Home  »  Company  »  Mallcom (India) L  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Mallcom (India) Ltd. Company

Mar 31, 2018

1. Significant Accounting Policies

1.1) Basis of Measurement

The Financial Statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value:

- Derivatives financial instruments

- Certain Financial assets measured at fair value (refer accounting policy regarding financial instruments) The financial statements are prepared in Indian Rupees ("INR”) and all values are rounded to the nearest Lakhs, except otherwise indicated.

2.2] Property, Plant and Equipment

On transition to Ind AS, the company has measured Property, Plant and Equipment at previous GAAP carrying value. Consequently the previous GAAP carrying value has been assumed to be deemed cost of Property, Plant and Equipment on the date of transition (Refer Note 49). Subsequently, Property, Plant and equipment are stated at cost less accumulated depreciation/amortization and impairment, if any. Freehold land not containing mineral reserve is disclosed at cost less impairment, if any. Cost comprises of purchase price and directly attributable cost of acquisition/bringing the asset to its working condition for its intended use (net of credit availed, if any) When significant parts of the plant and equipment are required to be replaced at intervals the company depreciates them seperately based on their specific useful lives. Capital work in progress is carried at cost and directly attributable expenditure during construction period which is allocated to the property, plant and equipment on the completion of project.

Borrowing costs directly attributable to the acquisition/ construction of a qualifying asset are capitalized as part of the cost of such asset till such time the asset is ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

Depreciation and Amortisation

Depreciation is provided on written down value method over the estimated useful lives of the assets. Leasehold Property are depreciated over their expected lease terms. No depreciation is charged on Freehold land. Estimated useful lives of the assets are as follows:

Nature of Asset Estimated Useful Lives

Plant & Machinery 15 Years

Building 30 Years

Electric Installations 15 Years

Mould & Dies 15 Years

Furniture & Fixtures 10 Years

Vehicles 8 Years

Office Equipment 5 Years

Computers 3 Years

Computer License 6 Years

Patent Right 6 Years

Gains or Losses arising from de-recognition of assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of Profit and loss when the asset is derecognized.

The residual Values, useful lives and method of depreciation of property, plant and equipment are reviewed at each financial year end adjusted prospectively, if appropriate.

3.3) Intangible Assets

On transition to Ind AS, the company has adopted optional exemption under Ind AS 101 to measure Intangiable Assets at previous GAAP carrying value. Consequently the previous GAAP carrying value has been assumed to be deemed cost of Intangiable Assets on the date of transition (Refer Note 49). Subsequently, Intangiable assets are stated at cost less accumulated amortization and impairment, if any. Cost comprises of purchase price and directly attributable cost of acquisition/bringing the asset to its working condition for its intended use (net of credit availed, if any]

Amortization is provises on a written down value method overestimated useful lives.

The residual values, useful lives and method of depreciation of intangiable assets are reviewed at each financial year end and adjusted prospectively, if appropriate.

3.4) Derecognition of Tangible and Intangible assets

An item of PPE is de-recognised upon disposal or when no future economic benefits are expected to arise from its use or disposal Gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Statement of Profit and Loss.

3.5) Leases

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease rentals are recognized as an expense in the Statement of Profit and Loss

3.6) Impairment of Non-Financial Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal & external factors. An impairment loss is recognized wherever the carrying amounts of an asset exceed its recoverable amount. The recoverable amount is the greater of the assets’ net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. Reversal of impairment loss is recognized immediately as Income in the Statement of Profit and Loss.

3.7) Financial Assets and Financial Liabilities Financial assets and financial liabilities (financial instruments) are recognized when the Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the Statement of Profit and Loss.

The financial assets and financial liabilities are classified as current, if they are expected to be realised or settled within operating cycle of the Company or otherwise these are classified as non-current.

The classification of financial instruments whether to be measured at Amortised Cost, at Fair Value through Profit and Loss (FVTPL) or at Fair Value through Other Comprehensive Income (FVTOCI) depends on the objective and contractual terms to which they relate. Classification of financial instruments are determined on initial recognition

i) Cash & Cash equivalents

Cash & Cash equivalents consist of Cash on Hand, Cash at Bank, Term Deposits & Cheques in Hand. All highly liquid financial instruments, which are readily convertible into determinable amounts of cash and which are subject to an insignificant risk of change in value and are having original maturities of three months or less from the date of purchase, are considered as cash equivalents. Cash and cash equivalents includes balances with banks which are unrestricted for withdrawal and usage.

ii) Financial Assets and Financial Liabilities measured at amortised cost

Financial Assets held within a business whose objective is to hold these assets 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 are measured at amortised cost The above Financial Assets and Financial Liabilities subsequent to initial recognition are measured at amortized cost using Effective Interest Rate (EIR) method. The effective interest rate is the rate that discounts estimated future cash payments or receipts (including all fees and points paid or received, transaction costs and other premiums or discounts) through the expected life of the Financial Asset or Financial Liability to the gross carrying amount of the financial asset or to the amortised cost of financial liability, or where appropriate, a shorter period, to the net carrying amount on initial recognition

iii) Financial Asset at Fair Value through Other Comprehensive Income (FVTOCI)

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business 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 amountout standing. Subsequent to initial recognition, they are measured at fair value and changes therein are recognized directly in other comprehensive income

iv) For the purpose of para (ii) and (iii) above, principal is the fair value of the financial asset at initial recognition and interest consists of consideration for the time value of money and associated credit risk.

v) Financial Assets or Liabilities at Fair value through profit or loss

Financial Instruments which does not meet the criteria of amortised cost or fair value through other comprehensive income are classified as Fair Value through Profit and loss. These are recognised at fair value and changes therein are recognized in the statement of profit and loss.

vi) Derivative and Hedge Accounting

The Company enters into derivative financial instruments such as foreign exchange forward, swap and option contracts to mitigate the risk of changes in foreign exchange rates in respect of financial instruments and forecasted cash flows denominated in certain foreign currencies. The Company uses hedging instruments which provide principles on the use of such financial derivatives consistent with the risk management strategy of the Company. The hedge instruments are designated and documented as hedges and effectiveness of hedge instruments to reduce the risk associated with the exposure being hedged is assessed and measured at inception and on an ongoing basis.

Any derivative that is either not designated as a hedge, or is so designated but is ineffective as per Ind AS 109 "Financial Instruments",is categorised as a financial asset, at fair value through profit or loss. Transaction costs attributable are also recognised in Statement of profit and loss. Changes in the fair value of the derivative hedging instrument designated as a fair value hedge are recognised in the Statement of profit and loss Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognised in other comprehensive income and presented within equity as cash flow hedging reserve to the extent that the hedge is effective

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. Any gain or loss recognised in other comprehensive income and accumulated in equity till that time remains and thereafter to the extent hedge accounting being discontinued is recognised in Statement of profit and loss. When a forecasted transaction is no longer expected to occur, the cumulative gain or loss accumulated in equity is transferred to the Statement of profit and loss.

vii) Impairment of financial assets

A financial asset is assessed for impairment at each balance sheet date. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

The Company measures the loss allowance for a financial asset at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. However, for trade receivables or contract assets that result in relation to revenue from contracts with customers, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

viii) Derecognition of financial instruments

The Company derecognizes a financial asset or a Company of financial assets when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party On derecognition of a financial asset (except for equity instruments designated as FVTOCI), the difference between the asset’s carrying amount and the sum of the consideration received and receivable are recognised in statement of profit and loss.

On derecognition of assets measured at Fair Value through Other Comprehensive Income FVTOCI, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment

Financial liabilities are derecognised if the Company’s obligations specified in the contract expire or are discharged or cancelled. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognized in Statement of Profit and Loss

3.8) Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investment. All other investments are classified as long term investments. Current Investments are carried at lower of cost and fair value determined on individual investment basis. Long-terms investments are carried at cost. A provision of diminution is made to recognize a decline, other than temporary, in the value of long-term investments

3.9) Inventories

Inventories are valued at lower of cost or net realisable value. Cost of inventories is ascertained on ''FIFO’ basis. Materials and other supplies held for use in the production of inventories are not written down below cost if the related finished products are expected to be sold at or above cost.

i) Raw Materials, Stores and spares

These are valued at the lower of cost and estimated net realizable value, after providing for cost of obsolescence and other anticipated losses, wherever, considered necessary.

ii] Work-in-progress and Finished Goods

These include cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on First in First out (FIFO) basis.

3.10) Foreign Currency Transaction

Foreign currency transactions are recorded in the reporting currency prevailing at the date of the transaction. Realized gains/ losses on foreign exchange transactions during the year are recognized in the Statement of Profit and Loss.

Monetary assets and liabilities denominated in foreign currency are translated at the yearend rates and resultant gains/losses from foreign exchange translations are recognized in the Statement of Profit and loss. Forward Exchange Contracts not intended for trading or speculation purposes.

The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or expense for the year.

3.11) Equity Share Capital

An equity instrument is a contract that evidences residual interest in the assets of the Company after deducting all of its liabilities. Par value of the equity shares is recorded as share capital and the amount received in excess of par value is classified as Securities Premium. Costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects

3.12) Provisions & Contingent Liabilities

Provisions are recognized when an enterprise has a present obligation as a result of past event that probably requires an outflow of resources to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. They are reviewed at each balance sheet date and adjusted to reflect the current best estimates

Contingent Liabilities are not provided for and are disclosed by way of notes to the financial statements when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or when there is a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the same or a reliable estimate of the amount in this respect cannot be made.

Contingent assets are not recognised but disclosed in the financial statement byway of notes to accounts when an inflow of economic benefits is probable.

3.13) Employee Benefits

i) Short Term Employee Benefits

Short term employee benefits, such as salaries, wages, incentives etc. are recognized as expenses at actual amounts, in the Statement of Profit and Loss of the year in which the related services are rendered. Leave not availed in a year can be carried forward up to 30 days.

ii) Defined Contribution Plans

Defined contribution plans are Provident Fund Scheme, Employee State Insurance Scheme and Government administered Pension Fund Scheme for the employees. The company makes monthly contributions towards these funds / schemes, which are recognized in the Statement of Profit & Loss in the financial year to which they relate. There is no obligation other than the monthly contributions,

iii) Defined Benefit Plans

The company has a defined benefit plan for Postemployment benefit in the form of Gratuity for all employees. Contribution on account of gratuity payment is made to the Gratuity Trust. Liability for above defined benefit plan is provided on the basis of actuarial valuation, as at the Balance Sheet date. The actuarial method used for measuring the liability is the Projected Unit Credit method. Actuarial gain and losses arising from experience adjustments and changes in actuarial assumptions are recognized in other comprehensive income

3.14) Revenue recognition Sales

Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, which generally coincides with delivery.

Export Benefits

Export incentives are accounted for on export of goods in the year of export if the entitlements can be estimated with reasonable accuracy and conditions precedent to claim is fulfilled.

Interest & Dividend

Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend income is recognized when the shareholders’ right to receive payment is established by the balance sheet date.

3.15] Borrowing Costs

Borrowing cost comprises of interest and other costs incurred in connection with the borrowing of the funds. All borrowing costs are recognised in the Statement of Profit and Loss using the effective interest method

3.16] Taxes on Income

Income tax expense representing the sum of current tax expenses and the net charge of the deferred taxes is recognized in the income statement except to the extent that it relates to items recognized directly in equity or other comprehensive income.

Tax expense comprises of current tax and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act.

Deferred income tax reflects the impact of current year’s timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax asset arising on account of unabsorbed depreciation or carry forward tax losses are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably or virtually certain, as the case may be, that sufficient income will be available against which deferred tax asset can be realized.

3.17) Earnings Per Share

Basic Earnings per Share is calculated by dividing the net profit or loss after tax for the year attributable to Equity Shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. The weighted average numbers of equity shares outstanding during the year are adjusted for events of bonus issue, bonus elements in a right issue to existing shareholders and share splits. For the purpose of calculating Diluted Earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

3.18) Segment Reporting

Segment is identified and reported taking into account the nature of products and services, the different risks and returns and the integral business reporting systems. The Company primary business segment is Industrial Safety Products. The Industrial Safety Products business incorporates product Company s’ viz. Leather hand Gloves, Industrial Work Garments, Seamless Knitted Gloves, Leather Shoe Upper, Safety Shoes and Nitrile Dipped Gloves, which mainly have similar risks and returns. Thus the Company business activity falls within a single primary business segment.

4) Critical accounting judgments, assumptions and key sources of estimation and uncertainty The preparation of the financial statements in conformity with the measurement principle of Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Differences between the actual results and estimates are recognised in the year in which the results are known /materialised and, if material, their effects are disclosed in the notes to the financial statements. Application of accounting policies that require significant areas of estimation, uncertainty and critical judgments and the use of assumptions in the financial statements have been disclosed below. The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below:

4.1 Depreciation / amortisation and impairment on property, plant and equipment / intangible assets.

Property, Plant and Equipment and Intangible assets are depreciated/amortised on straight-line/written down value basis over the estimated useful lives (or lease term if shorter) in accordance with Company accounting policy, taking into account the estimated residual value, wherever applicable.

The Company reviews its carrying value of its Tangible and Intangible Assets whenever there is objective evidence that the assets are impaired. In such situation Asset''s recoverable amount is estimated which is higher of asset’s or cash generating units (CGU) fair value less cost of disposal and its value in use. In assessing value in use the estimated future cash flows are discounted using pre-tax discount rates which reflect the current assessment of time value of money. In determining fair value less cost of disposal, recent market realisations are considered or other wise in absence of such transactions appropriate valuations are adopted. The Company reviews the estimated useful lives of the assets regularly in order to determine the amount of depreciation / amortisation and amount of impairment expense to be recorded during any reporting period. This reassessment may result in change estimated in future periods.

4.2 Arrangements containing leases and classification of leases

The Company enters into service / hiring arrangements for various assets/ services. The determination of lease and classification of the service/hiring arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee’s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset’s economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialised nature of the leased asset.

4.3 Claims and Compensation

Claims including insurance claims are accounted for on determination of certainty of realisation thereof.

4.4 Impairment allowances on trade receivables The Company evaluates whether there is any objective evidence that trade receivables are impaired and determines the amount of impairment allowance as a result of the inability of the customers to make required payments. The Company bases the estimates on the ageing of the trade receivables balance, credit-worthiness of the trade receivables and historical write-off experience. If the financial conditions of the trade receivable were to deteriorate, actual write-offs would be higher than estimated.

4.5 Income taxes

Significant judgment is required in determination of taxability of certain income and deductibility of certain expenses during the estimation of the provision for income taxes.

4.6 Defined benefit obligation (DBO)

Critical estimate of the DBO involves a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate, anticipation of future salary increases etc. as estimated by Independent Actuary appointed for this purpose by the Management. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

4.7 Provisions and Contingencies

Provisions and liabilities are recognised in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgement to existing facts and circumstances, which can be subject to change. Management judgment is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations/against the Company as it is not possible to predict the outcome of pending matters with accuracy.

The carrying amounts of provisions and liabilities and estimation for contingencies are reviewed regularly and revised to take account of changing facts and circumstances.


Mar 31, 2016

1.1 Corporate Information

Mallcom (India) Ltd.. domiciled in India, was incorporated in the year 1983 under Companies Act 1956. The company is one of The established manufacturer - exporter of Personal Protective Equipments. It has a long track record in the Industrial Safely Pro duds category.

Note 1.1: Statement of Significant Accounting Policies

Basis Per preparation of Financial Statements

The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India and comply with the Accounting Standards specified under Section 133 of the Companies Act. 2013 read with Rule 7 or the Companies (Accounts) Rule. 2014. The financial statements are prepared on historical cost convention on accrual basis except tor insurance claims which are accounted for on cash/acceptance basis due to uncertainty of realization.

The preparation of the finance statements in conformity with Generally Accepted Accounting Principles requires the management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingent Liabilities at the date of financial statements and income and expenses for the reporting period. Estimates and assumptions are reviewed on an ongoing basis.

The Accounting Policies in all material aspects, have been consistently applied by the company and are consistent with those used in the previous year except otherwise stated.

The significant accounting policies followed by The Company are elated below

i) Revenue recognition

Sate of goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, which generally coincides with delivery.

Export incentives

Export incentives are accounted for on export of goods in the year of export if the entitlements can be estimated with reasonable accuracy and conditions precedent to claim are fulfilled.

Interest

Revenue is recognized on a lime proportion basis taking into account the amount outstanding and the rate applicable

Dividend

Revenue is recognized when the shareholders'' right to receive payment is established by 1he balance sheet date.

ii) Fixed Assets

Fixed Assets are stated at cost less depreciation and impairment loss, if any. except in case of Land, which is shown at. cost including the cost of development, which is capitalized. Cost comprises the purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use.

Deprecation on Tangible Fixed Assets is provided over the estimated useful Life as specified in Schedule II of the Companies Act, 2013 on Written Down Value Method.

Depreciation on additions/disposals during The year is provided on prorata basis with reference Lo the date Of addition /disposal.

Intangible assets arc amortized over useful life not exceeding 6 years.

iii) Expenditure on New/Expansion Projects

Expenditure directly relating to the construction activity is capitalized. Pre operative and indeed expenditure incurred during construction period is capitalized as part of indirect construction cost to the extent to which the expenditure is related to the construction or is incidental thereto. Income attributable to the project is deducted from The total of such expenditure.

iv) Impairment

The carrying amounts of assets are reviewed al each balance sheet date if there is any indication of impairment based on internal/ external factors in impairment loss is recognized wherever the carrying amounts of an asset exceed its recoverable amount. The recoverable amount is the greater of the assets'' net soiling price and value in use. in assessing value in use. the estimated future cash flows are discounted to their present value at the weighted average cost of capital. Reversal of impairment loss is recognized immediately as income in the Statement of Profit and Loss.

v) Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investment. All other investments are classified as Long term Investments Current Investments are carried at Lower of cost and fair value determined on individual investment basis. Long-terms Investments are carried at cost. A provision of diminution is made to recognize a decline, other than temporary, in the value of long-term investments.

vi) Inventories

Raw Materials. Stores and spares are valued a! The lower of cost and estimated net realizable value, after providing for cost of obsolescence and other anticipated losses, wherever, considered necessary. Finished Goods and work-in- progress include cost of conversion and other costs incurred in bringing the inventories to their present Location and condition

Cost is determined on First in First out (FIFO) basis.

vii) Employee Benefits

Short-term Employee Benefit-

Short term employee benefits, such as salaries, wages, incentives etc are recognized as expenses al actual amount, in the Statement of profit and loss of the year in which the related services are rendered. Leave not availed in a year can be Carried forward up to 60 days.

Post Employment Benefits

(a) Defined Contribution Plans

Defined contribution plans are Provident Fund Scheme, Employee Slate insurants Scheme and Government administered Pension Fund Scheme For the employees. The company makes monthly contributions towards these Kinds t schemes. which are recognized in the Statement of Profit & Loss in the financial year to which they relate There is no obligation other than the monthly contributions.

(b) Defined Benefit Plans

The company has a defined benefit plan for Post-employment benefit in The form of Gratuity For all employees. Contribution On account -of gratuity payment s made to the Gratuity Trust. Liability far above defined benefit plan is provided an the basis of actuarial valuation, as at 1 he Balance Sheet date. The actuarial method used For measuring the liability is the Projected Until Credit method.

viii) Leases

Leases, where the lesser effectively retains substantially alt the risks and benefits of ownership of the leased item, art classified as operating leases. Operating lease rentals are recognized as an expense in the Statement of Profit and Loss.

ix) Borrowing Cost

Borrowing Costs relating lo acquisition/construction of qualifying assets are capitalized until the time of substantial activities necessary to prepare The qualifying assets For their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. ALL other borrowing costs are charged lo revenue

x) Foreign Currency Transaction

Foreign currency transactions are recorded in The reporting currency prevailing at the date of the transaction. Realized gains/ losses on foreign exchange transactions during the year are recognized in the Statement of Profit and Loss.

Monetary assets and liabilities denominated in Foreign currency are translated al the yearend rates and result gains/losses from foreign exchange transitions are recognized in the Statement of Profit and loss.

Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract.

Exchange differences on Such contracts are recognized the statement of profit and Loss m the year in which the exchange rates change. Any profit or Loss arising or. cancellation- or renewal to forward exchange contract is recognized as income or expense For the year.

xi) Accounting for Taxes on Income

Tax expense comprises of current tax and deferred tax. Current income tax is measured al the amount expected to be paid to the tax authorizes in accordance with the Indian Income Tax Act Deferred income last reflects the impact of current year''s timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years Deterred lax is measured based on the tax rates and the tax Laws enacted or substantively enacted at the balance sheet date- Deferred la? assets are recognized only to the extent that there is reasonable certainly that sufficient future taxable income will be available against which such deferred la- assets can be realized Deferred tax asset arising on account of unabsorbed depreciation or carry forward theses are recognized only if there is virtual calamity supported by convincing evidence that they can be realized against future taxable profits

The carrying amount of deferred tax assets are reviewed at each balance sheet dale The company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably or virtually certain, as the case may be. that sufficient income will be available against which deferred tax asset can be realized.

xii) Earnings Per Share

Basic Earnings Per Share is calculated by dividing the net profiler loss alter lax for the year attributable to Equity Shareholders (after deducting attributable taxes) by The weighted average number of equity shares outstanding during the year. The weighted average numbers of equity shares Outstanding during The year are adjusted for events of bonus issue, bonus elements in a right issue lo existing shareholders and share splits.

For the purpose of calculating Diluted Earnings per share. The net profit or Loss for The year attributable to equity shareholders and the we weighted average number of shares outstand.ng during the year are adjusted For The effects of all dilative potential equity shares.

xiii) Provisions & Contingent Liabilities

A prevision is recognized when an enterprise has a present obligator as a result of past event that probably requires an outflow of resources to settle the obligation, in respect of which a reliable estimate can be made Provisions are not discounted lo its present value and are determined based on best estimable requires to settle the obligation at the balance sheet dale. They are reviewed at each balance sheet date and adjusted to reflect the current best estimates

Contingent liabilities are not provided For and are disclosed by way of notes


Mar 31, 2015

Basis for preparation of Financial Statements

The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India and comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rule, 2014. The financial statements are prepared on historical cost convention on accrual basis except for insurance claims which are accounted for on cash/acceptance basis due to uncertainty of realization.

The preparation of the financial statements in conformity with Generally Accepted Accounting Principles requires the management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of financial statements and income and expenses for the reporting period. Estimates and assumptions are reviewed on an ongoing basis.

The Accounting Policies in all material aspects, have been consistently applied by the company and are consistent with those used in the previous year except otherwise stated.

The significant accounting policies followed by the Company are stated below:

i) Revenue recognition

Sale of goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, which generally coincides with delivery.

Export Incentives

Export incentives are accounted for on export of goods in the year of export if the entitlements can be estimated with reasonable accuracy and conditions precedent to claim are fulfilled.

Interest

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend

Revenue is recognized when the shareholders' right to receive payment is established by the balance sheet date.

ii) Fixed Assets

Fixed Assets are stated at cost less depreciation and impairment loss, if any, except in case of land, which is shown at, cost including the cost of development, which is capitalised. Cost comprises the purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use.

Depreciation on Tangible Fixed Assets is provided over the estimated useful life as specified in Schedule II of the Companies Act, 2013 on Written Down Value Method except in case of assets of Nitrile Dipped Gloves division where the depreciation is provided on straight line basis.

Depreciation on additions/disposals during the year is provided on pro-rata basis with reference to the date of addition /disposal.

Intangible assets are amortised over useful life not exceeding 3 years.

(Refer Note 26 on Depreciation)

iii) Expenditure on New/Expansion Projects

Expenditure directly relating to the construction activity is capitalized. Pre operative and indirect expenditure incurred during construction period is capitalized as part of indirect construction cost to the extent to which the expenditure is related to the construction or is incidental thereto. Income attributable to the project is deducted from the total of such expenditure.

iv) Impairment

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/ external factors. An impairment loss is recognized wherever the carrying amounts of an asset exceed its recoverable amount. The recoverable amount is the greater of the assets' net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. Reversal of impairment loss is recognized immediately as income in the Statement of Profit and Loss.

v) Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investment. All other investments are classified as long term investments. Current Investments are carried at lower of cost and fair value determined on individual investment basis. Long-terms investments are carried at cost. A provision of diminution is made to recognize a decline, other than temporary, in the value of long-term investments.

vi) Inventories

Raw Materials, Stores and spares are valued at the lower of cost and estimated net realizable value, after providing for cost of obsolescence and other anticipated losses, wherever, considered necessary. Finished Goods and work-in-progress include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Cost is determined on First in First out (FIFO) basis.

vii) Employee Benefits

Short Term Employee Benefits

Short term employee benefits, such as salaries, wages, incentives etc are recognized as expenses at actual amounts, in the Statement of Profit and Loss of the year in which the related services are rendered.

Leave not availed in a year can be carried forward upto 60 days. No provision for leave benefits is made.

Post Employment Benefits

(a) Defined Contribution Plans

Defined contribution plans are Provident Fund Scheme, Employee State Insurance Scheme and Government administered Pension Fund Scheme for the employees.

The company makes monthly contributions towards these funds / schemes, which are recognized in the Statement of Profit & Loss in the financial year to which they relate. There is no obligation other than the monthly contributions.

(b) Defined Benefit Plans

The company has a defined benefit plan for Post- employment benefit in the form of Gratuity for all employees. Contribution on account of gratuity payment is made to the Gratuity Trust. Liability for above defined benefit plan is provided on the basis of actuarial valuation, as at the Balance Sheet date. The actuarial method used for measuring the liability is the Projected Unit Credit method.

viii) Leases

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease rentals are recognized as an expense in the Statement of Profit and Loss.

ix) Borrowing Cost

Borrowing Costs relating to acquisition/construction of qualifying assets are capitalized until the time of substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

x) Foreign Currency Transaction

Foreign currency transactions are recorded in the reporting currency prevailing at the date of the transaction. Realized gains/ losses on foreign exchange transactions during the year are recognized in the Statement of Profit and Loss.

Monetary assets and liabilities denominated in foreign currency are translated at the yearend rates and resultant gains/losses from foreign exchange translations are recognized in the Statement of Profit and loss.

Forward Exchange Contracts not intended for trading or speculation purposes

The premium or discount arising at the inception of forward exchange contracts is amortised as expense

or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or expense for the year.

xi) Accounting for Taxes on Income

Tax expense comprises of current tax and deferred tax. Current income- tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income tax reflects the impact of current year's timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax asset arising on account of unabsorbed depreciation or carry forward tax losses are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably or virtually certain, as the case may be, that sufficient income will be available against which deferred tax asset can be realized.

xii) Earnings Per Share

Basic Earning Per Share is calculated by dividing the net profit or loss after tax for the year attributable to Equity Shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. The weighted average numbers of equity shares outstanding during the year are adjusted for events of bonus issue, bonus elements in a right issue to existing shareholders and share splits.

For the purpose of calculating Diluted Earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilative potential equity shares.

xiii) Provisions & Contingent Liabilities

A provision is recognized when an enterprise has a present obligation as a result of past event that probably requires an outflow of resources to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. They are reviewed at each balance sheet date and adjusted to reflect the current best estimates


Mar 31, 2014

1.1 Corporate Information

Mallcom (India) Ltd. company domiciled in India and incorporated under the provisions of the Companies Act, 1956.

1.2 Basis for preparation of Accounts

The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Indian Companies Act, 1956. The financial statements are prepared on historical cost convention on accrual basis. The Accounting policies have been consistently applied by the company and are consistent with those in the previous year.

1.3 Recognition of Income & Expenditure Income

Sales are recognized when goods are supplied and recorded net of discounts but include export incentives such as duty drawback. Duty drawback claims/ export incentives are provided for on the basis of lodgment of claim and their acceptance by the authorities. Dividend and claims are accounted for as and when realized.

Expenditure

Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities.

1.4 Goodwill and other Intangible Assets Miscellaneous expenditure including company formation expenses and public issue expenses are amortized over a period of five years.

1.5 Fixed Assets

Fixed Assets are stated at cost less depreciation and impairment loss, if any, except in case of land, which is shown at, cost including the cost of development, which is capitalized. Cost comprises the purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use.

Depreciation is provided on written down value method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956 except in case of assets of 100% SEZ unit for Nitrile Dipped Gloves where the depreciation is provided on straight line basis.

Impairment

The carrying amounts of assets are reviewed at each balance sheet date. If there is any indication of impairment based on internal/ external factors, an impairment loss is recognized wherever the carrying amounts of an asset exceed its recoverable amount. The recoverable amount is the greater of the assets' net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

1.6 Investments

Investments are classified in to current and long-terms investments. Current Investments are stated at the lower of cost and fair value. Long-terms investments are stated at cost. A provision of diminution is made to recognize a decline, other than temporary, in the value of long-term investments.

1.7 Inventories

Raw Materials, Stores and spares are valued at the lower of cost and estimated net realizable value, after providing for cost of obsolescence and other anticipated losses, wherever, considered necessary. Finished Goods and work-in-progress include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

1.8 Retirement/ Post Retirement Benefits Contribution to defined contribution schemes such as Provident Fund and Family Pension Fund are charged to the profit and loss account as and when incurred. Contribution on account of gratuity payment is made to the gratuity trust based on actuarial valuation for the liability at the end of financial year. Leave encashment benefit is accounted for on cash basis.

1.9 Foreign Exchange Transaction

i. Income and Expenditure in Foreign Currency are converted at the actual rate prevailing on the date of transaction;

ii. Assets and Liabilities are converted at ruling rate of exchange at the end of the year except in case of transaction covered by specific forward contract in which case asset and liabilities are converted at the forward contract value.

iii. All exchange differences arising out of foreign currency transactions are dealt with in the profit & loss account.

1.10 Accounting for Taxes on Income

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the amount of Income Tax determined to be payable in respect of taxable income for a period. Deferred Tax is the tax effect on timing difference.

1.11 Earning per Share

Basic Earning Per Share is calculated by dividing the net profit or loss after tax for the year attributable to Equity Shareholders by the weighted average number of equity shares outstanding during the year. The weighted average numbers of equity shares outstanding during the year are adjusted for events of bonus issue, bonus elements in a right issue to existing shareholders and share splits.

For the purpose of calculating Diluted Earning Per Share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilative potential equity shares.

1.12 Provisions & Contingent Liabilities

Contingent Liabilities are not provided for and are disclosed by way of notes.

Contingent Liabilities not provided for

1.12.1 Export bills duly negotiated under LC and for which acceptance already received and /or moved to bank line Rs.66,310,258/- (Rs.72,005,412/-).

1.12.2 Outstanding Bank Guarantee issued by State Bank of India for Rs.100,000/- (Rs. 100,000/- )

1.12.3 B-17 Bond issued in favor of "Asst. Commissioner of Central Excise, Calcutta" amounting to Rs.2.50 Crores (Rs. 2.50 crore), covering the purchase of imported / indigenous capital goods/ raw materials without payment of Custom duty/ Excise Duty with respect to 100% E.O.U. for seamless knitted gloves;

1.12.4 B-17 Bond issued in favor of "Deputy Commissioner of Customs, FSEZ" amounting to Rs.3.10 Crores (Rs.3.10 Crores), covering the purchase of imported / indigenous capital goods/ raw materials without payment of Custom duty/ Excise Duty with respect to 100% SEZ unit..

1.12.5 Sales Tax demand in respect of earlier years, which has been disputed by the Company Rs.8,006,000/- (Rs.7,308,362/-).

1.12.6 Income Tax Demand in respect of earlier years, which has been disputed by the Company Rs.11,949,510/- [Nil]

1.12.7 The company has the following outstanding export forward contracts against the confirmed orders in hand hence no contingent liability has been estimated.

1.13 A sum of Rs.20,05,844/- (Rs.20,00,895/-) has been paid as remuneration (Inclusive of perquisites/ contribution to provident fund) to the Managing Director/Executive Director.

1.14 In the opinion of the Management and to the best of their knowledge and belief, the value of realization of loans and advances and other current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

1.15 Fixed deposits includes Rs.637,279/- (Rs. 172,333/-) with State Bank of India, Kolkata & Rs. Nil (Rs.400,000/ -) with Citi Bank N.A., Kolkata and includes placement as margin money.

1.16 Segmental Reporting

Based on the guiding principles given in Accounting Standard on "Segment Reporting"[(AS-17)] issued by the Institute of Chartered Accountant of India] the Company's primary business segment is Industrial Safety Products. The Industrial Safety Products business incorporates product groups viz. Leather hand Gloves, Industrial Work Garments, Seamless Knitted Gloves, Leather Shoe Upper, Safety Shoes and Nitrile Dipped Gloves, which mainly have similar risks and returns. Thus the Company's business activity falls within a single primary business segment.

1.17 The company exports almost its entire product. It has very insignificant local sales compared to total business of the company. Also it does not have any operation in economic environment with different risks and returns; hence it is considered operating in a single geographical segment.


Mar 31, 2013

1.1 Corporate Information

Mallcom (India) Ltd. company domiciled in India and incorporated under the provisions of the Companies Act, 1956.

1.2 Basis for preparation of Accounts

The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Indian Companies Act, 1956. The financial statements are prepared on historical cost convention on accrual basis. The Accounting policies have been consistently applied by the company and are consistent with those in the previous year.

1.3 Recognition of Income & Expenditure Income

Sales are recognized when goods are supplied and recorded net of discounts but include export incentives such as duty drawback. Duty drawback claims/ export incentives are provided for on the basis of lodgment of claim and their acceptance by the authorities. Dividend and claims are accounted for as and when realized.

Expenditure

Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities.

1.4 Goodwill and other Intangible Assets

Miscellaneous expenditure including company formation expenses and public issue expenses are amortized over a period of five years.

1.5 Fixed Assets

Fixed Assets are stated at cost less depreciation and impairment loss, if any, except in case of land, which is shown at, cost including the cost of development, which is capitalized. Cost comprises the purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use.

Depreciation is provided on written down value method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956 except in case of assets of 100% SEZ unit for Nitrile Dipped Gloves where the depreciation is provided on straight line basis.

Impairment

The carrying amounts of assets are reviewed at each balance sheet date. If there is any indication of impairment based on internal/ external factors, an impairment loss is recognized wherever the carrying amounts of an asset exceed its recoverable amount. The recoverable amount is the greater of the assets' net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

1.6 Investments

Investments are classified in to current and long-terms investments. Current Investments are stated at the lower of cost and fair value. Long-terms investments are stated at cost. A provision of diminution is made to recognize a decline, other than temporary, in the value of long-term investments.

1.7 Inventories

Raw Materials, Stores and spares are valued at the lower of cost and estimated net realizable value, after providing for cost of obsolescence and other anticipated losses, wherever, considered necessary. Finished Goods and work-in-progress include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

1.8 Retirement/ Post Retirement Benefits

Contribution to defined contribution schemes such as Provident Fund and Family Pension Fund are charged to the profit and loss account as and when incurred. Contribution on account of gratuity payment is made to the gratuity trust based on actuarial valuation for the liability at the end of financial year. Leave encashment benefit is accounted for on cash basis.

1.9 Foreign Exchange Transaction

i. Income and Expenditure in Foreign Currency are converted at the actual rate prevailing on the date of transaction;

ii. Assets and Liabilities are converted at ruling rate of exchange at the end of the year except in case of transaction covered by specific forward contract in which case asset and liabilities are converted at the forward contract value.

iii. All exchange differences arising out of foreign currency transactions are dealt with in the profit & loss account.

1.10 Accounting for Taxes on Income

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the amount of Income Tax determined to be payable in respect of taxable income for a period. Deferred Tax is the tax effect on timing difference.

1.11 Earning per Share

Basic Earning Per Share is calculated by dividing the net profit or loss after tax for the year attributable to Equity Shareholders by the weighted average number of equity shares outstanding during the year. The weighted average numbers of equity shares outstanding during the year are adjusted for events of bonus issue, bonus elements in a right issue to existing shareholders and share splits.

For the purpose of calculating Diluted Earning Per Share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilative potential equity shares.

1.12 Provisions & Contingent Liabilities

Contingent Liabilities are not provided for and are disclosed by way of notes.

Contingent Liabilities not provided for

1.12.1 Discounted foreign bills for Rs.13,60,75,737/- (Rs.8,09,35,142/-) out of which, Rs.13,60,75,737/- (Rs.8,09,35,142/-) have since been realized.

1.12.2 Outstanding Letter of Credit issued for Rs.41,21,402/ - [Nil] by State Bank of India against purchase of raw materials.

1.12.3 Outstanding Bank Guarantee issued by State Bank of India for Rs.1,00,000/- (Rs.783,342/-)

1.12.4The Company had provided the corporate guarantee for issuance of import letter of credit in favor the 100% subsidiary company "Mallcom Safety Equipments Private Limited" amounting to USD 390,000 [Rs.2,12,12,100/-] and since then had cancelled and replaced the same Import Letter of Credit in favor of the group company "VSFT Quilts & Pillows Private Limited" for the same value out of which a sum of USD 3,28,500/- [Rs.1,78,67,115/-] has already been paid with the remaining amount continues to be outstanding under the LC.

1.12.5 B-17 Bond issued in favor of "Asst. Commissioner of Central Excise, Calcutta" amounting to Rs.2.00 Crores (Rs. 2.00 crore), covering the purchase of imported / indigenous capital goods/ raw materials without payment of Custom duty/ Excise Duty with respect to 100% E.O.U. for seamless knitted gloves;

1.12.6 B-17 Bond issued in favor of "Deputy Commissioner of Customs, FSEZ" amounting to Rs.3.10 Crores (Rs.3.10 Crores), covering the purchase of imported / indigenous capital goods/ raw materials without payment of Custom duty/ Excise Duty with respect to 100% SEZ unit..

1.12.7 Sales Tax demand in respect of earlier years, which has been disputed by the Company Rs.1,18,13,187/- (Rs.73,08,362/-).

1.12.8The company has the following outstanding export forward contracts against the confirmed orders in hand hence no contingent liability has been estimated.

Particulars Purpose Currency Amount Cross Currency

Forward Contract Exports USD 24,47,030.28 Rupees

Exports EURO 6,27,000.00 Rupees

1.13 A sum of Rs.20,00,895/- (Rs.13,48,914/-) has been paid as remuneration (Inclusive of perquisites/ contribution to provident fund) to the Managing Director/Executive Director.

1.14 In the opinion of the Management and to the best of their knowledge and belief, the value of realization of loans and advances and other current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

1.15 Fixed deposits includes Rs.172,333/- (Rs. 2,77,38,915) with State Bank of India, Kolkata & Rs.400,000/- (Rs. Nil) with Citi Bank, Kolkata and includes placement as margin money/ security against overdraft facility.

1.16 Segmental Reporting

Based on the guiding principles given in Accounting

Standard on "Segment Reporting"[(AS-17)] issued by the Institute of Chartered Accountant of India] the Company's primary business segment is Industrial Safety Products. The Industrial Safety Products business incorporates product groups viz. Leather hand Gloves, Industrial Work Garments, Seamless Knitted Gloves, Leather Shoe Upper, Safety Shoes and Nitrile Dipped Gloves, which mainly have similar risks and returns. Thus the Company's business activity falls within a single primary business segment.

1.17 The company exports almost its entire product. It has very insignificant local sales compared to total business of the company. Also it does not have any operation in economic environment with different risks and returns; hence it is considered operating in a single geographical segment.

1.18 Related party transaction

List of Related Party and Relationships:

Mallcom Safety Pvt. Ltd [MSPL] : 100% Subsidiary

Kadambini Securities Pvt. Ltd [KSPL] : Associate

Mallcom Holdings Pvt. Ltd [MHPL] : Associate

Mallcom Safety Equipment Pvt.Ltd [MSEPL] : Subsidiary

Movers Construction Pvt.Ltd [MCPL] : Associate

Chaturbujh Impex Pvt.Ltd [CIPL] : Associate

Sri Ajay Kumar Mall : Key Managerial Person

b) Related Party Transactions: (Rs.'000 )

Nature of Transaction Associates Key Managerial Persons

Sale of goods [MSPL] 200,292.23 -

Remuneration - 2,000.89

Dividend Paid 3,288.70 1,320.98

Advance paid [MSEPL] 20,657.72 -

Advance Received [MSPL] 2,479.61 -

Unsecured Loan Received [KSPL] 8,544.11 -

Unsecured Loan Received [ MCPL] 10,354.73 -

Unsecured Loan Received [CIPL] 1,926.37


Mar 31, 2012

1.1 Basis for preparation of Accounts

The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Indian Companies Act, 1956. The financial statements are prepared on historical cost convention on accrual basis. The Accounting policies have been consistently applied by the company and are consistent with those in the previous year.

1.2 Recognition of Income & Expenditure Income

Sales are recognized when goods are supplied and recorded net of discounts but include export incentives such as duty drawback. Duty drawback claims/ export incentives are provided for on the basis of lodgment of claim and their acceptance by the authorities. Dividend and claims are accounted for as and when realized.

Expenditure

Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities.

1.3 Goodwill and other Intangible Assets

Miscellaneous expenditure including company formation expenses and public issue expenses are amortized over a period of five years.

1.4 Fixed Assets

Fixed Assets are stated at cost less depreciation and impairment loss, if any, except in case of land, which is shown at, cost including the cost of development, which is capitalized. Cost comprises the purchase price and any directly attributable cost of bringing the assets to its working condition for its intended use. Depreciation is provided on written down value method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956 except in case of assets of 100% SEZ unit for Nitrile Dipped Gloves where the depreciation is provided on straight line basis.

Impairment

The carrying amounts of assets are reviewed at each balance sheet date. If there is any indication of impairment based on internal/ external factors, an impairment loss is recognized wherever the carrying amounts of an asset exceed its recoverable amount. The recoverable amount is the greater of the assets' net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

1.5 Investments

Investments are classified in to current and long-terms investments. Current Investments are stated at the lower of cost and fair value. Long-terms investments are stated at cost. A provision of diminution is made to recognize a decline, other than temporary, in the value of long-term investments.

1.6 Inventories

Raw Materials, Stores and spares are valued at the lower of cost and estimated net realizable value, after providing for cost of obsolescence and other anticipated losses, wherever, considered necessary. Finished Goods and work-in-progress include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

1.7 Retirement/ Post Retirement Benefits

Contribution to defined contribution schemes such as Provident Fund and Family Pension Fund are charged to the profit and loss account as and when incurred. Contribution on account of gratuity payment is made to the gratuity trust based on actuarial valuation for the liability at the end of financial year.

1.8 Foreign Exchange Transaction

i. Income and Expenditure in Foreign Currency are converted at the actual rate prevailing on the date of transaction;

ii. Assets and Liabilities are converted at ruling rate of exchange at the end of the year except in case of transaction covered by specific forward contract in which case asset and liabilities are converted at the forward contract value.

iii. All exchange differences arising out of foreign currency transactions are dealt with in the profit & loss account.

1.9 Accounting for Taxes on Income

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the amount of Income Tax determined to be payable in respect of taxable income for a period. Deferred Tax is the tax effect on timing difference.

1.10 Earning per Share

Basic Earning Per Share is calculated by dividing the net profit or loss after tax for the year attributable to Equity Shareholders by the weighted average number of equity shares outstanding during the year. The weighted average numbers of equity shares outstanding during the year are adjusted for events of bonus issue, bonus elements in a right issue to existing shareholders and share splits.

For the purpose of calculating Diluted Earning Per Share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilative potential equity shares.

1.11 Provisions & Contingent Liabilities

Contingent Liabilities are not provided for and are disclosed by way of notes.

Contingent Liabilities not provided for

1.11.1 Discounted foreign bills for Rs.8,09,35,142/- (Rs.8,54,71,120/-) out of which, Rs.8,09,35,142/- (Rs.7,01,89,634/-) have since been realized.

1.11.2 Outstanding Bank Guarantees issued for Rs.783,342/- (Rs.783,342/-)

1.11.3 B-17 Bond issued in favor of "Asst. Commissioner of Central Excise, Calcutta" amounting to Rs.2.00 Crores (Rs. 2.00 crore), covering the purchase of imported / indigenous capital goods/ raw materials without payment of Custom duty/ Excise Duty with respect to 100% E.O.U. for seamless knitted gloves;

1.11.4 B-17 Bond issued in favor of "Deputy Commissioner of Customs, FSEZ" amounting to Rs.3.10 Crores (Rs.3.10 Crores), covering the purchase of imported / indigenous capital goods/ raw materials without payment of Custom duty/ Excise Duty with respect to 100% SEZ unit..

1.11.5 Sales Tax demand in respect of earlier years, which has been disputed by the Company Rs.73,08,362/- (Rs.73,08,362/-).

1.11.6 The company has the following outstanding export forward contracts against the confirmed orders in hand hence no contingent liability has been estimated.

Particulars Purpose Currency Amount Cross Currency

Forward Contract Exports USD 35,96,907.80 Rupees

Exports EURO 11,95,500.00 Rupees

1.12 A sum of Rs. 13,48,814/- (Rs.21,64,064/-) has been paid as remuneration (Inclusive of perquisites/ contribution to provident fund) to the Managing Director/Executive Director.

1.13 In the opinion of the Management and to the best of their knowledge and belief, the value of realization of loans and advances and other current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

1.14 Fixed deposits includes Rs.2,77,38,915/- (Rs.887,098) with State Bank of India, Kolkata & Rs.2,13,18,027/- (Rs.Nil) with Axis Bank Limited, New Town , Kolkata branch and includes placement as margin money/ security against overdraft facility.

1.15 Segmental Reporting

Based on the guiding principles given in Accounting Standard on "Segment Reporting"[(AS-17)] issued by the Institute of Chartered Accountant of India] the Company's primary business segment is Industrial Safety Products. The Industrial Safety Products business incorporates product groups viz. Leather hand Gloves, Industrial Work Garments, Seamless Knitted Gloves, Leather Shoe Upper, Safety Shoes and Nitrile Dipped Gloves, which mainly have similar risks and returns. Thus the Company's business activity falls within a single primary business segment.

1.16 The company exports almost its entire product. It has very insignificant local sales compared to total business of the company. Also it does not have any operation in economic environment with different risks and returns; hence it is considered operating in a single geographical segment.

1.17 Related party transaction

List of Related Party and Relationships:

Mallcom Safety Pvt. Ltd [MSPL] : 100% Subsidiary

Kadambini Securities Pvt. Ltd [KSPL] : Associate

Mallcom Holdings Pvt. Ltd [MHPL] : Associate

Sri Ajay Kumar Mall : Key Managerial Person

b) Related Party Transactions: (Rs.'000 )

Nature of Transaction Associates Key Managerial Persons

Sale of goods [MSPL] 158,627.79 -

Remuneration - 1348.81

Dividend Paid 4099.93 1651.23

Advance Received 4654.00 -

1.18 Earning per share

Profit after tax: Rs. 3,46,58,612 Rs. 6,62,97,700

Weighted average number of Equity 6,240,000 6,240,000 shares outstanding:

Basic and diluted earnings per share (Face value-Rs.10 per share) Rs. 5.55 Rs. 10.62

1.19 Office Premises for Gross Block value of Rs.17,13,290/- represents license fee paid for a limited period of 10 years subject to further extension on renewed Terms and conditions and in the event of the termination the license fee paid as above would be refundable in full.

1.20 Raw Materials, Chemicals and Packing Materials Consumption

31st March 2012 Percentage Rs. in Lakh %

Raw Materials

Imported 1286.91 16.73

Indigenously obtained 6404.37 83.27

7691.28 100.00

Consumables Stores and Spares

Imported 328.35 50.38

Indigenously obtained 323.44 49.62

651.79 100.00

31st March 2011 Percentage Rs. in Lakh % Raw Materials

Imported 5678.31 88.41

Indigenously obtained 744.29 11.59

6422.60 100.00

Consumables Stores and Spares

Imported 429.32 60.86

Indigenously obtained 276.09 39.14

705.41 100.00

1.21 Value of Imports calculated on C.I.F Basis Rs. in Lakh

31st march 31st march 2012 2011



Raw Materials 1331.01 637.81

Components and Spare Parts 333.99 372.42

Capital goods 284.04 68.18

Total 1949.04 1078.41

.22 Expenditure in Foreign Currency (on Cash Basis) Rs. in Lakh

Sales Commission 38.21 23.42

Sales Claim 22.17 3.26

Sales Promotion Expenses 11.97 9.90

Trade Fair Expenses 9.92 -

Total 82.27 36.58

1.23 Earnings in Foreign Exchange Rs. in Lakh

Exports - FOB Basis 11,042.10 9250.95

Total 11,042.10 9250.95

1.24 Till the year ended 31st March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31st March 2012. The revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. The company has reclassified previous year figures to conform to this year's classification. Except accounting for dividend on investments in subsidiaries, the adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements, particularly presentation of balance sheet.

Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X