Note 2: Significant Accounting Policies
Corporate Information
These statements comprise financial statements of Lime Chemicals Limited (CIN: L24100MH1970PLC014842)
('the company') for the year ended March 31, 2024. The company is a public listed company domiciled in India
and was incorporated on 17.10.1970 under the provisions of the erstwhile Companies Act 1956 applicable in
India. The Registered Office of the company is situated at 404 & 405, 4th Floor, Neco Chambers, Rajiv Gandhi
Road, Sector 11, CBD Belapur, Navi Mumbai, 400614.
The Company is engaged in the manufacturing Calcium Carbonate. t is used as input material in various industrial
sectors including Tooth Paste, Pharmaceuticals, PVC products, Rubber, Plastic, Polymer, Cable, Leather, Paper and
Paints.ThesefinancialstatementswereapprovedbytheBoardofDirectorsandauthorisedforissueonMay30,2024.
Summary of Significant Accounting Policies
a) Basis of Preparation of Financial Statements
The financial statements of the Company are prepared in accordance with the Indian Accounting Standards
(Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments
which are measured at fair values, and the provisions of the Companies Act , 2013 ('Act') (to the extent
notified). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies
(Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment
Rules, 2016.
Accordingly, the Company has prepared these Financial Statements which comprise the Balance Sheet
as at 31 March, 2024, the Statement of Profit and Loss, the Statement of Cash Flows and the Statement
of Changes in Equity for the year ended as on that date, and accounting policies and other explanatory
information (together hereinafter referred to as "financial statements") 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.
Current versus Non Current Classification
All assets and liabilities have been classified as current or non current as per the Company's normal
operating cycle and other criteria set out in the Schedule III to th Companies Act, 2013. Based on the
nature of transaction, the Company has ascertained its operating cycle as 12 months for the purpose of
current / non-current classification of assets and liabilities.
b) Use of Estimates
The preparation of the financial statements in conformity with Indian AS requires the Management to
make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent liabilities as at the date of the financial statements and the reported amounts of revenues and
expenses during the year. The Management believes that the estimates used in the preparation of the
financial statements are prudent and reasonable. Future results could differ from those estimates and the
difference between the actual results and the estimates are recognized in the periods in which the results
are known/materialize.
c) Revenue Recognition
A. Sale of Goods
The Company recognises revenue when control over the promised goods or services is transferred to the
customer at an amount that reflects the consideration to which the Company expects to be entitled in
exchange for those goods or services.
The Company recognises revenue generally at the point in time when the products are delivered to
customer or when it is delivered to a carrier for export sale, which is when the control over product is
transferred to the customer. In contracts where freight is arranged by the Company and recovered from
the customers, the same is treated as a separate performance obligation and revenue is recognised when
such freight services are rendered.
Contract balances
a) Trade receivables
A receivable is recognised when the goods are delivered and to the extent that it has an unconditional
contractual right to receive cash or other financial assets (i.e., only the passage of time is required before
payment of the consideration is due).
b) Contract Liabilites
A contract liability is the obligation to transfer goods or services to a customer for which the Company
has received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration before the Company transfers goods or services to the customer, a contract liability is
recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are
recognised as revenue when the Company performs under the contract including Advance received from
Customer
c) Interest Income
Interest income from a financial asset is recognised when it is probable that the economic benefits will
flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a
time basis.
d) Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
The Company applies a single recognition and measurement approach for all leases, except for short-term
leases and leases of low-value assets.The Company recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying assets.
Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and accumulated impairment losses.
e) Foreign currencies
The functional currency of the Company is determined on the basis of the primary economic environment
in which it operates. The functional currency of the Company is Indian National Rupee (INR).
The transactions in currencies other than the entity's functional currency (foreign currencies) are
recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting
year, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that
date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated
at the rates prevailing at the date when the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in Statement of Profit and Loss in the year in
which they arise.
f) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use or
sale, are added to the cost of those assets, until such time as the assets are substantially ready for their
intended use or sale.
All other borrowing costs are recognised in the Statement of Profit and Loss in the year in which they are
incurred.
g) Employee benefits
a) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are
recognised in respect of employees' services up to the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.
b) Other long-term employee benefit obligations
Accumulated compensated absences, which are expected to be availed or encashed beyond 12 months
from the end of the period are treated as other long term employee benefits for measurement purpose.
The Company's liability is actuarially determined by an independent actuary using the Projected Unit Credit
method at the end of each period. Remeasurements as a result of experience adjustments and changes in
actuarial assumptions are recognised in statement of profit and loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting period, regardless of
when the actual settlement is expected to occur.
c) Post employee obligations
The Company operates the following post-employment schemes:
- defined benefit plans such as gratuity
- defined contribution plans such as provident fund and superannuation fund
d) Gratuity obligations
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the
present value of the defined benefit obligation at the end of the reporting period less the fair value of plan
assets. The defined benefit obligation is determined at the year end by independent actuary using the
projected unit credit method.
The present value of the defined benefit obligation denominated in Indian Rupees is determined by discounting
the estimated future cash outflows by reference to market yields at the end of the reporting period on
government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement
of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions
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. Remeasurements are not reclassified to profit and
loss in the subsequent periods.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments
are recognised immediately in statement of profit and loss as past service cost.
ii) Defined contribution plans
Provident fund
The Company pays contributions toward provident fund to the regulatory authorities as per local regulations
where the Company has no further payment obligations. The contributions are recognised as employee benefit
expense when they are due.
Superannuation Fund
Contribution towards superannuation fund for qualifying employees as per the company's policy is made to Life
Insurance Corporation of India where the Company has no further obligations. Such benefits are classified as
Defined Contribution Schemes as the Company does not carry any further obligations, apart from contribution
made on monthly basis.
d) Bonus plans
The Company recognise a liability and an expense for bonuses. The Company recognise a provision where
contractually obliged or where there is a past practice that has created a constructive obligation.
e) Termination Benefits:
A liability for a termination benefit is recognised at the earlier of
- when the entity can no longer withdraw the offer of the termination benefit and
- when the entity recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the
payment of terminations benefits.
h) Taxes
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
Current tax is the amount of expected tax payable based on the taxable profit for the year as determined in
accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profit.Deferred
tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all
deductible temporary differences to the extent that it is probable that taxable profits will be available against
which those deductible temporary differences can be utilised.
Current and deferred tax for the year
Current and deferred tax are recognised in profit and loss, except when they are relating to items that are
recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax
are also recognised in other comprehensive income or directly in equity respectively. Where current tax or
deferred tax arises from the initial accounting for a business combination, the tax effect is included in the
accounting for the business combination.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation
authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.
i) Property, plant and equipment
The cost of property, plant and equipment comprises its purchase price net of any trade discounts
and rebates, any import duties and other taxes (other than those subsequently recoverable from the
tax authorities), any directly attributable expenditure on making the asset ready for its intended use,
including relevant borrowing costs for qualifying assets and any expected costs of decommissioning.
Expenditure incurred after the property, plant and equipment have been put into operation, such as
repairs and 194 maintenance, are charged to the Statement of Profit and Loss in the year in which the
costs are incurred. Major shut-down and overhaul expenditure is capitalised as the activities undertaken
improves the economic benefits expected to arise from the asset.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal
or retirement of an item of property,plant and equipment is determined as the difference between the
sales proceeds and the carrying amount of the asset and is recognised in Statement of Profit and Loss.
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its
estimated residual value. Depreciation is recognised so as to write off the cost of assets (other than
freehold land and properties under construction) less their residual values over their useful lives, using
straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in
respect of following categories of assets, in whose case the life of the assets has been assessed as under
based on technical advice, taking into account the nature of the asset, the estimated usage of the asset,
the operating conditions of the asset, past history of replacement, anticipated technological changes,
manufacturers warranties and maintenance support etc.
The Company reviews the residual value, useful lives and depreciation method annually and, if expectations
differ from previous estimates, the change is accounted for as a change in accounting estimate on a
prospective basis.
j) 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.
Amortisation is recognised on a straight-line basis over their estimated useful lives.The estimated useful
life and amortisation method are reviewed at the end of each reporting year.
k) Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost of raw materials include cost of purchase and other costs incurred in bringing the inventories to their
present location and condition. Cost of semifinished /finished goods and work in progress include cost of
direct materials and labor and a proportion of manufacturing overheads based on the normal operating
capacity but excluding borrowing costs.
Costs of inventories are determined on weighted average basis. Net realisable value represents the
estimated selling price for inventories less all estimated costs of completion and costs necessary to make
the sale.
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