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Accounting Policies of ITL Industries Ltd. Company

Mar 31, 2015

1 CORPORATE INFORMATION

1.1 ITL Industries Limited is engaged in Manufacturing of Band Saw Machines, CNC Tube Mills, Machine tools & Sale/purchase of Hydraulic Items. etc.

1.2 Registered Office of the Company is situated at 111, Sector B, Industrial Area Sanwer Road, Indore 452015 (M.P.)

2.1 Basis of accounting and preparation of financial statements

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 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. 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.

2.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

2.3 Inventories

Inventories are valued at cost. Cost includes all charges in bringing the goods to the point of sale.

2.4 Depreciation and amortization

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule II to the Companies Act, 2013. Pursuant to the enactment of the act , the company has applied the estimated useful lives of fixed assets . Accordingly the unamortized carrying values is being depreciated/ amortized over the revised/ remaining useful lives of assets. The difference in carrying values on 01/04/2014 due to shift from Schedule XiV of the Companies Act 1956 to Schedule II of the Companies Act 2013 has been charged to retained earnings.

2.5 Revenue recognition

Sale of goods/services:

Sales comprise sale of goods net of trade discount and sales tax. Excise duty collected has been included in sales value.

2.6 Other income

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

2.7 Tangible fixed assets

"Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance."

2 . 8 Employee benefits

Employee benefits include provident fund, superannuation fund, gratuity fund,. Liability of Gratuity has been provided as actually determined as at the year end and contribution is being made to LIC of India under group gratuity fund. However, leave encashment on separation has been accounted for on payment basis.

2. 9 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

2.10 Taxes on income

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

2.11 Treatment of Prior Period and Extra Ordinary Items

Any material (other than those arising out of over/ under estimation in earlier years) arising as a result of error or omission in preparation of earlier years financial statements are separately disclosed.

2.12 Provisions and Contingent liabilities

A provision is made based on reliable estimate when it is probable that an outflow or resources embodying economic benefits will be required to settle an obligation. Contingent liabilities, if material, are disclosed by way of notes to accounts.

2.13 Excise Duty

Excise duty payable on finished goods held in plant is neither included in expenditure nor valued in stocks, but it is accounted for on clearance of goods from plant. This accounting treatment has no impact on profits

2.14 Research and Development.

Capital Expenditure is included in Fixed Assets and Depreciation is provided at the respective applicable rate. Revenue expenditure is charged off in the year in which they are incurred and are included with the respective nature of accounts heads in the profit and loss account statement.


Mar 31, 2014

1.1 Basis of accounting and preparation of financial statements

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 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. 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.

2.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

2.3 Inventories

Inventories are valued at cost. Cost includes all charges in bringing the goods to the point of sale.

2.4 Depreciation and amortisation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 .

2.5 Revenue recognition Sale of goods/services:

Sales comprise sale of goods net of trade discount and sales tax. Excise duty collected has been included in sales value.

2.6 Other income

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

2.7 Tangible fixed assets

"Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalised and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance."

2. 9 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

2.10 Taxes on income

"Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income TaxAct, 1961.MinimumAlternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.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 substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. 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. "

2.11 Treatment ofPrior Period and Extra Ordinary Items

Any material (other than those arising out of over/ under estimation in earlier years) arising as a result of error or omission in preparation of earlier years financial statements are separately disclosed.

2.12 Provisions and Contingent liabilities

A provision is made based on reliable estimate when it is probable that an outflow or resources embodying economic benefits will be required to settle an obligation. Contingent liabilities, if material, are disclosed by way of notes to accounts.

2.13 Excise Duty

Excise duty payable on finished goods held in plant is neither included in expenditure nor valued in stocks, but it is accounted for on clearance of goods from plant. This accounting treatment has no impact on profits.

2.14 Research and Development

Research and Development costs other than cost of fixed assets acquired/ developed, are charged as expenditure in the year in which they are incurred


Mar 31, 2013

1.1 Basis of accounting and preparation of financial statements The financial statements of the Company have been prepared in accordance with the Generally Accepted, Accounting principles

1.2 Use of estimates The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Inventories Inventories are valued at cost. Cost includes all charges in bringing the goods to the point of sale.

1.4 Depreciation and amortisation Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956 .

1.5 Revenue recognition Sale of goods/services: Sales comprise sale of goods net of trade discount and sales tax. Excise duty collected has been included in sales value.

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

1.7 Tangible fixed assets Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalised and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

1.8 Employee benefits

Employee benefits include provident fund, superannuation fund, gratuity fund,. Liability of Gratuity has been provided as actually determined as at the year end and contribution is being made to LIC of India under group gratuity fund. However, leave encashment on separation has been accounted for on payment basis.

1.9 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

1.10 Taxes on income Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

1.11 Treatment of Prior Period and Extra Ordinary Items Any material (other than those arising out of over/ under estimation in earlier years) arising as a result of error or omission in preparation of earlier years financial statements are separately disclosed.

1.12 Provisions and Contingent liabilities A provision is made based on reliable estimate when it is probable that an outflow or resources embodying economic benefits will be required to settle an obligation. Contingent liabilities, if material, are disclosed by way of notes to accounts.

1.13 Excise Duty Excise duty payable on finished goods held in plant is neither included in expenditure nor valued in stocks, but it is accounted for on clearance of goods from plant. This accounting treatment has no impact on profits.

1.14 Research and Development Research and Development costs other than cost of fixed assets acquired/ developed, are charged as expenditure in the year in which they are incurred.


Mar 31, 2012

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Inventories

Inventories are valued at cost. Cost includes all charges in bringing the goods to the point of sale.

1.4 Depreciation and amortisation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956.

1.5 Revenue recognition Sale of goods/services:

Sales comprise sale of goods net of trade discount and sales tax. Excise duty collected has been included in sales value.

1.6 Other income

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

1.7 Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated overthe remaining useful life of such assets. Machineryspares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalised and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

1.8 Employee benefits

Employee benefits include provident fund, superannuation fund, gratuity fund,. Liability of Gratuity has been provided as actually determined as at the year end and contribution is being made to LIC of India under group gratuity fund. However, leave encashment on separation has been accounted for on payment basis.

1.9 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post taxeffect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

1.10 Taxes on income

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

1.11 Treatment of Prior Period and Extra Ordinary Items

Any material (other than those arising out of over/ under estimation in earlier years) arising as a result of error or omission in preparation of earlier years financial statements are separately disclosed.

1.12 Provisions and Contingent liabilities

A provision is made based on reliable estimate when it is probable that an outflow or resources embodying economic benefits will be required to settle an obligation. Contingent liabilities, if material, are disclosed by way of notes to accounts.

1.13 Excise Duty

Excise duty payable on finished goods held in plant is neither included in expenditure nor valued in stocks, but it is accounted for on clearance of goods from plant. This accounting treatment has no impact on profits.

1.14 Research and Development

Research and Development costs other than cost of fixed assets acquired/ developed, or charged as expenditure in the year in which they are incurred


Mar 31, 2010

The Company generally follows the Mercantile System of accounting recognizing both Income and Expenditure on accrual basis.

The accounts are prepared on historical basis and as a going concern, accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles..

A. Sales :

Sales comprise sale of goods net of trade discount and sales-tax.

B. Research & Development :

Research and development costs (other than cost of Fixed Assets acquired/developed) are charged as an expenses in the year in which they are incurred.

C. Retirement Benefits :

Provision for accruing liabilities for Gratuity has been made on the basis of the liability as actually determined as at the year end, and contribution are being made to L.I.C. of India under its Group Gratuity Fund. However, Leave encashment on separation has been accounted for on payment basis.

D. Depreciation :

Depreciation is provided under the Straight Line Method at rates provided under Schedule XIV of the Companies Act, 1956. The Company has not provided depreciation on assets of Agro division as the assets are not used during the year consequently the depreciation for the year is lower by Rs.1,25,332/-.

E. Inventories :

Work in process semi finished goods and finished goods are valued at estimated manufacturing cost. Stock of raw materials, Bought out items and stores spare and standard items is valued at moving average cost.

F. Excise Duty :

Excise Duty payable on finished goods held in plant is neither included in expenditure nor valued in stocks, but is accounted for on clearance of goods from plant. This accounting treatment has no impact on profits.

G. Taxes on Income :

i) Current tax is determined on the basis of the amount of tax payable on taxable income for the year.

ii) In accordance with Accounting standard 22 "Accounting for taxes on Income" issued by the institute of Chartered Accountants of India, amount of deferred tax for the timing difference between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted or subsequently enacted as of the Balance Sheet date.

 
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