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Moneycontrol.com India | Accounting Policy > Machine Tools > Accounting Policy followed by Solitaire Machine Tools - BSE: 522152, NSE: N.A
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Solitaire Machine Tools

BSE: 522152|ISIN: INE410A01013|SECTOR: Machine Tools
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Solitaire Machine Tools is not listed on NSE
Mar 15
Accounting Policy Year : Mar '17

a). System of Accounting:

i). The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis unless otherwise stated hereinafter.

ii). The accounts are prepared under historical cost convention, as a going concern and generally in accordance with applicable accounting standards.

iii). Use of Estimates:

The preparation of the financial statements in conformity with generally accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in the period in which such revisions are made.

b). Fixed Assets and Depreciation:

i). Fixed Assets are stated at their cost of acquisition less Depreciation. Additions to Fixed Assets are net of Modvat Credit.

ii). In respect of fixed assets acquired during the year, depreciation is charged on a straight line basis as to write off the cost of the asset over the useful lives. Useful life is considered as prescribed in Part ''C'' of Schedule II to the Companies Act, 2013 after considering residual value of 1 % as mentioned therein.

iii). Intangible Assets:

Technical Know How fee:

Intangible Assets are stated at cost of acquisition less accumulated amortization.

Technical Know How is amortized over a period of Five years in equal installments.

c). Investments:

Long Term Investments are stated at cost. Current Investments are carried at the lower of cost and quoted/fair value. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of management.

d). Valuation of Inventories:

i)-

Raw Materials - Components

- Lower of the Cost or net realizable value

ii).

Stores & Spares

- Lower of the Cost or net realizable value

iii).

Cutting Tools and Holding

Tools

- Lower of the Cost or net realizable value

iv).

Semi Finished Goods

- Lower of the Cost or net realizable value, calculated on percentage of work executed on contracted price.

v).

Finished Goods

- Lower of the Cost or net realizable

e). Foreign Exchange Transactions:

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transactions. Monetary items are translated at the year end rate. The differences between the rate prevailing on the date of transaction and on the date of settlement and also on translation at the end of the year are recognized as income or expenses, as the case may be for the year except in the case of Long Term Liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

f). Treatment of Retirement Benefits:

i)- The Company''s contribution to recognized provident fund, and Employees'' state Insurance Scheme are defined contribution plans are charged to the Profit and Loss Account when incurred.

ii)- The Company''s employees are covered under the Employees Group Gratuity Cum Life Assurance Scheme of Life Insurance Corporation of India which is a defined benefit scheme. The Company account for gratuity liability equivalent to the premium amount payable to Life Insurance Corporation of India every year, which is based on actuarial valuation.

iii). Leave Encashment is accounted on cash basis.

g). Revenue Recognition:

a) Revenue is recognized on transfer of significant risk and reward in respect of ownership.

b) Gross sales is exclusive of sales tax, excise duty and service income and are net of incentives discounts and rebates.

c) Set-off Claims and other claims, are accounted for as and when admitted by the appropriate authorities.

d) Exchange Fluctuation and accrued interest on L. C. Margin and Bank Guarantee Margin are accounted on cash basis.

e) Dividend income is recognized in the year when the right to receive payment is established.

h). Purchases are accounted for net of modvat credit.

i). Excise Duty:

Excise Duly in respect of finished goods lying in factory premises are provided for and included in the valuation of inventory.

j). Taxation:

i)- Provision for current income tax is determined on the basis of the amount of tax payable on taxable income for the vear.

ii)- Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable incomes and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

k). Contingent Liabilities, Provisions & Contingent Assets:

i). Contingent liabilities are not recognized and are disclosed in notes.

ii)- Provisions involving substantial degree of estimation in measurement are recognized when the present obligation resulting from past events gives rise to probability of outflow of resources embodying economic benefits on settlement.

iii). Provisions are reviewed at each Balance sheet date and adjusted to reflect the current best estimates.

iv). Contingent assets are neither recognized nor disclosed in financial statements.

1). Impairment of Assets:

The carrying amount of assets is reviewed at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company''s assets. If any indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount.

m). Borrowing Costs:

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalized as a part of the cost of such assets till such period the assets are ready for use. All other borrowing costs are charged to revenue.

NOTES ON ACCOUNTS FOR THE YEAR ENDED 31ST March, 2017

The previous periods figures have been regrouped/reclassified, wherever necessary to confirm to the current period presentation.

The Company has only one class of shares referred to as equity shares having a par value of ''10/-. Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The Board of Directors, in their meeting on 13.05.2017 proposed a dividend of Rs.1.25 per equity share. The proposal is subject to the approval of share holders at their Annual General Meeting to be held on 22.07.2017. The total dividend appropriation for the year ended 31.03.2017amounted to Rs.6,833,570/-including corporate dividend tax of Rs.l,155,850/-

During the year ended 31/03/2016 the amount per share dividend recognized as distributions to equity share holders was Rs.l/-. The total dividend appropriation for the year ended 31/03/2016 amounted to Rs.54,50,344/- including corporate dividend tax of Rs 9,08,168/-.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

The reconciliation of number of shares outstanding and the amount of share capital as at 31st March 2017 and 31st March 2016 is set out below:

25 Company is contingently liable in respect of:

a)- Penalty Levied by DGFT of Rs.23 Lacs (Net of advance) (Previous year- Rs.23 Lacs) and contested in appeal, vide WP No.1957 of 2000 pending at Delhi High Court

b). Bank Guarantees Rs. l, 15, 64,554/-( P.Y Rs. 82,92,000/-)

c). There is a dispute regarding demand raised by Excise and Custom Department (CEGAT) of Rs. 3,54,036/- (Previous year ^.3,54,036/-) which is being contested on Order No. D/827/97 of Rs.3, 54,036/- dt 14.08.1997. Amount has been paid against thereof as advance under protest and reflected under Non-Current Assets.

27 Related Party Disclosures have been set out as below. The related parties as defined by Accounting Standard 18 ''Related Party Disclosures prescribed under section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, in respect of which the disclosures have been made, are identified on the basis of information available with the Company:

a) Names of Related Parties and description of Relationship:

1).

Subsidiaries : Shruchi Manufacturing Limited JBS Machinery Corporation

2).

Enterprises under significant influence of Key Management Personnel or their relatives: Adventure Advertising Private Limited Metal Perforation Private Limited

3).

Key Management

Personnel : Mr. A.J. Sheth - Chairman & Managing Director

Mr. H.J. Badani -Vice Chairman & Managing Directoi Mr. Harsh Badani - Whole Time Direction

4).

Relatives of Key Management Jyoti P. Sheth Personnel and Associates

Source : Dion Global Solutions Limited
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