Managerial Accounting

A few words about the company

The company “Romany Gaz Group” SRL is a Moldavian-Irish research and production joint venture founded in 1997. The share of the Irish part is 10% and the share of the share of 90% of the Moldavian part is divided between two persons. The amount of the statutory capital is 5400 Lei.

The company was established with the following goals – elaborating, production, exploitation, servicing, repairing and delivering of technical, electronic devices and software. The two main products produced in the company are:

1. Dava gas burners used for heating and industrial purposes. The capacity of the burners is : 100 kW, 120 kW, 500 kW, 750 kW, 1000 kW and 2000 kW.

2. Motor Tester Navigator – a device used for the diagnosis of automobiles defections.

The financial position of the company improved significantly from the beginning of its existence. At the end of the first year of activity – in 1998 - the company registered losses amounting to 30.000 Lei . In 1999 , the company improved significantly its financial position and obtained a net profit of about 400.000 Lei. The positive trend can be noticed also in the operational activity of the current period – 2000.

The accounting department has a software program “WIZ Count” used in the accounting calculation and evidence. The accounting department established the following measures for the depreciation and amortization of assets: buildings – 45 years, computers- 2 years, furniture – 10 years, automobiles – 8 years, equipment – 5 years, software – 2 years. The petty inventories are depreciated depending on their value: if their cost is less than 50 Lei , they are depreciated 100% at the recording, but if their cost is more than 50 Lei , they are depreciated 90% at the recording and the rest at the end of the accounting period. In the managing of the inventories the FIFO system is used.

The tax on salaries is based on the category of income: for salaries less than 5600 Lei, the tax is 10%, but if the income is greater than 5600, the tax on salaries is 15%.

The level of income tax set by the law is 28%. Through the Law Nr. 625-XIII of November 3-rd, 1995 about the Free Business Zone, all the companies deploying the activities on the territory of that Zone pay only 45% of the stated 28%, or 12,6%. The level of VAT in Moldova is 19%, but through the above stated law, “Romany Gaz Group” is exempted from the payment of VAT, meaning that all the expenses with VAT incurred in the purchase of raw material and parts are included in the account of raw materials

The company has a personnel of 17 employees, most of them being qualified engineers. All the products made in the company are inventions of its employees, thus the company doesn’t pay the great deal of money on technologies.

The company uses raw materials from all over the world. The imported materials usually consist of electronic chips, microprocessors, plugs etc. The foreign partner companies are: “Ammo Group” -USA; “AVnet”, “EMG”, “Bosch” –Germany; “Ventur Tekniska”- Sweden; “WG Electronics” – Poland; “Fantini Cosmi” – Italy; “Moeller Electronics SA”, “SC Sinterom S.A” - Romania .

Company’s products are sold in Moldova as well as outside the country: Germany, Romania, Ukraine, Russia.