2. Significant Account Policies:
This note provides a list of the significant accounting policies adopted in the preparation of the
financial statements. These policies have been consistently applied to all the years presented, unless
otherwise stated.
a) Basis of preparation:
The financial statements have been prepared under the historical cost convention with the exception
of certain assets and liabilities that are required to be carried at fair values as per to Ind AS . 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.
b ) Use of estimates and critical accounting judgments:
In preparation of the financial statements, the company makes judgments, estimates and assumptions
about the carrying values of assets and liabilities that are not readily apparent from other sources. The
estimates and the associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimate and the underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period in which the estimate is revised and future periods
affected.
Significant judgments and estimates relating to the carrying values of assets and liabilities include
useful lives of property, plant and equipment and intangible assets, and investments, provision for
employee benefits and other provisions, recoverability of deferred tax assets, commitments and
contingencies.
c) Revenue Recognition:
Sale of products.
Cement: Revenue is recognized to the extent that it is probable that the economic benefits will flow
to the company and when the significant risks and rewards of ownership of the goods have been
transferred to the buyer, usually on delivery/dispatch of the goods. It is measured at the value of the
consideration received or receivable, net of returns, discounts, volume rebates. Power: Revenue from
sale of power is recognized and adjusted against the power cost.
d) Other income
Interest income is recognized on time proportion basis taking into account the amount outstanding and
the rate applicable.
e) 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 the intended use or sale. Investment income earned on the temporary
investment of specific borrowings pending their expenditure on qualifying assets is deducted from the
borrowing cost eligible for capitalization other borrowings costs are expensed in the period in which
they are incurred. There are no long term borrowings outstanding to any financial institutions as on
31st March 2023.
f) Employee Benefits:
(i) Short term obligations
Liabilities for wages and salaries, including non -monetary benefits are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are
recognized 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.
(ii) Other long-term employee benefit obligations
The liabilities for earned leave is not expected to be settled wholly within 12 months after the end of
the period in which the employees render the related service. They are therefore measured at the
present value of expected future payments to be made in respect of services provided by employees
up to the end of the reporting period using the projected unit credit method. The benefits are
discounted using the market yields at the end of the reporting period that have terms approximating
to the terms of the related obligations. Remeasurements as a result of the experience adjustments
and changes in actuarial assumptions are recognized in profit or loss. The obligations are resented 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.
(iii) Gratuity obligations
The liability or assets recognized in the balance sheet in respect of gratuity plans in 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 calculated annually by actuaries using the projected unit credit
method.
The present value of the defined benefit obligation 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 recognized 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 and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or
curtailments are recognized immediately in profit or loss.
(iv) Defined contribution plans
The company pays provident funds contributions to publicly administered funds as per local regulations
and superannuation funds to LIC of India. The company has no further payment obligations once the
contributions have been paid. The contributions are accounted for as defined contributions are
accounted for as defined contribution plans and the contributions are recognized as employee benefit
expense when they are due.
(v) Bonus plans
The company recognizes a liability and an expense for bonuses. The company recognizes a provision
where contractually obliged or where there is a past practice that has created a constructive
obligation.
g) Income Taxes:
Tax expense for the year comprises current and deferred tax.
Current Tax is the amount of tax payable on the taxable income for the year as determined in
accordance with the applicable tax rates and the provisions of the Income Tax Act,1961 and other
applicable tax laws that have been enacted or substantively enacted by the end of the reporting
period.
Deferred tax is recognized on temporary difference 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 generally recognized for all taxable temporary differences.
Deferred tax assets are generally recognized 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 utilized. Such deferred tax assets and liabilities are not recognized if the temporary
differences arise from the initial recognition (other than in a business combination) of assets and
liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition
deferred tax liabilities are not recognized if the temporary difference arises from the initial
recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and
reduced to the extent that is no longer probable that sufficient taxable profits will be available to
allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the period in which the liability is settled or the asset realized
based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the
reporting period.
Tax relating to items recognized directly in equity or other comprehensive income is recognized in
equity or other comprehensive income and not in the statement of profit and loss.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets and they are related to income taxes levied by the same tax authority, but they
intend to settle current tax liabilities and assets on a net basis or their tax assets on liabilities will be
realized simultaneously.
h) Property, plant and equipment (PPE):
Property, plant and equipment are carried at cost less accumulated depreciation and impairment
losses, if any. The cost of property, plant and equipment comprises of purchase price, applicable
duties and taxes, any directly attributable expenditure on making the asset ready for its intended use
other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed
assets, upto the date the asset is ready for its intended use.
All other repair and maintenance costs, including regular servicing, are recognized in the statement of
profit and loss as incurred. When a replacement occurs, the carrying value of the replacement part is
de-recognized. Where an item of property, plant and equipment comprises major components having
different useful lives, these components are accounted for as separate items.
Property, plant and equipment retired from active use and held for sale are stated at the lower of
their net book value and net realizable value and are disclosed separately.
An item of property, plant and equipment is derecognized 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 recognized in profit or loss.
i) Depreciation:
Depreciation is the systematic allocation of the depreciable amounts of PPE over its useful life and is
provided on the straight line method over the useful lives as prescribed in schedule II to the Act.
j) Investment properties:
Investment properties are properties held to earn rentals and/or for capital appreciation (including
property under construction for such purposes). Investments properties are measured initially at cost,
including transaction cost. Subsequent to initial recognition, investment properties are measured at
cost model which is in accordance with Ind AS 40.
An investment property is derecognized upon disposal or when the investment property is permanently
withdrawn from use and no further economic benefits are expected from disposal. Any gain or loss
arising on derecognition of the property is included in profit or loss in the period in which the property
is derecognized.
k) Impairment of assets:
Intangible assets and property, plant and equipment: Intangible assets and property, plant and
equipment are evaluated for recoverability whenever events or changes in circumstances indicate that
their carrying amounts may not be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e the higher of the fair value less cost to sell and the value in use) is
determined on an individual asset basis unless the asset does not generate cash flows that are largely
independent of those from other assets. In such cases, the recoverable amount is determined for the
cash generating unit (CGU) to which the asset belongs. If such asset is considered to be impaired, the
impairment to be recognized in the statement of profit and loss is measured by the amount by which
the carrying value of the asset exceeds the estimated recoverable amount of the asset. An impairment
loss is reversed in the statement of profit and loss if there has been a change in the estimates used to
determine the recoverable amount. The carrying amount of the asset is increased to its revised
recoverable amount, provided that this amount does not exceed the carrying amount that would been
determined (net of any accumulated amortization or depreciation) had no impairment loss been
recognized for the asset in prior years.
l) Inventories:
Raw Materials, Fuel, Stores and Spares and Packing Materials
Valued at lower of cost and net realizable value (NRV). However, these items are considered to be
realizable at cost, if the finished products, in which they will be used, are expected to be sold at or
above cost, cost is determined on weighted Average basis.
Material in Transit:
Valuation of Inventories of Materials in Transit is done at Cost.
Work-in-progress (WIP) and Finished Goods
Valued at lower of cost and NRV. Cost of Finished Goods and WIP includes cost of raw materials, cost
of conversion and other costs incurred in bringing the inventories to their present location and
condition. Cost of inventories is computed on weighted average basis.
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