Khyati Global Ventures Ltd. कंपली की लेखा नीति

A) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make
judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these
estimates are based on the management''s best knowledge of current events and actions, uncertainty about
these assumptions and estimates could result in the outcomes requiring a material adjustment to the
carrying amounts of assets or liabilities in future periods.

B) Property, plant and equipment

Property, plant and equipment, capital work in progress are stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if
capitalization criteria are met, directly attributable cost of bringing the asset to its working condition for the
intended use and initial estimate of decommissioning, restoring and similar liabilities. Any trade discounts
and rebates are deducted in arriving at the purchase price.

Such cost includes the cost of replacing part of the plant and equipment. When significant parts of property,
plant and equipment are required to be replaced at intervals, the Company depreciates them separately
based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in
the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied.
All other repair and maintenance costs are recognized in statement of profit or loss as incurred.

Gains or losses arising from derecognition of property, plant and equipment are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognized in the
statement of profit and loss when the asset is derecognized.

C) Inventories

Inventories are valued at the lower of cost (on FIFO / weighted average basis) and the net realizable value
after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in
bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving
charges. Work-in-progress and finished goods include appropriate proportion of overheads.

D) Depreciation on property, plant and equipment and intangibles

Depreciation is calculated using the Written-Down Value method. Depreciation and amortization on assets
acquired / disposed of during the year is provided on pro- rata basis with reference to the date of acquisition
/ disposal.

E) Impairment of property, plant and equipment and intangible assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired.
If any indication exists, or when annual impairment testing for an asset is required, the Company estimates
the asset''s recoverable amount. An asset''s recoverable amount is the higher of an assets or cash-generating
unit''s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent of those from other

assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount,
the asset is considered impaired and is written down to its recoverable amount. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. In
determining net selling price, recent market transactions are taken into account, if available. If no such
transactions can be identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and forecast calculations which are
prepared separately for each of the Company''s cash-generating units to which the individual assets are
allocated. These budgets and forecast calculations are generally covering a period of five years. For longer
periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses of continuing operations are recognized in the statement of profit and loss.

An assessment is made at each reporting date as to whether there is any indication that previously
recognized impairment losses may no longer exist or may have decreased. If such indication exists, the
Company estimates the assets or cash-generating unit''s recoverable amount. A previously recognized
impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s
recoverable amount since the last impairment loss was recognized. The reversal is limited so that the
carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss been recognized for the asset in
prior years. Such reversal is recognised in the statement of profit and loss.

F) Revenue recognition

Revenue is measured at the value of the consideration received or receivable. Amounts disclosed as revenue
are net of returns, trade allowances, rebates, discounts and indirect taxes. The Company recognizes revenue
when the amount of revenue can be reliably measured, it is probable that future economic benefits will
flow to the Company and specific criteria have been met for each of the Company''s activities as described
below: -
Sale of goods

Sales are recognized when substantial risk and rewards of ownership are transferred to customer. Generally,
sales take place when goods are dispatched or delivery is handed over to transporter.

Other operating revenue

Interest on investments and deposits is booked on a time-proportion basis taking into account the amounts
invested and the rate of interest. Revenue in respect of other types of income is recognized when no
significant uncertainty exists regarding realization of such income.

G) Earnings per share

Basic earnings per share are 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. The weighted
average number of equity shares outstanding during the period is adjusted for events such as bonus issue,
bonus element in a rights issue, share split and reverse share split (consolidation of shares) that have
changed the number of equity shares outstanding, without a corresponding change in resources. 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.

H) Foreign currency transactions _*

Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency
amount the exchange rate between the reporting currency and the foreign currency at the date of the
transaction.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date.
Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the transaction. Non- monetary items, which are measured
at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange
rate at the date when such value was determined.

Treatment of exchange differences

Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities
of the Company are recognized as income or expense in the statement of profit and loss.

I) Leases

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased
item, are classified as operating leases. Operating lease payments are recognized as an expense in the
Statement of Profit and Loss on a straight-line basis over the lease term.

Where the company is the lessor

Leases in which the Company does not transfer substantially all the risks and rewards incidental to
ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight¬
line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease
are added to the carrying amount of the leased asset and recognised over the lease term on the same basis
as rental income.

J) Retirement benefits

The Company provides gratuity benefits to eligible employees in accordance with the provisions of the
Payment of Gratuity Act, 1972, or other applicable regulations. The gratuity scheme is a defined benefit
plan. The Company''s obligation in respect of the defined benefit plan is determined at the end of each
reporting period by an independent qualified actuary. Actuarial gains and losses are recognized immediately
in the Statement of Profit and Loss.

K) Income taxes

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected
to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. The tax rates
and tax laws used to compute the amount are those that are enacted or substantively enacted, at the
reporting date.

Deferred income taxes reflect the impact of timing differences between taxable income and accounting
income originating during the current year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized
only to the extent that there is reasonable certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized. In situation where Company has unabsorbed
depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty
supported by convincing evidence that they can be realized against future taxable profits.

At each reporting date, the company re-assesses unrecognized deferred tax assets. It recognizes
unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as
the case may be, that sufficient future taxable income will be available against which such deferred tax
assets can be realized. The carrying amount of deferred tax assets are reviewed at each balance sheet date.
The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer
reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be
available against which deferred tax asset can be realized. Any such write down is reversed to the extent
that is becomes reasonably certain or virtually certain, as the case may be that sufficient future taxable
income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the
taxes on income levied by same governing taxation laws.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax.
The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence
that the Company will pay normal income tax during the specified period, i.e., the period for which MAT
credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset
in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative
Tax under the Income-tax Act, 1961, 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 "MAT credit entitlement" asset at
each reporting date and writes down the asset to the extent the Company does not have convincing
evidence that it will pay normal tax during the specified period.

L) Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprises cash at bank and in hand and
short-term investments with an original maturity of three months or less.

Summary of Significant Accounting Policies:A) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

B) Property, plant and equipment

Property, plant and equipment, capital work in progress are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met, directly attributable cost of bringing the asset to its working condition for the intended use and initial estimate of decommissioning, restoring and similar liabilities. Any trade discounts and rebates are deducted in arriving at the purchase price. Such cost includes the cost of replacing part of the plant and equipment. When significant parts of property, plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in statement of profit or loss as incurred.

Gains or losses arising from derecognition of property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

C) Inventories

Inventories are valued at the lower of cost (on FIFO / weighted average basis) and the net realizable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads.

D) Depreciation on property, plant and equipment and intangibles

Depreciation is calculated using the Written-Down Value method. Depreciation and amortization on assets acquired / disposed of during the year is provided on pro- rata basis with reference to the date of acquisition / disposal.

E) Impairment of property, plant and equipment and intangible assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an assets or cash-generating unit’s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Company’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations are recognized in the statement of profit and loss.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the assets or cash-generating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognised in the statement of profit and loss.

F) Revenue recognition

Revenue is measured at the value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates, discounts and indirect taxes.

The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the Company''s activities as described below: -Sale of goods

Sales are recognized when substantial risk and rewards of ownership are transferred to customer. Generally, sales take place when goods are dispatched or delivery is handed over to transporter. Other operating revenue

Interest on investments and deposits is booked on a time-proportion basis taking into account the amounts invested and the rate of interest.

Revenue in respect of other types of income is recognized when no significant uncertainty exists regarding realization of such income.

G) Earnings per share

Basic earnings per share are 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. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

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.

H) Foreign currency transactions Initial recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non- monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Treatment of exchange differences

Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the statement of profit and loss.

I) Leases

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

J) Retirement benefits

As the employees during the year are below prescribed limit for applicability of the payment of gratuity act, provision for gratuity has not been made. Since the earned leave if any is paid as and when due, the provision for leave encashment is not made during the year.

K) Income taxes

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situation where the

Company has unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each reporting date, the company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write down is reversed to the extent that is becomes reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, 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 “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

L) Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprises cash at bank and in hand and short-term investments with an original maturity of three months or less.

M) Provisions

A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. 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.

N) Borrowing

Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

O) Contingent liability

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

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