a) Company Overview
Mukta Agriculture Limited ("the Company") is engaged primarily in the business of trading in Agriculture products
and other related activities. The Company is a public limited Company incorporated and domiciled in India having
its registered office at 401/A, Pearl Arcade, Opp. P. K. Jewellers, Dawood Baugh Lane, Off. J. P. Road, Andheri
(West), Mumbai - 400 058. The Company is listed on BSE Limited (BSE).
b) Basis of Accounting
The Financial Statements of the Company have been prepared in accordance with the Indian Accounting Standards
(Ind AS) to comply with the Section 133 of the Companies Act, 2013 ("the 2013 Act"), and the relevant provisions,
rules and amendments, as applicable. The Financial Statements have been prepared on accrual basis under the
historical cost convention except certain assets measured at fair value.
c) Functional and Presentation Currency
These financial statements are presented in Indian rupees, which is the functional currency of the Company. All
financial information presented in Indian rupees has been rounded to the nearest rupees as per the requirement
of Schedule III, unless otherwise stated.
d) Use of Estimates and Judgements
The preparation of financial statements in conformity with Ind AS requires management to make estimates and
assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the
reported revenue and expenses during the year. The Management believes that the estimates used in preparation
of the Financial Statements are prudent and reasonable. Significant estimates used by the management in the
preparation of these financial statements include project revenue, project cost, saleable area, economic useful
lives of fixed assets, accrual of allowance for bad and doubtful receivables, loans and advances and current and
deferred taxes. Differences between the actual results and the estimates are recognised in the periods in which
the results are known / materialise.
e) Property, Plant and Equipment & Depreciation
i. Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment
losses, if any. The cost of an item of property, plant and equipment comprises:
- its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts
and rebates.
- any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable
of operating in the manner intended by management.
If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted for as separate items (major components) of property, plant and equipment.
Property, plant and equipment are derecognised from financial statement, either on disposal or when no
economic benefits are expected from its use or disposal. The gain or loss arising from disposal of property,
plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of
Property, plant and equipment recognised in the statement of profit and loss account in the year of occurrence.
ii. Subsequent expenditure
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and
the cost of the item can be measured reliably. The carrying amount of any component accounted for as a
separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss
during the reporting year in which they are incurred.
iii. Depreciation
Depreciation is being provided on written down value method on the basis of systematic allocation of the
depreciable amount of the assets over its useful life as stated in Schedule II of the Companies Act, 2013.
Depreciation on assets sold, discarded or scrapped, is provided up to the date on which the said asset is sold,
discarded or scrapped.
In respect of an asset for which impairment loss is recognized, depreciation is provided on the revised carrying
amount of the assets.
f) Intangible Assets -Recognition and measurement
Items of Intangible Assets are measured at cost less accumulated amortisation and impairment losses, if any. The
cost of intangible assets comprises:
- its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts
and rebates; and
- any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable
of operating in the manner intended by management.
i. Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the
expenditure will flow to the Company.
ii. Amortisation
Intangible assets are amortised over their estimated useful life on Straight Line Method.
g) Impairment of Assets
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other
assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal
and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or
groups of assets (cash-generating units). Non-financial assets that suffered an impairment are reviewed for
possible reversal of the impairment at the end of each reporting period.
h) Investments
Long term investments are stated at cost. However, provision for diminution is made to recognise any decline,
other than temporary, in the value of long term investments.
Current investments are stated at the fair value.
i) Measurement at fair values
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability or
- In the absence of a principal market, in the most advantageous market for the asset or liability
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
For the purpose of fair value disclosures, the Company has determined classes of assets & liabilities on the basis
of the nature, characteristics and the risks of the asset or liability and the level of the fair value hierarchy as
explained above.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period
during which the change has occurred.
j) Financial Instrument
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.
Financial assets include Trade receivable, loan to body corporate, loan to employees, security deposits,
Investments and other eligible current and non-current assets.
Financial liabilities include Loans, trade payable and eligible current and non-current liabilities.
Offsetting financial instruments - Financial assets and liabilities are offset and the net amount is reported in the
balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention
to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right
must not be contingent on future events and must be enforceable in the normal course of business and in the
event of default, insolvency or bankruptcy of the group or the counterparty.
k) Inventories
i. The cost of inventories comprises all cost of purchase, cost of conversion and other costs incurred in bringing
the inventories to their present location and condition. Inventories are valued at cost or net realizable value,
whichever is lower on the basis of first in first out method or specific identification, as the case may be.
ii. Finished stock are valued at lower of cost or net realizable value on the basis of actual identified units.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
l) Revenue Recognition
In respect of Sales
Sales are recognised when goods are supplied and significant risk and reward of the ownership in the goods are
transferred to the buyer as per the terms of contract and no significant uncertainty exists regarding the amount
of the consideration that will be derived from the sale of the goods. Sales are inclusive of duty and net of returns,
trade discounts, rebates and GST.
In respect of interest income
Interest income is accounted on an accrual basis at interest rate method. The effective interest rate is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross
carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the
expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment,
extension, call and similar options) but does not consider the expected credit losses.
In respect of Dividend income
Dividend income including share of profit in LLP is recognized when the right to receive the payment is established,
it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount
of the dividend can be measured reliably.
m) Taxation
The income tax expense or credit for the period is the tax payable on the current period's taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the Company operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax
liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss).
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
the end of the reporting period and are expected to apply when the related deferred income tax asset is realised,
or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
n) Employee Benefits
i. Short term employee benefits
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within
12 months after the end of the period in which the employees render the related service are recognised in
respect of employees' services up to the end of the reporting period and are measured at the amounts
expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit
obligations in the balance sheet.
ii. Post-employment benefits
Long-term employee benefits The Company's net obligation in respect of long term employee benefit is the
amount of future benefit that employees have earned in return of their service in the current and prior periods.
The benefit is discounted to determine its present value. Re- measurement are recognized in Statement of
Profit & Loss in the period in which they arise.
o) Cash and Cash equivalent
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities
of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
p) Earnings per share
Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of
equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest
and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity
shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the
weighted average number of equity shares which could have been issued on conversion of all dilutive potential
equity shares.
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