective of the information required under Ind AS 108.

Note:

The carrying values of financial assets and liabilities represent their approximate fair value.

23: Financial Instruments

i) Capital management

The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through optimisation of debt and equity balance.

The capital structure of the Company consists of net debt (borrowings as detailed in note 10 and 12 offset by cash and bank balances) and total equity of the Company.

The Company uses net debt equity ratio as a capital management index and calculates the ratio as total liabilities divided by total equity. Total liabilities and total equity are based on the amounts stated in the separate financial statements.

24: Financial risk management objectives and policies Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the Risk Management Committee (RMC) which is responsible for developing and monitoring the Company’s risk management policies.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and control and monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.

The Company’s activities expose it to market risk, liquidity risk and credit risk which are measured, monitored and managed to abide by the principles of risk management.

i) Credit Rsik

Credit risk arises when a customer defaults on its contractual obligations to pay resulting in financial loss to the Company. The Company has adopted a policy of categorising the customers based on the performance and accordingly credit limit ceiling of each category is defined. The Company''s exposure and categorisation of its customers are continuously monitored . Credit exposure is controlled by customer credit limits which are reviewed and approved. The Company applies the simplified approach to providing for expected credit losses prescribed by Ind AS 109, which permits the use of the lifetime expected loss provision for all trade receivables.

There is no change in estimation techniques or significant assumptions during the reporting period.

ii) Liquidity Risk Liquidity risk management

The board of directors has established an appropriate liquidity risk management framework for the management of the Company’s short, medium and longterm funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

iii) Interest Rate Risk

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company’s cash flows as well as costs. The Company has no interest bearing liabilities as on the balance sheet date.

Derivative Financial Instruments

The Company holds no derivative financial instrument as on the reporting Date. Hence the company is not exposed to the said risk.

25: Leases

The Company assesses whether a contract contains a lease at the inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether : (i) the contract involves the use of an identified asset; (ii) the Group has substantially all of the economic benefits from use of the asset through the period of the lease, and (iii) the Group has the right to direct the use of the asset.

As on April 1, 2023 the Company does not have any existing lease which are required to be recognized as right-of-use (ROU) Asset and a corresponding Lease liability.

26: The figures for the previous year have been regrouped/reclassified to correspond with the current year''s classification/disclosures that include changes consequent to the issuance of "Guidance Note on Division II - Ind AS Schedule III to the companies Act 2013".

A) General:

The accounts have been prepared under the historical cost convention and in accordance with the provisions of the Companies Act,1956 and Accounting Standards notified vide Companies ( Accounting Standards ) Rules, 2006 read with the General Circular 15/2013 dated September 13, 2013.

Accounting policies have been consistently applied except where a revision to an existing AS requires a change in the accounting policy hitherto in use.

All expenses and income are accounted on accrual basis except where there is uncertainty about the receipt thereof in view of the claims/dispute.

B) Use of estimates:

The preparation of financial statement requires management to make estimates and assumption that affect the reported amount of assets and liabilities on the date of financial statements and disclosure relating to contingent assets and liabilities as at the balance sheet date and reported amounts of income and expenses during the year. Difference between the actual results and the estimates are recognised in the year in which the result are known/materialised.

C) Sales and Other Income:

Income from Export Incentives is recognised on the basis of certainties as to its utilisation and related realisation.

D) Inventories:

Inventory is valued at lower of cost and net realisable value. Traded goods are valued using FIFO method.

E) Employee Benefits:

(a) Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered. Leave Encashment - accrued year-end leave are provided for on accrual basis and paid off as at the year end. No accumulation of leave is allowed to be carried forward.

(b) Gratuity - year-end liabilities on account of gratuity payable to employees are determined on the basis of actuarial valuation with appropriate contributions to the Company''s gratuity fund and charged to profit and loss account.

Actuarial gains and losses in respect of above post employment benefits are charged to the profit and loss account.

F) Fixed Assets:

Fixed Assets have been stated at cost.

G) Depreciation:

a) Depreciation on Fixed Assets has been provided on written down value basis at the rates as prescribed under the Income Tax Rules 1962, except in the case of assets mentioned at serial Nos.(b) and (f) herein below whereon it has been provided at the rates as prescribed under Schedule XIV to the Companies Act, 1956.

Rates as per Rates as per Schedule XIV to the Income Tax Companies Act1956 (%) (%)

a) Building : Office 5 10 Residential (Area less than 80sq metres) 5 5 b) Furniture & Fixtures 18.1 10 c) Office Equipments 13.91 15 d) Air Conditioning Machine 13.91 15 e) Refrigerator 13.91 15 f) Motor Car 25.89 15 g) Computer 40 60

b) Depreciation on additions to assets during the year valuing up to Rs.5,000/- has been provided at the rate of 95%.

c) Depreciation on additions to assets has been provided for the full year. No depreciation is being provided on assets sold during the year.

H) Impairment:

Fixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed asset is determined. An impairment loss is recognised, wherever the carrying amount of assets either belonging to cash generating units or otherwise exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing the value in use, the estimated future cash flow from the use of assets is discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective asset, which in case of CGU, are allocated to assets on a prorated basis.

I) Foreign Exchange Transaction:

i) Assets & Liabilities :

Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currency monetary assets and liabilities at the year end are translated using closing exchange rates. The loss or gain thereon and also on the exchange difference on settlement of the foreign currency transaction during the year are recognised as income or expenses and are adjusted to the profit and loss account under respective heads of accounts.

ii) Export Sales:

These transactions are stated at the rate as on the date of negotiation or collection or at forward contract rates, wherever applicable.

J) Borrowing Cost :

Borrowing cost incurred in relation to the acquisitions or construction of assets are capitalised/ allocated as part of the cost of such assets. Other borrowing costs are charged as an expense in the year in which these are incurred.

K) Taxation :

Provision for tax is made for current and deferred taxes. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference, which are capable of reversal in subsequent periods are recognised using tax rates and tax laws, which have been enacted or substantively enacted. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets will be realised. In case of carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognised only if there is "virtual certainty" that such deferred tax assets can be realised against future taxable profits.

L) Provision, contingent liabilities and contingent assets :

Provision involving substantial degree of estimates in measurement are recognised 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 assets are neither recognised nor disclosed in the financial statement. Contingent Liabilities are not provided for but disclosed by way of Note.

A) General:

The accounts have been prepared under the historical cost convention and in accordance with the provisions of the Companies Act 1956 and Accounting Standards notified vide Companies (Accounting Standards) Rules, 2006.

All expenses and income are accounted on accrual basis except where there is uncertainty about the receipt thereof in view of the claims/dispute.

Accounting policies unless specifically stated to be otherwise, are consistent and are in consonance with generally accepted accounting principles.

B) Use of estimates:

The preparation of financial statement requires management to make estimates and assumption that affect the reported amount of assets and liabilities on the date of financial statements and disclosure relating to contingent assets and liabilities as at the balance sheet date and reported amounts of income and expenses during the year. Difference between the actual results and the estimates are recognised in the year in which the result are known/materialised.

C) Sales and Other Income:

Income from Export Incentives is recognised on the basis of certainties as to its utilisation and related realisation.

D) Inventories:

Inventory is valued at lower of cost and net realisable value. Traded goods are valued using FIFO method.

E) Employee Benefits:

(a) Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

(b) i) Gratuity - year-end liabilities on account of gratuity payable to employees are determined on the basis of actuarial valuation with appropriate contributions to the Company's gratuity fund and charged to profit and loss account. ii) Leave Encashment - accrued year-end leave are provided for on accrual basis and paid off as at the year end. No accumulation of leave is allowed to be carried forward.

Actuarial gains and losses in respect of above post employment benefits are charged to the profit and loss account.

F) Fixed Assets:

Fixed Assets have been stated at cost.

G) Depreciation:

a) Depreciation on Fixed Assets has been provided on written down value basis at the rates as prescribed under the Income Tax Rules 1962, except in the case of assets mentioned at serial Nos.(b) and (f) hereinbelow whereon it has been provided at the rates as prescribed under Schedule XIV to the Companies Act, 1956.

H) Impairment:

Fixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed asset is determined. An impairment loss is recognised, wherever the carrying amount of assets either belonging to cash generating units or otherwise exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing the value in use, the estimated future cash flow from the use of assets is discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective asset, which in case of CGU, are allocated to assets on a prorated basis.

I) Foreign Exchange Transaction: i) Assets & Liabilities :

Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currency monetary assets and liabilities at the year end are translated using closing exchange rates. The loss or gain thereon and also on the exchange difference on settlement of the foreign currency transaction during the year are recognised as income or expenses and are adjusted to the profit and loss account under respective heads of accounts.

ii) Export Sales:

These transactions are stated at the rate as on the date of negotiation or collection or at forward contract rates, wherever applicable.

J) Borrowing Cost :

Borrowing cost incurred in relation to the acquisitions or construction of assets are capitalised/ allocated as part of the cost of such assets. Other borrowing costs are charged as an expense in the year in which these are incurred.

K) Taxation :

Provision for tax is made for current and deferred taxes. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference, which are capable of reversal in subsequent periods are recognised using tax rates and tax laws, which have been enacted or substantively enacted. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets will be realised. In case of carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognised only if there is "virtual certainty" that such deferred tax assets can be realised against future taxable profits.

L) Provision, contingent liabilities and contingent assets :

Provision involving substantial degree of estimates in measurement are recognised 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 assets are neither recognised nor disclosed in the financial statement. Contingent Liabilities are not provided for but disclosed by way of Note.

A) General :

The accounts have been prepared under the historical cost convention and in accordance with the provisions of the Companies Act 1956 and Accounting Standards notified vide Companies (Accounting Standards) Rules, 2006.

All expenses and income are accounted on accrual basis except where there is uncertainty about the receipt thereof in view of the claims/dispute.

Accounting policies unless specifically stated to be otherwise, are consistent and are in consonance with generally accepted accounting principles.

B) Use of estimates :

The preparation of financial statement requires management to make estimates and assumption that affect the reported amount of assets and liabilities on the date of financial statements and disclosure relating to contingent assets and liabilities as at the balance date and reported amounts of income and expenses during the year. Difference between the actual results and the estimates are recognised in the year in which the result are known/ materialised.

C) Sales and Other Income :

Income from Export Incentives is recognised on the basis of certainties as to its utilisation and related realisation.

D) Inventories :

Inventory is valued at lower of cost and net realisable value. Traded goods are valued using FIFO method.

E) Employee Benefits :

(a) Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

(b) i) Gratuity - year-end liabilities on account of gratuity payable to employees are determined on the basis of actuarial valuation with appropriate contributions to the Companys gratuity fund and charged to profit and loss account.

ii) Leave Encashment - accrued year-end leave are provided for on accrual basis and paid off as at the year end. No accumulation of leave is allowed to be carried forward.

Actuarial gains and losses in respect of above post employment benefits are charged to the profit and loss account

F) Fixed Assets :

Fixed Assets have been stated at cost.

G) Depreciation :

a) Depreciation on Fixed Assets has been provided on written down value basis at the rates as prescribed under the Income Tax Rules 1962, except in the case of assets mentioned at serial Nos. (b) and (f) herein below whereon it has been provided at the rates as prescribed under Schedule XIV to the Companies Act 1956.

b) Depreciation on additions to assets dunng the year valuing up to Rs. 5,000/- has been provided at the rate of 95%.

c) Depreciation on additions to assets has been provided for the full year. No depreciation is being provided on assets sold during the year.

H) Impairment :

Fixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed asset is determined. An impairment loss is recognised, wherever the carrying amount of assets either belonging to cash generating units or otherwise exceeds recoverable amount The recoverable amount is the greater of assets net selling price or its value in use. In assessing the value in use, the estimated future cash flow from the use of assets is discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss no longer exists or has decreased. Impairment loss/ reversal thereof is adjusted to the carrying value of the respective asset, which in case of CGU, are allocated to assets on a prorata basis.

I) Foreign Exchange Transation :

i) Assets & Liabilities :

Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currency monetary assets and liabilities at the year end are translated using closing exchange rates. The loss or gain thereon and also on the exchange difference on settlement of the foreign currency transaction during the year are recognised as income or expenses and are adjusted to the profit and loss account under respective heads of accounts.

ii) Export Sales :

These transaction are stated at the rate as on the date of negotiation or collection or at forward contract rates, wherever applicable.

J) Borrowing Cost :

Borrowing cost incurred in relation to the acquisitions or construction of assets are capitalised/ allocated as part of the cost of such assets. Other borrowing cost are charged as an expense in the year in which these are incurred.

K) Investments :

Long Term Investments are stated at cost less provision for diminution in value other than temporary, if any. Current Investments are valued at lower of cost and fair value determined on an individual investment basis.

L) Taxation :

Provision for Tax is made for current, deferred and fringe benefits taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing cifference, which are capable of reversal in subsequent periods are recognised using tax rates and tax laws, which have been enacted or substantively enacted. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets will be realised. In case of carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognised only if there is "virtual certainty" that such deferred tax assets can be realised against future taxable profits.

M) Provision, contingent liabilities and contingent assets :

Provision involving substantial degree of estimates in measurement are recognised 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 assets are neither recognised nor disclosed in the financial statement. Contingent Liabilities are not provided for but disclosed by way of Note.