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Moneycontrol.com India | Accounting Policy > Miscellaneous > Accounting Policy followed by Mallcom (India) - BSE: 539400, NSE: N.A
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Mallcom (India)

BSE: 539400|ISIN: INE389C01015|SECTOR: Miscellaneous
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May 24, 16:00
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Mallcom (India) is not listed on NSE
Mar 15
Accounting Policy Year : Mar '16

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

Source : Dion Global Solutions Limited
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