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35
Annual Report 2011-12
34 Kajaria Ceramics Limited
to reduce the balance under this
head.
Short-term borrowings:
It represents
working capital facilities for managing
day-to-day business operations. What
is worth highlighting is that despite
the huge increase in operational
scale, working capital facilities
declined (albeit marginally) –
primarily due to better working
capital management and the strength
in the brand.
Current maturities of long term debts:
It represents the term loans repayable
in the next 12 months shown in the
current liabilities as per the new
Schedule VI of the Companies Act,
1956.
Fixed Assets
Gross block increased marginally by
3.33% from
`
6,999.88 million as on
31st March, 2011 to
`
7,233.27 million
as on 31st March, 2012 due to routine
capex and investment in digital
printing machines.
Depreciation:
The Company
consistently charged depreciation
under the Straight Line Method as
specified in the Companies Act, 1956.
Despite the marginal capex in 2011-
12, provision for depreciation
increased significantly from
`
294.99
million in 2010-11 to
`
370.77 million
in 2011-12. This is due to the full year
depreciation on capital expenditure
of
`
1,546.42 million in 2010-11
(capitalised only in the fourth quarter
of 2010-11).
Accumulated depreciation, as a
proportion of the gross block, stood at
35.15% as on 31st March, 2012
representing the newness of the gross
block – an important competitive
edge in a cluttered industry space.
Investments
The Company’s investment increased
to
`
123.52 million as on 31st March,
2012 from
`
90.14 million as on 31st
March, 2011. This is primarily due to
the acquisition of a 51% stake in Jaxx
Vitrified Private Limited for
`
62.80
million and formation cost at
`
4.51
million of M/s Kajaria Ceramics Addis
PLC – Ethiopia, our subsidiary. The
Company exited from earlier
investments namely Kajaria Plus Ltd
and Regency Trust Ltd.
Net current assets
Net current assets (working capital)
increased from
`
743.15 million as on
31st March, 2011 to
`
1,040.70 million
as on 31st March, 2012. Despite an
increase in operational scale, the
working capital cycle decrease from
42 days in 2010-11 to 27 days 2011-
12 primarily due to a decrease in the
inventory holding period and
improved terms of trade with
creditors and increasing business
liquidity.
Current Assets
Current assets stood at
`
3,763.88
million as on 31st March, 2012
against
`
3,077.30 million as on 31st
March, 2011. This is in line with the
growing operations of the Company.
As per the new Balance Sheet format
prescribed, the balance under current
assets are reflected in the various
heads as shown in Table 3:
In the old format loans and advances
which are long term in nature were
included with other current assets, in
the new format it is part of non-
current assets. The current assets
increased 22% over the previous year
despite a 38% increase in net sales.
Inventory:
Increased from
`
1,515.11
million as on 31st March, 2011 to
`
1,757.82 million as on 31st March,
2012. While the increase in absolute
numbers is primarily on account of
finished good inventory, the finished
good (finished goods and stock in
trade) cycle has declined to 29 days
in 2011-12 from 36 days in FY 2010-
11. Overall, the inventory cycle
declined to 46 days in 2011-12 from
55 days in 2010-11.
Sundry Debtors:
Increased 55.12%
from
`
909.04 million as on 31st
March, 2011 to
`
1,410.11 million as
on 31st March, 2012 in line with
increased turnover. The debtors’ cycle
increased to 37 days in 2011-12 from
33 days in 2010-11 – due to huge
sale in the month of March 12. More
than 97% of the receivables were
outstanding for less than 180 days –
reflecting the strength in the debtors
balance.
Loans and Advances:
Decreased from
`
623.23 million on 31st March, 2011
to
`
536.99 million as on 31st March,
2012. As per the new Balance Sheet
format, the balance under loans and
advances is reflected in the various
heads as shown in Table 4:
Long-term loans and advances
represent balances recoverable over a
period exceeding 12 months. Other
current assets represent advances to
suppliers and balances with
government authorities.
Current Liability and Provisions:
The
balance under this sub-head stood at
`
2,723.18 million as on 31st March,
2012 against
`
2,334.15 million as on
31st March, 2011. The increase is
largely on account of an increase in
the provision for expenses and higher
dividend (proposed) for 2011-12.
As per the new Balance Sheet format,
the balance under current liabilities
and provisions is reflected in various
heads as shown in Table 5:
Table 5: Reconciliation of current liabilities
(
`
in Million)
Note of Balance Sheet
As at 31st March, 2012 As at 31st March, 2011
Current liabilities - As per Balance Sheet (new format)
7-10
4,368.20
4,128.86
Add: Long-term provisions (for gratuity)
6
62.24
42.16
4,430.44
4,171.02
Less: Short-term borrowings
7
1,038.00
1,040.38
Less: Current maturities of long-term debts
9
669.26
796.49
Total
2,723.18
2,334.15
Table 3: Reconciliation of current assets
(
`
in Million)
Note of Balance Sheet
As at 31st March, 2012 As at 31st March, 2011
Current assets - As per Balance Sheet (new format)
16-20
3,605.34
2,784.69
Long-term loans and advances
14
157.86
291.29
Other non-current assets
15
0.68
1.32
Total
3,763.88
3,077.30
Debt-equity (x)
2007-08
2.18
2.01
1.39
1.26
0.86
Working capital cycle
(days)
136
109
80
42
27
ROCE (Avg.) (%)
11.20
13.08
16.98
22.28
28.62
2008-09
2009-10
2010-11
2011-12
Table 4: Reconciliation of loans and advances
(
`
in Million)
Note of Balance Sheet
As at 31st March, 2012 As at 31st March, 2011
Long-term loans and advances
14
157.86
291.29
Other non-current assets
15
0.68
1.32
Short-term loans and advances
19
15.21
-
Other current assets
20
363.24
330.62
Total
536.99
623.23
Table 2: Reconciliation of External debt
(
`
in Million)
Note of Balance Sheet
As at 31st March, 2012 As at 31st March, 2011
Long-term borrowings
4
709.98
959.92
Short-term borrowings
7
1,038.00
1,040.38
Current liabilities - current maturities of long-term debts
9
669.26
796.49
Total
2,417.24
2,796.79