a. Company Overview
NCL Industries Limited (“the Company”), is a public
company domiciled in India and was incorporated
on 10 September 1979 under the provisions of the
Companies Act, 1956 applicable in India. Its shares are
listed on National Stock Exchange of India (NSE) and
Bombay Stock Exchange (BSE) of India. The Registered
Office of the Company is located at NCL Pearl, 7th floor,
SD Road, Secunderabad, Telangana. The Company is
principally engaged in the business of manufacturing
and selling of Cement, Ready Mix concrete (RMC),
Cement Bonded Particle Boards (CBPB), Doors, and
operates two Small Hydro Power (SHP) projects. The
Company has manufacturing facilities in the states
of Telangana, Andhra Pradesh and Himachal Pradesh,
Electricity generating facilities in the states of Andhra
Pradesh and Karnataka of India and caters mainly to
the domestic market.
b. The Standalone financial statements were approved
for issue in accordance with the resolution of the
Board of Directors on May 29, 2026.
c. Basis of Preparation, Critical Accounting Estimates
and Judgements, Material Accounting Policies and
Recent Accounting Pronouncements
i) Statement of compliance
The financial statements have been prepared in
accordance with the Indian Accounting Standards (“Ind
AS”) notified under Section 133 of the Companies
Act, 2013 read with Rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015, as amended from
time to time, and other accounting principles generally
accepted in India. These financial statements also
comply with the relevant presentation and disclosure
requirements of the Securities and Exchange Board of
India (SEBI), where applicable.
The Company has consistently applied accounting
policies to all periods.
ii) Basis of Preparation and presentation of Financial
Statements:
These financial statements have been prepared under
the historical cost convention on accrual basis and
company estimates that the carrying amounts stated
are reasonable approximations of fair values. Fair value
is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction
between market participants at the measurement date,
regardless of whether that price is directly observable
or estimated using another valuation technique. In
estimating the fair value of an asset or a liability, the
Company takes into account the characteristics of the
asset or liability if market participants would take those
characteristics into account when pricing the asset or
liability at the measurement date.
iii) Functional and Presentation currency
These financial statements are presented in Indian
Rupees which is the functional currency of the
Company and the currency of the primary economic
environment in which the Company operates.
Rounding of amounts
All amounts disclosed in the financial statements
which also include the accompanying notes have been
rounded off to the nearest lakhs as per the requirement
of Schedule III to the Companies Act 2013, unless
otherwise stated.
iv) Classification of Current / Non-Current Assets and
Liabilities
All the 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 the Companies Act, 2013.
Assets: An asset is classified as current when it satisfies
any of the following criteria:
a) it is expected to be realised in, or is intended for
sale or consumption in, the Company's normal
operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is expected to be realised within twelve months
after the reporting date; or
d) it is cash or cash equivalents unless it is restricted
from being exchanged or used to settle a liability
for at least twelve months after the reporting
date.
Liabilities: A liability is classified as current when it
satisfies any of the following criteria:
a) it is expected to be settled in the Company's
normal operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is due to be settled within twelve months after
the reporting date; or
d) the Company does not have an unconditional
right to defer settlement of the liability for at
least twelve months after the reporting date.
Terms of a liability that could, at the option of
the counterparty, result in its settlement by the
issue of equity instruments do not affect its
classification.
All other assets/ liabilities are classified as non-current.
Based on the nature of products and the time between
the acquisition of assets for processing and their
realisation in Cash or cash equivalents, the Company
has ascertained its normal operating cycle as 12
months for the purpose of Current / Non-current
classification of assets and liabilities.
v) Critical /Significant accounting estimates, judgements
and assumptions
In the application of the accounting policies, the
management of the Company are required to make
judgements, estimates and assumptions about the
carrying amounts of assets and liabilities that are not
readily apparent from other sources. The Management
believes that the estimates used in preparation of the
financial statements are prudent and reasonable and
the associated assumptions are based on historical
experience and other factors that are considered to be
relevant.
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 The estimates and
underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the
revision affects only that period, or in the period of the
revision and future periods if the revision affects both
current and future periods.
Actual results could differ from those estimates.
The significant areas of estimation, uncertainty and
critical judgements in applying accounting policies
that have the most significant effect on the amount
recognised in the financial statements is included in
the following notes
Useful Lives of Property, Plant and Equipment and
Intangible Assets:
The Company has estimated useful life of each class
of assets based on the nature of assets, the estimated
usage of the asset, the operating condition of the asset,
past history of replacement, anticipated technological
changes, etc. The Company reviews the useful life of
property, plant and equipment and Intangible assets as
at the end of each reporting period. This reassessment
may result in change in depreciation expense in future
periods.
Impairment Testing:
Property, plant and equipment that are subject to
depreciation/ amortisation are tested for impairment
periodically including when events occur or changes in
circumstances indicate that the recoverable amount of
the cash generating unit is less than its carrying value.
The recoverable amount of cash generating units is
higher of value-in-use and fair value less cost to sell.
The calculation involves use of significant estimates
and assumptions which includes turnover and earnings
multiples, growth rates and net margins used to
calculate projected future cash flows, risk-adjusted
discount rate, future economic and market conditions.
Income Taxes:
Deferred tax assets are recognised to the extent that
it is regarded as probable that deductible temporary
differences can be realised. The Company estimates
deferred tax assets and liabilities based on current tax
laws and rates and in certain cases, business plans,
including management's expectations regarding the
manner and timing of recovery of the related assets.
Changes in these estimates may affect the amount of
deferred tax liabilities or the valuation of deferred tax
assets and thereby the tax charge in the Statement of
Profit and Loss.
Provision for tax liabilities require judgements on
the interpretation of tax legislation, developments in
case laws and the potential outcomes of tax audits
and appeals which may be subject to significant
uncertainty. Therefore, the actual results may vary
from expectations resulting in adjustments to
provisions, the valuation of deferred tax assets, cash
tax settlements and therefore the tax charge in the
Statement of Profit and Loss.
Defined Benefit Plans:
The cost of the defined benefit plans and the present
value of the defined benefit obligation are based on
actuarial valuation using the projected unit credit
method. 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 and mortality
rates. Due to 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 Balance Sheet date.
The parameter most subject to change is the discount
rate. In determining the appropriate discount rate, the
management considers the interest rates of government
bonds in currencies consistent with the currencies of
the post-employment benefit obligation. The mortality
rate is based on publicly available mortality tables for
the specific countries. Those mortality tables tend to
change only at intervals in response to demographic
changes. Future salary increases and gratuity increases
are based on expected future inflation rates.
Allowance for uncollectible trade receivables
Trade receivables do not carry interest and are stated
at their nominal values as reduced by appropriate
allowances for estimated irrecoverable amounts.
Estimated irrecoverable amounts are based on
the aging of the receivable balances and historical
experiences. Individual trade receivables are written
off when management deems them not be collectible.
Provisions and Contingency: The Company has
assessed the probable unfavourable outcomes and
creates provisions where necessary. Where these are
assessed as not probable or where they are probable
upon a contingency, they are disclosed as contingent
liability.
Mine closure, site restoration and decommissioning
obligations
The obligation is estimated on the basis of cash flows
expected to be incurred as per applicable mining
regulations. The Company reviews the cash flows as
at the end of each reporting period. This reassessment
may result in change in amount of expense in future
periods.
vi) Revenue of Recognition:
The Company primarily generates revenue from simply
structured sales of building materials, such as cement,
Cement Bonded Particle Boards, Ready Mix Concrete
and Power generation, for which the control passes to
the customer at a specific point in time. In the context
of the sale of the products, separate performance
obligations may arise from freight and transport
services as well as from services directly related to
the sale of the products. These services are generally
performed at the time that the control of the products
is transferred.
Revenue is the amount of consideration expected to be
received in exchange for transferring promised goods
or services to a customer, excluding amounts collected
on behalf of third parties (GST). Revenue is recognized
when (or as) a performance obligation is satisfied by
transferring the control of a promised good or service
to the customer. A customer obtains control of a good
or service if it has the ability to direct the use of and
obtain substantially all of the remaining benefits from
that good or service. Control is transferred over time
or at a point in time. Revenue from the sale of goods
is recognised when control of the good is transferred
to the customer, usually upon delivery and there is no
unfulfilled obligation that could affect the customer's
acceptance of the products.
Rendering of services: Revenue arising from services
is recognised in the accounting period in which the
services are rendered, and it is measured using either
output methods or input methods, depending on the
nature of service provided. A receivable is recognized
when there is an unconditional right to consideration
for the performance obligations to the customer that
are satisfied.
A contract asset is recognized when the performance
obligation to the customer is satisfied before the
customers pays or before payment is due, usually when
goods or services are transferred to the customer
before the Company has a right to invoice.
A contract liability is recognized when there is an
obligation to transfer goods or services to a customer
for which the Company has received consideration
from the customer (prepayments) or there is an
unconditional right to receive consideration before
the Company transfers a good or a service (deferred
income). The contract liability is derecognized when
the promise is fulfilled and revenue is recorded in the
statement of profit and loss.
Revenue is net of GST wherever applicable, recognized
on accrual basis, to the extent that it is probable that
the economic benefits will flow to the Company and
the revenue can be reliably measured.
Sale of Goods: The Company recognises the revenue
when it transfers control over the goods to the customer.
Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction
price (net of variable consideration) allocated to that
performance obligation. The transaction price of
goods sold is net of variable consideration on account
of various discounts and schemes offered by the
Company as part of the contract.
Rental Income: Income from rental of immovable
property is recognised on a straight-line basis over the
lease term, in accordance with the terms of the lease
agreement.
Rendering of services: Revenue from services is
recognised with reference to the stage of completion
of a contract when outcome can be measured reliably.
Stage of completion is measured by the services
performed till Balance Sheet date as a percentage of
total services contracted.
Sale of Power: Revenue from generation and supply
of power is recognised on the supply of net units
generated from the plant to the Grid, as per the terms
of the respective Power Purchase Agreements entered
into with such user.
Interest income is recognized using the effective
interest rate method.
vii) Property Plant and Equipment:
Property Plant and equipment are stated at cost,
net of credit availed in respect of any taxes, duties
less accumulated depreciation. Property, plant and
equipment 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.
Cost comprises the purchase price and any attributable
cost to bringing the asset to the location and condition
necessary for it to be capable of operating in the
manner intended by management. Borrowing costs
relating to acquisition of qualifying asset which takes
substantial period of time to get ready for intended
use are also included to the extent they relate to the
period up to such assets are ready for their intended
use. Expenditure directly relating to construction/
erection activity is capitalized. Indirect expenditure
incurred during construction period is capitalized
as part of the construction cost to the extent such
expenditure is related to construction or is incidental
thereto.
Subsequent expenditure incurred on existing Property
Plant and equipment is added to their book value only
if such expenditure increases the future benefits from
the existing assets beyond their previously assessed
standard of performance.
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 the Statement of
Profit and Loss. Proportionate depreciation is charged
for the addition and disposal of an item of property,
plant and equipment made during the year.
In the transition to Ind-AS, the Company has elected to
continue with the carrying value of all of its property,
plant and equipment recognized as of April 1, 2015
(transition date ) measured as per the previous GAAP
and use that carrying value as its deemed cost as of the
transition date.
Depreciation and amortization
i) Depreciation of Buildings and Plant & Machinery
is provided on straight line method of depreciation
based on the useful lives of the assets, as per
Schedule II of the Companies Act 2013
ii) Depreciation of Other Assets is provided on
Written Down Value method based on the useful
lives of the assets, as per Schedule II of the
Companies Act 2013
iii) Depreciation of Assets of Energy Division
is charged as per Part B of the Schedule.
Depreciation on fixed assets of Energy Division
is provided on straight line method at the rates
and in the manner prescribed as per notification
no.151 dated 29.03.1994 issued by Ministry of
Power (Department of Power).
iv) The assets' residual values are measured at not
more than 5% of the original cost of the asset.
v) On tangible property, plant and equipment added
/ disposed-off during the year, depreciation
is charged on pro-rata basis from the date of
addition / till the date of disposal.
vi) Gains and losses on disposal of assets are
determined by comparing the sale proceeds with
the carrying amount. These are included in profit
or loss within other income.
vii) Individual low-cost assets (acquired for Rs.
5,000/- or less) are depreciated at 100 % in the
year of acquisition/ purchase
viii) The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate
Impairment of assets
Assets are tested for impairment whenever
events or changes in circumstances indicate that
the carrying amount may not be recoverable. An
impairment loss is recognized for the amount by
which the asset's carrying amount exceeds its
recoverable amount. The recoverable amount is
the higher of an asset's fair value less costs of
disposal and value in use. For the purposes of
assessing impairment, assets are grouped at the
lowest levels for which separately identifiable
cash inflows can be generated which are largely
independent of the cash inflows from other
assets or group of assets (cash-generating units).
CWIP (Capital Work in Progress)
Capital works in progress are stated at cost net
of impairment loss, if any. Cost of the Assets in
the course of construction are accounted in
capital work in progress account. At the point
when an asset is capable of operating in the
manner intended by management, the cost of
construction is transferred to the appropriate
category of property, plant and equipment.
Tangible assets not ready for the intended use
on the date of Balance Sheet are disclosed as
“Capital work-in progress”. Advances given
towards acquisition /construction of fixed assets
outstanding at each Balance Sheet date are
disclosed as Capital Advances under “Other Non¬
Current Assets” as appropriate.
viii) Investments In Subsidiaries And Joint Venture:
Investments in subsidiaries and joint ventures
are carried at cost less accumulated impairment
losses, if any. Where an indication of impairment
exists, the carrying amount of the investment
is assessed and written down to its recoverable
amount. On disposal of investments in subsidiaries
and joint venture, the difference between net
disposal proceeds and the carrying amounts are
recognised in the Statement of Profit and Loss.
The Share of profit or loss from the joint venture (a
partnership firm) is considered and accounted as
other income or other expenses in the standalone
financial statements.
ix) Inventories
Inventories are valued at the lower of cost and
estimated net realisable value (net of allowances)
after providing for obsolescence and other losses,
where considered necessary.
Cost of raw materials, stores and spares and
packing material includes cost of purchase and
other costs incurred in bringing the inventories to
their present location and condition.
Cost of finished goods and work-in progress
include all costs of purchases, conversion costs
and other costs incurred in bringing the inventories
to their present location and condition. It includes
the appropriate portion of overheads. Cost of
conversion of inventories include costs directly
related to the units of production, such as direct
labour. They also include a systematic allocation
of fixed and variable production overheads that
are incurred in converting materials into finished
goods.
Trade discounts or rebates are deducted in
determining the costs of purchase.Net realisable
value represents the estimated selling price for
inventories less all estimated costs of completion
and costs necessary to make the sale. The cost
(net of taxes subsequently recoverable from tax
authorities) of raw materials, stores & spares is
determined on moving weighted average basis.
Net realisable 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.
The methods of determining cost of various
categories of inventories are as follows:
Borrowing costs consist of interest and other
costs that an entity incurs in connection with the
borrowing of funds.
xii) Foreign Exchange Transactions/Translation
Transactions in foreign currencies are accounted
at functional currency, at the exchange rate
prevailing on the date of transactions. Gains/
losses arising out of the fluctuations in the
exchange rate between functional currency and
foreign currency are recognized in the Statement
of Profit &Loss in the period in which they arise.
The fluctuations between foreign currency and
functional currency relating to monetary items at
the year ending are accounted as gains / losses in
the Statement of Profit & Loss.
xiii) Research and Development
All expenses incurred for Research &
Development are charged to revenue as incurred.
Capital Expenditure incurred during the year on
Research & Development is shown as additions
to Fixed Assets.
x) Borrowings
Borrowings are initially recognised at fair value,
net of transaction cost incurred. Borrowings
are subsequently measured at amortised cost.
Any difference between the proceeds (net of
transaction cost) and the redemption amount is
recognised in statement of profit and loss over
the period of the borrowings, using the effective
interest method. Fees paid on the established
loan facilities are recognised as transaction cost
of the loan, to the extent that it is probable that
some or all the facility will be drawn down.
xi) Borrowing Costs
Borrowing cost directly attributable to acquisition
and construction of qualifying 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 or sale are capitalised as part of the cost of
the asset. All other borrowing costs are expensed
in the period in which they occur.
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