NOTES FORMING PART OF THE FINANCIAL STATEMENTS

Note No. Particulars_

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 SIGNIFICATE ACCOUNTING POLICIES

2.1 Basis of accounting and brparation of financial statements

The financial statements of the Company have been brpared 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 brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year.

2.2 Use of estimates

The brparation 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 brparation 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 Debrciation and amortisation

Debrciation has been provided on the straight-line method as per the rates brscribed 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 unamortised carrying values is being debrciated/ amortised 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 debrciation 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 debrciable fixed assets are adjusted to the cost of the respective assets and debrciated 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 debrciated 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 brviously 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 brparation 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 Debrciation 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.

Note No. 3

The amount due to Micro and Small Enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006 could not be determined due to non-availability of information from the enterprises. However, no interest was paid / payable in terms of Section 16 of the said Act.

Note No. 4

No amount is paid / payable by the Company under section 441A of the Companies Act, 1956 (cess on turnover), since the rules specifying the manner in which the cess shall be paid has not been notified yet by the Central Government.

Note No. 5

Income Tax Assessments of the Company have been completed upto assessment Year 2012-13.

Note No. 6

In terms of Accounting Standard 17, the Company has identified following segments and the details is furnished as under: