3. Provisions, Contingent Liabilities, Contingent
Assets and Commitments(a) General
Provisions are recognized when the Company has a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to
settle the obligation and a reliable estimate can be
made of the amount of the obligation. If the effect
of the time value of money is material, the amount
of a provision shall be the present value of expense
expected to be required to settle the obligation
Provisions are therefore discounted, when effect is
material, The discount rate shall be pre-tax rate that
reflects current market assessment of time value of
money and risk specific to the liability. Unwinding of
the discount is recognized in the Statement of Profit
and Loss as a finance cost. Provisions are reviewed at
each balance sheet date and are adjusted to reflect
the current best estimate.
(b) Contingencies
Contingent liabilities are disclosed when there is
a possible obligation arising from past events, the
existence of which will be confirmed only by the
occurrence or non-occurrence of one or more
uncertain future events not wholly within the control
of the Company or a present obligation that arises
from past events where it is either not probable that
an outflow of resources will be required to settle or
a reliable estimate of the amount cannot be made.
Information on contingent liability is disclosed in the
Notes to the Financial Statements.
A contingent asset is a possible asset that arises from
past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one
or more uncertain future events not wholly within
the control of the entity, Contingent assets are not
recognized, but are disclosed in the notes. However,
when the realization of income is virtually certain, then
the related asset is no longer a contingent asset, but it
is recognized as an asset.
4 Significant management judgement in
applying accounting policies and estimation
uncertainty
The preparation of the Company's financial
statements requires management to make
judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities at the date
of the financial statements. Estimates and assumptions
are continuously evaluated and are based on
management's experience and other factors,
including expectations of future events that are
believed to be reasonable under the circumstances.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or
liabilities affected in future periods.
In particular, the Company has identified the following
areas where significant judgements, estimates and
assumptions are required. Further information on
each of these areas and how they impact the various
accounting policies are described below and also
in the relevant notes to the financial statements.
Changes in estimates are accounted for prospectively.
a) Judgements
In the process of applying the company's accounting
policies, management has made the following
judgements, which have the most significant effect on
the amounts recognized in the financial statements:
i) Contingencies:
Contingent liabilities may arise from the ordinary
course of business in relation to claims against the
company, including legal, contractor, land access
and other claims. By their nature, contingencies will
be resolved only when one or more uncertain future
events occur or fail to occur. The assessment of the
existence, and potential quantum, of contingencies
inherently involves the exercise of significant judgments
and the use of estimates regarding the outcome of
future events.
ii) Recognition of Deferred tax Assets
The extent to which deferred tax assets can be
recognized is based on an assessment of the
probability that future taxable income will be available
against which the deductible temporary differences
and tax loss carry-forward can be utilized. In addition,
significant judgement is required in assessing the
impact of any legal or economic limits or uncertainties
in various tax jurisdictions.
b) Estimates and Assumptions
The key assumptions concerning the future and other
key sources of estimation uncertainty at the reporting
date that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described
below.
The Company based its assumptions and estimates on
parameters available when the financial statements
were prepared. Existing circumstances and
assumptions about future developments, however,
may change due to market change or circumstances
arising beyond the control of the Company. Such
changes are reflected in the assumptions when they
occur.
i) Useful lives of tangible/in tangible assets:
The Company reviews its estimate of the useful lives
of tangible/intangible assets at each reporting date,
based on the expected utility of the assets.
ii) Defined benefit obligation:
The cost of the defined benefit plan and other post¬
employment benefits and the present value of such
obligation are determined using actuarial valuations.
An actuarial valuation involves making various
assumptions that may differ from actual developments
in the future.
These include the determination of the discount rate,
future salary increases, mortality rates and future
pension increases. In view of 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.
iii) Inventories:
The Company estimates the net realizable values
of inventories, taking into account the most reliable
evidence available at each reporting date.
iv) Fair Value measurement of Financial Instruments:
When the fair values of financial assets and financial
liabilities recorded in the Balance Sheet cannot be
measured based on quoted prices in active markets
shows at cost.
The company does not have any potential equity shares and thus, weighted average number of shares for
computation of basic EPS and diluted EPS remains same.
Note 33: Transition to IND AS H6
As a lessee The Company's lease asset classes primarily consist of leases for land. The Company assesses whether
a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic
benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the
use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU”) and a
corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of
twelve months or less (short-term leases) and low value leases.
The following is the summary of practical expedients elected on initial application:
- Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with
a similar end date.
- Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months
of lease term on the date of initial application.
- Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial
application.
The aggregate depreciation expense on ROU assets is included under depreciation and amortization expense
in the statement of Profit and Loss.
Note34: Payable to MSME
Based on the details regarding the status of the supplier obtained by the company, their amount payable to
the supplier covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) has been
paid within 45 days.This has been relied upon by the auditors.
Note 35: Segment Information
The Company is engaged in the business of two segments i.e. 1) Manufacturing of Engineered Quartz Stone
Slabs and 2) manufacturing of Natural Stone Granites Slab and Tiles. Information is reported to and evaluated
regularly by the Coperational Decision Maker (CODM) i.e. Managing Director for the purpose of resource
allocation and assessing performance focuses on the business as whole. The CODM reviews the Company's
performance focuses on the analysis of profit before tax at an overall entity level.
Note 36: Corporate Social Responsibility
The Corporate Social Responsibility (CSR) obligation for the year as computed by the Company and relied
upon by the auditors is ^ 2.27 Lakhs for the period ended March 31, 2026 (for the year ended March 31,2025:
^ 5.51 Lakhs).
Note 37: Employee Benefits Plana. General description of the employee Benefit Plan
The company has an obligation towards gratuity, unfunded defined benefit retirement plan covering eligible
employees. The plan provides for lump sum payment to vested employees at retirement, death while in
employment or on termination of the employment of an amount equivalent to 15 days/one month salary, as
applicable, payable for each completed year of service or part thereof in excess of six months in terms of
Gratuity scheme of the company or as per payment of Gratuity Act, whichever is higher. Vesting occurs upon
completion of five years of service.
b. Plan typically exposes the company to
actuarial risks such as:
investment risks, interest rate risk, longevity risk and
salary risk.
Investment Risk
The present value of the defined benefit plan liability
(denominated in Indian Rupee) is calculated using
a discount risk which is determined by reference to
market yields at the end of the reporting period on
government bonds. Currently, for the plan in India, it
has relatively balanced mix of investments in Insurance
related products.
Interest Rate Risk
A decrease in the bond interest rate will increase the
plan liability; however, this will be partially offset by an
increase in the return on the plan's debt.
Longevity Risk
The present value of the defined benefit plan liability
is calculated by reference to the best estimate of the
mortality of plan participants both during and after
their employment. An increase in the life expectancy
of the plan participants will increase the plan's liability.
Salary Risk
The present value of the defined plan liability is
calculated by reference to the future salaries of plan
participants. As such, an increase in the salary of the
plan participants will increase the plan's liability.
No other post-retirement benefits are provided to the
employees.
In respect of the plan in India, the most recent
actuarial valuation of the plan assets and the present
value of the defined benefit obligation were carried
out as at the end of March 31, 2026 by an actuary. The
present value of the defined benefit obligation were
carried out as at March 31, 2026 by an actuary. The
present value of the defined benefit obligation, and
the related current service cost and the past service
cost, were measured using the projected unit credit
method.
Details of defined benefit plan -As per Actuarial
valuation are as follows:
Defined Contribution Plans
The Company has a defined contribution plan in
respect of provident fund. Contributions are made to
provident fund in India for employees at the rate of
12% of basic salary as per regulations. The contributions
are made to registered provident fund administered
by the Government. The obligation of the group is
limited to the amount contributed and it has no further
contractual nor any constructive obligation.
Note 38: Contingent Liabilities
Letters of Credit
Letter of Credit - ^ NIL Lacs (PY - NIL)
Contingent liabilities and commitments (to the extent not provided for)
Bills of Exchange Discounted ^ 705.51 Lacs (PY- ^ 1009.62 Lacs)
Guarantee & counter guarantee outstanding - ^ NIL Lacs (PY - NIL)
Level 1:
Quoted prices in the active market. This level of
hierarchy includes financial assets that are measured
by reference to quoted prices in the active market.
This category consists of quoted equity shares and
debt based open ended mutual funds.
Level 2:
Valuation techniques with observable inputs. This level
of hierarchy includes items measured using inputs
other than quoted prices included within Level 1
that are observable for such items, either directly or
indirectly. This level of hierarchy consists of debt based
close ended mutual fund investments and over the
counter (OTC) derivative contracts.
Level 3:
Valuation techniques with unobservable inputs. This
level of hierarchy includes items measured using
inputs that are not based on observable market
data (unobservable inputs). Fair value determined in
whole or in part, using a valuation model based on
assumptions that are neither supported by prices from
observable current market transactions in the same
instruments nor based on available market data.
The main item in this category are unquoted equity
instruments.
The fair value of the financial assets are determined at
the amount that would be received to sell an asset in
an orderly transaction between market participants.
The following methods and assumptions were used to
estimate the fair values:
Investments in debt mutual funds:
Fair value is determined by reference to quotes from
the financial institutions, i.e.. Net asset value (NAV) for
investments in mutual funds declared by mutual fund
house.
Quoted equity investments:
Fair value is derived from quoted market prices in
active markets.
Unquoted equity investments:
Fair value is derived on the basis of income approach,
in this approach the discounted cash flow method is
used to capture the present value of the expected
future economic benefits to be derived from the
ownership of these investments.
Note 42: Financial Risk Management
The Company's management monitors and manages
the financial risks relating to the operations of the
Company. These risks include market risk (including
currency risk, interest rate risk and other price risk),
credit risk and liquidity risk.
The management reviews cash resources, implements
strategies for foreign currency exposures and ensuring
market risk limit and policies.
(a) Market risk
Market risk is the risk of any loss in future earnings,
in realizable fair values or in future cash flows that
may result from a change in the price of a financial
instrument. The value of a financial instrument may
change as result of changes in interest rates, foreign
currency exchange rates, equity price fluctuations,
liquidity and other market changes. Future specific
market movements can not be normally predicted
with reasonable accuracy.
(i) Foreign currency risk
The Company's functional currency in Indian
Rupees (INR). The Company undertakes transactions
denominated in the foreign currencies; consequently,
exposure to exchange rate fluctuations arise. Volatility
in exchange rates affects the Company's revenue
from export markets and the costs of imports, primarily
in relation to raw material. The Company is exposed to
exchange rate risk under its trade and debt portfolio.
Adverse movements in the exchange rate between
the Rupee and any relevant foreign currency result's
in the increase in the Company's overall debt positions
in Rupee terms without the Company having incurred
additional debt and favorable movements in the
exchange rates will conversely result in reduction in
the Company's receivable in foreign currency.
(b) Credit risk
Credit risk is the risk of financial loss to the Company if
a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises
principally from the Company's receivables from
customers and loans given. Credit risk arises from
cash held with banks and financial institutions, as well
as credit exposure to clients, including outstanding
accounts receivables. The maximum exposure to
credit risk is equal to the carrying value of the financial
assets. The objective of managing counterparty credit
risk is to prevent losses in financial assets. The Company
assesses the credit quality of the counterparties, taking
into account their financial position, past experience
and other factors.
(C) Liquidity Risk
The Company has a liquidity risk management
framework for managing its short term, medium
term and long term sources of funding vis-a-vis short
term and long term utilization requirement. This is
monitored through a rolling forecast showing the
expected net cash flow, likely availability of cash and
cash equivalents, and available undrawn borrowing
facilities.
Note 43: Capital management
(a) Risk management
The Company's capital requirement is mainly to fund
its capacity expansion, repayment of principal and
interest on its borrowings and strategic acquisitions. The
principal source of funding of the Company has been,
and is expected to continue to be, cash generated
from its operations supplemented by funding from
bank borrowings. The Company is not subject to any
externally imposed capital requirements.
The Company regularly considers other financing and
refinancing opportunities to diversify its debt profile,
reduce interest cost and elongate the maturity of
its debt portfolio, and closely monitors its judicious
allocation amongst competing capital expansion
projects and strategic acquisitions, to capture market
opportunities at minimum risk.
Note 44:
The company has used the borrowings from banks and financial institutions for the specific purpose for which it
was taken at the balance sheet date.
Note 45: Additional Regulatory Information
(i) The title in respect of self-constructed buildings and title deeds of all other immovable properties (other than
properties where the company is the lessee and the lease agreements are duly executed in favour of the
lessee), disclosed in the financial statements included under Property, Plant and Equipment are held in the
name of the Company as at the balance sheet date.
(ii) The company has not revalued its Property, Plant and Equipment (including Right-of-Use Assets), and
intangible assets.
(iii) Capital-Work-in Progress (CWIP)
(iv) No proceedings have been initiated during the year or are pending against the Company as at
March 31, 2026 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988
(as amended in 2016) and rules made thereunder.
(v) The Company has not been declared wilful defaulter by any bank or financial institution or government or
any government authority.
(vi) The company has no transactions with companies struck off under section 248 of the Companies Act, 2013
or section 560 of Companies Act, 1956.
(vii) The company has registered all the charges and satisfaction thereof with the Registrar of Companies within
the statutory Periods.
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