1 Corporate Information
Mrugesh Trading Ltd ("the Company") is a public limited Company domiciled in India. The registered office of the
Company is at 252, Swantraveer Savarkar Rashtriya Smarak,Veer Savarkarmarg, Next to Mayer Banglow, Shivaji Park,
Mumbai City, Mumbai, Maharashtra, India, 400028. The company maintains its books of accounts at Office No 704, Shilp
Zaveri, Nr. Shaymal Cross Road, Satelite, Ahmedabad, Gujarat, India, 380015.
2 Basis of Preparation and Presentation of standalone financial statements:-
2.1 Statement of Compliance and Basis of Preparation
The standalone financial statements comply in all material aspects with the Indian Accounting Standards (Ind AS) notified
under the relevant provisions of Companies Act, 2013 (the "Act") read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended and other relevant provisions of the Act. The financial statements have been prepared on a
historical cost convention and accrual basis, except for certain financial assets and liabilities measured at fair value.
2.2 Going Concern
These standalone financial statements have been prepared on a going concern basis.
2.3 Classification of Current and Non-current Assets and Liabilities
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is
treated as current when it is:-
• Expected to be realised or intended to be sold or consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months after the reporting period, or
• 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 current when:
• It is expected to be settled in normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash
equivalents. The Company has identified twelve months as its operating cycle for the purpose of current-non current
classification of assets and liabilities.
2.4 Rounding of Amounts
All the amounts disclosed in the standalone financial statements and notes presented in Indian Rupees have been rounded
off to the nearest thousand as per the requirement of Schedule III to the Act unless otherwise stated.
2.5 Functional and Presentation Currency
These standalone financial statements are presented in Indian Rupees ("Rs." or "INR"), which is also the Company's
functional currency. All amounts have been rounded off to two decimal places to the nearest thousand, unless otherwise
indicated.
3 Summary of Significant Accounting Policies
This note provides a list of the significant accounting policies adopted in the preparation of these standalone financial
statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
A Use of Estimates
The preparation of financial statements in conformity with Ind AS requires management to make certain estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities (including contingent liabilities)
and the accompanying disclosures. The management believes that the estimates used in preparation of the financial
statements are prudent and reasonable. Future results could differ due to these estimates and differences between the
actual results and the estimates are recognised in the periods in which the results are known / materialized.
B Significant Estimates and assumptions are required in particular for
(i) Recognition of deferred tax assets
A deferred tax asset is recognised for all the deductible temporary differences to the extent that it is probable that taxable
profit will be available against which the deductible temporary difference can be utilised. The management assumes that
taxable profits will be available while recognising deferred tax assets.
(ii) Impairment of Non Financial Assets:
The Company assesses at each reporting date as to whether there is any indication that any property, plant and equipment
and intangible assets may be impaired. If any such indication exists the recoverable amount of an asset is estimated to
determine the extent of impairment, if any. An impairment loss is recognised in the Statement of Profit and Loss to the
extent, asset's carrying amount exceeds its recoverable amount.
C Inventories
Inventories are valued at the lower of cost and the net realisable value estimated by the management after providing for
obsolescence and other losses, where considered necessary.
Cost of Stock in Trade is determined on Moving Average Method.
D Property, Plant and Equipment
Property, Plant and Equipments are stated at cost of acquisition less accumulated depreciation and impairment in value, if
any. Cost comprises the purchase price and any other attributable cost of bringing the asset to its working condition for its
intended use. Subsequent costs have been included in the asset's carrying amount as recognised as a separate asset, as a
appropriate only when it is probable future benefits associated with the item will flow to the entity and the cost can be
measured reliably.
Depreciation is provided using straight line method, pro-rata for the period of use, based on the respective useful lives as
mentioned under Schedule II of the Act. Leasehold land and improvements are depreciated over the estimated useful life,
or the remaining period of lease from the date of capitalisation, whichever is shorter.
Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the
asset is derecognised.
E Foreign Currency Transactions:
The Company's financial statements are presented in Indian Rupees [Rs.], which is the functional and presentation
currency.
(i) The transactions in foreign currencies are translated into functional currency at the rates of exchange prevailing on the
dates of transactions.
(ii) Foreign Exchange gains and losses resulting from settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies at the year end exchange rates are recognised in the Statement of
Profit and Loss. However, foreign currency differences arising from the translation of certain equity instruments where the
Company had made an irrevocable election to present in OCI subsequent changes in the fair value are recognised in OCI.
(iii) Foreign exchange differences regarded as adjustments to borrowing costs are presented in the Statement of Profit and Loss
within finance costs. All other foreign exchange gains and losses are presented in the Statement of Profit and Loss on a net
basis.
F Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
A. Financial Assets
i. Initial recognition and measurement
All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted
to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.
ii. Subsequent measurement
a) Financial assets carried at amortised cost (AC)
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in
order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding.
b) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
c) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured at FVTPL.
iii Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based
on Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting
period.
B. Financial Liabilities
i). Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring
nature are directly recognised in the Statement of Profit and Loss as finance cost.
ii). Subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method.
C. Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or
it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of
a financial liability) is derecognized from the Company's Balance Sheet when the obligation specified in the contract is
discharged or cancelled or expires.
G Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The company is reported at an overall level and hence there are no reportable segment as per Ind AS 108.
H Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases
of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing
the right to use the underlying assets.
i) Right of use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease
incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term. The right of use assets
are also subject to impairment.
ii) Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments are fixed payments. In calculating the present value of lease
payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate
implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes
to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the
assessment of an option to purchase the underlying asset.
iii) Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease
term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of
low-value assets recognition exemption that are considered to be low value.
Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over
the lease term.
I Borrowing Costs
(i) Borrowing costs consist of interest and other borrowing costs that are incurred in connection with the borrowing of funds.
Other borrowing costs include ancillary charges at the time of acquisition of a financial liability, which is recognised as per
EIR method.
Borrowing costs also include exchange differences to the extent regarded as an adjustment to the borrowing costs.
(ii) Borrowing costs that are directly attributable to the acquisition/ construction of a qualifying asset are capitalised as part of
the cost of such assets, up to the date the assets are ready for their intended use. All other borrowing costs are recognised in
profit or loss in the period in which they are incurred.
J Revenue Recognition
Revenue from sale of products is recognised when the control on the goods have been transferred to the customer. The
performance obligation in case of sale of product is satisfied at a point in time i.e., when the material is shipped to the
customer or on delivery to the customer, as may be specified in the contract.
Brokerage income is recognized on transactions on which "Settlements" are completed during the year. In case of Income
from Marketing of Financial Products the same are accounted on cash basis.
Other Income is accounted on accrual basis except Dividend Income, Interest on Government Bonds and Interest on
Income Tax Refunds which are accounted on cash basis.
K Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or loss attributable to equity holders of the company (after
deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding
during the period.
Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in
dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares
outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and
reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders of the parent company and the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
L Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original
maturity of three months or less, that are readily convertible to a known amount of cash and subject to an insignificant risk
of changes in value.
M Trade and other payables
These amounts represent liabilities for goods and services provided to the company prior to the end of the financial year
which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other
payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They
are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest (EIR)
method.
N Taxes on Income
Tax expense comprises of current income tax and deferred tax.
(i) Current Taxation
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at
the reporting date where the Company operates and generates taxable income.
Current tax items, relating to items recognised outside the statement of profit and loss, are recognised in correlation to the
underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions
where appropriate. Provision for current tax is recognised based on the estimated tax liability computed after taking credit
for allowances and exemption in accordance with the Income Tax Act, 1961.
Current tax assets and liabilities are offset where the Company has a legally enforceable right to offset and intends either to
settle on a net basis, or to realize the asset and settle the liability simultaneously.
(ii) Deferred Taxation
Deferred tax is provided using the balance sheet approach on temporary differences between the tax bases of assets and
liabilities and their carrying amounts in the financial statements at the reporting date. Deferred tax relating to items
recognised outside profit or loss is recognised outside profit or loss (either in Other Comprehensive Income or in equity).
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any
unused tax losses to the extent it is probable that these assets can be realised in future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date. Deferred tax assets and liabilities are offset where a legally enforceable right exists to offset current tax
assets and liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Deferred tax includes MAT tax credit. the Company reviews such tax credit asset at each reporting date to assess its
recoverability.
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