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Accounting Policies of Solid Stone Company Ltd. Company

Mar 31, 2015

NOTE 1 : NATURE OF OPERATIONS

Solid Stone Company Limited is primarily engaged in the business of natural stones, building materials and allied building business activities. The company presently has manufacturing facilities in Palghar and Retail outlets at Mumbai and Delhi

Basis of Accounting

The Financial Statements are prepared in accordance with the generally accepted accounting principles in India under the historical cost convention (except for revaluation of Plant and Machinery), on an accrual basis, in accordance with applicable Accounting Standards and the relevant provisions of the Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per criteria set out in the Schedule III to the Companies Act, 2013.

Use of Estimates

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized.

Revenue Recognition

All the revenues are accounted on accrual basis except dividend income which is recognized when the shareholders' or unit holders' right to receive payment in established Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Sales

Sales and Purchase of goods includes Vat, Sales tax. Sales of Services is net of service tax if any.

Fixed Assets

Tangible Fixed Assets are stated at cost or revalued amounts, as the case may be, less accumulated depreciation and provision for impairment, if any. The cost includes expenditure incurred in the acquisition and construction / installation and other related expenses in bringing the asset to working condition for its intended use. In respect of qualifying assets, related pre-operational expenses including borrowing costs are also capitalized. In case of revaluation of fixed assets, the original cost as written up by the value, is considered in the account and the differential amount is transferred to revaluation reserve.

Intangible Assets are stated at acquisition cost, net of accumulated amortization and provision for impairment, if any.

Depreciation

Depreciation on Tangible and Intangible Assets has been provided on Straight Line Method based on the revised useful life of the assets and in the manner prescribed in Schedule II to the Companies Act, 2013 on prorata basis from the date of additions and/or disposal.

Change in Accounting Policy

The Depreciation on Tangible and Intangible Fixed Assets was hitherto provided on written down value method. Based on the past estimation, the use of such assets is expected to be relatively even over its estimated useful life and that there is no discernible pattern of decline in its service potential. Accordingly, the Company, in order to reflect a more appropriate presentation of financial statements, has changed the method of depreciation on such assets, existing as at 1st April 2014, to straight line basis. The decrease in the charge of accumulated depreciation arising from retrospective computation from the date of addition/installation of such assets, aggregating to Rs, 1,66,51,774 has been accounted and disclosed under separately.

Further, Effective 1st April 2014, the company has charged depreciation based on the revised remaining useful life of the assets as per the requirements of Schedule II of the Companies Act, 2013. Due to above, depreciation charge for the year ended 31st March 2015 is higher by Rs, 28,59,106/-. Consequently the profit for the year is lower by Rs, 28,59,106/- and the deferred tax charge being higher by Rs,. 9,27,637/-.

Further, consequent to Notification GSR 627(E) dated August 29, 2014 amending Para 7(b) under Schedule II. Company has during the year, charged off transitional depreciation amounting to Rs, 4,19,162/- to Statement of Profit and Loss.

Borrowing costs

Interest and other borrowing costs, attributable to the acquisition of or construction of qualifying assets till such time the assets are substantially ready for their intended use, are capitalised. All other borrowing costs are charged to revenue.

Impairment

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price and "Value in use" of the assets. The estimated future cash flows considered for determining the value in use, are discounted to their present value at the weighted average cost of capital.

Investments

Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost or fair value. Long-term investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.

Foreign Currency Transactions

Initial Recognition

Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transactions.

Subsequent Recognition

As at the reporting date, non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

All monetary assets and liabilities in foreign currency are restated at the end of accounting period.

Exchange differences on restatement of all other monetary items are recognized in the Statement of Profit and Loss.

Forward Exchange Contracts

The premium or discount arising at the inception of forward exchange contract entered into to hedge an existing asset / liability, is amortized as expense or income over the life of the contract. Exchange difference on such a contract is recognized in the Statement of Profit and Loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or as expense for the period.

Inventory

(i) Inventory is valued as follows:

Stocks of Raw Materials, Stores and Spare parts are valued at cost. Finished Goods and Stock of Traded Goods are valued at lower of cost or net realizable value

(ii) Cost of Finished Goods and Stock in Process is determined by considering materials, labor and other related direct expenses.

Customs Duty and Excise Duty

Customs Duty and Excise Duty have been accounted for on the basis of both payments made in respect of goods cleared as well as provision made for goods lying in bonded warehouse. Such provision is included in the valuation of closing stocks of respective materials and goods.

Retirement & other employee benefits

Short term employee benefits are accounted in the period during which the services have been rendered.

The Company's liability towards Gratuity, Pension to certain categories' of employees and long term employee Compensated Leave Encashment being defined benefit plans are accounted for based on Actuarial valuation done at the year end using the Projected Unit Credit Method. Actuarial gains and losses are charged to Statement of Profit & Loss.

Income Taxes

Tax expense comprises both current and deferred taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognized using the tax rates and tax laws that have been enacted or substantively enacted. 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. If the company has carry forward unabsorbed depreciation and tax losses, deferred Tax assets are recognized only to the extent there is a virtual certainty supported by convincing evidence that sufficient taxable income will be available against which such deferred tax assets can be realized.

Minimum Alternative Tax 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. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

Segment Reporting Policies

Identification of Segments:

The Company is primarily engaged in the business of natural stones, building material and allied building activities which is considered as a single segment.

Provisions and Contingent Liabilities

The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is 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 that the likelihood of outflow of resources is remote, no provision or disclosure is made.

(a) Rights, preferences and restrictions attached to shares

The company has one class of equity shares having a par value of Rs,10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Nature of security:

Working Capital facilities from banks are secured on pari passu basis, by way of hypothecation of inventories, book debts and receivables both present and future and further secured by way of equitable mortgage of company's factory and machinery and equipments as well as equitable mortgage over factory and machinery and equipments of M/s. Global Instilled Solid Industries Limited (Related party).

* Figures in bracket indicate figures of previous year

** The Company, has changed the method of depreciation on assets, existing as at 1st April 2014, to straight line basis. The decrease in the charge of accumulated depreciation till 1st April, 2014 has been reflected as a credit to the Profit and Loss Account


Mar 31, 2012

Basis of Accounting

The Financial Statements are prepared in accordance with the generally accepted accounting principles in India under the historical cost convention (except for revaluation of Plant and Machinery), on an accrual basis, in accordance with applicable Accounting Standards and the relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per criteria set out in the Schedule VI to the Companies Act, 1956.

Change in accounting policy

Exchange Rate differences:

Monetary assets and liabilities in foreign currency, which were outstanding as at the year end were translated at the year end at the closing exchange rate and the resultant exchange differences were recognised in the statement of profit & loss upto 31st March, 2012.

Use of Estimates

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known / materialised.

Revenue Recognition

All the revenues are accounted on accrual basis except dividend income which is recognised when the shareholders' or unitholders' right to receive payment in established

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

Sales

Sales and Purchase of goods includes Vat, Sales tax. Sales of Services is net of service tax if any.

Fixed Assets

Tangible Fixed Assets are stated at cost or revalued amounts, as the case may be, less accumulated depreciation and provision for impairment, if any. The cost includes expenditure incurred in the acquisition and construction / installation and other related expenses in bringing the asset to working condition for its intended use. In respect of qualifying assets, related pre-operational expenses including borrowing costs are also capitalised. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the account and the differential amount is transferred to revaluation reserve.

Intangible Assets are stated at acquisition cost, net off accumulated amortisation and provision for impairment, if any. Depreciation

Depreciation on Tangible Assets has been provided on Written Down Value Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 on prorata basis from the date of additions and/or disposal. Depreciation on Intangible Assets comprising of Computer Software has been provided on Written Down Value Method at the rates mentioned for computers and in the manner prescribed in Schedule XIV to the Companies Act, 1956 on prorata basis from the date of additions and/or disposal Borrowing costs

Interest and other borrowing costs, attributable to the acquisition of or construction of qualifying assets till such time the assets are substantially ready for their intended use, are capitalised. All other borrowing costs are charged to revenue.

Impairment

The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price and "Value in use" of the assets. The estimated future cash flows considered for determining the value in use, are discounted to their present value at the weighted average cost of capital.

Investments

Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost or fair value. Long-term investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.

Foreign Currency Transactions

Initial Recognition

Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transactions. Subsequent Recognition

As at the reporting date, non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

All monetary assets and liabilities in foreign currency are restated at the end of accounting period.

Exchange differences on restatement of all other monetary items are recognised in the Statement of Profit and Loss. Forward Exchange Contracts

The premium or discount arising at the inception of forward exchange contract entered into to hedge an existing asset / liability, is amortised as expense or income over the life of the contract. Exchange difference on such a contract is recognised in the Statement of Profit and Loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognised as income or as expense for the period.

Forward exchange contracts outstanding as at the year end on account of firm commitment / highly probable forecast transactions are mark-to-market and the losses, if any, are recognised in the Statement of Profit and Loss and gains are ignored in accordance with the announcement of Institute of Chartered Accountants of India on 'Accounting for Derivatives' issued in March 2008.

Inventory

(i) Inventory is valued as follows:

Stocks of Raw Materials, Stores and Spare parts are valued at cost. Finished Goods and Stock of Traded Goods are valued a lower of cost or net realisable value

(ii) Cost of Finished Goods and Stock in Process is determined by considering materials, labour and other related direct expenses.

Customs Duty and Excise Duty

Customs Duty and Excise Duty have been accounted for on the basis of both payments made in respect of goods cleared as well as provision made for goods lying in bonded warehouse. Such provision is included in the valuation of closing stocks of respective materials and goods.

Retirement & other employee benefits

Short term employee benefits are accounted in the period during which the services have been rendered.

The Company's liability towards Gratuity, Pension to certain catagories of employees and long term employee Compensated Leave Encashment being defined benefit plans are accounted for based on Actuarial valuation done at the year end using the Projected Unit Credit Method. Actuarial gains and losses are charged to Statement of Profit & Loss.

Income Taxes

Tax expense comprises both current and deferred taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assests and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets are recognised only to the extent that there is reasonable certainity that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the company has carry forward unabsorbed depreciation and tax losses, deferred Tax assets are recognised only to the extent there is a virtual certainity supported by convincing evidence that sufficient taxable income will be available against which such deferred tax assets can be realised.

Mimimum Alternative Tax credit is recognised 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. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

Segment Reporting Policies Identification of Segments:

The Company is primarily engaged in the business of natural stones, building material and allied building activities which is considered as a single segment.

Provisions and Contingent Liabilities

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is 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 that the likelihood of outflow of resources is remote, no provision or disclosure is made.


Mar 31, 2011

1. GENERAL:

The Financial Statements are prepared on the historical cost convention in accordance with the applicable Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006, and the relevant provisions of the Companies Act, 1956

2. USE OF ESTIMATES:

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of the assets and liabilites on the date of financial statements and reported amount of revenue and expenses during the reporting period. Difference between actual results and estimates are recognised in the period in which the results are known / materialised

3. REVENUE RECOGNITION :

All revenues are accounted on accrual basis except dividend income which is recognised when the shareholders' or unitholders' right to receive payment is established

4. FIXED ASSETS:

Fixed assets are stated at cost less accumlated depreciation and provision of impairment if any. The cost includes expenditure incurred in the acquisition and construction/installation and other related expenses in bringing the asset to working condition for its intended use.

5. EXCISE DUTY:

Excise duty in respect of goods manufactured by the company is accounted at the time of removal of goods from the factory.

6. SALES:

Sales includes Excise Duty, Sales tax and exchange rate differences arising on Sales transactions

7. INVENTORIES:

Stocks of Raw Materials, Stores and Spare parts are valued at cost. Finished goods are valued at lower of cost or net realisable value. Cost for the purpose of valuation of finished goods is determined by considering material, labour and related overheads.

8. DEPRECIATION:

Depreciation on fixed assets has been provided on written down value at the rates and in the manner specified in the Schedule XIV to the Companies Act, 1956 on prorata basis from the date of additions and/or disposal

9. TAXATION:

Income Tax expense comprises current tax and deferred tax charge or credit. The Deferred tax assets and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets are recognised 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.

10. INVESTMENTS:

Investments are stated at 'cost'. A Provision for diminution is made to recognise a decline, if any, other than temporary, in the value of long term investments. An investment in the shares of subsidiary companies and other companies outside India is stated at cost by converting at the rate of exchange at the time of their acquisition.

11. LEASES :

Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the leased term are classified as operating lease. Operating lease payments are recognized as expense in the Profit and Loss Account on a straight-line basis over the lease term.

12. RETIREMENT AND EMPLOYEE BENEFITS:

Short Term employee benefits are accounted in the period during which the services have been rendered. The liability for the defined benefit plan of Gratuity is determined on the basis of the assumption that the employees are entitled to receive the benefit as at each year end. The same is charged to the Profit and Loss Account

13. FOREIGN CURRENCY TRANSACTIONS :

Foreign Currency transactions are accounted at the rates prevailing at the date of transaction. Exchange difference on settlement / conversion are adjusted to the Profit and Loss Account.

14. BORROWING COST:

Borrowing cost include interest, fees and other charges incurred in connection with the borrowing of funds and is considered as revenue expenditure for the year in which it is incurred. Borrowing cost attributed to the acquisition/ improving of qualifying capital assets and incurred till the commencement of commercial use of assets is capitalised as cost of the assets.

15. PROVISIONS AND CONTINGENT LIABILITIES

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is 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 that the likelihood of outflow of resources is remote, no provision or disclosure is made


Mar 31, 2010

1. GENERAL :

The accounts have been prepared on the basis of historical cost convention, and on the principles of a going concern.

2. REVENUE RECOGNITION :

All revenues are accounted on accrual basis.

3. FIXED ASSETS :

Fixed assets are valued at cost of acquisition.

4. EXCISE DUTY :

Excise duty in respect of goods manufactured by the company is accounted at the time of removal of goods from the factory.

5. SALES :

Sales includes Excise Duty, Sales tax and exchange rate differences arising on sales transactions.

6. INVENTORIES :

Stocks of Raw Materials, Stores and Spare parts are valued at cost Finished goods are valued at lower of cost or net realisable value. Cost for the purpose of valuation of finished goods is determined by considering material, labour and related overheads.

7. DEPRECIATION :

Depreciation on fixed assets has been provided on written down value method on prorata basis at the rates specified in the Schedule XIV to the Companies Act, 1956.

8. TAXATION :

Income Tax expense comprises current tax and deferred tax charge or credit. The deferred tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantially enacted by the Balance Sheet date.

9. INVESTMENTS :

Investments are stated at cost. A Provision for diminution is made to recognise a decline, if any, other than temperory, in the value of long term investments. An investment in the shares of subsidiary companies and other companies outside India is stated at cost by converting at the rate of exchange at the time of their acquisition.

10. LEASES :

Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the leased term are classified as operating lease. Operating lease payments are recognized as expense in the Profit and Loss Account on a straight-line basis over the lease term.