a. Basis of Preparation and Measurement
The Financial statements have been
prepared on a historical cost basis, except
for the following assets and liabilities:
(i) Derivative financial instruments.
(ii) Certain financial assets and liabilities
measured at fair value (refer
accounting policy regarding financial
instruments - note 4(s)).
(iii) Employee’s defined benefit plan as
per actuarial valuation.
Historical cost is generally based on the
fair value of the consideration given in
exchange for goods and services.
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 under current market conditions,
regardless of whether that price is directly
observable or estimated using another
valuation technique. In determining 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.
The financial statements are presented
in Indian Rupees ("' ”) and all values are
rounded to the nearest Crore, except
otherwise indicated.
b. Classification of Assets and Liabilities
into Current and Non-Current
The Company has ascertained its operating
cycle as twelve months for the purpose of
Current/Non-Current classification of its
Assets and Liabilities.
For the purpose of Balance Sheet, an asset
is classified as current if:
(i) It is expected to be realized, or is
intended to be sold or consumed, in
the normal operating cycle; or
(ii) It is held primarily for the purpose of
trading; or
(iii) It is expected to realize the asset within
twelve months after the reporting
period; or
(iv) The asset is a cash or cash equivalent
unless it is restricted from being
exchanged or used to settle a liability
for at least twelve months after the
reporting period.
All other assets are classified as non-current.
Similarly, a liability is classified as current if:
(i) It is expected to be settled in the
normal operating cycle; or
(ii) It is held primarily for the purpose of
trading; or
(iii) It is due to be settled within twelve
months after the reporting period; or
(iv) The Company does not have the right
at the end of the reporting period to
defer settlement of the liability for at
least twelve months after the reporting
period.
All other liabilities are classified as non¬
current.
Deferred tax assets / liabilities are
classified as non-current assets / liabilities.
c. Property, Plant and Equipment
Property, plant and equipment are stated
at cost less accumulated depreciation/
amortisation and impairment, if any.
Freehold land not containing mineral
reserve is disclosed at cost less impairment,
if any. Cost comprises of purchase price
and directly attributable cost (net of credit
availed, if any) of acquisition/bringing
the asset to its working condition for its
intended use, including relevant borrowing
costs.
The carrying amount of any component
accounted for as a separate asset
is derecognized when replaced. All
subsequent costs are charged to statement
of profit and loss unless 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.
Stripping costs are capitalized as part of
depreciable cost of development of mines
when it represent improved access to
limestone reserves.
Capital work in progress is carried at cost
and directly attributable expenditure/
income during construction period
(including financing cost related to
borrowed funds for construction or
acquisition of qualifying assets) which
is allocated to the property, plant and
equipment on the completion of project.
Advances given towards acquisition
or construction of property, plant and
equipment outstanding at each reporting
date are disclosed as capital advances
under "other non- current assets”.
Capital expenses incurred by the Company
on construction/development of certain
assets which are essential for production,
supply of goods or for the access to
any existing assets of the Company are
recognised as enabling assets under
Property, plant and equipment.
Depreciation is provided on written down
value method over the estimated useful
lives of the assets which are determined
based on technical parameters/assessment.
Estimated useful lives of the assets are as
follows:
Freehold land containing mineral reserve
is amortized over its estimated commercial
life based on the units-of-production
method.
Assets individually costing less than or
equal to ' 25,000 are fully depreciated in the
year of purchase.
Depreciation on additions is provided on a
pro-rata basis from the date of installation
or acquisition and in case of projects, from
the date when it is ready for intended use.
Depreciation on deductions/disposals is
provided on a pro-rata basis up to the date
of deduction/disposal.
Gains or losses arising from de-recognition
of 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 disposed and/or
derecognized.
The residual values, useful lives and method
of depreciation of property, plant and
equipment are reviewed at each financial
year end and adjusted prospectively, if
appropriate.
d. Intangible Assets
Intangible assets are stated at cost
less accumulated amortisation and
impairment, if any. Cost comprises of
purchase price and directly attributable cost
(net of credit availed, if any) of acquisition/
bringing the asset to its working condition
for its intended use.
Amortisation is provided on a written
down value method over estimated useful
lives, but not exceeding three years except
mining rights which is amortised based on
units-of-production method.
Expenditure on research phase is
recognized as an expense when it is
incurred. Expenditure on development
phase which results in creation of assets is
included in related assets.
An intangible asset is derecognised on
disposal, or when no future economic
benefits are expected from its use or
disposal. Gains or losses arising from
derecognition of an item of intangible
asset are measured as the difference
between the net disposal proceeds and
the carrying amount of such item of
intangible asset and are recognised in the
statement of profit and loss when the asset
is derecognised.
The residual values, useful lives and method
of amortisation of intangible assets are
reviewed at each financial year end and
adjusted prospectively.
e. Borrowing Costs
Borrowing costs directly attributable to
the acquisition/construction of a qualifying
asset that necessarily takes substantial
period of time to get ready for its intended
use are capitalized as part of the cost of
the asset. All other borrowing costs are
expensed in the period in which they
occur. Borrowing costs consists of interest
and other costs that an entity incurs in
connection with the borrowing of funds.
Borrowing costs also includes exchange
differences to the extent regarded as an
adjustment to the borrowing costs.
f. Impairment of Non-Financial Assets
The carrying amounts of non-financial
assets are reviewed at each reporting date if
there is any indication of impairment based
on internal and external factors.
An impairment loss is recognized wherever
the carrying amount of an asset exceeds its
recoverable amount. An asset’s recoverable
amount is the higher of fair value less costs
of disposal 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 the risks specific to the
asset. In determining fair value less cost of
disposal, recent market transactions are
taken into account. If no such transactions
can be identified, an appropriate valuation
model is used. When it is not possible to
estimate the recoverable amount of an
individual asset, the Company estimates
the recoverable amount of Cash Generating
Unit (CGU) to which the asset belongs.
The cash generating unit is the smallest
identifiable group of assets that generates
cash inflows that are largely independent
of cash inflows of other assets or group of
assets.
A previously recognized impairment loss is
further provided or reversed depending on
changes in circumstances.
Where an impairment loss subsequently
reverses, the carrying amount of the asset
is increased to the revised estimate of
its recoverable amount, but so that the
increased carrying amount does not exceed
the carrying amount that would have been
determined had no impairment loss been
recognized for the asset in prior years. A
reversal of an impairment loss is recognized
as income immediately.
g. Revenue Recognition
Revenue is recognized to depict the
transfer of promised products or services to
customers. Revenue is measured based on
the consideration to which the Company
expects to be entitled in a contract with a
customer and excludes amount collected
on behalf of third party.
Revenue from sale of products is
recognized when products are delivered
to the customers. Delivery occurs when
the product has been shipped to the
customers, the risks of obsolescence and
loss have been transferred to customers and
the customer has accepted the products
in accordance with sales arrangement.
Revenue is disclosed net of Goods and
Services Tax (GST), discounts, volume
rebates and returns, as applicable.
h. Dividend income is recognized when the
right to receive the payment is established.
Interest income is recognized using the
Effective Interest Rate (EIR) method.
Difference between the sale price and
carrying value of investment is recognized
as profit or loss on sale/redemption of
investment on the date of transaction.
i. Insurance, railway and other claims where
quantum of accruals cannot be ascertained
with reasonable certainty, are recognized
only when collection is virtually certain
which generally coincides with receipt.
j. Government Grants
Government grants are recognized when
there is reasonable assurance that the
Company will comply with the conditions
attached thereto and the grants will be
received.
Grants related to income are recognized in
statement of profit and loss on a systematic
basis over the period to match them with
the related costs.
Grants related to assets are included in
liabilities as deferred income and are
credited to income on a systematic basis
over the useful life of the related assets.
The benefit of government loan at a
below-market rate of interest is treated
as a government grant, measured as the
difference between proceeds received and
the fair value of the loan based on prevailing
market interest rates and is recognized in
the statement of profit and loss.
k. Employee Benefits(i) Defined Contribution Plan
Superannuation, Provident
Fund, National Pension Scheme
and Employees State Insurance
Corporation ("ESIC”) are considered
as defined contribution plan and
the contributions are charged to the
statement of profit and loss for the year
in which employees have rendered
related services.
(ii) Defined Benefit Plan
Gratuity is considered as defined
benefit plan and is provided for on the
basis of an actuarial valuation, using
the projected unit credit method,
as at the date of the Balance Sheet.
Defined benefit costs are categorized
as follows:
• service cost (including current
service cost, past service cost,
as well as gains and losses on
curtailments and settlements);
• net interest expense or income;
and
• re-measurements.
The Company presents the first two
components of defined benefit costs in
statement of profit and loss in the line
item ‘Employee Benefits Expenses’.
Re-measurement, comprising
of actuarial gains and losses, the
effect of the asset ceiling, excluding
amounts included in net interest on
the net defined benefit liability and
the return on plan assets (excluding
amounts included in net interest
on net defined benefit liability), are
recognized immediately in the Balance
Sheet with a corresponding debit or
credit to retained earnings through
Other Comprehensive Income (OCI)
in the period in which they occur. Re¬
measurements are not reclassified
to statement of profit and loss in
subsequent periods.
(iii) Other Long Term Benefits
En-cashable leave in case of employees
covered by Cement Wage Board and
non en-cashable leave are provided for
on the basis of an actuarial valuation,
using the projected unit credit method,
as at the Balance Sheet date. Actuarial
gains/losses, if any, are recognized in
statement of profit and loss in the year
in which they arise.
(iv) Other Short Term Benefits
A liability is recognized for benefits
accruing to employees in respect of
wages and salaries, annual leave in the
period the related service is rendered.
Liabilities recognized in respect of
short-term employee benefits, are
measured at the undiscounted
amount of the benefits expected to be
paid in exchange for the related service.
l. Foreign Currency Transactions
Items included in the financial statements
are measured using the currency of
the primary economic environment in
which the entity operates (the ‘functional
currency’). The Company’s financial
statements are presented in Indian Rupees,
which is also the Company’s functional
currency.
Foreign currency transactions are initially
recorded in the functional currency, using
the exchange rate at the date of transaction.
At each balance sheet date, foreign
currency monetary items are reported
using the closing exchange rates. 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 transaction.
Exchange difference arising on the
settlement of monetary items or on
reporting 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 as expense in the
year in which they arise except the amount
of such exchange differences capitalized
in accordance with policy on ‘Borrowing
Costs’.
m. Taxation
Income tax expense represents the sum
of current and deferred tax (including
Minimum Alternate Tax). Tax is recognized
in statement of profit and loss except
to the extent that it relates to items
recognized directly in equity or other
comprehensive income, in such case the
tax is also recognized directly in equity
or in other comprehensive income. Any
subsequent change in direct tax on items
initially recognized in equity or other
comprehensive income is also recognized
in equity or other comprehensive income,
such change could be for change in tax
rate.
Current tax provision is measured on
the basis of estimated taxable income
computed in accordance with the
provisions of the Income Tax Act, 1961 and
other applicable tax laws.
Current tax assets and liabilities are offset
only if there is a legally enforceable right
to set off the recognized amounts, and it is
intended to realize the asset and settle the
liability on a net basis or simultaneously.
Deferred tax is recognized on differences
between the carrying amounts of assets
and liabilities in the Balance Sheet and
the corresponding tax bases used in
the computation of taxable profit and
are accounted for using the balance
sheet approach. Deferred tax liabilities
are recognized for all taxable temporary
differences and deferred tax assets are
recognized for all deductible temporary
differences, carry forward tax losses and
allowances to the extent it is probable
that future taxable profits will be available
against which those deductible temporary
differences, carry forward tax losses and
allowances can be utilized. Deferred tax
assets and liabilities are measured at the
tax rates that are expected to apply in the
year when the asset is realized or liability
is settled, based on tax rates and tax laws
that have been enacted or substantially
enacted at the reporting date.
Deferred tax assets and liabilities are offset
if a legally enforceable right exists to set
off current tax assets against current tax
liabilities and deferred taxes relate to
same taxable entity and the same taxation
authority.
The carrying amount of deferred tax asset
is reviewed at each balance sheet date and
reduced to the extent that it is no longer
probable that sufficient taxable profits will
be available against which the temporary
differences can be utilized.
Tax credit is recognized in respect of
Minimum Alternate Tax (MAT) paid in terms
of section 115 JAA of the Income Tax Act,
1961 based on convincing evidence that
the Company will pay normal income tax
within statutory time frame and the same
is reviewed at each balance sheet date. MAT
credit are in the form of unused tax credits
that are carried forward by the Company
for a specified period of time, hence it is
grouped with Deferred Tax Asset.
n. Inventories(i) Raw Materials, Stores & Spare Parts,
Packing Materials and Fuel
These are valued at lower of cost
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 weighted
average basis which includes
expenditure incurred for acquiring
inventories like purchase price, import
duties, taxes (net of tax credit) and
other costs incurred in bringing the
inventories to their present location
and condition.
(ii) Work-in-Progress, Finished Goods
and Stock-in-Trade
These are valued at lower of cost
and net realizable value. Cost of
work-in-progress and finished goods
include direct materials and labour
and a proportion of manufacturing
overheads based on normal operating
capacity. Cost of stock-in-trade includes
cost of purchase and other costs
incurred in bringing the inventories to
their present location and condition.
Cost is determined on a 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.
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