Basic HTML Version
83
Annual Report 2011-12
82 Kajaria Ceramics Limited
Notes on Consolidated Accounts
I.
Principles of Consolidation
The consolidated financial results of Kajaria Ceramics Ltd (“the Company”) and its subsidiaries have been prepared on the
following basis:-
a) The financial statements of the Company and its subsidiary companies have been consolidated on a line-by-line basis
by adding together with the book value of like items of assets, liabilities and after eliminating the inter subsidiary
balances in accordance with Accounting Standard (AS) 21 - “Consolidated Financial Statements” issued by the Institute
of Chartered Accountants of India.
b) As far as possible the consolidated financial statement have been prepared using uniform accounting policies for like
transactions and in similar circumstances and are presented to the extent possible in the same manner as the
company’s separate financial statements.
c) The difference between the cost of investment in the subsidiaries, over the net assets at the time of acquisition of
shares in the subsidiaries is recognised in the financial statements as Goodwill or Capital Reserve as the case may be.
d) Minority Interest’s share of net profit of subsidiary for the year is identified and adjusted against the income of the
group in order to arrive at the net income attributable to shareholders of the Company.
e) Minority Interest’s share of net assets of the subsidiary Company is identified and presented in the consolidated
Balance Sheet separate from liabilities and the equity of the Company’s shareholders.
f) Particulars of subsidiary companies considered in the consolidated financial statements are :
NOTE
1
SIGNIFICANT ACCOUNTING POLICIES
NOTE
1
SIGNIFICANT ACCOUNTING POLICIES
(Contd...)
Notes on Consolidated Accounts
b) Raw Materials - at moving weighted average basis.
c) Work-in-Process - at estimated cost
d) Finished Goods - at lower of cost or estimated realisable value.
e) Stock in trade - at lower of cost or estimated realisable value.
f) Material in Transit - at cost.
VII. Excise & Custom Duty:
a) Custom Duty is accounted for at the time receipt of goods in custom warehouse.
b) CENVAT Credit, to the extent availed, is adjusted towards cost of materials.
VIII. Sales
Sales are inclusive of excise duty and after deducting VAT and discounts.
IX. Foreign Currency Transactions:
a) Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the
transaction or that approximates the actual rate at the date of the transaction.
b) Monetary items denominated in foreign currencies at the year end are restated at year end rates, except in cases
covered by forward exchange contracts.
c) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the
statement of Profit & Loss.
X. Export Benefits
Export Benefits in respect of unutilised Advance Licences under DEPB Scheme are accounted for in the year of Export to
the extent of duty leviable on imports to be made in future. The consumption of Raw Material, Stores and other inputs and
the valuation of closing stock are stated net of such export benefits.
XI. Employee Benefits:
a) Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account
of the year in which the related service is rendered.
b) Gratuity liability has been provided on the basis of actuarial valuation.
XII. Research & Development:
Revenue Expenditure on research and development is charged to Profit & Loss Account in the year in which it is incurred.
Capital Expenditure on research and development is treated as additions to Fixed Assets in case the same qualifies as a
tangible asset as per AS - 10 issued by ICAI.
XIII. Provision, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation
as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not
recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial
statements.
XIV. Sundry Debtors:
Sundry Debtors are shown net of bills discounted.
XV.
Dividend received is accounted for as and when it is declared.
XVI.
Unless specifically stated to be otherwise, these policies are consistently followed.
II. Basis of Accounting:
The Company prepares its financial statements in accordance with applicable accounting standards and generally accepted
accounting principles and also in accordance with the requirements of the Companies Act, 1956.
III. Income and Expenditure:
Accounting of Income & Expenditure is done on accrual basis.
IV. Fixed Assets & Depreciation:
a) Fixed assets are stated at their original cost of acquisition inclusive of inward freight, duties and expenditure incurred
in the acquisition, construction/installation. CENVAT/ VAT credit availed on capital equipment is accounted for by
credit to respective fixed assets.
b) In case of assets acquired out of foreign currency loans, the increase/decrease in liability on account of fluctuation in
exchange rates is charged to the Statement of Profit & Loss.
c) Depreciation is charged at the rates provided in Schedule XIV of the Companies Act, 1956 on Straight Line Method on
assets of Holding Company and on WDV Method on assets of Subsidiary Company. Continuous process plant as
defined in Schedule XIV has been considered on technical evaluation. In case of assets of sale outlets of dealers,
depreciation is charged @ 20% on SLM basis. Assets costing upto
`
5,000/- are fully depreciated in the year of
purchase. Goodwill is amortised using Straight Line Method in 5 years.
V. Investments:
Long term investments are stated at cost.
VI. Inventories:
Inventories are valued on the following basis:
a) Stores and Spares - at moving weighted average basis.
Name of the Subsidiary
Country of
Proportion of
Incorporation
ownership interest
Soriso Ceramic Pvt Ltd
India
51%
Jaxx Vitrified Pvt Ltd
India
51%
Kajaria Ceramics Addis Plc
Ethiopia
100%