Provisions are recognised when the Company has a present legal or constructive obligation as a result of a past eventand it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation andamount of the obligation can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions (excluding retirement benefits) are measured at the management's best estimate of the expenditure requiredto settle the present obligation at the Balance Sheet date. If the effect of the time value of money is material, provisionsare determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessmentsof the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provisiondue to the passage of time is recognised as an interest expense.
Contingent liabilities
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, butprobably will not require an outflow of resources embodying economic benefits or the amount of such obligation cannotbe measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflowof resources embodying economic benefits is remote, no provision or disclosure is made.
Contingent Assets
A contingent asset is disclosed, where an inflow of economic benefits is probable.
Basic earnings per share is calculated by dividing the profit or loss attributable to owners of the Company by theweighted average number of equity shares outstanding during the financial year. The weighted average number of equityshares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, otherthan the conversion of potential equity shares that have changed the number of equity shares outstanding, without acorresponding change in resources.
Diluted earnings per share, adjusts the figures used in the determination of basic earnings per share to take into accountthe after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and theweighted average number of additional equity shares that would have been outstanding assuming the conversion of alldilutive potential equity shares.
Equity-settled share-based payments to employees are measured at the fair value of the employee stock options at thegrant date.
The fair value determined at the grant date of the equity-settled share-based payments is amortised over the vestingperiod, based on the Company's estimate of equity instruments that will eventually vest, with a corresponding increasein equity.
At the end of each reporting period, the Company revises its estimate of the number of equity instruments expectedto vest. The impact of the revision of the original estimates, if any, is recognised in the Standalone Statement of Profitand Loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the ShareOption Outstanding.
The Company measures the cost of equity-settled transactions with employees using Black-Scholes model to determinethe fair value of the liability incurred on the grant date. Estimating fair value for share-based payment transactions requiresdetermination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant.
This estimate also requires determination of the most appropriate inputs to the valuation model including the expectedlife of the share option, volatility and dividend yield and making assumptions about them.
The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note46.
The Company's investment in its subsidiary is carried at cost net of accumulated impairment loss, if any. On disposal ofthe Investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to theStandalone Statement of Profit and Loss.
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies(Indian Accounting Standards) Rules as issued from time to time.
All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest lakhs asper the requirement of Schedule III, unless otherwise stated.
The preparation of the Company's financial statements requires management to make judgments, estimates and assumptionsthat affect the application of accounting policies, reported amounts of assets, liabilities, income and expenses, andaccompanying disclosures, and the disclosure of contingent liabilities. The estimates and associated assumptions are basedon historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. Theestimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognisedin the period in which the estimate is revised if the revision affects only that period or in the period of the revision and futureperiods if the revision affects both current and future periods.
Information about judgments made in applying accounting policies that have the most significant effects on the amountsrecognised in the financial statements is included in the following notes:
Note 43 : Lease term: whether the Company is reasonably certain to exercise extension options.
(ii) Assumptions and estimation uncertainties
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, thathave a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the nextfinancial year, are described below:
a) Mines Reclamation Provisions and related asset :
In determining the fair value of the Mines Restoration Obligation, assumptions and estimates are made in relationto discount rates, the expected cost of mines restoration and the expected timing of those costs (Refer Note 2(A)2.10 and 19).
b) Provisions & Contingent Liabilities
The Company exercises judgment in measuring and recognising provisions and the exposures to contingent liabilitieswhich is related to pending litigation or other outstanding claims. If a loss arising from these litigations and/or claimsis probable and can be reasonably estimated, the management records the amount of the estimated loss. If a lossis reasonably possible, but not probable, the management discloses the nature of the significant contingency and, ifquantifiable, the possible loss that could result from the resolution of the matter. As additional information becomesavailable, the management reassesses any potential liability related to these litigations and claims and may needto revise the estimates. Such revisions or ultimate resolution of these matters could materially impact the results ofoperations, cash flows or financial statements of the Company. (Refer Note 25 and 27)
c) Current tax expense and deferred tax
The calculation of the Company's tax charge necessarily involves a degree of estimation and judgement in respectof certain items whose tax treatment cannot be finally determined until resolution has been reached with therelevant tax authority or, as appropriate, through a formal legal process. The final resolution of some of these itemsmay give rise to material adjustment to taxable profits/losses (Refer note 7 and 26).
d) Useful lives of property, plant and equipment and intangibles
The Company reviews the estimated useful lives of property, plant and equipment and intabgibles at the end of eachreporting period or even earlier in case, circumstances change such that the recorded value of an asset may notbe recoverable. The estimate of useful life requires significant management judgment and requires assumptionsthat can include: planned use of equipments, future volume trends, revenue and expense growth rates and annualoperating plans, and in addition, external factors such as changes in macroeconomic trends which are consideredin connection with the Company's long-term strategic planning (Refer Note 2(A) 2.09 and 2(A) 2.10).
e) Employee benefit plans
The Company's obligation on account of gratuity and compensated absences is determined based on actuarialvaluations. An actuarial valuation involves making various assumptions that may differ from actual developmentsin 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, these liabilities are highly sensitive tochanges 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, themanagement considers the interest rates of government bonds in currencies consistent with the currencies of thepost-employment benefit obligation.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only atinterval in response to demographic changes. Future salary increases are based on expected future inflation rates.Further details about gratuity obligations are given in Note 32A(ii).
b) Rights, preferences and restrictions attached to equity shares
The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for onevote per share held. In the event of liquidation the equity shareholders are eligible to receive the remaining assets of theCompany after distribution of all preferential amount, in proportion to their shareholding. The Dividend proposed by theBoard of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in thecase of interim dividend.
c) 2,65,212 equity shares (March 31, 2024 : 2,65,212) are kept in abeyance out of the Rights Issue entitlement pendingsettlement of disputes.
d) 3,035 equity shares (March 31,2024 : 3,035) were issued in past but remain unsubscribed.
e) Shares held by holding company
1) Capital Reserve : The Company had issued 6% non-cumulative compulsorily convertible preference shares to its thenparent company. Subsequently, the preference shareholders relinquished their right and resultant gain was recorded inthe capital reserve in the year of 2010. It also include subsidies received from State Government in the year 2002-03.
2) Capital Redemption Reserve : This was created on redemption of 14% redeemable cumulative preference shares in year1996-97.
3) Securities Premium : Securities premium is used to record the excess of the amount received over the face value of theshares. This can be utilised in accordance with the provision of the Companies Act, 2013.
4) Shares Options Outstanding : The Company has share option schemes under which options to subscribe for theCompany's shares have been granted to specific employees. The share-based payment reserve is used to recognise thevalue of equity-settled share-based payments provided to certain class of employee as part of their remuneration. Referto Note 46 for further details of these plans.
5) General Reserve : The Company has transferred a portion of the net profit of the Company before declaring dividend togeneral reserve. However, mandatory transfer to general reserve is not required under the Companies Act, 2013.
6) Surplus in statement of profit and loss represent surplus/accumulated earnings of the Company and are available fordistribution to shareholders.
a) A sum of ' 767.84 lakhs (March 31,2024 : ' 309.84 lakhs) on account of arrears, rent, service charges, way leave fees ofcertain leasehold property, consequent to the Order of the Estate Officer of Mumbai Port Trust (MPT) dated February 28,2007, has not been provided for as the said property was assigned in an earlier year to M/s Dinbandhu Estate Pvt. Ltd. (theAssignee). The assignment was subject to the approval of MPT which was to be arranged by the Assignee. The Companyis contesting the said Order before the High Court.
b) In respect of retrospective revision (August 2012 to January 2018) of electricity duty the Company has received a demandof ' 1,472 lakhs from Paschim Gujarat Vij Company Limited. The Company has filed a writ petition with the High Court.Management believes that the probability of the above matter converting into a liability for the Company is remote basisvarious precedents and applicable laws. As per the direction received from High Court, the Company has deposited ' 500lakhs as fixed deposit with the High Court in July 2018.which has been disclosed as contingent liability above. Companyhas recognised contingent liability of ' 49.65 Lakhs (March 31,2024 : ' 49.65 Lakhs) towards other civil matters.
c) It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above pendingresolution of the respective proceedings. The Company does not expect any reimbursements in respect of the abovecontingent liabilities.
d) Competition Commissioner of India has visited the office on 22nd and 23rd of December, 2022 for the purpose ofconducting "Search" to find out certain information concerning the Competition Commission. Since, company have notindulged in any concerning Competition Commission which is in violation of Competition Law and have not committed anybreach of Competition Laws, management do not apprehend any material impact on the standalone financial statementsof the company.
e) Company had on 06 April 2022 executed the Power Purchase Agreement ("PPA") with CGE Shree Digvijay Cement GreenEnergy Private Limited ("CGE"), a Special Purpose Vehicle and part of Continuum Green Energy Ltd. ("Continuum")for a contracted capacity of 8.10 MW hybrid wind and solar power ("Project") and Share Purchase Share SubscriptionAgreement ("SPSA") executed on same date between the Company, CGE and Continuum. As per PPA, the Project wasscheduled to be fully commissioned from the Scheduled Commencement date of 06 January 2023. However, due to delay,fundamental breaches and negligence on the part of Continuum, Project was partly commissioned on 19 June 2023 andfully commissioned only on 24 January 2025.
As per PPA, SPV and Continuum were obligated to compensate the Company for delayed commissioning and supply ofelectricity as per PPA. In this regard, As on 31 March 2025 the Company has claimed INR 2,116.56 lakhs by issuing debitnotes to CGE in terms of the PPA. The Company had sent legal notice to CGE during the year claiming its dues payable byCGE under PPA. CGE has in counter wrongly preferred to issue notice to terminate the PPA and initiate Corporate Insolvencyproceedings against the Company before the Hon'ble National Company Law Tribunal, Ahmedabad Bench for withheldingdues payable for power purchase by the Company. The matter is now listed on 29 April 2025 for preliminary hearing onmaintainability of the present petition. Further due to ongoing dispute for compensation for breach of agreement, theCompany has during the year invoked arbitration as per the PPA. Arbitrators have been appointed by both the parties, andboth the appointed arbitrators are in the process of appointing presiding arbitrator. Once the tribunal is fully constituted,arbitration proceedings will commence. Considering the existing dispute arbitration proceedings and the facts, it is likely thatthe insolvency petition filed by CGE will not be maintainable, subject to the discretion of the Hon'ble Tribunal.
f) The amount assessed as contingent liability do not include interest till the reporting date that could be claimed by counterparties.
Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is' 3,884.40 lakhs (March 31, 2024: ' 982.11 lakhs).
The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity Plan provideslumpsum payments to vested employees at retirement, death, incapacitation or termination of employment, as per theCompany's policy. Vesting occurs on completion of 5 continuous years of service as per Indian law. However, no vestingcondition applies in case of death. The gratuity payable to employees is based on the employee's tenure of service and lastdrawn salary at the time of leaving the services of the Company. The gratuity plan is a funded plan and is administratedthrough a trust namely Shree Digvijay Cement Co. Ltd. Employee Gratuity Fund.
The estimates of future salary increases, considered in actuarial valuation, takes into account, inflation, seniority,promotions and other relevant factors, such as demand and supply in the employment market.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at intervalin response to demographic changes. Future salary increases are based on expected future inflation rates.
The Gratuity scheme is Defined Benefit Plan that provides for a lumpsum payment made on exit either by way ofretirement, death, disability or voluntary withdrawal. The benefits are defined on the basis of final salary and the periodof service and paid as lump sum at exit. The risks commonly affecting the defined benefit plan are expected to be:
Demographic Risk: This is the risk of variability of results due to unsystematic nature of decrements that includemortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is notstraight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is importantnot to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typicallycosts less per year as compared to a long service employee.
Salary Inflation Risk : Higher than expected increases in salary will increase the defined benefit obligation.
Interest-rate risk: The defined benefit obligation calculated uses a discount rate based on government bonds. If bondyields fall, the defined benefit obligation will tend to increase.
iv) Defined Benefit Liability and Employer Contributions
The Company considers that the contribution rates set at the last valuation date are sufficient to eliminate the deficitover the agreed period and that regular contributions, which are based on service costs, will not increase significantly.
The weighted average duration of the defined benefit obligation is 3.15 years (March 31,2024 - 3.27 years). The expectedmaturity analysis of undiscounted gratuity is as follows:
Based on the data provided to us on the pattern of availment of leave by employees of the company in the past, it has beenassumed that 1.75% (1.75% in Previous Year) for Previllage Leave & 5.00% (5% in Previous Year) for Sick leave of leavebalance as at the valuation date and each subsequent year following the valuation date is availed by the employee. Thebalance leave is assumed to be available for encashment on separation from the company
The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by thecompany towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for theCode on Social Security, 2020 on November 13, 2020. The Company will assess the impact and its evaluation once thesubject rules are notified. The Company will give appropriate impact in its financial statements in the period in which, theCode becomes effective and the related rules to determine the financial impact are published.