Chemkart India Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

2 SIGNIFICANT ACCOUNTING POLICIES
a Basis of Preparation

The financial statements are prepared under historical cost convention, ongoing concern concept and in compliance with the
CompaniesjAccounting Standards) Rules, 2006 notified under section 211(3C) of the Companies Act, 1956 (the "Act read with the
general circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of sectionl33 of Companies
Act, 2013. The Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis to the
extent measurable and where there is certainty of ultimate realization in respect of incomes. Accounting policies not specifically
referred to otherwise, are consistent and in consonance with the generally accepted accounting policies. The financial statements
are presented in Indian rupees rounded off to the nearest rupees.

b Use of Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires the
management to make estimates and assumptions that affect the reported amount of assets. Liabilities, revenues and expenses
and disclosure of contingent liabilities on the date of the financial statements. 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
dates of the financial statements. Actual results could differ from the estimates and assumptions used in preparing the
accompanying financial statement. Any revision to accounting estimates is recognized prospectively in current and future
periods.

c Property, Plant and Equipment

Fixed Assets are stated at cost, inclusive of incidental expenses related thereto and are net of cenvat credit less accumulated
depreciation. The cost of the fixed assets comprises purchase price and any attributes cost of bringing the asset to its working
condition for its intended use.

d Depreciation and amortization

Depreciation on Fixed Assets is provided on the written-down-value method at the rates and in the manner prescribed under
Schedule XIV to the Act. Depreciation on additions/ deletions to fixed assets is calculated pro-rata from/up to the date of such
additions/ deletions.

e 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 the asset. If such recoverable amount of the asset or
recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is
reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss
Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the
recoverable amount is reassessed and the asset is reflected at the recoverable amount.

f Investment

Long-term investments and current maturities of long-term investments are stated at cost, less provision for other than
temporary diminution in value. Current investments, except for current maturities of long-term investments, comprising
investments in mutual funds, government securities and bonds are stated at the lower of cost and fair value.

g Inventories

Inventories held under current assets are valued at cost or net realizable value, whichever is less. Cost is determined on weighted
average basis.

Inventories of finished goods and work in progress held under current assets are valued at cost or net realizable value, whichever
is less.

Inventories of stores and spares held under current assets are valued at cost or net realizable value, whichever is less,
h Cash and cash equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are
subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase,
to be cash equivalents.

i Revenue recognition

Income from sale of goods is recognized on transfer of significant risks and rewards of ownership of the goods to the customer.
Revenues from other services are recognized pro-rata over the period of the contracts as and when services are rendered.

Interest income is recognized on time proportion basis at contracted rate.

j Employee Benefits

Post-employment benefit plans

The Company contributes to recognized provident fund which is a defined contribution scheme. The contributions are accounted
for an accrual basis and recognized in the statement of profit and loss.

k Foreign currency transactions

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign
currency monetary assets and liabilities other than net investments in non-integral foreign operations are translated at the
exchange rate prevailing on the balance sheet date and exchange gains and losses are recognised in the statement of profit and
loss. Exchange difference arising on a monetary item that, in substance, forms part of an enterprise''s net investments in a non¬
integral foreign operation are accumulated in a foreign currency translation reserve.

I Taxation

(a) Current Year Income Tax:

Provision for current tax and fringe benefit tax is made considering various allowances and benefit available to the Company
under the provisions of Income Tax Act, 1961.

(b) Deferred Income Tax:

In accordance with Accounting Standard AS-22 "Accounting for Taxes on Income", deferred tax resulting from timing differences
between book and tax profits are accounted for at tax rate substantially enacted by the Balance Sheet date to the extent the
timing differences are expected to be crystallized.

Deferred Tax Assets arising on account of carried forward losses and unabsorbed depreciation as per Income Tax Act, 1961 are
recognized to the extent there is a virtual certainty supported by convincing evidence that such assets will be realized.

m Earnings Per Shares

Basic earning per share is computed 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.

Diluted earning per share is computed by taking into account the weighted average number of equity shares outstanding during
the period and the weighted average number of equity shares which would be issued on conversion of all dilutive potential equity
shares into equity shares.

2. Significant Accounting Policies

A. Significant Accounting Policies:

1. Basis of Accounting

The financial statements are prepared under historical cost convention, ongoing
concern concept and in compliance with the Companies(Accounting Standards)
Rules, 2006 notified under section 211(3C) of the Companies Act, 1956 (the "Act
read with the general circular 15/2013 dated 13^th September 2013 of the Ministry of
Corporate Affairs in respect of section''133 of Companies Act, 2013. The Company
follows mercantile system of accounting and recognizes income and expenditure
on accrual basis to the extent measurable and where there is certainty of ultimate
realization in respect of incomes. Accounting policies not specifically referred to
otherwise, are consistent and in consonance with the generally accepted
accounting policies. The financial statements are presented in Indian rupees
rounded off to the nearest rupees.

2. Fixed Assets

Fixed Assets are stated at cost, inclusive of incidental expenses related thereto and
are net of cenvat credit less accumulated depreciation. The cost of the fixed assets
comprises purchase price and any attributes cost of bringing the asset to its
working condition for its intended use,

3. Use of Estimates

The preparation of the financial statements in conformity with generally accepted
accounting principles requires the management to make estimates and
assumptions that affect the reported amount of assets, Liabilities, revenues and
expenses and disclosure of contingent liabilities on the date of the financial
statements. 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 dates of the financial statements. Actual results could differ
from the estimates and assumptions used in preparing the accompanying financial
statement. Any revision to accounting estimates is recognized prospectively in
current and future periods.

4. Depreciation

Depreciation on Fixed Assets is provided on the written-down-value method at the
rates and in the manner prescribed under Schedule XIV to the Act. Depreciation on
additions/ deletions to fixed assets is calculated pro-rata from/up to the date of
such additions/ deletions.

5. Inventories

Inventories held under current assets are valued at cost or net realizable value,
whichever is less. Cost is determined on weighted average basis.

Inventories of finished goods and work in progress held under current assets re
valued at cost or net realizable value, whichever is less.

Inventories of stores and spares held under current assets re valued at cost or net
realizable value, whichever is less.

6. Revenue recognition

Income from sale of goods is recognized on transfer of significant risks and
rewards of ownership of the goods to the customer.

Revenues from other services are recognized pro-rata over the period of the
contracts as and when services are rendered.

Interest income is recognized on lime proportion basis at contracted rate.

7. Mi.scelIaneous Expenditure

Preliminary expenses are written-off in ten equal annual installments.

8. Taxes on Income

(a) Current Year Income Tax:

Provision for current tax and fringe benefit tax is made considering various
allowances and benefit available to the Company under the provisions of Income
Tax Act, 1961.

(b) Deferred Income Tax

In accordance with Accounting Standard AS-22 "Accounting for Taxes on
Income", deferred tax resulting from timing differences between book and tax
profits are accounted for at tax rate substantially enacted by the Balance Sheet date
to the extent the timing differences are expected to be crystallized.

Deferred Tax Assets arising on account of carried forward losses and unabsorbed
depreciation as per Income Tax Act, 1961 are recognized to the extent there is a
virtual certainty'' supported by convincing evidence that such assets will be
realized.

9. 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 the asset. If such recoverable amount of the
asset or recoverable amount of the cash generating unit to which the asset belongs
is less than its carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is recognized in the
Profit and Loss Account. If at the Balance Sheet date there is an indication that if a
previously assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.

10. Employee benefits

Defined contribution plan

The Company contributes to recognized provident fund which is a defined
contribution scheme, The contributions are accounted for an accrual basis and
recognized in the statement of profit and loss.

11. Earnings per share

The Company reports basic and diluted earnings per share in accordance with
Accounting Standards 20-Earnings per Share prescribed by the companies
(Accounting Standards) Rules, 2006. Basic earnings per share are computed by
dividing the net profit after tax by the weighted average number of the equity
shares outstanding during the year.

Diluted earnings per share reflect the potential dilution that could occur if
securities or other contracts to issue equity shares were exercised or converted
during the year. Diluted earnings per share is computed by dividing the net profit
after tax by weighted average number of equity shares and dilutive potential
equity shares outstanding during the year.