o) Provisions, Contingent Liabilities and Contingent Assets
(I) Provisions
General
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of the past
event and it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that refects,
when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost.
Provision for mine reclamation expenses
The company records a provision for mines reclamation. Mine reclamation costs are provided at the present value of
expected costs to settle the obligation using estimated cash flows. The cash flows are discounted at a current pre-tax
rate that refects the risks specific to the reclamation liability. The unwinding of the discount is expensed as incurred and
recognised in the statement of profit and loss as a finance cost. The estimated future costs of reclamation are reviewed
annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to
or deducted from such provision prospectively.
(ii) Contingent liabilities
A contingent liability is:
(a.) a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non¬
occurrence of one or more uncertain future events beyond the control of the Company or,
(b.) a present obligation that is not recognized because;
o it is not probable that an outflow of resources will be required to settle the obligation at the reporting date or
o the amount of the obligation cannot be measured with sufficient reliability
The Company does not recognize a contingent liability but discloses its existence in the financial statements.
(iii) Contingent Asset
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by- the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. The
Company does not recognize the contingent asset in its standalone financial statements since this may result in the
recognition of income that may never be realised. Where an inflow of economic benefits is probable, the Company
disclose a brief description of the nature of contingent assets at the end of the reporting period. However, when the
realisation of income is virtually certain, then the related asset is not a contingent asset and the Company recognize such
assets.
p) Retirement and other employee benefits
(i) Superannuation Fund (being administered by Trusts) is defined contribution schemes and the contributions are
charged to the statement of profit and loss for the period when the contributions to the respective funds are due. There
are no other obligations other than the contribution payable to the respective funds.
(ii) Retirement benefits in the form of provident fund contributed to statutory provident fund is a defined contribution scheme
and the payments are charged to the statement of profit and loss for the period when the payments to the respective
funds are due. There are no obligations other than contribution payable to provident fund authorities.
(iii) Retirement benefits in the form of provident fund contributed to trust set up by the employer is a defined benefit scheme
and the amounts are charged to the statement of profit and loss for the period when the payments to the trust are due. If
the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution
already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid.
(iv) Gratuity liability (being administered by a Trust) is a defined benefit obligation and is provided for on the basis of an
actuarial valuation done using projected unit credit method at the end of each financial year.
Actuarial gains and losses for defined benefit plans are recognized in full in the period in which they occur in the OCI.
(v) Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit.
The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of
the unused entitlement that has accumulated at the reporting date. The Company treats accumulated leave expected to
be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term
compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the
year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The
Company presents the entire leave as a current liability in the balance sheet, since it does not have an unconditional right
to defer its settlement for 12 months after the reporting date.
q) Financial instruments
Initial recognition
The company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of
the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade
receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (that are not at fair value through profit or loss) are added to
or deducted from the fair value, as appropriate, on initial recognition.
Classification and Subsequent measurement: Financial Assets
I. Non-derivative financial instruments
i) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised 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.
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.
Classification and Subsequent Measurement: Financial liabilities:
Financial liabilities are classified as follow:
iv) Financial liability at fair value through profit or loss (FVTPL)
Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated
upon initial recognition as FVTPL. Gains or Losses on liabilities held for trading are recognised in the
Statement of Profit and Loss.
v) Other Financial Liabilities:
Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade
and other payables maturing within one year from the balance sheet date, the carrying amounts approximate
fair value due to the short maturity of these instruments.
Impairment of financial assets
Financial assets, other than those at Fair Value through Profit and Loss (FVTPL), are assessed for indicators of
impairment at the end of each reporting period. Financial assets are considered to be impaired when there is
objective evidence that, as a result of one or more events that occurred after the initial recognition of the
financial asset, the estimated future cash flows of the investment have been affected, or a significant or
prolonged decline in the fair value of the security below its cost is considered to be objective evidence of
impairment.
For all other financial assets, objective evidence of impairment could include:
- Significant financial difficulty of the issuer or counterparty;
- Breach of contract, such as a default or delinquency in interest or principal payments;
- It becoming probable that the borrower will enter bankruptcy or financial re-organisation; or the
disappearance of an active market for that financial asset because of financial difficulties.
For certain categories of financial assets, such as trade receivables, assets are assessed for impairment on
individual basis.
For financial assets that are carried at cost, the amount of impairment loss is measured as the difference
between the asset’s carrying amount and the present value of the estimated future cash flows discounted at
the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in
subsequent periods.
For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event occurring after the impairment was
recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the
carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised
cost would have been had the impairment not been recognized.
De-recognition of financial assets
The Company de-recognises a financial asset when the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the
asset to another party. If the company neither transfers nor retains substantially all the risks and rewards of
ownership and continues to control the transferred asset, the Company recognises its retained interest in the
asset and an associated liability for amounts it may have to pay. If the company retains substantially all the
risks and rewards of ownership of a transferred financial asset, the company continues to recognise the
financial asset and also recognises a collateralised borrowing for the proceeds received.
On de-recognition of a financial asset in its entirety, the difference between the asset’s carrying amount and
the sum of the consideration received and receivable and the cumulative gain or loss that had been
recognized in other comprehensive income and accumulated in equity is recognized in profit or loss.
De-recognition of financial liabilities
A financial liability shall be derecognized when, and only when it is extinguished i.e when the obligation
specified in the contract is discharged or cancelled or expires.
r) Dividend Distributions
The Company recognizes a liability to make payment of dividend to owners of equity when the distribution is authorized
and is no longer at the discretion of the Company and is declared by the shareholders. A corresponding amount is
recognised directly in equity.
s) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders
after deducting preference dividends and attributable taxes by the weighted average number of equity shares
outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all
dilutive potential equity shares, if any.
t) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an
original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as
defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company’s cash
management.
(I) During the year 31 March 2022, the Company has entered into Power Purchase Agreement, Share Subscription Agreement
and Shareholders Agreement with Lalganj Power Private Limited (""LPPL"") on 10 August 2021 for subscribing to 36,36,364
equity shares of INR 10 each constituting 4.25% of the paid-up equity share capital at a premium of Rs. 3.2 per share
aggregating to Rs. 48.0 million in order to procure around 22 Gigawatt hours per annum of solar power under captive
arrangement for operating its plant located at Village Madora, District Jhansi, Uttar Pradesh, India.
(ii) During the year 31 March 2024, the Company has entered into Power Purchase Agreement, Share Subscription Agreement
and Shareholders Agreement with Continuum MP Windfarm Development Private Limited ('CMWDPL') on 26 September
2023 for subscribing to 92,76,800 equity shares of INR 10 each constituting 4.57% of the paid-up equity share capital
aggregating to Rs. 92.8 million in order to procure around 8MW per annum of Hybrid power (wind-solar) under captive
arrangement for operating its Narsingarh and Imlai plant located in Madhya Pradesh, India.
The Company during the year 31 March 2025, has further entered into a Share Purchase and Shareholders’ Agreement with
CMWDPL on 08 November 2024 to acquire/purchase 63,77,800 number of fully paid-up equity shares of face value of Rs. 10/-
each for cash at par by making an investment aggregating to INR 63.4 million to source hybrid (wind-solar) power as a captive
consumer for a capacity of additional 5.5 MW for its plants situated at Damoh. Therefore, the total cumulative investment of the
Company now amounts to INR 156.2 million, equivalent to 4.71% of the fully diluted equity share capital of the CMWDPL.
31. Significant accounting judgements, estimates and assumptions
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures, and the disclosure of
contingent liabilities. 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.
Judgements
In the process of applying the Company’s accounting policies, management has made the following judgements, which
have the most significant effect on the amounts recognised in the financial statements:
Contingent liabilities
Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including
legal, land access and other claims. By their nature, contingencies will be resolved only when one or more uncertain future
events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves
the exercise of significant judgement and the use of estimates regarding the outcome of future events.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year,
are described below. The Company based its assumptions and estimates on parameters available when the financial
statements were prepared. Existing circumstances and assumptions about future developments, however, may change
due to market change or circumstances arising beyond the control of the Company. Such changes are reflected in the
assumptions when they occur.
(i) Useful lives of Property, Plant & Equipment:
The Company uses its technical expertise along with historical and industry trends for determining the economic life of
an asset/component of an asset. The useful lives are reviewed by management periodically and revised, if appropriate.
In case of a revision, the unamortised depreciable amount is charged over the remaining useful life of the assets.
(ii) Defined benefit plans
The cost of the defined benefit gratuity plan and other post-employment defined benefits are determined using
actuarial valuations. An actuarial valuation involves 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 reporting date.
Further details about gratuity obligations are given in Note 34.
(iii) Fair value measurement of financial instrument
When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based
on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted
Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this
is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of
inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the
reported fair value of financial instruments. Refer Note 36 of the financials.
(iv) Mines reclamation expenses:
In determining the fair value of the Mines Restoration Obligation, assumptions and estimates are made in relation to
discount rates, the expected cost of mines restoration and the expected timing of those costs.
(v) Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount
and timing of future taxable income. Given the nature of business, differences arising between the actual results and
the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income
and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of
such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of
tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a
wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the Company and that are believed to be
reasonable under the circumstances.
34. A) GRATUITY AND OTHER EMPLOYMENT BENEFIT PLANS
The Company has three post-employment funded plans, namely Gratuity, Superannuation and Provident Fund.
Gratuity being administered by a Trust is computed as 15 days salary, for every completed year of service or part
thereof in excess of 6 months and is payable on retirement/ termination/ resignation. The benefit vests on the
employee after completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme
where annual contributions as demanded by the insurer are deposited to a Gratuity Trust Fund established to
provide gratuity benefits. The Trust Fund has taken a Scheme of Insurance, whereby these contributions are
transferred to the insurer. The Company makes provision of such gratuity asset/ liability in the books of accounts
on the basis of actuarial valuation as per 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 reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans
operated in India, 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 interval in response to demographic changes. Future salary increases and gratuity
increases are based on expected future inflation rates for the respective countries.
Plan assets also include investments and bank balances used to deposit premiums until due to the insurance
company.
Retirement benefits in the form of Superannuation Fund (being administered by Trusts) are funded defined
contribution schemes and the contributions are charged to the Statement of profit and loss of the year when the
contributions to the respective funds are due. There are no other obligations other than the contribution payable.
The Provident Fund being administered by a Trust is a defined benefit scheme whereby the Company deposits an
amount determined as a fixed percentage of basic pay to the fund every month. The benefit vests upon
commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual
basis to confirm to the interest rate declared by the Government for the Employees Provident Fund. Based on
latest actuarial valuation of the said trust, there is no deficit in the fund.
The following tables summarize the components of net benefit expense recognized in the statement of profit and
loss and the amounts recognized in the balance sheet for the Gratuity.
Statement of profit and loss
(i) Net employees benefit expense recognized in employee cost:-
36. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company has exposure to the following risks arising from financial instruments:
- credit risk (see 36(ii));
- liquidity risk (see 36 (iii)); and
- market risk (see 36(iv)).
(i) Risk management framework
The Company’s risk management policies are established to identify and analyse the risks faced by the
Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies are reviewed periodically to reflect changes in market conditions and the Company’s
activities. The Company, through its training and management standards and procedures, aims to maintain a
disciplined and constructive control environment in which all employees understand their roles and
obligations.
The Company’s Audit Committee oversees how Management monitors compliance with the Company’s risk
management policies and procedures, and reviews the adequacy of the risk management framework in
relation to the risks faced by the company. The Audit Committee is assisted in its oversight role by the senior
management of the Company and through the periodical internal audits carried out by the Internal Auditors.
(ii) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and
from its financing activities, including deposits with banks and financial institutions, foreign exchange
transactions and other financial instruments. The Company has no significant concentration of credit risk with
any counterparty.
Trade receivables
Customer credit risk is managed in line with the Company’s established policy, procedures and control
relating to customer credit risk management. Credit quality of a customer is assessed through internal
evaluation which takes into account the financial parameters, past experience with the counterparty and
current economic/market trends. Individual credit limits are thus defined in accordance with this assessment.
Outstanding customer receivables are regularly monitored and any shipments to major customers are
generally covered by advances, security deposits, bank guarantees etc.
Trade receivables are consisting of a large number of customers. The Company does not have higher
concentration of credit risks to a single customer. Single largest customer has total exposure in sales 0.10%
(31 March 2024: 0.10%) and in receivables 3.68% (31 March 2024: 4.04%).
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury
department in accordance with the Company’s policy. Investments of surplus funds are made with approved
counterparties only.
Credit Risk on cash and cash equivalent, deposits with the banks/financial institutions is generally low as the
said deposits have been made with the banks/financial institutions who have been assigned high credit rating
by international and domestic rating agencies.
Credit Risk on Derivative Instruments are generally low as Company enters into the Derivative Contracts with
the reputed Banks and Financial Institutions.
(iii) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at
reasonable price. The Company’s treasury department monitors liquidity on an ongoing basis through rolling
cash flow forecasts. The Company’s objective is to maintain timely and adequate funding for its operations via
multiple sources including but not limited to bank overdrafts, bank loans, debentures, preference shares etc.
The Company’s debt will mature in less than one year at 31 March 2025 (31 March 2024: 50%) based on the
carrying value of borrowings refected in the financial statements.
(iv) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as
equity. Financial instruments affected by market risk include loans and borrowings, deposits, investments and
derivative financial instruments.
The Company’s treasury department is entrusted with managing the overall market risks in line with the company’s
established risk management policies which are approved by the Senior Management and Audit Committee.
I. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Company’s main interest risk arises from the long-term borrowings
with variable rates, which exposes the Company to cash flow interest rate risk. Company’s policy is to maintain
most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary.
The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest
rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate
because of a change in market i nterest rates.
The Company manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps. Under
these swaps, the company agrees with other parties to exchange, at specified intervals, the difference
between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional
principal amounts. Generally, the company raises long-term borrowings at floating rates and swaps them into
fixed rates that are lower than those available if the company borrowed at fixed rates directly.
The Company is thus not exposed to significant interest rate risks at the respective reporting dates.
II. Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates
relates primarily to the Company’s operating or financing activities and the same are hedged in line with
established risk management policies of the Company.
41. The Company is primarily engaged in the manufacturing of cement and hence entire operation represents a single
primary segment. The company operates within India only and hence geographical segment is also not applicable to
the company.
42. Standards notified but not yet effective
There are no new standards that are notified, but not yet effective, upto the date of issuance of the Company's financial
statements.
43. Additional Statutory Information
(I) The Company do not have any Benami property, where any proceeding has been initiated or pending against
the Company for holding any Benami property.
(ii) The Company do not have any transactions with companies struck off.
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period
(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company have 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:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company have 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 Company shall:
(a) 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
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(vii) The Company have not any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961
(such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(viii) Ratio Analysis and its elements :-
The following are analytical ratios for the year ended 31 March 2025 and 31 March 2024:
Notes: The Debt-equity and Net capital turnover ratio improved mainly on account of reduction in the debt repayments during
the year. Trade receivable turnover ratio increased due to increase in outstanding receivables not yet due at the year end.
44. Previous year figures have been regrouped / reclassified, where necessary, to conform to this year’s classification.
As per our report of even date
For S.N. Dhawan & CO LLP For and on behalf of the Board of Directors of
Chartered Accountants HeidelbergCement India Limited
Firm Registration No. 000050N/N500045
Manish Surana Jyoti Narang Atul Khosla Joydeep Mukherjee
Partner Chairperson Director Managing Director
Membership No. 503812 DIN:00351187 DIN:06476856 DIN:06648469
Vimal Kumar Jain Anil Kumar Sharma Ravi Arora
Place: Gurugram Director Chief Financial Officer Company Secretary
Date: 28 May 2025 DIN: 09561918
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