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Kajaria Ceramics Limited
Annual Report
2012-13
25
YEARSOF
WORKINGWITH
ANATTITUDE
CELEBRATING
Notes on 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 recognized 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 :
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 arising on consolidation is
tested for impairment at the Balance Sheet date.
V.
Investments:
Long term investments are stated at cost.
1. SIGNIFICANT ACCOUNTING POLICIES TO THE CONSOLIDATED BALANCE SHEET AND STATEMENT OF PROFIT & LOSS
Name of the Subsidiary
Country of
Proportion of
Incorporation
ownership interest
Soriso Ceramic Pvt Ltd
India
51%
Jaxx Vitrified Pvt Ltd
India
51%
Vennar Ceramics Limited
India
51%
Cosa Ceramics Pvt Ltd
India
51%
Kajaria Ceramics Addis Plc
Ethiopia
100%
