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Accounting Policies of Kajaria Ceramics Ltd. Company

Mar 31, 2015

I. Basis of preparation of financial statements:

These financial statements have been prepared to comply with Accounting Principles Generally accepted in India (Indian GAAP), the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements are prepared on accrual basis under the historical cost convention. The financial statements are presented in Indian rupees rounded off to the nearest rupees in crore.

II. Use of estimates:

The preparation of financial statements in conformity with Indian GAAP requires judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

III. Tangible & Intangible Fixed Assets:

a) Tangible assets are stated at their original cost of acquisition inclusive of inward freight, duties and expenditure incurred in the acquisition, construction/installation less accumulated amortization and impairment loss, if any. 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 has been charged to Profit & Loss Account.

c) Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/ depletion and impairment loss, if any.

IV. Depreciation and amortization:

Depreciation / amortization on tangible and intangible fixed assets is provided to the extent of depreciable amount on the straight line (SLM) Method. Depreciation is provided at the rates and in the manner prescribed in Schedule II to the Companies Act, 2013 except on some assets, where useful life has been taken based on external / internal technical evaluation.

V. Impairment:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.

VI. Investments:

Long-term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

VII. Inventories:

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition.

Inventories are valued on the following basis:

a) Stores and Spares - at moving weighted average basis.

b) Raw Materials - at moving weighted average basis.

c) Work-in-Process - at estimated cost.

d) Finished Goods - at lower of cost or net realizable value.

e) Stock in trade - at lower of cost or net realizable value.

f) Material in Transit - at cost.

VIII. Revenue Recognition:

Revenue is recognized only when risks and rewards incidental to ownership are transferred to the customer, it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services and excise duty, adjusted for discounts (net).

Dividend income is recognized when the right to receive payment is established.

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the interest rate applicable.

IX. Excise Duty:

Excise duty is accounted on the basis of both, payments made in respect of goods cleared and provision made for goods lying in bonded warehouses.

X. 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 recognized in the profit and loss account.

XI. Government grants and subsidies:

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/ subsidy will be received.

Where the grant or subsidy relates to revenue, it is recognized as income on a accrual basis in the statement of profit and loss. Where the grant relates to a fixed asset, it is net off from the relevant asset.

XII. Employee Benefits:

a) 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.

b) Long term employee benefits : Liability towards Gratuity and unavailed leaves has been provided on the basis of actuarial valuation.

XIII. Borrowing costs:

Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.

XIV. 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.

XV. Provision, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized 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 recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

XVI. Income Tax:

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income tax reflects the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/ period. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation or losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same. Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.

XVII. Unless specifically stated to be otherwise, these policies are consistently followed.


Mar 31, 2014

I. 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.

II. Income and Expenditure:

Accounting of Income & Expenditure is done on accrual basis.

III. Tangible, Intangible 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 has been charged to Profit & Loss Account.

c) Depreciation is charged on Straight Line Method at the rates provided in Schedule XIV of the Companies Act, 1956. Continuous process plant as defined in Schedule XIV has been considered on technical evaluation. Cost of fitments at sale outlets are depreciated @ 20% on SLM basis. Assets costing upto Rs.5,000/- are fully depreciated in the year of purchase.

IV. Investments:

Long term investments are stated at cost.

V. Inventories:

Inventories are valued on the following basis:

a) Stores and Spares - at moving weighted average basis.

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.

VI. Excise Duty:

CENVAT Credit, to the extent availed, is adjusted towards cost of materials.

VII. Sales

Sales are inclusive of excise duty and after deducting VAT and discounts.

VIII. 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 profit and loss account.

IX. Government grants and subsidies:

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/ subsidy will be received.

Where the grant or subsidy relates to revenue, it is recognized as income on a accrual basis in the statement of profit and loss. Where the grant relates to a fixed asset, it is net off from the relevant asset.

X. Employee Benefits:

a) 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.

b) Liability towards Gratuity and unavailed leaves has been provided on the basis of actuarial valuation.

XI. 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.

XII. Provision, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized 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 recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

XIII. Dividend received is accounted for as and when it is declared.


Mar 31, 2013

I. 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.

II. Income and Expenditure:

Accounting of Income & Expenditure is done on accrual basis.

III. Tangible, Intangible 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 has been charged to Profit & Loss Account.

c) Depreciation is charged on Straight Line Method at the rates provided in Schedule XIV of the Companies Act, 1956. 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 Rs.5,000/- are fully depreciated in the year of purchase.

IV. Investments:

Long term investments are stated at cost.

V. Inventories:

Inventories are valued on the following basis:

a) Stores and Spares - at moving weighted average basis.

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.

VI. 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.

VII. Sales

Sales are inclusive of excise duty and after deducting VAT and discounts.

VIII. 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 recognized in the profit and loss account.

IX. Employee Benefits:

a) 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.

b) Gratuity liability has been provided on the basis of actuarial valuation.

X. 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.

XI. Provision, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized 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 recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

XII. Government grants and subsidies:

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/ subsidy will be received.

Where the grant or subsidy relates to revenue, it is recognized as income on a accrual basis in the Statement of Profit and Loss. Where the grant relates to a fixed asset, it is net off from the relevant asset.

XIII. Dividend received is accounted for as and when it is declared.

XIV. Unless specifically stated to be otherwise, these policies are consistently followed.

a) The Company has not issued any shares during the year.

b) The holders of the equity shares are entitled to receive dividends as declared from time to time, and are entitled to voting rights proportionate to their share holding at the meetings of shareholders.

c) Following Shareholders hold equity shares more than 5% of the total equity shares of the company at the end of the period


Mar 31, 2012

I. 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.

II. Income and Expenditure:

Accounting of Income & Expenditure is done on accrual basis.

III. Tangible, Intangible 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 has been charged to Profit & Loss Account.

c) Depreciation is charged on Straight Line Method at the rates provided in Schedule XIV of the Companies Act, 1956. 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 Rs 5,000/- are fully depreciated in the year of purchase.

IV. Investments:

Long term investments are stated at cost.

V. Inventories:

Inventories are valued on the following basis:

a) Stores and Spares - at moving weighted average basis.

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.

VI. 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.

VII. Sales

Sales are inclusive of excise duty and after deducting VAT and discounts.

VIII. 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 profit and loss account.

IX. 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.

X. Employee Benefits:

a) Shortterm 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.

XI. 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.

XII. 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.

XIII. Dividend received is accounted for as and when it is declared.

XIV. Unless specifically stated to be otherwise, these policies are consistently followed.


Mar 31, 2010

1. 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.

2. Income and Expenditure: Accounting of Income & Expenditure is done on accrual basis except Interest on export bills which is accounted for on actual realization.

3. 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.

b) In case of assets acquired out of foreign currency loans, the increase/decrease in liability on account of fluctuation in exchange rates has been charged to Profit & Loss Account.

c) Depreciation is charged on Straight Line Method (SLM) at the rates provided in Schedule XIV of the Companies Act, 1956. 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.

d) CENVAT credit availed on capital equipment is accounted for by credit to respective fixed assets.

e) Capital Work-in-progress includes project advances pending execution.

4. Investments: Long term investments are stated at cost.

5. Inventories: Inventories are valued on the following basis:

a) Stores and Spares - at moving weighted average basis.

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) Material in Transit - at cost.

6. 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.

7. Sales: Sales are inclusive of excise duty and after deducting sales tax and discounts. Discounts are recognised when substantially all conditions appurtenant thereto have been fulfilled.

8. Foreign Currency Transactions:

a) Transactions denominated in foreign currencies are recorded at the exchange rate 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 Profit and Loss Account.

9. 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.

 
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