Accounting Policies of Mohit Industries Ltd. Company

Mar 31, 2017

1 CORPORATE INFORMATION

Mohit Industries Limited (''the company) is a public limited company domiciled in India and incorporated under the provisions of the Company Law. Its shares are listed on BSE and NSE. The company is having its head quarters in Surat and plants at Kim. The company is primarily engaged in manufacture of Texturized Yarn from POY and weaving of the Yarn to Grey Cloth.

2 SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the Historical Cost Convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 2013.

B. USE OF ESTIMATES

The preparation of financial statements in confirmation with GAAP requires the management to make estimates and assumptions considered in reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that estimates used in preparation of financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between actual results and the estimates are recognized in the periods in which these gets materialized.

C. INVENTORIES

Closing stocks are valued at lower of cost or estimated realizable value. Cost of inventories comprise Cost of Purchase, Cost of Conversion and other costs incurred in bringing them to their respective present location and condition. The cost has been worked out on FIFO basis.

D. INVESTMENTS

Non-Current Investments are stated at cost less provision for diminution, other than temporary, in value of such investments. Current Investments are carried at lower of Cost or Net realizable Value. Provision for diminution in value of non-current investments, other than of temporary nature, is charged to Profit & Loss Account.

E. DEPRECIATION & AMORTIZATION

I) Depreciation on fixed assets has been charged on straight line method (SLM) on useful life of assets as prescribed in Schedule II of the Companies Act, 2013 except for intangible assets.

II) Depreciation on all assets are charged at rates of Single Shift except for Plant & Machinery in which depreciation is charged at rates of Triple Shift.

III) Depreciation on addition has been provided from the date of putting the assets into use.

IV) Cost of Software capitalized is amortized over period of five years.

F. EMPOLYEE BENEFITS

(a) All the Short Term Employee Benefits are accounted for on the basis of services rendered by the employees of the company.

(b) Company contributes towards Provident Fund which is Defined Contribution schemes. Liability in in respect thereof is determined on basis of contribution required to be made as per statutes/ rules.

(c) No provision has been made for Long Term Employee Benefits such as Gratuity and Leave Encashment as the same are recognized as and when they become due for payment.

G. FIXED ASSETS

Fixed Assets are stated at Cost, Less Accumulated Depreciation. All Costs, including Financing Cost are included in Total cost and accordingly capitalized in Fixed Assets. Capital Work In Progress includes Capital Items not installed or Building construction not completed.

H. REVENUE RECOGNITION

Sale of Goods

Sales of goods are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer which generally coincides with the delivery of goods.

Sales of Services (Job Charges)

Job Charges are recognized on delivery of the goods to the customers after completing the job work on the same.

Export Benefits

Export Benefits are recognized in the year of export

I. BORROWING COST

Borrowing Costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of Cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged the Statement of Profit & Loss.

J. CENVAT and VALUE ADDED TAX (VAT)

CENVAT and VAT credit received on purchases is reduced from respective item of purchases. Excise Duty & VAT on Sales is credited to Payable account and differential amount, if any, is paid. Thus, the company has followed exclusive method of accounting whereby purchases, sales and stock is shown exclusive of Cenvat & VAT and accounted for in separate Account.

K. FOREIGN CURRENCY TRANSACTION

The Foreign Currency Transaction of the company includes Purchases of Fixed Assets and Sales of Texturized Yarn which are valued at the Rate prevailing at the time of the transaction.

Monetary assets & liabilities in foreign currency, outstanding at the close of year, are converted into Indian currency at appropriate exchange rate prevailing on date of Balance Sheet. The resultant gain or loss, except to the extent of long term monetary items for acquisition of capital assets, is charged to Statement of Profit & Loss.

Gain or Loss relating to Long Term Monetary items for financing acquisition of depreciable capital assets, is adjusted to the acquisition cost of such asset and depreciated over its remaining useful life.

L. TAXES ON INCOME

Tax Expenses comprises of both current and deferred tax at the applicable enacted rates. Current tax represents the amount of income tax payable in respect of taxable income for the reporting period.

Deferred tax represents the effect of timing differences between taxable income and accounting income for the reporting period that originate in one period and are capable of reversal in one or more subsequent periods. MAT credit available on current tax is recognized as asset. MAT credit is recognized if there is convincing evidence of realization of the same. MAT Credit utilized is recognized as Tax Expense.

M. FINANCIAL DERIVATIVES

In respect of derivative contracts, premiums paid, gains & losses on settlement and losses on restatement are recognized in Profit & Loss Statement.

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Mar 31, 2016

1 CORPORATE INFORMATION

Mohit Industries Limited (''the company) is a public limited company domiciled in India and incorporated under the provisions of the Company Law. Its shares are listed on BSE and NSE. The company is having its head quarters in Surat and plants at Kim. The company is primarily engaged in manufacture of Texturized Yarn from POY and weaving of the Yarn to Grey Cloth.

Scheme of Demerger

During the year the company has transferred its AAC Block Division to Bigbloc Construction Limited in pursuance of Scheme of Arrangement (Demerger) which has been approved by Hon''ble Gujarat High Court on 22 February, 2016 and is effective from 16th March, 2016. According to Scheme of Demerger all the assets & liabilities of AAC Block Division vests with Bigbloc Construction Limited with effect from Appointed dated which is 01st April, 2015. Thus, the financial statements of the company have been prepared considering AAC Block Division being transferred to Bigbloc Construction Limited effectively from 01st April, 2015. Thus, all the income & expenses and assets & liabilities of AAC Block Division is taken in Bigbloc Construction Limited and not considered in these Annual Financial Statements of the company. Due to above reason, figures of previous year are not comparable with the figures of this year.

2 SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the Historical Cost Convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 2013.

B. USE OF ESTIMATES

The preparation of financial statements in confirmation with GAAP requires the management to make estimates and assumptions considered in reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that estimates used in preparation of financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between actual results and the estimates are recognized in the periods in which these gets materialized.

C. INVENTORIES

Closing stocks are valued at lower of cost or estimated realizable value. Cost of inventories comprise Cost of Purchase, Cost of Conversion and other costs incurred in bringing them to their respective present location and condition. The cost has been worked out on FIFO basis.

D. INVESTMENTS

Non-Current Investments are stated at cost less provision for diminution, other than temporary, in value of such investments. Current Investments are carried at lower of Cost or Net realizable Value. Provision for diminution in value of non-current investments, other than of temporary nature, is charged to Profit & Loss Account.

E. DEPRECIATION & AMORTIZATION

I) Depreciation on fixed assets has been charged on straight line method (SLM) on useful life of assets as prescribed in Schedule II of the Companies Act, 2013 except for intangible assets.

II) Depreciation on all assets are charged at rates of Single Shift except for Plant & Machinery at Kim Unit in which depreciation is charged at rates of Triple Shift.

III) Depreciation on addition has been provided from the date of putting the assets into use.

IV) Cost of Software capitalized is amortized over period of five years.

F. EMPOLYEE BENEFITS

(a) All the Short Term Employee Benefits are accounted for on the basis of services rendered by the employees of the company.

(b) Company contributes towards Provident Fund which is Defined Contribution schemes. Liability in respect thereof is determined on basis of contribution required to be made as per statutes / rules.

(c) No provision has been made for Long Term Employee Benefits such as Gratuity and Leave Encashment as in the opinion of the management no such liabilities has become due as at the end of year.

G. FIXED ASSETS

Fixed Assets are stated at Cost, Less Accumulated Depreciation. All Costs, including Financing Cost are included in Total cost and accordingly capitalized in Fixed Assets. Capital Work In Progress includes Capital Items not installed or Building construction not completed.

H. REVENUE RECOGNITION Sale of Goods

Sales of goods are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer which generally coincides with the delivery of goods.

Sales of Services (Job Charges)

Job Charges are recognized on delivery of the goods to the customers after completing the job work on the same. Export Benefits

Export Benefits are recognized in the year of export

I. BORROWING COST

Borrowing Costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of Cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged the Statement of Profit & Loss.

J. CENVAT and VALUE ADDED TAX (VAT):-

CENVAT and VAT credit received on purchases is reduced from respective item of purchases. Excise Duty & VAT on Sales is credited to Payable account and differential amount, if any, is paid. Thus, the company has followed exclusive method of accounting whereby purchases, sales and stock is shown exclusive of Cenvat &VAT and accounted for in separate Account.

K. FOREIGN CURRENCY TRANSACTION

The Foreign Currency Transaction of the company includes Purchases of Fixed Assets and Sales of Texturized Yarn which are valued at the Rate prevailing at the time of the transaction.

Monetary assets & laities in foreign currency, outstanding at the close of year, are converted into Indian currency at appropriate exchange rate prevailing on date of Balance Sheet. The resultant gain or loss, except to the extent of long term monetary items for acquisition of capital assets, is charged to Statement of Profit & Loss.

Gain or Loss relating to Long Term Monetary items for financing acquisition of depreciable capital assets, is adjusted to the acquisition cost of such asset and depreciated over its remaining useful life.

L. TAXES ON INCOME

Tax Expenses comprises of both current and deferred tax at the applicable enacted rates. Current tax represents the amount of income tax payable in respect of taxable income for the reporting period. Deferred tax represents the effect of timing differences between taxable income and accounting income for the reporting period that originate in one period and are capable of reversal in one or more subsequent periods. MAT credit available on current tax is recognized as asset. MAT credit is recognized there is convincing evidence of realization of the same. MAT Credit utilized is recognized as Tax Expense.

M. FINANCIAL DERIVATIVES

In respect of derivative contracts, premiums paid, gains & losses on settlement and losses on restatement are recognized in Profit & Loss Statement.

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Mar 31, 2013

A. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

The finacial statements have been prepared under the Historical Cost Convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

B. USE OF ESTIMATES

The preparation of financial statements in confirmation with GAAP requires the management to make estimates and assumptions considered in reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that estimates used in preparation of financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between actual results and the estimates are recongnised in the periods in which these gets materialized.

C. INVENTORIES

Closing stocks are valued at lower of cost or estimated realisable value. Cost of inventories comprise Cost of Purchase, Cost of Conversion and other costs incurred in bringing them to their respective present location and condition.

D. INVESTMENTS

Non-Current Investments are stated at cost less provision for dimunition, other than temporary, in value of such investments. Current Investments are carried at lower of Cost or Net realisable Value. Provision for dimunition in value of non-current investments, other than of temporary nature, is charged to Profit & Loss Account.

E. DEPRECIATION & AMORTIZATION

I) Depreciation on fixed assets has been charged on straight line method (SLM) at the rates specified in Schedule XIV of the Companies Act, 1956.

II) Depreciation on all assets are charged at rates of Single Shift except for Plant & Machinery at Kim Unit in which depreciation is charged at rates of Triple Shift.

III) Depreciation on addition has been provided from the date of putting the assets into use.

IV) Intangible assets have been amortized over period of five years.

F. EMPOLYEE BENEFITS

All the Short Term Employee Benefits are accounted for on the basis of services rendered by the employees of the company. Contribution to Provident Fund are charged to Profit & Loss Account as and when the contribution is made. No provision has been made for Long Term Employee Benefits and Defined Benefit Plans as in opinion of the management no such liabilities has accrued as at the end of the accounting year.

G. FIXED ASSETS

Fixed Assets are stated at Cost, Less Accumulated Depreciation. All Costs, including Financing Cost are included in Total cost and accordingly capitalised in Fixed Assets. Capital Work In Progress includes Capital Items not installed or Building construction not completed.

H. REVENUE RECOGNITION

SALE OF GOODS

Sales of goods are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer which generally coincides with the delivery of goods. Sales include excise duty but excludes value added tax.

SALES OF SERVICE (JOB CHARGES)

Job Charges are recognised on delivery of the goods to the customers after completing the job work on the same.

I. BORROWING COST

Borrowing Costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of Cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

J. VALUE ADDED TAX (VAT):-

VAT credit received on purchases is reduced from respective item of purchases. VAT on Sales is credited to Vat Credit Account and differential amount is paid. Thus, the company has followed exclusive method of accounting whereby purchases, sales and stock is shown exclusive of VAT and accounted for in separate VAT Account.

K. FOREIGN CURRENCY TRANSACTION

The Foreign Currency Transaction of the company includes Purchases of Fixed Assets and Sales of Texturized Yarn which are valued at the Rate prevailing at the time of the transaction. The gain/loss between foreign currency at time of transaction and at time of payment/receipts is charged to P&L account. Also, the amount outstanding of monetary items in Foreign Currency has been converted in INR at Closing Rate on 31-03-2013 and any gain/loss on same has also been charged to Profit & Loss Account.

L. TAXES ON INCOME

Tax Expenses comprises of both current and deferred tax at the applicable enacted rates. Current tax represents the amount of income tax payable in respect of taxable income for the reporting period. Deferred tax represents the effect of timing differences between taxable income and accounting income for the reporting period that originate in one period and are capable of reversal in one or more subsequent periods. MAT credit available on current tax is recognised as asset. MAT credit is recognised if there is convincing evidence of realization of the same.

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Mar 31, 2012

A. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

The finacial statements have been prepared under the Historical Cost Convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

B. USE OF ESTIMATES t

The preparation of financial statements in confirmation with GAAP requires the management to make estimates and assumptions considered in reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that estimates used in preparation of financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between actual results and the estimates are recongnised in the periods in which these gets materialized.

C. INVENTORIES

Closing stocks are valued at lower of cost or estimated realisable value. Cost of inventories comprise Cost of Purchase, Cost of Conversion and other costs incurred in bringing them to their respective present location and condition.

D. INVESTMENTS

IMon-Current Investments are stated at cost less provision for dimunition, other than temporary, in value of such investments. Current Investments are carried at lower of Cost or Net realisable Value. Provision for dimunition in value of non-current investments, other than of temporary nature, is charged to Profit & Loss Account.

E. DEPRECIATION

I) Depreciation on fixed assets has been charged on straight line method (SLM) at the rates specified in Schedule XIV of the Companies Act, 1956.

II) Depreciation on all assets are charged at rates of Single Shift except for Plant &

Machinery at Kim Unit in which depreciation is charged at rates of Triple Shift. Further, the Depreciation on Plant & Machinery of Silvassa Unit & AAC Block Palghar Unit was charged as Triple Shift upto last year which has been changed to Single Shift in the Current Year.

III) Depreciation on addition has been provided from the date of putting the assets into use.

F. EMPOLYEE BENEFITS

All the Short Term Employee Benefits are accounted for on the basis of services rendered by the employees of the company. Contribution to Provident Fund are charged to Profit & Loss Account as and when the contribution is made. No provision has been made for Long Term Employee Benefits and Defined Benefit Plans as in opinion of the management no such liabilities has accrued as at the end of the accounting year.

G. FIXED ASSETS

Fixed Assets are stated at Cost, Less Accumulated Depreciation. All Costs, including Financing Cost are included in Total cost and accordingly capitalised in Fixed Assets. Capital Work In Progress includes Capital Items not installed or Building construction not completed and Advances given to Creditors for Fixed Assets.

H. REVENUE RECOGNITION SALE OF GOODS

Sales of goods are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer which generally coincides with the delivery of goods. Sales include excise duty but excludes value added tax.

SALES OF SERVICE (JOB CHARGES)

Job Charges are recognised on delivery of the goods to the customers after completing the job work on the same.

I. BORROWING COST

Borrowing Costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of Cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

J. VALUE ADDED TAX (VAT)

VAT credit received on purchases is reduced from respective item of purchases. VAT on Sales is credited to Vat Credit Account and differential amount is paid. Thus, the company has followed exclusive method of accounting whereby purchases, sales and stock is shown exclusive of VAT and accounted for in separate VAT Account.

K. FOREIGN CURRENCY TRANSACTION

The Foreign Currency Transaction of the company includes Purchases of Fixed Assets and Sales of Texturized Yarn which are valued at the Rate prevailing at the time of the transaction. The gain/loss between foreign currency at time of transaction and at time of payment/receipts is charged to P&L account. Also, the amount outstanding of monetary items in Foreign Currency has been converted in INR at Closing Rate on 31-03-2012 and any gain/loss on same has also been charged to Profit & Loss Account.

L. TAXES ON INCOME

Tax Expenses comprises of both current and deferred tax at the applicable enacted rates. Current tax represents the amount of income tax payable in respect of taxable income for the reporting period. Deferred tax represents the effect of timing differences between taxable income and accounting income for the reporting period that originate in one period and are capable of reversal in one or more subsequent periods. MAT credit available on current tax is recognised as asset. MAT credit is recognised if there is convincing evidence of realization of the same.

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Mar 31, 2011

A. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS

The finacial statements have been prepared under the Historical Cost Convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

B. INVENTORIES

Closing stocks are valued at lower of cost or estimated realisable value. Cost of inventories comprise Cost of Purchase, Cost of Conversion and other costs incurred in bringing them to their respective present location and condition.

C. INVESTMENTS

Long Term Investments are stated at cost. Current Investments are carried at lower of Cost or Net realisable Value.

D. DEPRECIATION

I) Depreciation on fixed assets has been charged on straight line method (SLM) at the rates specified in Schedule XIV of the Companies Act, 1956.

II) Depreciation on addition has been provided from the date of putting the assets into use.

E.EMPOLYEE BENEFITS

All the Short Term Employee Benefits are accounted for on the basis of services rendered by the employees of the company. Contribution to Provident Fund are charged to Profit & Loss Account as and when the contribution is made. No provision has been made for Long Term Employee Benefits and Defined Benefit Plans as in opinion of the management no such liabilities has accrued as at the end of the accounting year.

F. FIXED ASSETS

Fixed Assets are stated at Cost, Less Accumulated Depreciation. All Costs, including Financing Cost are included in Total cost and accordingly capitalised in Fixed Assets. Capital Work In Progress includes Capital Items not installed or Building construction not completed and Advances given to Creditors for Fixed Assets.

G. CAPITAL ISSUE EXPENDITURE/PRELIMINARY EXPENSES

a) Expenditure incurred in connection with issue of capital has been capitalised and is amortised over a period of 5 years.

b) Preliminary expenses are amortised over a period of 5 years.

H. VALUE ADDED TAX (VAT):-

VAT credit received on purchases is reduced from respective item of purchases. VAT on Sales is credited to Vat Credit Account and differential amount is paid. Thus, the company has followed exclusive method of accounting whereby purchases, sales and stock is shown exclusive of VAT tpand accounted for in separate VAT Account.

I. FOREIGN CURRENCY TRANSACTION

The Foreign Currency Transaction of the company includes Purchases of Fixed Assets and Sales of Texturized Yarn which are valued at the Rate prevailing at the time of the transaction. Thegain/loss between foreign currency at time of transaction and at time of payment/receipts is charged to P&L account. Also, the amount outstanding of monetary items in Foreign Currencyhas been converted in INR at Closing Rate on 31-03-2011 and any gain/loss on same has also been charged to Profit & Loss Account.

J. DEFERRED TAX LIABILITY

Deferred Tax Liability

Deferred tax resulting from 'timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the assets will be realised in future.

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Mar 31, 2010

A. Basis of presentation of financial statements

The fmacial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in india and the provisions of the companies act, 1956.

B. INVENTORIES

Closing stocks are valued at lower of cost or estimated realisable value. Cost of inventories comprise Cost of Purchase, Cost of Conversion and other costs incurred in bringing them to their respective present location and condition.

C. INVESTMENTS

Long Term Investments are stated at cost. Current Investments are carried at lower of Cost or Net realisable Value.

D. DEPRECIATION

I) Depreciation on fixed assets has been charged on straight line method (SLM) at the rates specified in Schedule XIV of the Companies Act, 1956.

II) Depreciation on addition has been provided from the date of putting the assets into use.

E. EMPOLYEE BENEFITS

All the Short Term Employee Benefits are accounted for on the basis of services rendered by the employees of the company. Contribution to Provident Fund are charged to Profit & Loss Account as and when the contribution is made. No provision has been made for Long Term Employee Benefits and Defined Benefit Plans as in opinion of the management no such liabilities has accrued as at the end of the accounting year.

F. FIXED ASSETS

Fixed Assets are stated at Cost, Less Accumulated Depreciation. All Costs, including Financing Cost are included in Total cost and accordingly capitalised in Fixed Assets. Capital Work In Progress includes Capital Items not installed or Building construction not completed and Advances given to Creditors for Fixed Assets.

G. CAPITAL ISSUE EXPENDITURE/PRELIMINARY EXPENSES

a) Expenditure incurred in connection with issue of capital has been capitalised and is amortised over a period of 5 years.

b) Preliminary expenses are amortised over a period of 5 years.

H. VALUE ADDED TAX (VAT):-

VAT credit received on purchases is reduced from respective item of purchases. VAT on Sales is credited to Vat Credit Account and differential amount is paid. Thus, the company has followed exclusive method of accounting whereby purchases, sales and stock is shown exclusive of VAT and accounted for in separate VAT Account.

I. FOREIGN CURRENCYTRANSACTION

The Foreign Currency Transaction of the company includes purchases of Raw material and Fixed Assets which are valued at the Rate prevailing at the time of the transaction.