2.1 BASIS OF PREPARATION
Ministry of corporate affairs has notified roadmap to implement IND AS notified under Companies (Indian Accounting Standard) Rules 2015 as
amended by the Companies (Indian Accounting Standard) Rules 2016. And according to the said roadmap the company is required to apply IND
AS in preparation of financial statement from the financial year beginning from 1st April 2017.
These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the
('Ind AS') as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 ('Act') read with of the Companies
(Indian Accounting Standards) Rules,2016 as amended and other relevant provisions of the Act.
2.2 Use of estimates, assumption and judgement
The preparation of the financial statements requires management to make estimates, judgements and assumptions. Actual results could vary
from these estimates. The estimates, judgements and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision effects only that period or in the period of the revision and
future periods if the revision affects both current and future years (refer Notes on critical accounting estimates, assumptions and judgements).
The management believes that the estimates used in preparation of the financial statements are prudent and reasonable.
3 Statement of Compliance
The financial statements comprising of the Balance Sheet, Statement of Profit and Loss, Statement of changes in equity, Statement of Cash Flow
together with notes comprising a summary of Significant Accounting Policies and Other Explanatory Information for the Year ended on that
date and comparative information in respect of the preceding period and Balance Sheet as on transition date, i.e. 1st April 2016 have been
prepared in accordance with IND AS as notified and duly approved by the Board of Directors, along with proper explanation for material
departures.
4 ACCOUNTING POLICIES
4.1 Basis of Measurement
The standalone financial statements have been prepared on accrual basis and under the historical cost convention except following which have
been measured at fair value:
a. Financial assets and liabilities except those carried at amortised cost
b. Defined benefit plans - Plan assets measured at fair value less present value of defined obligations
An asset is classified as current when it is:
(a) Expected to be realised or intended to be sold or consumed in normal operating cycle,
(b) Held primarily for the purpose of trading,
(c) Expected to be realised within twelve months after the reporting period, or
(d) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting
period
All other assets are classified as non-current
A liability is classified as current when it is:
(a) Expected to be settled in normal operating cycle,
(b) Due to be settled within twelve months after the reporting period, or
(c) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities
are classified as non-current.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. Deferred tax
assets and liabilities are classified as non-current assets and liabilities.
4.2 Inventories
a. Raw Material :
Raw materials, components, stores and spares are valued at cost or landed value whichever is lower. However, materials and other items held
for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are
expected to be sold at or above cost. Cost of raw materials, components, stores and spares is determined on FIFO basis.
b. Finished goods & work in progress:
Work in progress is valued at cost
Finished goods are valued at lower of cost or net realisable value. Cost includes direct materials and labour and a portion of manufacturing
overhead based on normal operating capacity.Net realisable value is the estimated selling price in the ordinary course of business, less
estimated costs of completion and estimated costs necessary to make the sale.
4.3 Statement of cash flows
The Statement of cash flows has been prepared uuder indirect method as prescribed in IND AS 7 'Statement of Cash flows', where by net profit
before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or
payments and item of income or expense associated with investing or financial cash flows. The cash flows from operating, investing and
financing activities of the Company are segregated.
4.4 Prior Period Errors
Prior period errors include omissions and misstatements arising from a failure to use reliable information that was available or could have been
obtained when financial statements for those periods were approved for issue.
Prior period errors relating to the last comparative period will be shown by restating the comparative figures of Balance sheet and Profit and
loss, wherever necessary. Thus, it will be disclosed in the comparative financial statements as if the error had not even occurred.
4.5 Revenue recognition and other income
a. Revenue on sale of products
The Company recognise revenues on accrual basis and measured it at the fair value of the consideration received or receivable, net of discounts,
volume rebates, GST. Revenue is shown inclusive of excise duty since excise duty is liability of the manufacturer which forms part of the cost of
production, irrespective of whether the goods are sold or not.
Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is
probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the
goods, and the amount of revenue can be measured reliably.
Export sale has been recognised at the time of removal of goods from factory at invoice value (whether FOB or CIF) on the basis of exchange
rates declared by Custom Department for that particular month.
No significant financing component exists in the sales.
b. Revenue from services (Job Charges Received):
Revenue from services is recognised in the accounting period in which the services are rendered.
c. Export Benefits:
Export benefits in the form ofDuty Drawback, Duty Entitlement Pass Book (DEPB) and other schemes are recognized in the Statement of profit
and loss when the right to receive credit as per the terms of the scheme is established in respect of exports made and when there is no
significant uncertainty regarding the ultimate collection of the relevant export proceeds.
4.6 Other income
a. Interest
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the
rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on
initial recognition.
b. Dividend
Dividend income is recognized in the Statement of profit and loss when the right to receive dividend is established.
c. Lease Rent
Lease Rent is recognized as income in the Statement of profit and loss on accrual basis i.e. as and when lease rent is due.
4.7 Property. Plant and Equipment
Property, plant and equipment are tangible items that:
(a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
(b) are expected to be used during more than one period.
Items such as spare parts, stand-by equipment and servicing equipment are recognised in accordance with this Ind AS when they meet the
definition of property, plant and equipment. Otherwise, such items are classified as inventory.
Initial recognition: The Company has applied for the one time transition exemption of considering the carrying cost on the transition date i.e.
April 1, 2016 as the deemed cost under IND AS.The initial cost of property, plant and equipment comprises its purchase price, including non¬
refundable purchase taxes, and any directly attributable costs ofbringing an asset to working condition and location for its intended use. It also
includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.
Subsequent expenses and recognition: Expenditure incurred after the property, plant and equipment have been put into operation, such as
repairs and maintenance, are normally charged to the Statement of Profit and Loss in the period in which the costs are incurred. Subsequently
Property, Plant and Equipment are carried at cost less accumulated depreciation and accumulated impairment losses, if any.
Gain/loss on disposal: The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying amount of the asset and is recognized in the Statement of Profit and Loss on the date of
disposal or retirement.
Depreciation: Property, Plant and Equipments except free hold land is depreciated on Straight Line Method in the manner prescribed in
Schedule II to the Companies Act, 2013. Depreciation on additions and deletion during the year has been provided on pro-data basis with
refernce to the month of addition and deletion.
Capital work in progress
The expenses relating to the construction of building is capitalised at the time when they are incurred. And when the asset would be completed,
the same shall be transferred to asset a/c.
4.8 Leases
Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term unless
the receipts are structured to increase in line with expected general inflation to compensate for the excepted inflationary cost increases. The
respective leased assets are included in the balance sheet based on their nature.
Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term unless
either (a) another systematic basis is more represantative of the time pattern of the user's benefit even if the payments to the lessors are not on
that basis, or (b) the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor's
expected inflationary cost increases. In the event that lease premiums are paid to enter into operating leases, such premiums are recognised as
a prepaid expenditure and amortised over the period of lease.
Financial lease transactions entered are considered as financial arrangements and the leased assets are capitalised on an amount equal to the
present value of future lease payments and corresponding amount is recognised as a liability. The lease payments made are apportioned
between finance charge and reduction of outstanding liability in relation to leased asset.
Leasehold land has been amortised over the remaining period of lease term.
4.9 Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less accumulated amortisation/depletion
and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its
working condition for the intended use.
Intangible assets under development :
Expenditure incurred on intangible assets under development stage eligible for capitalization carried as intangible assets under development.
4.10 Investments in Subsidiary
The Company has invested in shares of its subsidiary Mayur Global Private Limited of whose 52% shares are in hand ofMayur Leathers Product
Limited.
4.11 Borrowing
Borrowings are initially recognised at net of transaction costs incurred and measured at amortised cost. Transaction cost is amortized over the
period of Borrowing using straight line method
4.12 Employee retirement benefits
a. Short - term Employee Benefits:-
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are
recognised in the period in which the employee renders the related services
The Company recognises the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a
liability after deducting any amount already paid.
b. Post-employment Benefits:-
(a) Defined Contribution Plan: Contribution to superannuation fund is recognised as an expense in the Statement of Profit & Loss as it is
incurred. There are no other obligations. Eligible employees receive benefits from a provident fund which is a defined contribution plan. Both
the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered
employee's salary.
4.13 Earnings per share
• Basic earnings per share is computed using the net profit for the year attributable to the shareholders' and weighted average number of shares
outstanding during the year.
• Diluted earnings per share is computed using the net profit for the year attributable to the shareholder' and weighted average number of equity
and potential equity shares outstanding during the year, except where the result would be anti-dilutive.
4.14 Impairment of assets
An asset is considered as impaired when at the date of Balance Sheet there are indications of impairment and the carrying amount of the asset
exceeds its recoverable amount (i.e. the higher of the fair value less cost to sell and value in use). The carrying amount is reduced to the
recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss. Any impairment gain loss is
transfarred to profit and loss.
|