|1. Basis of Preparation of Financial Statements :
i. The financial statements have been prepared to comply in all
material respects with the Accounting Standards notified under section
133 of the Companies Act, 2013, read together with paragraph 7 of the
Companies (Accounts) Rules, 2014.
ii. Financial statements are based on historical cost and are prepared
on accrual basis.
iii. Accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year, except in case
of depreciation (Refer note 51).
iv. 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 as at the date
of financial statements and the results of operations during the
reporting period. Although these estimates are based upon management's
best knowledge of current events and actions, actual result could
differ from these estimates.
a. Fixed Assets :
i. Fixed Assets are stated at their original cost of acquisition /
installation (net of Modvat / Cenvat credit availed), net of
accumulated depreciation, amortization and impairment losses, except
freehold non mining land which is carried at cost less impairment
ii. Capital work in progress is stated at the amount expended up to the
date of Balance Sheet.
iii. Machinery spares which can be used only in connection with a
particular item of fixed asset and the use of which is irregular, are
capitalised at cost net of Modvat / Cenvat.
iv. Expenditure during construction period (including financing cost
relating to borrowed funds for construction or acquisition of
qualifying fixed assets) incurred on projects under implementation are
treated as Pre-operative expenses, pending allocation to the assets,
and are included under "capital work-in-progress". These expenses are
apportioned to fixed assets on commencement of commercial production.
b. Depreciation and Amortizations :
I. Tangible Assets :
i. Premium on leasehold land is amortized over the period of lease.
ii. Depreciation is provided as per the useful life prescribed in
Schedule II of the Companies Act, 2013, for Captive Power Plant related
assets (consisting of Buildings and Plant & Machinery) based on
"Written Down Value Method" and for other assets based on "Straight
Continuous process plants are identified based on technical assessment
and depreciated at the specified rate as per Schedule II to the
Companies Act, 2013.
Depreciation on additions to fixed assets is provided on a pro-rata
basis from the date of acquisition or installation, and in the case of
a new project, from the date of commencement of commercial production.
Depreciation on assets sold, discarded, demolished or scrapped, is
provided upto the date on which the said asset is sold, discarded,
demolished or scrapped.
In respect of an asset for which impairment loss is recognized,
depreciation is provided on the revised carrying amount of the assets
over its remaining useful life. iii. Machinery spares, which are
capitalized, are depreciated over the useful life of the related fixed
asset. The written down value of such spares is charged to the
statement of profit and loss, on issue for consumption. iv. Cost of
mineral reserve embedded in the cost of freehold mining land is
depreciated in proportion of actual quantity of minerals extracted to
the estimated quantity of extractable mineral reserves. v. Fixed
assets, constructed by the Company, but ownership of which vests with
the Government / Local Authorities :
a) Expenditure on Power lines is depreciated over the period as
permitted in the Electricity Supply Act, 1948 / 2003, as applicable.
b) Expenditure on Marine structures is depreciated over the period of
c) Expenditure on other fixed assets is depreciated at the rate of
depreciation specified in Schedule II to the Companies Act, 2013.
II. Intangible Assets :
i. Expenditure to acquire Water drawing rights from Government / Local
Authorities / other parties is amortised on straight line method over
the period of rights to use the facilities ranging from ten to thirty
years. ii. Expenditure on Computer software is amortised on straight
line method over the period of expected benefit not exceeding five
c. Impairment of Assets :
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal / external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
greater of the asset's net selling price 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 risks specific to the
assets. A previously recognized impairment loss is increased or
reversed depending on changes in circumstances.
d. Investments :
i. Recognition and Measurement
Investments that are intended to be held for more than a year, from the
date of acquisition, are classified as long-term investments and are
carried at cost. However, provision for diminution in value of
investments is made to recognize a decline, other than temporary, in
the value of the investments. Investments other than long-term
investments being current investments are valued at cost or fair value
whichever is lower, determined on an individual basis.
ii. Presentation and Disclosure
Investments, which are readily realizable and intended to be held for
not more than one year from balance sheet date, are classified as
current investments. All other investments are classified as
e. Inventories :
Inventories are valued as follows :
i. Coal, fuel, packing materials, raw materials, stores and spares :
Lower of cost less provision for slow and non-moving inventory, if any,
and net realizable 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 is determined on a moving weighted
ii. Work-in-progress, finished goods, stock in trade and trial run
Lower of cost and net realizable value. Cost includes direct materials
and labor and a proportion of manufacturing overheads based on normal
operating capacity. Cost of finished goods includes excise duty. Cost
is determined on a monthly moving weighted average basis.
Net realizable 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.
f. Provisions / Contingencies :
A provision is recognized for a present obligation as a result of past
events if it is probable that an outflow of resources will be required
to settle the obligation and in respect of which a reliable estimate
can be made. Provisions are not discounted to its present value and are
determined based on best estimate of the amount required to settle the
obligation at the Balance Sheet date. A contingent liability is
disclosed, unless the possibility of an outflow of resources is remote.
g. Foreign Currency Conversion :
Foreign currency transactions are recorded at the rates of exchange
prevailing on the date of transaction. Foreign currency monetary items
are reported using the closing rate. Non-monetary items which are
carried in terms of historical cost denominated in a foreign currency
are reported using the exchange rate at the date of the transaction.
Exchange differences arising on the settlement of monetary items or on
reporting Company's monetary items at rates different from those at
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or expenses in
the year in which they arise.
h. Revenue recognition :
Revenue is recognized to the extent it is probable that the economic
benefits will flow to the Company and the revenue can be reliably
measured i. Revenue is recognized when the significant risks and
rewards of ownership of the goods have passed to the buyer.
Accordingly, domestic sales are accounted on dispatch of products to
customers and Export sales are accounted on the basis of date of Bill
of Lading. Sales are disclosed net of sales tax / value added tax,
discounts and sales returns, as applicable. Sales exclude
self-consumption of cement.
ii. Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable. Dividend
income is recognized when right to receive is established by the
Balance Sheet date.
i. Mines Reclamation Expenses :
The Company provides for the expenses to reclaim the quarries used for
mining. The total estimate of reclamation expenses is apportioned over
the estimate of mineral reserves and a provision is made based on the
minerals extracted during the year.
Mines reclamation expenses are incurred on an ongoing basis and until
the closure of the mine. The actual expenses may vary based on the
nature of reclamation and the estimate of reclamation expenditure.
j. Employee Benefits :
i. Defined Contribution Plan
Employee benefits in the form of contribution to Superannuation Fund,
Provident Fund managed by Government Authorities, Employees State
Insurance Corporation and Labor Welfare Fund are considered as defined
contribution plan and the same is charged to the statement of profit
and loss for the year in which the employee renders the related
ii. Defined Benefit Plan
Retirement benefits in the form of gratuity, post-retirement medical
benefit and death & disability benefit are considered as defined
benefit obligations and are provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
the balance sheet. Actuarial gains / losses, if any, are recognized in
the statement of profit and loss.
Employee Benefit, in the form of contribution to Provident Fund managed
by a Trust set up by the Company, is charged to statement of profit and
loss for the year in which the employee renders the related service.
The deficit, if any, in the accumulated corpus of the trust is
recognized in the statement of profit and loss based on actuarial
iii. Other long-term benefits
Compensated absences are provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
the balance sheet. Actuarial gains / losses, if any, are immediately
recognized in the statement of profit and loss.
k. Employee Stock Compensation cost :
The Company measures compensation cost relating to employee stock
option using the fair value method. Discount on Equity Shares as
compensation expenses under the Employee Stock Option Scheme, is
amortized in accordance with Employee Stock Option Scheme and Employee
Stock Purchase Scheme Guidelines, 1999 issued by the Securities and
Exchange Board of India and the Guidance Note on Accounting for
Employee Share-based payments, issued by the Institute of Chartered
Accountants of India.
l. Borrowing Costs and Share Issue Expenses :
i. Borrowing cost attributable to acquisition and construction of
assets that necessarily takes substantial period of time are
capitalised as part of the cost of such assets up to the date when such
assets are ready for intended use. ii. Expenses on issue of Shares,
Debentures and Bonds as well as Premium on Redemption of Debentures are
adjusted to Securities Premium Account in accordance with Companies
iii. Borrowing cost such as discount or premium and ancillary costs in
connection with arrangement of borrowings are amortized over the period
iv. Other borrowing costs are charged as expense in the year in which
these are incurred. m. Taxation :
Tax expense comprises of current income and deferred income tax and
includes any adjustments related to past periods in current and / or
deferred tax adjustments that may become necessary due to certain
developments or reviews during the relevant period.
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Income Tax Act, 1961.
Deferred income taxes reflect the impact of current year's timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the Balance Sheet date.
Deferred tax assets are recognized only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each Balance
Sheet date. The Company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain that
sufficient future taxable income will be available against which
deferred tax asset can be realized. Any such write-down is reversed to
the extent that it becomes reasonably certain that sufficient future
taxable income will be available. n. Leases :
Where the Company is the lessee :
Leases where the lesser effectively retains substantially all the risks
and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an expense
in the statement of profit and loss on a straight-line basis over the
lease term. Where the Company is the lesser :
i. Assets given under finance lease are recognized as a receivable at
an amount equal to the net investment in the lease. Lease rentals are
apportioned between principal and interest on the internal rate of
return method. The principal amount received reduces the net investment
in the lease and interest is recognized as revenue. Initial direct
costs such as legal costs, brokerage costs, etc. are recognized
immediately in the statement of profit and loss.
ii. Assets subject to operating leases are included in fixed assets.
Lease income is recognized in the statement of profit and loss on a
straight-line basis over the lease term. Costs, including depreciation,
are recognized as an expense in the statement of profit and loss.
Initial direct costs such as legal costs, brokerage costs, etc. are
recognized immediately in the statement of profit and loss. o.
Segment Reporting Policies :
i. Identification of segments
The Company has only one business segment 'Cementations Materials' as
its primary segment. The analysis of geographical segments is based on
the areas in which major operating divisions of the Company operate.
ii. Segment Policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole. p. Cash and Bank Balances :
i. Cash and Bank balances in the Balance Sheet comprises of cash at
bank including fixed deposits, cherubs in hand and cash on hand.
ii. Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank, cash on hand and short-term investments with an
original maturity of three months or less. q. Government Grants and
i. Grants and subsidies from the Government are recognized when there
is reasonable certainty that the grant / subsidy will be received and
all attaching conditions will be complied with.
ii. When the grant or subsidy relates to an expense item, it is
recognized as income over the periods necessary to match them on a
systematic basis to the costs, which it is intended to compensate.
iii. Where the grant or subsidy relates to an asset, its value is
deducted from the gross value of the asset concerned in arriving at the
carrying amount of the related asset.
iv. Government grants in the nature of Promoters' contribution are
credited to capital reserve and treated as a part of Shareholders'
r. Earnings Per Share :
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
b) Rights, preferences and restrictions attached to equity shares
The Company has only one class of equity shares having a par value of
Rs, 2 per share. Each shareholder is entitled to one vote per equity
share. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the ensuing Annual General Meeting,
except in case of interim dividend. In the event of liquidation of the
Company, the equity shareholders are eligible to receive remaining
assets of the Company, after distribution of all preferential amounts,
in proportion to their shareholding.
As per the records of the Company, including its register of
shareholders / members and other declarations received from
shareholders regarding beneficial interest, the above shareholding
represent both legal and beneficial ownership of shares.
e) Outstanding employee stock options exercisable into Nil (previous
year - 2,344,400) equity shares of Rs, 2 each fully paid up (Refer note
f) Outstanding tradable warrants and right shares kept in abeyance
exercisable into 186,690 (previous year - 186,690) and 139,830
(previous year - 139,830) equity shares of Rs, 2 each fully paid-up
a. Secured by bank guarantee and repayable as below :
Rs, 5.86 crores on 27th February, 2020 Rs, 3.59 crores on 18th August,
b. Sales tax deferment loan is interest free and payable in 10 annual
installments starting from April 2007 to April 2017 of varying amounts
from Rs, 1.52 crores to Rs, 13.23 crores.