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Accounting Policies of IST Ltd. Company

Mar 31, 2015

'The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act,2013.

The significant accounting policies adopted in the presentation of the Accounts are as under:-

a) Valuation of Inventories :

i) Raw Material, Stores, Spares and purchased components, Finished Goods, and Goods under process are valued at cost on weighted average basis or net realisable value which ever is lower.

ii) Tools and Instruments are valued at cost less depletion in value.

iii) Stock of Scrap is valued at estimated realisable value.

b) Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

c) Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

d) Revenue Recognition:-

i) Sales are recognized when goods are supplied

ii) Processing Income: Processing income is recognized after services are rendered.

e) Other Income

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established

f) Foreign Exchange Transactions:-

Foreign Exchange transactions are recorded at the exchange rate prevailing on the date of transaction. The difference in realized gains and losses on foreign exchange transactions other than those relating to the fixed assets are recognized in the profit and loss account.

g) Excise Duty :

The Excise Duty is accounted for at the time of dispatch of goods from the Factory.

h) Tangible and Intangible fixed assets

Tangible fixed assets are stated at cost less accumulated depreciation / amortization and impairment losses, if any. Cost includes expenses incidental to the acquisition/installation of assets. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment. Interest on loans to acquire qualifying assets is added to the cost of fixed assets in accordance with Accounting Standard 16 on "Borrowing Costs"

i) Depreciation / Amortization

'Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013.

Depreciation on intangible assets has been provided on the straight-line method on useful life of 6 years.

'The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial year and the amortization period is revised to reflect the changed pattern, if any.

j) Employees Retirement Benefits :

Company's Contribution towards Provident Fund is charged to Profit & Loss Account. The amount of gratuity & leave encashment benefits on the basis of actuarial valuation is charged to Profit & Loss Account.

k) In determining earnings per share, the company considers the net profit after tax and includes the post-tax effect of any extraordinary items. The number of shares used in computing basic earnings per share is the number of shares outstanding during the period.

l) Claims :

Credits for certain claims such as interest on Telephone Deposits, Insurance, and Customs Duty Drawback etc. are taken as and when determined or received.

m) The liability for reimbursement of Medical Expenses and Leave Travel Allowance is provided for at the time when the same is due and the claim is made irrespective of the time of expenditure incurred by the employees.

n) Liquidated damages on Defence Sales are accounted for as and when ascertained.

o) Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.

Current and deferred tax relating to items directly recognised in reserves are recognised in reserves and not in the Statement of Profit and Loss.

p) Investments

Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually

q) Provisions, Contingent Liabilities and Contingent Assets

i Provisions are recognized in terms of Accounting Standard 29 - 'Provisions, Contingent Liabilities and Contingent Assets' as mandated by Rule 3 of the Companies (Accounting Standards) Rules, 2006, when there is a present obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and a reliable estimate of the amount of the obligation can be made.

ii. Contingent Liabilities are recognized and disclosed only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for.

iii. Contingent assets are not recognized in the financial statements.

r) Impairment of Assets

The Company reviews the carrying value of its fixed assets for any possible impairment at each Balance Sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value at an appropriate discount rate.


Mar 31, 2014

(i) Basis of Accounting :

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

(ii) Fixed Assets :

a) Fixed Assets are stated at Cost less Depreciation.

b) Plant & Machinery manufactured within the plant is stated at Cost (less Depreciation wherever applicable). The over head expenses are, however, allocated on estimates given by Technical Personnel.

(iii) Depreciation :

Depreciation is calculated on Straight Line Method at the rates prescribed in schedule XIV of the Companies Act.1956

(iv) Valuation of Inventories :

a) Raw Material, Stores,Spares and purchased components, Finished Goods, and Goods under process are valued at cost on weighted average basis or net realisable value which ever is lower.

b) Tools and Instruments are valued at cost less depletion in value.

c) Stock of Scrap is valued at estimated realisable value.

(v) Revenue Recognition

a) Sales are recognized when goods are supplied .

b) Processing Income : Processing income is recognized after services are rendered.

(vi) Foreign Exchange Transactions

Foreign Exchange transactions are recorded at the exchange rate prevailing on the date of transaction. The difference in realized gains and losses on foreign exchange transactions other than those relating to the fixed assets are recognized in the profit and loss account.

(vii) Investments:

Investments are stated at cost and dimunition in value is provide for.

(viii) Employees Retirement Benefits :

Company''s Contribution towards Provident Fund is charged to Profit & Loss Account. The amount of gratuity & leave encashment benefits on the basis of acturial valuation is charged to Profit & Loss Account.

(ix) Excise Duty :

The Excise Duty is accounted for at the time of despatch of goods from the Factory.

(x) Claims :

Credits for certain claims such as interest on Telephone Deposits, Insurance, Customs Duty Drawback etc. are taken as and when determined or received.

(xi) The liability for reimbursement of Medical Expenses and Leave Travel Allowance is provided for at the time when the same is due and the claim is made irrespective of the time of expenditure incurred by the employees.

(xii) Liquidated damages on Defence Sales are accounted for as and when ascertained.

(xiii) In determinig earnings per share, the company considers the net profit after tax and includes the post-tax effect of any extraordinary items. The number of shares used in computing basic earnings per share is the number of shares outstanding during the period.

(xiv) Income Tax

Provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions. The differences that result between the profit offered for income tax and the profit as per the financial statement are identified and thereafter a deferred tax assets or deferred tax liability is recorded for timing differ- ences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate being considered.

(xv) Impairment of Assets

The management assesses the performance of its unit to arrive at the value in use to check for impairment, if any, in Fixed Assets, as required under AS 28 of the ICAI and provides for any impairment therof in Profit & Loss Account.

(xvi) Provision,Contingent Liabilites and Contingent Assets

The Company creates a provision when there is a present obligation as a result of a past event where the out flow of economic resources is probable and a reliable estimate of the amount of obligation can be made. The disclousure is made for possible or present obligation that may, but probably will not, require out flow of resources as contengent liabilities in the financial statements. Contengent assets are not recognized in the financial statements.


Mar 31, 2012

(i) Basis of Accounting :

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

(ii) Fixed Assets :

a) Fixed Assets are stated at Cost less Depreciation.

b) Plant & Machinery manufactured within the plant is stated at Cost (less Depreciation wherever applicable). The over head expenses are, however, allocated on estimates given by Technical Personnel.

(iii) Depreciation:

Depreciation is calculated on Straight Line Method at the rates prescribed in schedule XIV of the Companies Act, 1956.

(iv) Valuation of Inventories :

a) Raw Material, Stores,Spares and purchased components, Finished Goods, and Goods under process are valued at cost on weighted average basis or net realisable value which ever is lower.

b) Tools and Instruments are valued at cost less depletion in value.

c) Stock of Scrap is valued at estimated realisable value.

(v) Revenue Recognition

a) Sales are recognized when goods are supplied.

b) Processing Income : Processing income is recognized after services are rendered.

(vi) Foreign Exchange Transactions

Foreign Exchange transactions are recorded at the exchange rate prevailing on the date of transaction. The difference in realized gains and losses on foreign exchange transactions other than those relating to the fixed assets are recognized in the profit and loss account.

(vii) Investments:

Investments are stated at cost and dimunition in value is provided for.

(viii) Employees Retirement Benefits :

Company's Contribution towards Provident Fund is charged to Profit & Loss Account. The amount of gratuity & leave encashment benefits on the basis of acturial valuation is charged to Profit & Loss Account.

(ix) Excise Duty :

The Excise Duty is accounted for at the time of despatch of goods from the Factory.

(x) Claims :

Credits for certain claims such as interest on Telephone Deposits, Insurance, Custom Duty Drawback etc. are taken as and when determined or received.

(xi) The liability for reimbursement of Medical Expenses and Leave Travel Allowance is provided for at the time when the same is due and the claim is made irrespective of the time of expenditure incurred by the employees.

(xii) Liquidated damages on Defence Sales are accounted for as and when ascertained.

(xiii) In determining earnings per share, the company considers the net profit after tax and includes the post- tax effect of any extraordinary items. The number of shares used in computing basic earnings per share is the number of shares outstanding during the period.

(xiv) Income Tax

Provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions.

The differences that result between the profit offered for income tax and the profit as per the financial statement are identified and thereafter a deferred tax assets or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate being considered.

(xv) Impairment of Assets

The management assesses the performance of its unit to arrive at the value in use to check for impairment, if any, in Fixed Assets, as required under AS 28 of the ICAI and provides for any impairment thereof in Profit & Loss Account.

(xvi) Provision,Contingent Liabilities and Contingent Assets

The Company creates a provision when there is a present obligation as a result of a past event where the out flow of economic resources is probable and a reliable estimate of the amount of obligation can be made. The disclosure is made for possible or present obligation that may, but probably will not, require out flow of resources as contingent liabilities in the financial statements. Contingent assets are not recognized in the financial statements.


Mar 31, 2010

(i) Basis of Accounting :

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

(ii) Fixed Assets :

a) Fixed Assets are stated at Cost less Depreciation.

b) Plant & Machinery manufactured within the plant is stated at Cost (less Depreciation wherever applicable). The over head expenses are, however, allocated on estimates given by Technical Personnel.

(iii) Depreciation:

Depreciation is calculated on Straight Line Method at the rates prescribed in schedule XIV of the Companies Act,1956

(Iv) Valuation of Inventories :

a) Raw Material, Stores, Spares and purchased components, Finished Goods, and Goods under process are valued at cost on weighted average basis or net realisable value which ever is lower.

b) Tools and Instruments are valued at cost less depletion in value.

c) Stock of Scrap is valued at estimated realisable value.

(v) Revenue Recognition

a) Sales are recognized when goods are supplied and are inclusive of excise duty and sales tax.

b) Processing income : Processing income is recognized after services are rendered.

(vi) Foreign Exchange Transactions

Foreign Exchange transactions are recorded at the exchange rate prevailing on the date of transaction. The difference in realized gains and losses on foreign exchange transactions other than those relating to the fixed assets are recognized in the profit and loss account.

(vli) Investments:

Investments are stated at cost and dimunition in value is provide for.

(viii) Employees Retirement Benefits :

Companys Contribution towards Provident Fund is charged to Profit & Loss Account. The amount of gratuity & leave encashment benefits on the basis of acturial valuation is charged to Profit & Loss Account.

(ix) Excise Duty:

The Excise Duty is accounted for at the time of despatch of goods from the Factory.

(x) Claims:

Credits for certain claims such as interest on Telephone Deposits, Insurance, Customs Duty Drawback etc. are taken as and when determined or received.

(xi) The liability for reimbursement of Medical Expenses and Leave Travel Allowance is provided for at the time when the same is due and the claim is made irrespective of the time of expenditure incurred by the employees.

(xii) Liquidated damages on Defence Sales are accounted for as and when ascertained.

(xiii) In determinig earnings per share, the company considers the net profit after tax and includes the post- tax effect of any extraordinary items. The number of shares used in computing basic earnings per share is the number of shares outstanding during the period.

(xiv) Income Tax

Provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions.

The differences that result between the profit offered for income tax and the profit as per the financial statement are identified and thereafter a deferred tax assets or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate being considered.

(xv) Impairment of Assets

The management assesses the performance of its unit to arrive at the value in use to check for impairment, if any, in Fixed Assets, as required under AS 28 of the ICAI and provides for any impairment therof in Profit & Loss Account.

(xvi) Provision, Contingent Liabilites and Contingent Assets

The Company creates a provision when there is a present obligation as a result of a past event where the out flow of economic resources is probable and a reliable estimate of the amount of obligation can be made. The disclousure is made for possible or present obligation that may, but probably will not, require out flow of resources as contingent liabilities in the financial statements. Contingent assets are not rec- ognized in the financial statements.

 
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