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, 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.



 
Subscribe now to get personal finance updates in your inbox!