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Accounting Policies of Mohite Industries Ltd. Company

Mar 31, 2016

i) Basic of Accounting

These financial statements 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, as applicable. The financial statements have been prepared under the historical cost convention on accrual basis.

ii) Inventories

Raw materials are carried at the lower of cost and net realizable value. Cost is determined on a FIFO basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of cost and net realizable value. Stores and spare parts are carried at lower of cost and net realizable value. Finished goods produced or purchased by the Company are carried at lower of cost and net realizable value. Cost includes direct material and labour cost and a proportion of manufacturing overheads.

iii) Use of Estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expense during the year. Examples of such estimates include provisions for doubtful receivables, employee benefits, provision for income taxes, accounting for contract costs expected to be incurred, the useful lives of depreciable fixed assets and provision for impairment. Future results could differ due to changes in these estimates and the difference between the actual result and the estimates are recognized in the period in which the results are known / materialize.

iv) Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation / amortization as per Schedule II of Companies Act, 2013. Costs include all expenses incurred to bring the asset to its present location and condition.

v) Depreciation

In respect of fixed assets (other than freehold land and capital work-in-progress) acquired during the year, depreciation / amortization is charged on a straight line basis so as to write-off the cost of the assets over the useful lives as prescribed in Schedule II of Companies Act, 2013.

vi) Revenue Recognition Sales

Sales are accounted for on when the sign cant risks and rewards of ownership are transferred to the buyer. Other Income

The Company recognizes income (including rent etc.) on accrual basis. However, where the ultimate collection of the same lacks reasonable certainty, revenue recognition is postponed to the extent of uncertainty.

vii) Leases

Assets taken on lease by the Company in its capacity as lessee, where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such a lease is capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is recognized for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognized as operating leases. Lease rentals under operating leases are recognized in the statement of profit and loss.

viii) Impairment

At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset. Reversal of impairment loss is recognised as income in the statement of profit and loss.

ix) Investments

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.

x) Employee benefits

(i) Post-employment benefit plans

Contributions to defined contribution retirement benefit schemes are recognized as expense when employees have rendered services entitling them to such benefits.

(ii) Other employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service. These benefits include compensated absences such as paid annual leave and performance incentives.

xi) Provision for Taxation

Current income tax expense comprises taxes on income from operations in India. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax in future period. Accordingly, MAT is recognized as an asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with it will fructify.

Deferred tax expense or benefit is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and is likely to reverse in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available to realize such assets. In other situations, deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

xii) 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 are translated at the exchange rate prevailing on the balance sheet date and exchange gains and losses are recognized in the statement of profit and loss. Foreign currency non-monetary assets are converted at exchange rates prevailing on the date of the transaction.

xiii) Provisions, Contingent liabilities and Contingent assets

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized in the financial statements. A contingent asset is neither recognized nor disclosed in the financial statements.

xiv) 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.


Mar 31, 2014

I) Basic of Accounting:

The financial statements are prepared on accrual basis under the historical cost convention, in accordance with Generally Accepted Accounting Principles in India, and in compliance with the Accounting Standards referred to in Section 211 (3C) and requirements of the Companies Act, 1956.

ii) Fixed Assets:

Fixed assets are stated at cost of acquisition, including interest during construction period if any, less accumulated depreciation.

iii) Investments:

Non Current Investments are carried at cost less provision, if any, for diminution in value other than temporary nature. Current investments are carried atlowerofcostormarketvalue.

iv) Inventories:

Inventories are valued as under-

a] Stock of cotton, stores, spares, packing material at lower of cost and market value.

b] Stock in process at lower of cost and market value.

c] Finished Yarn at lower of cost and market value.

d] Cotton waste at net realizable value.

v) Income Recognition:

The income is generally accounted for on accrual basis.

vi) Depreciation :

Depreciation for the current financial year is provided on ''Straight Line Method'' at the rates prescribed under Schedule XIV ofthe CompaniesAct, 1956.

vii) Foreign Exchange Transactions:

a] Transactions in foreign currency are recorded at actual exchange rates applied by the bankers of the company.

b] Receivables, balances in bank and payables denominated in foreign currency outstanding at the end of the year are translated at closing rates.

viii) Excise Duty:

Since the excise duty rate applicable to Company''s product is zero percent, no provision is required to be made in the accounts for excise duty payable on goods manufactured and lying in the factory premises.

ix) Provision for Taxation:

Provision for taxation is made attherates applicable under the IncomeTaxAct, 1961 after claiming deduction allowable under its various provisions. Deferred Tax has not been recognized as a matter of prudence in absence of reasonable certainty of income in near future.


Mar 31, 2013

I) Basic of Accounting :

The financial statements are prepared on accrual basis under the historical cost convention, in accordance with Generally Accepted Accounting Principles in India, and in compliance with the Accounting Standards referred to in Section 211 (3C) and requirements of the Companies Act, 1956.

ii) Fixed Assets :

Fixed assets are stated at cost of acquisition, including interest during construction period if any, less accumulated depreciation.

iii) Investments :

Non Current Investments are carried at cost less provision, if any, for diminution in value other than temporary nature.

Current investments are carried at lower of cost or market value.

iv) Inventories :

Inventories are valued as under- a] Stock of cotton, stores, spares, packing material at lower of cost and market value.

b] Stock in process at lower of cost and market value.

c] Finished Yarn at lower of cost and market value.

d] Cotton waste at net realizable value.

v) Income Recognition :

The income is generally accounted for on accrual basis.

vi) Depreciation :

Depreciation for the current financial year is provided on ‘Straight Line Method’ at the rates prescribed under Schedule XIV of the Companies Act, 1956.

vii) Foreign Exchange Transactions :

a] Transactions in foreign currency are recorded at actual exchange rates applied by the bankers of the company.

b] Receivables, balances in bank and payables denominated in foreign currency outstanding at the end of the year are translated at closing rates.

viii) Excise Duty :

Since the excise duty rate applicable to Company’s product is zero percent, no provision is required to be made in the accounts for excise duty payable on goods manufactured and lying inthe factory premises.

ix) Provision for Taxation :

Provision for taxation is made at the rates applicable under the Income Tax Act, 1961 after claiming deduction allowable under its various provisions.


Mar 31, 2012

(i) Basic of Accounting

The Financial Statements are prepared on accrual basis under the historical cost convention, in accordance with Generally Accepted Accounting Principles in India, and in compliance with the Accounting Standards referred to in Section 211 (3C) and requirements of the Companies Act, 1956.

(ii) Fixed Assets:

Fixed assets are stated at cost of acquisition, including interest during construction period if any, less accumulated depreciation.

(iii) Investments:

Non Current Investments are carried at cost less provision, if any, for diminution in value other than temporary nature.

Current investments a re carried at lower of cost or ma rket value.

(iv) Inventories :

Inventories are valued as under:

[a] Stock of cotton, stores, spares, packing material at lower of cost and market value.

[b] Stock in process - at lower of cost and market value.

[c] Finished Yarn at lower of cost and market value.

[d] Cotton waste at net realizable value.

(v) Income Recognition :

The income is generally accounted for on accrual basis.

(vi) Depreciation :

Depreciation for the current financial year is provided on 'Straight Line Method' at the rates prescribed under Schedule XIV of the Companies Act, 1956.

(vii) Foreign Exchange Transactions :

[a] Transactions in foreign currency are recorded at actual exchange rates applied by the bankers of the Company.

[b] Receivables, balances in bank and payables denominated in foreign currency outstanding at the end of the year are translated at closing rates.

(viii) Excise Duty:

Since the excise duty rate applicable to Company's product is zero percent, no provision is required to be made in the accounts for excise duty payable on goods manufactured and lying in the factory premises.

(ix) Provision for Taxation:

Provision for taxation is made at the rates applicable under the Income Tax Act, 1961 after claiming deduction allowable under its various provisions.


Mar 31, 2010

1. Accounting Convention:

The financial statements are prepared on accrual basis under the historical cost convention, in accordance with Generally Accepted Accounting Principles in India, and in compliance with the Accounting Standards referred to in Section 211 (3C) and requirements of the Companies Act, 1956.

2. Fixed Assets:

Fixed assets are stated at cost of acquisition, including interest during construction period if any, less accumulated depreciation.

3. Investments:

Long-term investments are carried at cost less provision, if any, for diminution in value other than temporary. Current investments are carried at lower of cost or market value.

4. Inventories:

Inventories are valued as under:

[a] Stock of cotton, stores, spares, packing material at lower at cost and market value.

[b] Stock in process — Yarn manufacturing at lower of cost and market value.

[c] Finished Yarn at lower of cost and market value.

[d] Cotton waste at net realizable value.

5. Income recognition:

The income is generally accounted for on accrual basis.

6. Depreciation:

Depreciation for the current financial year is provided on Straight Line Method at the rates prescribed under Schedule XIV of the Companies Act, 1956.

7. Foreign Exchange Transactions:

[a] Transactions in foreign currency are recorded at actual exchange rates applied by the bankers of the Company.

[b] Receivables, balances in bank and payables denominated in foreign currency outstanding at the end of the year are translated at closing rates.

8. Excise Duty:

Since the excise duty rate applicable to Companys product is zero percent, no provision is required to be made in the accounts for excise duty payable on goods manufactured and lying in the factory premises.

9. Provision for taxation:

Provision for taxation is made at the rates applicable under the Income Tax Act, 1961 after claiming deduction allowable under its various provisions.

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