m) Provision, Contingent Liabilities and Contingent assets:
The company recognizes provisions when there is present obligation as a result of past event and it is
probable that there will an outflow of resources and reliable estimate can be make of the amount of
the obligation. If the effect of the time value of money is material, provisions are determined by
discounting the expected future cash flows to the net present value using an appropriate pre-tax
discounting rate that reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability. Unwinding of the discount is recognized in the statement
of profit and loss as finance cost. Provisions are reviewed at each reporting date and are adjusted to
reflect the current best estimate. At present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle or a reliable estimate of the
amount cannot be made, is disclosed as a contingent liability. Contingent Liability are also disclosed
when there is a possible obligation arising from past events, the existence of which will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of the country.
Contingent assets are not recognized in financial statements since this may result in the recognition of
income that may never be realized.
n) Financial Instruments:
Financial assets and financial liabilities are recognized when the Company becomes a party to the
contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognized immediately in profit or loss.
A. Financial Assets
(i) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortized cost if it is held within a business model
whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms
of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
(ii) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held
within a business model whose objective is achieved by both collecting contractual cash flows and
selling financial assets and the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding.
Further, in case where the company has made an irrevocable selection based on its business model, for
its investments which are classified as equity instruments, the subsequent changes in fair value are
recognized in other comprehensive income.
(iii) Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories are subsequently fair valued
through profit or loss.
(iv) The company recognizes loss allowances using the expected credit loss (ECL) model for the financial
assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no
significant financing component is measured at an amount equal to lifetime ECL. For all other financial
assets, expected credit losses are measured at an amount equal to the 12month ECL, unless there has
been a significant increase in credit risk from initial recognition in which case those are measured at
lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss
allowance at the reporting date to the amount that is required to be recognized is recognized as an
impairment gain or loss in statement of profit or loss.
B. Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the
substance of the contractual arrangements entered into and the definitions of a financial liability and an
equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company
after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of
direct issue costs.
Financial Liabilities
Trade and other payables are initially measured at fair value, net of transaction costs, and are
subsequently measured at amortised cost using the effective interest rate method. Any difference
between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is
recognized over the term of the borrowing in the statement of profit and loss.
Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the
financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under
Ind AS 109. A Financial liability (or a part of financial liability) is derecognized from the company’s
balance sheet when the obligation specified in the contract is discharged or cancelled or expires.
Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and
assumptions that are based on market conditions and risks existing at each reporting date. The methods
used to determine fair value include discounted cash flow analysis, available quoted market prices and
dealer quotes. All methods of assessing fair value result in general approximation of value, and such
value may not be realized.
Offsetting financial Instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where
there is a legally enforceable right to offset the recognized amounts and there is an intention to settle
on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right
must not be contingent on future events and must be enforceable in the normal course of business and
in the event of default, insolvency or bankruptcy of the Company or the counterparty.
o) Earning Per Share:
The basic earnings per share is computed by dividing the profit/(loss) for the year attributable to the
equity shareholders by the weighted average number of equity shares outstanding during the year. For
the purpose of calculating diluted earnings per share, profit/(loss) for the year attributable to the
equity shareholders and the weighted average number of the equity shares outstanding during the year
the adjusted for the effects of all dilutive potential equity shares.
p) Cash and cash equivalents:
Cash and cash equivalents include cash on hand and demand deposits with banks. Cash equivalents are
short-term balances (with an original maturity of three months or less), highly liquid investments that
are readily convertible into known amounts of cash and which are subject to insignificant risk of changes
in value.
q) Segment Reporting -Identification of Segments:
An operating segment is a component of the Company that engages in business activities from which it
may earn revenues and incur expenses, whose operating results are regularly reviewed by the
company’s chief operating decision maker to make decisions for which discrete financial information is
available. Based on the management approach as defined in Ind AS 108, the chief Executive Officer will
evaluate the Company’s performance and allocates resources based on an analysis of various
performance indicators by business segments and geographic segments.
r) Government Grants:
Grants from the government are recognized at 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 income are deferred and recognized in the profit or loss over the period
necessary to match them with costs they are intended to compensate and presented within other
income.
Government grants relating to the purchase of property, plant and equipment are included in non¬
current liabilities as deferred income and are credited to profit and loss on a straight line basis over the
expected lives of the related assets and presented within other income. The benefit of a government
loan at below current market rate of interest is treated as a government grant.
s) .Leases
Lease-Rentals payable under leases are charged to the statement of profit and loss
t) Rounding off amounts
All amounts disclosed in the financial statement and notes have been rounded off to the nearest lakhs as
per the requirement of Schedule III, unless otherwise stated.
u) The Company has considered internal and certain external sources of information, including economic
forecasts and industry reports, up to the date of approval of the financial statements in determining the
possible effects on the carrying amounts of inventories, receivables, deferred tax assets and other
current assets that may result from the Covid-19 pandemic. The Company has used the elements of
prudence in applying the judgements and assumptions, including sensitivity analysis, and based on
current estimates expects the carrying amount of these assets will be recovered. The eventual outcome
of impact of the global health pandemic may be different from these estimated as on the date of
approval of these financial results.
The accompanying notes form an integral part of financial statements
As per our report of even date For and On behalf of the Board
For Satyanarayana & co, For Sri Chakra Cement Limited
Chartered Accountants
(FRN No 003680S)
Sd/- Sd/- Sd/-
G Venkataratnam K Vijay Kumar K Sriram
Partner Managing Director Whole-time Director
MNo: 19455 DIN:00769568 DIN: 05103429
Sd/- Sd/-
Place: Hyderabad P Rajendra Babu NSRV Prasad
Date: 27.05.2024 Company Secretary Chief Financial Officer
UDIN: 24019455BKBUCH9365 M No: 6934
|