1. MATERIAL ACCOUNTING POLICIES
This note provides a list of the material accounting policies adopted in the presentation of these Standalone Financial Statements.
1.01 Basis of Preparation
a) The Standalone Financial Statements of the Company have been prepared in accordance with Indian Accounting
Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to
time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013, as amended from time to
time (Ind AS compliant Schedule III), as applicable to the Financial Statements.
b) Compliance with Ind AS
The Standalone Financial Statements comply in all material aspects with Indian Accounting Standards (“Ind AS”) notified
under section 133 of the Companies Act, 2013 (“the Act”), and relevant rules issued thereunder and the relevant provisions
of the Act. In accordance with proviso to the Rule 4A of the Companies (Accounts) Rules, 2014, the terms used in these
Standalone Financial Statements are in accordance with the definitions and other requirements specified in the applicable
Accounting Standards.
c) Historical cost convention
The Standalone Financial Statements have been prepared on a historical cost basis, except for the following:
i. certain financial assets and liabilities (including derivative instruments) are measured at fair value; and
ii. defined benefit plans - plan assets measured at fair value.
iii. the accounting policies and related notes further described the specific measurements applied for each of the assets
and liabilities.
d) The Company has prepared the Standalone Financial Statements on the basis that it will continue to operate as a going
concern.
e) All amounts disclosed in the Standalone Financial Statements and notes have been rounded off to the nearest crores,
except where otherwise indicated.
1.02 Current versus non-current classification
The Company segregates assets and liabilities into current and non-current categories for presentation in the Balance Sheet
after considering its normal operating cycle and other criteria set out in Ind AS 1 - Presentation of Financial Statements. For this
purpose, current assets and liabilities include the current portion of non-current assets and liabilities respectively. Deferred tax
assets and liabilities are always classified as non-current.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash
equivalents. The Company has identified period up to twelve months as its operating cycle.
1.03 Use of judgements, estimates & assumptions
While preparing the Standalone Financial Statements in conformity with Ind AS, the management makes certain estimates and
assumptions that require subjective and complex judgments. These judgments affect the application of accounting policies and
the reported amount of assets, liabilities, income and expenses, disclosure of contingent liabilities at the statement of financial
position date and the reported amount of income and expenses for the reporting period. Financial reporting results rely on our
estimate of the effect of certain matters that are inherently uncertain. Future events rarely develop exactly as forecast and the
best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions.
The management continually evaluates these estimates and assumptions based on the most recently available information.
Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods
affected. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amounts recognised in the Standalone Financial Statements are as below :
The Company has equity stake in various entities for strategic reasons concerning its operation. The relationship with these
entities have been determined based on principles laid down in Ind AS 110 - Consolidated Financial Statements.
The entities mentioned below are considered as subsidiaries :
a) Antique Granito Private Limited (formerly known as Antique Marbonite Private Limited)
b) Small Luxetile Private Limited (formerly known as Small Johnson Floor Tiles Private Limited)
c) Stellar Ceramics Private Limited (formerly known as Spectrum Johnson Tiles Private Limited)
d) Coral Gold Tiles Private Limited
e) Sanskar Ceramics Private Limited
f) Sunbath Sanitary Private Limited (w.e.f. August 22, 2024)
Key assumptions
a) Evaluation of recoverability of deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be
available against which the losses can be utilised. Significant management judgment is required to determine the amount
of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together
with future tax planning strategies.
b) Assets and obligations relating to employee benefits
The cost of the defined benefit plans, compensated absences and the present value of the defined benefit obligations
are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These inter alia include the determination of the
discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long¬
term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed
at each reporting date.
c) Useful lives of Property, plant and equipment
The Company reviews the useful life of Property, plant and equipment at the end of each reporting period. This
reassessment may result in change in depreciation expense in future periods.
d) Impairment of Property, plant and equipment and intangibles
For Property, plant and equipment and intangibles an assessment is made at each reporting date to determine whether
there is an indication that the carrying amount may not be recoverable or previously recognised impairment losses no
longer exist or have decreased. If such indication exists, the Company estimates the asset's or Cash Generating Units
(CGU's) recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised.
e) Impairment of investment
For determining whether the investments in subsidiaries, joint ventures and associates are impaired requires an estimate in
the value in use of investments. In considering the value in use, the Directors have estimated the future cash flow, capacity
utilisation, operating margins and other factors of the underlying businesses / operations of the investee companies. Any
subsequent changes to the cash flows due to changes in the above mentioned factors could impact the carrying value of
investments.
f) Valuation of inventories
The Company estimates the net realisable value (NRV) of its inventories by taking into account estimated selling price,
estimated cost of completion, estimated costs necessary to make the sale, obsolescence considering the past trend.
Inventories are written down to NRV where such NRV is lower than their cost.
g) Recognition and measurement of other Provisions
The recognition and measurement of other provisions is based on the assessment of the probability of an outflow of
resources, and on past experience and circumstances known at the closing date. The actual outflow of resources at a
future date may therefore, vary from the amount included in other provisions.
h) Mine Restoration Provision
I n determining the fair value of the Mines Restoration Obligation, assumptions and estimates are made in relation to the
expected cost of mines restoration and the expected timing of those costs.
i) Fair value of financial instruments
Management uses valuation techniques in measuring the fair value of financial instruments where active market quotes are
not available. Details of the assumptions used are given in the notes regarding financial assets and liabilities. In applying
the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions that
are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where
applicable data is not observable, management uses its best estimate about the assumptions that market participants
would make. These estimates may vary from the actual prices that would be achieved in an arm's length transaction at the
reporting date.
1.04 Property, plant and equipment
a) Freehold land is carried at historical cost less impairment losses, if any.
b) Property, plant and equipment is stated at cost, less accumulated depreciation and accumulated impairment losses. The
initial cost of an asset comprises its purchase price, non-refundable purchase taxes and any costs directly attributable
to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended
by management, the initial estimate of any decommissioning obligation, if any, and, for assets that necessarily take a
substantial period of time to get ready for their intended use, finance costs. The purchase price is the aggregate amount
paid and the fair value of any other consideration given to acquire the asset.
c) When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them
separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in
the carrying amount of the plant and equipment as a replacement, if the recognition criteria are satisfied. All other repair
and maintenance costs are recognised in the Statement of Profit and Loss as incurred.
d) An item of Property, plant and equipment and any significant part initially recognised is derecognised upon disposal
or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net realisable value and the carrying amount of the asset) is included in the
Statement of Profit and Loss.
e) Expenditure directly attributable to setting up / construction of new projects are capitalised. Administrative and other
general overhead expenses, which are specifically attributable to the setting up / construction activities, incurred during
the construction period, are capitalised as part of the indirect cost. Other indirect expenditure incurred during such period
which are not related to the setting up / construction activities are charged to Statement of Profit and Loss. Income earned
during this period from setting up activities is deducted from the total of indirect expenditure.
f) The residual values and useful lives of Property, plant and equipment are reviewed at each financial year end, and changes,
if any, are accounted prospectively.
g) Stores and spares which meet the definition of Property, plant and equipment and satisfy the recognition criteria of Ind AS
16 are capitalised as Property, plant and equipment.
h) Cost of mining reserves included in freehold / leasehold land, balance cost of leasehold mining land and mines development
expenses are amortised systematically based on principle of Unit of Production method.
i) The Company has elected to continue with the carrying value for all of its Property, plant and equipment as recognised
in the Standalone Financial Statements on transition to Ind AS, measured as per the previous GAAP and use that as its
deemed cost as at the date of transition.
j) Depreciation on Property, plant and equipment is provided on straight line method. In accordance with requirements
prescribed under Schedule II to the Companies Act, 2013, the Company has assessed the estimated useful lives of its
Property, plant and equipment and has adopted the useful lives as given below :
k) The Company depreciates significant components of the main asset (which have different useful lives as compared to the
main asset) based on the individual useful life of those components. Useful life for such components of Property, plant and
equipment is assessed based on the historical experience and internal technical inputs which varies from 2 to 40 years.
l) Capital Work in Progress is stated at cost, net of accumulated impairment loss, if any.
1.05 Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets
are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles
are not capitalised and the related expenditure is reflected in the Statement of Profit and Loss in the period in which the
expenditure is incurred.
Technical know-how / license fee and application software are classified as Intangible Assets.
Intangible assets with finite lives are amortised on straight line basis over their useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method
for an intangible asset with a finite useful life are reviewed at each year end. The amortisation expense on Intangible assets with
finite lives and impairment loss is recognised in the Statement of Profit and Loss.
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is included in the Statement of Profit and
Loss when the asset is derecognised.
The Company has elected to continue with the carrying value for all of its Intangible assets as recognised in the Standalone
Financial Statements on transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date
of transition.
Estimated lives for current and comparative periods in relation to application of straight line method of amortisation of intangible
assets (acquired) are as follows :
Research and Development
Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognised as an
Intangible asset when the Company can demonstrate the following:
a) The technical feasibility of completing the intangible asset so that it will be available for use or sale;
b) Its intention to complete the asset;
c) Its ability to use or sell the asset;
d) Ability to generate future economic benefits;
e) The availability of adequate resources to complete the development and use or sell the asset; and
f) The ability to measure reliably the expenditure attributable to the intangible asset during development.
1.06 Impairment of Assets
Carrying amount of Tangible assets, Intangible assets, investments in Subsidiaries, Joint Ventures and Associates (which are
carried at cost) are tested for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less
costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate
valuation model is used.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash inflows, which are largely independent of the cash inflows from other assets or Company's assets (cash-generating units).
Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the
end of each reporting period.
1.07 Inventories
Raw materials, fuels, stores and spares are valued at lower of cost and net realisable value. However, materials and other
items held for use in the production of inventories are not written down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Cost in case of Raw material and Packing material, Stores and Spares
and Traded Goods include purchase cost net of refundable taxes and other overheads incurred in bringing such items of
inventory to its present location and condition. Cost of raw materials, components and stores and spares which do not meet the
recognition criteria under Property, plant and equipment is determined on a weighted average basis.
Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials, labour,
other direct cost and a proportion of manufacturing overheads based on normal operating capacity. Cost of inventories is
computed on weighted average basis.
Traded goods are valued at lower of weighted average cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and
estimated costs necessary to make the sale.
The factors that the Company considers in determining the allowance for slow moving, obsolete and other non-saleable
inventory in determining net realisable value include ageing of inventory, price changes and such other related factors.
1.08 Cash and cash equivalents
Cash and cash equivalents in the Balance Sheet comprise cash at banks and on hand and short-term deposits with an original
maturity of three months or less, which are subject to insignificant risk of change in value.
For the purpose of Statement of cash flows, cash and cash equivalents consist of cash, short-term deposits as defined above
and short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to
insignificant risk of changes in value as they are considered as an integral part of the Company's management.
1.09 Financial Instruments
Financial assets and financial liabilities are recognised when a Company becomes a party to the contractual provisions of the
instruments.
Initial Recognition and Measurement - Financial Assets and Financial Liabilities
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, Fair Value Through Other
Comprehensive Income (“FVTOG”) or Fair Value Through Profit or Loss (“FVTPL”). Financial liabilities are classified, at initial
recognition, as financial liabilities at Fair Value Through Profit or Loss (“FVTPL”), loans and borrowings including bank overdrafts,
financial guarantee contracts and derivative financial instruments, as appropriate. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss and ancillary costs related to borrowings) are added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of
financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the Statement of Profit and
Loss.
Classification and Subsequent Measurement : Financial Assets
The Company classifies financial assets as subsequently measured at amortised cost, Fair Value Through Other Comprehensive
Income (“FVTOCI”) or Fair Value Through Profit or Loss (“FVTPL”) on the basis of following :
- the entity's business model for managing the financial assets and
- the contractual cash flow characteristics of the financial asset.
Amortised Cost
A financial asset is classified and measured at amortised cost if both of the following conditions are met:
- the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual
cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
FVTOCI (Debt instruments)
A financial asset is classified and measured at FVTOCI if both of the following conditions are met:
- the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows
and selling financial assets; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. For
debt instruments, at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or reversals
are recognised in the Statement of Profit or Loss and computed in the same manner as for financial assets measured at
amortised cost. The remaining fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value changes
recognised in OCI is reclassified from the equity to profit or loss. The Company's debt instruments at fair value through OCI
includes investments in quoted debt instruments.
FVTOCI (Equity instruments)
Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity instruments designated
at fair value through OCI when they meet the definition of equity under Ind AS 32 - Financial Instruments : Presentation, for the
issuer and are not held for trading. The classification is determined on an instrument-by-instrument basis. Equity investment
which are held for trading are classified as at FVTPL.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in
the Statement of Profit and Loss, when the right of payment has been established, except when the Company benefits from
such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity
instruments designated at fair value through OCI are not subject to impairment assessment.
The Company elected to classify irrevocably its non-listed equity investments under this category.
FVTPL
Financial assets in this category are those that are held for trading and have been either designated by management upon
initial recognition or are mandatorily required to be measured at fair value under Ind AS 109 - Financial Instruments, i.e., they do
not meet the criteria for classification as measured at amortised cost or FVTOCI. Management only designates an instrument
at FVTPL upon initial recognition, if the designation eliminates, or significantly reduces, the inconsistent treatment that would
otherwise arise from measuring the assets or liabilities or recognising gains or losses on them on a different basis. Such
designation is determined on an instrument-by-instrument basis.
Financial assets at fair value through profit or loss are carried in the Balance Sheet at fair value with net changes in fair value
recognised in the Statement of Profit and Loss.
Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised
cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 - Financial Instruments, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
Classification and Subsequent measurement : Financial Liabilities
The Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial
guarantee contracts and derivative financial instruments.
Financial Liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial
recognition as FVTPL.
Gains or losses on financial liabilities held for trading are recognised in the Statement of Profit and Loss.
Financial Liabilities at amortised cost
Financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the
effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments
(including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.
Derecognition of Financial Assets and Financial Liabilities
The Company de-recognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or
it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards
of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of
the risks and rewards of ownership and does not retain control of the financial asset. If the Company enters into transactions
whereby it transfers assets recognised in its Balance Sheet, but retains either all or substantially all of the risks and rewards of
the transferred assets, the transferred assets are not derecognised.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable
right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal
course of business and in the event of default, insolvency or bankruptcy of the Company or the counter party.
1.10 Financial liabilities and equity instruments :Classification as debt or equity
Debt and equity instruments issued by the Company are classified either as financial liabilities or as equity in accordance with
the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences residual interest in the assets of the Company after deducting all of its
liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
1.11 Investments in Subsidiaries, Associates and Joint Ventures
A Subsidiary is an entity that is controlled by another entity. An investor controls an investee if and only if the investor has the
following : (i) Power over the investee, (ii) exposure, or rights, to variable returns from its involvement with the investee and (iii)
the ability to use its power over the investee to affect the amount of the investor's returns.
An Associate is an entity over which the Company has significant influence. Significant influence is the power to participate in
the financial and operating policy decisions of the investee, but is not control or joint control over those policies.
A Joint Venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the
net assets of the Joint Venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities require unanimous consent of the parties sharing control.
The Company's investments in its Subsidiaries, Associates and Joint Ventures are accounted at cost.
1.12 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs
are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an
adjustment to the borrowing costs.
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