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Company Information

Home » Market » Company Information

UltraTech Cement Ltd.

Sep 27, 04:00
7620.00 +94.75 (+ 1.26 %)
 
VOLUME : 13514
Prev. Close 7525.25
Open Price 7525.25
TODAY'S LOW / HIGH
7525.25
 
 
 
7672.30
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
3755.00
 
 
 
8070.60
Sep 27, 03:56
7622.90 +101.40 (+ 1.35 %)
 
VOLUME : 261520
Prev. Close 7521.50
Open Price 7543.60
TODAY'S LOW / HIGH
7526.05
 
 
 
7670.85
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 7622.90 (175)
52 WK LOW / HIGH
3753.90
 
 
 
8073.30
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Market Cap. ( ₹ ) 220042.30 Cr. P/BV 4.98 Book Value ( ₹ ) 1,530.34
52 Week High/Low ( ₹ ) 8073/3754 FV/ML 10/1 P/E(X) 40.28
Bookclosure 18/08/2021 TTM EPS ( ₹ ) 218.13 Div Yield (%) 0.49
NOTES TO ACCOUNTS
You can view the entire text of Notes to accounts of the company for the latest year
Year End :2021-03 

B) 1. Tangible Assets include assets for which ownership is not in the name of the Company - Gross Block of ' 442.04 Crores (March 31,2020'406.72 Crores).

2. Buildings include ' 12.13 Crores (March 31, 2020 ' 12.13 Crores) being cost of Debentures and Shares in a company entitling the right of exclusive occupancy and use of certain premises.

3. Opening Gross Block includes Research and Development Assets (Building, Plant and Equipment, Furniture and Fixtures, Office Equipment and Intangible Assets) of ' 43.19 Crores (March 31,2020'44.54 Crores) and Net Block of ' 21.19 Crores (March 31,2020'24.65 Crores). Addition for the Research and Development Assets during the year is ' 0.30 Crores (March 31,2020'1.12 Crores).

4. Title of immovable properties having Gross Block of ' 3,388.19 Crores (March 31,2020'3,568.28 Crores) and Net

Block of ' 3 263 42 Crorec (March 31 2020'3 418 88 Crorec) is yet to be transferred in the name of the Company

(f) The Weighted average incremental borrowing rate of 9.16% p.a. for local currency borrowings and 3.27% p.a. for foreign currency borrowings has been applied for measuring the lease liability at the date of initial application.

(g) The total cash outflow for leases for year ended March 31,2021 is ' 120.70 Crores (March 31,2020'112.46 Crores).

(h) Income from sub leasing of Right to use assets is for year ended March 31, 2021 is ' 61.28 Crores (March 31, 2020 ' 64.87 Crores).

a) Capital Reserve: Company’s capital reserve is mainly on account of acquisition of cement business of Larsen & Toubro Ltd., Gujarat Units of JCCL and cement capacities of 21.2 MTPA of Jaiprakash Associates Ltd (JAL) and JCCL, being excess of the net assets acquired over the consideration paid.

b) Securities Premium: Securities premium is credited when shares are issued at premium. It is utilised in accordance with the provisions of the Act, to issue bonus shares, to provide for premium on redemption of shares or debentures, equity related expenses like underwriting costs, etc.

c) Debenture Redemption Reserve (DRR): The Company has issued redeemable non-convertible debentures. Accordingly, the Companies (Share capital and Debentures) Rules, 2014 (as amended), requires 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. However, this requirement is no more applicable w.e.f. April 1,2018 as per the amendment in the Companies (Share capital and Debentures) Rules, 2014 vide dated August 16, 2019; accordingly, the Company has not made any new addition in the said reserve and accounted the reversal of outstanding reserve linked to payment of specific non-convertible debentures.

d) General Reserve: The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provision of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.

e) Shares Options Outstanding Reserve: The Company has three share option schemes under which options to subscribe for the Company’s shares have been granted to certain executives and senior employees. The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration. Refer to Note 45 for further details of these plans.

f) Treasury Shares: The Company has formed an Employee Welfare Trust for purchasing Company’s shares to be allotted to eligible employees under Employees Stock Options Scheme, 2018 (ESOS 2018). As per Ind AS 32 -Financial Instruments: Presentation, Reacquired equity shares of the Company are called Treasury Shares and deducted from equity.

g) Cashflow Hedge Reserve: The Company has designated its hedging instruments as cash flow hedges and any effective portion of cashflow hedge is maintained in the said reserve. In case the hedging becomes ineffective, the amount is recognised in the Statement of Profit and Loss.

(b) (i) The Company had filed appeals against the orders of the Competition Commission of India (CCI) dated

31/08/2016 and 19/01/2017. Upon the NCLAT disallowing its appeal against the CCI order dated 31/08/2016, the Hon’ble Supreme Court has, by its order dated 05/10/2018, granted a stay against the NCLAT order. Consequently, the Company has deposited an amount of ' 144.95 crores equivalent to 10% of the penalty amount. The Company, backed by legal opinions, believes that it has a good case in both the matters and accordingly no provision has been made in the results.

(ii) In the month of December 2020, officers from CCI visited the Company’s premises seeking information for certain periods under the Competition Act 2002. Company has provided the information sought by them and will co-operate for any further information that may be required. The Company presently believes that this does not have any material impact.

(c) Guarantees:

The Company has issued corporate guarantees as under:

In favour of the Banks / Lenders on behalf of some of its Subsidiaries and Joint Venture (JV), as mentioned below, for the purposes of replacing old loans, acquisition financing, working capital and other general corporate purposes:

• UltraTech Nathdwara Cement Limited: ' 3,050.00 Crores (March 31,2020'3,050.00 Crores).

• Bhaskarpara Coal Company Limited (JV): ' 1.70 Crores (March 31,2020'4.00 Crores).

• UltraTech Cement Middle East Investment Limited and its subsidiaries: USD 161.30 Million (Equivalent to ' 1,179.24 Crores) {March 31,2020 USD 387.05 Million (Equivalent to ' 2,928.59 Crores)}.

(These Corporate Guarantees are issued in different currencies viz. Indian Rupee, USD and UAE Dirham.)

Note 34: Capital and other commitments:

Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) 2,230.08 Crores. (March 31,2020'832.59 Crores).

Note 35:

The Supreme Court of India has allowed an appeal filed by the State of Rajasthan in a matter relating to transfer of mining lease in the name of the Company’s wholly owned subsidiary, Gotan Lime Stone Khanij Udyog Private Limited (“GKUPL”) and has directed the State of Rajasthan to frame and notify its policy relating to transfer of mining lease and thereafter pass appropriate order in respect of the mining lease of GKUPL. State Government has notified the new policy related to transfer of new mining lease, based on which the Company has requested the State Government to consider reinstatement of the mines in its favour.

Note 36: Scheme of Demerger of Cement Business of Century Textiles and Industries Limited (Ind AS 103):

(A) The Scheme of Demerger amongst Century Textiles and Industries Limited (“CTIL” or ‘the Demerged Undertaking’) and the Company and their respective shareholders and creditors (“the Scheme”) was made effective from October 1,2019. The National Company Law Tribunal, Mumbai Bench (“NCLT”) had approved the Scheme by its Order dated July 3, 2019 and fixed May 20, 2018 as the Appointed Date. Consequently, the Company had included the financial results/information of the Demerged Undertaking in its standalone financial statements with effect from May 20,

2018 (which is deemed to be the acquisition date for purpose of Ind AS 103 - Business Combinations) to include the financial results/information of the acquired Cement Business Division of CTIL (‘the Demerged Undertaking’).

(B) The assets of the Demerged Undertaking comprising of 3 Integrated Units with a total capacity of 12.6 MTPA and 1 Grinding Unit with a grinding capacity of 2.0 MTPA have an enterprise valuation of ' 8,387.71 Crores. The acquisition of the Demerged undertaking continues to support the Company to strengthen its presence in the Eastern & the Central markets and extend its footprint in Western and Southern markets. This also provide synergies in manufacture and distribution process and logistics alignment leading to economies of scale and creation of efficiency by reducing time to market and benefiting customers. The acquisition continues to create value for its shareholders by acquiring ready to use assets which creates operational efficiencies and reducing time to markets vis-a-vis greenfield projects which are time consuming due to challenges in acquisition of land and limestone mining leases.

(C) Fair Value of the Consideration transferred:

As per Ind AS 103 - Business Combinations, purchase consideration has been allocated on the basis of fair valuation determined by an independent valuer. Costs related to acquisition (including stamp duty on assets transferred) had been charged to Statement of Profit and Loss on the appointed date.

Against the total enterprise value of ' 8,387.71 Crores, the Company had taken over borrowings of ' 3,000.00 Crores from CTIL. After taking these liabilities into account, effective purchase consideration of ' 5,387.71 Crores had been discharged on October 16, 2019, being the Record Date in terms of the Scheme, by issue of 1 (one) equity share of the Company of face value ' 10/- each for every 8 (eight) equity shares of CTIL of face value ' 10/- each to the shareholders of CTIL. The Fair value of the shares issued is ' 5,387.71 crores which had been determined based on the last closing price prior to the Appointed Date.

(E) Acquired Receivables:

As on the date of acquisition, gross contractual amount of the acquired Trade and other Receivables was ' 293.06 Crores against which no provision had been considered since fair value of the acquired receivables were equal to carrying value as on the date of acquisition.

(F) Contingent Liabilities

The Company has assumed all the contingent liabilities of the Demerged Undertaking as per the Scheme. Total contingent liability transferred to the Company was ' 806.64 Crores.

(G) Acquisition related costs

During the year ended March 31,2019 acquisition related costs of ' 5.16 Crores had been recognised under Miscellaneous Expenses and Rates and Taxes in the Statement of Profit and Loss. The stamp duty paid / payable on transfer of the assets amounting to ' 113.88 Crores had been charged to the Statement of Profit and Loss and shown as an exceptional item.

Note 37: Employee Benefits (Ind AS 19):

(A) Defined Benefit Plans:

(a) Gratuity:

The gratuity payable to employees is based on the employee’s service and last drawn salary at the time of leaving the services of the Company and is in accordance with the Rules of the Company for payment of gratuity.

Inherent Risk

The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risks.

(b) Pension:

The Company considers pension for some of its employees at senior management based on the period of service and contribution for the Company. There is no material risk associated with this plan.

(c) Post-Retirement Medical Benefits:

The Company provides post-retirement medical benefits to certain ex-employees who were transferred under the Scheme of arrangement for acquiring Larsen & Toubro cement business and eligible for such benefits from earlier Company. There is no material risk associated with this plan.

(e) Contribution to Other Funds:

Amount recognized as an expense under the head “Contribution to Other Funds” of Statement of Profit and Loss ' 28.47 Crores (March 31,2020'30.32 Crores).

(B) Amount recognized as an expense in respect of Compensated Absences is ' (8.04) Crores (March 31,2020'59.52 Crores).

(C) Amount recognized as expense for other long-term employee benefits is ' 0.86 Crores (March 31,2020'44.18 Crores).

Note 38: Segment Reporting (Ind AS 108):

The Company has presented segment information in the consolidated financial statements. Accordingly, as per Ind AS 108 ‘Operating Segments’, no disclosures related to segments are presented in these standalone financial statements.

Compensation for March 31,2020 includes compensation of Mr. K. K. Maheshwari, who was Managing Director till December 31,2019 and was designated as Vice Chairman and Non-Executive Director w.e.f January, 01,2020. Post- retirement benefits included amount paid to him for Gratuity and Leave Encashment of ' 8.27 Crores. Further the Board had approved one-time payout of ' 9.45 Crores and pension of ' 28,34,000 per month with effect from January 1,2020 for his past services as Managing Director, which is also part of the above Post-employment benefits.

Based on the recommendation of the Nomination, Remuneration and Compensation Committee, all decisions relating to the remuneration of the Directors are taken by the Board of Directors of the Company, in accordance with shareholders’ approval, wherever necessary.

Terms and Conditions of transactions with Related Parties:

The sales to and purchases from related parties including fixed Assets are made in the normal course of business and 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.

The Company’s inter corporate loan to its subsidiary which is repayable on demand, for the current year the rate of interest is 1 month MCLR. (March 31,2020: 1 month MCLR)

For the year ended March 31,2021, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. 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.

The weighted average share price at the date of exercise for options was ' 5,759.93 per share (March 31,2020 ' 4,181.12 per share) and weighted average remaining contractual life for the share options outstanding as at March 31,2021 was 5.10 years (March 31,2020: 5.12 years).

The weighted average remaining contractual life for SAR is 3.22 years (March 31,2020: 4.22 years).

The exercise price for outstanding options and SAR is ' 10 per share for RSU’s and ranges from ' 1,965 per share to ' 6,735 per share for options.

(D) Fair Valuation:

5,350 share options were granted during the year. Weighted Average Fair value of the options granted during the year is ' 3,091.60 per share (March 31,2020'2,682.45 per share).

The fair value of option has been done by an independent firm of Chartered Accountants on the date of grant using the Black-Scholes Model/ Binomial Model.

The Key assumptions in the Black-Scholes Model for calculating fair value as on the date of grant:

(a) For ESOS 2013:

1. Risk Free Rate - 8.5% (Tranche I), 7.8% (Tranche II-III), 8.56% (Tranche IV)

7.6% (Tranche V), 6.74% (Tranche VI)

2. Option Life - (a) For Options - Vesting period (1 Year) Average of exercise period

(b) For RSU - Vesting period (3 Years) Average of exercise period

3. Expected Volatility* - Tranche-I: 0.29, Tranche-II: 0.27, Tranche-III: 0.28, Tranche-IV: 0.60

Tranche-V: 0.60, Tranche-VI: 0.61

4. Expected Growth in Dividend - Tranche -I: 20%, Tranche II-III: 15%, Tranche-IV: 5%, Tranche-V: 5%,

Tranche-VI: 5%

(b) For ESOS 2018:

1. Risk Free Rate - 7.47% (Tranche I)

2. Option Life - (a) For Options - Vesting period (1 Year) Average of exercise period

(b) For RSU - Vesting period (3 Years) Average of exercise period

3. Expected Volatility* - Tranche-I: 0.24

4. Dividend Yield - Tranche -I: 0.46%

*Expected volatility on the Company’s stock price on National Stock Exchange based on the data commensurate with the expected life of the options/RSU’s up to the date of grant.

(a) For ESOS - SAR - 2018:

1. Risk Free Rate - 7.47% (Tranche I)

2. Option Life - (a) For Options - Vesting period (1 Year) Average of exercise period

(b) For RSU - Vesting period (3 Years) Average of exercise period

3. Expected Volatility* - Tranche-I: 0.25,

4. Dividend Yield - Tranche -I: 0.46%

(b) For ESOS 2018:

1. Risk Free Rate - 6.78% (Tranche II), 6.72% (Tranche III), 5.84% (Tranche IV & V)

2. Option Life - (a) For Options - Vesting period (1 Year) Average of exercise period

(b) For RSU - Vesting period (3 Years) Average of exercise period

3. Expected Volatility* - Tranche-II: 0.26, Tranche- III: 0.26, Tranche- IV & V: 0.26

4. Dividend Yield - Tranche -II & III: 0.27%; Tranche IV & V: 0.27%

*Expected volatility on the Company’s stock price on National Stock Exchange based on the data

Note 45 (B): Fair Value measurements (Ind AS 113):

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in an orderly transaction in the principal (or most advantageous) market at measurement date under the current market condition regardless of whether that price is directly observable or estimated using other valuation techniques.

The Company has established the following fair value hierarchy that categorizes the values into 3 levels. The inputs to valuation techniques used to measure fair value of financial instruments are:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The fair value of all bonds which are traded in the stock exchanges is valued using the closing price or dealer quotations as at the reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market (For example traded bonds, over the counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on company specific estimates. The mutual fund units are valued using the closing Net Asset Value. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

(a) The fair values of the quoted investments/units of mutual fund schemes are based on market price/net asset value at the reporting date.

(b) The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves and an appropriate discount factor.

(c) The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates and interest rate curve of the respective currencies.

(d) The fair value of currency swap is calculated as the present value determined using forward exchange rates, currency basis spreads between the respective currencies, interest rate curves and an appropriate discount factor.

(e) The fair value of foreign currency option contracts is determined using the Black Scholes valuation model.

(f) The fair value of the remaining financial instruments is determined using discounted cash flow analysis. The discount rates used is based on management estimates.

The significant unobservable inputs used in the fair value measurement of the fair value hierarchy together with a

quantitative sensitivity analysis as at March 3T 2021 and March 3T 2020 are as shown below:

Note 46: Financial Risk Management Objectives (Ind AS 107):

The Company’s principal financial liabilities, other than derivatives, comprises of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets, other than derivatives include trade and other receivables, investments and cash and cash equivalents that derive directly from its operations.

The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company. The Company uses derivative financial instruments, such as foreign exchange forward contracts, foreign currency option contracts, principal only swaps, cross currency swaps that are entered to hedge foreign currency risk exposure, interest rate swaps, coupon only swaps to hedge variable interest rate exposure and commodity fixed price swaps to hedge commodity price risks. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

(A) Foreign Currency Risk:

Foreign currency risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the foreign currency borrowings, import of fuels, raw materials and spare parts, capital expenditure, exports of cement and the Company’s net investments in foreign subsidiaries.

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure.

The Company has standard operating procedures and investment policy for deployment of surplus liquidity, which allows investment in debt securities, fixed deposits and mutual fund schemes of debt categories only and restricts the exposure in equity markets.

Compliances of these policies and principles are reviewed by the internal auditors/internal risk management committee on periodical basis.

The Corporate Treasury team updates the Audit Committee on a quarterly basis about the implementation of the above policies. It also updates the Risk Management Committee of the Company on periodical basis about the various risks to the business and status of various activities planned to mitigate the risks.

(I) Market Risk:

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and borrowings.

(B) 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 exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowing with floating interest rates. For all long-term borrowings with floating rates, the risk of variation in the interest rates is mitigated through interest rate swaps. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

(B) Cash Flow Hedges: The Company has foreign currency external commercial borrowings / investments and to mitigate the risk of foreign currency and floating interest rates the Company has taken forward contracts, currency options, currency swaps, interest rates swaps and principal only swaps. The Company is following hedge accounting for all the foreign currency borrowings/ investments raised on or after April 01,2015 based on qualitative approach.

The Company assesses hedge effectiveness based on following criteria:

(i) an economic relationship between the hedged item and the hedging instrument;

(ii) the effect of credit risk; and

(iii) assessment of the hedge ratio

The Company designates the derivatives to hedge its currency risk and generally applies a hedge ratio of 1:1. The Company’s policy is to match the critical terms of the forward exchange contracts to match with the hedged item.

(II) Credit Risk Management:

Credit risk arises when a customer or counterparty does not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing / investing activities, including deposits with banks/financial institutions, mutual fund investments, and investments in debt securities, foreign exchange transactions and financial guarantees. 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 has credit evaluation policy for each customer and based on the evaluation credit limit of each customer is defined. Wherever the Company assesses the credit risk as high the exposure is backed by either bank guarantee / letter of credit or security deposits.

Total Trade receivable as on March 31,2021 is ' 2,285.99 Crores (March 31,2020'1,848.28 Crores)

The Company does not have higher concentration of credit risks to a single customer. A single largest customer has total exposure in sales 2.10% (March 31,2020: 2.4%) and in receivables 10.7% (March 31,2020: 9.5%)

As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

As per policy receivables are classified into different buckets based on the overdue period ranging from 6 months -one year to more than two years. There are different provisioning norms for each bucket which are ranging from 25% to 100%.

(C) Commodity price risk management:

Commodity price risk for the Company is mainly related to fluctuations in coal and pet coke prices linked to various external factors, which can affect the production cost of the Company. Since the Energy costs is one of the primary costs drivers, any adverse fluctuation in fuel prices can lead to drop in operating margin. To manage this risk, the Company enters into fixed price swaps/other derivatives for imported coal, enter into long-term supply agreement for pet coke, identifying new sources of supply etc. While fixed price swaps/other derivatives are available in the markets for coal but in case of pet coke no such derivative is available; it has to be procured at spot prices. Additionally, processes and policies related to such risks are reviewed and controlled by senior management and fuel requirement are monitored by the central procurement team.

Investments, Derivative Instruments, Cash and Cash Equivalent and Deposits with Banks/Financial Institutions

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.

Investments of surplus funds are made only with approved Financial Institutions / Counterparty. Investments primarily include investment in units of mutual funds, quoted Bonds, Non-Convertible Debentures issued by Government / Semi Government Agencies / PSU Bonds / High Investment grade corporates etc. These Mutual Funds and Counterparties have low credit risk.

Total Non-current and current investments excluding Subsidiaries, Joint Ventures and Associates as on March 31,

Financial Guarantees

The Company has given corporate guarantees amounting to ' 4,230.94 Crores in favour of its subsidiaries and joint ventures (Refer note 33 (c).

(III) Liquidity risk management:

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. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company’s treasury team is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows.

Note 48: Capital Management (Ind AS 1):

The Capital management objective of the Company is to (a) maximise shareholder value and provide benefits to other stakeholders and (b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Company’s capital management, capital/equity includes issued equity share capital, share premium and all other equity.

Note 49: Research and Development:

Revenue expenditure on Research and Development included in different heads of expenses in the Statement of Profit and Loss is ' 15.25 Crores. (March 31,2020'16.34 Crores).

Note 50: Corporate Social Responsibility:

Expenditure incurred in cash on Corporate Social Responsibility activities, included in different heads of expenses in the Statement of Profit and Loss is ' 120.68 Crores (March 31,2020'123.55 Crores) and on account of capital expenditure Nil (March 31,2020'0.96 Crores). The said capital expenditure is incurred on acquiring and owning assets which are being used for the purpose of Corporate Social Responsibility. The amount required to be spent under Section 135 of the Companies Act, 2013 for the year ended March 31,2021 is ' 73.72 Crores (March 31,2020'63.50 Crores) i.e. 2% of average net profits for last three financial years, calculated as per section 198 of the Companies Act, 2013.

(a) Other Operating Revenues include Incentives against capital investments, under State Investment Promotion Scheme of ' 233.03 Crores (March 31,2020'381.84 Crores).

(b) Sales Tax deferment loan granted under State Investment Promotion Scheme has been considered as a government grant and the difference between the fair value and nominal value as on date is recognized as an income. Accordingly, an amount of ' 48.83 Crores (March 31,2020: ' Nil Crores) has been recognized as an income.

Every year change in fair value is accounted for as an interest expense.

(c) Repairs and maintenance are net of subsidy received, under State Investment Promotion Scheme of ' 0.37 Crores. (March 31,2020'0.32 Crores).

(d) Cost of materials consumed are net of grants received towards royalty expense amounting to ' 12.26 Crores (March 31,2020'23.44 Crores)

Note 52: Assets held for Disposal (Ind AS 105):

The Company has identified certain assets like Land, Aggregate Mines, Coal Washery etc. which are available for sale in its present condition. The Company is committed to plan the sale of asset and an active programme to locate a buyer and complete the plan have been initiated. The Company expects to dispose off these assets in the due course.

Note 53: Revenue (Ind AS 115)

(A) The Company is primarily in the Business of manufacture and sale of cement and cement related products. The product shelf life being short, all sales are made at a point in time and revenue recognised upon satisfaction of the performance obligations which is typically upon dispatch/ delivery. The Company has a credit evaluation policy based on which the credit limits for the trade receivables are established, the Company does not give significant credit period resulting in no significant financing component. The Company, however, has a policy for replacement of the damaged goods.

Note 54:

Under the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019, announced by the Government of India, the Company has provided a one-time expense of ' 130.66 Crores as part of Rates and Taxes, against various disputed liabilities during the year ended March 31,2020.

Note 55:

Exceptional item of ' 164.00 crores for the year ended March 31,2021 represents a one-time expense upon receiving an order dated July 17, 2020, issued by the Hon’ble Supreme Court denying the Company’s claim of capital investment subsidy, sanctioned in 2010 under Rajasthan Investment Promotion Scheme -2003.

Note 57: COVID-19 (Global Pandemic)

In the face of COVID - 19 pandemic the Company’s operations across locations were stopped in line with the Government directives. This had an adverse impact on revenues during the quarter ended June 30, 2020, as expected.

Even before the formal announcement of the national lockdown, keeping in mind the well-being of its employees, the Company enabled ‘work from home’ for its employees and taken all necessary steps to ensure a seamless transition to the new ways of working for employees, while at the same time ensuring business continuity. The Company was in continuous engagement with all its stakeholders through various digital platforms. Critical Response Teams were set up across the organisation to plan scenarios and respond to the rapidly changing situation.

With the Government allowing select activities to operate, the Company gradually resumed operations at its establishments after obtaining necessary government approvals and ensuring compliance with the statutory guidelines in line with the standard operating procedure (SOP) announced by the Ministry of Home Affairs, Government of India.

With the easing of lockdown, operations gradually stabilised. The Company has the unique advantage of being able to cater to demand in different parts of the country.

The Company recovered the carrying amount of all its assets including inventory, receivables and loans in the ordinary course of business. The Company’s capital and financial resources remained entirely protected and its liquidity position remain adequately covered. The Company was able to service its debt obligations as per schedule and on due dates.

Note 58:

Previous year figures have been regrouped / reclassified wherever necessary to correspond with current year classification disclosure.