Note: - 1 SIGNIFICANT ACCOUNTING POLICIES
1. Corporate Information:
Glittek Granites Limited (the 'Company') is a public limited company domiciled in India incorporated under the
provisions of the Companies Act. Its shares are listed in Bombay Stock Exchange Ltd. (BSE) The registered office of the
company is at 42, KIADB Industrial Area, Pillagumpe village of Hoskote Taluk of Bangalore, Karnataka, India.
Company is engaged in the business of manufacturing, processing and trading of:
i) Granites Slab.
ii) Tiles
2. Basis of preparation of Financial Statements :
The Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed
under Section 133 of the Companies Act 2013 (“the Act”), as notified under the Companies (Indian Accounting
Standard) Rules, 2015 and other relevant provision of the Act, to the extent applicable and presentation requirements
of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the Standalone
Financial Statement.
The financial statements have been prepared under historical cost convention and on an accrual basis, except for the
following items which have been measured as required by relevant Ind AS:
a) Financial Instruments classified as fair value through other comprehensive income.
b) The defined benefit loss/(profit) is recognized as at the present value of defined benefit obligation less fair value of
plan assets through other comprehensive income.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially
adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The
Company's management evaluates all recently issued or revised accounting standards on an on-going basis.
Where changes are made in presentation, the comparative figures of the previous years are regrouped and re-arranged
accordingly.
3. Accounting Estimates And Assumptions:
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the date of the financial statements and the results of operations during the
reporting year end. Although these estimates are based upon management's best knowledge of current events and
actions, actual results could differ from these estimates.
4. Equity
a. Ordinary Shares
Ordinary shares are classified as Equity Share capital. Incremental costs directly attributable to the issuance of new
shares and buyback are recognized as a deduction from equity, net of any tax effects.
b. Securities Premium
The amount received in excess of the par value of equity shares has been classified as securities premium.
c. Retained Earnings
Retained earnings represent the amount of accumulated earnings of the company.
d. Capital Reserve
Government grants in the nature of State Investment Subsidy are accounted for on cash basis and treated as Capital
Reserve.
5. Property, Plant and Equipment
a. Property, Plant and Equipment are stated at original cost (net of tax/ duty credit availed) less accumulated
depreciation and impairment losses except freehold land which is carried at cost. Cost includes cost of acquisition,
construction and installation, taxes, duties, freight, other incidental expenses related to the acquisition, trial run
expenses (net of revenue) and pre-operative expenses including attributable borrowing costs incurred during pre¬
operational period.
b. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the company and the cost of
the item can be measured reliably. The carrying amount of any component as a separate asset is derecognised when
replaced. All other repairs and maintenance are charged to profit and loss during the reporting period in which they are
incurred.
c. Assets which are not ready for their intended use on reporting date are carried as capital work-in-progress at
cost, comprising direct cost and related incidental expenses.
d. On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant
and equipment as at 1st April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost
of the property, plant and equipment.
e. Property, Plant and Equipments including continuous process plants are depreciated and/or amortized on the
basis of their useful lives as notified in Schedule II to the Companies Act, 2013. The assets residual values and useful
lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Depreciation on Property, Plant & Equipment is provided on straight-line basis on the useful life of the asset as
mentioned in Schedule II to the companies Act, 2013
Depreciation in respect of additions to assets has been charged on pro rata basis with reference to the period when the
assets are ready for use. The Provision for Depreciation for the multiple shifts has been made in respect of eligible
assets on the basis of operation of respective units.
f. Useful lives of the Property, Plant and Equipment as notified in Schedule II to the Companies Act, 2013 are as
follows :
Buildings - 30 years
Plant and Equipments - 15 years
Furniture and Fixtures - 10 years
Vehicles - 8 years for Motor car and 10 years for two wheelers
Office Equipments - 5 years
Computers - 3 years
6. Intangible Assets
a. Intangible assets acquired by payment e.g., Computer Software are disclosed at cost less amortization on a
straight-line basis over its estimated useful life.
b. Intangible assets are carried at cost, net of accumulated amortization and impairment loss, if any.
c. On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible
assets as at 1st April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the
intangible assets
d. Intangible assets are amortised on straight-line method as follows :
Computer Software - 3 years
7. Lease Property
The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by
an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an
option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the
Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease,
it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the
option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if
there is a change in the non-cancellable period of a lease.
Lease rentals under an operating lease, are recognized as an expense in the statement of profit and loss on a straight
line basis over the lease term.
8. Impairment of Assets
At the end of each accounting year the carrying amount of property, plant and equipment intangible
assets and financial assets is reviewed for impairment. Impairment, if any, is recognized where the
carrying amount exceeds the recoverable amounts being the higher of net realizable price and value
in use. An impairment loss is charged to Statement of Profit and loss in the year in which an asset is
identified as impaired. The impairment loss recognized in prior accounting periods is reversed if
there has been a change in the estimate of recoverable amount.
9. Inventories
a. Inventories related to raw materials, packing materials, stores & spares are valued at cost on weighted
average basis or net realizable value whichever is lower.
b. Waste & scraps are valued at estimated realizable value.
c. Semi Finished goods and Finished goods are valued at Estimated cost or net realizable value whichever is
lower. Finished goods and process stock include all cost of purchases, cost of conversion and other related costs
incurred in bringing the inventories to their present location and condition.
d. Net realizable value is the estimated selling price by taking conversion rate as on 31.03.2024 in the ordinary
course of business less the estimated cost of completion and the estimated costs necessary to make the sale.
10. Cash Flow Statement
Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a
non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular
revenue generating, financing and investing activities of the Company is segregated.
Cash and cash equivalents in the balance sheet comprise cash at bank, cash/cheques in hand and short term
investments (excluding pledged term deposits) with an original maturity of three months or less.
11. A. Financial Assets
(i) Initial Recognition and Measurement
The Company classifies its financial assets as those to be measured subsequently at fair value (either through other
comprehensive income, or through profit or loss) and those to be measured at amortized cost.
(ii) Subsequent Measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
(a) Debt instruments measured at amortized cost using the effective interest rate method and losses arising from
impairment are recognized in Profit and Loss if both the following conditions are met:
•The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
•Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and
interest (SPPI) on the principal amount outstanding.
(b) Equity instruments at fair value through other comprehensive income.
(c) Equity instruments at fair value through profit or loss (FVTPL)
(d) Equity Instruments in subsidiaries are carried at cost, in accordance with option available in Ind AS 27 “Separate
Financial Statements”.
(iii) De-Recognition
A financial asset is de-recognized only when the Company has transferred the rights to receive cash flows from the
financial asset, or when it has transferred substantially all the risks and rewards of the asset, or when it has transferred
the control of the asset.
(iv) Impairment of Financial Assets
In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and
recognition of impairment loss on the Trade receivables or any contractual right to receive cash or another financial
asset that result from transactions that are within the scope of Ind AS 11 and Ind AS 18.
The Company follows 'simplified approach' for recognition of impairment loss allowance on trade receivables.
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it
recognizes impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition.
As a practical expedient, the Company uses historically observed default rates over the expected life of the trade
receivables and is adjusted for forward-looking estimates to determine impairment loss allowance on portfolio of its
trade receivables.
B. Financial Liabilities:
i) Classification as debt or equity - Debt and equity instruments are classified as either financial liabilities or as equity
in accordance with the substance of the contractual arrangement.
ii) Equity instruments - An equity instrument is any contract that evidences a residual interest in the assets of an
entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds
received, net of direct issue costs.
iii) Initial Recognition and Measurement:
All Financials Liabilities are recognized net of transaction costs incurred.
iv) Subsequent Measurement-
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the
Effective Interest Rate (“EIR”) method. Gains and losses are recognised in profit or loss when the liabilities are
derecognised through the EIR amortisation process.
v) De-Recognition
All Financials Liabilities are removed from balance sheet when the obligation specified in the contract is discharged,
cancelled or expired.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the
terms of an existing liability are substantially modified, such an exchange or modification is treated as the de¬
recognition of the original liability and the recognition of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit and loss.
12. Tax Asset
Tax assets and Tax liabilities are offset and the net amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the
assets and settle the liabilities simultaneously.
13. Revenue Recognition:
Revenue comprises of all economic benefits that arise in the ordinary course of activities of the Company which
result in increase in Equity, other than increases relating to contributions from equity participants. Revenue is
recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be
reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
Sale of Goods: Revenue from sales of goods is recognised on transfer of significant risks and rewards of ownership to
the customers either at the time of dispatch or delivery or when the risk of loss transfers.
Services: Revenue from Services are recognized as and when the services are rendered. The Company collects service
tax/Goods & Service Tax on behalf of the government and therefore, it is not an economic benefit flowing to the
Company and hence excluded from Revenue.
Interest: Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective
interest rate applicable.
Insurance Claims: Insurance Claims are accounted for on acceptance and when there is a reasonable certainty of
receiving the same, on grounds of prudence.
14. Foreign Currency Transactions:
The Company's financial statements are presented in Indian Rupees ('INR'), which is also the Compa ny's functional
currency.
Foreign currency transactions are recorded on initial recognition in the functional currency, using the exchange rate at
the date of the transaction. At each balance sheet date, foreign currency monetary items are reported using the closing
exchange rate. Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet
date of the Company's monetary items at the closing rate are recognised as income or expenses in the period in which
they arise.
Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the
exchange rate at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rate at the date when the fair value is determined.
15. Employee Benefits:
Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and
Loss of the year in which the related service is rendered.
Post Employment and Retirement benefits in the form of Gratuity are considered as defined benefit obligations, using
the projected unit credit method, as at the date of the Balance Sheet. Every Employee who has completed five years or
more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act,
1972. Gratuity is covered under a scheme of LIC and contribution in respect of such scheme is recognized in Profit &
Loss Account. The liability at the Balance Sheet date is provided for based on actuarial valuation carried out by Life
Insurance Corporation of India
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by
reference to market yields at the end of reporting period on government bonds that have terms approximating to the
terms of the related obligation
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions of the
defined benefit obligation are recognised in the period in which they occur, directly in other comprehensive income.
They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Employee benefits in the form of Provident Fund is considered as defined contribution plan and the contributions to
Employees' Provident Fund Organization established under The Employees' Provident Fund and Miscellaneous
Provisions Act 1952 is charged to the Statement of Profit and Loss of the year when the contributions to the respective
funds are due. The Company pays provident fund contributions to publicly administered provident funds as per local
regulations.
The Company has no further payment obligations once the contributions have been paid.
16. Borrowing Costs:
Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to
the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of
funds.
General and specific borrowing costs that are directly attributable to the acquisition or construction of qualifying assets
are capitalised as part of the cost of such assets during the period of time that is required to complete and prepare the
asset for its intended use. A qualifying asset is one that takes necessarily substantial period of time to get ready for its
intended use.
All other borrowing costs are expensed in the period in which they are incurred.
17. Accounting for Taxes on Income:
Tax expenses comprise of current tax and deferred tax including applicable surcharge and cess.
Current Income tax is computed using the tax effect accounting method, where taxes are accrued in the same period in
which the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability
computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a
liability due to disallowances or other matters is probable.
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the
tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all
deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax
assets are recognized to the extent that it is probable that taxable profits against which the deductible temporary
differences, and the carry forward unused tax credits and unused tax losses can be utilised.
Deferred tax is recognised in the statement of profit and loss, except to the extent that it relates to items recognized in
other comprehensive income. As such, deferred tax is also recognised in other comprehensive income.
Deferred Tax Assets and Deferred Tax Liabilities are offset, if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the Deferred Tax Assets and Deferred Tax Liabilities relate to taxes on income
levied by same governing taxation laws.
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