2. (d) Material Accounting policies
The material accounting policies used in preparation of the standalone financial statements have been included in
the relevant notes to the standalone financial statements.
Property, Plant and Equipment (PPE) are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.
The cost comprises purchase price, including import duties and non- refundable purchase taxes, borrowing costs, if recognition criteria
are met and any directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and
rebates are deducted in arriving at the purchase price.
Subsequent expenditure related to an item of PPE is capitalised only when it is probable that future economic benefits associated with
these will flow to the Company and the cost of the item can be measured reliably. Such cost includes the cost of replacing part of the
plant and equipment. 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.
Items of stores and spares that meet the definition of PPE are capitalized at cost. Otherwise, such items are classified as inventories.
Catalysts which are used in commissioning of new plant are capitalized and are amortized based on the estimated useful life as technically
assessed. Subsequent issues of catalysts, if any, are treated as inventory.
Gains or losses arising from derecognition of the assets are measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
Depreciation on PPE is calculated using the straight-line method to allocate their cost, net of their residual values, over their useful lives
estimated by the management based on technical evaluation, which are equal to the useful life prescribed under Schedule II to the
Companies Act, 2013, other than the cases as mentioned in table below from S.No. (i) to (vi), where the useful lives are different from
those prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and
reflect fair approximation of the period over which the assets are likely to be used. A major portion of the plant and equipment of the
Company has been considered as continuous process plant.
Footnotes:
1. Freehold land having carrying value of Rs. 0.01 Crore (Previous Year : Rs. 0.01 Crore) and Leasehold land having carrying value of
Rs. 0.33 Crore (Previous Year : Rs. 0.34 Crore) are yet to be registered in the Company's name.
2. The carrying value of Buildings includes Rs. 0.00 Crore (Previous Year : Rs. 0.00 Crore) representing undivided share in assets jointly
owned with others.
3. Deletions from Plant and Equipment includes Plant and Equipment having gross block of Rs. 3.94 Crore (Previous Year: Rs. 11.71
Crore) and Vehicles having gross block of Rs. 0.37 Crore (Previous Year: Rs. 0.00 Crore) and Accumulated Depreciation of Plant and
Equipment of Rs. 1.46 Crore (Previous Year: Rs. 6.33 Crore) and Vehicles of Rs. 0.35 Crore (Previous Year: Rs. 0.00 Crore ) transferred
to "Assets held for sale" (refer note 42).
4. Leasehold Improvements have been fully depreciated during the current year and are carried at residual value.
5. Leasehold Improvements (on Finance Lease) had been fully depreciated in earlier years and are carried at residual value.
6. Capital Work-in-Progress of Rs. 649.35 Crore (Previous Year : Rs. 183.54 Crore) primarily represents capital expenditure comprising
direct costs, related incidental expenditure and borrowing costs majorly in respect of Technical Ammonium Nitrate Project and
other Plant and Equipment & Buildings.
Capital Work-in-Progress (“CWIP”)
As at March 31, 2025
(a) Ageing Schedule
Note 4A : Other Intangible Assets
Accounting policy
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are
carried at cost less accumulated amortization and accumulated impairment losses, if any. Intangible assets with finite lives are amortised
on a straight line basis over the estimated useful economic life. Software is the acquired intangible asset.
Management of the Company assessed the useful life of software as finite and cost of software is amortized over its estimated useful life
of five years on straight line basis.
The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of
each reporting period. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is
changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization
method is changed to reflect the changed pattern. Such changes are accounted for in accordance with Ind AS-8 "Accounting Policies,
Changes in Accounting Estimates and Errors".
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and
the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
of 1:1.33, Series G, H, I, J & K preference shares will be converted in the ratio of 1:1. This conversion is subject to adjustments set
forth, if any, in the Articles of Association of CVL.
2. During the previous years, ISGN Corporation ("ISGN, USA") and ISG Novasoft Technologies Limited, ("ISGN, India"), subsidiaries of
CVL have sold / transferred certain assets / liabilities to the respective buyers.
As part of the aforesaid transactions, the Company executed keepwell agreements with the respective buyers and the concerned
subsidiaries. As per the terms of the aforesaid keepwell agreements, the Company has to ensure that the concerned subsidiary has
sufficient funds to enable it to make payments against indemnity obligations of the subsidiary under the agreements executed for
sale / transfer of assets / liabilities. The aggregate indemnity obligations of the subsidiaries under the aforesaid agreements shall
not exceed Rs. 134.19 Crore (Previous Year: Rs. 131.80 Crore).
# Fair Value Loss had been recognised for the total 320 Corporate Bonds valued Rs. 32.00 Crore during the earlier years. Subsequently, an
amount of Rs. 6.95 Crore have been recovered till now, accordingly, the fair value loss to the extent of recovery has been reversed which
includes an allottment of 4,00,000 InvIT units allotted as part of interim distribution valuing Rs. 4.00 Crore, on which, further fair value
loss of Rs. 4.00 Crore has been recognized due to lack of marketability of the units during the year.
Note 8B : Trade Receivables
Accounting Policy
The Group recognises an allowance for expected credit losses (ECLs) for assets carried at amortised cost and FVOCI debt instruments.
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the
Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include
cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognised
in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are
provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit
losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For trade receivables, the
Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk but instead recognises
a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical
credit loss experience, adjusted for forward-looking factors specific to the trade receivables and the economic environment. For debt
instruments at fair value through OCI, the Group applies the low credit risk simplification.
Contract Assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company fulfils its
performance obligation by transferring goods or services to a customer before the customer pays consideration or before payment is
due, a contract asset is recognised for the earned consideration that is conditional.
Trade Receivables
A receivable represents the company's right to an amount of consideration that is unconditional (i.e., only the passage of time is required
before payment of the consideration is due).
As per the records of the Company, including its register of shareholders / members, the above shareholding represents both legal
and beneficial ownership of shares.
e) For the period of 5 years immediately preceding March 31, 2025
Buyback of equity shares
The Board of Directors at its meeting held on January 08, 2024 had approved buyback by the Company up to 1,55,55,555
equity shares of Rs. 10/- each representing up to 3.74% of total paid-up equity capital of the Company as on March 31,
2023, at a maximum price of Rs. 450/- per equity share, for an aggregate consideration up to Rs. 700 Crore (excluding
taxes and expenses pertaining to Buy-back) in accordance with the applicable provisions of the Securities and Exchange
Board of India (Buy-back of Securities) Regulations, 2018, and the Companies Act, 2013 & Rules made thereunder
(the "Buy-back"). Accordingly, the Company bought back 1,55,55,555 equity shares at a price of Rs. 450 per share,
aggregating to Rs. 700 Crore (excluding taxes and expenses pertaining to Buy-back), and these shares were extinguished.
Consequent to the said Buyback, the equity share capital of the Company stands reduced by Rs.15.56 Crore to Rs. 400.65 Crore and
an equivalent amount of Rs. 15.56 Crore was transferred from retained earnings to capital redemption reserve account as per the
provisions of Section 69 of the Companies Act, 2013. During FY 2023-24 further, an amount of Rs. 849.27 Crore being the excess
of amount paid over the par value of shares bought back including taxes and expenses pertaining to Buy-back, was debited to
retained earnings / securities premium account.
Description of Nature and Purpose of each Reserve
(a) Retained Earnings
Retained Earnings comprises of prior years as well as current year's undistributed earnings after taxes. During the previous
year, part of the retained earnings was used towards Buy-back of equity shares (refer note 10e).
(b) General Reserve
General Reserve is a free reserve. It represents appropriation of profit by the Company. General reserve is created by a transfer
from one component of equity to another and is not an item of other comprehensive income.
(c) Capital Reserve
Capital Reserve represents the amount on account of forfeiture of equity shares of the Company. Utilisation of reserve will be
as per the provisions of the relevant statute.
(d) Capital Redemption Reserve
Capital Redemption Reserve represents reserve created on redemption of preference shares and reserve created when
Company purchases its own shares out of free reserves or securities premium. During the previous year a sum equal to the
nominal value of the equity shares bought back was transferred to Capital Redemption Reserve. Utilisation of reserve will be
as per the provisions of the relevant statute.
(e) & (f) Tonnage Tax Reserve and Tonnage Tax Reserve (utilised) Account under Section 115VT of the Income Tax Act, 1961
These reserves were created till the time erstwhile 'Shipping Division' was under Tonnage Tax Regime.
(g) Cash Flow Hedging Reserve
The Company uses hedging instrument as part of its management of foreign currency risk associated with its highly probable
forecast sale. Foreign currency risk associated with highly forecasted sale transaction is being hedged by taking foreign
currency loans.
i On June 28, 2024, the Company has made the pre-payment of outstanding External Commercial Borrowings ("ECB")
from banks of USD 13.75 Crore (Rs. 1,146.52 Crore) which carried interest in the range of 3 months LIBOR / Overnight
SOFR plus 1.35% - 1.81% per annum.
ii On June 28, 2024, the Company has made the pre-payment of outstanding Foreign currency term loans ("FCTL") from a
financial institution of USD 7.62 Crore (Rs. 635.38 Crore) which carried interest in the range of 3 months LIBOR / Overnight
SOFR plus 1.55% - 1.81% per annum.
Aforementioned ECB's /FCTL's loans were secured by first pari-passu charge by way of mortgage, by deposit of title deeds
in respect of immovable properties of the Company and hypothecation of the movable fixed assets (Property, Plant and
Equipment) of the Company, both present and future subject to prior charges created in favour of banks on current assets
and other movables for securing working capital borrowings.
Pursuant to the provisions contained in Chapter VI of the Companies Act 2013 ('Act'), the charge has been satisfied in full on
July 23, 2024 in accordance with provisions of the Act.
Note 11B: Other Financial Liabilities
Accounting Policy
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received
and the company will comply with all attached conditions.
Government grants relating to the purchase / acquisition of property, plant and equipment are included in non-current liabilities as
deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets.
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