Star Cement Ltd. के अकाउंट के लिये नोट

Mar 31, 2025

(xxii) Provisions and Contingencies

A Provision is recognized for a present obligation as a result of past events if it is probable that an outflow of
resources will be required to settle the obligation and in respect of which a reliable estimate can be made.
Provisions are measured at the present value of management''s best estimate of the expenditure required
to settle the present obligation at the end of the reporting period. The discount rate used to determine the
present value is a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest
expense. Liabilities which are material and whose future outcome cannot be ascertained with reasonable
certainty are treated as contingent and disclosed by way of notes to the accounts. Contingent assets are also
disclosed by way of notes to the accounts.

(xxiii) Mines Restoration provisions

An obligation for restoration, rehabilitation and environmental costs arises when environmental disturbance
is caused by the development or ongoing extraction from mines. Costs arising from restoration at closure of
the mines and other site preparation work are provided for based on their discounted net present value, with
a corresponding amount being capitalised at the start of each project. The amount provided for is recognised,
as soon as the obligation to incur such costs arises. These costs are charged to the Statement of Profit and
Loss over the life of the operation through the depreciation of the asset and the unwinding of the discount
on the provision. The costs are reviewed periodically and are adjusted to reflect known developments which
may have an impact on the cost or life of operations. The cost of the related asset is adjusted for changes in
the provision due to factors such as updated cost estimates, new disturbance and revisions to discount rates.
The adjusted cost of the asset is depreciated prospectively over the lives of the assets to which they relate. The
unwinding of the discount is shown as a finance cost in the Statement of Profit and Loss.

(xxiv) Segment reporting

An operating segment is a component of the Company that engages in business activities from which it
may earn revenues and incur expenses, whose operating results are regularly reviewed by the company''s
Chief Operating Decision Maker ("CODM") to make decisions for which discrete financial information is
available. Based on the management approach as defined in Ind AS 108, the CODM evaluates the Company''s
performance and allocates resources based on an analysis of various performance indicators by business
segments and geographic segments.

Note: 3.2 - The National Company Law Tribunal (NCLT) Guwahati Bench vide order dated May 10, 2024 had approved
the scheme for amalgamation of Meghalaya Power Limited (MPL), Megha Technical & Engineers Private Limited
(MTEPL) & NE Hills Hydro Private Limited (NHHL) (collectively referred as ""transferor companies"") with Star Cement
Meghalaya Limited (SCML) pursuant to sections 230 to 232 of Company Act, 2013 and the appointed date of the scheme
was April 01, 2023.

As per approved amalgamation scheme, 1,19,80,567 equity shares of Star Cement Meghalaya limited (SCML) has to be
issued to the shareholders of transferor companies. As the company being the sole shareholder of all these transferor
companies, the company has received 1,19,80,567 shares of SCML against its investment in MPL, MTEPL and NHHL.

Based on above, the Company had aggregated its total investments of H10,339.07 lakhs in transferor companies viz
MPL (no.of equity shares 1,71,30,620 of value H7,597.43 lakhs), MTEPL (no.of equity shares 2,73,46,400 of value H2,734.64
lakhs) and NHHL (no.of equity shares 70,000 of value H7.00 lakhs) with its investment in SCML.

Note: 7.2 - The carrying amount of deferred tax assets are reviewed at each balance sheet date. Based on the
management''s estimate regarding the future projection, company expects to have sufficient future taxable profits
against which above deferred tax asset shall be realized.

Note: 7.3 - Section 115 BAA of the Income Tax Act, 1961, introduced by the Taxation Laws (Amendment) Act, 2019 gives a
one-time irreversible option for payment of income tax at reduced rate with effect from financial year commencing April
01, 2019 subject to certain conditions. The Company has made an assessment of the impact of the above amendment
and decided to continue with the existing tax structure until utilisation of accumulated minimum alternative tax credit
("MAT"). The company shall, however, continue to review its profitability forecast at regular intervals and shall carry out
necessary remeasurement adjustments to deferred tax/liabilities as per Ind As -12 " Income Taxes" upon assessment of
reasonable certainty to avail the option under section 115 BAA.

a) Terms/Rights attached to equity shares

The Company has only one class of equity shares having par value of H1/- per share. Each holder of equity shares is
entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed
by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting
except in case of interim dividend.

In the event of liquidation of the Company, the holders of the 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

Capital reserve

This reserve has been created pursuant to scheme of amalgamation between company and Star Ferro and Cement
Limited and can be utilized in accordance with the provisions of the Companies Act, 2013.

Capital redemption reserve

In accordance with section 69 of the Companies Act, 2013, the Company creates capital redemption reserve equal to
the nominal value of the shares bought back as an appropriation from retained earnings.

General reserve

The Company had transferred a portion of the net profit of the Company before declaring dividend to general reserve
pursuant to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not required under
the Companies Act 2013.

Retained earnings

Retained earnings represents accumulated profit of the Company as on reporting date. Such profits are after adjustment
of payment of dividend, transfer to any reserves and adjustment for remeasurement gain/loss on defined benefit plan.

Note: 18 - Borrowings (non-current) (Contd.)

Note: 18.1 - Term loan of H12,500.00 lakhs (March 31, 2024 - Nil) secured by the first charge on Fixed assets of the 3.3
MTPA Clinker plant at Lumshnong Meghalaya is repayable in 28 quarterly installments starting from January, 2026.
Term loan carries interest @ repo rate 1.50% p.a.

Note: 18.2 - Term loan from a subsidiary company is long term in nature and it is payable in 5 years and the rate of
interest is 8.67% (March 31, 2024: 8.49%). Refer note 48

Note: 18.3 - The Company has not made any default in loan repayment and interest payments at each reporting date.

Note: 22.1 - Working capital borrowings of H201.66 lakhs (March 31 2024: H103.77 lakhs) from banks are secured by first
charge on current assets of the company''s cement grinding unit at Guwahati, Assam.

Note: 22.2 - Working capital borrowings of H58.15 lakhs (March 31 2024: H406.83 lakhs) from banks are secured by pari
passu charge on current assets of the Company''s manufacturing facility at Lumshnong, Meghalaya.

Note: 22.3 - Working capital borrowings of H1.29 lakhs (March 31 2024: H8.69 lakhs) from a bank is secured by first charge
on all current assets of the Siliguri Grinding Unit.

Note: 22.4 - The rate of interest for the cash credit borrowings ranges between 8.25% to 9.80% (March 31, 2024- 8.25%
to 9.77%)

Note: 22.5 - Buyer''s credit for capex from a bank amounting to H3,195.65 lakhs (March 31, 2024 - H3,111.04 lakhs) is
secured by way of exclusive charge on machinery imported under the facility sanctioned by the bank.

Note: 22.6 - Buyer''s credit carrys interest @ 6 months EURIBOR 0.55% p.a (March 31, 2024- 6 months EURIBOR 0.40%
to 0.45% p.a) and it is repayable in 180 days.

Note: 34.1 - Interest to others include interest on income tax NIL (March 31, 2024- H12.40 lakhs)

Note: 34.2 - Interest expense on borrowings include applicable loss on foreign currency transaction/translation of
H84.62 lakhs (March 31, 2024- Nil)

Note: 34.3 - Interest of H1,247.76 lakhs (March 31, 2024- H229.31 lakhs) is capitalised during the year as pre- operative
expenses in capital work in progress which includes applicable loss on foreign currency transaction/translation of H NIL
(March 31, 2024: H62.12 lakhs). Refer note 2.2 (b).

Note: 34.4 - For applicable interest rate, refer note 18.1, note 22.4 and note 22.6.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to
the prior years.

iv) The major categories of plan assets

The defined benefit plans are funded with Insurance Company. The Company does not have any liberty to
manage the funds provided to insurance company. Thus the composition of each major category of plan assets
has not been disclosed.

(v) Risk exposure

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which
are detailed below:

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference
to the Government of India bonds. If the return on plan asset is below this rate, it will create a plan deficit.

Interest risk:

A decrease in the interest rate on plan assets will increase the plan liability.

Life expectancy:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the
mortality of plan participants both during and at the end of the employment. An increase in the life expectancy
of the plan participants will increase the plan liability.

Salary growth risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan
participants. An increase in the life expectancy of the plan participants will increase the plan liability.

(vi) Defined benefit liability and employer contributions

Expected contributions to post-employment benefits plans for the year ending March 31, 2026 are H196.30
lakhs (March 31, 2025 - H164.40 lakhs)

The weighted average duration of the defined benefit obligation is 4.63 years (March 31, 2024: 4.61 years). The
expected maturity analysis of undiscounted gratuity is as follows:

The primary objective of capital management is to ensure the maintenance of healthy capital ratio in order to support
its business and maximise stakeholders value. The company manages its capital structure according to changing
economic conditions. No changes were made in the objectives, policies or processes during the year ended March 31,
2025 as compared to previous year. There have been no breaches of financial covenants of any interest bearing loans
and borrowings for the reported year. The company monitors capital structure on the basis of debt to equity ratio. For
the purpose of company''s capital management, equity includes paid up equity share capital and other equity, and debt
comprises long-term and short-term borrowings including current maturities of long term borrowings. The following
table summarizes debt and equity of the company.

(i) Fair value hierarchy

The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments
by valuation techniques:

Level 1: This level includes those financial instruments which are measured by reference to quoted prices
(unadjusted) in active markets for identical assets or liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity-specific
estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in
level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included
in level 3.

(ii) Valuation technique used to determine fair value

The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following methods and assumptions were used to estimate the fair values:

(a) The fair value of cash and cash equivalents, trade receivables and payables, short-term loans, current financial
liabilities and assets and current borrowings approximate their carrying amount largely due to the short-term
nature of these instruments. The management considers that the carrying amounts of financial assets and
financial liabilities recognised at nominal cost/amortised cost in the financial statements approximate their fair
values. In respect of non current borrowings and loans, fair value is determined by using discount rates that
reflect the present borrowing rate of the company.

(b) Investments (other than investments in subsidiaries) traded in the active market are determined by reference to
the quotes from the stock exchanges as at the reporting date. Unquoted investments in shares have been valued
based on historical net asset value as per the latest audited financial statements after considering the impact of
fair valuation of immovable properties which is based on valuation report from an independent valuer.

(v) Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly
based on market conditions existing at the end of each reporting year. For details of the key assumptions used see
42(ii).

Note: 43 - Financial risk management

The Company''s activities are exposed to a varieties of financial risks viz credit risk, liquidity risk and market risk (i.e.
foreign currency risk, interest rate risk and price risk).This note explains the sources of risk which the entity is exposed
to and how the entity manages the risk.

(A) Credit risk

Credit risk is the risk that counterparty will 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 activities including deposits placed with banks and financial institutions
and other financial instruments.

i) Trade receivables

Customer credit risk is managed as per the Company''s established policies, procedures and defined controls
relating to customer credit risk management. Trade receivables are non-interest bearing and are generally
carrying 30 days credit terms for trade customers. Outstanding customer receivables are regularly monitored
and the Company receives security deposits from its customers which mitigates the credit risk. No single
customer accounted for 10% or more of the Company''s net sales. Therefore, the Company does not expect any
material risk on account of non-performance by any of its counterparties.

For expected credit loss as at each reporting date, the Company assesses the risk profile of trade receivables
and categorises risk profile viz. trade receivables for which credit risk has not been significantly increased from
initial recognition, trade receivables for which credit risk has increased significantly but are not credit impaired
and for trade receivables for which credit risk has increased significantly and are credit impaired.

The Company has adopted simplified approach model to compute credit loss allowance based on a provision
matrix. The provision matrix is prepared based on historically observed default rates over the expected life of
trade receivables and is adjusted for forward-looking estimates. At each reporting date, the historically observed
default rates and changes in the forward-looking estimates are updated. Accordingly, loss allowances on trade
receivables are measured using provision matrix at an amount equal to life time expected losses i.e. expected
cash shortfall.

ii) Financial instruments and deposits

Credit risk pertaining to balances with banks and financial institutions is managed by the Company''s Treasury
department in accordance with Company''s policy. Surplus funds are parked only within approved investment
categories with well defined limits. Investment category is periodically reviewed by the Finance committee.

Credit risk arising from short term liquid funds, other balances with banks and other cash equivalents is limited
because the counterparties are banks and recognised financial institutions with high credit ratings assigned by
the credit rating agencies. None of the financial instruments of the Company result in material concentration
of credit risks.

Other financial assets mainly include incentives receivable from the government, insurance claim receivables,
fixed deposits, loans & interest thereon and security deposits given. There are no indications that defaults in
payment obligations would occur in respect of these financial assets.

The Company''s maximum exposure to credit risk for the components of the Balance Sheet as at March 31, 2025
and March 31, 2024 is the carrying amounts as given in Note 42.

(B) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities that are settled by delivering cash or another financial asset.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability
of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the
nature of the underlying business, the Company maintains sufficient cash and liquid investments available to meet
its obligation.

Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing
facilities below) and cash and cash equivalents on the basis of expected cash flows. The management also considers
the cash flows projection and level of liquid assets necessary to meet these on a regular basis.

(a) Other financial liabilities includes deposits received from customers amounting to H19,881.52 lakhs (March
31,2024 - H18,738.00 lakhs). These deposits do not have a contractual re-payment term but are repayable
on demand. Since, the Company does not have an unconditional right to defer the payment beyond 12
months from reporting date, these deposits have been classified under current financial liabilities. For
including these amounts in the above mentioned maturity analysis, the Company has assumed that these
deposits including interest thereon, will be repayable at the end of the next reporting period. The actual
maturity period for the deposit amount and the interest thereon can differ based on the date on which these
deposits are settled to the customers.

(C) Market risk

(i) Foreign currency risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rates. The Company deals with international vendors with respect to stores & spares and capital
goods procurement, which rises exposure of the company to foreign exchange risk. In view of low proportion
of import, as compared to the overall operations, the exposure of the Company to foreign exchange risk is also
not considered to be material and thus the company has not entered into any derivative financial contracts as on
March 31, 2025. The risk is measured through a forecast of highly probable foreign currency cash flows.

(iii) Price risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices (other than those arising from interest rate risk or currency risk), whether those changes are
caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar
financial instruments traded in the market.

The Company''s exposure to equity securities price risk arises from investments held by the company in
equity securities and classified in the Balance Sheet as at fair value through profit and loss. The Company
has investment in quoted and unquoted equity securities as per details in note no 42. Investment is done in
accordance with the limits set by the Company. The Company''s Finance Committee reviews and approves all
investment decisions.

(iv) Commodity price risk

Commodity price risk for the Company is mainly related to fluctuations in coal 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 coal linkage agreements for long-term supply agreement for coal, identifying new
sources of supply etc. 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.

Note: 44 - Lease

a) The Company has entered into lease agreements with different parties for taking offices and land on lease and
license basis for business operation. The lease term of different contracts varies in a range of 2 to 99 years and price
is on fixed rental basis with escalation clauses in the lease agreements.

b) The Company also has certain leases with lease terms of 12 months or less. The Company applies the ''short-term
lease'' recognition exemptions for these leases.

c) The weighted average incremental borrowing rate for lease liabilities are between 8.71% to 8.84% per annum (March
31, 2024: 8.48% to 8.68% per annum). Set out below are the carrying amounts of lease liabilities included under
financial liabilities and its movements during the year.

Note: 45 - Contingent liability &capital commitments (Contd.)

order NGT had accepted the recommendation of 5^th Interim Report of the Independent Committee set up
by NGT, which then suggested imposition of penalty on cement companies and thermal power plants in
Meghalaya.

The Company did not purchase any illegal coal and had complied with all disclosure requirements of the
various Government Departments. The Report of NGT Committee was based on the assumptions & views of
the Committee and not on hard facts. Moreover neither the Company has been issued a show-cause nor any
opportunity of being heard was given to the Company before submitting the Interim reports by the Independent
Committee to NGT. Further NGT did not serve any notice on the Company before passing the impugned order
which is a clear violation of principles of natural justice.

In an earlier year on an appeal by the Company, the Apex Court vide it''s order dated May 2, 2023 restored
the proceeding back to NGT, at the stage, as it stood prior to the passing of the judgement dated January 17,
2020. Subsequently the matter has been transferred to the NGT, Eastern Zone Bench, and the Company has
filed necessary affidavits in the previous year and the matter is subjudice. No provision has been considered
necessary at this stage

(b) As reported in the earlier year, the Company had received a demand notice from the Divisional Mining Officer
(DMO), Directorate of Mineral Resources, Meghalaya, Jowai towards outstanding dues of royalty & Cess on
Coal, Sandstone and Clay procured/consumed by the Company in certain specific periods between F.Y. 2009¬
10 to F.Y. 2022-23 amounting to H2001.22 lakhs (including H1292.54 lakhs towards Penal Interest) against which
a provision amounting to H439.92 lakhs had been made in the books of accounts till the last years on account
of abundant precaution. As per the provisions of the Mines and Minerals (Development and Regulation) Act,
1957, the liability for payment of royalty in respect of any mineral removed/ consumed from the mining lease
area arises on the holder of the mining lease and not on the purchaser of such mined minerals. Hence, there is
no obligation of the Company to pay royalty/cess in case the minerals are procured from third party vendors.
Further during the year, the office of DMO has withdrawn and issued no dues certificates towards its demand
for payment of Royalty & Cess on Clay and Sandstone and waived off /reduced the penal interest on Sandstone
and coal respectively. Thereby the above demand has been reduced to H549.90 lakhs (including H109.98 lakhs
towards Penal Interest). Based on the same and since the liability to pay royalty & cess itself is not applicable to
the company, no provision of differential demand on coal of H109.98 lakhs has been provided and shown as
contingent liability.

The office of DMO in its correspondences during the year, has raised the demand towards Royalty & Cess on
Shale & Clay amounting to H428.97 lakhs for the period Feb''2020 to May''2024 without giving detailed breakup of
the same. Even though, the same office of DMO has already withdrawn and issued no dues certificates towards
its demand for payment of Royalty & Cess on Clay and Shale for the period Feb''2020 to Dec''2022 and Feb''2020
to Jan''2024 respectively before raising the above demand. Since the company had already applied for no due
certificate for the remaining period and expected to receive in due course, no provision has been made in the
books of accounts and shown as contingent liability. Based on the legal opinion received in this regard, the
Company has disputed the demand and believe that the said demand is not tenable, and the matter shall be
disposed of in the favour of the Company.

(c) The Company had received a demand notice from the Director General of Goods & Services Tax Intelligence
(DGGI), Shillong towards non-payment of GST under reverse charge mechanism (RCM) amounting to H861.23
Lakhs on payment of Royalty, DMF, NMET & Mineral cess and H239.23 Lakhs towards ineligible input tax credit
(ITC) availed by the company under RCM during certain specific periods between July 2017 to December 2018
(along with penalty amounting to H861.23 & 239.23 Lakhs and interest thereon).

The Company had made the adequate payment of GST under RCM amounting to H239.23 Lakhs @ 5% applicable
rate, before the issuance of demand notice, which has not been taken in cognizance by DGGI and imposed
a demand of H861.23 Lakhs based on a higher rate of 18% based on CBIC circular no 164/20/2021-GST dated
6^th October 2021 with retrospective effect. By giving a reference of a Tribunal decision on a similar case in
the favour of assessee, the company has submitted its reply to DGGI and sought for disposal of the matter in
its favour and no communication has been received from DGGI since then and the matter is pending. The
company considers the above demand non tenable and deserves to be set aside. Based on the legal opinion
received, the Company believes that it has a good case in this matter and no provision is required at this stage.

Note: Post-employment benefits and other long-term benefits related to KMPs is being disclosed based on actual
payment made on retirement /resignation of services, but does not include provision made on actuarial basis as
the same is available for all employees together. Further, in view of applicability of such benefits only to CFO and
CS of the Company, the amount of provision made on actuarial basis are not significant considering the nature of
operation and size of the Company.

E) Terms and conditions of transactions with related parties:

(i) The sales and purchases transaction with related parties (including transactions related to property, plant and
equipment) 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.

(ii) Refer note 5 and note 18 for details (viz payment terms and rate of interest) of inter corporate loans and inter
corporate borrowings.

(iii) For the year ended March 31, 2025, 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.

(iv) The remuneration of directors and KMP is determined by the Nominations & Remuneration Committee having
regard to the performance of individuals and market trends.

(a) Average inventory (opening inventory closing inventory)/2

(b) Average trade receivable -: (opening trade receivable closing trade receivable)/2

(c) Average trade payable -: (opening trade payable closing trade payable)/2

(d) Capital employed -: (Equity (incl. other equity-Intangible Assets- Intangible Assets under Development) Current
Borrowing Non Current Borrowing

(e) Average shareholders equity-: (opening equity (incl. other equity) closing equity (incl. other equity))/2

(f) Average Investment -: (opening investment closing investment)/2

(g) Debt service -: Interest payments lease payments principal repayments

Note: 52 - Other Statutory information

i) The Company has not advanced or loaned or invested funds to any other person or entity, 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.

ii) The company has not been declared as wilful defaulter by any bank of financial institution or other lender.

iii) The Company have not traded or invested in Crypto currency or Virtual currency during the current financial year
and previous financial year.

iv) The Company has not received any fund from any person or entity, 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.

v) The Company has not entered into 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).

Note: 54- Audit Trail

The Company has been using various accounting software for maintaining its books of account which has a feature of
recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions except
Audit trail feature is not enabled at database level.

Note: 55 -

These financial statements have been approved by the Board of Directors of the Company on May 21, 2025 for issue to
the shareholders of the Company for the adoption.

As per our report of even date For and on behalf of Board of Directors of Star Cement Limited

For Singhi & Co. Manoj Agarwal Sajjan Bhajanka

Chartered Accountants Chief Financial Officer Chairman & Managing Director

Firm Registration No.:302049E DIN: 00246043

(Gopal Jain) Debabrata Thakurta Tushar Bhajanka

Partner Company Secretary Deputy Managing Director

Membership No. 059147 DIN: 09179632

Place : Kolkata
Date : May 21, 2025

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Mar 31, 2024

(xxii)Provisions and contingencies

A Provision is recognized for a present obligation as a result of past events if it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and disclosed by way of notes to the accounts. Contingent assets are also disclosed by way of notes to the accounts.

(xxiii) Mines restoration provisions

An obligation for restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the development or ongoing extraction from mines. Costs arising from restoration at closure of the mines and other site preparation work are provided for based on their discounted net present value, with a corresponding amount being capitalised at the start of each project. The amount provided for is recognised, as soon as the obligation to incur such costs arises. These costs are charged to the Statement of Profit and Loss over the life of the operation through the depreciation of the asset and the unwinding of the discount on the provision. The costs are reviewed periodically and are adjusted to reflect known developments which may have an impact on the cost or life of operations. The cost of the related asset is adjusted for changes in the provision due to factors such as updated cost estimates, new disturbance and revisions to discount rates. The adjusted cost of the asset is depreciated prospectively over the lives of the assets to which they relate. The unwinding of the discount is shown as a finance cost in the statement of profit and loss.

(xxiv) Segment reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the company''s Chief Operating Decision Maker ("CODM") to make decisions for which discrete financial information is available. Based on the management approach as defined in Ind AS 108, the CODM evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments.

(v) Risk exposure

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below:

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the Government of India bonds. If the return on plan asset is below this rate, it will create a plan deficit.

Interest risk:

A decrease in the interest rate on plan assets will increase the plan liability.

Life expectancy:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

Salary growth risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the life expectancy of the plan participants will increase the plan liability.

(vi) Defined benefit liability and employer contributions

Expected contributions to post-employment benefits plans for the year ending March 31, 2025 are H164.40 lakhs ( March 31, 2024 - H126.12 lakhs)

The weighted average duration of the defined benefit obligation is 4.61 years (March 31, 2023: 5.56-5.77 years). The expected maturity analysis of undiscounted gratuity is as follows:

The primary objective of capital management is to ensure the maintenance of healthy capital ratio in order to support its business and maximise shareholders value. The Company manages its capital structure according to changing economic conditions. No changes were made in the objectives, policies or processes during the year ended March 31, 2024 as compared to previous year. There have been no breaches of financial covenants of any interest bearing loans and borrowings for the reported year. The Company monitors capital structure on the basis of debt to equity ratio. For the purpose of Company''s capital management, equity includes paid up equity share capital and other equity, and debt comprises long-term and short-term borrowings including current maturities of long term borrowings. The following table summarizes debt and equity of the Company.

(i) Fair value hierarchy

The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:

Level 1: This level includes those financial instruments which are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(ii) Valuation technique used to determine fair value

The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following methods and assumptions were used to estimate the fair values:

(a) The fair value of cash and cash equivalents, trade receivables and payables, short-term loans, current financial liabilities and assets and borrowings approximate their carrying amount largely due to the short-term nature of these instruments. The management considers that the carrying amounts of financial assets and financial liabilities recognised at nominal cost/amortised cost in the financial statements approximate their fair values. In respect of non current trade receivables and loans, fair value is determined by using discount rates that reflect the present borrowing rate of the company .

(b) Investments (other than Investments in Subsidiaries) traded in the active market are determined by reference to the quotes from the Stock exchanges as at the reporting date. Quoted Investments for which quotations are not available have been included in the market value at the face value/paid up value, whichever is lower except in case of bonds where the net present value at current yield to maturity have been considered. Unquoted investments in shares have been valued based on historical net asset value as per the latest audited financial statements after considering the impact of fair valuation of immovable properties which is based on valuation report from an independent valuer.

(v) Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting year. For details of the key assumptions used see 43(ii).

Note : 44 - Financial risk management

The Company''s activities are exposed to a varieties of financial risks viz credit risk, liquidity risk and market risk (i.e. foreign currency risk, interest rate risk and price risk).This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(A) Credit risk

Credit risk is the risk that counterparty will 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 activities including deposits placed with banks and financial institutions and other financial instruments.

i) Trade receivables

Customer credit risk is managed as per the Company''s established policies, procedures and defined controls relating to customer credit risk management. Trade receivables are non-interest bearing and are generally carrying 30 days credit terms. Outstanding customer receivables are regularly monitored and the Company receives security deposits from its customers which mitigates the credit risk. No single customer accounted for 10% or more of the Company''s net sales. Therefore, the Company does not expect any material risk on account of non-performance by any of its counterparties.

For expected credit loss as at each reporting date, the Company assesses the risk profile of trade receivables and categorises risk profile viz. trade receivables for which credit risk has not been significantly increased from initial recognition, trade receivables for which credit risk has increased significantly but are not credit impaired and for trade receivables for which credit risk has increased significantly and are credit impaired.

The Company has adopted simplified approach model to compute credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. At each reporting date, the historically observed default rates and changes in the forward-looking estimates are updated. Accordingly, loss allowances on trade receivables are measured using provision matrix at an amount equal to life time expected losses i.e. expected cash shortfall.

The following table summarises the change in the loss allowances measured using simplified approach model expected credit loss assessment.

ii) Financial instruments and deposits

Credit risk pertaining to balances with banks and financial institutions is managed by the Company''s Treasury department in accordance with Company''s policy. Surplus funds are parked only within approved investment categories with well defined limits. Investment category is periodically reviewed by the Company''s Board of Directors.

Credit risk arising from short term liquid funds, other balances with banks and other cash equivalents is limited because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the credit rating agencies. None of the financial instruments of the Company result in material concentration of credit risks.

Other financial assets mainly include incentives receivable from the government, fixed deposits, loans & interest thereon and security deposits given. There are no indications that defaults in payment obligations would occur in respect of these financial assets."

The Company''s maximum exposure to credit risk for the components of the Balance Sheet as at March 31, 2024 and March 31, 2023 is the carrying amounts as given in Note 43.

(B) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the underlying business, the Company maintains sufficient cash and liquid investments available to meet its obligation.

(C) Market risk

(i) Foreign currency risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company deals with international vendors with respect to stores, coal and capital goods procurement, which rises exposure of the company to foreign exchange risk. In view of low proportion of import, as compared to the overall operations, the exposure of the Company to foreign exchange risk is also not considered to be material. The risk is measured through a forecast of highly probable foreign currency cash flows.

(iii) Price risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market.

The Company''s exposure to equity securities price risk arises from investments held by the company in equity securities and classified in the Balance Sheet as at fair value through profit and loss. The Company has investment in quoted and unquoted equity securities as per details in note no 43. Investment is done in accordance with the limits set by the Company. The Company''s Board of Directors reviews and approves all investment decisions.

Note : 45 - Lease

a) The Company has entered into lease agreements with different parties for taking offices and land on lease and license basis for business operation. The lease term of different contracts varies in a range of 2 to 9 years and price is on fixed rental basis with escalation clauses in the lease agreements.

b) The Company also has certain leases of buildings with lease terms of 12 months or less. The Company applies the ''short-term lease'' recognition exemptions for these leases.

c) The weighted average incremental borrowing rate for lease liabilities are between 8.48% to 8.68% (March 31, 2023: 4.76% to 7.80% ). Set out below are the carrying amounts of lease liabilities included under financial liabilities and its movement during the year.

Note : 46 - Contingent liability and Capital commitments (Contd.)

The Company did not purchase any illegal coal and had complied with all disclosure requirements of the various Government Departments. The Report of NGT Committee was based on the assumptions & views of the Committee and not on hard facts. Moreover neither the Company has been issued a show-cause nor any opportunity of being heard was given to the Company before submitting the Interim reports by the Independent Committee to NGT. Further NGT did not serve any notice on the Company before passing the impugned order which is a clear violation of principles of natural justice.

In the previous year on an appeal by the Company, the Apex Court vide it''s order dated May 2, 2023 restored the proceeding back to NGT, at the stage, as it stood prior to the passing of the judgement dated January 17, 2020. Subsequently the matter has been transferred to the NGT, Eastern Zone Bench, and the Company has filed necessary affidavits and the matter is subjudice. No provision has been considered necessary at this stage ."

(b) As reported in the previous year, the Company had received a demand notice dated March 20, 2023 from the Divisional Mining Officer (DMO), Directorate of Mineral Resources, Meghalaya, Jowai towards outstanding dues of royalty & Cess on Coal, Sandstone, Clay and Shale procured/consumed by the Company in certain specific periods between F.Y. 2009-10 to F.Y. 2022-23 amounting to H2650.31 lakhs (including H1552.61 lakhs towards penal interest) against which a provision amounting to H487.88 lakhs was made in earlier years on account of abundant precaution. As per the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, the liability for payment of royalty in respect of any mineral removed/ consumed from the mining lease arises on the holder of the mining lease and not on the purchaser of such mined minerals. Hence, there is no obligation of the Company to pay royalty/cess in case the minerals are procured from third party vendors. During the year the office of DMO has withdrawn and issued no dues certificates towards its demand for payment of Royalty & Cess on Shale and accordingly provision lying in the books amounting to H47.96 lakhs have been written back. Since the liability to pay royalty & cess itself is not applicable to the company, no provision of differential demand of H1561.30 lakhs (including penal interest H1292.54 lakhs & net of provision kept in the books) has not been provided and shown as contingent liability. Based on the legal opinion received in this regard, the Company has disputed the demand and believe that the said demand is not tenable and the matter shall be disposed off in the favour of the Company.

(c) The Company had received a demand notice from the Director General of Goods & Service Tax Intelligence (DGGI), Shillong towards non-payment of GST under reverse charge mechanism (RCM) amounting to H861.23 lakhs on payment of Royalty, DMF, NMET & Mineral cess and H239.23 lakhs towards ineligible input tax credit (ITC) availed by the company under RCM during certain specific periods between July 2017 to December 2018 (along with penalty amounting to H861.23 & H239.23 lakhs and interest thereon).

The Company has made the adequate payment of GST under RCM amounting to H239.23 lakhs @ 5% applicable rate, before the issuance of demand notice, which has not been taken in cognizance by DGGI and imposed a demand of H861.23 lakhs based on a higher rate of 18% based on CBIC circular no 164/20/2021-GST dated October 6, 2021 with retrospective effect. By giving a reference of a Tribunal decision on a similar case in the favour of assessee, the company has submitted its reply to DGGI and sought for disposal of the matter in its favour and no communication has been received from DGGI since then and the matter is pending. The company considers the above demand non tenable and deserves to be set aside. Based on the legal opinion received, the Company believes that it has a good case in this matter and no provision is required at this stage.

Note: 52 - Other statutory information

i) The Company has not advanced or loaned or invested funds to any other person or entity, 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.

ii) The company has not been declared as wilful defaulter by any bank of financial institution or other lender.

iii) The Company have not traded or invested in Crypto currency or Virtual currency during the current financial year and previous financial year.

iv) The Company has not received any fund from any person or entity, 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.

v) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with the Companies (Restriction on number of Layers) Rules, 2017

vi) The Company has not entered into 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).

vii) Struck off Company: Transactions with the struck off companies under section 248 of the Companies Act,2013 is as under -:

Note: 54- Audit trail

The Company has been using accounting software ERP SAP S4HANA for maintaining its books of account which has a feature of recording audit trail (change log) facility and the same has operated throughout the year for all relevant transactions except Audit trail feature is not enabled for certain data changes to the data for users with certain access rights to a third party software.

Note: 55

These financial statements have been approved by the Board of Directors of the Company on May 22, 2024 for issue to the shareholders of the Company for the adoption.

As per our report of even date For and on behalf of Board of Directors of Star Cement Limited

For Singhi & Co. Vinit Kumar Tiwari Sajjan Bhajanka

Chartered Accountants Chief Executive Officer Chairman & Managing Director

Firm Registration No.302049E DIN:00246043

(Gopal Jain) Manoj Agarwal Rajendra Chamaria

Partner Chief Financial Officer Vice-Chairman & Managing Director

Membership No. 059147 DIN:00246171

Place : Kolkata/Lumshnong Debabrata Thakurta

Date : May 22, 2024 Company Secretary

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Mar 31, 2023

Note 7.2 : The carrying amount of deferred tax assets are reviewed at each balance sheet date. Based on the management''s estimate regarding the future projection, company expects to have sufficient future taxable profits against which above Deferred Tax Asset shall be realized.

Note 7.3 : Based on the Legal opinion obtained by the Company, a sum of '' 984.61 lakhs of Mat Credit entitlement pertaining to earlier years has been recognised during the year based on its availability and a sum of '' 212.29 lakhs has been charged off during the year.

Note 7.4 : Section 115 BAA of the Income Tax Act, 1961, introduced by the Taxation Laws (Amendment) Act, 2019 gives a onetime irreversible option for payment of income tax at reduced rate with effect from financial year commencing 1st April, 2019 subject to certain conditions. The Company has made an assessment of the impact of the above amendment and decided to continue with the existing tax structure until utilisation of accumulated minimum alternative tax ("MAT"). The Company shall, however, continue to review its profitability forecast at regular intervals and shall carry out necessary remeasurement adjustments to deferred tax/liabilities as per Ind As -12 " Income Taxes" upon assessment of reasonable certainty to avail the option under section 115 BAA.

a) Terms/Rights attached to equity shares

The Company has only one class of equity shares having par value of '' 1/- per share. Each holder of Equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of liquidation of the Company, the holders of the 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.

b) In terms of approval of the Board of Directors obtained at its meeting held on 13th August, 2021, the Company had offered Buy Back of Equity shares to all eligible equity shareholders of the Company on a proportionate basis through tender offer route using Stock Exchange mechanism. The buyback of equity shares through the Stock Exchange commenced on 22nd September, 2021 and closed on 5th October, 2021. Accordingly, the Company bought back and extinguished a total of

82.48.580 equity shares of ''1 each at a price of ''150 per equity share, representing 2.00% of the pre-buyback paid-up equity share capital of the Company. The buyback resulted in a cash outflow of ''123.73 crores (excluding transaction costs such as Brokerage, Buy Back Tax, Securities Transaction Tax, GST, Stamp duty and other related expenses etc.). Payments to the eligible shareholders were completed on 13th October, 2021. In the last five financial years, Company had bought back

1.50.48.580 number of equity shares.

Nature and purpose of reserves

Capital Reserve

This reserve has been created pursuant to scheme of amalgamation between company and Star Ferro and Cement Limited and can be utilized in accordance with the provisions of the Companies Act, 2013.

Capital Redemption Reserve

In accordance with section 69 of the Companies Act, 2013, the Company creates capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from retained earnings.

General reserve

The Company had transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act 2013.

Retained earnings

Retained earnings represents accumulated profit of the Company as on reporting date. Such Profits are after adjustment of payment of dividend, transfer to any reserves and adjustment for remeaseurement Gain/loss on defined benefit plan.

(a) Working capital facilities of '' 27.03 Lakhs (March 31 2022: '' 139.42 Lakhs) from banks are secured by pari passu first charge on current assets of the Company’s cement grinding unit at Guwahati, Assam. In the previous year, these working capital facilities were also guaranteed by some of the Directors of the Company. (Refer Note 48 )

(b) Working Capital facilities of '' 591.34 Lakhs (March 31 2022: '' 195.43 Lakhs ) from banks are secured by first pari passu charge on current assets of the Company’s manufacturing facility at Lumshnong, Meghalaya.

(c) Working Capital facilities of '' 228.81 Lakhs (March 31 2022: '' 70.51 lakhs ) from a bank is secured by hypothecation of all current assets of the Siliguri Grinding Unit on first charge basis.

(d) The rate of interest for the above loans ranges between 6.60% to 9.20% (March 31,2022 - 4.40% to 7.80% )

31 (a) Primary business of the Company is Manufacturing and sale of Cement. All other activities of the Company are related to its primary business. The product shelf life being short, all sales are made at a point in time and the revenue is recognised upon satisfaction of the performance obligations which is typically upon dispatch / delivery.

31 (b) The Company has a credit evaluation policy based on which the credit limits for the trade receivables are established, the Company does not give a significant credit period resulting in no significant financing component. The normal credit period is 30 days.

31 (c) The company operates within the geographical areas of India.

31 (d) Reconciliation of revenue as per contract price and as recognised in statement of profit and loss:

Note 39.2: The Corporate Tax Rate used for the year 2022-23 and 2021-22 for above reconciliation is 34.944% ( 30% surcharge @12% education cess @4% ) payable on taxable profits under the Income Tax Act, 1961.

Note 39.3: During the year, the Company has not surrendered or disclosed any income in the tax assessments under the Income Tax Act, 1961 ( such as search or survey or any other relevant provision of the Income tax Act, 1961 ). Accordingly, there are no transactions which are not recorded in the books of accounts.

Note 39.4: The tax holiday period enjoyed by Company’s Guwahati Grinding Unit u/s 801E of income Tax Act, 1961 has ended in the financial year 2021-22 leading to an overall increase in the company’s tax expenditure.

NOTE: 41 | EMPLOYEES BENEFIT OBLIGATIONS

(a) Post-employment obligations

i) Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance Company.

NOTE: 41 | EMPLOYEES BENEFIT OBLIGATIONS (Contd.)

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior years.

(v) Risk exposure

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below:

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the Government of India bonds. If the return on plan asset is below this rate, it will create a plan deficit.

Interest risk:

A decrease in the interest rate on plan assets will increase the plan liability.

Life expectancy:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

Salary growth risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the life expectancy of the plan participants will increase the plan liability.

(vi) Defined benefit liability and employer contributions

Expected contributions to post-employment benefits plans for the year ending 31st March, 2024 are '' 126.12 Lakhs ( 31st March, 2023 - '' 88.42 Lakhs)

b) Defined Contribution Plan:

In respect of defined contribution plan, with respect to provident fund contribution and pension fund contribution, an amount of '' 360.60 Lakhs (March 31,2022: '' 308.49 Lakhs) has been recognised as expenses in the statement of Profit and loss during the year.

NOTE: 42 | CAPITAL MANAGEMENT Risk management

The primary objective of capital management is to ensure the maintenance of healthy capital ratio in order to support its business and maximise shareholder value. The Company manages its capital structure and makes changes in view of changing economic conditions. No changes were made in the objectives, policies or process during the year ended 31st March, 2023 as compared to previous year. There have been no breaches of financial covenants of any interest bearing loans and borrowings for the reported year. The Company monitors capital structure on the basis of debt to equity ratio. For the purpose of Company’s capital management, equity includes paid up equity share capital and other equity, and debt comprises long and short term borrowings including current maturities of these borrowings. The following table summarises long term debt and equity of the Company.

NOTE: 43 | FINANCIAL INSTRUMENTS BY CATEGORY (Contd.)

(i) Fair value hierarchy

The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:

Level 1: This level includes those financial instruments which are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(ii) Valuation technique used to determine fair value

The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following methods and assumptions were used to estimate the fair values:

(a) The fair value of cash and cash equivalents, trade receivables and payables, short-term loans, current financial liabilities and assets and borrowings approximate their carrying amount largely due to the short-term nature of these instruments. The management considers that the carrying amounts of financial assets and financial liabilities recognised at nominal cost/amortised cost in the financial statements approximate their fair values. In respect of non current trade receivables and loans, fair value is determined by using discount rates that reflect the present borrowing rate of the Company.

(b) Investments (other than Investments in Subsidiaries) traded in the active market are determined by reference to the quotes from the Stock exchanges as at the reporting date. Quoted Investments for which quotations are not available have been included in the market value at the face value/paid up value, whichever is lower except in case of bonds where the net present value at current yield to maturity have been considered. Unquoted investments in shares have been valued based on historical net asset value as per the latest audited financial statements after considering the impact of fair valuation of immovable properties which is based on valuation report from independent valuer.

During the reporting period ending 31st March, 2023 and 31st March, 2022 there was no transfer between level 1 and level 2 fair value measurement.

The carrying amount of Cash and cash equivalents, Bank balances (other than cash and cash equivalents), investment in bonds, security deposits, loans and other financial assets, trade receivables, trade payables, security deposits and retention money and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

NOTE: 44 | FINANCIAL RISK MANAGEMENT

The Company’s activities are exposed to a variety of financial risks: credit risk, liquidity risk and market risk (i.e. foreign currency risk, interest rate risk and price risk).This note explains the sources of risk which the entity is exposed to and how the entity manages the risk:

(A) Credit risk

Credit risk is the risk that counterparty will 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 activities including deposits placed with banks and financial institution and other financial instruments.

i) Trade receivables

Customer credit risk is managed by each business unit as per the Company’s established policies, procedures and defined control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally carrying 30 days credit terms. Outstanding customer receivables are regularly monitored. Further the Company receives security deposits from its customers which mitigates the credit risk. . No single customer accounted for 10% or more of the Company’s net sales. Therefore, the Company does not expect any material risk on account of non-performance by any of its counterparties. For expected credit loss as at each reporting date the Company assesses position of the assets for which credit risk has not significantly increased from initial recognition, assets for which credit risk has increased significantly but are not credit impaired and for assets for which credit risk has increased significantly and are credit impaired.

For trade receivables, the Company compute credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. At each reporting date, the historically observed default rates and changes in the forwardlooking estimates are updated. Accordingly, loss allowances on trade receivables are measured using provision matrix at an amount equal to life time expected losses i.e. expected cash shortfall.

ii) Financial instruments and deposits

Credit risk pertaining to balances with banks and financial institutions is managed by the Company’s treasury department in accordance with it’s policy. Surplus funds are parked only within approved investment categories with well defined limits. Investment category is periodically reviewed by the Company’s Board of Directors.

Credit risk arising from short term liquid funds, other balances with banks and other cash equivalents is limited and no collaterals are held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the credit rating agencies. None of the financial instruments of the Company result in material concentration of credit risks.

Other financial assets mainly include incentives receivable from the government, equity share application monies, loans & interest thereon and security deposits given. There are no indications that defaults in payment obligations would occur in respect of these financial assets.

The Company’s maximum exposure to credit risk for the components of the Balance Sheet as at 31st March, 2023 and 31st March, 2022 is the carrying amounts as illustrated in Note 43.

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the underlying business, the Company maintains sufficient cash and liquid investments available to meet its obligation. Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The management also considers the cash flows projection and level of liquid assets necessary to meet these on a regular basis.

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in Indian Rupee (INR)

Maturities of financial liabilities

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for all financial liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

(C) Market risk

(i) Foreign currency risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

(ii) 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 debt obligations with floating interest rates.

The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During 31st March, 2023 and 31st March, 2022 , the Company’s borrowings at variable rate were denominated in Indian Rupee (INR).

The Company’s Deposit taken from dealers is at fixed rate and measured 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 risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market.

The Company’s exposure to equity securities price risk arises from investments held by the Company in equity securities and classified in the Balance Sheet as at fair value through profit and loss. The Company has investment in quoted and unquoted equity securities. Investment is done in accordance with the limits set by the Company. The Company’s Board of Directors reviews and approves all investment decisions.

NOTE: 45 | LEASE

a) The Company has entered into agreements for taking on lease certain offices / warehouses on lease and license basis. The lease term is for a period ranging from 2 to 9 years, on fixed rental basis with escalation clauses in the lease agreements. In addition to the above, the Company has certain leasehold land under finance lease arrangements for terms ranging for 99 years which has been reclassified from Freehold land and site development to right of use assets.

b) The Company also has certain leases of buildings with lease terms of 12 months or less. The Company applies the ''shortterm lease’ recognition exemptions for these leases.

c) Lease liabilities are recognised at weighted average incremental borrowing rate of 4.76% to 8.81% . Set out below are the carrying amounts of lease liabilities included under financial liabilities and right to use asset included in Property, Plant and Equipment and the movements during the year.

NOTE: 46 | CONTINGENT LIABILITY & CAPITAL COMMITMENTS i) Contingent Liability ('' in Lakhs)
	Sl. No	Particulars	As at 31st March, 2023	As at 31st March, 2022
	1	Claims against the Company not acknowledge as debts :
		- Income tax demand	65.67	52.17
		- Excise duty demand {Refer note 46 (a)}	617.47	637.44
		- Royalty & cess demand {Refer note 46 (b)}	4,184.06	4,184.06
		- Royalty & cess demand {Refer note 46 (c)}	2,162.43	-
		- Demand of Custom Duty	22.51	22.51
		- Service tax demand	599.77	599.77
		- Goods & service tax demand	2,217.21	2,217.21
		- Others	138.27	138.27
			10,007.39	7,851.43
ii)	Commitments ('' in Lakhs)
	Sl. No	Particulars	As at 31st March, 2023	As at 31st March, 2022
	1	Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)	39,806.17	870.63
	2	Letters of credit issued by bank	3,902.00	469.07
	3	Bank guarantee given	5,944.00	7963.89

Note: Based on legal opinion / decisions in similar cases, the Company believes that the Company has a fair chance of favorable decisions in cases mentioned here-in-above and hence no provision is considered necessary.

(a) On the basis of the direction of the Hon’ble High Court of Meghalaya dated 30-08-2018 following the decision of the Hon’ble Supreme Court dated 10-11-2017 passed in SRD Nutrients Private Limited Vs. Commissioner of Central Excise, Guwahati, Company had received a refund of Education Cess and Secondary & Higher Education Cess amounting to '' 566.05 Lakhs in an earlier year. However, the Apex court vide its order dated 06-12-2019 has taken a contrary view in the matter of M/S Unicorn Industries Vs Union of India and Others. Based on the later judgement a demand letter was raised by the department to refund back the amount granted. As the order dated 30-08-2018, has attained its finality and the refund was granted accordingly, the Company has preferred a writ petition before the Hon’ble Meghalaya High

NOTE: 46 | CONTINGENT LIABILITY & CAPITAL COMMITMENTS (Contd.)

Court against the above demand letter. Hon’ble Meghalaya High Court has stayed the said demand vide its order dated 16-06-2020 and the matter is subjudice. Based on the legal advice obtained by the Company from an External Counsel and based on its own assessment there is every likelihood that the said demand shall be quashed and therefore no provision have been taken in the books of account.

(b) In respect of demand notice dated 19th February, 2020 received by the Company from Director of Mineral Resources, Meghalaya, for payment of royalty, MEPRF, VAT/GST for '' 4,184.06 Lakhs in pursuance to the National Green Tribunal (NGT) order dated 17th January, 2020 passed in O.A. No. 110(TCH)/2012 for alleged illegal coal procurement. By passing the said order NGT has accepted the Recommendation of the 5th Interim Report of the Independent Committee set up by NGT, which has suggested imposition of penalty on Cement Companies and Thermal Power Plants in Meghalaya. The Company did not purchase any illegal coal and had complied with all disclosure requirements of the various Government Departments. The Report of NGT Committee has been founded on the basis of assumptions and views of the Committee and not on hard facts. Further to note, that neither the Company has been issued a show-cause nor any opportunity of being heard was given to the Company before submitting the Interim reports by the Independent Committee to NGT. Even NGT has not served any notice on the Company before passing the impugned order dated 17th January, 2020 which is clear violation of principles of natural justice.The Company backed by the legal opinions, believes that it has a good case in the matter as the said order was issued based on certain hypothetical assumptions and views and not on hard facts. No opportunity of being heard was provided to the Company either by NGT committee or by NGT itself which passed order without going into the merits & facts and accepted the recommendations of 5th Interim Report. Therefore, there is every likelihood of the Demand Notice and the order of the NGT being set aside. The Company has preferred an appeal before the Hon’ble Supreme Court of India against the NGT Order.The Hon’ble Supreme Court in its Order dated 2nd May, 2023 has set the Order of NGT and remand back the same to NGTfor its further considerations and accordingly, no provisions has been made in the accounts.

(c) During the year the Company has received a demand notice dated 20th March, 2023 from the Divisional Mining Officer (DMO), Directorate of Mineral Resources, Meghalaya, Jowai towards outstanding dues of royalty & Cess on Coal, Sandstone, Clay and Shale procured/consumed by the Company in certain specific periods between FY 09-10 to FY 22-23 amounting to '' 2,650.31 Lakhs (including '' 1,552.61 Lakhs towards Penal Interest). As per the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, the liability for payment of royalty in respect of any mineral removed/ consumed from the mining lease arises on the holder of the mining lease and not on the purchaser of such mined minerals. Hence, there is no obligation of the Company to pay royalty/cess in case the minerals are procured from third party vendors. However, as an abundant precaution, the Company has kept liability towards Royalty & Cess on above mineral products amounting to '' 487.88 Lakhs (including net additional provision of '' 89.79 Lakhs during the year). Since the liability to pay royalty & Cess itself is not applicable to the Company, hence provision for differential amount of demand amounting to '' 609.82 Lakhs and penal interest amounting to '' 1,552.61 Lakhs has not been provided and shown as contingent liability. The Company shall contest the above demand and based on the legal opinion obtained in this regard, it believes the said demand raised by the DMO is not tenable and the matter shall be disposed off in the favour of the Company.

D Terms and Conditions of transactions with Related Parties:

(i) The sales and purchases transactions with related parties (including transactions related to property, plant and equipment) 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.

(ii) The Company''s inter corporate loan to its subsidiaries which is repayable on demand, for the current year the rate of interest is 6.60% to 9.20% (March 31,2022 - 4.40% to 7.80% )

(iii) For the year ended March 31,2023, 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.

(iv) The remuneration of Directors is determined by the Nominations & Remuneration Committee having regard to the performance of individuals and market trends.

E Post-employment benefits and other long-term benefits related to KMPs is being disclosed based on actual payment made on retirement /resignation of services, but does not includes provision made on actuarial basis as the same is available for all employees together. Further, in view of applicability of such benefits only to CFO & CS of the Company, the amount of provision made on actuarial basis are not significant considering the nature of operation and size of the Company.

NOTE: 52 | OTHER 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 have not traded or invested in Crypto currency or Virtual Currency during the financial year.

iii) The Company has not advanced or loaned or invested funds to any other person or entity, 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.

iv) The Company has not received any fund from any person or entity, 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.

v) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with the Companies (Restriction on number of Layers) Rules, 2017

vi) The Company has not entered into 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).

NOTE: 54 | These financial statements have been approved by the Board of Directors of the Company on May 19, 2023 for issue to the shareholders of the Company for the adoption.

---

Mar 31, 2022

a Terms/Rights attached to equity shares

The Company has only one class of equity shares having par value of '' 1/- per share. Each holder of Equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of liquidation of the Company, the holders of the 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.

b In terms of approval of the Board of Directors obtained at its meeting held on 13th August, 2021, the Company had offered Buy Back of Equity shares of all eligible equity shareholders of the Company on a proportionate basis through tender offer route using Stock Exchange mechanism. The buyback of equity shares through the Stock Exchange commenced on 22nd September, 2021 and closed on 5th October, 2021. Accordingly, the Company bought back and extinguished a total of

82.48.580 equity shares of '' 1 each at a price of '' 150 per equity share, representing 2.00% of the pre-buyback paid-up equity share capital of the Company. The buyback resulted in a cash outflow of '' 123.73 Crore (excluding transaction costs such as Brokerage, Buy Back Tax, Securities Transaction Tax, GST, Stamp duty and other related expenses etc.). Payments to the eligible shareholders were completed on 13th October, 2021. In the last five financial year company had buy back

1.50.48.580 number of equity shares.

Nature and purpose of reserves

Capital Reserve

During amalgamation with Star Ferro and Cement Limited , the excess of net assets taken, over the cost of consideration paid is treated as capital reserve.

Capital Redemption Reserve

In accordance with section 69 of the Companies Act, 2013, the Company creates capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from retained earnings.

General reserve

The Company had transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act 2013.

Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(v) Risk exposure

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below: Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the Government of India bonds. If the return on plan asset is below this rate, it will create a plan deficit.

Interest risk:

A decrease in the interest rate on plan assets will increase the plan liability.

Life expectancy:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

Salary growth risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the life expectancy of the plan participants will increase the plan liability.

c) Provident Fund:

Contribution towards provident fund are recomputed as expenses in the statement of profit and loss. The Company has a defined contribution plan. Under the defined contribution plan, provident fund is contributed to the Government administered provident fund. The Company has no further contractual nor any constructive obligation, other than the contribution payable to the provident fund. The expense recognised during the period towards defined contribution plan is '' 336.72 Lakhs (31st March, 2021 '' 279.01 Lakhs)

| 43 | CAPITAL MANAGEMENT Risk management

The Company’s objectives when managing capital are to:

• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

• maintain an optimal capital structure to reduce the cost of capital

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares .

The amount mentioned under total equity in balance sheet is considered as Capital.

The Company does not have any externally imposed capital requirements.

(A) Credit risk

Credit risk is the risk that counterparty will 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) including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. i) Trade receivables

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally carrying 30 days credit terms. Outstanding customer receivables are regularly monitored. Further the Company receives security deposit from its customers which mitigates the credit risk. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically. The ageing of trade receivables as of balance sheet date is given below. The age analysis have been considered from the due date:

ii) Financial instruments and deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s finance department. Investments of surplus funds are made only with approved counterparties in accordance with the Company’s policy. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments. Loans are given to body corporate are as per the Company policy and the receipt of repayment are reviewed on regular basis. For banks and financial institutions, only high rated banks/institutions are accepted.

Financial Assets are considered to be of good quality and there is no significant credit risk.

The Company’s maximum exposure to credit risk for the components of the Balance Sheet as at 31st March, 2022 and 31st March, 2021 is the carrying amounts as illustrated in Note 47.

(B) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the underlying business, the Company maintains sufficient cash and liquid investments available to meet its obligation.

Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The management also considers the cash flows projection and level of liquid assets necessary to meet these on a regular basis.

(i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reporting period:

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in INR.

Maturities of financial liabilities

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for all financial liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

(C) Market risk

(i) Foreign currency risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Company deals with an international customer and is therefore exposed to foreign exchange risk (primarily with respect to USD) arising from this foreign currency transactions. In view of low proportion of export/import, as compared to the overall operations, the exposure of the Company to foreign exchange risk is also not considered to be material.

Further foreign exchange risk also arises from future cash flow against foreign currency loan. The risk is measured through a forecast of highly probable foreign currency cash flows.

(ii) Interest rate risk

Ilnterest 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 long-term debt obligations with floating interest rates.

The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During 31st March, 2022 and 31st March, 2021 , the Company’s borrowings at variable rate were denominated in INR .

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.

(iii) Price risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market.

The Company’s exposure to equity securities price risk arises from investments held by the company in equity securities and classified in the Balance Sheet as at fair value through profit and loss. The Company has investment in quoted and unquoted equity securities. Investment is done in accordance with the limits set by the Company. The Company’s Board of Directors reviews and approves all investment decisions.

(i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

• the fair value of all assets and liabilities

• the fair value of the financial instruments is determined using discounted cash flow analysis.

The carrying amounts of all other financial assets and financial liabilities are considered to be the same as their fair values, due to their short-term nature.

The fair values for financial instruments were calculated based on cash flows discounted using current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

The fair values of borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk. The carrying amounts of other borrowings with floating rate of interest are considered to be close to the fair value.

(v) Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period. For details of the key assumptions used and the impact of changes to these assumptions see (ii) above.

48 | CONTINGENT LIABILITY & COMMITMENTS a) Contingent Liability ('' in Lakhs)
Sl. No	Particulars	31st March, 2022	31st March, 2021
1	Claims against the Company not acknowledge as debts - Excise/ VAT/ royalty/IncomeTax etc.	7,846.08	5,518.46
2	Duty saved under EPCG scheme	-	46.65
b) Commitments ('' in Lakhs)
Sl. No	Particulars	31st March, 2022	31st March, 2021
1	Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)	870.63	223.24
2	Letters of credit issued by bank	469.07	335.99
3	Bank guarantee given	7,963.89	-

Note: Based on legal opinion / decisions in similar cases, the Management believes that the Company has a fair chance of

favorable decisions in cases mentioned here-in-above and hence no provision is considered necessary.

(a) On the basis of the direction of the High Court of Meghalaya dated 30th August, 2018 following the decision of the Supreme Court dated 10th November, 2017 passed in SRD Nutrients Private Limited Vs. Commissioner of Central Excise, Guwahati, Company has received a refund of Education Cess and Secondary & Higher Education Cess amounting to '' 566.05 Lakhs in earlier years. However, the Apex court vide its order dated 6th December, 2019 have taken a contrary view in the matter of M/S Unicorn Industries Vs Union of India and Others. Based on the later judgement a demand letter was raised by the department to refund back the amount granted. As the order dated 30th August, 2018, has attained its finality and the refund was granted accordingly, the Company has preferred a writ petition before the Meghalaya High Court against the above demand letter. Meghalaya High Court has stayed the said demand vide its order dated 16th June, 2020. The final hearing of the case is yet to be conducted before the Meghalaya High Court. Based on the legal advice obtained by the Company from External Counsel as well as its own assessment there is every likelihood that the said demand will be quashed and therefore no provision have been taken in the books of account.

(b) In respect of demand notice dated 19th February, 2020 received by the Company from Director of Mineral Resources, Meghalaya, for payment of royalty, MEPRF, VAT/GST for '' 4,184.06 Lakhs in pursuance to the National Green Tribunal (NGT) order dated 17th January, 2020 passed in O.A. No. 110(TCH)/2012 for alleged illegal coal procurement. By passing the said order NGT has accepted the Recommendation of the 5th Interim Report of the Independent Committee set up by NGT, which has suggested imposition of penalty on Cement Companies and Thermal Power Plants in Meghalaya.The Company has not purchased any illegal coal and has complied with all disclosure requirements of the various Government Departments. The Report of NGT Committee has been founded on the basis of assumptions and views of the Committee and not on hard facts. Further to note that the Company has neither been issued a show-cause nor any opportunity of being heard was given to the Company before submitting the Interim reports by the Independent Committee to NGT. Even NGT has not served any notice on the Company before passing the impugned order dated 17th January, 2020 which is clear violation of principles of natural justice.The Company backed by the legal opinions, believes that it has a good case in the matter as the said order was issued based on certain hypothetical assumptions and views and not on hard facts. No opportunity of being heard was provided to the Company either by NGT committee or by NGT itself which passed order without going into the merits & facts and accepted the recommendations of 5th Interim Report. Therefore, there is every likelihood of the Demand Notice and the order of the NGT being set aside. The Company has preferred an appeal before the Supreme Court of India against the NGT Order which is pending, and accordingly, no provisions has been made in the accounts.

| 49 | EXCEPTIONAL ITEMS

(a) Supreme Court vide its’ order dated 17th November, 2020 has rejected the Review petitions filed by some of the Petitioners against its’ Judgment dated 22-04-2020 in the matter of Union of India -vs- M/s V.V.F Limited & Others. As the said order reached its’ finality , the Company has Refunded and provided for Excise duty amounting to '' 2,931.36 Lakhs which was received by the Company in earlier years and shown as Exceptional Item in the Statement of Profit and Loss Account for the previous financial year.

(b) The Company has exercised the option in accordance to paragraph 46A of the Accounting Standard 11 (AS-11) - "The Effects of Changes in Foreign Exchange Rates". Accordingly, the Company has depreciated the foreign exchange (gain)/loss arising on revaluation on long term foreign Currency monetary items in so far as they relate to the acquisition of depreciable capital assets over the balance useful life of such assets. The depreciated portion of net foreign exchange (gain)/loss on such long term foreign currency monetary items for the year ended 31st March,2022 is '' 25.11Lakhs (31st March, 2021: '' 37.04 Lakhs).

(c) Segment information

(i) Cement is the only identified operating segment of the Company.There is no separate reportable segment as required by I nd AS 108 ''Operating Segments’. There are no revenues from transactions with a single customers amounting to 10 % or more of the Company’s revenues during the current and previous year.

| 55 | Previous year’s figures have been regrouped and/or rearranged wherever necessary, to confirm to current year classification.

| 56 | The financial statements are approved by the audit committee at its meeting held on 17th May, 2022 and by the Board of Directors on the same date.

---

Mar 31, 2021

a Terms/Rights attached to equity shares

The Company has only one class of equity shares having par value of '' 1/- per share. Each holder of Equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of liquidation of the Company, the holders of the 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.

b During the previous year the Company has bought back 68,00,000 Equity Shares of '' 1 each from all the existing shareholders/ beneficial owners of the Company as on record date i.e. 5th July, 2019 on a proportionate basis through tender offer route at a price of '' 150/- each for an aggregate amount of '' 1,02,00,00,000/-. The payments have been made to all the eligible shareholders on 15th November, 2019, subsequently the bought back shares have been extinguished. c Reconciliation of the shares outstanding at the beginning and at the end of the reporting period.

Capital Reserve

During amalgamation with Star Ferro and Cement Limited , the excess of net assets taken, over the cost of consideration paid is treated as capital reserve.

Capital Redemption Reserve

In accordance with section 69 of the Companies Act, 2013, the Company creates capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from general reserve.

General reserve

The Company had transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.

Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitvity analysis did not change compared to the prior period. (iv) The major categories of plan assets

The defined benefit plans are funded with Insurance Company of India. The Company does not have any liberty to manage the funds provided to insurance company. Thus the composition of each major category of plan assets has not been disclosed.

(v) Risk exposure

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below: Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the Government of India bonds. If the return on plan asset is below this rate, it will create a plan deficit.

Interest risk:

A decrease in the interest rate on plan assets will increase the plan liability.

Life expectancy:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

Salary growth risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the life expectancy of the plan participants will increase the plan liability.

c) Provident Fund:

Contribution towards provident fund are recomputed as expenses in the statement of profit and loss. The Company has a defined contribution plan. Under the defined contribution plan, provident fund is contributed to the Government administered provident fund. The Company has no further contractual nor any constructive obligation, other than the contribution payable to the provident fund. The expense recognised during the period towards defined contribution plan is '' 279.01 Lakhs (31st March, 2020: '' 261.46 Lakhs).

|39| CAPITAL MANAGEMENT

(a) Risk management

The Company’s objectives when managing capital are to:

• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

• maintain an optimal capital structure to reduce the cost of capital

In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares .

The amount mentioned under total equity in balance sheet is considered as Capital.

The Company does not have any externally imposed capital requirements.

ii) Financial instruments and deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s finance department. Investments of surplus funds are made only with approved counterparties in accordance with the Company’s policy. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments. Loans are given to body corporate are as per the Company policy and the receipt of repayment are reviewed on regular basis. For banks and financial institutions, only high rated banks/institutions are accepted.

Financial Assets are considered to be of good quality and there is no significant credit risk.

The Company’s maximum exposure to credit risk for the components of the Balance Sheet as at 31st March 2021 and 31st March 2020 is the carrying amounts as illustrated in Note 43.

(B) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the underlying business, the Company maintains sufficient cash and liquid investments available to meet its obligation.

Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The management also considers the cash flows projection and level of liquid assets necessary to meet these on a regular basis.

(i) Foreign currency risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Company deals with an international customer and is therefore exposed to foreign exchange risk (primarily with respect to USD) arising from this foreign currency transactions. In view of low proportion of export/import, as compared to the overall operations, the exposure of the Company to foreign exchange risk is also not considered to be material.

Further foreign exchange risk also arises from future cash flow against foreign currency loan. The risk is measured through a forecast of highly probable foreign currency cash flows.

(ii) 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 long-term debt obligations with floating interest rates.

The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During 31st March, 2021 and 31st March, 2020 , the Company’s borrowings at variable rate were denominated in INR.

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 risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market.

The Company’s exposure to equity securities price risk arises from investments held by the company in equity securities and classified in the Balance Sheet as at fair value through profit and loss. The Company has investment in qouted and unqouted equity securities. Investment is done in accordance with the limits set by the Company. The Company’s Board of Directors reviews and approves all investment decisions.

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

The Company has recognised interest on lease liability of '' 29.32 Lakhs under Finance Costs (Previous year '' 25.87 Lakhs). Further '' 2.37 Lakhs (Previous year '' 1.51 Lakhs) capitalised as Pre-operative expenses.

The aggregate depreciation on ROU assets has been included under depreciation and amortisation expense in the Statement of Profit and Loss.

(i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

• the fair value of all assets and liabilities

• the fair value of the financial instruments is determined using discounted cash flow analysis.

(iii) Fair value of financial assets and liabilities measured at fair value - recurring fair value measurements

The carrying amounts of all other financial assets and financial liabilities are considered to be the same as their fair values, due to their short-term nature.

The fair values for financial instruments were calculated based on cash flows discounted using current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

The fair values of borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk. The carrying amounts of other borrowings with floating rate of interest are considered to be close to the fair value.

(v) Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period. For details of the key assumptions used and the impact of changes to these assumptions see (ii) above.

Note: Based on legal opinion / decisions in similar cases, the Management believes that the Company has a fair chance of

favorable decisions in cases mentioned here-in-above and hence no provision is considered necessary.

(a) On the basis of the direction of the High Court of Meghalaya dated 30-08-2018 following the decision of the Supreme Court dated 10-11-2017 passed in SRD Nutrients Private Limited Vs. Commissioner of Central Excise, Guwahati, Company has received a refund of Education Cess and Secondary & Higher Education Cess amounting to '' 566.05 Lakhs in previous years. However, the Apex court vide its order dated 06-12-2019 have taken a contrary view in the matter of M/S Unicorn Industries Vs Union of India and Others. Based on the later judgement a demand letter was raised by the department to refund back the amount granted. As the order dated 30-08-2018, has attained its finality and the refund was granted accordingly, the Company has preferred a writ petition before the Meghalaya High Court against the above demand letter. Meghalaya High Court has stayed the said demand vide its order dated 16-06-2020. Based on the legal advice obtained by the Company from External Counsel as well as its own assessment there is every likelihood that the said demand will be quashed and therefore no provision have been taken in the books of account.

(b) In respect of demand notice dated 19th February, 2020 received by the Company from Director of Mineral Resources, Meghalaya, for payment of royalty, MEPRF, VAT/GST for '' 4,184.06 Lakhs in pursuance to the National Green Tribunal (NGT) order dated 17-01-2020 passed in O.A. No. 110(TCH)/2012 for alleged illegal coal procurement. By passing the said order NGT has accepted the Recommendation of the 5th Interim Report of the Independent Committee set up by NGT, which has suggested imposition of penalty on Cement Companies and Thermal Power Plants in Meghalaya.The Company has not purchased any illegal coal and has complied with all disclosure requirements of the various Government Departments. The Report of NGT Committee has been founded on the basis of assumptions and views of the Committee and not on hard facts. Further to note that the Company has neither been issued a show-cause nor any opportunity of being heard was given to the Company before submitting the Interim reports by the Independent Committee to NGT. Even NGT has not served any notice on the Company before passing the impugned order dated 17-01-2020 which is clear violation of principles of natural justice. The Company backed by the legal opinions, believes that it has a good case in the matter as the said order was issued based on certain hypothetical assumptions and views and not on hard facts. No opportunity of being heard was provided to the Company either by NGT committee or by NGT itself which passed order without going into the merits & facts and accepted the recommendations of 5th Interim Report. Therefore, there is every likelihood of the Demand Notice and the order of the NGT being set aside. The Company has preferred an appeal before the Supreme Court of India against the NGT Order, and accordingly, no provisions has been made in the accounts.

|45| EXCEPTIONAL ITEMS

(a) Supreme Court vide its’ order dated 17-11-2020 has rejected the Review petitions filed by some of the Petitioners against its’ Judgment dated 22-04-2020 in the matter of Union of India vs M/s V.V.F Limited & Others. As the said order reached its’ finality , the Company has Refunded 50% of differential Excise duty amounting to '' 1,466.23 Lakhs which was received by the company in previous years, and for which the demand letter was issued by the Department. The Company has also provided for the balance 50% of such refund amounting to '' 1,465.13 Lakhs which was shown as receivable and recognised in income in previous years. Refund/Reversal on account of both amounting to '' 2,931.36 Lakhs is shown as Exceptional Item in the Statement of Profit and Loss Account for the current financial year.

Notes

(i) The sales to and purchases from related parties are made in the normal course of business and on terms equivalent to those that prevail in arm’s length transactions. During the previous year, the Company has taken inter corporate loan from its subsidiary which is repayable on demand, for current year the rate of interest is 5.6% (31st March, 2020: 8.62%)

(ii) Post employment benefits and long term employee benefits are determined on the basis of actuarial valuation for the company as a whole and hence segregation is not available.

(b) The Company has exercised the option in accordance to paragraph 46A of the Accounting Standard 11 (AS-11) - "The Effects of Changes in Foreign Exchange Rates". Accordingly, the Company has depreciated the foreign exchange (gain)/loss arising on revaluation on long term foreign Currency monetary items in so far as they relate to the acquisition of depreciable capital assets over the balance useful life of such assets. The depreciated portion of net foreign exchange (gain)/loss on such long term foreign currency monetary items for the year ended 31st March, 2021 is '' 37.04 Lakhs (31 March 2020: '' 39.43 Lakhs).

(c) Segment information

(i) Cement is the only identified operating segment of the Company.There is no separate reportable segment as required by Ind AS 108 ''Operating Segments’. There are no revenues from transactions with a single customers amounting to 10 per cent or more of the Company’s revenues during the current and previous year.

48. The Company has considered the possible effects that may result from COVID-19 in the preparation of these financial State

ments. The Company believes that pandemic is unlikely to impact on the recoverability of the carrying value of its assets as at 31st March, 2021. Looking to the present situation of pandemic, the extent to which the same will impact Company’s future financial results is currently uncertain and will depend on further developments.

49. Previous year’s figures have been regrouped and/or rearranged wherever necessary, to confirm to current year classification.

50. The financial statements are approved by the audit committee at its meeting held on 9th June, 2021 and by the Board of

Directors on the same date.

The accompanying notes are an integral part of the financial statements.

---

Mar 31, 2018

Corporate Information

Star Cement Limited (formerly Cement Manufacturing Company Limited ) (the Company) is a public limited Company domiciled in India and incorporated on 2nd November, 2001 as per the provisions of Companies Act, 1956. The Company is engaged in the manufacturing and selling of Cement Clinker & Cement. The manufacturing units are located at Lumshnong, Meghalaya and Guwahati, Assam. The Company is selling its product across north eastern and eastern states of India.

1. RECENT ACCOUNTING DEVELOPMENTS

Standards issued but not yet effective

Ind AS 115:- Revenue from contracts with customers

The Company is in the process of assessing the detailed impact of Ind AS 115. Presently, the Company is not able to reasonably estimate the impact that application of Ind AS 115 is expected to have on its financial statements, except that adoption of Ind AS 115 is not expected to significantly change the timing of the Company’s revenue recognition for product sales. Consistent with the current practice, recognition of revenue will continue to occur at a point in time when products are dispatched to customers, which is also when the control of the asset is transferred to the customer under Ind AS 115.

The Company intends to adopt the standard using the modified retrospective approach which means that the cumulative impact of the adoption will be recognised in retained earnings as of 1 April 2018 and that comparatives will not be restated.

Ind AS 21:- Foreign currency transactions and advance consideration

Management has assessed the effects of applying the appendix to its foreign currency transactions for which consideration is received in advance. The Company expects this change to impact its accounting for revenue contracts involving advance payments in foreign currency.

The Company intends to adopt the amendments prospectively to items in scope of the appendix that are initially recognised on or after the beginning of the reporting period in which the appendix is first applied (i.e. from 1 April 2018).

a. During the year Company has sold/ discarded Property, Plant and Equipment amounting to RS.26.70 Lacs ( 31 March 2017 - RS.26.62 Lacs)

b. During the year ending 31 March 2018 foreign exchange gain/(loss) of RS.1.91 Lacs (31 March 2017 - RS.14.53 Lacs) is added to factory building in accordance with para 46A of AS-11 (Previous GAAP), since the Company has applied the exemption under Ind AS 101 and accordingly opted to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statement.

c. For Property, plant and equipment existing as on 1 April 2016, i.e. date of transition to Ind AS, the Company has used Indian GAAP carrying value as deemed cost (refer note no 48 (A.1.1) IND AS Exemption applied.

a Terms/Rights attached to equity shares

The Company has only one class of equity shares having par value of RS.1/- per share. Each holder of Equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of liquidation of the Company, the holders of the 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.

b Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

c Shares held by Holding Company

d Details of shareholders holding more than 5% of equity share capital

Notes-

2.1 29,54,75,000 Equity Shares amounting to RS.2954.75 Lacs was cancelled upon allotment of shares pursuant to Scheme of Amalgamation.

2.2 As per records of the Company, including its register of shareholders/members and other declaration received from shareholders regarding beneficial interest, the above shareholding represent both legal and beneficial ownership.

Nature and purpose of reserves

Capital Reserve

During amalgamation, the excess of net assets taken, over the cost of consideration paid is treated as capital reserve. (Refer amalgamation Note : 45)

General reserve

The Company had transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act 2013.

Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

Notes-

a) Rupee term loan of RS.3780.38 Lacs (31st March 2017: RS.2,662.54 Lacs) from a bank is repayable in 16 equal quarterly instalments commencing from June 2018. The Loans is secured by pari passu first charge on Property, plant & equipment of the Company’s cement plant at Lumshnong, Meghalaya and second pari passu charge on the current assets of the Company’s cement plant at Lumshnong, Meghalaya.

Rupee term loan of RS.5811.48 Lacs as on 31st March 2018 from a Bank is repayable in further 5 equal half yearly instalments being next instalment falling due in June 2018. The loan is secured by pari passu first charge on the Property, plant & equipment of the Company’s cement plant at Lumshnong, Meghalaya and second pari passu charge over the current assets of the Company’s cement plant at Lumshnong, Meghalaya.

Rupee Term Loan of Nil (31 March ‘2017 - Nil, 1st April 2016 RS.2185.58 Lacs ) from a bank was repayable in further 5 equal quarterly instalments ending on June, 2017. The Loans was secured by pari passu first charge on Property, plant & equipment of the Company’s cement plant at Lumshnong, Meghalaya and second pari passu charge on the current assets of the Company’s cement plant at Lumshnong, Meghalaya.

Rupee Term loan of Nil (31 March 2017: RS.2,992.25 Lacs; 01 April 2016: 6,639.08 Lacs) was repayable in 7 quarterly instalments ending on December 2019. These loans has been fully repaid in FY 2017-18.

Rupee Term loan of Nil (31 March 2017: RS.4,687.50 Lacs; 01 April 2016: 5,000.00 Lacs) was repayable in 16 equal quarterly instalments commencing from June 2017 and ending on March 2021. This loan has been fully repaid in FY 2017-18.

Foreign Currency loan of RS.401.26 (31 March 2017: RS.1,255.86 Lacs; 01 April 2016: 2,158.90 Lacs) is repayable in 7 quarterly instalments ending on December 2019.

These loans are secured by pari passu first charge on Property, plant & equipment and pari passu second charge on current assets of the Company’s cement grinding unit at Guwahati, Assam. The term loans are also secured by personal guarantees of some of the directors of the Company.

b) Rupee term loan of RS.1875.01 Lacs (31 March 2017: RS.2,437.51 Lacs; 1 April 2016: 3,000.00 Lacs) is repayable in equal 10 quarterly instalment ending on September 2020.

The loan is to be secured by first charge on Property, plant & equipment of Megha Technical & Engineers Private Limited, a wholly owned subsidiary of the Company. Pending security creation, the loan is temporarily secured by personal guarantee of some of the directors of the Company as on 31 March 2018.

c) As on 31 March 2017, Rupee term loan of RS.6,999.28 Lacs from a body corporate was repayable in 8 equal half Yearly instalments commencing from December 2017. This loan has been fully repaid in FY 2017-18. The loan was secured by pari passu first charge on the Property, plant & equipment of the Company’s cement plant at Lumshnong, Meghalaya and second pari passu charge over the current assets of the Company’s cement plant at Lumshnong, Meghalaya. The loan was also secured by personal guarantee of one of the director of the Company 1 April 2016.

d) Hire purchase finance is secured by hypothecation of respective vehicles and is repayable within four years having varying date of payment.

e) The Company does not have any continuing defaults in repayment of loans and interest as at reporting period.

f) Terms loans from related party (subsidiary Company and directors) are long term in nature i.e. payable in 5 years.

Notes-

(a) Working Capital facilities of RS.3,004.82 Lacs (31 March 2017: RS.4,056.60 Lacs, 1 April 2016: RS.2,131.82 Lacs) from banks are secured by pari passu first charge on current assets and second pari passu charge on Property, plant & equipment of the Company’s cement plant at Lumshnong, Meghalaya.

Working capital facilities of RS.5,106.87 Lacs (31 March 2017: RS.7,151.65 Lacs, 1 April 2016: H 8,471.81 Lacs) from banks are secured by pari passu first charge on current assets and pari passu second charge on Property, plant & equipment of the Company’s cement grinding unit at Guwahati, Assam.

These working capital facilities have been guaranteed by some of the Directors of the Company.

(b) Short term loan from banks as on 31 March 2018 is due for repayment in April 2018 (31 March 2017: June, 2017, 1 April 2016: June, 2016). Foreign Currency demand loan from a bank outstanding on 1 April 2016 was paid in September, 2016.

(c) Bill discounting is to be settled within a period of 90 days.

3.1 Amount to be transferred to the Investor Education and Protection Fund shall be determined on the respective due date.

4.1 The capitalisation rate used to determine the borrowing cost of RS.5.99 Lacs capitalised during the year ended 31st March, 2017 is the weighted average interest rate applicable to the entity’s specified borrowings i.e 8.45%.

5.1 Depreciation is net off increase of RS.367.98 Lacs for the year ended 31 March, 2018 (decrease of RS.633.89 Lacs for the year ended 31 March, 2017) on account of amortisation of Government Grant.

6.1. The Tax Rate used for the year 2016-17 and 2017-18 reconcilation above is the Corporate tax rate of 34.608% ( 30% surcharge @12% education cess @3% ) payable on taxable profits under the Income Tax Act, 1961.

Note : 7 - Employees benefit obligations

(a) Leave Encashment

Under leave encashment scheme, the Company allows its employees to encash accumulated leave over and above thirty days at any time during the year. Hence the entire amount of the provision is presented under current. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken or paid within the next 12 months.

(b) Post-employment obligations

(i) Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance Company.

The amounts recognised in the Balance Sheet and the movements in the net defined benefit obligation over the year are as follows:

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(iv) The major categories of plan assets

The defined benefit plans are funded with insurance Companies of India. The Company does not have any liberty to manage the funds provided to insurance Companies. Thus the composition of each major category of plan assets has not been disclosed.

(v) Risk exposure

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below:

Investment risk:

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to the Government of India bonds. If the return on plan asset is below this rate, it will create a plan deficit.

Interest risk:

A decrease in the interest rate on plan assets will increase the plan liability.

Life expectancy:

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

Salary growth risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability.

(vi) Defined benefit liability and employer contributions

Expected contributions to post-employment benefits plans for the year ending 31 March 2019 are RS.109.36 Lacs.

The weighted average duration of the defined benefit obligation is 4.94-6.15 years(31 March 2017: 7.91-9.48 years, 1 April 2016: 7.73-9.55 years). The expected maturity analysis of undiscounted gratuity is as follows:

Note: Based on legal opinion / decisions in similar cases, the Management believes that the Company has a fair chance of favourable decisions in cases mentioned here-in-above and hence no provision is considered necessary.

(a) Against Company’s claim in respect of its cement plant at Lumshnong for refund of differential excise duty, Hon’ble High Court at Guwahati (Shillong Bench) vide its order dated 12th September, 2012, has directed the Excise Department to release 50% of the disputed amount against furnishing of solvent surety. Based on the said judgment of the Hon’ble High Court in favour of the Company and legal opinion obtained by the Company, the differential excise duty refund of Nil (31 March 2017- RS.127.80 Lac, 1 April 2016 - RS.223.19 Lacs) has been recognised the books of accounts.

(b) Against Company’s claim in respect of its cement plant at Guwahati for refund of differential excise duty, Hon’ble High Court at Guwahati vide its order dated 1st December, 2016, in the matter of Raj Coke industries & others versus the Union of India has directed the Excise Department to release 50% of the disputed amount against furnishing of solvent surety. Based on the said judgment of the Hon’ble High Court and legal opinion obtained by the Company, the differential excise duty refund of Nil (31 March 2017 - RS.793.54 Lacs, 1 April 2016 - Nil) have been recognized as revenue in the books of accounts.

(c) Para B2 of Ind AS 101 states that except as permitted, a first time adopter shall apply the derecognition requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind ASs. As a result, no impact has been taken as on 1 April 2016.

(i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the fair value of all assets and liabilities

- the fair value of the financial instruments is determined using discounted cash flow analysis.

(iii) Fair value of financial assets and liabilities measured at fair value - recurring fair value measurements

(iv) Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of all other financial assets and financial liabilities are considered to be the same as their fair values, due to their short-term nature.

The fair values for financial instruments were calculated based on cash flows discounted using current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

The fair values of borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk. The carrying amounts of other borrowings with floating rate of interest are considered to be close to the fair value.

Significant estimates

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period. For details of the key assumptions used and the impact of changes to these assumptions see (ii) above.

Note : 8 - Capital management

(a) Risk management

The Company’s objectives when managing capital are to:

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

The amount mentioned under total equity in balance sheet is considered as Capital.

(b) Dividends paid and proposed

Note : 9 - Financial risk management

The Company’s activities are exposed to a variety of financial risks: credit risk, liquidity risk and market risk (i.e. foreign currency risk, interest rate risk and price risk).

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk:

(A) Credit risk

Credit risk is the risk that counterparty will 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) including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

i) Trade receivables

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally carrying 30 days credit terms. Outstanding customer receivables are regularly monitored. Further the Company receives security deposit from its customers which mitigates the credit risk. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically. The ageing of trade receivables as of balance sheet date is given below. The age analysis have been considered from the due date:

ii) Financial instruments and deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s finance department. Investments of surplus funds are made only with approved counterparties in accordance with the Company’s policy. Counterparty credit limits are reviewed by the Companies’ Board of Directors on an annual basis. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments. Loans are given to body corporate are as per the Company policy and the receipt of repayment are reviewed on regular basis. For banks and financial institutions, only high rated banks/institutions are accepted.

Financial Assets are considered to be of good quality and there is no significant credit risk.

The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2018, 31 March 2017 and 1 April 2016 is the carrying amounts as illustrated in Note 41.

(B) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the underlying business, the Company maintains sufficient cash and liquid investments available to meet its obligation.

Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The management also considers the cash flows projection and level of liquid assets necessary to meet these on a regular basis.

(i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reporting period:

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in INR.

Maturities of financial liabilities

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for all financial liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

*Security deposit received from customer has not been included in the above maturity profile as the repayment of the same cannot be reasonably estimated.

(C) Market risk

(i) Foreign currency risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Company deals with international customers and is therefore exposed to foreign exchange risk (primarily with respect to USD) arising from this foreign currency transactions. In view of low proportion of export/import, as compared to the overall operations, the exposure of the Company to foreign exchange risk is also not considered to be material.

Further foreign exchange risk also arises from future cash flow against foreign currency loan. The risk is measured through a forecast of highly probable foreign currency cash flows.

Foreign currency risk exposure

The Company’s exposure to foreign currency risk at the end of the reporting period expressed in INR are as follows:-

Sensitivity

The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments.

*Holding all other variables constant

(ii) 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 long-term debt obligations with floating interest rates.

The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During 31 March 2018, 31 March 2017 and 1 April 2016, the Company’s borrowings at variable rate were denominated in INR and USD.

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.

(a) Interest rate risk exposure On Financial Liabilities:

The exposure of the Company’s financial liabilities to interest rate risk is as follows:

(b) Sensitivity

Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates as below:

(iii) Price risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market.

The Company’s exposure to equity securities price risk arises from investments held by the Company in equity securities and classified in the balance sheet as at fair value through profit and loss. The Company has investment in qouted and unqouted equity securities. Investment is done in accordance with the limits set by the Company. The Company’s Board of Directors reviews and approves all investment decisions.

Sensitivity

The table below summarizes the impact of increases/decreases of the share prices on the Company’s equity.

Note : 10 - Assets pledged as security

The carrying amounts of assets pledged as security for current and non-current borrowings are:

Note : 11 - Scheme of Amalgamation

(a) Pursuant to the Scheme of Amalgamation (“The Scheme”) between Star Ferro and Cement Limited (SFCL) and the Company as approved by the National Company Law Tribunal, Guwahati Bench at Guwahati vide its order dated 7th February, 2017, all the assets and liabilities of SFCL have been transferred to and vested in the Company at their respective book values on a going concern basis with effect from 1st April, 2016 being the appointed date. The said order of the National Company Law Tribunal has been filed with the Registrar of Companies on 22 nd February, 2017, the effective date of the scheme and accordingly, the Scheme of Amalgamation has been given effect to in these accounts. The said amalgamation has been accounted for under the “Pooling of Interest Method” as prescribed under the order.

(b) Details of Assets and Liabilities along with value of each of the assets and liabilities being transferred under the Scheme of Amalgamation are as under:

(c) Pursuant to the Scheme, the difference between book value of assets and liabilities transferred from the SFCL being RS.101.87 Lacs, has been credited to Shareholders’ Fund of the Company as under:

(i) Pursuant to the said Scheme of Amalgamation, the Company is to issue 29,54,90,077 no of Equity Shares in the ratio of 1.33 Equity Shares of face value of each RS.1/- to the shareholders of SFCL in lieu of 1 (one) Equity Share of face value of each RS.1/- held by them in SFCL as fully paid - up. Upon such allotment of shares, 29,54,75,000 no. of Equity Shares held by SFCL shall stand cancelled.

(ii) Consequent to the allotment of new shares as per the Scheme of Amalgamation, Current share capital of the Company will increase by H 0.15 Lac.

Note : 12 - Other notes

(a) Based on the information/documents available with the Company, information as per the requirement of Section 22 of The Micro, Small and Medium Enterprises Development Act, 2006 are as under:

(b) The Company has exercised the option in accordance to paragrapRs.46A of the Accounting Standard 11 (AS-11) - “The Effects of Changes in Foreign Exchange Rates”. Accordingly, the Company has depreciated the foreign exchange (gain)/ loss arising on revaluation on long term foreign Currency monetary items in so far as they relate to the acquisition of depreciable capital assets over the balance useful life of such assets. The depreciated portion of net foreign exchange (gain)/loss on such long term foreign currency monetary items for the year ended 31 March, 2018 is H 80.40 Lac ( 31 March 2017: RS.109.31 Lacs, 1 April 2016 RS.120.38 Lacs).

(c) Segment information

(i) Cement is the only identified operating segment of the Company.There is no separate reportable segment as required by Ind AS 108 ‘Operating Segments.

There are no revenues from transactions with a single customers amounting to 10 per cent or more of the Company’s revenues during the current and previous year.”

(ii) Geographical information

The entire revenue of the Company has been generated by way of domestic & export sales.

(d) As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting, education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural developments projects. Gross amount required to be spent by the Company during the year is RS.124.48 Lacs, (31 March, 2017 RS.57.04 Lacs)

Note : 13 - First-time adoption of Ind AS I - Transition to Ind AS

These are the Company’s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 1, have been applied in preparing the financial statements from the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the Company’s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

Set below are the applicable Ind AS optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A.1 Ind AS optional exemptions A.1.1 Deemed cost

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 recognised 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. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

A.1.2 Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except whether the effect is expected to be not material.

The Company has elected to apply this exemption for such contracts/arrangements.

A.1.3 Investments in subsidiaries

In financial statements, a first-time adopter that subsequently measures an investment in a subsidiary at cost, may measure such investment at cost (determined in accordance with Ind AS 27) or deemed cost (fair value or previous GAAP carrying amount) in its opening Ind AS balance sheet. Selection of fair value or previous GAAP carrying amount for determining deemed cost can be done for each subsidiary

Accordingly, the Company has elected to measure all of its investment in subsidiary at their previous GAAP carrying value.

A.1.4 Long Term Foreign Currency Monetary Items

Ind AS 101 allows that a first-time adopter may continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP.

Accordingly, the Company has elected to continue the following policy adopted by it under the previous GAAP for accounting for exchange differences arising from translation of aforesaid long-term foreign currency monetary items.

A.2 Ind AS mandatory exceptions A.2.1 Estimates

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

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP.

A.2.2 Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the fact and circumstances that exits at the date of transition to Ind AS.

A.2.3 De-recognition of financial assets and liabilities

Ind AS 109 requires entity to derecognize a financial asset when, and only when the contractual rights to the cash flows from the financial asset expire, or it transfers the financial asset as and the transfer qualifies for derecognition. Para B2 of Ind AS 101 states that except as permitted, a first time adopter shall apply the derecognition requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition.

As a result, trade receivables increased by RS.653.84 Lacs as at 31 March 2017 with a corresponding impact on current borrowings. Accordingly, the said adjustment has no impact on either equity and profit or loss for the year ended 31 March 2017.

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

A.2.4 Cash flow Statements

The transition from Indian GAAP to Ind AS has no material impact on the Cash flow Statement.

C. Notes to first-time adoption:

Note 1 : Investments in equity shares

The Company holds investment in equity shares of entities other than in subsidiaries, associate and joint venture. Under previous GAAP such investments were measured at cost.

As per Ind AS 109, these investments has been measured at fair value. The Company has categorised these investments as fair value through profit or loss (FVTPL) and any changes in fair value of those investment has been recognised in profit or loss.

Note 2 : Financial Gurantee Contract

The Company has given guarantee on behalf of its subsidiary. As per Ind AS 109, the Company has recognised a guarantee fee income for giving guarantee on behalf of subsidiary for loans taken by subsidiaries.

Note 3 : Borrowings at effective interest rate

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. Hence the Company has measured its borrowing as per the above requirement of Ind AS 109 by adjusting the transaction cost with borrowing and interest expense has been recognised as per effective interest rate.

Note 4 : Government grant

As per Ind AS 20, government grants related to assets, shall be presented in the Balance Sheet by setting up the grant as deferred income. Hence the Company has accounted the government grant received towards assets as per the requirement of Ind AS 20 by creating a deferred government grant. In subsequent year this deferred government grant has been amortised over the useful life of the assets.

Note 5 : Amalgamation adjustment

As mentioned in note 45, pursuant to the Scheme of Amalgamation (“The Scheme”) between Star Ferro and Cement Limited (SFCL) and the Company as approved by the National Company Law Tribunal, Guwahati Bench at Guwahati vide its order dated 7th February, 2017, all the assets and liabilities of SFCL have been transferred to and vested in the Company at their respective book values on a going concern basis with effect from 1st April, 2016 being the appointed date.

Note 6 : Employee benefit obligation

In accordance with Ind AS 19, “Employee Benefits” re-measurement gains and losses on post employment defined benefit plans are recognised in other comprehensive income as compared to the profit or loss under the previous GAAP.

Note 7 : Deferred tax

The various transitional adjustments lead to different temporary differences. According to the accounting policies in Note 1, 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.

Note 8 : Bill Discounting

Ind AS 109 requires entity to derecognize a financial asset when, and only when the contractual rights to the cash flows from the financial asset expire, or it transfers the financial asset as and the transfer qualifies for derecognition. Para B2 of Ind AS 101 states that except as permitted, a first time adopter shall apply the derecognition requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind ASs.

Note 9 : Retained earnings

Retained earnings as at 1 April 2016 has been adjusted consequent to the above Ind AS transition adjustments.

Note 10 : Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

14. Previous year’s figures have been regrouped and/or rearranged wherever necessary, to confirm to current year Classification.

15. The financial statements are approved by the audit committee at its meeting held on 17th May, 2018 and by the Board of Directors on the same date.

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Mar 31, 2017

Corporate Information

Star Cement Limited (formerly Cement Manufacturing Company Limited) (the Company) is a public limited company domiciled in India and incorporated on 2nd November, 2001 under the provisions of Companies Act, 1956. The Company is engaged in the manufacturing and selling of Cement Clinker & Cement. The manufacturing units are located at Lumshnong, Meghalaya and Guwahati, Assam. The Company is selling its product across north eastern and eastern states of India.

Notes:-

1. Rupee Term Loan of RS.2,702.10 Lacs from a bank is repayable in 16 equal quarterly instalments commencing from June 2018. The Loan is secured by pari passu first charge on fixed assets of the Company’s cement plant at Lumshnong, Meghalaya and second pari passu charge on the current assets of the Company’s cement plant at Lumshnong, Meghalaya.

2. Rupee Term Loans of RS.2,992.25 Lacs from banks are repayable in further 10 unequal quarterly instalments ending on December 2019. Rupee Term Loan of RS.4,687.50 Lacs from a bank is repayable in 15 equal quarterly instalments commencing from June 2017. Foreign Currency loan of RS.1,255.86 Lacs from a bank is repayable in further 11 unequal quarterly instalments ending on December 2019. These loans are secured by pari passu first charge on fixed assets and pari passu second charge on current assets of the Company’s cement grinding unit at Guwahati, Assam.The term loans are also secured by personal guarantees of some of the Directors of the Company.

3. Rupee Term Loan of RS.2,437.51 Lacs from a financial institution is repayable in 13 equal quarterly instalments commencing from December 2016. The loan is to be secured by first charge on fixed assets of Megha Technical & Engineers Private Limited, a wholly owned subsidiary of the Company. Pending security creation, the loan is temporarily secured by personal gurantee of some of the Directors of the Company.

4. Rupee Term Loan of RS.6,999.28 Lacs from a body corporate is repayable in 8 equal half Yearly instalments commencing from December 2017. The loan is secured by pari passu first charge on the fixed assets of the Company’s cement plant at Lumshnong, Meghalaya and second pari passu charge over the current assets of the Company’s cement plant at Lumshnong, Meghalaya. The loan is also secured by personal guarantee of one of the Director of the Company.

5. Hire Purchase Finance is secured by hypothecation of respective vehicles and is repayable within four years having varying date of payment.

6. The Company does not have any continuing defaults in repayment of loans and interest as at reporting period.

1.1 In the opinion of the Management and to the best of their knowledge and belief the value on realization of loans, advances and other current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

1.2 Scheme of Amalgamation

(a) Pursuant to the Scheme of Amalgamation (“The Scheme”) between Star Ferro and Cement Limited (SFCL) and the Company as approved by the National Company Law Tribunal, Guwahati Bench at Guwahati vide its order dated 7th February, 2017, all the assets and liabilities of SFCL have been transferred to and vested in the Company at their respective book values on a going concern basis with effect from 1st April, 2016 being the appointed date. The said order of the National Company Law Tribunal has been filed with the Registrar of Companies on 22nd February, 2017, the effective date of the scheme and accordingly, the Scheme of Amalgamation has been given effect to in these accounts. The said amalgamation has been accounted for under the “Pooling of Interest Method” as prescribed under Accounting Standard 14 (AS -14) - “Accounting for Amalgamations” issued by the Institute of Chartered Accountants of India.

(b) Details of Assets and Liabilities along with value of each of the assets and liabilities being transferred under the Scheme of Amalgamation are as under:

(a) Pursuant to the said Scheme of Amalgamation, the Company is to issue 29,54,90,077 number of Equity Shares in the ratio of 1.33 Equity Shares of face value of RS.1/- each to the shareholders of SFCL in lieu of 1 (one) Equity Share of face value of RS.1/- each held by them in SFCL as fully paid - up. Upon such allotment of shares, 29,54,75,000 number of Equity Shares held by SFCL shall stand cancelled.

(b) Consequent to the allotment of new shares as per the Scheme of Amalgamation, Current share capital of the Company will increase by Rs.0.15 Lac.

1.3 Based on the information/documents available with the Company, information as per the requirement of Section 22 of The Micro, Small and Medium Enterprises Development Act, 2006 are as under:

1.4 The Company deals in only one Segment i.e. Cement . There is no separate reportable segment as required by Accounting Standard 17- ‘Segment Reporting’. The Company mainly caters to the needs of the domestic market. As such there are no reportable geographical segments.

1.5 As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural developments projects.

A CSR Committee has been formed by Company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

a) Gross Amount required to be spent by the Company during the year is RS.57.04 Lacs, (P.Y. RS.40.52 Lacs)

b) Amount spent during the year on:

1.6(a) Against company’s claim in respect of its cement plant at Lumshnong for refund of differential excise duty, Hon’ble High Court at Guwahati (Shillong Bench) vide its order dated 12th September, 2012, has directed the Excise Department to release 50% of the disputed amount against furnishing of solvent surety. Based on the said judgment of the Hon’ble High Court in favour of the Company and legal opinion obtained by the Company, the differential excise duty refund of RS.127.80 lacs (P.Y. RS.223.19 Lacs) has been recognized as revenue in the book of accounts.

(b) Against company’s claim in respect of its cement plant at Guwahati for refund of differential excise duty, Hon’ble High Court at Guwahati vide its order dated 1st December, 2016, in the matter of Raj Coke industries & others versus the Union of India has directed the Excise Department to release 50% of the disputed amount against furnishing of solvent surety. Based on the said judgment of the Hon’ble High Court and legal opinion obtained by the Company, the differential excise duty refund of RS.793.54 Lacs (H Nil) have been recognized as revenue in the book of accounts.

1.7 Employee Defined Benefits Defined Contribution Plans

(a) The Company has recognized an expense of RS.231.4 Lacs (Previous year - RS.199.11 Lacs) towards the defined contribution plans.

(b) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company. The following tables summarize the components of net benefit expenses recognized in statement of profit and loss and the funded status and amounts recognized in the balance sheet for gratuity. Under leave encashment scheme, the Company allows its employees to encash accumulated leave over and above thirty days at any time during the year. The scheme is not funded by company.

1.8 The Company had exercised the option given in paragraph 46A of the Accounting Standard 11 (AS-11) - “The Effects of Changes in Foreign Exchange Rates”. Accordingly, the Company has depreciated the foreign exchange (gain)/loss arising on revaluation on long term foreign Currency monetary items in so far as they relate to the acquisition of depreciable capital assets over the balance useful life of such assets. The depreciated portion of net foreign exchange (gain)/loss on such long term foreign currency monetary items for the period ended on 31st March, 2017 is RS.109.31 lacs, (PY RS.120.38 lacs). The unamortized portion carried forward as at 31st March, 2017 is RS.437.63 lacs, (as at 31.03.15 RS.561.47 lacs).

1.9. During the year, the Company had Specified Bank Notes (SBNs) and other denomination notes (ODNs) as defined in the MCA Notification No. G.S.R. 308(E) dated March 31, 2017. The SBNs and ODNs held and transacted during the period from November 8, 2016 to December 30, 2016 are as under:

*For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning as provided in notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407 (E), dated November 8, 2016.

1.10 The Companies (Indian Accounting Standards) Rules, 2015 (Ind-AS) would be applicable to the Company from Financial year commencing on and after 1st April, 2017. Accordingly, the financial statements have been prepared in compliance with Companies (Accounting Standards) Rules, 2006.

1.11 Tax expense for earlier years represents write back upon completion of assessments and change in estimate of allow ability of certain deductions.

1.12 Previous year’s figures have been regrouped and/or rearranged wherever necessary, to confirm to current period classification.

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Mar 31, 2016

1. Rupee Term Loan ofRs,2,185.58 lacs from a bank is repayable in further 5 equal quarterly installments ending on June, 2017. The Loan is secured by pari passu first charge on current assets and first charge on fixed assets of the Company’s cement plant at Lumshnong, Meghalaya.

2. Rupee Term Loan ofRs,6,662.45 lacs from banks are repayable in further 15 unequal quarterly installments ending on December, 2019. Rupee Term Loan ofRs,5,000.00 lacs from a bank is repayable in 16 equal quarterly installments commencing from June,

2017. Foreign Currency loan ofRs,2158.90 lacs from a bank is repayable in further 14 unequal quarterly installments ending on December, 2019. The loans are secured by pari passu first charge on fixed assets and pari passu second charge on current assets of the Company’s cement grinding unit at Guwahati, Assam.

3. Rupee Term Loan ofRs,3,000.00 lacs from a financial institution is repayable in 16 equal quarterly installments commencing from January, 2017. The loan is to be secured by first charge on fixed assets of Cement Plant at Lumshnong, Meghalaya of Megha Technical & Engineers Private Limited, a wholly owned subsidiary of the Company.

4. The term loans are also secured by personal guarantees of some of the directors of the Company.

5. Hire Purchase Finance is secured by hypothecation of respective vehicles and is repayable within four years having varying date of payment.

6. The Company does not have any continuing defaults in repayment of loans and interest as at reporting period.

b. Working Capital facilities ofRs,2,131.82 Lacs from banks are secured by first pari passu charge on current assets of Lumshnong unit and second pari passu charge on fixed assets of the Company’s cement plant at Lumshnong, Meghalaya.

c. Working capital facilities ofRs,8,471.81 Lacs from banks are secured by pari passu first charge on current assets and pari passu second charge on fixed assets of the company’s cement grinding unit at Guwahati, Assam.

d. The Working capital facilities have been guaranteed by some of the Directors of the Company.

e. Short term loan from banks is due for repayment on June, 2016 and Foreign Currency demand loan from a bank is due for repayment on September, 2016.

Note : Periodically, the Company evaluates reliability of all customer dues. The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates, general economic factors, which could affect the customers’ ability to settle. The Company normally provides for debtor dues outstanding for six months or longer from the invoice date, at the Balance Sheet date. The Company pursues the recovery of the dues, in part or full.

7 In the opinion of the Management and to the best of their knowledge and belief the value on realization of loans, advances and other current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

8 Based on the information/documents available with the Company, information as per the requirement of Section 22 of The Micro, Small and Medium Enterprises Development Act, 2006 are as under:

9 The Company deals in only one Segment i.e. Cement. There is no separate reportable segment as required by Accounting Standard 17- ‘Segment Reporting’. The Company mainly caters to the needs of the domestic market. As such there are no reportable geographical segments.

10 Against company’s claim for refund of differential excise duty, Hon’ble High Court at Guwahati (Shillong Bench) vide its order dated 12th September, 2012, has directed the Excise Department to release 50% of the disputed amount against furnishing of solvent surety in line with the Interim Order dated 13th January, 2012 passed by Hon’ble Supreme Court in case of “VVF Ltd and others”. Based on the said judgment of the Hon’ble High Court in favour of the company and legal opinion obtained by the company, the differential excise duty refund ofRs,223.19 Lacs (PY.Rs,385.28 Lacs) has been recognized as revenue in the book of accounts.

11. As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural developments projects.

A CSR Committee has been formed by Company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

a) Gross Amount required to be spent by the Company during the year isRs,40.52 Lacs , (PY.Rs,37.30 Lacs)

12. Related party Disclosures

A Names of the related parties where control exists Nature of relationship

Star Ferro and Cement Limited (SFCL) Holding Company

Megha Technical & Engineers Private Limited (MTEPL) Subsidiary Company

Star Cement Meghalaya Limited (SCML) Subsidiary Company

Meghalaya Power Limited (MPL) Subsidiary Company

NE Hills Hydro Limited (NEHL) Subsidiary Company B Others-with whom transactions have taken place during the year

I Names of other related parties Nature of relationship

Century Plyboards (India) Limited (CPIL) Enterprises influenced by KMP

Shyam Century Ferrous Limited (SCFL) Enterprises influenced by KMP

II Key Management Personnel

Names of other related parties Nature of relationship

Mr. Sajjan Bhajanka Chairman & Managing Director

Mr. Rajendra Chamaria Vice Chairman & Managing Director

Mr. Sanjay Agarwal Managing Director

Mr. Prem Kumar Bhajanka Director

Mr. Sanjay Kumar Gupta CEO

Mr. Manoj Agarwal Company Secretary

III Relatives of Key Management Personnel

Names of the related parties Nature of relationship

Mr. Rahul Chamaria Son of Mr. Rajendra Chamaria

Mr. Sachin Chamaria Son of Mr. Rajendra Chamaria

Note: Based on discussion with the solicitors / favorable decisions in similar cases/legal opinion taken by the Company, the management believes that the Company has a good chance of success in cases mentioned herein-above and hence, no provision there against is considered necessary.

13. Employee Defined Benefits

Defined Contribution Plans

(a) The Company has recognized an expense ofRs,199.11 Lacs (Previous Year -Rs,158.20 Lacs) towards the defined contribution plans.

(b) The company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company. The following tables summarize the components of net benefit expenses recognized in statement of profit and loss and the funded status and amounts recognized in the balance sheet for gratuity. Under leave encashment scheme, the company allows its employees to encash accumulated leave over and above thirty days at any time during the year. The scheme is not funded by company.

Withdrawal rates (Varying between per annum depending upon the duration and age of the employees) Varying between 8% per annum to 1% per annum depending on duration and age of the employees.

14.The Company had exercised the option given in paragraph 46A of the Accounting Standard 11 (AS-11) “The Effects of Changes in Foreign Exchange Rates”. Accordingly, the Company has depreciated the foreign exchange (gain)/loss arising on revaluation on long term foreign Currency monetary items in so far as they relate to the acquisition of depreciable capital assets over the balance use life of such assets. The depreciated portion of net foreign exchange (gain)/loss on such long term foreign currency monetary items for the year ended 31st March, 2016 isRs,120.38 lacs, (PY.Rs,136.57 lacs). The unamortized portion carried forward as at 31st March, 2016 isRs,561.47 lacs, (as at 31.03.15Rs,482.42 lacs).

15.The Ministry of Corporate Affairs (MCA) vide notification dated 29th August, 2014 has amended Schedule II to the Companies Act, 2013 requiring mandatory componentization of fixed assets for financial statements in respect of financial years commencing on or after 1st April, 2015. During the year, the Company has undertaken the componentization of fixed assets w.e.f. 1st April, 2015 on the basis of technical evaluation and useful life thereof. Consequent to the same, the Depreciation expenses is higher byRs,8.62 Lacs and profit before tax is lower byRs,8.62 Lacs for the year ended 31st March, 2016.

16. Previous year’s figures have been regrouped and/or rearranged wherever necessary, to confirm to current year’s classification.

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Mar 31, 2015

a Terms/Rights attached to equity shares

The Company has only one class of equity shares having par value of H10/- per share. Each holder of Equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of liquidation of the Company, the holders of the 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 declaration received from shareholders regarding beneficial interest, the above shareholding represent both legal and beneficial ownership.

1. Rupee Term Loan of H3,935.58 Lacs from a Bank is repayable in further 9 equal quarterly installments ending on June 2017. The Loan is secured by pari passu first charge on current assets and first charge on fixed assets of the Company’s cement plant at Lumshnong, Meghalaya.

2. Rupee Term Loans of H9,842.45 Lacs and Foreign Currency Loan of H3,414.10 Lacs from Banks are repayable in further 19 unequal quarterly installments ending on December 2019. The loans are secured by pari passu first charge on fixed assets and pari passu second charge on current assets of the Company’s cement grinding unit at Guwahati, Assam.

3. The term loans are also secured by personal guarantees of some of the Directors of the Company.

4. Hire Purchase Finance is secured by hypothecation of respective vehicles and is repayable within two years having varying date of payment.

5. The Company does not have any continuing defaults in repayment of loans and interest as at reporting period.

b. Working Capital facilities of H4,030.83 Lacs from Banks are secured by first pari passu charge on current assets of Lumshnong unit and second pari passu charge on fixed assets of the Company’s cement plant at Lumshnong, Meghalaya.

c. Working capital facilities of H8,843.74 Lacs from Banks are secured by pari passu first charge on current assets and pari passu second charge on fixed assets of the Company’s cement grinding unit at Guwahati, Assam.

d The Working capital facilities have been guaranteed by some of the Directors of the Company.

e. Short term loan from a Bank is due for repayment on June, 2015.

6 In the opinion of the Management and to the best of their knowledge and belief the value on realization of loans, advances and other current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

7 There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of the information available with the Company.

8 The Company deals in only one Segment i.e. Cement and only in India. There is no separate reportable segment as required by Accounting Standard 17- ''Segment Reporting’. The Company mainly caters to the needs of the domestic market. As such there are no reportable geographical segments.

9 Against company’s claim for refund of differential excise duty, Hon’ble High Court at Guwahati (Shillong Bench) vide its order dated 12th September, 2012, has directed the Excise Department to release 50% of the disputed amount against furnishing of solvent surety in line with the Interim Order dated 13th January, 2012 passed by Hon’ble Supreme Court in case of "VVF Ltd and others”. Based on the said judgment of the Hon’ble High Court in favour of the Company and legal opinion obtained by the Company, the differential excise duty refund of H385.28 Lacs (P.Y.H1818.29 Lacs) has been recognized as revenue in the book of accounts.

10 - Related party Disclosures

A Names of the related parties where control exists Nature of relationship

Star Ferro and Cement Limited (SFCL) Holding Company

Megha Technical & Engineers Private Limited (MTEPL) Subsidiary Company

Star Cement Meghalaya Limited (SCML) Subsidiary Company

Meghalaya Power Limited (MPL) Subsidiary Company

NE Hills Hydro Limited (NEHL) Subsidiary Company

B Others-with whom transactions have taken place during the year I Names of other related parties Nature of relationship

Century Plyboards (India) Limited (CPIL) Associate

Shyam Century Ferrous Limited (SCFL) Associate

Star India Cement Limited (SICL) Associate

II Key Management Personnel

Names of other related parties Nature of relationship

Mr. Sajjan Bhajanka Chairman & Managing Director

Mr. Rajendra Chamaria Vice Chairman & Managing Director

Mr. Sanjay Agarwal Managing Director

Mr. Prem Bhajanka Director

Mr. Pankaj Kejriwal Director

Mr. Sanjay Kr. Gupta CEO (Deputy CEO upto 25.03.15)

Mr. Dilip Kr. Agarwal CFO (w.e.f 20.09.14)

Mr. Manoj Agarwal Company Secretary

III Relatives of Key Management Personnel

Names of the related parties Nature of relationship

Mrs. Renu Chamaria Wife of Mr. Rajendra Chamaria

Mr. Rahul Chamaria Son of Mr. Rajendra Chamaria

Mr. Sachin Chamaria Son of Mr. Rajendra Chamaria

Note: Based on discussion with the solicitors/favourable decisions in similar cases/legal opinion taken by the Company, the management believes that the Company has a good chance of success in cases mentioned here-in-above and hence, no provision there against is considered necessary

11 - Employee Defined Benefits

Defined Contribution Plans

(a) The Company has recognized an expense of H158.20 Lacs (Previous year - H118.20 Lacs) towards the defined contribution plans.

(b) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company. The following tables summarize the components of net benefit expenses recognized in statement of profit and loss and the funded status and amounts recognized in the balance sheet for gratuity. Under leave encashment scheme, the Company allows its employees to encash accumulated leave over and above thirty days at any time during the year. The scheme is not funded by Company.

12

The Company had exercised the option given in paragraph 46A of the Accounting Standard 11 (AS-11) - "The Effects of Changes in Foreign Exchange Rates”. Accordingly, the Company has depreciated the foreign exchange (gain)/loss arising on revaluation on long term foreign Currency monetary items in so far as they relate to the acquisition of depreciable capital assets over the balance use life of such assets. The depreciated portion of net foreign exchange (gain)/loss on such long term foreign currency monetary items for the year ended 31st March, 2015 isRs,136.64 Lacs, (PYRs,0.19 Lacs). The unamortized portion carried forward as at 31st March, 2015 isRs,482.42 Lacs, (as at 31.03.14Rs,456.53 Lacs).

13 The Company has charged depreciation based on the remaining useful life of the assets as per the provisions and requirements of Schedule II to the Companies Act, 2013 effective from April 1, 2014. Had there not been any change in useful life of the Assets, depreciation for the year would have been lower byRs,3,878.45 Lacs and consequently profit before tax for the year would have been higher byRs,3,878.45 Lacs.

14 Previous year’s figures have been regrouped and/or rearranged wherever necessary, to confirm to current year’s classification.

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Mar 31, 2014

a Terms/Rights attached to equity shares

The company has only one class of equity shares having par value of H10 per share. Each holder of Equity shares is entitlled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend.

In the event of liquidation of the company, the holders of the 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 declaration received from shareholders regarding beneficial interest, the above shareholding represent both legal and beneficial ownership.

1. Rupee Term Loan of H196.43 lacs from a bank is repayable on quarter ending June 2014. The Loan is secured by first charge on fixed assets (except specifically charged assets) and pari passu second charge on current assets of the company''s cement plant at Lumshnong, Meghalaya.

2. Rupee Term Loan of H5,685.58 lacs from a bank is repayable in further 13 equal quarterly instalments ending on June 2017. The Loan is secured by pari passu first charge on current assets and first charge on fixed assets of the company''s cement plant at Lumshnong, Meghalaya.

3. Rupee Term Loans of H12,500.00 lacs and Foreign Currency Loan of H4,154.73 lacs from banks are repayable in further 23 unequal quarterly instalments ending on December 2019. The loans are secured by pari passu first charge on fixed assets and pari passu second charge on current assets of the Company''s Cement grinding unit at Guwahati, Assam.

4. The term loans are also secured by personal guarantees of some of the directors of the Company.

5. Hire Purchase Finance is secured by hypothecation of respective vehicles and is repayable within three to four years having varying date of payment.

6. The Company does not have any continuing defaults in repayment of loans and interest as at reporting period.

b. Working Capital facilities of H3,517.26 Lacs from banks are secured by first pari passu charge on current assets of Lumshnong unit and second pari passu charge on fixed assets of the Company''s cement plant at Lumshnong, Meghalaya.

c. Working capital facilities of H4,940.38 Lacs from banks are secured by pari passu first charge on current assets and pari passu second charge on fixed assets of the Company''s Cement Grinding unit at Guwahati, Assam.

d The Working capital facilities have been guaranteed by some of the Directors of the Company.

e. Short term loan from a bank is due for repayment on June, 2014.

Provision for doubtful debts

Periodically, the Company evaluates all customer dues to the Company for collectability. The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates, general economic factors, which could effect the customers''s ability to settle. The Company normally provides for debtor dues oustanding for six months or longer from the invoice date, at at the Balance Sheet date. The Company pursues the recovery of the dues, in part or full.

NOTE 7

In the opinion of the Management and to the best of their knowledge and belief the value on realization of loans, advances and other current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

NOTE 8

There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of the information available with the company.

NOTE 9

The Company deals in only one Segment i.e. Cement and only in India. There is no separate reportable segment as required by Accounting Standard 17- ''Segment Reporting''. The Company caters to the needs of the domestic market. As such there are no reportable geographical segments.

NOTE 10

Against company''s claim for refund of differential excise duty, Hon''ble High Court at Guwahati (Shillong Bench) vide its order dated 12^th September, 2012, has directed the Excise Department to release 50% of the disputed amount against furnishing of solvent surety in line with the Interim Order dated 13^th January, 2012 passed by Hon''ble Supreme Court in case of "VVF Ltd and others”. Based on the said judgment of the Hon''ble High Court in favour of the company and legal opinion obtained by the company, the differential excise duty refund of H1818.29 lacs has been recognized as revenue in the book of accounts.

NOTE 11 Related party Disclosures

A Names of the related parties where control exists Nature of relationship

Star Ferro and Cement Limited (SFCL) Holding Company

Megha Technical & Engineers Private Limited (MTEPL) Subsidiary Company

Star Cement Meghalaya Limited (SCML) Subsidiary Company

Meghalaya Power Limited (MPL) Subsidiary Company

NE Hills Hydro Limited (NEHL) Subsidiary Company B Others-with whom transactions have taken place during the year

I Names of other related parties Nature of relationship

Century Plyboards (India) Limited (CPIL) Associate

Star India Cement Limited (SICL) Associate

II Key Management Personnel

Names of other related parties Nature of relationship

Mr. Sajjan Bhajanka Chairman & Managing Director

Mr. Rajendra Chamaria Vice Chairman & Managing Director

Mr. Sanjay Agarwal Joint Managing Director

Mr. Prem Kumar Bhajanka Managing Director (upto 31.08.13)

Mr. Pankaj Kejriwal Director

Mr. Atul Rasiklal Desai Chief Operating Officer (upto 04.03.2013)

Mr. Sanjay Kr. Gupta Deputy CEO (w.e.f. 01.10.2013)

Mr. Sanjay Kr.Gupta CFO & President (upto 30.09.2013)

III Relatives of Key Management Personnel

Names of the related parties Nature of relationship

Mrs. Renu Chamaria Wife of Mr. Rajendra Chamaria

Mr. Rahul Chamaria Son of Mr. Rajendra Chamaria

Mr. Sachin Chamaria Son of Mr. Rajendra Chamaria

Defined Contribution Plans

(a) The Company has recognized an expense of H118.20 Lacs (Previous year - H71.37 Lacs) towards the defined contribution plans.

(b) The company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company. The following tables summarize the components of net benefit expenses recognized in statement of profit and loss and the funded status and amounts recognized in the balance sheet for gratuity. Under leave encashment scheme, the company allows its employees to encash accumulated leave over and above thirty days at any time during the year. The scheme is not funded by company.

NOTE 12

During the year ended 31^st March, 2014, in line with the Notification dated 29^th December, 2011 issued by the Ministry of Corporate Affairs, the Company has availed the option given in paragraph 46A of the Accounting Standard 11 (AS-11) - The Effects of Changes in Foreign Exchange Rates”. Accordingly, the Company has, with effect from 1^st April, 2013, depreciated the foreign exchange (gain)/loss arising on revaluation on long term foreign Currency monetary items in so far as they relate to the acquisition of depreciable capital assets over the balance life of such assets. The depreciated portion of net foreign exchange (gain)/loss on such long term foreign currency monetary items for the year ended 31^st March, 2014 is RS,0.19 Lacs. The unamortized portion carried forward as at 31^st March, 2014 is H456.53 Lacs. Had the Company, followed the earlier policy of charging the entire amount to the Statement of Profit and Loss, the profit before tax for the year would have been lower by RS,456.53 Lacs.

NOTE13_

Previous year''s figures have been regrouped and/or rearranged wherever necessary, to confirm to current year''s classification.

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Mar 31, 2013

a. Terms/Rights attached to equity shares

The Company has only one class of equity shares having par value of Rs, 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend 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 the 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.

1. Rupee Term Loan of Rs, 984.51 Lacs from a bank is repayable in 5 equal quarterly installments ending on June 2014.The Loan is secured by first charge on fixed assets of Lumshnong unit (except specifically charged assets) and second charge on current assets of the Company’s cement plantat Lumshnong, Meghalaya.

2. Rupee Term Loan of Rs, 7000.00 Lacs from a bank is repayable in 16 equal quarterly installments commencing from September 2013. The Loan is secured by first pari passu charge on current assets and first pari passu charge on fixed assets of the Company’s Lumshnong unit.

3. Rupee Term Loans of Rs, 12,203.59 Lacs and Foreign Currency loan of Rs, 1,615.30 Lacs from banks are repayable in 28 unequal quarterly installments commencing from March 2013. The loans are secured by first pari passu charge on fixed assets of Company’s cement plant at Guwahati, Assam.

4. The term loans are also secured by personal guarantees of some of the directors of the Company.

5. Buyers credit from banks have been availed against Letters of Credit (sub-limit to Term Loans) issued by banks which are secured by first charge on fixed assets of the Company’s Cement plantat Guwahati, Assam.

6. Hire Purchase Finance is secured by hypothecation of respective vehicles and is repayable within three to four years.

7. The Company does not have any continuing defaults in repayment of loans and interest as at reporting period.

Provision for Doubtful Debts

Periodically, the Company evaluates all customer dues to the Company for collectability. The need for provisions is assessed based on various factors including collectability of specific dues, risk perceptions of the industry in which the customer operates, general economic factors, which could affect the customers’ ability to settle. The Company normally provides for debtor dues outstanding for six months or longer from the invoice date at the Balance Sheet date. The Company pursues the recovery of the dues, in part or full.

8 In the opinion of the Management and to the best of their knowledge and belief the value on realization of loans, advances and other current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

9 There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of the information available with the Company.

10 The Company deals in only one Segment i.e. Cement and only in India. There is no separate reportable segment as required by Accounting Standard 17 - ‘Segment Reporting’. The Company caters to the needs of the domestic market. As such there are no reportable geographical segments.

11 Pursuant to the Scheme of Arrangement (the scheme) approved by the shareholders of Century Ply boards (India) Ltd. (CPIL), the holding company, their investment in the company is proposed to be transferred and vested in Star Ferro & Cement Ltd (resulting company) at its book value on going concern basis with effect from 1st April 2012, being the appointed date. Upon the scheme being effective SFCL will become the holding company in place of CPIL. Pending approval of the scheme by Hon’ble High Court at Kolkata, no effect has been given in these accounts.

12 Related Party Disclosures

Names of the transacting related parties and related party relationship:

Holding Company Century Ply boards (India) Limited (CPIL)

Subsidiary Companies Megha Technical & Engineers Private Limited (MTEPL)

StarCementMeghalaya Limited (SCML)

Meghalaya Power Limited (MPL)

NE Hills Hydro Limited (NEHL)

Associates Star India Cement Limited (SICL)

Key Management Personnel Mr. Sajjan Bhajanka (Chairman & Managing Director)

Mr. Rajendra Chamaria (Vice Chairman & Managing Director)

Mr. Sanjay Agarwal (Joint Managing Director)

Mr. Pankaj Kejriwal (Director)

Mr. Atul Rasiklal Desai (COO) for the period from 05.09.2012 to 04.03.2013 Mr. Sanjay Kr. Gupta (CFO & President)

Note MhRI Employee Defined Benefits

(a) Defined Contribution Plans

The Company has recognized an expense of Rs, 71.37 Lacs (Previous year - Rs, 60.83 Lacs) towards the defined contribution plans.

(b) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company. The following tables summarize the components of net benefit expenses recognized in statement of profit & loss and the funded status and amounts recognized in the balance sheet for gratuity.

Under leave encashment scheme, the Company allows its employees to encash accumulated leave over and above thirty days at any time during the year. The scheme is not funded by Company.

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Mar 31, 2012

1. Rupee Term Loan of Rs, 1,777.50 Lacs from a bank is repayable in 9 equal quarterly installments of Rs, 197.50 Lacs each ending on June 2014.The Loan is secured by first charge on fixed assets of the Company''s cement plant at Lumshnong, Meghalaya (except specifically charged assets). Further,the loan has been guaranteed by personal gurantees of some of Directors of the Company.

2. Rupee Term Loans of Rs, 7803.30 Lacs from banks (sanctioned limit Rs, 17500.00 Lacs) are repayable in 28 equal quarterly installments of Rs, 625 Lacs each commencing from March 2013. The loans are secured by first charge on fixed assets of company''s cement plant at Guwahati ,Assam (under implementation) on pari pasu basis. The loans have also been guaranteed by personal guarantees of some of the Directors of the Company.

3. Buyers credit of Rs, 33.92 Lacs from a bank has been availed against Letter of Credit issued by a bank which is secured by first charge on specific fixed asset of the Company''s Cement plant at Lumshnong, Meghalaya.

4. Buyers credit of Rs,2367.38 Lacs from banks have been availed against Letters of Credit (sub—limit to Term Loans) issued by banks which are secured by first charge on fixed assets of the Company''s Cement plant at Guwahati, Assam (under implementation).

5. Hire Purchase Finance is secured by hypothecation of vehicles and is repayable within three to four years having varrying date of payment.

6. The Company does not have any continuing defaults in repayment of loans and interest as at reporting period.

7 In the opinion of the Management and to the best of their knowledge and belief the value on realization of loans, advances and other current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

8 There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of the information available with the company.

9 The Company deals in only one Segment i.e. Cement and only in India. There is no separate reportable segment as required by Accounting Standard 17 — ‘Segment Reporting’. The Company caters to the needs of the domestic market. As such there are no reportable geographical segments.

10 — Related Party Disclosures

a) Names of the transacting related parties and related party relationship

Holding Company Century Plyboards (India) Limited (CPIL)

Subsidiary Companies Megha Technical & Engineers Private Limited (MTEPL)

Star Cement Meghalaya Limited (SCML)

Meghalaya Power Limited (MPL)

NE Hills Hydro Limited (NEHL)

Associates Adonis Vyapaar Private Limited (ADVPL)

Apanapan Viniyog Private Limited (AVPL)

Ara Suppliers Private Limited (ASPL)

Arham Sales Private Limited (ARSPL)

Star India Cement Limited (SICL)

Key Management Personnel Mr. Sajjan Bhajanka (Chairman & Managing Director)

Mr. Rajendra Chamaria (Vice Chairman & Managing Director)

Mr. S.B.Roongta (Managing Director) upto 30th September, 2011 Mr. Sanjay Agarwal (Joint Managing Director)

Mr. Pankaj Kejriwal (Director)

Mr. Sanjay Kr. Gupta (Chief Financial Officer)

11 — Employee Defined Benefits (Contd.)

b) The company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company. The following tables summarize the components of net benefit expenses recognized in statement of profit and loss and the funded status and amounts recognized in the balance sheet for gratuity.

Under leave encashment scheme, the company allows its employees to encash accumulated leave over and above thirty days at any time during the year. The scheme is not funded by company.

12 Till the year ended 31st March 2011, the company was using pre—revised Schedule VI to the Companies Act 1956, for the preparation and presentation of its financial statements. During the year ended 31st March, 2012, the revised Schedule VI notified under Companies Act, 1956 has become applicable to the company. The company has reclassified previous year figures to confirm to this year’s classification.

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Mar 31, 2011

1 In the opinion of the Management and to the best of their knowledge and belief, the value on realization of loans, advances and other current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

2 The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid at the year end, interest paid/payable under this Act has not been given.

3 The Company deals in only one segment, i.e. cement and only in India. There is no separate reportable segment as required by Accounting Standard 17 - ''Segment Reporting''. The Company caters to the needs of the domestic market. As such there are no reportable geographical segments.

4 During the year, the Company acquired 100.00% shareholding of NE Hills Hydro Limited (NEHHL), consequent to which NEHHL has become a subsidiary of the Company w.e.f February 3, 2011.

5 During the year, the Company has increased its shareholding in Meghalaya Power Limited (MPL) to 51% from 49% as at 31.03.2010, consequent to which MPL has become a subsidiary of the Company w.e.f April 1, 2010.

6 Disclosure in respect of related parties pursuant to Accounting Standard 18 “Related Party Disclosures”

a Names of the transacting related parties and description of relationships:

Holding Company Century Plyboards (India) Limited (CPIL)

Subsidiary Companies Megha Technical & Engineers Private Limited (MTEPL)

Star Cement Meghalaya Limited (SCML)

Meghalaya Power Limited (MPL) (w.e.f 01.04.2010)

NE Hills Hydro Limited (NEHHL) (w.e.f 03.02.2011) Associates Skipper Limited (SL)

Shyam Energy Limited (SEL)

Star India Cement Limited (SICL)

Shyam Metalics & Energy Limited (SMEL)

Shyam Century Cement Industries Limited (SCCIL)

Key Management Personnel Sajjan Bhajanka (Chairman & Managing Director)

Brij Bhushan Agarwal (Vice Chairman)

Rajendra Chamaria (Vice Chairman & Managing Director)

S B Roongta (Managing Director)

Sanjay Agarwal (Joint Managing Director)

Sajan Kumar Bansal (Director)

Prem Kumar Bhajanka (Director)

Pankaj Kejriwal (Director)

Clara Suja (Director)

Sanjay Kr Gupta (Chief Financial Officer)

7 Employee Defined Benefits

a Defined Contribution Plans:

The Company has recognized an expense of Rs, 48.36 lacs (Previous Year - Rs, 38.97 lacs) towards the defined contribution plans. b The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company. The following tables summaries the components of net benefit expenses recognized in the Profit & Loss Account and the funded status and amounts recognized in the Balance Sheet for the Gratuity.

8 In pursuance of “Accounting Standard 28 - Impairment of Assets” issued by the Institute of Chartered Accountants of India, the Company reviewed its carrying cost of assets with value in use (determined based on future earnings) and based on such review, the Management is of the view that in the current financial year, impairment of assets is not considered necessary.

9 Information pursuant to provisions of paragraphs 3, 4-C and 4-D of Part-II of Schedule VI to the Companies Act, 1956.

10 Figures have been rounded off to the nearest lacs.

11 Previous year''s figures have been regrouped and/or rearranged wherever necessary, to conform to current year''s classification.