SENSEX NIFTY India | Accounting Policy > Trading > Accounting Policy followed by Singer India - BSE: 505729, NSE: SINGER
Singer India
BSE: 505729|NSE: SINGER|ISIN: INE638A01027|SECTOR: Trading
Nov 27, 16:01
-1.6 (-0.78%)
VOLUME 6,565
Singer India is not traded in the last 30 days
« Jun 13
Accounting Policy Year : Jun '15
(a) Basis of Preparation
 The financial statements of the Company have been prepared in
 accordance with the generally accepted accounting principles in India
 (Indian GAAP). The company has prepared these financial statements to
 comply in all material respects with the accounting standards notified
 under section 133 of the Companies Act 2013 (''the Act), read together
 with paragraph 7 of the Companies (Accounts) Rules 2014 and provisions
 of the Act, to the extent notified.  The financial statements have been
 prepared on an accrual basis and under the historical cost convention
 except for certain Fixed Assets which are carried at revalued amounts
 and on going concern basis.
 (b) Use of Estimates
 The preparation of the Financial Statements in conformity with
 generally accepted accounting principles requires the management to
 make estimates and assumptions that affect the reporting balances of
 assets and liabilities and disclosures relating to contingent
 liabilities as at the date of the financial statements and reporting
 amounts of income and expenditure during the year.  Contingencies are
 recorded when it is probable that a liability will be incurred, and the
 amount can be reasonably estimated. Actual results could differ from
 such estimates. Any revision to accounting estimates is recognized in
 the period the same is determined.
 (c) Fixed Assets (Tangible & Intangible)
 Tangible Fixed Assets are stated at cost (or revalued amount as the
 case may be), less accumulated depreciation and impairment losses, if
 any. Cost comprises the purchase price / cost of acquisition including
 taxes, duties, freight and other incidental expenses related to
 acquisition, construction and installation to bring the asset to its
 working condition for its intended use. In case of revaluation of fixed
 assets, the original cost as written up by the valuer, is considered in
 the accounts and the differential amount is transferred to revaluation
 reserve.  Borrowing costs that are directly attributable to
 acquisition, construction or production of a qualifying asset are
 Intangible fixed assets are stated at cost less accumulated
 amortization and net of impairments, if any. An intangible asset is
 recognized if it is probable that the expected future economic benefits
 that are attributable to the asset will flow to the Company and its
 cost can be measured reliably. Intangible assets having finite useful
 lives are amortized on straight line basis over their estimated useful
 (d) Impairment of Assets
 Regular review is done to determine whether there is any indication for
 impairment in carrying amount of the Company''s fixed assets. If any
 indication exists, an assets recoverable amount is estimated based on
 internal / external factors. An impairment loss is recognized if the
 carrying amount of an asset exceeds its recoverable amount. The
 recoverable amount is the greater of the asset''s net selling 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.
 (e) Investments
 Long term investments are stated at cost. Provision for diminution in
 value, other than temporary, is made in the accounts. Earnings on
 investments are accounted for when the right to receive payment is
 (f) Inventories
 Raw materials are valued at Lower of cost and net realizable value.
 However, materials and other items held for use in the production of
 inventories are not written down below cost if the finished products in
 which they will be incorporated are expected to be sold at or above
 cost. Cost is determined on a First in First out basis.
 Work-in-progress and finished goods are valued at Lower of cost and net
 realizable value. Cost includes direct materials and labour and a
 proportion of manufacturing overheads based on normal operating
 capacity. Cost of finished goods includes excise duty. Cost is
 determined on a First in First Out basis.
 Traded goods are valued at Lower of cost and net realizable value. Cost
 includes cost of purchase and other costs incurred in bringing the
 inventories to their present location and condition. Cost is determined
 on a First in First out basis.
 Goods in transit are valued at cost
 Net realizable value is the estimated selling price in the ordinary
 course of business, less estimated costs of completion to make the
 (g) Warranties
 Product warranty costs are determined using reasonable estimates based
 on costs incurred in the past and are provided for in the year sale is
 made.  Contractual obligations in respect of warranties includes
 estimates made for the products sold by the Company which are covered
 under free replacement warranty on manufacturing defects / breakages
 etc.  in respect of sewing machines and domestic appliances are accrued
 at 1% of sales to cover future costs.
 (h) Excise Duty
 Excise duty is accounted for at the point of manufacture of goods and
 accordingly, is considered for valuation of finished goods stock lying
 in the factory and branches and as on the Balance Sheet date.
 (i) Revenue recognition
 Revenue is recognized to the extent that it is probable that the
 economic benefits will flow to the company and the revenue can be
 reliably measured.  Revenue from sale of goods including traded and
 manufactured products is recognized upon passage of title to the
 customers, in accordance with the Sale of Goods Act, 1930. The Company
 collects Sales taxes / Value added Taxes (VAT) on behalf of the
 Government and, therefore, these are not economic benefits flowing to
 the Company. Hence they are excluded from Revenue. Interest income is
 recognized on time proportionate basis taking into account the amount
 outstanding and the rate applicable and is stated at gross. Export
 incentives are accounted on accrual basis.
 (j) Depreciation / Amortization
 i) Tangible Assets
 a) Depreciation on the tangible fixed assets is provided on straight
 line method based on the useful life of the assets as estimated by the
 management.  The estimate of the useful life of the assets has been
 assessed based on internal evaluation/ technical advice which
 considered the nature of the asset, expected physical wear and tear,
 the operating conditions of the asset etc., The useful lives of
 following assets; furniture & fittings, plant and machinery and office
 equipment, are depreciated over estimated useful lives of 5 years, 4 -
 15 years & 2- 5 years respectively which are lower than those indicated
 in Schedule II. The Company has used the following lives to provide
 depreciation on its fixed assets (except building as mentioned in para
 (b) below):
 b) The buildings are depreciated equally over the balance useful life
 ascertained by independent technical expert, which ranges between 41
 years and 52 years after considering the structural condition etc.  The
 management believes that the balance useful lives so assessed best
 represent the periods over which the buildings are expected to be in
 c) Leasehold land is amortized over the lease period.
 d) In case of leasehold land and building which were revalued in the
 past, the additional depreciation on the increased value of the assets
 due to revaluation is debited to Statement of Profit & Loss and
 equivalent amount is transferred from Revaluation Reserve to General
 e) Depreciation on fixed assets added/disposed off during the year is
 provided on pro-rata basis with reference to the month of addition/
 f) In case of impairment, if any, depreciation is provided on the
 revised carrying amount of the assets over its remaining useful life.
 ii) Intangible Assets
 Computer software is amortized over a period of thirty six months on
 the straight line method.
 (k) Lease
 Leases where the lessor effectively retains substantially all the risks
 and benefits of ownership of the leased assets are classified as
 operating leases. Operating lease payments are recognized as an expense
 in the Statement of Profit & Loss on a straight-line basis over the
 lease term.
 (l) Foreign currency transactions
 Foreign currency transactions are recorded in the reporting currency,
 by applying to the foreign currency amount the exchange rate between
 the reporting currency and the foreign currency at the date of the
 Foreign currency monetary items are reported using the closing rate.
 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.
 Exchange differences arising on the settlement of monetary items or on
 reporting company''s monetary items at rates different from those at
 which they were initially recorded during the year, or reported in
 previous financial statements, are recognised as income or as expenses
 in the year in which they arise.
 (m) Employees Benefits
 Short Term Employee Benefit is recognized as an expense in the
 Statement of Profit and Loss of the year in which related service is
 rendered. Post employment and other Long Term Employee Benefits are
 provided in the Accounts in the following manner:
 i) Gratuity: Maintained as a defined benefit retirement plan and
 contribution is made to the Life Insurance Corporation of India, as per
 the Company''s Scheme.  Provision / write back, if any is made on the
 basis of the present value of the liability as at the Balance Sheet
 date determined by actuarial valuation following projected Unit Credit
 Method and is treated as liability.
 ii) Leave Encashment: As per independent actuarial valuation as at the
 Balance Sheet date following projected Unit Credit Method in accordance
 with the requirements of Accounting Standard AS-15 on Employee Benefit''
 is included in provisions.
 iii) Provident Fund: Liability on account of Provident Fund (Pension)
 for employees is a defined contribution wherever contributions are made
 to a fund administered by Government Provident Fund Authority.
 For employees, Provident Fund administered by a Recognized Trust, is a
 Defined Benefit Plan (DBP) wherein the employee and the Company make
 monthly contributions. Pending the issuance of Guidance Note from the
 Actuarial Society of India, actuarial valuation is not carried out and
 the Company provides for required liability at year end, in respect of
 the shortfall, if any, upon confirmation from the Trustees of such
 (n) Research and development
 Research and development expenses of revenue nature are charged to the
 Statement of Profit & Loss in the year in which they are incurred.
 (o) Taxes on Income
 Tax expense comprises of current and deferred tax.  Current income tax
 is measured at the amount expected to be paid to the tax authorities in
 accordance with the Indian Income Tax Act,1961.Deferred income taxes
 reflects the impact of current year timing differences between taxable
 income and accounting income for the year and reversal of timing
 differences of earlier years.
 Deferred tax is measured based on the tax rates and the tax laws
 enacted or substantively enacted at the balance sheet date. 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. In situations
 where the company has unabsorbed depreciation or carry forward tax
 losses, all deferred tax assets are recognized only if there is virtual
 certainty 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 date. The company writes down the carrying amount of the deferred
 tax assets to the extent that it is no longer reasonably certain or
 virtually certain, as the case may be, that sufficient future taxable
 income will be available against which deferred tax asset can be
 realized. Any such write-down is reversed to the extent that it becomes
 reasonable certain or virtually certain, as the case may be, that
 sufficient future taxable income will be available.
 Minimum Alternate Tax (MAT) is accounted for in accordance with tax
 laws which give rise to future economic benefits in the form of tax
 credits against which future income tax liability is adjusted and is
 recognized as an asset in the Balance Sheet.
 (p) Provisions, Contingent Liabilities & Contingent Assets
 A provision is recognized when the Company has a present obligation as
 a result of past event and it is probable that an outflow of resources
 will be required to settle the obligation, in respect of which a
 reliable estimate can be made.  Provisions made in terms of Accounting
 Standard-29, are not discounted to its present value and are determined
 based on the management estimate required to settle the obligation at
 the balance sheet date.  These are reviewed at each balance sheet date
 and adjusted to reflect the current management estimates.
 A contingent liability is a possible obligation that arises from past
 events whose existence will be confirmed by the occurrence or
 non-occurrence of one or more uncertain future events beyond the
 control of the company or a present obligation that is not recognized
 because it is not probable that an outflow of resources will be
 required to settle the obligation. The company does not recognize a
 contingent liability but discloses its existence in the financial
 Contingent assets are not recognized in the financial statements.
 (q) Earnings per share
 Earning per share is calculated by dividing the net profit or loss for
 the year attributable to equity shareholders by the weighted average
 number of equity shares outstanding during the year.
 (r) Events after the Balance Sheet date
 Events occurring after the date of the Balance Sheet which affect the
 financial position to a material extent are taken into cognizance.
 (s) Cash and cash equivalents
 Cash and cash equivalents for the purpose of cash flow statement
 comprise cash at bank and in hand and fixed deposits with maturity of
 three months or less.
Source : Dion Global Solutions Limited
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