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HOME / MARKET TODAY / COMPANY SNAPSHOT / Accounting Policy

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Last Updated on: 04 Feb 2016 15:34 Hrs
Malabar Trading Comp Accounting Policy March 2015 
1 COMPANY INFORMATIONS

The Malabar Trading Company Limited ("The Company") was incorporated on 18th April, 1980 under the Companies Act, 1956. The company made its maiden public issue during June 1980 aggregating Rs. 3.00 lacs for raising working capital and meeting issue expenses. The paid-up capital of the Company post listing in 1980 was Rs. 5,00,000 divided into 50,000 equity shares of Rs. 10 each. The Company was incorporated with the main object of trading; acting as distributors, commission agents etc. Presently the registered office of the Company is situated at 228/A, Lower Ground Floor, Dreams The Mall, L B S Marg, Bhandup (W), Mumbai M.H.

In February, 2011, the Company altered its objects clause by inserting objects relating to (i) Hospitality Entertainment and related activities (ii) Healthcare related activities (iii) Agro food produce, production and process including forward and back integration and (iv) Infrastructure and construction activities, to be carried on either directly or indirectly through joint venture/wholly owned subsidiaries/acquisition of strategic stake in such entities in the respective fields or otherwise and also obtained the approval of members u/s 149(2A) of the Companies Act, 1956 to carry on these newly inserted objects.

In March, 2011, the Company issued 15,00,000 equity shares of Rs. 10 each at a premium of Rs. 62 per share upon conversion of warrants. In August, 2011, the Company announced issue of Bonus Shares in the ratio of 6 equity shares as bonus shares against every 1 share held. Post bonus, the present paid-up share capital of the Company is Rs. 10,85,00,000 divided into 1,08,50,000 equity shares of Rs. 10 each.

The Company had acquired 99.87% stake in M/s IADFAC Laboratories Private Limited ("ILPL") a Company engaged in lab testing of Dairy, Food and other products. ILPL has ISO 17025 Certification, BIS, Egmark & more. Further, the Company had also acquired 97.26% stake in M/s Protect Nature Private Limited ("PNPL"), a Company engaged in the business of agro food produce, production and process including forward and backward integration including manufacturing of fertilizers. Pursuant to the said acquisitions, ILPL and PNPL became subsidiaries of the Company.

Further the company had allotted 92,40,000 Convertible Preferential Share Warrants on preferential basis to other then promoter at face value of Rs. 10 each with a premium of Rs. 25/- per share pursuant to the preferential issue of equity shares.

During the financial year 2013-14, company had sold 789000 unquoted equity shares at a total consideration of Rs. 59.18 Lacs of M/s IADFAC Laboratories Private Limited ("ILPL") (99.87% Holding of "ILPL") and 900000 unquoted equity shares at a total consideration of Rs. 360.00 Lacs of M/s Protect Nature Private Limited ("PNPL") (97.26% Holding of "PNPL"). Pursuant to the said transfer, company had incurred total loss of Rs. 141.83 Lacs.

2 NOTES

2.a Basis of Preparation

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI).

2.b Use of Estimates

The preparation of the financial statements in conformity with GAAP requires estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income 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 the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

2.c Own Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation. Direct costs are capitalized until fixed assets are ready for use.

2.b Depreciation and Amortisation

Depreciation on Tangible Assets is provided to the extent of salvage value of the Assets of the Compant in the manner prescribed in Schedule II of the Companies Act 2013.

2.e Impairment of Assets

The assets is treated as impaired when the carring cost of the assets exceeds its recoverable value. The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

2.f Investments

Investments are classified as long-term based on Management's intention at the time of purchase. Long term investments are carried at cost.

2.g Inventories

Inventories include the Traded Goods available for Sale i.e. quoted equity shares. Value of Inventories includes the Cost of Procuring Goods and Services, Borrowing Cost (if permitted by AS-16 - "Borrowing Cost") and any other expenditure incurred in relation to the inventory necessary to bring that in the Present and Saleable Condition.

Inventory is managed using First in First Out basis as suggested by Accounting Standard - 2 and valued at Cost or Market Price which ever is lower.

2.h. Cash & Cash Equilents

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

2.1 Provision for Contingent Liabilities

A provision is recognized if, as a result of a past event, the Company has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

2.j Revenue Recognition

The company derives its revenue from Interest and Trading of Shares.

Sales of Shares are recognized in accordance with the settlement cycle of stock exchange. The revenue in respect of Interest Income is recognized on accrual basis. Rentals are recognized ratably on a straight line basis over the balance sheet period.

In Statement of Profit & Loss, company has taken the income as the difference between the value of sale and purchase of shares.

2.k Employee Benefit

Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

2.1 Provision for Current & Deferred Tax

Income taxes are accrued in the same period that the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable. Minimum alternate tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. Paid in accordance with the tax laws, which gives rise to future economic benefits in the form of tax credit against future income tax liability, is recognized as an asset in the Balance Sheet if there is convincing evidence that the Company will pay normal tax after the tax holiday period and the resultant asset can be measured reliably.

Deferred Tax resulting from timing difference between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the date of balance sheet date.

2.m Earnings per share

Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

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Company Identification Number (CIN): Sharekhan Ltd: U99999MH1995PLC087498; Sharekhan Commodities Pvt Ltd: U67120MH2000PTC127261; Sharekhan Financial Services Pvt Ltd: U65920MH2004PTC149518; Sharekhan.Com India Pvt Ltd: U80904MH2000PTC126954; Sharekhan Insurance Broking Ltd: U67120MH2000PLC127257