Notes Forming Part of Financial Statements for the year ended 31st March, 2016 1 CORPORATEINFORMATION 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 ofTexturized 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 ail the assets & liabilities of AAC Block Division vests with Bigbloc Construction Limited with effect from Appointed dated which is 0lst April, 2015. Thus, the financial statements of the company have been brpared considering AAC Block Division being transferred to Bigbloc Construction Limited effectively from Olst April, 2015. Thus, ail 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 brvious year are not comparable with the figures of this year. 2 SIGNIFICANT ACCOUNTING POLICIES A. BASIS OF brSENTATION OF FINANCIAL STATEMENTS The financial statements have been brpared 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 brparation 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 brparation 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 brsent location and condition. The cost has been worked out on FIFO basis. 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. DEbrCIATION & AMORTIZATION I) Debrciation on fixed assets has been charged on straight line method (SLM) on useful life of assets as brscribed in Schedule II of the Companies Act, 2013 except for intangible assets. II) Debrciation on ail assets are charged at rates of Single Shift except for Plant & Machinery at Kim Unit in which debrciation is charged at rates of Triple Shift. III) Debrciation 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) Ail 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 perstatutes/ 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 Debrciation. Ail 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 of Services (Job Charges) Job Charges are recognised 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. Ail 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 CURRENCYTRANSACTION The Foreign Currency Transaction of the company includes Purchases of Fixed Assets and Sales of Texturized Yarn which are valued at the Rate brvailing at the time of the transaction. Monetary assets & liabities in foreign currency, outstanding at the close of year, are converted into Indian currency at appropriate exchange rate brvailing 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 debrciable capital assets, is adjusted to the acquisition cost of such asset and debrciated 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 rebrsents the amount of income tax payable in respect of taxable income for the reporting period. Deferred tax rebrsents 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 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, brmiums paid, gains & losses on settlement and losses on restatement are recognized in Profit & Loss Statement. 3 No provision for diminution in value of non-current investments has been made as in the opinion of management the diminution is of temporary nature. 4 Disclosures of the Micro, Small and Medium Enterprises:- The management of the Company has not received any intimation from 'suppliers' regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure requirements in this regard as per Schedule III of the Companies Act, 2013 could not be provided. 5 Previous period Comparatives Consequent to the Scheme of De-merger of AAC Block Division effective from lst April, 2015 the figures for the year ended March 31, 2016, are not comparable with the corresponding figures disclosed under brvious year ended March 31, 2015. As per our Audit Report Attached For RKM & CO. Chartered Accountants Firm Registration No.: 108553W (DeepakV. Bhatia) Partner M. No.102465 FOR & ON BEHALF OF BOARD OF DIRECTORS SITARAM SABOO Chairman NARAYAN SABOO Managing Director NARESH SABOO Director MANISH SABOO Director & CFO SWATI MALU Company Secretary Place : Surat Date : 27-05-2016 |