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Accounting Policies of Sportking India Ltd. Company

Mar 31, 2014

A) Accounting Convention :

The financial statements are prepared under historical cost convention using the accrual system of accounting in accordance with the accounting principles generally accepted in India and the requirements of the Companies Act, 1956, including the mandatory Accounting Standards as prescribed by the Companies (Accounting Standards) Rules, 2006. Value Added Tax (VAT), Income Tax, Wealth Tax, and Service Tax, Cess, Insurance Claims, etc. which are accounted for as and when final demand/refund/claim is determined on final assessment.

b) Use of Estimates :

The preparation of financial statements requires the management of the company to make estimates and assumption that effect the reported balances of assets/liabilities and disclosure relating to the contingent liabilities and provisions as at the date of the financial statements and reported amounts of income and expenses during the year. The difference between the actuals and estimates are recognized in the year such amounts are known/materialised.

c) Provisions, Contingent Liabilities and Contingents Assets :

Provisions involving substantial degree of estimation in measurement are recognized where there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contigent Liabilities are not recognized but are disclosed in the notes. Contigent assets are neither recognized nor disclosed in the financial statements/notes.

d) Fixed Assets :

i) Fixed Assets are stated at cost of acquisition, net of modvat /cenvat credit /terminal excise duty, additional custom duty including net effect on foreign exchange fluctutation/contracts, financial cost and other incidental expenses till the commencement of commercial production attributable to acquisition or construction/installation of fixed assets less depreciation and impairment loss.

ii) Capital works in progress are carried at cost, comprising direct cost, finance cost, net effect on foreign fluctuation/contracts and related incidental expenses.

iii) Intangible assets are stated at cost of acquisition less accumulated amortisation.

e) Depreciation / Amortisation :

i) The company has provided depreciation on Straight Line Method in accordance with the rates as prescribed in Schedule XIV under the provisions of The Companies Act, 1956 on the fixed assets when it is put to use on monthly basis.

ii) Renovation to premises taken on lease by the company have been amortised over the period of lease and in case of premature termination would be written off fully.

iii) Electricity Line Expenses / Service connection charges and Computer Software being intangible are amortised over a period of 5 years.

f) Impairment of Assets :

At each balance sheet date the carrying amounts of fixed assets are reviewed by the management to determine whether there is any indication that these assets had suffered an impairment loss. If any such indication exists recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing, value in use, the estimated future cash flows expected from the continuing use of the assets and from its disposal are discounted to their present value using a pre tax discount rate that reflects the current market assessments of time value of money and risks specific to the asset. Reversal of impairment loss is recognized immediately as income in the profit and loss account.

g) Inventories :

These are valued as under:

i) Raw Material, Work-in-Process At cost or net realisable value and useable whichever is lower.

ii) Stores & Spares At cost less provision for obsolescence or net realisable value whichever is lower.

iii) Finished Goods At cost plus excise duty payable on sale or net realisable value whichever is lower.

iv) Unusable waste At net realisable value

v) The raw material, stores & spares and raw-material contents of work-in-process are valued by using the first-in-first out (FIFO) method while the finished goods are valued by using weighted average cost method. Cost relating to finished goods/work-in-process means direct raw material cost and allocable manufacturing expenses.

vi)The company makes provision for the value of goods in transit at the year end for imported/indigenous raw material and imported spare parts only.

vii) The policy of valuation of inventories is in accordance with Accounting Standard-2 (Revised) 'Valuation of Inventories' issued by the Institute of Chartered Accountants of India.

h) Sales/Revenue Recognition :

i) Domestic sales are accounted, net of returns & trade discounts, on dispatch of products to customers from the works/warehouses and export sales on shipment of goods. Sales within India comprising of sale of goods and services are inclusive of excise duty, if any. The sale value of goods on which value added tax has already been charged, are exclusive of such tax.

ii) The revenue in respect of export benefit is recognized on post exports basis, at the rate at which the entitlement accrues, to the extent the company is reasonably certain of the realisable value.

i) Excise Duty :

The excise duty liability has been accounted for in respect of the finished goods/ useable waste cleared/ lying in the factory/bonded premises which are liable to excise duty provided the cenvat of excise duty/ additional custom duty of the inputs have been availed.

j) Employee Benefits :

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains / losses in respect of long term benefits are adjusted to the profit and loss account.

k) Modvat (Cenvat) :

Modvat (cenvat) credit/Terminal Excise Duty paid on inputs and capital assets is accounted for by reducing the purchase cost of related inputs or the capital assets.

l) Subsidy :

Government's Capital Investment Subsidy in the nature of promoters' contribution represents Capital Reserve.

m) Direct Taxes :

i) Current Tax

Provision for Income Tax, if any, is based on the assessable profits, computed in accordance with the provisions of Income Tax Act, 1961.

ii) Defered Tax

Deferred Income tax expense or benefit is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax assets or liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

iii) Wealth Tax

Wealth tax is ascertained in accordance with the provisions of the Wealth Tax Act 1957

n) Foreign Currency Transactions :

i) Foreign currency transactions are accounted for at equivalent rupee value converted at the exchange rates prevailing at the time of such transaction

ii) Monetary Assets & Liabilities in foreign currency are translated at the year-end rate through exchange fluctuation account to the respective accounts as per the guidance issued by The Institute of Chartered Accountants of India

iii) Any income or expense on account of exchange differences either on settlement or translation is recognized in the revenue account except in cases where they relate to acquisition of fixed assets and before put to use in which case they are adjusted to the carrying cost of such assets.

iv) Financial derivatives and hedging contracts are accounted on the date of settlement. The accrued/ realised gain/loss in respect of the settled contracts/ renewed/ cancelled is only recognized in the books of accounts.

o) Prior Period Items :

Income and expenditure which relate to significant items of prior accounting period other than those occasioned during the close of accounting year to which it is relatable, is considered in current year.

p) Borrowing Costs :

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the asset till the asset is ready for use. Other borrowing costs are recognised as an expense in the year in which they are incurred.

q) Lease :

Leases of assets under which the lessor effectively retains all the risks and benefits of ownership are classified as operating lease. Payments made under operating lease are charged to profit and loss account over the period of lease.


Mar 31, 2013

A| Accounting Convention :

The financial statements are prepared under historical cost convention using (he accrual system of accounting ir accordance with the accounting principles generally accepted in India and the requirements ot the companies Act 1956. including the mandatory Accounting Standards as prescribed by the Companies (Accounting Standards) Rules, 2006. valueAdded Tax (VAT), income rax, Wealth Tax, and Service Tax. Cess, Insurance Claims etc which are accounted for as and when final demand/refund/claim is determined on final assessment,

b) Use of Estimates :

The preparation of financial statement requires the management of the company 10 make estimates gnd assumption (hal effect the reported balances of assetsfhatulilias and disclosure relating to the cent ngent uL hi us and provisions as at the date of the financial statements and reported amounts of income and expenses during the year The difference between the actuals and estimates are recognized in the year such amounts are known materilised.

c} Provisions, Contingent Liabilities and Contingents Assets :

Provisions involving substantial degree of estimation in nneasui ament are recognized where there is a presanl obligation as a result of pest events and it is probable that there will be an c jUIqw of resources. Contigent Liabilities are not recognized but are disclosed In the notes. Cent gam assets ere neither recognized 'lor disclosed in the financial statEmantsfnptes

d) Fixed Assets:

j) Fixed Assefa are slated at cost of acquisition, net of modvat feenvat credit /terminal excise duty additional custom duty >ncludng net effect on foreign exchange fluctufationfcontracts. (inane at cost and other incidental expenses till the commencement of commercial production attributable to acquisition or construction''natal lahon of fixed, assets less degree ahon ann impairment loss, ii) Capital works in progress are earned al cost, comprising direct cost, finance cost, net effect on foreign fluctuation contracts and related incidental expenses iii) Intangible assets are stated at cost of acquisition less accumulated amortisation

e) Depreciation / Amortisation :

i) The company has provided depreciation on Straight Line Method in accordance with the rates as presenbed in Schedule XIV under (he provisions of The Companies Act, 1956 on the fixed assete when it is put to use on monthly basis.

ii] Renovation to premises taken on lease by the company have been amortised aver the pentad of lease and In case of premature tm mi nation would be written off fully iii) Electricity Line Expenses i Service connection changes and Computer Software being mtengihte ere amortised over a period of 5 years.

f) Impairment of Assets :

At each balance sheet date the carrying amounts of fixed assets are reviewed by the management to determine wnether there is any indication thal these assets had suffered an impairment loss If any such indication exisls recoverable emounl of the asset is estimated in order to determine the extent o! impairment loss Recoverable amount is the higher of an asset's net selling pace and value in use. In assessing, value in use. the estimaled tulure cash flows expected from the continuing use of the assets and from its disposal are discounted to their present value using a pre tax discount rate mat reflects the cunenl market assessments of time value of money and nsks specific to ttie asset. Reversal of mpaimmenl loss is recognizer! immediately as income in the profit and loss account

g) Inventories :

These are valued as under

1) Raw Material Work-in-Process and useable At cost or net realisable value whichever is lower

ii) Stores & Spares At cost less provision for obsolescence or net realisable value whichever lower

iii) Finished Goods At cosl plus excise duty payable on salecr net realisable value whichever is lower

iv) Unusable waste At net realisable value

v) The raw malenal. stores 4 Spares and raw-materiel contenls of work -in -process are valued by using me first-in-firsi out (FIFO) method while the finished goods are valued by using weighted average cost method Co3t relating to finished goodsfwork-in -process means direct raw material cost and allocable manufacluring expenses

vi) The company makes provision for the value of goods in transit ait me year end for imported/indigenous raw maierial and imported spare parts only

vii) The policy ol valuation of inventories is in accordance with Accounting Stendard-2 (Revised) h/alualion of inventories' issued by ihe tnslilute of Chartered Accountants of India

h) Sale/Revenue Recognition :

1) Domestic sales are accounted, net of returns trade discounts, on dispatch of products to customers from the works anehouses and export sales on shipment of goods Sales within India comprising of sale of goods and services are inclusive of excise duty, if arty. The sale value of goods on which value added tax has already been charged, are exclusive of such tax. ii) The revenue m respect of export benefit is recognised on post exports basis, at 1he rate at which the enlivement accrues, to the extenlthe company Is reasonably certain of the realisable value

i) Excise Duty:

T no excise duty liability has been accounted for ir respect of the finished goodsV useable waste cleared,1f lying in (he factoryfbgnded premises which are liable to exc se duly provided the cenvat of excise dutyf additional cl atom duty of the inputs have been availed

j) Employes Benefits:

1) Shod-term employee benefits ere recognized as an expense at (he undiscounted amount in ihe profit and loss acoourf gl the year in which the related service is rendered. n> Long term employee benefits are recognized as an expense in the profil and loss account (or 1he year m which (he employee has rendered services The expense is recognized at ihe present value of the amount payable determined using actuarial va.ualkm techniques. Actuarial ga ns / lasses in respect of long term benefits are adjusted to Ihe profit and loss account

k| Nodvat fCenval):

Modval fcenval} ciBuit/TerrninalExCise Duly paid on nocls anc capital assets if; accounted "or hy reducing lUe purchase cos?f related inputs or the capita!assets

l) Subsidy ;

Governments Capital Investment Subsidy in the nature ofpnomoters1 contribution represents Copcai Peseme

m) Direct Taxes:

Provision (or Income Tax, it any, is based on the assessable profits, computed m accordance with th e provisions of I ncome Tax Act, 1961

ii) Detered Tax

Deferred Income tax expense or benetil is recognized an timing differences being the d fferenoe between taxable income and accounting income that originate in one period and ate capable at reverse m cme or more Subsequent pB'itid Deferred tax assets or liabilities are measured using the tax rates and lax laws teat have been enacted or substantially enacted by me balance sheet date. Deterred tax assets in resped &f unabsnrued depreciation and carry forward of losses are recognized only to the extent mat mere is virtual certainty thal sufficient taxable income will be available to rea ize these assels All other deferred tax assets are recognized only to the extent there is reasonable certainty thal sufficient future taxable moome will be available to realize these assets,

ii) Wealth Tax

Wealth tax is ascertained m accordance with the provisions of the Weann Tax Ad 1967

n) Foreign Currency Transactions :

ij Foreign currency transactions are accounted ford equivalent rupee value converted al ihe Exchange rates prevailing at the time of such transaction

ii] Monetary Assets £ Liabilities, in foreign currency are translated al Ihe year-end rate Ihrough exchange fluctuation account to the respective accounts as per Ihe guidance issued by The Institute of Chartered Accountants of India

iii) Any income or expense on account of exohange differences eilher on settlement or translation is recognized in the revenue account except in cases where (hey relate to acquisition of fixed assets and before put to use in which case they are adjusted 1o 1he carrying cost of such assets.

iy) Financial derivatives and hedging conhaclsare accounted on Lhe date of settlement. The accrued/ realised gain/loss in respect of the settled contracts/ renewed^ cancelled is only recognized rn the books of accounts,

o) Prior Period Items :

Income and expenditure which relate to significant items of prior accounting period ether then those occasioned during the dose of accounting year to which it is relalable, is considered in current year,

p) Borrowing Costs:

Borrowing costs thal are direotly attributable to fhe acquisition construction or production of sq'.n ifying asset are capitalised as part of lhe owl of the asset till Lite asset is ready for use. Other borrowing costs are recognised as an expense in the year in whicil ihey are incurred

q) LeasE :

Leases of assets under which the lessor effectively relates all the risks and benefits of ownership are classified as operating tease. Payments made under operating lease are charged to profiL and loss account over me penod of lease.


Mar 31, 2012

A) Accounting Convention:

The financial statements are prepared under historical cost convention using the accrual system of accounting in accordance with the accounting principles generally accepted in India and the requirements of the Companies Act, 1956, including the mandatory Accounting Standards as prescribed by the Companies (Accounting Standards) Rules, 2006

b) Use of Estimates:

The preparation of financial statements requires the management of the company to make estimates and assumption that effect the reported balances of assets/liabilities and disclosure relating to the contingent liabilities and provisions as at the date of the financial statements and reported amounts of income and expenses during the year. The difference between the actuals and estimates are recognized in the year such amounts are known/materialised.

c) Provisions, Contingent Liabilities and Contingents Assets :

Provisions involving substantial degree of estimation in measurement are recognized where there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contigent Liabilities are not recognized but are disclosed in the notes. Contigent assets are neither recognized nor disclosed in the financial statements/notes.

d) Fixed Assets:

i) Fixed Assets are stated at cost of acquisition, net of modvat/cenvat credit/terminal excise duty, additional custom duty, or of construction, including pre-operative, financial and other incidental expenses attributable to acquisition or construction of fixed assets less depreciation.

ii) Capital works in progress are carried at cost, comprising direct costs, related incidental expenses & attributable interest.

iii) Intangible assets are stated at cost of acquisition less accumulated amortisation.

e) Depreciation / Amortisation:

i) The company has provided depreciation on Straight Line Method in accordance with the rates as prescribed in Schedule XIV under the provisions of The Companies Act, 1956 on the fixed assets when it is put to use.

ii) Renovation to premises taken on lease by the company have been amortised over the period of lease and in case of premature termination would be written off fully.

iii) Electricity Line Expenses / Service connection charges and Computer Software being intangible are amortised over a period of 5 years.

f) Impairment of Assets:

At each balance sheet date the carrying amounts of fixed assets are reviewed by the management to determine whether there is any indication that these assets had suffered an impairment loss. If any such indication exists recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing, value in use, the estimated future cash flows expected from the continuing use of the assets and from its disposal are discounted to their present value using a pre tax discount rate that reflects the current market assessments of time value of money and risks specific to the asset. Reversal of impairment loss is recognized immediately as income in the profit and loss account.

g) Inventories:

These are valued as under:

i) Raw Material, Work-in-Process and useable

At cost or estimated realisable value whichever is lower.

ii) Stores & Spares

At cost less provision for obsolescence or estimated realisable value whichever is lower.

iii) Finished Goods

At cost plus excise duty payable on sale or estimated realisable value whichever is lower.

iv) Unusable waste

At net realisable value

v) The raw material, stores & spares and raw-material contents of work-in-process are valued by using the first-in-first out (FIFO) method while the finished goods are valued by using weighted average cost method. Cost relating to finished goods/work-in-process means direct raw material cost and allocable manufacturing expenses.

vi) The company makes provision for the value of goods in transit at the year end for imported/indigenous raw material and imported spare parts only and does not make any provision in respect of other materials.

vii) The policy of valuation of inventories is in accordance with Accounting Standard-2 (Revised) 'Valuation of Inventories' issued by the Institute of Chartered Accountants of India.

h) Sales/Revenue Recognition:

i) Domestic sales are accounted, net of returns & trade discounts, on dispatch of products to customers from the works/warehouses and export sales on shipment of goods. Sales within India comprising of sale of goods and services are inclusive of excise duty cleared in the domestic market. The sale value of goods oh which value added tax has been charged, are exclusive of value added tax.

ii) The revenue in respect of export benefit is recognized on post exports basis, at the rate at which the entitlement accrued, to the extent the company is reasonably certain of the realisable value.

i) Excise Duty:

The excise duty liability has been accounted for in respect of the finished goods/ useable waste cleared/ lying in the factory/bonded premises which are liable to excise duty provided the cenvat of excise duty/ additional custom duty of the inputs have been availed.

j) Employee Benefits:

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains / losses in respect of long term benefits are adjusted to the profit and loss account.

k) Modvat (Cenvat):

Modvat (cenvat) credit/Terminal Excise Duty paid on inputs and capital assets is accounted for by reducing the purchase cost of related inputs or the capital assets.

l) Subsidy:

Government Capital Investment Subsidy in the nature of promoters' contribution represents Capital Reserve.

m) Direct Taxes:

i) Current Tax

Provision for Income Tax, if any, is based on the assessable profits, computed in accordance with the provisions of Income Tax Act, 1961

ii) Defferred Tax

Deferred Income tax expense or benefit is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period. Deferred tax assets or liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

iii) Wealth Tax

Wealth tax is ascertained in accordance with the provisions of the Wealth Tax Act 1957

n) Foreign Currency Transactions:

i) Foreign currency transactions are accounted for at equivalent rupee value converted at the exchange rates prevailing at the time of such transaction

ii) Monetary Assets & Liabilities in foreign currency are translated at the year-end rate through exchange fluctuation account to the respective accounts as per the guidance issued by The Institute of Chartered Accountants of India

iii) Any income or expense on account of exchange differences either on settlement or translation is recognized in the revenue account except in cases where they relate to acquisition of fixed assets and before put to use in which case they are adjusted to the carrying cost of such assets.

iv) Financial derivatives and hedging contracts are accounted on the date of settlement. The accrued/ realised gain/loss in respect of the settled contracts/ renewed/ cancelled is only recognized in the books accounts.

o) Prior Period Items:

Income and expenditure which relate to significant items of prior accounting period other than those occasioned during the close of accounting year to which it is relatable, is considered in current year.

p) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the asset till the asset is ready for use. Other borrowing costs are recognised as an expense in the year in which they are incurred.

q) Lease:

Leases of assets under which the lessor effectively retains all the risks and benefits of ownership are classified as operating lease. Payments made under operating lease are charged to profit and loss account over the period of lease.



 
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