1C(xiv) Provisions, Contingent Liabilities & Contingent Assets
(a) Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation.
(b) Contingent liability is disclosed in books for a present obligation arising from past events where it is not probable that an outflow of resources will be required to settle the obligation and a reliable estimate is not possible.
Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.
1C(xv) Government Grants
Government grants which the company is entitled to based on investments made under State Investment Promotion Scheme. The grant amount periodically computed based on income linked with VAT / GST payment are recognised in the Statement of Profit and Loss in the period in which there is reasonable assurance that money becomes receivable.
The benefit of a government loan at below current market rate of interest is treated as a government grant. The loan is recognised and measured in accordance with Ind AS 109. The benefit of the below market rate of interest/ interest free loans is measured as the difference between the initial carrying value of the loan determined in accordance with Ind AS 109 (at Fair Value) and the proceeds received, which is disclosed as deferred income liability. Government grant is recognised in the statement of profit and loss on a systematic basis by transferring from deferred income liability over the period of the loan during which the entity recognises as interest expense, the related costs for which the grants are intended to compensate.
1 C(xvi) Leases
As a Lessee
The Company recognizes a right to use asset and the lease liability from the lease commencement date. The leased asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The leased asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term. The Company uses its incremental borrowing rate as the discount rate. The lease liability is subsequently measured at amortised cost using the effective interest method.
The Company applies the short-term lease recognition exemption to those leases that have a lease term of 12 months or less (Short term Leases) from the commencement date and do not contain a purchase option. Lease payments on short-term leases are recognised as expense on a straight-line basis over the lease term.
1C(xvii) (a) Financial Assets
Financial assets are recognized when the Company becomes a party to the contractual provisions of the instrument. All financial assets are recognised initially at fair value. These assets are subsequently classified and measured at:
(i) amortised cost
(ii) fair value through profit and loss (FVTPL)
(iii) fair value through other comprehensive income (FVTOCI).
All equity instruments other than in subsidiaries and associates in scope of Ind AS 109 are measured at fair value, the company may, on initial recognition, irrevocably elect to measure the same either at FVTOCI or FVTPL.
The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument is recognised as other income in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVTOCI. Fair value changes excluding dividends, on an equity instrument measured at FVTOCI are recognised in OCI. Amounts recognised in OCI are not subsequently reclassified to the Statement of Profit and Loss. Dividend income on the investments in equity instruments are recognised as ‘other income’ in the Statement of Profit and Loss.
Debt instruments are measured at amortised cost, fair value through other comprehensive income (‘FVTOCI’) or fair value through profit or loss (‘FVTPL’) till derecognition on the basis of (i) the entity’s business model for managing the financial assets and (ii) the contractual cash flow characteristics of the financial asset.
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the contractual rights to receive the cash flows from the asset.
Expected credit losses are recognised for financial assets other than those classified under FVTPL category. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. The company's trade receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to lifetime expected credit losses ie., expected credit short fall. The impairment losses and reversals are recognised in Statement of Profit and Loss.
(b) Financial Liabilities
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are classified and measured at amortised cost / fair value through profit and loss (FVTPL). In case of trade payables, they are initially recognised at fair value and subsequently, these liabilities are held at amortised cost, using effective interest method.
Financial liabilities are subsequently measured at amortised cost. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.
A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expires.
Terms / Rights / restrictions attached to shares:
The company has only one class of Equity share. Each share has a paid up value of ' 10/- Every shareholder is entitled to one vote per share, except for the holders of Global Depository Shares , as given below:
During the year 2005-06, the company allotted 5,12,27,592 underlying equity shares of ' 10/- each represented by 2,56,13,796 Global Depository Shares (GDS) in the ratio of 2:1. Holders of these GDSs have no voting rights with respect to the Deposited shares.
During the years 2022-23 and 2023-24, the company has not declared any dividend.
During the year 2017-18, pursuant to the Scheme of Amalgamation of Trinetra Cement Limited and Trishul Concrete Products Limited (Transferor Companies) with The India Cements Limited (Transferee Company) approved by the Hon’ble National Company Law Tribunal, Division Bench, Chennai, vide its Order dated 20.04.2017, the Company has allotted, in June 2017, 9,73,544 equity shares of Rs.10/- each fully paid-up to the eligible shareholders of Trinetra Cement Limited and erstwhile Trishul Concrete Products Limited.
Shares reserved for issue under Employee stock option scheme:
As recommended by the Compensation Committee, the Board of Directors has granted, as on 01.04.2017, 18,35,000 options to eligible employees under Employees Stock Option Scheme, 2016 (Scheme). The options granted under the Scheme got vested with the employees on 01.04.2018 and the vested options were to be exercised within one year from the date of vesting. On exercise of each option, one equity share of ' 10/- each fully paid-up were to be allotted at a price of ' 50/- per share, including a premium of ' 40/- per share.
Out of the above, 17,45,000 Stock Options were vested on 01.04.2018 and the balance 90,000 Stock Options were cancelled. During the year 2018-19, all the 17,45,000 options were exercised by the Option holders and equal number of equity shares were allotted to them. Consequently the paid up equity share capital stands at ' 309.90 Crores.
> Items (a) (i) 1 to 5 are secured by way of first pari passu charge among five Term Lenders on the immovable and movable fixed assets of Sankarnagar Cement Plant & Thermal Power Plant and Malkapur Cement Plant of the Company.
> Items (a) (i) 13 is secured by way of first Charge on the entire immovable and movable fixed assets pertaining to cement plant and Captive thermal power plant at Vishnupuram on pari passu basis with ICICI Bank Term Loans
> Items (a) (i) 8 is secured by way of a first pari passu charge on the immovable and movable fixed assets of Chilamkur Cement Plant of the Company.
> Items (a) (i) 10 & 17 are secured by way of an exclusive charge on the immovable properties of the Company being land and building situated at 142/1 (Old No.93), Santhome High Road, Chennai.
> Items (a) (i) 7 & 12 are secured by way of pari passu charge on immovable fixed assets situated at No.4/9, Boat Club Road, III Avenue, R.A. Puram, Chennai.
> Item (a) (i) 15 is secured by way of an exclusive first charge on the immovable and movable fixed assets of Sankaridurg Cement Plant of the Company.
> Items (a) (i) 9 & 14 are secured by way of first pari passu charge on both immovable and movable fixed assets of Dalavoi Cement Plant of the Company
> Item (a) (i) 11 is exclusive charge on land admeasuring 100.890 acres situated at Thalaiyuthu Village in Manur Taluk, Tirunelveli District, Tamilnadu identified with certain specific survey numbers.
> Item (a) (i) 16 is secured by way of exclusive charge on the immovable & first pari passu charge on movable fixed assets of the cement grinding unit located at Vallur Village, Ponneri Taluk, Tamil Nadu.
> Items (b) The Working Capital Facilities availed by the Company, are secured by first pari passu charge on the Current Assets of the Cement Business of the Company and by Second pari passu charge on the movable properties (other than Current Assets), ranking after the charges created / to be created in favour of the Term Lenders
As on 31-03-2023
> Items (a) (i) 1 to 5 were secured by way of first pari passu charge among five Term Lenders on the immovable and movable fixed assets of Sankarnagar Cement Plant & Thermal Power Plant and Malkapur Cement Plant of the Company.
> Items (a) (i) 6 & 13 was secured by way of first charge on the entire immovable and movable fixed assets pertaining to cement plant and Captive thermal power plant at Vishnupuram on pari passu basis with ICICI Bank Term Loans
> Items (a) (i) 8 was secured by way of a first pari passu charge on the immovable and movable fixed assets of Chilamkur Cement Plant of the Company.
> Items (a) (i) 10 & 17 were secured by way of an exclusive charge on the immovable properties of the Company being land and building situated at 142/1 (Old No.93), Santhome High Road, Chennai and further secured by the movable assets pertaining to ship / vessel MV Chennai Selvam and all the ten shares of vessel MV Chennai Selvam.
> Items (a) (i) 7 & 12 were secured by way of pari passu charge on immovable fixed assets situated at No.4/9, Boat Club Road, III Avenue, R.A. Puram, Chennai.
> Item (a) (i) 15 was secured by way of an exclusive first charge on the immovable and movable fixed assets of Sankaridurg Cement Plant of the Company.
> Items (a) (i) 9 & 14 were secured by way of first pari passu charge on both immovable and movable fixed assets of Dalavoi Cement Plant of the Company
> Item (a) (i) 11 was exclusive charge on land admeasuring 100.890 acres situated at Thalaiyuthu Village in Manur Taluk, Tirunelveli District, Tamilnadu identified with certain specific survey numbers.
> Item (a) (i) 16 was secured by way of exclusive charge on the immovable & first pari passu charge on movable fixed assets of the cement grinding unit located at Vallur Village, Ponneri Taluk, Tamil Nadu.
> Items (b) The Working Capital Facilities availed by the Company, were secured by first pari passu charge on the Current Assets of the Cement Business of the Company and by Second pari passu charge on the movable properties (other than Current Assets), ranking after the charges created / to be created in favour of the Term Lenders.
The company had accounted for its current and deferred tax obligations as at 31.03.2022 based on the tax rates prevailing as per the old tax regime. However, during the year 2022-23, the Company opted for lower tax regime under Section 115BAA of the Income Tax Act, 1961, resulting in restatement of net deferred tax liability at the reduced tax rate of 25.17% (basing on the decision to adopt lower tax rate as referred above for filing its income tax return for the FY 2021-22) as against the old tax rate of 34.94% and thus reversed ' 14,810 Lakhs towards deferred tax liabilities.
E. During the Financial year 2023-24, the following transactions are disclosed under Exceptional Items:
(i) The Company, during the quarter ended 30th September 2023, entered into agreements for sale of its Land admeasuring 73.75 Acres with certain agreed conditions. The land was registered in favour of the buyer during the quarter ended 31st March 2024 and accordingly the company has recognised ' 34.58 Crores as Profit on Sale.
(ii) Diminution in value of land held for sale, based on an agreement for sale, amounting to ' 5.10 Crores is recognised during the quarter ended 31st March 2024.
(iii) The company has during the quarter ended 31st March 2024, paid a sum of ' 13.59 Crores, as per demand from authorities, towards additional cost of Limestone mined during earlier years at its Sankarnagar Plant.
(iv) Exceptional items of ' 26.21 Crores, in the quarter ended 31st December 2023, represents profit on sale of ship, M.V.Chennai Selvam.
F. During the Financial year 2022-23, the following transactions are disclosed under Exceptional Items:
(i) Company had invested in shares of Andhra Pradesh Gas Power Corporation Ltd (APGPCL) a gas based power generating company for the purpose of obtaining Low cost power as a captive consumer.
During the year, the operations of APGPCL was suspended due to cancellation of allocation of natural gas under Administered Price Mechanism (“APM”). Further the increase in the cost of Gas from October 2022 made the cost of power from APGPCL uneconomical for the users. The resumption of operations of APGPCL will not be possible without gas allocation from GAIL. Considering the above, the Company has fully provided for the impairment in the value of investments in APGPCL in the quarter/year. The provision for impairment in the value of investments of '113.83 crores has been disclosed as exceptional item in the Statement of Profit and Loss.
(ii) During the year the company concluded the sale of investment held in its subsidiary Springway Mining Private Limited (SMPL) for an agreed consideration of ' 476.88 crores vide Share Purchase Agreement (SPA) on October 10, 2022.The investment represented the company’s greenfield expansion initiatives. The Company had so far invested ' 308.72 crores from time to time till October 7, 2022, including loans and advances to SMPL aggregating to ' 126.12 crores towards procurement of land. The transaction for sale of investment stated above contemplates that the advances made towards the Purchase of Land amounting to '126.12 crores shall also be returned to the Company. The transaction has since been consummated and the entire consideration has been received except for ' 3 crores retained for handing over possession of a small portion of Land. The profit on sale of Investments of ' 294.28 crores has been considered in the Standalone financial results for the quarter ended December 31,2022.
G. The company has during April 2024 divested its Cement Grinding Unit at Parli to Ultratech Cement company Ltd for a total consideration Rs.315 crores. The Profit on sale will be recognised in the Quarter ended 30th June 2024.
H. The Company has, based on the suggestions from experts, identified some initiatives required to improve the operating efficiencies in its plants. The suggestions involve use of alternate materials as well as some additions / improvements in the existing machinery. The company has taken necessary steps for raising the funds for meeting the capital expenditure as mentioned above and also for augmenting the working capital. Steps initiated at few plants for optimizing plant efficiencies have started showing results, which the company intends to implement across all its manufacturing plants which would facilitate in marginalizing the operating costs significantly.
C. Defined Benefit Plan:
The details of parameters adopted for valuation of post-employment benefit plans and leave benefits, as per Ind AS 19, are as under:
(a) Contribution to Pension Funds:
The company offers pension plans for managerial grade employees and whole time Director. While some of the employees are eligible for Defined Benefit Plan of Pension, others are eligible for Defined Contribution Plan of Pension. The Defined Benefit Plans of pension are managed by Life Insurance Corporation of India and the provision has been made on the basis of actuarial valuation.
(b) Gratuity:
The employees are eligible for Gratuity benefits as per the Payment of Gratuity Act, 1972. The Gratuity Scheme is governed by a Trust created for this purpose by the Company. The amount of Contribution to be made is arrived at based on an actuarial valuation done at the Balance Sheet date.
(c) National Pension Scheme (NPS):
The compensation structures are designed to provide opportunity for effective tax planning and retirement planning. The structures and the break-up are reviewed by HR department over a period of time to offer the best possible benefits to Employees. During the year 2023-24, The Company has introduced contribution to the National Pension Scheme as part of the compensation structure. Accordingly, the same was rolled out from the month of Sep-23. NPS being low cost Investment option with flexibility to choose and Change Fund managers, offers portability in case of change of employment and maximum of 10% of Basic DA is allowed a deduction under Section 80CCD(2) of the Income Tax Act.
5. Registration of charges:
Registration, Modification and Satisfaction of charges relating to the year under review, had been filed with the Registrar of Companies (ROC), within the prescribed time or within extended time requiring the payment of additional fees.
6. Compliance with number of layers of companies:
The Company has complied with the number of layers prescribed under the Companies Act, 2013.
7. Compliance with approved scheme(s) of arrangements:
The group has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
8. Utilization of borrowed funds and share premium:
The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the group (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the group shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
9. Undisclosed income:
There is no income surrendered or disclosed as income during the current or previous financial year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
10. Details of crypto currency or virtual currency:
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
11. Valuation of Property, Plant and Equipment, intangible asset and investment property:
The Company has not revalued its property, plant and equipment (including right-of-use assets) during the current financial year.
41.20 Previous year's figures have been regrouped wherever necessary.
As per our report of 20th May, 2024
For BRAHMAYYA & CO., For S. VISWANATHAN LLP N. SRINIVASAN RUPA GURUNATH S. BALASUBRAMANIAN ADITYAN
Chartered Accountants Chartered Accountants Vice Chairman & Wholetime Director (DIN: 00036898)
Firm Regn. No. 000511S Firm Regn. No. 004770S / S200025 Managing Director (DIN: 01711965) V. RANGANATHAN
N.SRI KRISHNA CHELLA K. SRINIVASAN (DIN: 00116726) (DIN: 0055°121)
Partner Partner R. SRINIVASAN S. SRIDHARAN SANJAY SHANTILAL pATEL
Membership No: 026575 Membership No: 023305 Executive President Company Secretary (DIN: 00283429)
(Finance & Accounts) Sandhya rajAn
Place : Chennai (DIN: 08195886)
Date : 20th May, 2024 Directors
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