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A Oneindia Venture

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Notes to Accounts of Heidelberg Cement India Ltd.

Mar 31, 2025

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 nonÂ¬
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 assetâs 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 assetâs 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 Companyâs 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 Shareholdersâ 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 Companyâs 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 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 Companyâs 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 Companyâs
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 Companyâs Audit Committee oversees how Management monitors compliance with the Companyâs 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 Companyâs 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 Companyâs treasury
department in accordance with the Companyâs 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 Companyâs treasury department monitors liquidity on an ongoing basis through rolling
cash flow forecasts. The Companyâs 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 Companyâs 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 Companyâs treasury department is entrusted with managing the overall market risks in line with the companyâs
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 Companyâs main interest risk arises from the long-term borrowings
with variable rates, which exposes the Company to cash flow interest rate risk. Companyâs policy is to maintain
most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary.

The Companyâs 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 Companyâs exposure to the risk of changes in foreign exchange rates
relates primarily to the Companyâs 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 yearâs 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

Mar 31, 2024

(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.

Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of reserves:

(i) Capital reserve

Pursuant to the scheme of amalgamation, excess of fair value of net assets taken by the company over the paid up value of equity shares issued to the shareholders of erstwhile Indorama Cement Limited (IRCL) and HeidelbergCement India Private Limited (HIPL) amounting to Rs. 549.7 million has been treated and shown as capital reserve w.e.f 1 April 2008. The Company may issue fully paid-up bonus shares to its members out of the Capital reserve account.

(ii) Capital redemption reserve

Capital redemption reserve was created for the redemption of preference shares. The Company may issue fully paid-up bonus shares to its members out of the Capital redemption reserve account.

(iii) Securities premium

Security premium is created when shares are issued at premium. The Company may issue fully paid-up bonus shares to its members out of the security premium account, and company can use this reserve for buy-back of shares.

(a) India rupee loan from a party other than banks:

The Company has availed the facility of interest free loan from âThe Pradeshiya Industrial and Investment Corporation of U.P Ltd.â (âPICUP), Lucknow in accordance with the âIndustrial Investment Promotion Scheme-2012'', Uttar Pradesh. This loan is secured by bank guarantee and repayable after expiry of 7 (Seven) years from the date of disbursement of loan. Effective interest rate in respect of this borrowing is 9.01 % p.a for the year ended 31 March 2024 and 31 March 2023. As on 31 March 2024, principal amount of such loan is Rs. 1,380.5 million (31 March 2023: Rs. 2,010.0 million).

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 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. Government grant is recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate.

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.

Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

33. COMMITMENTS AND CONTINGENCIES a) Capital Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 473.0 million (31 March 2023: Rs. 40.8 million). b) Contingencies and Provision for litigations i) Contingent liabilities not provided for
Particulars	31 March 2024 Rs. in million	31 March 2023 Rs. in million
(a) Claims against the company not acknowledged as debt	128.6	97.0
(b) Other money for which the company is contingently liable: - Excise Duty/ Service Tax/ CENVAT Credit	41.2	43.0
- Sales Tax/ Trade Tax/ Entry Tax	84.9	84.9
Total	254.7	224.9

In respect of above cases based on the favorable decisions in similar cases/ legal opinions taken by the Company/ discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in these financial statements.

Above provisions have been made against demands raised by various authorities. All these cases are under litigation and are pending with various authorities; expected timing of resulting outflow of economic benefits cannot be specified. Amount deposited under protest against these provisions are shown under other current assets in note no.10.

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 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.

The average duration of the defined benefit plan obligation at the end of the reporting period is 5 years (31 March 2023: 5 years).

B) PROVIDENT FUND

Provident fund for certain eligible employees is managed by the Company through trust âMysore Cement Limited officers'' and staff provident fund trustâ, in line with the Provident Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee.

In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary has provided a valuation of provident fund liability and based on the assumption provided below there is no shortfall as at 31 March, 2024 and 31 March, 2023 respectively.

35. TAX INCENTIVE

The Company is entitled to benefits under the Madhya Pradesh State Industrial Promotion Policy, 2004 and 2010 for the increased cement production facility at Damoh, Madhya Pradesh w.e.f. 18 February 2013. Under the said policy, the Company has been exempted from payment of Entry Tax on input materials for a period of 7 years and also claim refund upto 75% of VAT/CST paid ( which is subsumed on GST) on sales for a period of 10 years within the state of Madhya Pradesh in respect of the increased production facility. Accordingly, the SGST incentives amounting to Rs. 190.8 million have been accrued for the period from 1 April 2022 to 17 February 2023 (i.e till the last date of entitlement) under the head ''other operating revenue''.

36. DETAIL OF CSR EXPENDITURE

a) Gross amount required to be spent by the company during the year:

During the year, the gross amount required to be spent by the Company on activities related to Corporate Social Responsibility (CSR) amounted to Rs. 57.5 million (31 March 2023: Rs. 75.0 million).

37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company has exposure to the following risks arising from financial instruments:

- credit risk (see 37 (i i));

- liquidity risk (see 37 (iii)); and

- market risk (see 37(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 2023: 0.02%) and in receivables 4.01% (31 March 2023: 1.25%).

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. Approximately 50% of the Company''s debt will mature in less than one year at 31 March 2024 (31 March 2023: 31%) based on the carrying value of borrowings refected in the financial statements.

The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. Maturities of financial liabilities

The table below summarises the maturity profile of the company''s financial liabilities based on contractual undiscounted payments.

(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 interest 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.

When a derivative is entered into for the purpose of hedging, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions, the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

38. CAPITAL MANAGEMENT

For the purpose of the Companyâs capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the Companyâs capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.

42. 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.

43. 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.

44. 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.

45. Previous year figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.

Mar 31, 2023

Terms / rights attached to equity shares

Nature and purpose of reserves:

(i) Debenture redemption reserve (''DRR'')

The Company had issued redeemable non-convertible debentures. Accordingly, the Companies (Share capital and Debentures) Rules, 2014 (as amended), require the company to create DRR out of profits of the company available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of the value of debentures issued. As per Share Capital and Debentures amendment rules, 2019, as notified on August 16, 2019, no further DRR has been created during the year ended 31 March 2020 and 31 March 2021. Further, the company has fully repaid these nonconvertible debentures during the previous year, therefore balance in DRR transferred to retained earnings.

(ii) Capital reserve

(iii) Capital redemption reserve

Capital redemption reserve was created for the redemption of preference shares. The Company may issue fully paid-up bonus shares to its members out of the Capital redemption reserve account.

(iv) Securities premium

(a) India rupee loan from a party other than banks:

The Company has availed the facility of interest free loan from âThe Pradeshiya Industrial and Investment Corporation of U.P Ltd.â (âPICUP), Lucknow in accordance with the âIndustrial Investment Promotion Scheme-2012'', Uttar Pradesh. This loan is secured by bank guarantee and repayable after expiry of 7 (Seven) years from the date of disbursement of loan. Effective interest rate in respect of this borrowing is 9.01 % p.a for the year ended 31 March 2023 and 31 March 2022. As on 31 March 2023, principal amount of such loan is Rs. 2,010.0 million (31 March 2022: Rs. 2,345.8 million).

The Government of India on 20 September 2019 vide the Taxation Laws (Amendment) Ordinance 2019, inserted a new Section 115BAA in the Income Tax Act, 1961, which provides an option to the Company for paying Income Tax at reduced rates as per the provisions / conditions defined in the said section. The Company, up to financial year 2021-22, is continuing to provide for income tax at the old rates, based on the available outstanding MAT credit entitlement and various exemptions and deductions available to the Company under the Income Tax Act, 1961. However, the Company has applied the lower income tax rates on the deferred tax assets / liabilities to the extent these are expected to be realised or settled in the future period when the Company may be subjected to lower tax rate and accordingly reversed net deferred tax liability of Rs. 541.1 million and Rs. 303.8 million during the year ended 31 March 2021 and 31 March 2022 respectively. During the financial year 2022-23, the Company has adopted reduced income tax rate as per section 115BAA of Income Tax Act, 1961.

30. 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

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 33.

(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.

32. COMMITMENTS AND CONTINGENCIES

a) Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 40.8 million (31 March 2022: Rs. 75.6 million).

b) Contingencies and Provision for litigations

i) Contingent liabilities not provided for
Particulars	31 March 2023 Rs. in million	31 March 2022 Rs. in million
(a) Claims against the company not acknowledged as debt	97.0	127.1
(b) Other money for which the company is contingently liable: - Excise Duty / Service Tax / CENVAT Credit	43.0	43.0
- Sales Tax / Trade Tax / Entry Tax	84.9	90.2
Total	224.9	260.3

In respect of above cases based on the favorable decisions in similar cases / legal opinions taken by the Company / discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in these financial statements.

*The Arbitration Tribunal pronounced an adverse award dismissing Company''s claims and allowed counter-claim of Rs. 140.5 million in favour of Vendor. A provision for litigation of Rs. 140.5 million made in March 2020 and amount deposited to the Registrar under protest in April 2021. The Hon''ble High Court of Delhi has rejected Company''s appeal vide order dated 28 September 2022 and special leave petition fled in this matter also not admitted by Hon''ble Supreme Court of India.

33. 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 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.

The average duration of the defined benefit plan obligation at the end of the reporting period is 5 years (31 March 2022: 5 years).

B) PROVIDENT FUND

34. TAX INCENTIVE

The Company is entitled to benefits under the Madhya Pradesh State Industrial Promotion Policy, 2004 and 2010 for the increased cement production facility at Damoh, Madhya Pradesh w.e.f. 18 February 2013. Under the said policy, the Company has been exempted from payment of Entry Tax on input materials for a period of 7 years and also claim refund upto 75% of VAT/CST paid ( which is subsumed on GST) on sales for a period of 10 years within the state of Madhya Pradesh in respect of the increased production facility. During the previous year, the Company had received approval from the State Government of Madhya Pradesh for its SGST claims pertaining to earlier years and accordingly, the SGST incentives amounting to Rs. 190.8 million and Rs. 424.6 million (including Rs. 205.9 million for earlier years) have been accrued for the period from 1 April 2022 to 17 February 2023 (i.e till the last date of entitlement) and for the year ended 31 March 2022 respectively under the head ''other operating revenue''.

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

(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

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 0.02% (31 March 2022: 0.07%) and in receivables 1.25% (31 March 2022: 3.58%).

Financial instruments and cash deposits

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. Approximately 31% of the Company''s debt will mature in less than one year at 31 March 2023 (31 March 2022: 14%) based on the carrying value of borrowings refected in the financial statements.

The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. Maturities of financial liabilities

The table below summarises the maturity profile of the company''s financial liabilities based on contractual undiscounted payments.

(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.

I. Interest rate risk

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

37. CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the Company''s capital management is to maximize the shareholder value.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2023 and 31 March 2022.

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.

44. Previous year figures have been regrouped/ reclassified, where necessary, to conform to this year''s classification.

Mar 31, 2018

1. CORPORATE INFORMATION

HeidelbergCement India Limited (hereinafter referred to as âHCILâ or âthe Companyâ) is a public company domiciled in India and is incorporated on 13 May 1958 under the provisions of the Companies Act, 1956. The Companyâs equity is listed on BSE Limited and National Stock Exchange of India Limited. The registered office of the company is located at 9th floor, Infinity Tower âCâ, DLF Cyber City, Gurugram, Haryana 122002.

The Company is engaged in the manufacturing and selling of Cement and Cement related products at its three locations viz. Ammasandra (Karnataka), Damoh (Madhya Pradesh) and Jhansi (Uttar Pradesh).

The financial statements were authorised for issue in accordance with a resolution of the directors on 24 May 2018.

2. BASIS OF PREPARATION

These financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, the relevant provisions of the Companies Act, 2013 (âthe Actââ) and guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable.

Effective April 1, 2016, the Company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101 First time adoption of Indian Accounting Standards, with April 1, 2015 as the transition date. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP.

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value:

- Derivative financial instruments,

- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments),

The financial statements are presented in Indian Rupees (INR) and all values are rounded to the nearest million (INR 000,000) upto one decimal, except when otherwise indicated.

Derivative instruments at fair value through OCI Interest rate swaps

The Company had an interest rate swap agreement whereby the Company receives a fixed rate of interest of 9.08% and pays interest at a variable rate. The swap was being used to hedge the exposure to changes in the fair value of its fixed rate unsecured loan. The decrease in fair value of the interest rate swap was recognised in finance costs and offset with a similar gain on the bank borrowings. The fixed rate on unsecured loan has been repaid during the current year and accordingly interest rate swap agreement has ended.

No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member. Trade receivables are non-interest bearing and are generally on terms of 0 to 60 days.

* The company can utilize these balances only toward settlement of the unpaid dividend.

Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the company, and earn interest at the respective short-term deposit rates.

Terms/ rights attached to equity shares

a. Shares held by holding/ultimate holding company and/or their subsidiaries/associates

Out of equity shares issued by the Company, shares held by its holding company, ultimate holding company and their subsidiaries/ associates are as below:

Nature and purpose of reserves:

(i) Cash flow hedge reserve

This represents effective portion of cash flow hedge and differential accrued interest as on balance sheet date. The period of such reserve will be similar to maturity period of underlying ECB loan in foreign currencies.

(ii) Debenture redemption reserve (âDRRâ)

The Company has issued redeemable non-convertible debentures. Accordingly, the Companies (Share capital and Debentures) Rules, 2014 (as amended), require the company to create DRR out of profits of the company available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of the value of debentures issued.

(iii) Capital reserve

(iv) Capital redemption reserve

Capital redemption reserve was created for the redemption of preference shares. The Company may issue fully paid-up bonus shares to its members out of the Capital redemption reserve account.

(v) Securities premium reserve

Security premium reserve is created when shares are issued at premium. The Company may issue fully paid-up bonus shares to its members out of the security premium reserve account, and company can use this reserve for buy-back of shares.

(a) Debentures

10.4% Debentures (listed at BSE Limited) are redeemable at par in three tranches of Rs. 1,250.0 million, Rs. 1,250.0 million and Rs. 1,200.0 million at the end of 6th, 7th and 8th year respectively from the date of allotment of 16 December, 2013. The Company has the option on or prior to the redemption date to buy-back, purchase, redeem, re-sell and/or re-issue all or part of debentures from the debenture holders, subject to such debenture holders having the discretion to offer its debentures in response to the Company exercising such an option.

(b) India rupee loan from a party other than banks :

(i) The Company has availed Indian rupees term loan in the form of External Commercial Borrowing (ECB) from HeidelbergCement AG, Germany, the ultimate holding company outstanding amounting to Rs. 1,500.0 million (31 March 2017: Rs. 1,500.0 million) on unsecured basis. This is repayable on completion of 5 years from the date of drawdown of the respective tranches. Interest rate in respect of this borrowing is 10.5% p.a for the year ended 31 March 2018 and 31 March 2017.

(ii) The Company has availed the facility of interest free loan from âThe Pradeshiya Industrial and Investment Corporation of U.P. Ltd.â (âPICUP), Lucknow in accordance with the âIndustrial Investment Promotion Scheme-2012â, Uttar Pradesh. This loan is secured by bank guarantee and repayable after expiry of 7 (Seven) years from the date of disbursement of loan. Effective interest rate in respect of this borrowing is 9.01% p.a for the year ended 31 March 2018 and 31 March 2017.

(c) Foreign currency loan from a party other than banks :

The Company has availed foreign currency term loan in the form of External Commercial Borrowing (ECB) in US Dollars from the parent company Cementrum I.B.V. outstanding Rs. Nil (31 March 2017: USD 20 million equivalent to Rs. 1,301.2 million) on unsecured basis at a rate linked to LIBOR 6M. The loan is repayable after a period of 5 years from the date of drawdown of the respective tranches. Exposure of fluctuation in foreign currency and LIBOR rate have been hedged through a Cross Currency Interest Rate Swap agreement with a bank whereby Companyâs liability of repayment of loan is converted and fixed in Indian rupees and interest rate is fixed for the entire duration of such loans. Interest rate in respect of this borrowing is in range of 7.65% p.a to 9.55% p.a for the year ended 31 March 2018 and 31 March 2017.

Terms and conditions of the above financial liabilities:

a) Trade payables are non-interest bearing and are normally settled within 0 to 60 day terms.

b) Other current financial liabilities are generally interest bearing and have an average term of six months for borrowings and one year for deposits.

c) Interest payable is normally settled quarterly/half yearly/yearly throughout the financial year.

d) For terms and conditions with related parties, refer to Note 31

Revenue from operations

In accordance with Ind AS 18 on âRevenueâ and Schedule III to the Companies Act, 2013, Sales for the previous year ended 31 March 2017 and for the period 1 April 2017 to 30 June 2017 were reported gross of Excise Duty and net of Value Added Tax (VAT)/ Sales Tax. Excise Duty was reported as a separate expense line item. Consequent to the introduction of Goods and Services Tax (GST) with effect from 1 July 2017, VAT/Sales Tax, Excise Duty etc. have been subsumed into GST and accordingly the same is not recognised as part of sales as per the requirements of Ind AS 18. Hence revenue from operations for the year ended March 31, 2018 is not comparable with the previous year corresponding figures.

Sales for the year ended 31 March 2018 includes Excise duty up to 30 June 2017. Sale of goods includes excise duty collected from customers of Rs. 724.9 million (31 March 2017: Rs. 2,843.9 million). Sale of goods net of excise duty is Rs. 18,566.8 million (31 March 2017: Rs. 16,876.1 million)

Government Grants

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 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. Government grants is recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate.

3. 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

I n the process of applying the Companyâs 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 33.

(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 38 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.

(b) Related party transactions

Note 31 (a) provides the information about the companyâs structure including the details of the fellow subsidiaries and the holding company. The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year.

Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables.This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Transactions with key management personnel

Compensation of key management personnel of the Company

The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key management personnel. As the liabilities for gratuity and leave encashment are provided on an actuarial basis for the Company as a whole, the amounts pertaining to the key management personnel are not included above.

Loans from related parties

a. Foreign currency loan from a party other than banks :

b. India rupee loan from a party other than banks :

The Company has availed Indian rupees term loan in the form of External Commercial Borrowing (ECB) from HeidelbergCement AG, Germany, the ultimate holding company outsatnding amounting to Rs. 1,500.0 million (31 March 2017: Rs. 1,500.0 million) on unsecured basis. This is repayable on completion of 5 years from the date of drawdown of the respective tranches. Interest rate in respect of this borrowing is 10.5% p.a for the year ended 31 March 2018 and 31 March 2017.

c. Debentures

10.4% Debentures (listed at BSE Limited) are redeemable at par in three tranches of Rs. 1,250.0 million, Rs. 1,250.0 million and Rs. 1,200.0 million at the end of 6th, 7th and 8th year respectively from the date of allotment of 16 December, 2013. The Company has the option on or prior to the redemption date to buy-back, purchase, redeem, resell and/or re-issue all or part of debentures from the debenture holders, subject to such debenture holders having the discretion to offer its debentures in response to the Company exercising such an option.

All outstanding balances are unsecured and are repayable in cash and cash equivalents.

4. COMMITMENTS AND CONTINGENCIES

a) Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 27.8 million (31 March 2017: Rs. 95.7 million).

b) Other commitments (Leases)

The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms except two office premises which is taken on a non-cancellable lease. The Company has recognized Rs. 36.3 million (31 March 2017: Rs. 10.4 million) in respect of cancellable operating leases and Rs. 12.9 million (31 March 2017: Rs. 21.6 million) in respect of non-cancellable operating leases.

Operating Lease (Non-Cancellable)

The total of future minimum lease payments under non- cancellable operating leases for each of the following periods:

In respect of above cases based on the favourable decisions in similar cases/ legal opinions taken by the Company/ discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in these financial statements.

Note: Figures in brackets are for the previous period.

Mine reclamation expense is incurred on an ongoing basis and until the closure of mines. The actual expenses may vary based on the nature of reclamation and the estimate of reclamation expenses.

5. a) Gratu ity 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 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.

Note:

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Assumptions regarding future mortality are based on published statistics and mortality tables.

- Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

The following payments are expected contributions to the defined benefit plan in future years:

The average duration of the defined benefit plan obligation at the end of the reporting period is 5 years (31 March 2017: 5 years).

B) PROVIDENT FUND

Provident fund for certain eligible employees is managed by the Company through trust âMysore Cement Limited officersâ and staff provident fund trustâ, in line with the Provident Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee.

6. As per Micro, Small and Medium Enterprises Act, 2006, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the Company, none of the creditors fall under the definition of âSupplierâ as per Section 2(n) of the Act. In view of this prescribed disclosures under Section 22 of the Act are not required to be made in the financial statements.

7. Tax incentive

8. Capital advances included an amount of Rs. 150.6 million paid during an earlier year to the supplier against a bank guarantee for setting up a Waste Heat Recovery based Power Generation Plant at the Companyâs clinkerisation unit at Narsingarh in Madhya Pradesh. A dispute arose with the supplier as they failed to adhere to the agreed timelines and insisted for enhancement of the contract price in view of depreciation of Rupee against US dollars, despite the contract being for a fixed price. The supplier offered the Company to renegotiate and agree with its sub-contractors for settlement of the aforesaid advance. Due to continuous breach of the terms of the Contract by the supplier the Company was compelled to terminate the contract and invoke the advance bank guarantee to recover the advances paid to the said supplier. The Honâble High Court of Delhi had on 19 October 2013 granted an ad interim ex-parte injunction against the invocation of aforesaid Bank Guarantee, against which the Company had filed an application for vacation of stay. The Honâ ble High court of Delhi vide its order dated 23 May 2017 vacated the aforesaid stay/injunction and the company invoked the bank guarantee and recovered the entire advance of Rs. 150.6 million.

Further, the Company also has initiated arbitration proceeding against the said supplier to claim the advance amount given as per the terms of the supply contract, interest on advance amount given and compensation in terms of risk purchase clause of the contract for loss incurred in respect of work completed through other third parties, which is currently pending. The company has completed its argument and the matter is at the stage of final argument of Supplier.

9. DETAIL OF CSR EXPENDITURE:

a.) Gross amount required to be spent by the company during the year:

During the year, the gross amount required to be spent by the Company on activities related to Corporate Social Responsibility (CSR) amounted to Rs. 14.5 million (31 March 2017: Rs. 1.6 million).

b). Amount spent during the year ended on 31 March 2018

10. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company has exposure to the following risks arising from financial instruments:

- credit risk (see 38(ii));

- liquidity risk (see 38 (iii)); and

- market risk (see 38 (iv)).

(i) Risk management framework

The Companyâs 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 Companyâs 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 Companyâs Audit Committee oversees how Management monitors compliance with the Companyâs 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 Companyâs 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 0.08% (31 March 2017: 0.04%) and in receivables 7.17% (31 March 2017: 4.9%).

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the Companyâs 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 Companyâs treasury department monitors liquidity on an ongoing basis through rolling cash flow forecasts. The Companyâs 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. Approximately 22% of the Companyâs debt will mature in less than one year at 31 March 2018 (31 March 2017: 17%) based on the carrying value of borrowings reflected in the financial statements.

The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low.

Maturities of financial liabilities

The table below summarises the maturity profile of the companyâs financial liabilities based on contractual undiscounted payments.

(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 Companyâs treasury department is entrusted with managing the overall market risks in line with the companyâs 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 Companyâs main interest risk arises from the long-term borrowings with variable rates, which exposes the Company to cash flow interest rate risk. Companyâs policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 31 March 2018 and 31 March 2017, the companyâs borrowings at variable rate were mainly denominated in INR and USD.

The Companyâs 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 interest 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 has a cross currency interest rate swap agreement with a bank for ECB Loan of USD Nil (31 March 2017: USD 20,000,000) whereby the Company pays a fixed rate of interest for various tranches of loan and receives a variable rate linked to LIBOR. The swap is being used to hedge the ECB loan taken on floating interest rate linked to LIBOR.

The loss on reinstatement of bank borrowings up to year end amounting to Rs. Nil (up to 31 March 2017: Rs. 206.7 million) has been charged off to Statement of profit and loss and offset with a similar gain on increase in fair value of Derivative Assets. The Company has closing derivative assets of Rs. Nil (31 March 2017: Rs. 186.5 million) which is presented under financial assets in Note 5. Effective portion of cash flow hedge and differential accrued interest amounting to Rs. Nil (31 March 2017: Rs.(-) 2.5 million) has been taken to âcash flow hedge reserve â under other equity in Note 12.

The Company is thus not exposed to significant interest rate risks at the respective reporting dates.

II. Foreign currency risk

Foreign currecy 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 Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating or financing activities and the same are hedged in line with established risk management policies of the Company.

When a derivative is entered into for the purpose of hedging, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

11. CAPITAL MANAGEMENT

The Company manages its capital structure and makes adjustments in light of changes in economic conditions. The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings (including government grants) less cash and cash equivalents.

In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.

12. During the year, the Company has capitalized the following expenses of revenue nature to the cost of fixed assets/Capital work in progress which are incurred during construction period on substantial expansion of existing units/new projects/intangible assets of the Company. Consequently, expenses disclosed under the respective notes are net of amount capitalised by the company:

13. Standard issued but not yet effective

Ind AS 115- Revenue from Contract with Customers:

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115 âRevenue from Contracts with Customersâ, which replaces Ind AS 11 âConstruction Contractsâ and Ind AS 18 âRevenueâ. Except for the disclosure requirements, the new standard will not materially impact the Companyâs financial statements. The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.

Dividends would attract dividend distribution tax when declared or paid. Proposed dividends on equity shares are subject to approval at the Annual General Meeting and are not recognised as a liability (including DDT thereon) as at 31 March 2018.

14. 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.

15. The financial statements as at and for the year ended March 31, 2017 were audited by another firm of Chartered Accountants and previous year figures have been regrouped / reclassified, where necessary, to conform to this yearâs classification.

As per our report of even date

Mar 31, 2017

1. CORPORATE INFORMATION

Heidelberg Cement India Limited (hereinafter referred to as âHCILâ or âthe Companyâ) is a public company domiciled in India and is incorporated on 13 May 1958 under the provisions of the Companies Act, 1956. The Companyâs equity is listed on BSE Limited and National Stock Exchange of India Limited. The registered office of the company is located at 9^th floor, Infinity Tower âC, DLF Cyber City, Gurugram, Haryana 122002.

The Company is engaged in the manufacturing and selling of Cement and Cement related products at its three locations viz. Ammasandra (Karnataka), Damoh (Madhya Pradesh) and Jhansi (Uttar Pradesh).

The financial statements were authorised for issue in accordance with a resolution of the directors on 25 May 2017.

2. BASIS OF PREPARATION

For all periods up to and including the year ended 31 March 2016, the company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended 31 March 2017 are the first the company has prepared in accordance with Ind AS. Refer to note 40 for an explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows.

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value:

- Derivative financial instruments,

- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments),

In addition, the carrying values of recognised assets and liabilities designated as hedged items in fair value hedges that would otherwise be carried at amortised cost are adjusted to record changes in the fair values attributable to the risks that are being hedged in effective hedge relationships.

The financial statements are presented in Indian Rupees (INR) and all values are rounded to the nearest million (INR 000,000), except when otherwise indicated.

Derivative instruments at fair value through OCI

Derivative instruments at fair value through OCI reflect the positive change in fair value of foreign exchange forward contracts and interest rate swap, designated as cash flow hedges to hedge highly probable forecast purchase in US dollars (USD).

Interest rate swaps

The Company had an interest rate swap agreement whereby the Company receives a fixed rate of interest of 9.08% and pays interest at a variable rate. The swap is being used to hedge the exposure to changes in the fair value of its fixed rate unsecured loan. The decrease in fair value of the interest rate swap has been recognised in finance costs and offset with a similar gain on the bank borrowings.

Terms/ rights attached to equity shares

Nature and purpose of reserves:

i. Cash flow hedge reserve

This represent effective portion of cash flow hedge and differential accrued interest as on balance sheet date. The period of such reserve will be similar to maturity period of underlying ECB loan in foreign currencies

ii. Debenture redemption reserve (DRR)

iii. Capital reserve

Pursuant to the scheme of amalgamation, excess of fair value of net assets taken by the company over the paid up value of equity shares issued to the shareholders of erstwhile Indorama Cement Limited (IRCL) and Heidelberg Cement India Private Limited (HIPL) amounting to Rs.549.7 million has been treated and shown as capital reserve w.e.f 1 April 2008. The Company may issue fully paid-up bonus shares to its members out of the Capital reserve account.

iv. Capital redemption reserve

Capital redemption reserve was created for the redemption of preference shares. The Company may issue fully paid-up bonus shares to its members out of the Capital redemption reserve account.

v. Securities premium account

Security premium account is created when shares are issued at premium. The Company may issue fully paid-up bonus shares to its members out of the security premium reserve account, and company can use this reserve for buy-back of shares.

(a) Debentures

10.4% Debentures (listed at BSE Limited) are redeemable at par in three tranches of Rs.1,250.0 million, Rs.1,250.0 million and Rs.1,200.0 million at the end of 6th, 7th and 8th year respectively from the date of allotment of 16 December, 2013. The Company has the option on or prior to the redemption date to buy-back, purchase, redeem, re-sell and/or re-issue all or part of debentures from the debenture holders, subject to such debenture holders having the discretion to offer its debentures in response to the Company exercising such an option.

(b) India rupee loan from a party other than banks :

(i) The Company has availed Indian rupees term loan in the form of External Commercial Borrowing (ECB) from Heidelberg Cement AG, Germany, the ultimate holding company amounting to Rs.1,500.0 million (31 March 2016: Rs.1,500.0 million, 1 April 2015: Rs.1,500.0 million) on unsecured basis. This is repayable on completion of 5 years from the date of drawdown of the respective tranches. Interest rate in respect of this borrowings is 10.5% p.a. for the year ended 31 March 2017, 31 March 2016 and 1 April 2015.

(ii) The Company has availed the facility of interest free loan from âThe Pradeshiya Industrial and Investment Corporation of U.P. Ltd.â (âPICUP), Lucknow in accordance with the âIndustrial Investment Promotion Scheme-2012, Uttar Pradesh. This loan is repayable after expiry of 7 (Seven) years from the date of disbursement of loan. Effective interest rate in respect of this borrowing is 9.01% p.a. for the year ended 31 March 2017 and 31 March 2016.

(c) Foreign currency loan from a party other than banks :

The Company has availed foreign currency term loan in the form of External Commercial Borrowing (ECB) in US Dollars from the parent company Cementrum I.B.V. outstanding USD 20 million equivalent to Rs.1,301.2 million (31 March 2016: USD 65 million equivalent to Rs.4,306.6 million, 1 April 2015: USD 125 million equivalent to Rs.7,786.4 million) on unsecured basis at a rate linked to LIBOR. The loan is repayable after a period of 5 years from the date of drawdown of the respective tranches. Exposure of fluctuation in foreign currency and LIBOR rate have been hedged through a Cross Currency Interest Rate Swap agreement with a bank whereby Companyâs liability of repayment of loan is converted and fixed in Indian rupees and interest rate is fixed for the entire duration of such loans. Interest rate in this borrowings is in range of 7.65% p.a to 9.55% p.a for the period ended 31 March 2017, 31 March 2016 and 1 April 2015.

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 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. Government grant is recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate.

Terms and conditions of the above financial liabilities:

a) Trade payables are non-interest bearing and are normally settled within 0 to 60 day terms.

b) Other current financial liabilities are generally interest bearing and have an average term of six months for borrowings and one year for deposits.

c) Interest payable is normally settled quarterly/half yearly/yearly throughout the financial year.

d) For terms and conditions with related parties, refer to Note 31.

Government grants

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 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. Government grants is recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate.

3 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 Companyâs 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 33.

(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 38 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.

Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2017, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2016: INR Nil, 1 April 2015: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Loans from related parties

a) Foreign currency loan from a party other than banks :

b) India rupee loan from a party other than banks :

The Company has availed Indian rupees term loan in the form of External Commercial Borrowing (ECB) from Heidelberg Cement AG, Germany, the ultimate holding company amounting to Rs.1,500.0 million (31 March 2016: Rs.1,500.0 million, 1 April 2015: Rs.1,500.0 million) on unsecured basis. This is repayable on completion of 5 years from the date of drawdown of the respective tranches.

c) Debentures

10.4% Debentures (listed at BSE Limited) are redeemable at par in three tranches of Rs.1,250.0 million, Rs.1,250.0 million and Rs.1,200.0 million at the end of 6th, 7th and 8th year respectively from the date of allotment of 16 December, 2013. The Company has the option on or prior to the redemption date to buy-back, purchase, redeem, re-sell and/or re-issue all or part of debentures from the debenture holders, subject to such debenture holders having the discretion to offer its debentures in response to the Company exercising such an option.

All outstanding balances are unsecured and are repayable in cash.

4. COMMITMENTS AND CONTINGENCIES

(a) Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.95.7 million (31 March 2016: Rs.105.5 million, 1 April 2015: Rs.623.7 million).

(b) Other commitments (Leases)

The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms except two office premises which is taken on a non-cancellable lease. The Company has recognized Rs.10.4 million (31 March 2016: Rs.19.3 million, ) in respect of cancellable operating leases and Rs.21.6 million (31 March 2016: Rs.10.8 million, ) in respect of non-cancellable operating leases.

Operating Lease (Non-Cancellable)

The total of future minimum lease payments under non- cancellable operating leases for each of the following periods:

Out of the total rent recognised, â Nil (31 March 2016: Rs.0.3 million) relating to residential accommodation provided to the employees has been shown under Employee benefit expenses.

*The Company had filed writ petition against the order of the Madhya Pradesh State Mining Department (referred as âdepartmentâ) towards payment of additional royalty on limestone based on the ratio of 1.6 tonnes of limestone to 1 tonne of cement produced. The Company holds the view that the payment of royalty on limestone is correctly made based on the actual quantity of limestone extracted from the mining area. All writ petitions & writ appeals filed by the cement manufacturers regarding Royalty have been disposed off by Madhya Pradesh High Court vide its Order dated 8th July 2014 and it has quashed and set aside the departmentâs contention to use notional conversion factor of 1.6 instead of actual consumption. Further, The Mineral resource Department, Government of Madhya Pradesh has issued direction to its collectors vide letter dated July 19, 2016 for assessment of royalty on limestone which required royalty calculation based on 1.6 tonnes of Limeston per tonne of clinker in case no weighbridge/ beltometer is installed. The Company has commenced the process of getting the reassessment done.

The management believes that chances of earlier reported contingent liability of Rs.2,492.2 million to crystallize as remote.

Note: Figures in brackets are for the previous period.

(iii) Movement of provision for Mine reclamation expenses during the year as required by Ind AS 37:

Mine reclamation expenses

Mine reclamation expense is incurred on an ongoing basis and until the closure of mines. The actual expenses may vary based on the nature of reclamation and the estimate of reclamation expenses.

5. 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 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.

Balance Sheet

(ii) Reconciliation of the net defined benefit (asset) liability

The following table shows reconciliation from the opening balances to the closing balances for the net defined benefit (asset) liability and its components.

Note:

Assumptions regarding future mortality are based on published statistics and mortality tables.

- Sensitivity analysis

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

The following payments are expected contributions to the defined benefit plan in future years:

The average duration of the defined benefit plan obligation at the end of the reporting period is 5 years (31 March 2016: 5 years).

B) PROVIDENT FUND

6 As per Micro, Small and Medium Enterprises Act, 2006, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the Company, none of the creditors fall under the definition of âSupplierâ as per Section 2(n) of the Act. In view of this prescribed disclosures under Section 22 of the Act are not required to be made in the financial statements.

7 SALES AND ENTRY TAX BENEFIT

8 Capital advances include an amount of Rs.150.6 million paid during an earlier year to the supplier against a bank guarantee for setting up a Waste Heat Recovery based Power Generation Plant at the Companyâs clinkerisation unit at Narsingarh in Madhya Pradesh. A dispute arose with the supplier as they failed to adhere to the agreed timelines and insisted for enhancement of the contract price in view of depreciation of Rupee against US dollars, despite the contract being for a fixed price. The supplier offered the Company to renegotiate and agree with its sub-contractors for settlement of the aforesaid advance. Due to continuous breach of the terms of the Contract by the supplier the Company was compelled to terminate the contract and invoke the advance bank guarantee to recover the advances paid to the said supplier. The Honâble High Court of Delhi had on 19 October 2013 granted an ad interim ex-parte injunction against the invocation of aforesaid Bank Guarantee, against which the Company had filed an application for vacation of stay. The Honâble High court of Delhi vide its order dated 23 May 2017 vacated the aforesaid stay/injunction. The company invoked the Bank guarantee and recovered the advance payment amount of Rs.150.6 million.

Further, the Company also has initiated arbitration proceeding against the said supplier to claim the advance amount given as per the terms of the supply contract, interest on advance amount given and compensation in terms of risk purchase clause of the contract for loss incurred in respect of work completed through other third parties, which is currently pending. The matter is at the stage of cross- examination of the Company witnesses.

9. DETAIL OF CSR EXPENDITURE:

a) Gross amount required to be spent by the company during the year:

During the year, the gross amount required to be spent by the Company on activities related to Corporate Social Responsibility (CSR) amounted to Rs.1.6 million (31 March 2016: Rs.1.6 million).

b). Amount spent during the year ending on 31 March 2017

10 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company has exposure to the following risks arising from financial instruments:

- credit risk (see 38(ii));

- liquidity risk (see 38 (iii)); and

- market risk (see 38 (iv)).

(i) Risk management framework

The Companyâs 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 Companyâs 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 Companyâs Audit Committee oversees how Management monitors compliance with the Companyâs 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 Companyâs 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 have total exposure in sales 0.04% (31 March 2016: 0.05%) and in receivables 4.9% (31 March 2016: 3.7%, 1 April 2015: 6.0%).

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance with the Companyâs 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 Companyâs treasury department monitors liquidity on an ongoing basis through rolling cash flow forecasts. The Companyâs 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. Approximately 18% of the Companyâs debt will mature in less than one year at 31 March 2017 (31 March 2016: 35%, 1 April 2015: 29%) based on the carrying value of borrowings reflected in the financial statements.

The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low.

Maturities of financial liabilities

The table below summarises the maturity profile of the companyâs financial liabilities based on contractual undiscounted payments.

(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 Companyâs treasury department is entrusted with managing the overall market risks in line with the companyâs 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 Companyâs main interest risk arises from the long-term borrowings with variable rates, which exposes the Company to cash flow interest rate risk. Companyâs policy is to maintain most of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 31 March 2017 and 31 March 2016, the companyâs borrowings at variable rate were mainly denominated in INR and USD.

The Companyâs 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 interest 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 has a cross currency interest rate swap agreement with a bank for ECB Loan of USD 20,000,000 (31 March 2016: USD 65,000,000) whereby the Company pays a fixed rate of interest for various tranches of loan and receives a variable rate linked to LIBOR. The swap is being used to hedge the ECB loan taken on floating interest rate linked to LIBOR.

The loss on reinstatement of bank borrowings up to year end amounting to Rs.206.7 million (up to 31 March 2016: Rs.1,086.8 million) has been charged off to Statement of profit and loss and offset with a similar gain on increase in fair value of Derivative Assets. The Company has closing derivative assets of Rs.186.5 million (31 March 2016: Rs.1,082.7 million) which is presented under financial assets in Note 5. Effective portion of cash flow hedge and differential accrued interest amounting to Rs.(-) 2.5 million (31 March 2016: Rs.37.2 million) has been taken to âcash flow hedge reserve â under other equity in Note 12.

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 Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating or financing activities and the same are hedged in line with established risk management policies of the Company.

When a derivative is entered into for the purpose of hedging, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Note: If the rate is decreased by 100 bps, profit will increase by an equal amount.

The Company is thus not exposed to significant foreign currency risks at the respective reporting dates.

11 CAPITAL MANAGEMENT

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2017 and 31 March 2016.

12. FIRST-TIME ADOPTION OF IND AS

These financial statements, for the year ended 31 March 2017, are the first the company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at 1 April 2015, the Companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

a) Deemed Cost for PPE and Intangible assets

Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustment for decommissioning liabilities. This exemption has been used for intangible assets covered by Ind AS 38, Intangible assets and investment property covered by Ind AS 40 investment properties.

On transition to Ind AS, the company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognized as at April 1, 2015 measured as per previous GAAP and use that carrying value as the deemed cost of property, plant and equipment and intangible assets.

b) Business Combination

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

Ind AS mandatory exceptions

c) Hedge accounting

Hedge accounting can only be applied prospectively from the transition date to transactions that satisfy the hedge accounting criteria in Ind AS 109, at that date. Hedging relationships cannot be designated retrospectively, and the supporting documentation cannot be created retrospectively. As a result, only hedging relationships that satisfied the hedge accounting criteria as of 1 April 2015 are reflected as hedges.

The Company had designated various hedging relationships as cash flow hedges under the previous GAAP. On date of transition to Ind AS, the entity had assessed that all the designated hedging relationship qualifies for hedge accounting as per Ind AS 109. Consequently, the Company continues to apply hedge accounting on and after the date of transition to Ind AS.

d) Estimates

An Entityâs estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustment to reflect any difference in accounting policies), unless there is objective evidence that those estimates are in error.

Ind AS estimates as at 1 April, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP.

Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

NOTES TO THE RECONCILIATION OF EQUITY AS AT 1 APRIL 2015 AND 31 MARCH 2016 AND PROFIT OR LOSS FOR THE YEAR ENDED 31 MARCH 2016

A. Property, plant and equipment and Depreciation

Under IGAAP, Leasehold Land were classified as Fixed Assets as the standard on leases excluded Land. However, as per Ind AS 17, where the substantial risks and rewards incidental to ownership of an asset has not been transferred in the name of Company, the Company has classified such land under Operating Leases. The amount paid towards such leases has been shown as prepaid expenses under other current/non-current assets.

This change has resulted in decrease in property plant and equipment and increase in other current/non-current assets as on 31 March 2016 by Rs.23.1 million (1 April 2015 Rs.23.7 million)

In addition, this change has resulted in an increase in other expenses and decrease in depreciation expenses for the year ended 31 March 2016 by Rs.1.6 million. There is no impact on the total equity and profit.

B. Borrowings and Government Grant

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.

Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred. Accordingly, borrowings as at 31 March 2016 have been reduced by Rs.6.7 million (1 April 2015: â Nil) with a corresponding adjustment to retained earnings. The profit for the year ended 31 March 2016 increased by Rs.6.7 million as a result of the lower finance cost. Further, the benefit of a government loan at below current market rate of interest amounting to Rs.145.6 million is treated as a government grant as on 31 March 2016 instead of recognizing as borrowings.

C. Provisions

Under the previous GAAP, discounting of provisions was not allowed. Under Ind AS, provisions are measured at discounted amounts, if the effect of time value is material. Accordingly, non-current provisions have been discounted to their present values. This change reduced the non-current provisions as at 1 April 2015 by Rs.5.8 million and increased the current provisions as at 31 March 2016 by Rs.3.3 million. Consequent to the same, the profit for the year ended 31 March 2016 reduced by Rs.3.3 million and equity as at 31 March 2016 reduced by net of tax Rs.2.2 million (equity as at 1 April 2015 increased by an Rs.3.8 million).

D. Deferred tax

As various Ind AS transitional adjustments lead to temporary differences, therefore according to the Ind AS 12, the company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity. The net impact on deferred tax liabilities (net of unused credit losses) as on 31 March 2016 is Rs.329.5 million (1 April 2015: Rs.181.1 million).

E. Excise duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31 March 2016 by Rs.2,675.7 million. There is no impact on the total equity and profit.

F. Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2016 increased by Rs.6.1 million. There is no impact on the total equity as at 31 March 2016.

G. Depreciation and amortization expense

Pursuant to the applicability of Schedule II of The Companies Act, 2013 w.e.f. 1st April, 2015, the Company had reassessed the estimated useful lives of fixed Assets and accordingly depreciation of Rs.59.4 million was on account of assets whose useful life is already exhausted as on 1st April, 2015 has been adjusted to opening balance of retained earnings in terms of transitional provision of the said Schedule II. However as per Ind AS, the change in useful lives needs to be effected from the year in which useful lives were changed, accordingly depreciation for the year has been increased by Rs.59.4 million and corresponding deferred tax has been increased by Rs.20.6 million.

H. Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss includes remeasurements of defined benefit plans and effective portion of gains and losses on cash flow hedging instruments. The concept of other comprehensive income did not exist under previous GAAP.

I. Cost of hedging

Under the previous GAAP, the Company had adopted the hedge accounting principles as provided in Accounting Standard 30, Financial Instruments: Recognition and Measurement, issued by the Institute of Chartered Accountants of India, and accordingly, the cost relating to hedging was expensed in the profit or loss to the extent considered ineffective. Under Ind AS 109, costs relating to hedging are accounted as a part of the other comprehensive income to the extent considered as effective and are aligned to the hedging strategy. However, this has no impact on total equity as at1 April 2015 and as at 31 March 2016.

J. Retained earnings

Retained earnings as at April 1, 2015 has been adjusted consequent to the above Ind AS transition adjustments.

13. During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated 31 March 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from 8 November 2016 to 30 December 2016, the denomination wise SBNs and other notes as per the notification is given below:

14. During the year, the Company has capitalized the following expenses of revenue nature to the cost of fixed assets/Capital work in progress which are incurred during construction period on substantial expansion of existing units/new projects/ intangible assets of the Company. Consequently, expenses disclosed under the respective notes are net of amount capitalised by the company:

15. STANDARD ISSUED BUT NOT YET EFFECTIVE

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, âStatement of cash flowsâ and Ind AS 102, âShare-based payment.â These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, âStatement of cash flowsâ and IFRS 2, âShare-based payment,â respectively. The amendments are applicable to the company from April 1, 2017.

Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the Company to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and noncash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

Amendment to Ind AS 102:

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.

The company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

16. 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.

17. Previous period figures have been regrouped / reclassified, where necessary, to conform to this yearâs classification.

As per our report of even date

Mar 31, 2016

1. CAPITAL WORK IN PROGRESS AND CAPITALISATION OF EXPENDITURE

(a) Capital work in progress include tangible assets amounting to Rs, 560.5 million (31 March 2015: Rs, 1,274.2 million).

(b) Capital work in progress includes an amount Rs, 217.1 million (31 March 2015: Rs, 1,003.1 million) towards setting up of Waste Heat Recovery (WHR) Power Plant at its clinkerisation unit at Narsingarh, adjacent to the Kilns to generate power from waste heat. The same is being setup as a separate unit for generation of approximately 12 to 13 MW of power. The Company intends to utilize the energy generated by WHR for captive consumption. The Company has capitalized two lines which has commenced commercial production in February''2016. Closing balance of Rs, 217.1 million pertains to remaining one line which is expected to be commissioned in 2016-17.

(c) Capital work-in-progress relating to tangible fixed assets includes capital items in transit amounting to Rs, Nil (31 March 2015: Rs, 5.7 million).

(d) During the year, the Company has capitalized the following expenses of revenue nature to the cost of fixed assets/ Capital work in progress which are incurred during construction period on substantial expansion of existing units/ new projects/intangible assets of the Company. Consequently, expenses disclosed under the respective notes are net of amount capitalized by the company:

2. RELATED PARTY DISCLOSURE

(a) Names of related parties and related party relationship:

Names of related parties where control exists irrespective of whether transactions have occurred or not:

Ultimate holding company Heidelberg Cement AG

Holding company Cementrum I.B.V

Related parties under AS 18 with whom transactions have taken place during the period:

Fellow subsidiaries Heidelberg Cement Asia Pte Ltd

Cochin Cement Limited PT Inducement Tunggal Prakarsa Tbk

Key management personnel Mr. Sushil Kumar Tiwari, Whole Time Director

Additional related parties as per Companies Act, 2013 with whom transactions have taken place during the year:

Chief Financial Officer Mr. Anil Sharma (w.e.f. 1 April 2014)

Company Secretary Mr. Rajesh Relan (w.e.f. 1 April 2014)

* Change of Rs, 3,479.8 million (31 March 2015: Rs, 60.2 million) in ECB loan amount payable to Cement rum IBV as at 31 March 2016 is on account of repayment amounting to Rs, 2,752.6 million and balance on account of reinstatement at closing exchange rate.

** As the liabilities for gratuity and leave encashment are provided on an actuarial basis for the Company as a whole, the amounts pertaining to the director are not included above.

3. The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms except one office premises which is taken on a non-cancellable lease. The Company has recognized Rs, 17.7 million (31 March 2015: Rs, 21.4 million) in respect of cancellable operating leases and Rs, 10.8 million (31 March 2015: Rs, 10.1 million) in respect of non-cancellable operating leases.

Operating Lease (Non-Cancellable)

The total of future minimum lease payments under non- cancellable operating leases for each of the following periods:

Out of the total rent recognized, Rs, 0.3 million (31 March 2015: Rs, 1.4 million) relating to residential accommodation provided to the employees has been shown under Employee benefit expenses.

Rs, Nil (31 March 2015: Rs, 1.0 million) relating to a non-cancellable operating lease has been capitalized during the current year.

4. CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs, 105.5 million (31 March 2015: Rs, 623.7 million).

*The Company had filed writ petition against the order of the Madhya Pradesh State Mining Department (referred as ''department'') towards payment of additional royalty on limestone based on the ratio of 1.6 tonnes of limestone to 1 tonne of cement produced. The Company holds the view that the payment of royalty on limestone is correctly made based on the actual quantity of limestone extracted from the mining area. All writ petitions & writ appeals filed by the cement manufacturers regarding Royalty have been disposed of by Madhya Pradesh High Court vide its Order dated 8^th July 2014 and it has quashed and set aside the department''s contention to use notional conversion factor of 1.6 instead of actual consumption. Further, the matter has been relegated before the Assessing Officer for re-examination of the entire matter afresh from the stage of filing of the returns in light of above observation. Presently, the reassessment is in process.

In respect of above cases based on the favorable decisions in similar cases/legal opinions taken by the Company/ discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in these financial statements.

Note: Figures in brackets are for the previous period.

Mine reclamation expense is incurred on an ongoing basis and until the closure of mines. The actual expenses may vary based on the nature of reclamation and the estimate of reclamation expenses.

5. CROSS CURRENCY INTEREST RATE SWAP

The Company has a cross currency interest rate swap agreement with a bank for ECB Loan of USD 65,000,000 (31 March 2015: USD 125,000,000) whereby the Company pays a fixed rate of interest for various tranches of loan and receives a variable rate linked to LIBOR. The swap is being used to hedge the ECB loan taken on floating interest rate linked to LIBOR.

The loss on reinstatement of bank borrowings up to year end amounting to Rs, 1,086.8 million (up to 31 March 2015: Rs, 1,814.1 million) has been charged off to Statement of profit and loss and offset with a similar gain on increase in fair value of Derivative Assets. The Company has closing derivative assets of Rs, 1,082.7 million (31 March 2015: Rs, 1,896.6 million) which is presented under other current assets in Note 13.2. Effective portion of cash flow hedge and differential accrued interest amounting to Rs, 37.2 million (31 March 2015: Rs, 144.3 million) has been taken to "Hedging Reserve Account" under Reserves and Surplus under Note 4.

6. Excise duty on sales amounting to Rs, 2,675.7 million (31 March 2015: Rs, 3,271.0 million) has been reduced from sales in statement of profit and loss. Excise duty expenses on increase in stocks amounting to Rs, 30.0 million (31 March 2015: excise duty income of Rs, 8.1 million) has been considered in Note 21 of the financial statements.

7. 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. 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. The Guidance Note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. 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

Note:

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation.

b) Provident Fund

Provident fund for certain eligible employees is managed by the Company through trust "Mysore Cement Limited officers'' and staff provident fund trust", in line with the Provident Fund and Miscellaneous Provision Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee.

8. As per Micro, Small and Medium Enterprises Act, 2006, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the Company, none of the creditors fall under the definition of "Supplier" as per Section 2(n) of the Act. In view of this prescribed disclosures under Section 22 of the Act are not required to be made in the financial statements.

9. SALES AND ENTRY TAX BENEFIT

10. Capital advances include an amount of Rs, 150.6 million paid during an earlier year to a supplier against a bank guarantee for setting up a Waste Heat Recovery based Power Generation Plant at the Company''s clinkerisation unit at Narsingarh in Madhya Pradesh. A dispute arose with the supplier as they failed to adhere to the agreed timelines and insisted for enhancement of the contract price in view of depreciation of Rupee against US dollars, despite the contract being for a fixed price. The supplier offered the Company to renegotiate and agree with its sub-contractors for settlement of the aforesaid advance. The Company invoked the advance bank guarantee to recover the advances paid to the said supplier. The Hon''ble High Court of Delhi had on 19 October 2013 granted an ad interim ex-parte injunction against the invocation of aforesaid Bank Guarantee, against which the Company had filed an application for vacation of stay, which is currently pending. The Company has sent a notice of arbitration to the supplier on 18 May 2016 demanding advance given as per supply contract, interest on advance given and compensation in terms of risk purchase clause of the contract for loss incurred in respect of work completed through other third parties.

Basis legal assessment, precedents of Supreme Court judgments and valid bank guarantee, the management is confident of recovering the amounts and no adjustments are considered necessary in the financial statements in this regard.

11. DISCONTINUED OPERATION

a) In accordance with the approval granted by the Board of Directors of the Company on 21 May 2013, the Company executed a Business Transfer Agreement on 5 October 2013 with JSW Steel Limited for sale of its cement grinding facility in Raigad, Maharashtra, to JSW Steel Limited, as a going concern on slump sale basis for a consideration of '' 1,660.0 million. The process of selling the Raigad plant was completed on 3 January 2014 and net gain of Rs, 603.1 million has been disclosed as an exceptional item in the statement of profit and loss during the previous period.

The carrying amounts of the total assets and liabilities disposed off at 3 January 2014 are as follows. Comparative information for Raigad plant is included in accordance with AS 24 Discontinuing Operations.

Dec 31, 2012

1. CORPORATE INFORMATION

HeidelbergCement India Limited (hereinafter referred to as "HCIL" or "the Company") is a Company formed and registered under the Companies Act, 1956. The principal activity of HCIL is the manufacture of Portland cement at its four locations viz. Ammasandra (Karnataka), Damoh (Madhya Pradesh), Jhansi (Uttar Pradesh) and Raigad (Maharashtra).

2. BASIS OF PREPARATION

The financial statements have been prepared to comply in all material respects with the Notified Accounting Standard by the Companies Accounting Standards Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The Company has changed the denomination of the financial figures from Rupees in lacs to Rupees in million (or ''MINR''). Therefore, figures for the previous year have also been stated in the new denomination. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

a. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

a. Indian rupee loan :

Secured by 100% unconditional and irrevocable Corporate Guarantee of HeidelbergCement AG, Germany, the ultimate holding company. The loans are repayable in 4 equal half yearly installments after completion of 3 years from the date of drawdown of the respective tranches. The loans carry floating interest rates linked to the base rates of the banks .

b. External commercial borrowings :

The Company has availed ECB from the parent company "Cementrum 1 B.V." on unsecured basis at a rate linked to LIBOR. The loan is repayable after a period of 5 years from the date of drawdown of the respective tranches. The entire exposure has been hedged through a Cross Currency Interest Rate Swap agreement with a bank whereby the Company pays a fixed rate of interest and receives a variable rate linked to LIBOR.

3. SEGMENTAL INFORMATION:

(a) Business Segment

The Company primarily deals in only one business segment i.e. "Cement".

(b) Geographical Segment

The Company primarily operates into two geographical segments i.e. within India and outside India which are based on the location of the customers.

4. The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms except for three office premises which is taken on a non-cancellable lease. The Company has recognized Rs. 28.7 million (Previous year: Rs. 25.8 million) in respect of cancellable operating leases and Rs. 6.4 million (Previous year: Rs. 4.7 million) in respect of non-cancellable operating leases.

Out of the total rent recognised, Rs. 0.4 million (Previous year Rs. 0.6 million) relating to residential accommodation provided to the employees has been shown under Employee Benefit Expenses.

Rs. 3.4 million (Previous year: Rs. 3.4 million) relating to a non-cancellable operating lease and Rs. 2.2 million (Previous year: Rs. 3.1 million) relating to cancellable operating lease has been capitalized during the current year.

5. CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 486.0 million (Previous year: Rs. 2,149.0 million).

In respect of above cases based on the favorable decisions in similar cases/ legal opinions taken by the Company/ discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any of the above liability has been made in these financial statements.

Note: Figures in brackets are for the previous year.

Above provisions have been made against demands raised by various authorities. All these cases are under litigation and are pending with various authorities; expected timing of resulting outflow of economic benefits cannot be specified.

6. CROSS CURRENCY INTEREST RATE SWAP

The Company has a cross currency interest rate swap agreement with a bank for ECB Loan of USD 125,000,000 (Previous year USD 90,000,000) whereby the Company pays a fixed rate of interest for various tranches of loan and receives a variable rate linked to LIBOR. The swap is being used to hedge the ECB loan taken on floating interest rate linked to LIBOR.

The loss on restatement of bank borrowings amounting to Rs. 885.9 million (previous year Rs. 629.3 million) has been charged off to Statement of profit and loss and offset with a similar gain on increase in fair value of cross currency swap. Effective portion of cash flow hedge and differential accrued interest amounting to Rs. 63.0 million (previous year Rs. 47.4 million) has been taken to "Hedging Reserve Account" under Reserves & Surplus under Note 4.

7. Excise duty on sales amounting to Rs. 1,750.6 million, which includes Rs. 23.8 million (Previous Year: Nil) from sales out of production during trial runs (Previous year Rs. 1,439.8 million) has been reduced from sales in statement of profit and loss and expenditure during construction period. Excise duty expenses on increase in stocks amounting to Rs. 11.4 million (Previous year excise duty income of Rs. 2.5 million) has been considered in Note 21 of the financial statement and excise duty on closing stock out of trial production amounting Rs. 6.6 million (Previous year Rs. Nil) has been debited to expenditure during construction period under capital work in progress.

8. 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. 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 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. The Guidance Note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. Based on latest audited balance sheet of the said trust, there is no deficit in the fund.

Note:

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation.

9. PREVIOUS YEAR FIGURES

Till the year ended 31 December 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 December 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year''s classification.

Dec 31, 2011

1. The Capital Work-in-progress relating to tangible fixed assets includes capital advances amounting to Rs. 5,388.74 lacs (Previous year: Rs. 15,077.68 lacs) and inventory of capital items in transit amounting to Rs. 1,987.16 lacs (Previous Year: Rs. 2,089.73 lacs).

Capital work-in-progress includes expenditure during construction period on substantial expansion of existing units of the company.

2. SEGMENTAL INFORMATION:

(a) Business Segment

The Company primarily deals in only one business segment i.e, "Cement".

(b) Geographical Segment

The Company primarily operates into two geographical segments i.e. within India and outside India which are based on the location of the customers. Geographical Segment

Difference of Rs. 6,293.18 lacs in ECB loan amount received & payable to Cementrum IBV as at December 31, 2011 is on account of restatement of ECB loan at closing exchange rate.

3. The Company has taken various residential premises, Office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms except for three Office premises which are taken on a non-cancellable lease. The Company has recognized Rs. 258.13 lacs (Previous year: Rs. 267.39 lacs) in respect of cancellable operating leases and Rs. 47.42 lacs (Previous year: Rs. 34.07 lacs) in respect of non-cancellable operating leases.

Operating Lease (Non Cancellable)

The total of future minimum lease payments under non- cancellable operating leases for each of the following periods:

Out of the total rent recognised, Rs. 6.00 lacs (Previous year Rs.25.46 lacs) relating to residential accommodation provided to the employees has been shown under Personnel Expenses.

4. CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.21,489.72 lacs (Previous year: Rs.84,109.97 lacs).

In respect of above cases based on the favorable decisions in similar cases/legal opinions taken by the Company/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in these financial statements.

Above provisions have been made against demands raised by various authorities. All these cases are under litigation and are pending with various authorities; expected timing of resulting outflow of economic benefits cannot be specified.

5. CROSS CURRENCY INTEREST RATE SWAP

The Company has a cross currency interest rate swap agreement with a bank for ECB Loan of USD 90,000,000 whereby the Company pays a fixed rate of interest of 7.65% to 9.55% (for various tranches of loan) and receives a variable rate equal to LIBOR 6M 250 bps on the loan amount. The swap is being used to hedge the ECB loan taken on floating interest rate of LIBOR 6M 250 bps.

The loss on account of restatement of ECB amounting to Rs. 6,293.18 lacs has been charged off to Profit and loss account and off set with a similar gain on increase in fair value of cross currency swap. Eff ective portion of cash fl ow hedge and differential accrued interest amounting to Rs.474.09 lacs has been taken to "Hedging Reserve Account" under Reserve & Surplus.

6. Excise duty on sales amounting to Rs.14,398.07 lacs (Previous Year Rs.11,983.21 lacs) has been reduced from sales and decrease in the excise duty on closing inventories amounting to Rs. 25.11 lacs (previous year increase of Rs. 129.29 lacs) has been considered as an income (expense in the previous year) in the Profit & Loss Account.

7. 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 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. 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 Profit and Loss Account 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. The Guidance Note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. Based on certificate issued by the Actuary, there is no defi cit in the fund.

The following tables summarize the components of net benefit expense recognised in the Profit and Loss Account and the amounts recognised in the balance sheet for the Gratuity.

Note:

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligation.

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:

15. Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006 as per the information available with the Company in response to the enquiries from all existing suppliers with whom the Company deals.

(ii) the amount of interest paid by the buyer in terms of section 16, along with the amounts of the payment made to the supplier beyond the appointed day

(iii) the amount of interest due and payable for the year of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act

(iv) the amount of interest accrued and remaining unpaid

(v) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of this Act

Dec 31, 2010

1. NATURE OF OPERATIONS

HeidelbergCement India Limited (hereinafter referred to as "HCIL" or "the company") is a Company formed and registered under the Companies Act, 1956. The principal activity of HCIL is the manufacture of Portland cement at its four locations viz. Ammasandra (Karnataka), Damoh (Madhya Pradesh), Jhansi (Uttar Pradesh) and Raigad (Maharashtra).

2. The Capital Work-in-progress relating to tangible fixed assets includes capital advances amounting to Rs. 15,077.68 lacs (Previous year: Rs. 1,026.10 lacs) and inventory of capital items in transit amounting to Rs. 2,089.73 lacs (Previous Year: Rs. 1,587.64 lacs).

Capital work-in-progress includes expenditure during construction period on substantial expansion of existing units of the Company. There was no such expenditure in the previous year.

3. SEGMENTAL INFORMATION:

(a) Business Segment

The Company primarily deals in only one business segment i.e, "Cement".

(b) Geographical Segment

The Company primarily operates into two geographical segments i.e. within India and outside India which are based on the location of the customers.

4. RELATED PARTY DISCLOSURE

(a) Names of related parties:

Names of related parties where control exists irrespective of whether transactions have occurred or not:

Ultimate Holding Company Heidelberg Cement AG

Holding Company Cementrum I.B.V

Names of other related parties with whom transactions have taken place during the year:

Fellow Subsidiaries HeidelbergCement Technology Center

Scancemlnternational Ans

HeidelbergCement Asia Pte Ltd

Cochin Cements Limited

HC Fuels Limited

PT Indocement Tunggal Prakarsa Tbk

HC Trading Malta Limited

5. The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms except for one office premises which is taken on a non-cancellable lease. The Company has recognized Rs. 209.60 lacs (Previous year: Rs. 219.03 lacs) in respect of cancellable operating leases and Rs. 34.07 lacs (Previous year: Rs. 36.56 lacs) in respect of non-cancellable operating leases.

6. CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 84,109.97 lacs (Previous year: Rs. 5,135.52 lacs).

7. CONTINGENCIES

(a) Contingent Liabilities not provided for (Rs. in Lacs)

Particulars December 31, 2010 December 31, 2009

A. Disputed Statutory claims / levies:

Excise Duty / Service Tax 636.35 270.98

Sales Tax/ Trade Tax 8,565.64 7,657.25

Entry Tax 605.18 593.97

Differential Royalty on 13,999.51 12,098.38 Limestone

B. Claims against the Company 132.35 248.81 not acknowledged as Debts

Claims by various Suppliers 786.80 532.77 of goods and Services

Electricity charges 250.71 593.51

Claims by customers and others

C. Show cause notices for levy

Excise Duty / Service Tax 508.80 649.76 54.00 54.00 Sales Tax In respect of above cases based on the favorable decisions in similar cases/ legal opinions taken by the Company/ discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in these financial statements.

8. During the current year, the Company has exercised call option on May 11,2010 to redeem 9% Cumulative Redeemable Preference Shares of Rs. 100 each aggregating to Rs. 1,349.34 lacs. The accumulated dividend amounting to Rs. 414.57 lacs, which includes dividend Rs. 370.98 lacs for the period December 12, 2006 to December 31,2009 and Rs. 43.59 lacs for the period January 1, 2010 to May 11, 2010 (being the date of redemption), has also been paid on such redemption alongwith the redemption proceeds.

9. Excise duty on sales amounting to Rs. 11,983.21 lacs (Previous Year Rs. 10,384.63 lacs) has been reduced from sales and increase in the excise duty on closing inventories amounting to Rs. 129.29 lacs (Previous Year Rs. 25.95 lacs) has been considered as an expense in the Profit & Loss account.

10. 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 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. 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 Profit and Loss Account 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. The Guidance Note on implementing AS- 15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. Based on certificate issued by the Actuary, there is no deficit in the fund.

The following tables summarize the components of net benefit expense recognised in the Profit and Loss Account and the amounts recognised in the balance sheet for the Gratuity.

11. Previous Year Comparatives

Previous years figures have been regrouped where necessary to confirm to this years classification.

Dec 31, 2009

1. NATURE OF OPERATIONS

HeidelbergCement India Limited (hereinafter referred to as ÃHCILÃ or Ãthe CompanyÃ) is a Company formed and registered under the Companies Act, 1956. The name of the company has been changed from ÃMysore Cements LimitedÃ to ÃHeidelbergCement India LimitedÃ w.e.f. April 16, 2009, consequent to the issue of fresh Certifi cate of Incorporation by the Registrar of Companies, Karnataka. The principal activity of HCIL is the manufacture of Portland cement at its four locations viz. Ammasandra (Karnataka), Damoh (Madhya Pradesh), Jhansi (Uttar Pradesh) and Raigad (Maharashtra).

2. Amalgamation of Indorama Cement Limited and HeidelbergCement India Private Limited with the Company During the previous year, Indorama Cement Limited (hereinafter referred as IRCL) and HeidelbergCement India Private Limited (hereinafter referred as HIPL) were amalgamated with the Company as per the Scheme of Amalgamation sanctioned by the HonÃble Bombay High Court vide Order dated September 5, 2008, the HonÃble High Court of Punjab & Haryana vide Order dated November 14, 2008 and HonÃble High Court of Karnataka vide Order dated January 9, 2009.

The Scheme became operative with eff ect from the Appointed Date April 1, 2008.

Pursuant to this Scheme of Amalgamation, 67,721,681 equity shares of Rs.10 each fully paid were issued to the shareholders of IRCL in the ratio of 1.3544 equity shares of the Company for every 1 share held in erstwhile IRCL and 881,670 equity shares of Rs.10 each fully paid were issued to the shareholders of HIPL in the ratio of 0.1469 equity shares of the Company for every 1 share held in erstwhile HIPL.

The same was included in Equity Share Suspense Account as at December 31, 2008. The above shares have been allotted on March 27, 2009 and accordingly, the amount has been transferred from ÃEquity Share SuspenseÃ to ÃEquity Share CapitalÃ.

3. During the year, 146 (Previous year 95) employees have opted for Voluntary Retirement Scheme (VRS). The Company has incurred Rs. 594.84 lacs (Previous year: Rs. 356.35 lacs) for the settlement of the VRS liability and charged off the same to Profi t & Loss account.

4. Segmental Information:

(a) Business Segment

The Company primarily deals in only one business segment i.e, ÃCementÃ.

(b) Geographical Segment

The Company primarily operates into two geographical segments i.e. within India and outside India which are based on the location of the customers.

5. Related Party Disclosure

(a) Names of related parties:

Names of related parties where control exists irrespective of whether transactions have occurred or not :

Ultimate Holding Company HeidelbergCement AG

Holding Company Cementrum I B.V.

Names of other related parties with whom transactions have taken place during the year:

Fellow Subsidiaries

HeidelbergCement Technology Centre

Scancem International

HeidelbergCement Asia Pte Ltd

PT Indocement Tunggal Prakash TBK

HC Fuels Limited

Cochin Cements Limited

HC Trading Malta Limited

6. The Company has taken various residential, offi ce and warehouse premises under operating lease agreements. These are generally cancellable and are renewable by mutual consent on mutually agreed terms except for one offi ce premises which is taken on a non-cancellable lease. The Company has recognized Rs.219.03 lacs (Previous year: Rs.147.09 lacs) in respect of cancellable operating leases and Rs.36.56 lacs (Previous year: Rs.73.12 lacs) in respect of non-cancellable operating leases.

7. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.5,135.52 lacs (Previous year: Rs.6,162.83 lacs).

8. Contingencies

(a) Contingent Liabilities not provided for

(Rs. in lacs)

Particulars December 31, 2009 December 31, 2008

A. Disputed Statutory claims / levies:

Excise Duty 257.93 257.93

Sales Tax/ Trade Tax 7,657.25 6,320.54

Entry Tax 593.97 484.43

Service Tax 13.05 -

Differential Royalty on Limestone 12,098.38 10,506.25

B. Claims against the Company not acknowledged as Debts

Claims by various Suppliers of goods and Services 248.81 759.32

Electricity charges 532.77 746.35

Claims by customers and others 593.51 287.62

C. Show cause notices for levy

Excise Duty 638.67 499.68

Service Tax 11.09 39.62

Sales Tax 54.00 54.00

D. The Ministry of Textiles has deleted cement from the list of commodities Not quantifiable Not quantifiable to be packed in jute bags under the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987 from 1.7.1997. Grand Total 22,699.43 19,955.74

In respect of above cases based on the favorable decisions in similar cases/ legal opinions taken by the Company/ discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in these fi nancial statements.

9. During the year, the Company has proposed dividend on 9% cumulative redeemable preference shares for the period December 12, 2006 to December 31, 2009 amounting to Rs.370.98 lacs including Rs.121.44 lacs for the current year.

10. The Company follows Accounting Standard (AS-22) ÃAccounting for taxes on IncomeÃ, as notifi ed by Companies Accounting Standards Rules, 2006. The Company had deferred tax asset (net) amounting to Rs.1,805.79 lacs with carry forward losses and unabsorbed depreciation as a major component as on December 31, 2008. Since there was no convincing evidence which demonstrates virtual certainty of realization of such deferred tax asset in the near future, the Company had prudently decided not to recognize deferred tax asset on such timing diff erences in previous year.

In the current year, the Company has recognized net deferred tax liability amounting to Rs.1,646.90 lacs consisting of deferred tax liabilities of Rs.4,860.84 lacs and deferred tax assets of Rs.3,213.84 lacs. The Company has recognised the above deferred tax assets as it is virtually certain that the reversal of timing diff erence on account of depreciation would result in suffi cient taxable income against which such deferred tax assets can be realized.

11. Excise duty on sales amounting to Rs.10,384.63 lacs has been reduced from sales and excise duty on increase/decrease in stock amounting to Rs. 25.95 has been considered as (income)/expense in profi t & loss account.

12. 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 benefi t vests on the employee 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 benefi ts. 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. Plan assets also include investments and bank balances used to deposit premiums until due to the insurance company.

Retirement benefi ts in the form of Superannuation Fund (being administered by Trusts) are funded defi ned contribution schemes and the contributions are charged to the Profi t and Loss Account 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 defi ned benefi t scheme whereby the Company deposits an amount determined as a fi xed percentage of basic pay to the fund every month. The benefi t vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to confi rm to the interest rate declared by the Government for the Employees Provident Fund. The Guidance Note on implementing AS-15, Employee Benefi ts (Revised 2005) issued by the Accounting Standard Board (ASB) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defi ned benefi t plan. Based on certifi cate issued by the Actuary, there is no defi cit in the fund.

The following tables summarize the components of net benefi t expense recognised in the Profi t and Loss Account and the amounts recognised in the balance sheet for the Gratuity.

13. Discontinuing Operations

(a) With the acquisition of management control by HeidelbergCement Group in August 2006, the Company decided to discontinue the operations of Sponge iron plant and Steel melting shop situated at Ammasandra (Karnataka). Sponge iron plant was a separate segment while steel melting shop was included in others segment as per the Notifi ed Accounting Standard -17, ÃSegment ReportingÃ by Companies Accounting Standards Rules, 2006. This is in line with CompanyÃs strategy to focus its activities on cement and to abandon / dispose unrelated activities. During the previous year, the company had disposed entire assets of both divisions having carrying value of Rs.178.41 lacs (relating to Sponge iron plant - Rs120.44 lacs and Steel melting plant - Rs.57.97 lacs) at Rs.268.66 lacs and had recognised profi t of Rs.90.25 lacs on disposal of these assets.

14. Previous Year Comparatives

Previous year includes fi gures of the erstwhile Indorama Cement Limited and HeidelbergCement India Private Limited for the period April 1, 2008 to December 31, 2008. The current yearÃs fi gures are, accordingly, not comparable to those of previous year. Previous yearÃs figures have been regrouped where necessary to conform to this yearÃs classification.

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