Enter the first few characters of Company and click 'Go'

Notes to Accounts of Chambal Fertilisers & Chemicals Ltd.

Mar 31, 2023

1. Freehold land having carrying value of Rs. 0.01 Crore (Previous Year : Rs. 0.01 Crore) and Leasehold land having carrying value of Rs. 0.35 Crore (Previous Year : Rs. 0.35 Crore) are yet to be registered in the Company''s name.

2. The carrying value of Buildings includes Rs. 0.00 Crore (Previous Year : Rs. 0.00 Crore) representing undivided share in assets jointly owned with others.

3. Deletions from Plant and Equipment includes Equipment having gross block of Rs. 6.20 Crore (Previous Year: Rs. 1.71 Crore), Factory Equipment having gross block of Nil (Previous Year: Rs. 0.10 Crore), and Vehicles having gross block of Nil (Previous Year: Rs. 0.00 Crore) and Accumulated Depreciation of Plant and Equipment of Rs. 5.10 Crore (Previous Year: Rs. 1.45 Crore), Factory Equipment of Nil (Previous Year: Rs. 0.09 Crore), and Vehicles of Nil (Previous Year: Rs. 0.00 Crore) transfered to "Assets held for sale" (refer note 42).

4. Leasehold Improvements (on Finance Lease) had been fully depreciated in earlier years and are carried at residual value.

5. Capital Work-in-Progress of Rs. 101.63 Crore (Previous Year : Rs. 156.56 Crore) primarily represents capital expenditure in respect of Plant and Machinery & Buildings.

Capital Work-in-Progress (âCWIPâ)

1. CFCL Ventures Limited ("CVL") has issued ordinary shares, preference shares (series A-1, B-1, C-1, D-1, E-1, F-1, G, H, I, J & K) and warrants for ordinary shares and preference shares (series G, H & I). Conversion ratio of different series of non cumulative convertible preference shares into ordinary shares of CVL are as follows-Series A1 & B1 preference shares will be converted in the ratio of 1:1.22,

Series Cl, D1, El preference shares will be converted in the ratio of 1:1.68, Series F-1 preference shares will be converted in the ratio of 1:1.33, Series G, H, I, J & K preference shares will be converted in the ratio of 1:1. This conversion is subject to adjustments set forth, if any, in the Articles of Association of CVL.

2. During the previous years, ISGN Corporation ("ISGN, USA") and ISG Novasoft Technologies Limited, ("ISGN, India"), subsidiaries of CVL have sold / transferred certain assets / liabilities to the respective buyers.

As part of the aforesaid transactions, the Company executed keepwell agreements with the respective buyers and the concerned subsidiaries. As per the terms of the aforesaid keepwell agreements, the Company has to ensure that the concerned subsidiary has sufficient funds to enable it to make payments against indemnity obligations of the subsidiary under the agreements executed for sale / transfer of assets / liabilities. The aggregate indemnity obligations of the subsidiaries under the aforesaid agreements shall not exceed Rs.130.38 Crore (Previous Year: Rs. 123.01 Crore).

a) Reconciliation of the Shares Outstanding at the beginning and at the end of the Reporting Periods

There is no movement in the equity shares outstanding at the beginning and at the end of the reporting periods.

b) Terms / Rights attached to Equity Shares

The Company has only one class of shares having a par value of Rs.10 per share fully paid up. Each holder of equity shares is entitled to one vote per share and the equity shares will rank pari passu with each other in all respects. The Company declares and pays dividend in Indian rupees. The dividend recommended / proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting. Further, the Board of Directors may also declare an interim dividend.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after payment of all liabilities.

(b) Retained Earnings

Retained Earnings comprises of prior years as well as current year''s undistributed earnings after taxes.

General Reserve is a free reserve. It represents appropriation of profit by the Company. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.

(d) Treasury Shares

Treasury Shares represents equity shares of the Company acquired by CFCL Employees Welfare Trust from the secondary market to allocate or transfer these shares to eligible employees of the Company from time to time on the terms and conditions specified under the CFCL Employees Stock Option Scheme, 2010.

(e) Loss on Treasury Shares acquired

Loss on Treasury Shares acquired represents the amount of loss incurred by CFCL Employees Welfare Trust, on the transfer of equity shares to the eligible employees of the Company as per CFCL Employees Stock Option Scheme, 2010.

(f) Capital Reserve

Capital Reserve represents the amount on account of forfeiture of equity shares of the Company. Utilisation of reserve will be as per the provisions of the relevant statute.

(g) Capital Redemption Reserve

Capital Redemption Reserve represents reserve created on redemption of preference shares. Utilisation of reserve will be as per the provisions of the relevant statute.

(h) & (i) Tonnage Tax Reserve and Tonnage Tax Reserve (utilised) Account under Section 115VT of the Income Tax Act, 1961

These reserves were created till the time erstwhile ''Shipping Division'' was under Tonnage Tax Regime.

(j) Share Option Outstanding Account

The Share Option Outstanding Account is used to recognise the grant date fair value of options issued to employees under the CFCL Employees Stock Option Scheme, 2010. Refer to note 35 for further details of the plan.

(k) Cash Flow Hedging Reserve

The Company uses hedging instrument as part of its management of foreign currency risk associated with its highly probable forecast sale. Foreign currency risk associated with highly forecasted sale transaction is being hedged by taking foreign currency loans.

i External Commercial Borrowings ("ECB") from banks of USD 22.12 Crore (Rs. 1,817.91 Crore including current maturity of Rs. 688.37 Crore) (Previous Year: Rs. 2,311.76 Crore including current maturity of Rs. 634.94 Crore) carry interest in the range of 3 months LIBOR / ON SOFR plus 1.35% - 1.94% per annum. ECB amounting to USD 17.62 Crore (Rs. 1,448.12 Crore including current maturity of Rs.606.19 Crore) are repayable in remaining 10 quarterly instalments from June 30, 2023 onwards. ECB amounting to USD 4.50 Crore (Rs. 369.79 Crore including current maturity of Rs. 82.18 Crore) are repayable in remaining 18 equal quarterly instalments from June 30, 2023 onwards. These ECBs are secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties of the Company and hypothecation of the movable fixed assets of the Company, both present and future subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings.

ii Foreign currency term loans from a financial institution of USD 9.79 Crore (Rs. 804.82 Crore including current maturity of Rs.178.85 Crore) (Previous Year: Rs. 907.33 Crore including current maturity of Rs.164.97 Crore) carry interest of 3 months LIBOR plus 1.55% per annum. These term loans are repayable in remaining 18 equal quarterly instalments from June 30, 2023 onwards. These loans are secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties of the Company and hypothecation of the movable fixed assets of the Company, both present and future subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings.

i Rupee Loans - Working Capital Demand Loan of Rs. 890.00 Crore was repaid during the year. Further, loan was secured by hypothecation of all the Company''s current assets including all stocks and book debts and other movable assets, both present and future. This loan was further secured by second charge on the immovable properties of the Company. This loan was repayable on demand.

ii Foreign Currency Loans from Banks of Rs. 647.64 Crore (Previous Year: Rs. 161.94 Crore) carry interest in the range of 5.16% - 5.46% per annum. These loans are secured by hypothecation of all the Company''s current assets including all stocks and book debts and other movable assets, both present and future. These loans are further secured by second charge on the immovable properties of the Company. These loans have been repaid on April 06, 2023.

25 Contingent Liabilities and Contingent Assets: (i) Contingent Liabilities (not provided for) in respect of :
				(Rs. in Crore)
	S. No.	Particulars	As at March 31, 2023	As at March 31, 2022
	(a)	Demand raised by Service Tax, Goods and Services Tax, Sales Tax and Income Tax (IT) authorities being disputed by the Company *	142.39	104.94
	(b)	Penalty levied by FERA Board under appeal before the Calcutta High Court	0.01	0.01
	(c)	Various labour cases	Amount not ascertainable	Amount not ascertainable
	(d)	Other claims against the Company not acknowledged as debts	0.08	0.08
* Brief description of liabilities under (a) above are as follows :
				(Rs. in Crore)
	S. No.	Particulars	As at March 31, 2023	As at March 31, 2022
	1	Income Tax:
		(i) Demand raised by IT authorities on account of various disallowances for assessment year 2011-12	0.03	0.03
		(ii) Demand raised by IT authorities on account of various disallowances for assessment year 2017-18	10.36	10.36
		(iii) Demand raised by IT authorities on account of various disallowances for assessment year 2018-19	92.27	76.24
		(iv) Demand raised by IT authorities on account of various disallowances for assessment year 2019-20	8.53	8.53
		(v) Demand raised by IT authorities on account of various disallowances for assessment year 2020-21	6.29	6.29
		(vi) Demand raised by IT authorities on account of various disallowances for assessment year 2021-22	0.39	0.39
		(vii) Demand raised by IT authorities on account of various disallowances for assessment year 2022-23	2.83	_-
		(viii) Other Matters	7.11	2.83

(e) The Company had received a demand of Rs. 3.52 Crore plus penalty (Previous Year: Rs. 3.52 Crore) from Sales Tax Department, Kota in an earlier year towards use of natural gas for ammonia fuel, power and steam generation for the period April, 1996 to May, 2001. The Company has obtained a stay from Hon''ble High Court of Rajasthan, Jodhpur on 13^th July, 2001 (1996-97 to 1997-98) and on 17^th August, 2001 (1998-99 to 2001-02 - Upto May 2001). However, in the event of the Company having to pay the above, it is reimbursable by Fertiliser Industry Coordination Committee (FICC), Government of India under Subsidy Scheme.

(f) The Company as well as other users of natural gas under Hazira-Bijeypur-Jagdishpur Gas Pipeline had in earlier years received letters from GAIL (India) Limited, informing about the possibility of levy of excise duty on natural gas (presently not levied) with retrospective effect. The amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by FICC, Government of India under Subsidy Scheme.

(g) The Company as well as other users of Natural Gas under Hazira-Bijeypur-Jagdishpur Gas Pipeline had received a letter in an earlier year from GAIL (India) Limited, informing about the possibility of levy of Central Sales Tax. The Company has been taking the delivery of Gas in the State of Rajasthan and has been accordingly paying Rajasthan Sales Tax on the supply. Therefore, the Company is of the view that no Central Sales Tax is payable by it. Further, the amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by FICC, Government of India under Subsidy Scheme.

(h) Under the Jute Packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specified percentage of fertilisers dispatched were required to be supplied in Jute bags up to August 31, 2001. The provisions of the said Act were challenged in the Supreme Court, which upheld the constitutional validity of this Act in its judgment in 1996. In spite of making conscious efforts to step up use of jute packaging material, the Company had been unable to adhere to the specified percentage, due to strong customer resistance to use of jute bags. The Company had received show cause notice from the Office of the Jute Commissioner, Kolkata, for levying a penalty of Rs. 73.80 Crore (Previous Year: Rs. 73.80 Crore) for non compliance of the provisions of the said Act. The Company has obtained a stay order from Delhi High Court against the above show cause notice. Management believes that it had a strong case and basis merit of the case, the Company is of the view that the said levy is not tenable in law and accordingly no provision has been considered. Based on favorable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed above and hence no provision is considered necessary against the same.

In respect of above contingent liabilities, it is not practicable for the Company to estimate the timings of cash outflows, if any, pending resolution of the respective proceedings.

(ii)	Contingent assets (not recognised) in respect of :		(Rs. in Crore)
	Particulars	As at	As at
		March 31, 2023	March 31, 2022
	Un-utilised cenvat credit	3.06	3.06

The erstwhile Shipping Division of the Company had claimed cenvat credit in the service tax returns in the earlier years. However, such service tax credit receivable has not been recognised in the financial statements due to uncertainty in utilisation of the same.

a) Gratuity

The Company has a defined benefit gratuity plan. Benefit is being paid as under:

A) In case of retirement or death of an employee while in service of the Company, the gratuity will be payable as under:

i) Completed continuous service of 5 years and above upto 20 years - gratuity equivalent to 15 days last drawn salary for each completed year of service.

ii) Completed continuous service of above 20 years - gratuity equivalent to 15 days last drawn salary for first 20 years and 20 days last drawn salary for each completed year of service after 20 years.

B) In case of resignation or termination of an employee, where the employee has completed 5 years of continuous service with the Company, gratuity equivalent to 15 days last drawn salary for each completed year of service shall be payable. In case of erstwhile Shipping Division, the Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at the rate of 15 to 30 days last drawn salary for each completed year of service.

b) Post Retirement Medical Benefit Plan

The Company has post retirement medical benefit schemes in the nature of defined benefit plan which is unfunded.

c) Provident Fund

The Company had set up provident fund trusts, which were managed by the Trustees. Provident funds set up by employers, which requires interest shortfall to be met by the employer, has been treated as defined benefit plan till August 31, 2021. During the Previous Year, the Company had initiated the process of surrender of exemption granted to CFCL Employees'' Provident Fund and transferred the accumulated provident fund balance of employees to the Regional Provident Fund Commissioner (''RPFC). In view of the above, the Company remits the monthly contribution of Provident Fund to RPFC with effect from September 01,2021. Therefore, contribution to Provident Fund is treated as Defined Contribution Plan with effect from September 01,2021 except contribution to Provident Fund of erstwhile shipping division of the Company.

The Board of Trustees of Gratuity Trust are responsible for the administration of the plan assets and for the definition of the investment strategy. The Board of Trustees reviews the level of funding and investment and such a review includes the asset-liability matching strategy and investment risk management policy.

The Board of Trustees decides its contribution based on the results of its review. Generally, it aims to have a portfolio mix of equity instruments and debt instruments. Investments of Provident Fund Trust were governed by the rules issued by the Ministry of Labour, Government of India for Employee Provident Fund exempted establishment.

Sensitivities due to mortality & withdrawals are not material and hence impact of change is not calculated.

Sensitivities as to rate of inflation, rate of increase of pension payment, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The weighted average duration of the defined benefit plan obligation at the end of the reporting period is 14.70 years for Gratuity Plan and 14.70 years for Post Retirement Medical Benefits Plan (Previous Year : 14.36 years for Gratuity Plan and 14.34 years for Post Retirement Medical Benefits Plan).

31 Subsidies

(a) Nitrogenous Fertilisers are under the Concession Prices for urea under New Urea Policy 2015, New Pricing Scheme - Stage III, New Investment Policy 2012 (amended), Modified New Pricing Scheme - Stage - III and Uniform Freight Policy, which were further adjusted for input price escalation / de- escalation, as estimated on the basis of the prescribed norms in line with known policy parameters.

Contribution from sale of surplus ammonia has been accounted for in accordance with the known policy parameters. Current year''s subsidy income of Urea has been (reduced) / increased by Rs. (0.21) Crore (Previous Year: Rs. 90.38 Crore), pertaining to earlier years, but determined during the year.

35 Share Based Payments

Employees Stock Option Scheme

The shareholders of the Company had approved CFCL Employees Stock Option Scheme, 2010 on August 27, 2010 which was amended by the shareholders on September 13, 2013 and the revised CFCL Employees Stock Option Scheme, 2010 (ESOS) was approved by the shareholders on September 15, 2015. As per ESOS, 41,62,000 Stock Options can be issued to Whole time Director/ Managing Director and other specified categories of employees of the Company. The options are to be granted at market price. The market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Each option, upon vesting, shall entitle the holder to acquire 1 equity share of Rs.10 of the Company.

The expected volatility was determined based on historical volatility data. For calculating volatility, the Company has considered the daily volatility of the stock prices of the Company on National Stock Exchange of India Limited over a period prior to the date of grant, corresponding with the expected life of the options.

In financial year 2010-11, CFCL Employees Welfare Trust ("Trust") was constituted, inter alia, for the purpose of subscribing or acquiring equity shares of the Company from the Company or Secondary market, to hold the shares and to allocate or transfer these shares to eligible employees of the Company from time to time on the terms and conditions specified under the Employees stock option scheme. The Board of Directors at its meeting held on May 08, 2010 had approved grant of financial assistance upto Rs. 30.00 Crore by the Company to Trust in such manner and on such terms as agreed between the trustee(s) of the Trust and Managing Director of the Company for the purpose of subscribing or acquiring shares of the Company. Trust is holding 68,000 equity shares (Previous Year : 3,27,000 equity shares) of the Company which were purchased from the open market.

The Company has long term/ short term capital losses, to the tune of Rs. 104.86 Crore (Previous Year: Rs. 461.43 Crore) that are available for offsetting for three to five years against future taxable profits (long term / short term) of the Company. Deferred tax assets have not been recognised in respect of above losses in the financial year 2022-23 as there are no other tax planning opportunities or other evidence of recoverability in the near future.

Non-Current Tax Assets represents Advance Taxes / Tax Deductible at source and are shown as net of provisions of Rs. 587.64 Crore (Previous Year: Rs. 888.31 Crore)

37 Fair Values

The management assessed that fair value of financial assets and liabilities approximates their carrying amount.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

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

(i) Derivative financial instruments - The fair value of foreign exchange forward contracts is determined using the foreign exchange spot and forward rates at the balance sheet date. The fair value of Interest rate swap contracts is determined using the Black Scholes Valuation Model. The derivatives are entered into with the banks / counterparties with investment grade credit ratings.

(ii) Long term Security Deposits / Employee loans - The fair value of security deposits / employee loans approximates the carrying value and hence, the valuation technique and inputs have not been given.

(iii) Floating Rate Borrowings / Finance Lease Obligation / Lease Liabilities - The fair values of the Company''s interest bearing borrowings are determined by using discounted cash flow method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. The own non-performance risk as at March 31,2023 was assessed to be insignificant.

(iv) The carrying amount of bank deposits, trade receivables, cash and cash equivalents, investment at amortised cost, other current financial assets, trade payables, fixed rate borrowings and other current financial liabilities are considered to be the same as their fair values, due to their short term nature.

(v) The fair value of investments carried at fair value through profit and loss is determined using Income Approach, Market Approach and Net Assets Value Method. Determining whether the investments in subsidiaries are impaired requires an estimate of the value in use of investments. In considering the value in use, the management anticipates the future growth rates, discount rates and other factors of the underlying businesses.

39 Financial Risk Management Objectives and Policies

The Company''s principal financial liabilities, other than derivatives, comprises of borrowings, trade and other financial liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables and cash and cash equivalents which are derived directly from its operations. The Company also holds investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The management of these risks is carried out by the finance department under the approved policies of the Company. The finance department identifies, evaluates and hedges financial risks in close co-operation with the Company''s operating units. The management reviews overall risks periodically.

(i) Market Risk

The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant.

The following assumptions have been made in calculating the sensitivity analysis:

-The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held as at March 31,2023 and March 31,2022. a) 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. As and when deemed appropriate, the Company enters into Interest rate swap contracts for converting floating rate into fixed rate.

Interest Rate Sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the portion of loans and borrowings affected. With all other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows:

b) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The foreign exchange risk of the Company arises mainly out of import of fertilisers and foreign currency borrowings.

The major part of the long term borrowings of the Company comprises of External Commercial Borrowings / Foreign Currency Term Loans availed in US Dollars for financing of Gadepan-III plant of the Company. The repayment of these loans has started from financial year 2019-20. The revenue of the Company from Gadepan-III Plant is linked to US Dollars in terms of New Investment policy 2012. Accordingly, the Company has natural cover against fluctuation of foreign exchange rates and did not enter into transactions to hedge foreign exchange risk in respect of aforesaid foreign currency borrowings.

In order to mitigate the foreign exchange risk in respect of imported fertilisers, the Company continuously monitors its foreign exchange exposure and hedges its foreign exchange risk in this regard, to the extent considered necessary, through forward contracts and option structures.

Commodity price risk of the Company arises from the ongoing purchase of natural gas and imported fertilisers required for its operating activities.

(i) Natural gas is the major raw material for manufacture of Urea. The prices of Natural Gas are mostly linked to international crude oil prices which varies with the fluctuation in the prices of crude oil, demand supply pattern, etc. The part of the natural gas quantity required by the Company has also been purchased at fixed price. The cost of natural gas is considered appropriately in line with the subsidy policies of Government of India for manufacture of Urea. As per the guidelines for pooling of gas in fertilizer (Urea) sector issued by the Government of India, the natural gas is available to the Urea manufacturer at uniform price. The Company did not enter into any transaction for hedging the fluctuations in the prices of natural gas.

(ii) The Company deals in imported fertilisers (i.e. DAP, MOP and NPK), which are imported by the Company and sold in the domestic market. The prices of imported fertilisers may fluctuate due to demand-supply scenario, outage of plants, fluctuation in prices of raw materials, etc.

The Company takes following steps to mitigate the risk pertaining to fluctuation in prices:

(a) Dynamic sourcing strategy and review of demand and supply on regular basis;

(b) No long term commitments; and

The Company did not enter into any transactions to hedge the risk pertaining to fluctuation in prices.

(ii) 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 with banks and financial institutions, foreign exchange transactions and other financial instruments.

a) Trade Receivables

The Company''s receivables can be classified into two categories, one is from the customers/ dealers in the market and second one is from the Government of India in the form of subsidy. As far as Government portion of receivables are concerned, credit risk is Nil. In respect of market receivables from the customers/ dealers, the Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers and outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several states and operate in largely independent markets. The Company has also taken security deposits from its customers, which mitigate the credit risk to some extent.

b) Financial Instruments and Cash Deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s finance department. Credit risk arising from investment in mutual funds, bonds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised institutions with good credit ratings assigned by the credit rating agencies. Refer below table for Movement in allowances for debts and advances.

The Company''s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements at all times. The Company relies on a mix of borrowings and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium/ long term funding requirements. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom in its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

46 The Company will continue to assess the impact of the Supreme Court Judgment in case of "Vivekananda Vidyamandir and Others Vs the Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. CI/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees'' Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. As per the said assessment and the legal advice obtained by the Company, the aforesaid matter is not likely to have any significant impact and accordingly, no provision has been made in these Financial Statements.

(iii) Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(iv) Relationship with struck off companies

The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(v) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(vi) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(vii) Utilisation of borrowed funds and share premium

The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the group (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the group 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.

(viii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(ix) Loans or advances to specified persons

The Company has not granted loans or advances to promoters, directors,key management personnel and the related parties (as defined under Companies Act 2013) either severally or jointly with any other person, that are: (a) repayable on demand or (b) without specifying any terms or period of repayment.

(x) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(xi) Valuation of Property, Plant and Equipment, intangible assets and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(xiv) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

(xv) Utilisation of borrowings availed from banks and financial institutions

The borrowings obtained by the Company from banks and financial institutions have been applied for the purposes for which such loans were taken.

50 Significant Accounting Judgements, Estimates and Assumptions

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Property, Plant and Equipment

Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company''s assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

b) Income Taxes

Deferred Tax Assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

The Company was having brought forward losses on account of claim under section 35AD of Income tax Act, 1961 that has been used to offset taxable income during the financial year. The Company has profitable operations that supported the recognition of deferred taxes on these losses. On this basis, the Company has determined that it can recognise deferred tax assets on the tax losses carried forward.

The Company has Rs. 104.56 Crore (Previous Year: Rs. 461.43 Crore) of carried forward tax losses on account of long term/ short term capital losses. These losses mainly relate to the loss on voluntary liquidation of a subsidiary of the Company and merger of a subsidiary of the Company with its subsidiary and will expire in three to five years and may be used to offset

taxable long term / short term capital gains in the future. On this basis, the Company has determined that it cannot recognise deferred tax assets on these tax losses (long term/ short term capital losses) carried forward. If the Company would have been able to recognise all unrecognised deferred tax assets, profit and equity would have increased by Rs. 36.49 Crore (Previous Year: Rs.124.53 Crore). Further details on taxes are disclosed in note 36 to the financial statements.

The Government of India has introduced the Taxation Laws (Amendment) Act, 2019 and has given the option of lower tax rate subject to certain conditions. As the Company has carried forward tax losses and Minimum Alternate Tax ("MAT") credit mainly due to addition of New Urea Plant in the past and it is expected that the Company will remain under MAT for some more years, the management has carried out an assessment according to which the Company shall continue under the existing tax regime and move to lower tax rate after certain years. In view of above, the Company has re-assessed the deferred tax liability as per Ind AS 12 ''Income Taxes'' and resultant impact has been recognised during the year. Accordingly, the ''Deferred Tax'' for the financial year ended March 31,2023 includes a credit of Rs. 83.90 Crore (Previous Year: Rs. 33.00 Crore).

c) Defined Benefit Plans

The cost of the defined benefit gratuity plan, post-employment medical benefits and other defined benefit plans and the present value of the obligation of defined benefit plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its longterm nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for defined benefit plans, the management considers the interest rates of government bonds.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases are based on the expected future inflation rates. Further details about the defined benefit plans are given in note 30 to the financial statements.

d) Revenue

The Company''s revenue includes subsidy claims, part of which are pending notification / final implementation by ''Fertiliser Industry Coordination Committee'' (FICC), Government of India. As per management estimates, there is reasonable certainty based on Government of India policy and past experience that claims will be notified in due course. On issuance of notification by FICC, Government of India, the adjustments, if any, to revenue are not expected to be significant.

e) Fair Value Measurement of Financial Instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including discounted cash flow method. The inputs to these models are taken from observable markets wherever possible, but where this is not feasible, a degree of judgement is required in establishing fair values. The judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Further disclosures in this regard are given in note 38.

Mar 31, 2022

1. Freehold land having carrying value of Rs. 0.01 Crore (Previous Year : Rs. 0.01 Crore) and Leasehold land having carrying value of Rs.

0.35 Crore (Previous Year : Rs. 0.31 Crore) are yet to be registered in the Company''s name.

2. The carrying value of Buildings includes Rs.0.00 Crore (Previous Year : Rs.0.00 Crore) representing undivided share in assets jointly owned with others.

3. Deletions from Plant and Equipment includes Equipment having gross block of Rs. 1.71 Crore (Previous Year: Rs. 2.43 Crore), Factory Equipment having gross block of Rs. 0.10 Crore (Previous Year: Nil), Office Equipment includes Equipment having gross block of Nil (Previous Year: Rs. 0.00 Crore) and Vehicles having gross block of Rs. 0.00 Crore (Previous Year: Nil) and Accumulated Depreciation of Plant and Equipment of Rs. 1.45 Crore (Previous Year : Rs. 1.79 Crore), Factory Equipment of Rs. 0.09 Crore (Previous Year: Nil), Office Equipment of Nil (Previous Year: Rs. 0.00 Crore) and Vehicles of Rs. 0.00 Crore (Previous Year: Nil) transferred to ''Assets held for sale'' (refer note 43).

4. Leasehold Improvements (on Finance Lease) had been fully depreciated in earlier years carried at residual value.

5. Capital Work-in-Progress of Rs.156.56 Crore (Previous Year : Rs. 160.52 Crore) primarily represents capital expenditure in respect of Plant and Machinery & Buildings.

# Part of the amount of investment in said subsidiary had been returned to the Company before March 31,2020 on account of closure of bank account as part of the dissolution process and remaining investment had been impaired. The Subsidiary had been dissolved on April 06, 2020.

## Dissolved on February 09, 2021 Footnotes:

1. CFCL Ventures Limited (âCVL") has issued ordinary shares, preference shares (series A-1, B-1, C-1, D-1, E-1, F-1, G, H, I, J & K) and warrants for ordinary shares and preference shares (series G, H & I). Conversion ratio of different series of non cumulative convertible preference shares into ordinary shares of CVL are as follows-Series A1 & B1 preference shares will be converted in the ratio of 1:1.22, Series C1, D1, E1 preference shares will be converted in the ratio of 1:1.68, Series F-1 preference shares will be converted in the ratio of 1:1.33, Series G, H, I, J & K preference shares will be converted in the ratio of 1:1. This conversion is subject to adjustments set forth, if any, in the Articles of Association of CVL.

2. During the previous years, ISGN Corporation (âISGN, USA") and ISG Novasoft Technologies Limited, (âISGN, India"), subsidiaries of CVL have sold/transferred certain assets/liabilities to the respective buyers.

a) Reconciliation of the Shares Outstanding at the beginning and at the end of the Reporting Periods

There is no movement in the equity shares outstanding at the beginning and at the end of the reporting periods.

b) Terms / Rights attached to Equity Shares

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after payment of all liabilities.

Description of Nature and Purpose of each Reserve

(a) Securities Premium

Securities Premium represents amount received on issue of shares in excess of the par value. Utilisation of reserve will be as per the provisions of the relevant statute.

(b) Retained Earnings

Retained Earnings comprises of prior years as well as current year''s undistributed earnings after taxes.

(d) Treasury Shares

(e) Loss on Treasury Shares acquired

(f) Capital Reserve

Capital Reserve represents the amount on account of forfeiture of equity shares of the Company. Utilisation of reserve will be as per the provisions of the relevant statute.

(g) Capital Redemption Reserve

Capital Redemption Reserve represents reserve created on redemption of preference shares. Utilisation of reserve will be as per the provisions of the relevant statute.

(h) & (i) Tonnage Tax Reserve and Tonnage Tax Reserve (utilised) Account under Section 115VT of the Income Tax Act, 1961

These reserves were created till the time erstwhile ''Shipping Division'' was under Tonnage Tax Regime.

(j) Share Option Outstanding Account

(k) Cash Flow Hedging Reserve

(b) Nature of Security, Terms and Repayment Schedule:

i External Commercial Borrowings (âECB") from banks of USD 30.50 Crore (Rs. 2,311.76 Crore including current maturity of Rs. 634.94 Crore) (Previous Year: Rs. 2,842.43 Crore including current maturity of Rs. 612.47 Crore) carry interest in the range of 3 months LIBOR plus 1.35% - 2.30% per annum. ECB amounting to USD 25.00 Crore (Rs. 1,894.88 Crore including current maturity of Rs.559.14 Crore) are repayable in 14 quarterly instalments starting from June 30, 2022. ECB amounting to USD 5.50 Crore (Rs. 416.88 Crore including current maturity of Rs. 75.80 Crore) are repayable in 22 equal quarterly instalments starting from June 30, 2022. These ECBs are secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties of the company and hypothecation of the movable fixed assets of the Company, both present and future subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings.

ii Foreign currency term loans from a financial institution of USD 11.97 Crore (Rs.907.33 Crore including current maturity of Rs.164.97 Crore) (Previous Year: Rs.1,034.34 Crore including current maturity of Rs.159.13 Crore) carry interest in the range of 3 months LIBOR plus 1.55% - 2.30% per annum. These term loans are repayable in 22 equal quarterly instalments starting from June 30, 2022. These loans are secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties of the Company and hypothecation of the movable fixed assets of the Company, both present and future subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings.

i Rupee Loans - Working Capital Demand Loan from Banks of Rs. 890.00 Crore (Previous Year : Nil) carry interest at the rate of 4.00% per annum. Further, these loans are secured by hypothecation of all the Company''s current assets including all stocks and book debts and other movable assets, both present and future. These loans are further secured by second charge on the immovable properties of the Company. These loans are repayable on demand.

ii Foreign Currency Loans from Banks of Rs. 161.94 Crore (Previous Year: Nil) carry interest at the rate of 0.27% per annum. These loans are secured by hypothecation of all the Company''s current assets including all stocks and book debts and other movable assets, both present and future. These loans are further secured by second charge on the immovable properties of the Company. These loans were repaid on April 22, 2022.

(e) The Company had received a demand of Rs. 3.52 Crore plus penalty (Previous Year: Rs. 3.52 Crore) from Sales Tax Department, Kota in an earlier year towards use of natural gas for ammonia fuel, power and steam generation for the period April, 1996 to May, 2001. The Company has obtained a stay from Hon''ble High Court of Rajasthan, Jodhpur on 13th July, 2001 (1996-97 to 1997-98) and on 17th August, 2001 (1998-99 to 2001-02 - Upto May 2001). However, in the event of the Company having to pay the above, it is reimbursable by Fertiliser Industry Coordination Committee (FICC), Government of India under Subsidy Scheme.

(f) The Company as well as other users of natural gas under HBJ Gas Pipeline had in earlier years received letters from GAIL (India) Limited, informing about the possibility of levy of excise duty on natural gas (presently not levied) with retrospective effect. The amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by FICC, Government of India under Subsidy Scheme.

(g) The Company as well as other users of Natural Gas under HBJ Gas Pipeline had received a letter in an earlier year from GAIL (India) Limited, informing about the possibility of levy of Central Sales Tax. The Company has been taking the delivery of Gas in the State of Rajasthan and has been accordingly paying Rajasthan Sales Tax on the supply. Therefore, the Company is of the view that no Central Sales Tax is payable by it. Further, the amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by FICC, Government of India under Subsidy Scheme.

(h) Under the Jute Packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specified percentage of fertilisers dispatched were required to be supplied in Jute bags up to August 31, 2001. The provisions of the said Act were challenged in the Supreme Court, which upheld the constitutional validity of this Act in its judgment in 1996. In spite of making conscious efforts to step up use of jute packaging material, the Company had been unable to adhere to the specified percentage, due to strong customer resistance to use of jute bags. The Company had received show cause notice from the Office of the Jute Commissioner, Kolkata, for levying a penalty of Rs. 73.80 Crore (Previous Year: Rs. 73.80 Crore) for non compliance of the provisions of the said Act. The Company has obtained a stay order from Delhi High Court against the above show cause notice and on the basis of the stay order the Company is of the view that the said levy is not tenable in law and accordingly no provision has been considered.

Based on favorable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed above and hence no provision is considered necessary against the same.

In respect of above contingent liabilities, it is not practicable for the Company to estimate the timings of cash outflows, if any, pending resolution of the respective proceedings.

The Managing Director and Chief Financial Officer of the Company has been identified as the chief operating decision maker (CODM) as defined by Ind AS 108, ''Operating Segments''. The Company is in the business of manufacturing / marketing of Fertilisers and other Agri-inputs. Looking at the nature of business and risk involved the CODM has determined that the operations of the Company falls into single business segment. Further, all the customers and assets are located in India. Accordingly, no segment information is provided.

a) Gratuity

The Company has a defined benefit gratuity plan. Benefit is being paid as under-

A) In case of retirement or death of an employee while in service of the Company, the gratuity will be payable as under:

i) Completed continuous service of 5 years and above upto 20 years - gratuity equivalent to 15 days last drawn salary for each completed year of service.

The Scheme is funded with insurance company in the form of a qualifying insurance policy except in the case of crew employees of the division. The fund has the form of a trust and it is governed by the Board of Trustees. The Scheme is funded with insurance companies in the form of a qualifying insurance policies. The fund has the form of a trust and it is governed by the Board of Trustees.

b) Post Retirement Medical Benefit Plan

The Company has post retirement medical benefit schemes in the nature of defined benefit plan which is unfunded.

c) Provident Fund

The Company had set up provident fund trusts, which were managed by the Trustees. Provident funds set up by employers, which requires interest shortfall to be met by the employer, has been treated as defined benefit plan till August 31,2021. During the financial year, the Company had initiated the process of surrender of exemption granted to CFCL Employees'' Provident Fund and transferred the accumulated provident fund balance of employees to the Regional Provident Fund Commissioner (''RPFC''). In view of the above, the Company remits the monthly contribution of Provident Fund to RPFC with effect from September 01,2021. Therefore, contribution to Provident Fund is treated as Defined Contribution Plan with effect from September 01,2021.

The Board of Trustees decides its contribution based on the results of its review. Generally, it aims to have a portfolio mix of equity instruments and debt instruments. Investments of Provident Fund Trust is being governed by the rules issued by the Ministry of Labour, Government of India for Employee Provident Fund exempted establishment.

The following tables summarise the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the respective plans:

Sensitivities due to mortality & withdrawals are not material and hence impact of change is not calculated.

Sensitivities as to rate of inflation, rate of increase of pension payment, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement.

The weighted average duration of the defined benefit plan obligation at the end of the reporting period is 14.36 years for Gratuity Plan and 14.34 years for Post Retirement Medical Benefits Plan (Previous Year : 14.24 years for Gratuity Plan and 14.24 years for Post Retirement Medical Benefits Plan).

31 Subsidies

(a) Nitrogenous Fertilizers are under the Concession Scheme as per the New Pricing Scheme (NPS) - Stage - III, Modified NPS III - Stage - III, New Urea Policy 2015 and New Investment Policy 2012 (amended). The freight subsidy is as per the Uniform Freight Policy. The concession price and freight has been accounted for on the basis of notified prices, further adjusted for input price escalation/ de-escalation and as estimated by the management based on the prescribed norms in line with known policy parameters.

Contribution from sale of surplus ammonia has been accounted for in accordance with the known policy parameters. Current year''s subsidy income of Urea has been increased / (reduced) by Rs. 90.38 Crore (Previous Year: (Rs.10.38 Crore)), pertaining to earlier years, but determined during the year.

(b) Subsidy on Phosphatic and Potassic (P&K) fertilisers has been accounted for as per the concession rates based on Nutrient Based Subsidy Policy and Freight Subsidy has been accounted for in line with the policy, notified by the Government of India.

32 Leases

This note provides information for the leases where the Company is a lessee. The Company leases various offices and lease periods are generally fixed ranging from two months to nine years, but may have extension options.

Measurement of Right-of-Use Assets:

Right-of-Use Assets has been recognised using modified retrospective approach with lease liabilities recognised with equivalent amount. During the Financial Year 2019-20, the Company had adopted Ind AS 116 âLeases" for all lease contracts existing as on April 01,2019.

35 Share Based Payments

Employees Stock Option Scheme

The shareholders of the Company had approved CFCL Employees Stock Option Scheme, 2010 on August 27, 2010 which was amended by the shareholders on September 13, 2013 and the revised CFCL Employees Stock Option Scheme, 2010 (ESOS) was approved by the shareholders on September 15, 2015. As per ESOS, 4,162,000 Stock Options can be issued to Whole time Director/ Managing Director and other specified categories of employees of the Company. The options are to be granted at market price. The market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Each option, upon vesting, shall entitle the holder to acquire 1 equity share of Rs.10 of the Company.

In financial year 2010-11, CFCL Employees Welfare Trust (âTrust") was constituted, inter alia, for the purpose of subscribing or acquiring equity shares of the Company from the Company or Secondary market, to hold the shares and to allocate or transfer these shares to eligible employees of the Company from time to time on the terms and conditions specified under the Employees stock option scheme. The Board of Directors at its meeting held on May 08, 2010 had approved grant of financial assistance upto Rs. 30.00 Crore by the Company to Trust in such manner and on such terms as agreed between the trustee(s) of the Trust and Managing Director of the Company for the purpose of subscribing or acquiring shares of the Company. Trust is holding 3,27,000 equity shares (Previous Year : 5,81,000 equity shares) of the Company which were purchased from the open market.

36 The Company is continuously monitoring the situation arising on account of COVID-19 pandemic considering both internal and external factors and its production, dispatches, sales and market collections remained unaffected. The Company has made an assessment of its capital and financial resources including liquidity position and ability to service debt and other financing arrangements for next one year. The Company has also assessed the recoverability of the carrying values of its assets such as property, plant and equipment, inventory, trade receivables, investments and other current assets as at March 31,2022. There is no impact of COVID-19 on these financial statements for the financial year ended March 31,2022 .

The Company has long term/ short term capital losses, to the tune of Rs. 461.43 Crore (Previous Year: Rs. 469.54 Crore) that are available for offsetting for one to three years against future taxable profits (long term / short term) of the Company. Deferred tax assets have not been recognised in respect of above losses in the financial year 2021-22 as there are no other tax planning opportunities or other evidence of recoverability in the near future.

Non-Current Tax Assets represents Advance Taxes / Tax Deductible at Source and are shown as net of provisions of Rs. 888.31 Crore (Previous Year: Rs. 758.73 Crore).

38 Fair Values

The management assessed that fair value of financial assets and liabilities approximates their carrying amount.

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

40 Financial Risk Management Objectives and Policies

The Company''s principal financial liabilities, other than derivatives, comprises of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables and cash and cash equivalents which are derived directly from its operations. The Company also holds investments and enters into derivative transactions.

(i) Market Risk

The following assumptions have been made in calculating the sensitivity analysis:

b) Foreign Currency Risk

The major part of the long term borrowings of the Company comprises of External Commercial Borrowings / Foreign Currency Term Loans availed in US Dollars for financing of Gadepan-III plant of the Company. The repayment of these loans has started from financial year 2019-20.The revenue of the Company from Gadepan-III Plant is linked to US Dollars in terms of New Investment policy 2012. Accordingly, the Company has natural cover against fluctuation of foreign exchange rates and did not enter into transactions to hedge foreign exchange risk in respect of aforesaid foreign currency borrowings.

Commodity price risk of the Company arises from the ongoing purchase of natural gas and imported fertilisers required for its operating activities.

(i) Natural gas is the major raw material for manufacture of Urea. The prices of Natural Gas are mostly linked to international crude oil prices which varies with the fluctuation in the prices of crude oil, demand supply pattern, etc.The part of the natural gas quantity required by the Company has also been purchased at fixed price. The cost of natural gas is considered appropriately in line with the subsidy policies of Government of India for manufacture of Urea. As per the guidelines for pooling of gas in fertilizer (Urea) sector issued by the Government of India, the natural gas is available to the Urea manfacturer at uniform price. The Company did not enter into any transaction for hedging the fluctuations in the prices of natural gas.

The Company takes following steps to mitigate the risk pertaining to fluctuation in prices:

(a) Dynamic sourcing strategy and review of demand and supply on regular basis;

(b) No long term commitments; and

The Company did not enter into any transactions to hedge the risk pertaining to fluctuation in prices.

a) Trade Receivables

The Company''s receivables can be classified into two categories, one is from the customers/ dealers in the market and second one is from the Government of India in the form of subsidy. As far as Government portion of receivables is concerned, credit risk is Nil. In respect of market receivables from the customers/ dealers, the Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers and outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several states and operate in largely independent markets. The Company has also taken security deposits from its customers, which mitigate the credit risk to some extent.

b) Financial Instruments and Cash Deposits

(iii) Liquidity Risk

47 The Company will continue to assess the impact of the Supreme Court Judgment in case of âVivekananda Vidyamandir and Others Vs the Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. CI/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees'' Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of âbasic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. As per the said assessment and the legal advice obtained by the Company, the aforesaid matter is not likely to have any significant impact and accordingly, no provision has been made in these Financial Statements.

48 Previous year figures have been re-grouped / re-classified wherever necessary, to make them comparable.

(iii) Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(iv) Relationship with struck off companies

The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(v) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(vi) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(vii) Utilisation of borrowed funds and share premium

The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the group (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

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.

(viii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(ix) Loans or advances to specified persons

The Company has not granted loans or advances to promoters, directors, key management personnel and the related parties (as defined under Companies Act, 2013) either severally or jointly with any other person, that are: (a) repayable on demand or (b) without specifying any terms or period of repayment.

(x) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(xi) Valuation of Property, Plant and Equipment, intangible assets and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

53 Significant Accounting Judgements, Estimates and Assumptions

a) Property, Plant and Equipment

b) Income Taxes

The Company is having brought forward losses on account of claim under section 35AD of Income tax Act, 1961 that will be used to offset future taxable income. The Company has profitable operations that supports the recognition of deferred taxes on these losses. On this basis, the Company has determined that it can recognise deferred tax assets on the tax losses carried forward.

The Company has Rs. 461.43 Crore (Previous Year: Rs.469.54 Crore) of carried forward tax losses on account of long term / short term capital losses. These losses mainly relate to the loss on voluntary liquidation of a subsidiary of the Company and merger of a subsidiary of the Company with its subsidiary and will expire in one to three years and may be used to offset taxable long term / short term capital gains in the future. At present, the Company does not have any tax planning opportunities available that could support the recognition of these capital losses as deferred tax assets. On this basis, the Company has determined that it cannot recognise deferred tax assets on these tax losses (long term/ short term capital losses) carried forward. If the Company would have been able to recognise all unrecognised deferred tax assets, profit and equity would have increased by Rs. 124.53 Crore (Previous Year: Rs.127.36 Crore). Further details on taxes are disclosed in note 37 to the financial statements. The Government of India has introduced the Taxation Laws (Amendment) Act, 2019 and has given the option of lower tax rate subject to certain conditions. As the Company has carried forward tax losses and Minimum Alternate Tax (âMAT") credit mainly due to addition of New Urea Plant in the past and it is expected that the Company will remain under MAT for some more years, the management has carried out an assessment according to which the Company shall continue under the existing tax regime and move to lower tax rate after certain years. In view of above, the Company has re-assessed the deferred tax liability as per Ind AS 12 ''Income Taxes'' and resultant impact has been recognised during the year. Accordingly, the ''Deferred Tax'' for the financial year ended March 31,2022 includes a credit of Rs. 33.00 Crore (Previous Year: Rs. 61.25 Crore).

c) Defined Benefit Plans

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for defined benefit plans, the management considers the interest rates of government bonds.

d) Revenue

e) Fair Value Measurement of Financial Instruments

Mar 31, 2021

1. Freehold land having carrying value Rs. 0.01 Crore (Previous Year : Rs. 0.01 Crore) and Leasehold land having carrying value of Rs. 0.31 Crore (Previous Year : Rs. 0.31 Crore) are yet to be registered in the Company''s name.

2. The carrying value of Buildings includes Rs. 0.00 Crore (Previous Year : Rs. 0.00 Crore) representing undivided share in assets jointly owned with others.

3. Deletions from Plant and Equipment includes Equipment having gross block of Rs. 2.43 Crore (Previous Year: Rs. 1.56 Crore) and Office Equipment includes Equipment having gross block of Rs. 0.00 Crore (Previous Year: Nil) and Accumulated Depreciation of Rs. 1.79 Crore (Previous Year : Rs. 1.51 Crore) transferred to ''Assets held for sale'' (refer note 44).

4. It represents impairment of Single Super Phosphate (SSP) plant being cash generating unit (CGU). Management was monitoring the operation of the CGU for past years and reassessed the carrying value as per Ind AS 36 ''Impairment of Assets''. As per management assessment, CGU had been impaired as Company had decided not to produce the related products resulting into no operations during the previous years and in immediate future years. Accordingly, assets in CGU have been recorded at recoverable value resulting into impairment of Property plant and equipment amounting to Rs. 17.79 Crore and other assets which includes Inventory written off amounting to Rs. 1.59 Crore during the previous year. Refer note 7 for other assets and note 23 of other expenses for impact on Statement of Profit and Loss for the year ended March 31,2020.

The impairment loss of SSP plant had been calculated using recoverable value (fair value less cost to sell) inputs and Cost approach had been used as valuation technique. Basis aforesaid an amount of Rs. 0.94 Crore had been estimated as recoverable value. An increase/ (decrease) in fair value by 10% will result into increase / (decrease) by Rs. 0.09 Crore.

5. Capital Work-in-Progress of Rs. 160.52 Crore (Previous Year : Rs. 84.99 Crore) primarily represents capital expenditure in respect of Plant and Machinery & Buildings.

6. Leasehold Improvements (on Finance Lease) had been fully depreciated in earlier years carried at residual value.

1. CFCL Ventures Limited has issued ordinary shares, preference shares (series A-1, B-1, C-1, D-1, E-1, F-1, G, H, I, J & K) and warrants for ordinary shares and preference shares (series G, H & I). Conversion ratio of different series of non cumulative convertible preference shares into ordinary shares of CFCL Ventures Limited are as follows-Series A1 & B1 preference shares will be converted in the ratio of 1:1.22, Series C1, D1 & E1 preference shares will be converted in the ratio of 1:1.68, Series F-1 preference shares will be converted in the ratio of 1:1.33, Series G, H, I, J & K preference shares will be converted in the ratio of 1:1. This conversion is subject to adjustments set forth, if any, in the Articles of Association of CFCL Ventures Limited.

2. During the previous year, ISGN Corporation ("ISGN, USA") and ISG Novasoft Technologies Limited, ("ISGN, India"), subsidiaries of CFCL Ventures Limited ("CVL") have sold/transferred certain assets/liabilities to the respective buyers. In view of the same, the Company had re-measured the fair value of its investment in preference shares of CVL as at March 31,2020 and assessed its commitment in respect of ISGN, USA and provided for a loss of Rs. 72.15 Crore including impaired value of investment of Rs. 28.53 Crore carried at fair value through profit or loss, which had been shown as Exceptional items as per Note 24.

3. During the year ended March 31, 2021, the Company has made investment of Rs. 58.83 Crore in the preference shares of CFCL Ventures Limited, Cayman Islands ("CVL"). During the previous year, the Company had recognised liability of Rs. 43.62 Crore towards Commitment in relation to Investment. Further, the Company has re-measured fair value of its investment in the preference shares of CVL. Accordingly, the carrying value of the aforesaid investment to the extent of Rs. 43.62 Crore has been adjusted against the said liability and balance amount of Rs. 13.44 Crore has been shown as carrying value of Investment after providing fair value loss of Rs. 1.77 Crore as shown in Note 23.

a) Reconciliation of the Shares Outstanding at the beginning and at the end of the Reporting Periods

There is no movement in the equity shares outstanding at the beginning and at the end of the reporting periods.

b) Terms / Rights attached to Equity Shares-

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after payment of all liabilities.

Description of Nature and Purpose of each Reserve

(a) Securities Premium

Securities Premium represents amount received on issue of shares in excess of the par value. Utilisation of reserve will be as per the provisions of the relevant statute.

(b) Retained Earnings

Retained Earnings comprises of prior years as well as current year''s undistributed earnings after taxes.

(d) Treasury Shares

(e) Loss on Treasury Shares

(f) Capital Reserve: Capital Reserve represents the amount on account of forfeiture of equity shares of the Company. Utilisation of reserve will be as per the provisions of the relevant statute.

(g) Capital Redemption Reserve

Capital Redemption Reserve represents reserve created on redemption of preference shares. Utilisation of reserve will be as per the provisions of the relevant statute.

(h) & (i) Tonnage Tax Reserve and Tonnage Tax Reserve (utilised) Account under Section 115VT of the Income Tax Act, 1961:

These reserves were created till the time erstwhile ''Shipping Division'' was under Tonnage Tax Regime.

(j) Share Option Outstanding Account

(k) Cash Flow Hedging Reserve

(b) Nature of Security, Terms and Repayment Schedule:

i. External Commercial Borrowings ("ECB") from banks of USD 38.87 Crore (Rs. 2,842.43 Crore including current maturity of Rs. 612.47 Crore) (Previous Year: Rs. 3,482.60 Crore including current maturity of Rs.540.84 Crore) carry interest in the range of 3 months LIBOR plus 1.85% - 2.30% per annum. ECB amounting to USD 32.37 Crore (Rs. 2,367.18 Crore including current maturity of Rs.539.36 Crore) are repayable in 18 quarterly instalments starting from June 30, 2021 (which were earlier repayable in 9 half yearly instalments starting from September 30, 2021). ECB amounting to USD 6.50 Crore (Rs. 475.25 Crore including current maturity of Rs. 73.11 Crore) are repayable in 26 equal quarterly instalments starting from June 30, 2021 (which were earlier repayable in 13 half yearly instalments starting from September 30, 2021). These ECBs are secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties of the Company and hypothecation of the movable fixed assets of the Company, both present and future subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings.

ii. Foreign currency term loans from a financial institution of USD 14.15 Crore (Rs.1,034.34 Crore including current maturity of Rs.159.13 Crore) (Previous Year: Rs.1,235.18 Crore including current maturity of Rs.164.69 Crore) carry interest in the range of 3 months LIBOR plus 2.05% - 2.30% per annum. These term loans are repayable in 26 equal quarterly instalments starting from June 30, 2021 (which were earlier repayable in 13 half yearly instalments starting from September 30, 2021). These loans are secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties of the Company and hypothecation of the movable fixed assets of the Company, both present and future subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings.

i. Rupee Loans from Banks of Rs.1,999.16 Crore were repaid during the year which carried interest in the range of 6.15% - 7.60% per annum. Out of these, loan amounting Rs.1,274.16 Crore was from a bank under Special Banking Arrangement against the subsidy on Indigenous Urea and P&K Fertilisers receivable from Government of India. The Bank charged interest @ 6.15% per annum paid directly by Government of India to the bank.The loan was secured by hypothecation of subsidy receivables upto Rs.1,274.16 Crore from Government of India. The loan was repayable within 60 days. Further, Working Capital Demand Loans of Rs.725.00 Crore from banks were repaid during the year which were secured by hypothecation of the Company''s current assets including all stocks and book debts and other movable assets, both present and future. These loans were further secured by second charge on the immovable properties of the Company. The loans were repayable on demand.

ii. Foreign Currency Loans from Banks of Rs.412.92 Crore were repaid during the year which carried interest in the range of 1.19%-2.08% per annum. Out of these, loans amounting to Rs.162.80 Crore were secured by hypothecation of the Company''s current assets including all stocks and book debts and other movable assets, both present and future and were further secured by second charge on the immovable properties of the Company. These loans were repayable within 246 days to 251 days from drawdown / availment. Further, foreign currency loans amounting to Rs.250.12 Crore were secured by second charge on the Company''s current assets. These loans were repayable within 147 days to 168 days from drawdown / availment.

iii. Unsecured foreign currency loans of Rs.596.55 Crore were repaid during the year which carried interest in the range of 1.19% -2.12% per annum. These loans were repayable within 144 days to 263 days from drawdown / availment.

iv. Unsecured Commercial Paper of Rs.1,925.00 Crore were repaid during the year which carried interest in the range of 5.59% - 5.85% per annum. The commercial papers had a tenure of 60 days to 90 days.

(v) The Company had received a demand of Rs. 3.52 Crore plus penalty (Previous Year: Rs. 3.52 Crore) from Sales Tax Department, Kota in an earlier year towards use of natural gas for ammonia fuel, power and steam generation for the period April, 1996 to May, 2001. The Company has obtained a stay from Hon''ble High Court of Rajasthan, Jodhpur on 13th July, 2001 (1996-97 to 1997-98) and on 17th August, 2001 (1998-99 to 2001-02 - Upto May 2001). However, in the event of the Company having to pay the above, it is reimbursable by Fertiliser Industry Coordination Committee (FICC)/ Government of India under Subsidy Scheme.

(vi) The Company as well as other users of natural gas under HBJ Gas Pipeline had in earlier years received letters from GAIL (India) Limited, informing about the possibility of levy of excise duty on natural gas (presently not levied) with retrospective effect. The amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by FICC under Subsidy Scheme.

delivery of Gas in the State of Rajasthan and has been accordingly paying Rajasthan Sales Tax on the supply. Therefore, the Company feels that no Central Sales Tax is payable by it. Further, the amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by FICC under Subsidy Scheme.

(viii) Under the Jute Packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specified percentage of fertilisers dispatched were required to be supplied in Jute bags up to August 31, 2001. The provisions of the said Act were challenged in the Supreme Court, which upheld the constitutional validity of this Act in its judgment in 1996. In spite of making conscious efforts to step up use of jute packaging material, the Company had been unable to adhere to the specified percentage, due to strong customer resistance to use of jute bags. The Company had received show cause notice from the Office of the Jute Commissioner, Kolkata, for levying a penalty of Rs. 73.80 Crore (Previous Year: Rs. 73.80 Crore) for non compliance of the provisions of the said Act. The Company has obtained a stay order from Delhi High Court against the above show cause notice and on the basis of the stay order the Company is of the view that the said levy is not tenable in law and accordingly no provision has been considered.

Based on favorable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (B) (i) to (viii) above and hence no provision is considered necessary against the same.

In respect of above contingent liabilities, it is not practicable for the Company to estimate the timings of cash outflows, if any, pending resolution of the respective proceedings.

29 The Managing Director and Chief Financial Officer of the Company has been identified as the chief operating decision maker (CODM) as defined by Ind AS 108, ''Operating Segments''. The Company is in the business of manufacturing / marketing of Fertilisers and other Agri-inputs. Looking at the nature of business and risk involved, the operations of the Company falls into single business segment. Further, all the customers and assets are located in India. Accordingly, no segment information is provided.

a) Gratuity

The Company has a defined benefit gratuity plan. Benefit is being paid as under-

A) In case of retirement or death of an employee while in service of the Company, the gratuity will be payable as under:

i) Completed continuous service of 5 years and above upto 20 years - gratuity equivalent to 15 days last drawn salary for each completed year of service.

The Scheme is funded with insurance companies in the form of a qualifying insurance policies. The fund has the form of a trust and it is governed by the Board of Trustees.

b) Post Retirement Medical Benefit Plan

The Company has post retirement medical benefit schemes in the nature of defined benefit plan which is unfunded.

c) Provident Fund

The Company has set up provident fund trusts, which are managed by the Trustees. Provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. The actuarial valuation of Provident Fund was carried out in accordance with the guidance note issued by Actuarial Society of India for measurement of provident fund liabilities and there is no shortfall as at March 31,2021.

The Board of Trustees of Gratuity Trust and Provident Fund Trust are responsible for the administration of the plan assets and for the definition of the investment strategy. The Board of Trustees reviews the level of funding and investment and such a review includes the asset-liability matching strategy and investment risk management policy.

The Board of Trustees decides its contribution based on the results of its review. Generally, it aims to have a portfolio mix of equity instruments and debt instruments. Investments of Provident Fund Trust is being governed by the rules issued by the Ministry of Labour, Government of India for Employee Provident Fund exempted establishment.

32 Subsidies

(a) Nitrogenous Fertilizers are under the Concession Scheme as per the New Pricing Scheme (NPS) - Stage III, Modified NPS III, New Urea Policy 2015 for Gadepan-I and Gadepan-II Plants and New Investment Policy 2012 (amended) for Gadepan-III Plant. The freight subsidy is as per the Uniform Freight Policy. The concession price and freight has been accounted for on the basis of notified prices, further adjusted for input price escalation/ de-escalation and as estimated by the management based on the prescribed norms in line with known policy parameters.

Contribution from sale of surplus ammonia has been accounted for in accordance with the known policy parameters. Current year''s subsidy income of Urea has been reduced by Rs. 10.38 Crore (Previous Year: Rs. 47.04 Crore), pertaining to earlier years, but determined during the year.

(b) Subsidy on Phosphatic and Potassic (P&K) fertilizers has been accounted for as per the concession rates based on Nutrient Based Subsidy Policy notified by the Government of India and Freight subsidy has been accounted for in line with the policy.

33 Leases

Measurement of Right-of-Use Assets:

Right -of- Use Assets has been recognised using modified retrospective approach with lease liabilities recognised with equivalent amount. During the Previous Year, the Company had adopted Ind AS 116 "Leases" for all lease contracts existing as on April 01,2019. Further, the effect of the adoption was not material to these Financial Statements in previous year.

36 Share Based Payments

Employees Stock Option Scheme (ESOS)

The shareholders of the Company had approved Employees Stock Option Scheme, 2010 on August 27, 2010 which was amended by the shareholders on September 13, 2013. Consequent upon promulgation of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("ESOP Regulations"), the shareholders of the Company had approved the revised Employees Stock Option Scheme, 2010 (ESOS) on September 15, 2015 in compliance with the ESOP Regulations. As per ESOS, 4,162,000 Stock Options can be issued to Whole time Director / Managing Director and other specified categories of employees of the Company. The options are to be granted at market price. As per ESOP Regulations, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Each option, upon vesting, shall entitle the holder to acquire 1 equity share of Rs.10.

In financial year 2010-11, CFCL Employees Welfare Trust ("Trust") was constituted, inter alia, for the purpose of subscribing or acquiring equity shares of the Company from the Company or Secondary market, to hold the shares and to allocate or transfer these shares to eligible employees of the Company from time to time on the terms and conditions specified under the Employees stock option scheme. The Board of Directors at its meeting held on May 08, 2010 had approved grant of financial assistance upto Rs. 30.00 Crore by the Company to Trust in such manner and on such terms as agreed between the trustee(s) of the Trust and Managing Director of the Company for the purpose of subscribing or acquiring shares of the Company. Trust is holding 5,81,000 equity shares (Previous Year : 9,18,500 equity shares) of the Company which were purchased from the open market.

37 The Company is continuously monitoring the situation arising on account of COVID-19 pandemic considering both internal and external factors and taking appropriate measures in this regard. The Company has been able to operate its plants at normal levels The Company''s production, dispatches, sales and market collections remained unaffected. The Company has made an assessment of its capital and financial resources including liquidity position and ability to service debt and other financing arrangements for next one year. The Company has also assessed the recoverability of the carrying values of its assets such as property, plant and equipment, inventory, trade receivables, investments and other current assets as at March 31, 2021. Further, the Company has also evaluated impact of COVID-19 on internal financial controls over financial reporting and concluded that there is no impact of COVID-19 thereon. In view of above, there is no impact of COVID-19 on financial statements of the Company for the financial year ended March 31, 2021 .

38 Income Tax Expense

The major components of Income Tax Expense are:

The Company has long term/ short term capital losses, to the tune of Rs. 469.54 Crore (Previous Year: Rs. 470.67 Crore) that are available for offsetting for two to four years against future taxable profits (long term / short term) of the Company. Deferred tax assets have not been recognised in respect of above losses in the financial year 2020-21 as there are no other tax planning opportunities or other evidence of recoverability in the near future.

Non-Current Tax Assets are shown as net of provisions of Rs. 758.73 Crore (Previous Year: Rs. 203.13 Crore)

39 Fair Values

The management assessed that fair value of financial assets and liabilities approximates their carrying amount.

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

(iii) Floating Rate Borrowings / Finance Lease Obligation / Lease Liabilities - The fair values of the Company''s interest bearing borrowings are determined by using discounted cash flow (DCF) method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. The own non-performance risk as at March 31,2021 was assessed to be insignificant.

41 Financial Risk Management Objectives and Policies

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

(i) Market Risk

The following assumptions have been made in calculating the sensitivity analysis:

Interest Rate Sensitivity

b) Foreign Currency Risk

The major part of the long term borrowings of the Company comprises of External Commercial Borrowings / Foreign Currency Term Loans availed in US Dollars for financing of Gadepan-III plant of the Company. The repayment of these loans has started from previous financial year. Revenue from Urea produced and sold from Gadepan-III Plant is governed by New Investment Policy- 2012 (amended) of the Government of India. The revenue of the Company from Gadepan-III Plant is linked to US Dollars in terms of New Investment policy 2012. Accordingly, the Company has natural cover against fluctuation of foreign exchange rates and did not enter into transactions to hedge foreign exchange risk in respect of aforesaid foreign currency borrowings.

Foreign Currency Sensitivity

Commodity price risk of the Company arises from the ongoing purchase of natural gas and imported fertilisers required for its operating activities.

(i) Natural gas is the major raw material for manufacture of Urea. The prices of Natural Gas are mostly linked to international crude oil prices which varies with the fluctuation in the prices of crude oil, demand supply pattern, etc. The Company is not affected by price volatility of natural gas as the cost of natural gas is considered appropriately in line with the subsidy policies of Government of India for manufacture of Urea. The part of the natural gas quantity required by the Company has also been purchased at fixed price. As per the guidelines for pooling of gas in fertilizer (Urea) sector issued by the Government of India, the natural gas is available to the Urea manufacturer at uniform price. The Company did not enter into any transaction for hedging the fluctuations in the prices of natural gas.

The Company takes following steps to mitigate the risk pertaining to fluctuation in prices:

(a) Dynamic sourcing strategy and review of demand and supply on regular basis;

(b) No long term commitments; and

The Company did not enter into any transactions to hedge the risk pertaining to fluctuation in prices.

(ii) Credit Risk

a) Trade Receivables

The Company''s receivables can be classified into two categories, one is from the customers/ dealers in the market and second one is from the Government of India in the form of subsidy. As far as Government portion of receivables is concerned, credit risk is Nil. In respect of market receivables from the customers/ dealers, the Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers and outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several states and operate in largely independent markets. The Company has also taken security deposits from its customers, which mitigate the credit risk to some extent.

b) Financial Instruments and Cash Deposits

(iii) Liquidity Risk

The Company''s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements at all times. The Company relies on a mix of borrowings and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium/ long term funding requirements. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

48 During the financial year 2018-19, the Company had provided for Rs. 197.27 Crore due to delay in implementation of Modified NPS-III for payment on account of additional fixed cost to Urea units by the Ministry of Chemicals and Fertilisers, Government of India ("MOCF"). During the previous year ended March 31,2020, MOCF has amended Modified NPS-III. Accordingly, the Company had reversed the aforesaid provision of Rs. 197.27 Crore and had also written off an amount of Rs. 91.70 Crore towards subsidy receivables accrued during the previous years, in pursuance of such amendment in Modified NPS-III. The impact of the aforesaid reversal of provision and written off an amount had been included under "Exceptional Items" as per note 24 during the financial year ended March 31, 2020.

49 The Company will continue to assess the impact of the Supreme Court Judgment in case of "Vivekananda Vidyamandir and Others Vs the Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. CI/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees'' Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. As per the said assessment and the legal advice obtained by the Company, the aforesaid matter is not likely to have any significant impact and accordingly, no provision has been made in these Financial Statements.

50 Previous year figures have been re-grouped / re-classified wherever necessary, to make them comparable.

51 The Company, as per the Securities and Exchange Board of India (SEBI) circular SEBI/HO/DDHS/CIR/P/2018/144 dated November 26, 2018, is a Large Corporate and hence is required to disclose the following information about its borrowings:

53 Significant Accounting Judgements, Estimates and Assumptions

a) Property, Plant and Equipment

b) Income Taxes

The Company has Rs.469.54 Crore (Previous Year: Rs.470.67 Crore) of carried forward tax losses on account of long term / short term capital losses. These losses mainly relate to the loss on voluntary liquidation of a subsidiary of the Company and merger of a subsidiary of the Company with its subsidiary and will expire in two to four years and may be used to offset taxable long term / short term capital gains in the future. At present, the Company does not have any tax planning opportunities available that could support the recognition of these capital losses as deferred tax assets. On this basis, the Company has determined

that it cannot recognise deferred tax assets on these tax losses (long term/ short term capital losses) carried forward. If the Company would have been able to recognise all unrecognised deferred tax assets, profit and equity would have increased by Rs.127.36 Crore (Previous Year: Rs.127.75 Crore). Further details on taxes are disclosed in note 38 to the financial statements. The Government of India has introduced the Taxation Laws (Amendment) Act, 2019 and has given the option of lower tax rate subject to certain conditions. As the Company has carried forward tax losses and Minimum Alternate Tax ("MAT") credit mainly due to addition of New Urea Plant in the past and it is expected that the Company will remain under MAT for some more years, the management has carried out an assessment according to which the Company shall continue under the existing tax regime and move to lower tax rate after certain years. In view of above, the Company has re-assessed the deferred tax liability as per Ind AS 12 ''Income Taxes'' and resultant impact has been recognised during the year. Accordingly, the ''Deferred Tax'' for the financial year ended March 31,2021 includes a credit of Rs. 61.25 Crore (Previous Year: Rs. 343.97 Crore).

c) Defined Benefit Plans

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for defined benefit plans, the management considers the interest rates of government bonds.

d) Revenue

e) Fair Value Measurement of Financial Instruments

Mar 31, 2018

1. Corporate Information

Chambal Fertiliser and Chemicals Limited (the âCompanyâ) is a public company domiciled in India and has been incorporated under the provisions of the Companies Act, 1956. Its equity shares are listed on two recognised stock exchanges in India. The registered office of the Company is located at Gadepan, District Kota, Rajasthan, PIN- 325208. The Company is a large manufacturers of Urea in private sector in India and also deals in other fertilisers and Agri inputs (âFertiliser Divisionâ). Shipping Division (classified as discontinued operations, refer note 45(A)) of the Company was engaged in the business of running of ships for cargo for part of the year. The Company had executed agreement in May, 2017 for sale of all the 4 ships owned by the Company. With the delivery of the last ship of the Company in September 07, 2017, the Company had completed sale / disposal of all the ship forming part of the Shipping Division and ceased to have Shipping business operations. Further, the Company is in the process of setting up a new Urea plant under the New Investment Policy 2012 (amended) of the Government of India at its existing plant location at Gadepan, District Kota (Rajasthan).

These financial statements were authorised for issuance by the Board of Directors of the Company at its meeting held on May 10, 2018.

2. Significant Accounting Policies

2(a) Basis of Preparation

The separate financial statements of the Company have been prepared in accordance with Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2017. The Company has prepared these financial statements to comply in all material respects with the Accounting Standards (âInd ASâ) notified under Section 133 of the Companies Act, 2013 (âthe Actâ).

The financial statements have been prepared on an accrual basis and under the historical cost basis, except for the following material items those have been measured at fair value as required by relevant Ind AS:

- Derivative financial instruments;

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

- Defined benefit plans and other long-term employee benefits;

- Share-based payment transactions;

- Investment in debt instruments (i.e. preference shares).

The financial statements of the Company are presented in Indian Rupee (Rs.) and all values are presented in Lakhs (Rs. 00,000.00), except when otherwise indicated

Footnotes:

1. Freehold land having carrying value Rs.0.89 Lakh (Previous year : Rs.0.89 Lakh), Leasehold land having carrying value of Rs. 31.69 Lakhs (Previous year: Rs.32.04 Lakhs) and Buildings having carrying value of Rs.384.50 Lakhs (Previous year : Rs.390.98 Lakhs) are yet to be registered in the Companyâs name.

2. The carrying value of Buildings includes Rs.0.28 Lakh (Previous year : Rs.0.29 Lakh) representing undivided share in assets jointly owned with others.

3. Deletions from Plant and Equipment during the year includes Equipment having gross block of Rs.63.01 Lakhs (Previous year : Rs. 347.77 Lakhs) and Accumulated Depreciation of Rs. 7.85 Lakhs (Previous year : Rs.186.85 Lakhs) transferred to âAssets held for saleâ (refer note 45(B)).

4. Depreciation charge for the year includes an amount of Rs. 47.19 Lakhs (Previous year : Rs. 4159.71 Lakhs) related to Shipping Division. The amount is recognised in Discontinued Operations in the Statement of Profit and Loss {refer note 45(A)}.

a) Reconciliation of the Shares Outstanding at the beginning and at the end of the Reporting Periods

There is no movement in the equity shares outstanding at the beginning and at the end of the reporting periods.

b) Terms / Rights attached to Equity Shares-

The Company has only one class of shares having a par value of Rs.10 per share fully paid up. Each holder of equity shares is entitled to one vote per share and the equity shares will rank pari passu with each other in all respects. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after payment of all liabilities.

*As at March 31, 2018, shareholding is less than 5%.

As per the records of the Company, including its register of shareholders/members, the above shareholding represents both legal and beneficial ownership of shares.

Description of Nature and Purpose of each Reserve

(a) Securities Premium: Securities Premium represents amount received on issue of shares in excess of the par value.

(b) Retained Earnings: Retained earnings comprises of prior years undistributed earnings after taxes.

(c) General Reserve: This represents appropriation of profit by the Company. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.

(d) Treasury Shares: Treasury shares represents equity shares of the Company acquired by CFCL Employees Welfare Trust from the secondary market to allocate or transfer these shares to eligible employees of the Company from time to time on the terms and conditions specified under the CFCL Employees Stock Option Scheme.

(e) Loss on Treasury Shares: Loss on treasury shares acquired represents the amount of loss incurred by CFCL Employees Welfare Trust, on the transfer of equity shares to the eligible employees of the Company as per CFCL Employees Stock Option Scheme.

(f) Capital Reserve: Capital reserve represents the amount on account of forfeiture of equity shares of the Company.

(g) Capital Redemption Reserve: Capital redemption reserve represents reserve created on redemption of preference shares.

(h) & (i) Tonnage Tax Reserve and Tonnage Tax Reserve (utilised) under Section 115VT of the Income Tax Act, 1961 : These reserves were created till the time âShipping Divisionâ was under Tonnage Tax Regime.

(j) Share Option Outstanding Account: The share option outstanding account is used to recognise the grant date fair value of options issued to employees under the CFCL Employees Stock Option Scheme, 2010. Refer to note 35 for further details of the plan.

(k) Exchange Differences on Translation of Foreign Operation: Exchange differences arising on translation of foreign operation are recognised in other comprehensive income as described in accounting policy and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the foreign operations are disposed off.

(l) Cash Flow Hedging Reserve: The Company uses hedging instrument as part of its management of foreign currency risk associated with its highly probable forecast sale. Foreign currency risk associated with highly forecasted sale transaction is being hedged by taking foreign currency loan.

(B) Nature of Security, Terms and Repayment Schedule:

i. Foreign Currency Term Loans from banks of USD 3,154.61 Lakhs (Rs.205617.48 Lakhs including current maturity of Nil) (Previous Year Rs. 77654.85 Lakhs including current maturity of Nil) carry interest in the range of 3 months LIBOR plus 2.82%-3.07% p.a. The term loans amounting to USD 3,003.61 Lakhs (Rs.195775.30 Lakhs) are repayable in 13 half yearly instalments starting from September 30, 2019. Term loans amounting to USD 151.00 Lakhs (Rs.9842.18 Lakhs) are repayable in 17 equal half yearly instalments starting from September 30, 2019. These loans are secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties of the Company and hypothecation of the movable fixed assets of the Company, both present and future subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings.

ii. Foreign Currency term Loans from Financial Institution of USD 1,474.00 Lakhs (Rs.96075.63 Lakhs including current maturity of Nil) (Previous Year Rs 31080.10 Lakhs including current maturity of Nil ) carry interest in the range of 3 month LIBOR plus 3.07%-3.10% p.a. Term loans are repayable in 17 equal half yearly instalments starting from September 30, 2019. These loans are secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties of the company and hypothecation of the movable fixed assets of the Company, both present and future subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings.

iii. Finance Lease Obligation of Rs.32.21 Lakhs (including current maturities of Rs. 32.21 lakhs) (Previous year : Rs.106.94 Lakhs including current maturities of Rs.70.77 Lakhs) is payable in 5 monthly instalments of Rs.6.77 Lakhs each (i.e. lease obligation including interest) starting from April 2018 and carry interest rate of around 27.34% p.a. This is secured by assets acquired under the facility.

iv. Unsecured Rupee Term Loans of Rs 17500.00 Lakhs (Previous Year Nil) from banks carry interest @ 364 days treasury bill yield plus 1.45% per annum and are repayable in 8 equal quarterly instalments. Out of these, repayment of one term loan of Rs 10000.00 Lakhs will start from May 06, 2020 and repayment of another term loan of Rs 7500.00 Lakhs will start from May 20, 2020.

i Rupee loans of Rs 38373.47 Lakhs (Previous year Rs 51736.04 Lakhs) from a bank has been under Special Banking Arrangement against the subsidy on P&K Fertilisers receivable from Govt. of India. The Bank has charged interest @ 7.80% p.a.(including 6.84% p.a. paid by Govt. of India directly to banks). Accordingly, Rs 8.96 Lakhs (Previous year: Rs 108.88 Lakhs) @ 0.96% p.a. has been charged as interest expense in the statement of Profit and Loss. These loans are secured by hypothecation of subsidy receivables upto 38373.47 Lakhs (Previous Year: Rs 51736.04 Lakhs) from Govt. of India. The loans are repayable within 60 days.

ii Cash credit facilities of Rs 69695.24 Lakhs (Previous year Rs 22433.11 Lakhs) carrying interest in the range of 9.40% - 10.05% p.a. and Foreign currency loans of Nil (Previous year : Rs.18053.01 Lakhs ) from banks are secured by hypothecation of all the Companyâs current assets including all stocks and book debts and other movable assets, both present & future. These loans are further secured by second charge on all the immovable properties of the Company. The loans are repayable on demand.

iii Foreign currency loans of Rs. 25102.56 Lakhs (Previous year Rs. 48175.26 Lakhs ) carrying interest in the range of 1.78% - 2.48% p.a. are secured by second charge on the Companyâs current assets. The loans are repayable within 152 days.

iv Unsecured Commercial Paper of Rs 50000.00 Lakhs (Previous year Rs.110000.00 Lakhs) carry interest @ 6.98% p.a. The commercial paper is repayable on May 22, 2018.

v Unsecured foreign currency loans of Rs 62047.20 Lakhs (Previous year Rs.57361.52 Lakhs ) carry interest in the range of 1.76% - 2.08% p.a. The loans are repayable within 111 days.

v) The Company had received a demand of Rs.352.34 Lakhs (Previous year: Rs.352.34 Lakhs) from Sales Tax Department, Kota in an earlier year, which also includes penalty, towards use of natural gas for ammonia fuel, power and steam generation for the period April, 1996 to May, 2001. The Company has obtained a stay from Honâble High Court of Rajasthan, Jodhpur on 13th July, 2001. However, in the event of the Company having to pay the above, it is reimbursable by Fertiliser Industry Coordination Committee (FICC) / Government of India under Subsidy Scheme.

vi) The Company as well as other users of natural gas under HBJ Gas Pipeline had in earlier years received letters from GAIL (India) Limited, informing about the possibility of levy of excise duty on natural gas (presently not levied) with retrospective effect. The amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by FICC under Subsidy Scheme.

vii) The Company as well as other users of Natural Gas under HBJ Gas Pipeline had received a letter in an earlier year from GAIL (India) Limited informing about the possibility of levy of Central Sales Tax. The Company has been taking the delivery of Gas in the State of Rajasthan and has been accordingly paying Rajasthan Sales Tax on the supply. Therefore, the Company feels that no Central Sales Tax is payable by it. Further, the amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by FICC under Subsidy Scheme.

viii) Under the Jute Packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specified percentage of fertilisers dispatched were required to be supplied in Jute bags up to August 31 2001. The provisions of the said Act were challenged in the Supreme Court which upheld the constitutional validity of this Act in its judgment in 1996. In spite of making conscious efforts to step up use of jute packaging material, the Company had been unable to adhere to the specified percentage, due to strong customer resistance to use of jute bags. The Company had received show cause notice from the Office of the Jute Commissioner, Kolkata, for levying a penalty of Rs.7380.36 Lakhs (Previous year Rs.7380.36 Lakhs) for non compliance of the provisions of the said Act. The Company has obtained a stay order from Delhi High Court against the above show cause notice and on the basis of the stay order the Company is of the view that the said levy is not tenable in law and accordingly no provision has been considered.

Based on favorable decisions in similar cases legal opinion taken by the Company discussions with the solicitors etc. the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (B) (i) to (viii) above and hence no provision is considered necessary against the same.

3. Capitalisation of Expenditure

The Company has capitalised the following expenses of revenue nature to the cost of Capital Work in progress (CWIP). Consequently expenses disclosed under the respective notes are net of amounts capitalised by the Company. The break up of expenditure is as follows :

* Includes Rs.28506.31 Lakhs (Previous year:Rs.12927.47 Lakhs) related to upcoming urea manufacturing plant under the New Investment Policy 2012.

** Interest comprises of:

(i) Rs. 8314.32 Lakhs (Previous year : Rs.2560.39 Lakhs) on specific borrowings taken for upcoming urea manufacturing plant under the New Investment Policy 2012; and

(ii) Rs. 4243.12 Lakhs (Previous year : Rs.672.72 Lakhs) on general borrowings for upcoming urea manufacturing plant and other qualifying assets using the weighted average interest rate applicable during the year which is 6.24% p.a.

*** represents capitalisation of interest expense on qualifying assets.

4. The Company is into manufacturing of Urea and Single Super Phosphate and marketing of Fertilisers and other agri inputs. Looking at the nature of business and risk involved, the operations of the Company falls into single business segment. Further all the customers and assets are located into India. Accordingly no segment information is provided. Revenue from single customer i.e. Government of India amounted to Rs.395631.20 Lakhs (Previous year : Rs. 367154.43 Lakhs) from sales in the Fertilisers and other Agri-inputs segment.

5. Related party transactions

In accordance with the requirements of Ind AS - 24 âRelated Party Disclosuresâ, names of the related parties, related party relationship, transactions and outstanding balances where control exits and with whom transactions have taken place during the reported periods are:

Related party name and relationship

(a) Key Management personnel

(b) Subsidiaries

CFCL Ventures Limited, Cayman Islands Chambal Infrastructure Ventures Limited, India India Steamship Pte. Limited, Singapore India Steamship International FZE, UAE India Steamship Limited, India

Subsidiaries of CFCL Ventures Limited, Cayman Islands

ISGN Corporation, USA

ISG Novasoft Technologies Limited, India

Inuva Info Management Private Limited, India

(c) Joint venture

Indo Maroc Phosphore S.A. Morocco

(d) Post Employment Benefit Plans

CFCL Employees Provident Fund

Chambal Fertilisers and Chemicals Limited Senior Staff Superannuation Fund

CFCL Employees Group Gratuity Trust

India Steamship Staff Provident Fund

India Steamship Staff Gratuity Insurance Scheme

** Key management personnel are covered under the Companyâs Group Gratuity Scheme along with other employees of the Company. The gratuity, leave liability, post retirement medical benefits, long service award scheme and settlement allowance is determined for all the employees on an overall basis, based on the actuarial valuation done by an independent actuary. The specific amount of gratuity, leave liability, post retirement medical benefits, long service award scheme and settlement allowance liability for Key management personnel cannot be ascertained separately, except for the amount actually paid.

Key Management Personnel interests in the Employees Stock Option Scheme, 2010 (ESOS)

Share Options held by Key Management Personnel under the ESOS to purchase equity shares of the Company from CFCL Employees Welfare Trust have the following expiry dates and exercise prices:

* Nil (Previous year Rs.177.07 Lakhs) included in âLiabilities directly associated with assets classified as held for saleâ in respect of Shipping Division of the Company classified as held for sale and Discontinued Operations (refer note 45(A).

*/ ** Plan asset of Rs.312.31 Lakhs {Previous year Rs.345.80 Lakhs (including Rs.197.83 Lakhs pertaining to Shipping Division classified as held for sale and Discontinued Operations) has not been recognised in the financial statements, as the surplus of the trust, is distributable among the beneficiaries of the provident fund trust.

a) Gratuity

In case of Fertiliser Division, the Company has a defined benefit gratuity plan. Benefit is being paid as under-

A) In case of retirement or death of an employee while in service of the Company, the gratuity will be payable as under:

i) Completed continuous service of 5 years and above upto 20 years - gratuity equivalent to 15 days last drawn salary for each completed year of service.

The Scheme is funded with insurance companies in the form of a qualifying insurance policies. The fund has the form of a trust and it is governed by the Board of Trustees.

In case of Shipping Division, Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @ 15 to 30 days salary (last drawn salary) for each completed year of service. The Scheme is funded with insurance companies in the form of a qualifying insurance policies except in the case of crew employees of the division. The fund has the form of a trust and it is governed by the Board of Trustees.

b) Post Retirement Medical Benefit Plan

The Fertiliser Division of the Company has post retirement medical benefit schemes in the nature of defined benefit plan which is unfunded.

c) Provident Fund

The Company has set up provident fund trusts, which are managed by the Company. Provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. The actuarial valuation of Provident Fund was carried out in accordance with the guidance note issued by Actuarial Society of India for measurement of provident fund liabilities and there is no shortfall as at March 31, 2018.

The Board of Trustees decides its contribution based on the results of its review. Generally, it aims to have a portfolio mix of equity instruments and debt instruments. Investments of Provident Fund Trust is being governed by the rules issued by the Ministry of Labour, Government of India for Employee Provident Fund exempted establishment.

The Company expects to contribute Rs. 193.51 Lakhs (Previous year : Rs.195.42 Lakhs) and Rs. 482.71 lakhs (Previous year : Rs.422.49 Lakhs) to gratuity trust and provident fund respectively in the next financial year in respect of Continuing Operations of the Company.

The principal assumptions used in determining gratuity, provident fund and post-employment medical benefit obligations for the Companyâs plans are shown below:

Sensitivities due to mortality & withdrawals are not material and hence impact of change is not calculated.

Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement.

A quantitative sensitivity analysis for significant assumptions as at March 31, 2017 is shown below:

Sensitivities due to mortality & withdrawals are not material and hence impact of change is not calculated.

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The weighted average duration of the defined benefit plan obligation at the end of the reporting period is 14.10 years (Previous year : 14.43 years).

* Nil (Previous year : Rs.5.66 Lakhs) included in Discontinued Operations in the Statement of Profit and Loss in respect of Shipping Division of the Company {refer note 45(A)}.

** Nil (Previous year : Rs.14.31 Lakhs) included in Discontinued Operations in the Statement of Profit and Loss in respect of Shipping Division of the Company {refer note 45(A)}.

*** In respect of Fertiliser Division of the Company.

6. Subsidies

(a) Nitrogenous Fertilizers are under the Concession Scheme including freight as per the New Urea Policy 2015 and Uniform Freight Policy. The concession price and freight has been accounted for on the basis of notified prices further adjusted for input price escalation/ de-escalation and as estimated by the management based on the prescribed norms in line with known policies parameters.

Contribution from sale of surplus ammonia has been accounted for in accordance with the known policy parameters.

Current yearâs subsidy income of Urea is inclusive of (Rs.593.87 Lakhs) (Previous year : Rs.647.54 Lakhs) being the subsidy income, pertaining to earlier years, but determined during the year.

(b) Subsidy on traded fertilisers (other than Gypsum) has been accounted for as per concession rates based on Nutrient Based Subsidy Policy as notified by the Government of India.

7. Leases

(a) The lease payment made during the year amounts to Rs.83.89 Lakhs (Previous year : Rs.91.92 Lakhs), out of which Rs.64.68 Lakhs (Previous year : Rs.54.01 Lakhs) has been adjusted against principle and Rs.19.21 Lakhs (Previous year : Rs.37.91 Lakhs) has been shown as interest expense. The interest rate on finance leases is around 27.34% p.a. There is no renewal and escalation clause as well as restriction imposed in the lease agreement. There are no sub-leases.

(b) The Company has entered into Operating Lease Agreements for the premises which are non-cancellable. The lease payments recognized in the statement of profit and loss during the year amounts to Rs.678.91 Lakhs (Previous year : Rs.1032.02 Lakhs) including nil (Previous year : Rs.308.09 Lakhs) in discontinued operations in the statement of profit and loss in respect of Shipping Division of the Company (refer note 45(A)). The renewal of lease will be as per the mutual understanding of lessee and lessor and there is no escalation clause. There are no restrictions imposed in the lease agreements and there are no sub-leases. The break up of minimum lease payment outstanding as at March 31, 2018 is as follows:

* included nil (Previous year : Rs. 47.60 Lakhs) in respect of Shipping Division of the Company classified as held for sale and discontinued operations.

(c) The lease payments, other than cases covered in point no. (b) above i.e. non-cancellable leases, recognized in the statement of profit and loss during the year amounts to Rs.1486.00 Lakhs (Previous year : Rs.2238.10 Lakhs). The renewal of leases will be as per the mutual understanding of lessee and lessor and there is no escalation clause. There are no restrictions imposed by lease arrangements.

8. Share Based Payments

Employees Stock Option Scheme (ESOS)

The shareholders of the Company had approved CFCL Employees Stock Option Scheme, 2010 on August 27, 2010 which was amended by the shareholders on September 13, 2013. Consequent upon promulgation of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (âESOP Regulationsâ), the shareholders of the Company had approved the revised CFCL Employees Stock Option Scheme, 2010 (ESOS) on September 15, 2015 in compliance with the ESOP Regulations. As per ESOS, 4,162,000 Stock Options can be issued to Managing Director and other specified categories of employees of the Company. The options are to be granted at market price. As per ESOP Regulations, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Each option, upon vesting, shall entitle the holder to acquire 1 equity share of Rs.10.

The expected volatility was determined based on historical volatility data. For calculating volatility, the Company has considered the daily volatility of the stock prices of the Company on National Stock Exchange Limited over a period prior to the date of grant, corresponding with the expected life of the options.

In financial year 2010-11, CFCL Employees Welfare Trust (âESOP Trustâ) was constituted, inter alia, for the purpose of subscribing or acquiring equity shares of the Company from the Company or Secondary market, to hold the shares and to allocate or transfer these shares to eligible employees of the Company from time to time on the terms and conditions specified under the Employee stock option scheme. The Board of Directors at its meeting held on May 08, 2010 had approved grant of financial assistance upto Rs.3000.00 Lakhs by the Company to ESOP Trust in such manner and on such terms as agreed between the trustee(s) of the ESOP Trust and Managing Director of the Company for the purpose of subscribing or acquiring shares of the Company. ESOP Trust is holding 16,96,900 equity shares (Previous year : 22,47,902 equity shares) of the Company which were purchased from the open market.

9. Interest on income tax refund has been recognized, pending receipt of appeal effect orders for the assessment years where appeals have been decided in favour of the Company by the Commissioner of Income Tax (Appeals).

10. The current tax is net of tax on dividend received from a foreign subsidiary to the extent of dividend distribution tax on dividend distributed to shareholders of the Company as per the provisions of Section 115-O of the Income Tax Act,1961.

11. The Company has, during the year, accounted for income tax credit of Nil (Previous year : Rs.52.75 Lakhs) against income tax paid on profits by its subsidiary - M/s India Steamship Pte. Ltd., Singapore in proportion to the dividend received from the said subsidiary. The income tax credit is available in line with Article 25(2) of the Double Taxation Avoidance Agreement between India and Singapore.

During the year ended March 31, 2018 and March 31, 2017, the Company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence, DDT paid is charged to equity.

The Company has long term/ short term capital losses to the tune of Rs. 51440.71 Lakhs (Previous year: Rs.54264.58 Lakhs) that are available for offsetting for six to eight years against future taxable profits (long term/ short term) of the Company. Deferred tax assets have not been recognised in respect of above losses in the year 2017-18 as there are no other tax planning opportunities or other evidence of recoverability in the near future.

12. Fair Values

The management assessed that fair value of financial assets and liabilities approximates their carrying amount.

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

(i) Derivative financial instruments - The fair value of foreign exchange forward contracts is determined using the foreign exchange spot and forward rates at the balance sheet date. The fair value of foreign currency option contracts is determined using the Black Scholes valuation model. The derivatives are entered into with the banks / counterparties with investment grade credit ratings.

(ii) Security deposits / Employee loans - The fair value of security deposits / employee loans approximates the carrying value and hence, the valuation technique and inputs have not been given.

(iii) Floating rate borrowings / Finance lease obligation - The fair values of the Companyâs interest bearing borrowings are determined by using discounted cash flow (DCF) method using discount rate that reflects the issuerâs borrowing rate as at the end of the reporting period. The own non-performance risk as at March 31, 2018 was assessed to be insignificant.

(iv) The carrying amount of bank deposits, trade receivables, cash and cash equivalents, investment at amortised cost, other current financial assets, trade payables and other current financial liabilities are considered to be the same as their fair values, due to their short term nature.

(v) The fair value of investments carried at fair value through profit and loss is determined using income and market approach. The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis has not been performed as the amount is not material.

13. Financial Risk Management Objectives and Policies

The Companyâs principal financial liabilities, other than derivatives, comprises of loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include trade and other receivables and cash and cash equivalents that derive directly from its operations. The Company also holds investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The management of these risks is carried out by finance department under policies approved by the Board of Directors. The finance department identifies, evaluates and hedges financial risks in close co-operation with the Companyâs operating units. The Board of Directors reviews overall risks periodically.

(i) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types ofrisk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings, investments, other receivables, other payables and derivative financial instruments. The sensitivity analysis in the following sections relate to the position as at March 31, 2018 and March 31, 2017. The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant.

The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post retirement obligations, provisions and other non-financial assets and liabilities of foreign operation.

The following assumptions have been made in calculating the sensitivity analysis:

a) 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.

Interest Rate Sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on the portion of loans and borrowings affected. With all other variables held constant the Companyâs profit before tax is affected through the impact on floating rate borrowings, as follows:

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.

b) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates to short term borrowings taken against the Companyâs import of traded fertilisers and long term foreign currency borrowing taken for new Urea project.

The Company manages its foreign currency risk on short term borrowings by usually taking option and forward contracts.

During the financial year, the Company has adopted hedge accounting on foreign currency risk associated with highly forecasted sale transaction from new Urea project which is being hedged through foreign currency borrowings. Hedge accounting is applied to remove the accounting mismatch between the hedging instrument and hedged item. The effective portion of the change in the fair value of the hedging instrument is deferred into cash flow hedge reserve through OCI and will be recognised in profit or loss when the hedge item affects profit or loss.

(c) Commodity price risk

The Companyâs operating activities require the ongoing purchase of natural gas and other imported fertilisers.

(i) Natural gas being an international commodity is subject to price fluctuation on account of the change in the crude oil prices, demand supply pattern of natural gas and exchange rate fluctuations. The Company is not affected by the price volatility of the natural gas as under the Urea pricing formula, the cost of natural gas is pass through if the consumption of natural gas is within the permissible norms for manufacture of Urea.

(ii) The Company deals in imported fertilisers (i.e. DAP, MOP and NPK), which are imported by the Company and sold in the domestic market. The import prices of these goods are governed by international prices. There is a price and material availability risk, which may not be in line to meet the domestic market requirement. The risk, is also with domestic manufacturers whose costing is based on majorly imported raw materials and small value-add. However, a dynamic alignment of procurement to sales and constant review of market conditions and competitors costing help in mitigating the impact.

(ii) Credit risk

a) Trade receivables

The Companyâs receivables can be classified into two categories, one is from the customers/ dealers in the market and second one is from the Government of India in the form of subsidy. As far as Government portion of receivables is concerned, credit risk is Nil. In respect of market receivables from the customers/ dealers, the Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets. The Company has also taken security deposits from its customers, which mitigate the credit risk to some extent.

b) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Companyâs finance department. Credit risk arising from investment in mutual funds, bonds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies. The Company does not maintain the significant amount of cash and deposits other than those required for its day to day operations.

(iii) Liquidity risk

The Companyâs objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements at all times. The Company relies on a mix of borrowings and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium/ long term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

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

14. Capital Management

The Company objective while managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefit for other stakeholder. The Company will maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return the capital to shareholders, issue new shares or sell assets to reduce debt.

*The Company is setting up brownfield Ammonia Urea expansion project namely Gadepan III (âProjectâ) to produce 13.40 Lakhs MT of Urea. The above debt includes Rs.298148.47 Lakhs towards the Project, which is scheduled to commence production in the next Financial Year 2018-19. Majority of the balance debt is towards working capital requirement.

Under the terms of the borrowings facilities pertaining to Project, the Company is required to comply with certain financial covenants from Financial Year 2019 -20 onwards.

Proposed dividend on equity shares is subject to approval at the annual general meeting and is not recognised as a liability (including DDT thereon) as at March 31, 2018 and March 31, 2017.

15. (A) Discontinued Operations

The break up of the discontinued operations, which pertains to Shipping Division, as shown on the face of statement of profit and loss is as under:

As at March 31, 2017 the management of the Company was actively seeking a buyer for the sale of all the 4 (four) ships of the Shipping Division. During the year, the Company has entered into agreements for sale of all the ships. Therefore, the associated assets and liabilities of the Shipping Division were consequently presented as held for sale in financial statements for the year ended March 31, 2017. The division was classified as âdiscontinued operationsâ as per Ind AS 105. The last ship owned by the Company was delivered to the buyer on September 07, 2017. The disposal is consistent with the Companyâs long term policy to focus its activities on the Fertiliser and other Agri inputs business.

The financial information relating to the discontinued operations is set out below:

Write-down of Property, Plant and Equipment and Intangible Assets

During the previous year immediately before the classification of Shipping Division as discontinued operations, the recoverable amount was estimated for certain items of property, plant and equipment and intangible assets and a write-down of Rs.127.73 Lakhs was recognised to reduce the carrying amount of the assets in the disposal group to their fair value less costs to sell. This was recognised in Discontinued Operations in the Statement of Profit and Loss.

Allowance for Doubtful Debts and Advances

During the previous year immediately before the classification of Shipping Division as a discontinued operation, the recoverable amount was estimated for trade and other receivables and an allowance of Rs.215.85 lakhs was recognised to reduce the carrying amount of these assets in the disposal group to their net realisable value. This was recognised in Discontinued Operations in the Statement of Profit and Loss.

16. Disclosure required under Section 186 (4) of the Companies Act, 2013

(a) The Company has not granted any loan during the financial year ended March 31, 2018 under section 186 of the Companies Act, 2013.

(b) Particulars of Guarantee given:

* In case of equity investment at deemed cost, whereas investment in preference shares at fair value.

17. With effect from April 01, 2017, the Company has re-assessed residual value and useful lives of certain plant and equipment of Fertiliser and other Agri-inputs division of the Company. According to the management, the revised residual value and useful lives of such plant and equipment properly reflects the carrying value and period over which the same is expected to be used. In view of these changes, depreciation for the year ended March 31, 2018 is lower by Rs.786.00 Lakhs.

18. The Company is in the process of setting up a new Urea plant namely Gadepan III (âProjectâ) under the New Investment Policy 2012 (amended) at its existing plant location at Gadepan, Kota (Rajasthan) and the contracts for the Project had been awarded on a Lumpsum Turnkey (LSTK) basis. The milestone based payments are being made to the LSTK contractors for the purpose of accomplishment of the Project. The entire amount paid to LSTK contractors for the Project on the basis of achievement of milestones of Rs.359322.79 Lakhs as at March 31, 2018 (Previous year : Rs.148681.38 Lakhs ) is included under âCapital work-in-progressâ.

19. Disclosure on Specified Bank Notes (SBNs)

The disclosures regarding details of specified bank notes held and transacted during 8th November 2016 to 30th December 2016 has not been made since the requirement does not pertain to financial year ended March 31, 2018. Corresponding amounts as appearing in the audited financial statements for the financial year ended March 31,2017 are as under:

20. Significant Accounting Judgements, Estimates and Assumptions

The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Property, Plant and Equipment

Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Companyâs assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

b) Income Taxes

The Company has Rs. 51440.71 Lakhs (Previous year: Rs.54264.58 Lakhs) of carried forward tax losses on account of long term/ short term capital losses. These losses mainly relate to the loss on voluntary liquidation of a subsidiary of the Company and merger of a subsidiary of the Company with its wholly owned subsidiary and will expire in 5 to 7 years and may be used to offset taxable income arising in the future. At present, the Company does not have any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets. On this basis, the Company has determined that it cannot recognise deferred tax assets on the tax losses carried forward. If the Company would have been able to recognise all unrecognised deferred tax assets, profit and equity would have increased by Rs.14318.82 Lakhs (Previous year: Rs.15177.32 Lakhs). Further details on taxes are disclosed in note 39 to the financial statements.

c) Defined Benefit Plans

The cost of the defined benefit gratuity plan, post-employment medical benefits and other defined benefit plans and the present value of the obligation of defined benefit plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for defined benefit plans, the management considers the interest rates of government bonds.

d) Revenue

The Companyâs revenue includes subsidy claims, part of which are pending notification / final implementation by âFertiliser Industry Coordination Committeeâ (FICC), Government of India. As per management estimates, there is reasonable certainty based on Government of India policy and past experience that claims will be notified in due course. On issuance of notification by FICC, Government of India, the adjustments, if any, to revenue are not expected to be significant.

e) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets their fair value is measured using valuation techniques including discounted cash flow method. The inputs to these models are taken from observable markets wherever possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Further disclosures in this regard are given in note 41.

Mar 31, 2017

Footnotes:

1. Freehold land having carrying value Rs.0.89 lac (March 31, 2016 : Rs.0.89 lac and April 01, 2015 : Rs.0.89 lac), Leasehold land having carrying value of Rs. 32.04 lacs (March 31, 2016 : Rs.32.49 lacs and April 01, 2015 : Rs. 32.93 lacs) and Buildings having carrying value of Rs.390.98 lacs (March 31, 2016 : Rs.397.46 lacs and April 01, 2015 : Rs.403.93 lacs) are yet to be registered in the Company''s name.

2. The carrying value of Buildings includes Rs.0.29 lac (March 31, 2016 : Rs.0.30 lac and April 01, 2015 : Rs.0.31 lac) representing undivided share in assets jointly owned with others.

3. Adjustment to plant and equipment in the previous year included machinery having a carrying value of Rs.148.34 lacs transferred from ''Assets held for sale '' during the previous year.

4. Adjustment from plant and equipment in the previous year included cenvat credit of Rs.0.35 lac related to earlier years but availed during the previous year.

5. Adjustment from plant and equipment in the previous year included Rs.73.36 lacs being liabilities written back during the previous year.

6. Deletions from plant and equipment during the year includes equipment having gross block of Rs.347.77 lacs (Previous year : Nil) and accumulated depreciation of Rs.186.85 lacs (Previous year : Nil) transferred to ''Assets held for sale'' (refer note 46(B)).

7. Fair value measurement of Ships

The Company''s ships are stated at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment/ revaluation losses. The fair value measurements of the ships as at April 01, 2015 (date of transition to Ind AS) were performed by M/S UBA Insurance Surveyors and Loss Assessors LLP, independent valuer not related to the Company, who have appropriate qualification and relevant valuation experience in the fair value measurement of ships in relevant locations. Fair value of the ships was determined using the market comparable method. This means that valuations performed by the valuer are based on active market prices, significantly adjusted for difference in the type and utility of the specific ship, present international market scenario, age and remaining life of the specific ship. All resulting fair value estimates for ships are included in level 2.

8. Adjustment from ships during the previous year included one (1) ship having gross block of Rs.16,913.06 lacs and accumulated depreciation of Rs.931.45 lacs transferred to ''Assets held for sale'' (refer note 46(B)).

9. Depreciation charge for the year includes an amount of Rs. 4,159.71 lacs (Previous year : Rs. 5,473.63 lacs) related to Shipping Division. The amount is recognized in discontinued operations in the statement of profit and loss {refer note 46(A)(ii)}.

Notes:

i. * The Board of Directors of India Steamship Pte. Limited, Singapore, a wholly owned subsidiary of the Company, in its meeting held on December 27, 2016, had approved the reduction of its paid up capital by an amount of SGD 970,000, which is in excess of its funds requirement. Pursuant to this, the paid up share capital of India Steamship Pte. Limited has been reduced to SGD 109,962 on January 10, 2017. Pending distribution of the sum of SGD 970,000 (equivalent Rs.450.31 lacs) to the Company as at the year end, which has been shown as ''Receivable from subsidiary company'' (refer note 8E of the financial statements), the resultant gain due to foreign exchange variation of Rs.193.39 lacs has been shown as ''Gain on reduction of non-current investment'' (refer note 18 of the financial statements).

ii. ** During the year, CFCL Technologies Limited, Cayman Islands, a subsidiary of the Company, merged with its wholly owned

subsidiary CFCL Ventures Limited, Cayman Islands (CVL) effective from December 20, 2016 with an exchange ratio of 1:1 (received 2,932,947 ordinary shares of US$ 0.0001 each fully paid up in exchange of 2,932,947 ordinary shares of US$ 0.0001 each fully paid up and 11,740,459 preference shares of US$ 0.0001 each fully paid up in exchange of 11,740,459 preference shares of US$ 0.0001 each fully paid up). The value of investment recognized in the financial statements is based on the fair valuation report of an independent valuer. Accordingly, CVL became a direct subsidiary of the Company.

The fair value loss of Rs.39,225.16 lacs recognized through profit or loss till March 31, 2016, has been reversed and a loss of Rs.39,225.16 lacs has been recognized as loss on issuance of shares on account of merger during the year. The same has been shown under ''Exceptional item'' (refer note 24 to the financial statements).

CVL has issued ordinary shares, preference shares (series A-1, B-1, C-1, D-1, E-1, F-1, G, H & I) and warrants for ordinary shares and preference shares (series G, H & I). Conversion ratio of different series of non cumulative convertible preference shares into ordinary shares of CVL are as follows-Series A1, & B1 preference share will be converted in the ratio of 1:1.22, Series C1, D1, E1 preference share will be converted in the ratio of 1:1.68, Series F-1 preference share will be converted in the ratio of 1:1.33 and Series G, H and I preference share will be converted in the ratio of 1:1. This conversion is subject to adjustments set forth, if any, in the Articles of Association of CVL.

Further, the Company has given corporate guarantee of Rs.11,025.35 lacs (March 31, 2016: Rs.14,577.20 lacs and April 01, 2015 : Rs.13,751.10 lacs) to a bank on account of loan given by bank to step-down subsidiaries of CVL. The Company has further provided letter of continued financial support to the said subsidiary.

b) Terms / rights attached to equity shares-

The Company has only one class of shares having a par value of Rs.10 per share fully paid up. Each holder of equity shares is entitled to one vote per share and the equity shares will rank pari passu with each other in all respects. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after payment of all liabilities.

Description of nature and purpose of each reserve

(a) Securities Premium: Securities Premium represents amount received on issue of shares in excess of the par value.

(b) Retained Earnings: Retained earnings comprises of prior years undistributed earnings after taxes.

(c) General Reserve: This represents appropriation of profit by the Company. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.

(d) Treasury shares: Treasury shares represents equity shares of the Company acquired by CFCL Employees Welfare Trust from the secondary market to allocate or transfer these shares to eligible employees of the Company from time to time on the terms and conditions specified under the CFCL Employees Stock Option Scheme.

(e) Loss on treasury shares: Loss on treasury shares acquired represents the amount of loss incurred by CFCL Employees Welfare Trust, on the transfer of equity shares to the eligible employees of the Company as per CFCL Employees Stock Option Scheme.

(f) Capital reserve: Capital reserve represents the amount on account of forfeiture of equity shares of the Company.

(g) Capital redemption reserve : Capital redemption reserve represents reserve created on redemption of preference shares.

(h) & (i) Tonnage tax reserve and tonnage tax reserve (utilised) under Section 115VT of the Income Tax Act, 1961: These reserves were created till the time ''Shipping Division'' was under tonnage tax regime.

(j) Share option outstanding account : The share option outstanding account is used to recognise the grant date fair value of options issued to employees under the CFCL Employees Stock Option Scheme, 2010. Refer to note 36 for further details of the plan.

(k) Exchange differences on translation of foreign operation: Exchange differences arising on translation of foreign operation are recognized in other comprehensive income as described in accounting policy and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed off.

(B) Nature of security, terms and repayment schedule (continuing operation):

i. Foreign currency term loans from banks of USD Nil (March 31, 2016 : Rs.4,373.16 lacs including current maturities of Rs.4,373.16 lacs and April 01, 2015: Rs.14,501.16 lacs including current maturities of Rs.10,375.83 lacs) carried interest rate in the range of 3/6 months LIBOR plus 2.75%-4.50% p.a. These loans were secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties and hypothecation of movable fixed assets of the Company, both present and future (save and except assets of Shipping Division), subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings.

ii. Foreign currency term loans from banks of USD 1,197.36 lacs (Rs.77,654.85 lacs including current maturities of Nil) (March

31, 2016 : Rs.16,430.56 lacs including current maturities of Nil and April 01, 2015 : Nil including current maturities of Nil) carry interest @ 3 months LIBOR plus 2.821% p.a. These loans are repayable in 13 half yearly instilments starting from September 30,

2019. These loans are secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties and hypothecation of the movable fixed assets of the Company, both present and future (save and except assets of Shipping Division), subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings.

iii. Foreign currency term loans from financial institution of USD 479.22 lacs (Rs.31,080.10 lacs including current maturities of Nil) (March 31, 2016 : Rs.4,832.52 lacs including current maturities of Nil and April 01, 2015 : Nil including current maturities of Nil) carry interest @ 3 months LIBOR plus 3.096% p.a. The said term loan is repayable in 17 equal half yearly instilments starting from September 30, 2019. The loan is secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties and hypothecation of the movable fixed assets of the Company, both present and future (save and except assets of Shipping Division), subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings.

iv. Finance lease obligation of Rs.106.94 lacs (including current maturities of Rs.70.77 lacs) (March 31, 2016 : Rs.160.95 lacs including current maturities of Rs.54.01 lacs and April 01, 2015 : Rs.202.15 lacs including current maturities of Rs.41.21 lacs) is payable in 17 monthly instilments of Rs.6.77 lacs each (i.e. lease obligation including interest) starting from April 2017 and carry interest rate of around 27.34% p.a. This is secured by assets acquired under the facility.

i. Foreign currency term loan from a bank of USD Nil (March 31, 2016: Rs.13,252.00 lacs including current maturities of Rs.13,252.00 lacs and April 01, 2015: Rs.15,001.20 lacs including current maturities of Rs.2,500.20 lacs carried interest @ 3 months LIBOR plus 1.125% p.a.). The loan was secured by first priority mortgage on the Company''s vessel-Ratna Puja and assignment of earnings, insurance and requisition compensation in respect of such vessel.

ii. Foreign currency term loan from a bank of USD 290 lacs (Rs.18,807.95 lacs including current maturities of Rs.2,594.20 lacs) (March 31, 2016 : Rs.21,865.80 lacs including current maturities of Rs.3,313.00 lacs and April 01, 2015 : Rs.23,126.85 lacs including current maturities of Rs 2,500.20 lacs) carries interest @ 3 months LIBOR plus 0.875% p.a. The loan is repayable in 11 quarterly instilments of USD 10.00 lacs each (Rs.648.55 lacs) starting from June 09, 2017 and the last installment of USD 180.00 lacs (Rs.11,673.90 lacs) payable on March 09,

2020. The loan is secured by first priority mortgage on the Company''s vessel-Ratna Shalini and assignment of earnings, insurance and requisition compensation in respect of such vessel. During the financial year 2016-17, the said loan has been transferred to ''Liabilities directly associated with assets classified as held for sale'' of the discontinued operations {refer note 46(A)(ii)}.

iii. Foreign currency term loan from banks of USD 421.94 lacs (Rs.27,364.94 lacs including current maturities of Rs.8,189.16 lacs) (March 31, 2016 : Rs.36,324.33 lacs including current maturities of Rs.8,366.56 lacs and April 01, 2015 : Rs.42,158.22 lacs including current maturities of Rs.7,892.43 lacs) carry interest @ 3 months LIBOR plus 0.40% p.a. One tranche of the aforesaid term loan amounting to USD 130 lacs (Rs.8,431.15 lacs) is repayable in 13 equal quarterly installment starting from April 21, 2017. Another tranche of the aforesaid term loan amounting to USD 130 lacs (Rs.8,431.15 lacs) is repayable in 13 equal quarterly installment starting from June 03, 2017. Another tranche of the aforesaid term loan amounting to USD 161.94 lacs (Rs.10,502.64 lacs) is repayable in 14 equal quarterly instilments starting from April 18, 2017. This loan is secured by first priority mortgage on the Company''s three vessels i.e. Ratna Shruti, Ratna Shradha and Ratna Namrata and assignment of earnings, insurance and requisition compensation in respect of such vessels. During the financial year 2016-17, the said loan has been transferred to ''Liabilities directly associated with assets classified as held for sale'' of the discontinued operations {refer note 46(A)(ii)}.

iv. Foreign currency term loans from financial institution of USD 44.59 lacs (Rs.2,891.75 lacs including current maturities of Rs.2,891.75 lacs) (March 31, 2016 : Rs.6,894.23 lacs including current maturities of Rs.3,940.18 lacs and April 01, 2015 : Rs.10,220.42 lacs including current maturities of Rs.3,716.51 lacs) carry interest @ 6 months LIBOR plus 4.50% p.a. The said term loan is repayable in 3 equal quarterly instilments starting from April 03, 2017. The loan is secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties and hypothecation of the movable fixed assets of the Company, both present and future (save and except assets of Shipping Division), subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings. During the financial year 2016-17, the said loan has been transferred to ''Liabilities directly associated with assets classified as held for sale'' of the discontinued operations {refer note 46(A)(ii)}.

ii. Rupee loans of Nil (March 31, 2016 : Nil and April 01, 2015 : Rs.23,500.00 lacs) carried interest in the range of 10.10% - 10.25% p.a., Cash credit facilities carrying interest in the range of 9.00% - 12.40% p.a. and Foreign currency loans of Rs.18,053.01 lacs (March 31, 2016 : Rs.37,165.16 lacs and April 01, 2015 : Rs.13,323.75 lacs) carrying interest in the range of 1.25% - 1.42% p.a., from banks are secured by hypothecation of all the Company''s current assets including all stocks and book debts and other movable assets, both present & future (except assets of Shipping Division). These loans are further secured by second charge on the immovable properties (except assets of Shipping Division) of the Company.

iii. Foreign currency loans of Rs.48,175.26 lacs (March 31, 2016 : Rs.191,033.86 lacs and April 01,2015 : Rs.131,698.68 lacs) carrying interest @

1.15% - 1.60% p.a. are secured by second charge on the Company''s current assets (except assets of Shipping Division), both present and future.

iv. Unsecured foreign currency loans of Rs 57,361.52 lacs (March 31, 2016 : Rs.25,073.13 lacs and April 01, 2015 : Rs.46,821.73 lacs) carry interest in the range of 1.20% - 1.67% p.a.

v. Unsecured commercial papers of Rs. 110,000.00 lacs (March 31, 2016 : Rs. 65,000.00 lacs and April 1, 2015 : Rs. 30,000.00 lacs) carry interest in the range of 6.34% - 6.50% p.a.

(v) The Company had received a demand of Rs.352.34 lacs (March 31, 2016: Rs.352.34 lacs and April 01, 2015: Rs.352.34 lacs) from Sales Tax Department, Kota in an earlier year towards use of natural gas for ammonia fuel, power and steam generation for the period April, 1996 to May, 2001. The Company has obtained a stay from Hon''ble High Court of Rajasthan, Jodhpur on 11th July, 2001. However, in the event of the Company having to pay the above, it is reimbursable by Fertilizer Industry Coordination Committee (FICC) / Government of India under Subsidy Scheme.

(vii) The Company as well as other users of Natural Gas under HBJ Gas Pipeline had received a letter in an earlier year from GAIL (India) Limited, informing about the possibility of levy of Central Sales Tax. The Company has been taking the delivery of Gas in the State of Rajasthan and has been accordingly paying Rajasthan Sales Tax on the supply. Therefore, the Company feels that no Central Sales Tax is payable by it. Further, the amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by FICC under Subsidy Scheme.

(viii) Under the Jute Packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specified percentage of fertilizers dispatched were required to be supplied in Jute bags up to August 31, 2001. The provisions of the said Act were challenged in the Supreme Court, which upheld the constitutional validity of this Act in its judgment in 1996. In spite of making conscious efforts to step up use of jute packaging material, the Company had been unable to adhere to the specified percentage, due to strong customer resistance to use of jute bags. The Company had received show cause notice from the Office of the Jute Commissioner, Kolkata, for levying a penalty of Rs.7,380.36 lacs (March 31, 2016: Rs.7,380.36 lacs and April 01, 2015: Rs.7,380.36 lacs) for non compliance of the provisions of the said Act. The Company has obtained a stay order from Delhi High Court against the above show cause notice and has been advised that the said levy is not tenable in law and accordingly no provision has been considered.

Based on favorable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favor in respect of all the items listed in (B) (i) to (viii) above and hence no provision is considered necessary against the same.

29. Segment information Operating segment

The Managing Director & Chief Financial Officer of the Company has been identified as the chief operating decision maker (CODM) as defined by Ind AS 108, ''Operating Segments''. The CODM evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators.

The Company''s operating businesses are organized and managed separately according to the nature of products manufactured, traded and services provided. The CODM has identified two reportable segments are namely Fertilizers and other Agri inputs and Shipping. A description of the types of products and services provided by each reportable segment is as follows:

Fertilizers and other Agri-inputs segment includes manufacture and marketing of Urea, Single Super Phosphate (SSP) and purchase and sale of other fertilizers and Agri-inputs.

Shipping segment includes transportation of crude oil and liquid products through vessels owned and/ or hired by the Shipping Division. The division has been classified as held for sale and discontinued operations on March 31, 2017. Information about this discontinued segment is provided in note 46(A)(ii).

Textile segment includes manufacturing and sale of synthetic and cotton yarn. The division was sold on September 30, 2015. Information about this discontinued segment is provided in note 46(A)(i).

Information about geographical areas

The Company''s revenue from continuing operation i.e. Fertilizers and other Agri-inputs segment from external customers is located in India only. Hence, no additional disclosure about geographical information has been given.

Information about major customers

Revenue from single customer i.e. Government of India amounted to Rs.367,154.43 lacs (Previous year : Rs.466,194.73 lacs) arising from sales in the Fertilizers and other Agri-inputs segment.

30. Related party transactions

In accordance with the requirements of Ind AS - 24''Related Party Disclosures, names of the related parties, related party relationship, transactions and outstanding balances where control exits and with whom transactions have taken place during the reported periods are:

Related party name and relationship

(a) Key Management personnel

S. No. Name Designation

1. Mr. Saroj Kumar Poddar Chairman

2. Mr. Shyam Sunder Bhartia Non-Executive Director

3. Mr. Chandra Shekhar Nopany Non-Executive Director

4. Mr. Kashi Nath Memani Independent - Non Executive Director

5. Ms. Radha Singh Independent - Non Executive Director

6. Mr. Marco Philippus Ardeshir Wadia Independent - Non Executive Director

7. Mr. Aditya Narayan Independent - Non Executive Director

8. Mr. Anil Kapoor Managing Director

9. Mr. Abhay Baijal Chief Financial Officer

10. Mr. M.S. Rathore Company Secretary (till April 30, 2015)

11. Mr. Rajveer Singh Company Secretary (w.e.f. May 01, 2015)

(b) Subsidiaries

CFCL Technologies Limited, Cayman Islands (till December 19, 2016)

CFCL Ventures Limited, Cayman Islands (w.e.f. December 20, 2016)

Chambal Infrastructure Ventures Limited, India India Steamship Pte. Limited, Singapore India Steamship International FZE, UAE India Steamship Limited, India

Subsidiaries of CFCL Technologies Limited, Cayman Islands (till December 19, 2016)

CFCL Ventures Limited, Cayman Islands ISGN Corporation, USA

Subsidiaries of CFCL Ventures Limited, Cayman Islands

ISGN Corporation, USA (w.e.f. December 20, 2016)

ISG Novasoft Technologies Limited, India

Inuva Info Management Private Limited, India

Subsidiaries and step-down subsidiaries of ISGN Corporation, USA

ISGN Solutions Inc, USA (till May 18, 2016)

- Richmond Investors, LLC, USA (till July 10, 2015)

- Richmond Title Genepar, LLC, USA (till April 07, 2015)

- Richmond Title Services, LP , USA (till June 08, 2015)

- ISGN Fulfillment Services, Inc. (Pennsylvania, USA) (till May 18, 2016)

- ISGN Fulfillment Services, Inc (AZ, USA) (till January 12, 2016)

- ISGN Fulfillment Agency, LLC (DE, USA) (till May 18, 2016)

Indo Maroc Phosphore S.A. Morocco

(d) Post Employment Benefit Plans CFCL Employees Provident Fund

Chambal Fertilizers and Chemicals Limited Senior Staff Superannuation Fund

CFCL Employees Group Gratuity Trust

India Steamship Staff Provident Fund

India Steamship Staff Gratuity Insurance Scheme

** Key management personnel are covered under the Company''s Group Gratuity Scheme along with other employees of the Company. The gratuity, leave liability, post retirement medical benefits, long service award scheme and settlement allowance is determined for all the employees on an overall basis, based on the actuarial valuation done by an independent actuary. The specific amount of gratuity, leave liability, post retirement medical benefits, long service award scheme and settlement allowance liability for Key management personnel can not be ascertained separately, except for the amount actually paid.

* Rs.177.07 lacs included in ''Liabilities directly associated with assets classified as held for sale'' in respect of Shipping Division of the Company classified as held for sale and discontinued operations (refer note 46(A)(ii)).

*/ ¹ Plan asset of Rs.345.80 lacs (including Rs.197.83 lacs pertaining to Shipping Division classified as held for sale and discontinued operations) (March 31, 2016: Rs.427.84 lacs and April 01, 2015: Rs.294.53 lacs) has not been recognized in the financial statements, as the surplus of the trust, is distributable among the beneficiaries of the provident fund trust.

a) Gratuity

In case of Fertiliser division, the Company has a defined benefit gratuity plan. Benefit is being paid as under:

A) In case of retirement or death of an employee while in service of the Company, the gratuity will be payable as under:

i) Completed continuous service of 5 years and above upto 20 years - gratuity equivalent to 15 days last drawn salary for each completed year of service.

The Scheme is funded with insurance companies in the form of a qualifying insurance policies. The fund has the form of a trust and it is governed by the Board of Trustees.

b) Post Retirement medical benefit plan

The fertiliser division of the Company has post retirement medical benefit schemes in the nature of defined benefit plan which is unfunded.

c) Provident Fund

The Board of Trustees decides its contribution based on the results of its review. Generally, it aims to have a portfolio mix of equity instruments and debt instruments. Investments of Provident Fund Trust is being governed by the rules issued by the Ministry of Labour, Government of India for Employee Provident Fund exempted establishment.

The following tables summaries the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans:

* Provident fund in respect of textile division of the Company and Pension fund in respect of all divisions of the Company.

** Rs.5.66 lacs (Previous year : Rs.37.44 lacs) included in discontinued operations in the statement of profit and loss in respect of Shipping Division of the Company {refer note 46(A)(ii)}. Further, an amount of Rs.94.39 lacs towards Provident fund and Pension fund in respect of textile division included in discontinued operations in the statement of profit and loss for the year ended March 31, 2016 {refer note 46(A)(i)}.

*** Rs.14.31 lacs (Previous year : Rs.17.19 lacs) included in discontinued operations in the statement of profit and loss in respect of Shipping Division of the Company {refer note 46(A)(ii)}.

**** In respect of Fertilizer division of the Company.

32. Subsidies

(a) Nitrogenous Fertilizers are under the Concession Scheme including freight as per the New Pricing Scheme (NPS- Stage III) and New Investment Policy 2008 (for the period from April 1, 2015 to May 31, 2015), New Urea Policy 2015 (from June 01, 2015 onwards) and Uniform Freight Policy. The concession price and freight has been accounted for on the basis of notified prices, further adjusted for input price escalation/ de-escalation and as estimated by the management based on the prescribed norms in line with known policies parameters.

Contribution from sale of surplus ammonia has been accounted for in accordance with the known policy parameters.

Current year''s subsidy income of Urea is inclusive of Rs.647.54 lacs (Previous year : Rs.968.69 lacs) being the subsidy income, pertaining to earlier years, but determined during the year.

(b) Subsidy on traded fertilizers (other than Gypsum) has been accounted for as per concession rates based on Nutrient Based Subsidy Policy as notified by the Government of India.

(d) Subsidy on City Compost has been accounted as notified by the Government of India.

(e) The Textile division of the Company was eligible for interest concession under the TUFS (Technology Up gradation Fund Scheme) of the Government of India. Accordingly, the Company had availed interest concession of Rs.42.19 lacs during the previous year upto the date of sale of the division and reduced the same from interest expense. The amount is recognized in discontinued operations in the statement of profit and loss {refer note 46(A)(i)}.

33. Leases

(a) The lease payment made during the year amounts to Rs.91.92 lacs (Previous year : Rs.92.08 lacs), out of which Rs.54.01 lacs (Previous year : Rs.41.21 lacs) has been adjusted against principle and Rs.37.91 lacs (Previous year : Rs.50.87 lacs) has been shown as interest expense. The interest rate on finance leases is around 27.34% p.a. There is no renewal and escalation clause as well as restriction imposed in the lease agreement. There are no sub-leases.

(b) The Company has entered into Operating Lease Agreements for the premises which are non- cancellable. The lease payments recognized in the statement of profit and loss during the year amounts to Rs.1,032.02 lacs {(Previous year : Rs.987.63 lacs including Rs.308.09 lacs (Previous year : Rs.301.22 lacs)} in discontinued operations in the statement of profit and loss in respect of Shipping Division of the Company (refer note 46(A)(ii)}. The renewal of lease will be as per the mutual understanding of lessee and lessor and there is no escalation clause. There are no restrictions imposed in the lease agreements and there are no subleases. The breakup of minimum lease payment outstanding as at March 31, 2017 is as follows:

* included Rs.47.60 lacs in respect of Shipping Division of the Company classified as held for sale and discontinued operations.

(c) The lease payments, other than cases covered in point no. (b) above i.e. non - cancellable leases, recognized in the statement of profit and loss during the year amounts to Rs.2,238.10 lacs (Previous year : Rs.1,838.66 lacs). The renewal of leases will be as per the mutual understanding of lessee and lessor and there is no escalation clause. There are no restrictions imposed by lease arrangements.

36. Share based payments

Employees Stock Option Scheme (ESOS)

The shareholders of the Company had approved CFCL Employees Stock Option Scheme, 2010 on August 27, 2010 which was amended by the shareholders on September 13, 2013. Consequent upon promulgation of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("ESOP Regulations"), the shareholders of the Company had approved the revised CFCL Employees Stock Option Scheme, 2010 (ESOS) on September 15, 2015 in compliance with the ESOP Regulations. As per ESOS, 4,162,000 Stock Options can be issued to Managing Director and other specified categories of employees of the Company. The options are to be granted at market price. As per ESOP Regulations, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Each option, upon vesting, shall entitle the holder to acquire 1 equity share of Rs.10.

The expected volatility was determined based on historical volatility data. For calculating volatility, the Company has considered the daily volatility of the stock prices of the Company on National Stock Exchange Limited over a period prior to the date of grant, corresponding with the expected life of the options.

In financial year 2010-11, CFCL Employees Welfare Trust ("Trust") was constituted, inter alia, for the purpose of subscribing or acquiring equity shares of the Company from the Company or Secondary market, to hold the shares and to allocate or transfer these shares to eligible employees of the Company from time to time on the terms and conditions specified under the Employee stock option scheme. The Board of Directors at its meeting held on May 08, 2010 had approved grant of financial assistance upto Rs.3,000.00 lacs by the Company to Trust in such manner and on such terms as agreed between the trustee(s) of the Trust and Managing Director of the Company for the purpose of subscribing or acquiring shares of the Company. Trust is holding 2,247,902 equity shares (Previous year : 2,253,402 equity shares) of the Company which were purchased from the open market, out of interest free loan provided by the Company till March 31, 2017.

37. Pending receipt of appeal effect orders for the assessment years where appeals have been decided in favour of the Company by the Commissioner of Income Tax (Appeals), interest on income tax refund has not been recognized thereof as the amount is presently not reasonably determinable. Interest income on this refund shall be recognized in the year the appeal effect order is received from Income Tax Department.

38. The current tax is net of tax on dividend received from a foreign subsidiary to the extent of dividend distribution tax on dividend distributed to shareholders of the Company as per the provisions of Section 115-O of the Income Tax Act,1961.

39. The Company has, during the year, accounted for income tax credit of Rs.52.75 lacs (Previous year : Rs.661.14 lacs) against income tax paid on profits by its subsidiary - M/s India Steamship Pte. Ltd. Singapore in proportion to the dividend received from the said subsidiary. The income tax credit is available in line with Article 25(2) of the Double Taxation Avoidance Agreement between India and Singapore.

During the year ended March 31, 2017 and March 31, 2016, the Company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence, DDT paid is charged to equity.

The Company has long term/ short term capital losses, to the tune of Rs.54,264.58 lacs (March 31, 2016: Rs.31,392.75 lacs and April 01, 2015: Rs.31,392.75 lacs) that are available for offsetting for six to eight years against future taxable profits (long term/ short term) of the Company.

Deferred tax assets have not been recognized in respect of above losses in the year 2016-17 as there are no other tax planning opportunities or other evidence of recoverability in the near future.

41. Fair values

Set out below, the class of the carrying amounts and fair value of the Company''s financial instruments as at March 31, 2017, March 31, 2016 and April 01, 2015:

The management assessed that fair value of cash and cash equivalents, short term bank deposits, trade receivables, other current financial assets (except foreign currency option contracts), trade payables and other current financial liabilities (except derivative financial liabilities) approximate their carrying amounts largely due to the short-term maturities of these instruments.

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

(i) Derivative financial instruments - The fair value of foreign exchange forward contracts is determined using the foreign exchange spot and forward rates at the balance sheet date. The fair value of foreign currency option contracts is determined using the Black Scholes valuation model. The derivatives are entered into with the banks / counterparties with investment grade credit ratings.

(ii) Security deposits / Employee loans - The fair value of security deposits / employee loans approximates the carrying value and hence, the valuation technique and inputs have not been given.

(iii) Floating rate borrowings / Finance lease obligation - The fair values of the Company''s interest bearing borrowings are determined by using discounted cash flow (DCF) method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. The own non-performance risk as at March 31, 2017 was assessed to be insignificant.

There have been no transfers between level 1, level 2 and level 3 during the period.

43. Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables and cash and cash equivalents that derive directly from its operations. The Company also holds investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The management of these risks is carried out by finance department under policies approved by the Board of Directors. The finance department identifies, evaluates and hedges financial risks in close co-operation with the Company''s operating units. The Board of Directors reviews overall risks periodically.

(i) Market risk

The following assumptions have been made in calculating the sensitivity analysis:

a) 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 assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.

b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in exchange rates of various currencies with INR, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives.

c) Commodity price risk

The Company''s operating activities require the ongoing purchase of natural gas, other imported fertilizers and bunker for ships.

(ii) The Company deals in imported fertilizers (i.e. DAP, MOP and NPK), which are imported by the Company and sold in the domestic market. The import prices of these goods are governed by international prices. There is a price and material availability risk, which may not be in line to meet the domestic market requirement. The risk is also with domestic manufacturers whose costing is based on majorly imported raw materials and small value-add. However, a dynamic alignment of procurement to sales and constant review of market conditions and competitors costing help in mitigating the impact.

(iii) In respect of shipping business of the Company, the business is exposed to the volatility inherent in the prices of bunker, which are governed to some extent in line with crude oil prices. On the other hand, the shipping business revenue is dependent majorly on demand-supply of petroleum products and / or demand-supply of oil tankers. The market balance is difficult to predict and therefore, the division, when performing cargo contracts is exposed to bunker price fluctuations. Although, the division may enter into some hedging transactions to partially mitigate the risk of bunker price fluctuations, such hedging may not adequately cover its exposure to these fluctuation and there is no assurance that resulting rate will be sufficient to cover possible increase in the prices of bunker.

(ii) Credit risk

a) Trade receivables

The Company''s receivables can be classified into two categories, one is from the customers/ dealers in the market and second one is from the Government of India in the form of subsidy. As far as Government portion of receivables is concerned, credit risk is Nil. In respect of market receivables from the customers/ dealers, the Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets. The Company has also taken security deposits from its customers, which mitigate the credit risk to some extent.

b) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s finance department. Credit risk arising from investment in mutual funds, bonds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognized financial institutions with high credit ratings assigned by the international credit rating agencies. The Company does not maintain the significant amount of cash and deposits other than those required for its day to day operations.

(iii) Liquidity risk

The Company''s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements at all times. The Company relies on a mix of borrowings and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium/ long term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

44. Capital management

For the purpose of the Company''s capital management, capital includes issued equity share capital, security premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Company monitors capital keeping in view the adequate interest and debt service coverage ratio.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowings in the current period.

Proposed dividend on equity shares is subject to approval at the annual general meeting and is not recognized as a liability (including DDT thereon) as at March 31, 2017 and March 31, 2016.

(i) Textile division

The Board of Directors of the Company at its meeting held on March 14, 2015, inter alia, had approved the transfer of its textile business i.e. Birla Textile Mills (non core business) to Sutlej Textiles and Industries Limited as a going concern on slump sale basis. The Company had received a sum of Rs.500.00 lacs as an advance for the said sale till March 31, 2015. The associated assets and liabilities of the textile business were consequently presented as held for sale in the financial statements as at April 01, 2015. The sale was completed on September 30, 2015, on which date control of the textile business was passed on to the acquirer and has been reported as a ''discontinued operation''. The textile business represented the Company''s operating segment until April 01, 2015. The proceeds of sale exceeded the carrying amount of the related net assets and, accordingly, no impairment losses were recognized on the reclassification of the business as held for sale.

* Rupee term loan from banks of Nil (April 01, 2015 : Rs.1,908.60 lacs including current maturities of Rs.1,908.60 lacs) carried interest rate in the range of 11.10%-12.75% p.a. These loans were secured by first pari-passu charge by way of mortgage, by deposit of title deeds in respect of immovable properties and hypothecation of the movable fixed assets of the Company, both present and future (save and except assets of Shipping Division), subject to prior charges created in favour of banks on current assets and other movables for securing working capital borrowings. The said loan was transferred to ''Liabilities directly associated with assets classified as held for sale'' of the discontinued operations.

(ii) Shipping Division

As at March 31, 2017, the management of the Company was actively seeking a buyer for the sale of all the 4 (four) ships of the Shipping Division. Subsequent to the year end, the Company has entered into agreements for sale of all the ships existing as on March 31, 2017 and the ships are scheduled to be delivered to the concerned buyers between June 01, 2017 to September 15, 2017. Therefore, the associated assets and liabilities of the Shipping Division were consequently presented as held for sale in financial statements for the year ended March 31, 2017. The division is classified as ''discontinued operations'' as per Ind AS 105. The previous year figures have also been re-stated accordingly. The disposal is consistent with the Company''s long term policy to focus its activities on the Fertilizer and other Agri inputs business.

The aggregate net consideration to be received on the proposed sale of all the ships is lower than the carrying value of these ships as on the reporting date. Thus, the Company has recognized an impairment loss of Rs.2,160.34 lacs (net of deferred tax of Rs.8,184.61 lacs) as a result of proposed sale transactions of these ships. The loss is recognized in discontinued operations in the statement of profit and loss.

The shipping business represented the Company''s operating segment until March 31, 2016. Being a discontinued operation, that segment is no longer presented in the segment note.

The financial information relating to the discontinued operations is set out below.

Write-down of property, plant and equipment and intangible assets

Immediately before the classification of Shipping Division as discontinued operations, the recoverable amount was estimated for certain items of property, plant and equipment and intangible assets and a write-down of Rs.127.73 lacs was recognized on March 31, 2017 to reduce the carrying amount of the assets in the disposal group to their fair value less costs to sell. This was recognized in discontinued operations in the statement of profit and loss.

Allowance for doubtful debts and advances

Immediately before the classification of Shipping Division as a discontinued operation, the recoverable amount was estimated for trade and other receivables and an allowance of Rs.215.85 lacs was recognized on March 31, 2017 to reduce the carrying amount of these assets in the disposal group to their net realisable value. This was recognized in discontinued operations in the statement of profit and loss.

* In case of equity investment at deemed cost, whereas investment in preference shares at fair value.

49. First - time adoption of Indian Accounting Standards (Ind AS)

These are the Company''s first financial statements prepared in accordance with Ind AS. The significant accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet as at April 01, 2015 (the date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amount reported previously in financial statements prepared in accordance with the Accounting Standards notified under Section 133 of the Companies Act, 2013, read with paragraph 7 of the Companies (Accounts) Rules, 2014 (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) Optional exemptions applied

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

(i) Business combinations

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

(ii) 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 (PPE) as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for decommissioning liabilities in case there is no change in the functional currency. This exemption can also be used for intangible assets covered by Ind AS 38 ''Intangible Assets''. The Company has two divisions namely Fertilizer & other Agriinputs and Shipping Division. Shipping Division of the Company operates under the primary economic environment where USD is its functional currency.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets of its Fertilizer & other Agri-inputs Division at their previous GAAP carrying value, in case of ships of Shipping Division at fair value due to change in functional currency from INR to USD; and on rest of other PPE of the Shipping Division, Ind AS 16 has been applied retrospectively.

(iii) Cumulative translation difference

A first-time adopter need not comply with the requirements of Ind AS 21 to recognize cumulative translation differences on foreign operations (i.e. cumulative translation differences that existed at the date of transition to Ind AS). If a first-time adopter uses this exemption:

a) The cumulative translation differences for all foreign operations are deemed to be zero at the date of transition to Ind AS;

b) The gain or loss on a subsequent disposal of any foreign operation must exclude translation differences that arose before the date of transition to Ind AS and shall include later translation differences.

The exemption applies to all cumulative translation differences arising from the translation of foreign operation. Accordingly, the Company has elected to apply this exemption and cumulative currency translation differences for its foreign operation is deemed to be zero by transferring it to opening retained earnings at its transition date.

(iv) Share based payment

A first-time adopter is encouraged, but not required, to apply Ind AS 102 Share-based payment to equity instruments, that vested before date of transition to Ind AS. However, if a first-time adopter elects to apply Ind AS 102 to such equity instruments, it may do so only if the entity has disclosed publicly the fair value of those equity instruments, determined at the measurement date, as defined in Ind AS 102. The Company has elected not to apply Ind AS 102 ''Share-based payment'' to equity share options which got vested before April 01, 2015 (transition date).

(v) 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. However, the Company has used Ind AS 101 exemption and assessed all arrangements for embedded leases based on conditions in place as at the date of transition.

(vi) Investment in subsidiaries and joint venture

As per Ind AS 27, investment in subsidiaries and joint venture needs to be accounted into the books either at cost or at value determined in accordance with Ind AS 109. If a first time adopter measures such an investment at cost in accordance with Ind AS 27, it shall measure its investment at one of the following amounts in its separate opening balance sheet:

- Cost determined in accordance with the Ind AS 27; or

- Deemed cost

Deemed cost shall be either:

(a) the fair value at the entity''s date of transition to Ind AS; or

(b) the carrying value as per the previous GAAP at the date of transition.

A first time adopter may choose either (a) or (b) above to measure its investment in each subsidiary and joint venture. The Company has chosen to measure its investment in joint venture and subsidiary companies namely (i) CFCL Technologies Limited; and (ii) CFCL Infrastructure Ventures Limited at fair value on the date of transition to Ind AS. Further, Company has decided to carry its investment in CFCL Technologies Limited (debt instrument) at value determined in accordance with Ind AS 109. Rest of the investments are carried at cost (previous GAAP carrying amounts).

(vii) Investment in debt instrument (preference shares)

The Company has decided to carry its investment in Upper Ganges Sugar & Industries Limited (debt instrument) at value determined in accordance with Ind AS 109 at fair value through profit or loss.

(b) Ind AS mandatory exceptions applied

(i) Estimates

An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS 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 April 01, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

-Investment in equity instruments carried at FVTPL or FVTOCI;

-Investment in debt instruments carried at FVTPL; and -Impairment of financial assets based on expected credit loss model.

(ii) De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the derecognition requirements in Ind AS 109 retrospectively from a date of the entity''s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities, derecognized as a result of past transactions, was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109, prospectively from the date of transition to Ind AS.

(iii) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

Footnotes to the reconciliation of equity as at April 01, 2015 and March 31, 2016 and profit or loss for the year ended March 31, 2016

i. Property, plant and equipment (PPE)

The Company has carried out fair valuation of Property, plant and equipment (ships) of Shipping Division on account of change in functional currency of the division from INR to USD. Accordingly on the date of transition to Ind AS, a decrease of Rs.44,807.12 lacs (net of exchange variation gain of Rs.52,780.66 lacs on translation of ships at closing exchange rate on the date of transition) was recognized in PPE on account of such fair valuation. This amount has been recognized in ''Retained earnings''.

Further, the Company has adopted the policy of fair valuation of ships going forward and on account of the same, the Company has recorded a fair valuation loss of Rs.1,757.98 lacs during the financial year 2015-16 and the same has been charged to the statement of profit and loss. Retained earnings as on April 01, 2015 and March 31, 2016 were impacted negatively by Rs.44,807.12 lacs and Rs.46,565.10 lacs respectively.

The above transition has resulted in decrease in depreciation expense by Rs.2,241.42 lacs in the statement of profit and loss for the year ended March 31, 2016 with a corresponding increase in ''Retained earnings.

ii. Capitalization of ship special survey expense

In the previous GAAP, ship special survey expenses were charged to revenue expense in the year in which incurred. Under Ind AS, the cost of major inspection is capitalized and depreciated separately over the period to the next major inspection. Accordingly, the Company has capitalized ship special survey expenses of Rs.1,180.27 lacs with a corresponding credit to the statement of profit and loss for the year ended March 31, 2016.

iii. Depreciation of property, plant and equipment

The Company has capitalized certain critical/ capital spares aggregating to Rs.2,909.51 lacs falling under the definition of Property, plant and equipment (PPE) at the date of transition to Ind AS, which were recognized as ''Inventory'' under the previous GAAP. Accordingly, an amount of Rs.1,604.09 lacs being depreciation till the date of transition has been recognized in opening ''Retained earnings''.

Consequent to the above capitalization of spares as well as further capitalization during the year 2015-16, the depreciation expense of Rs.422.17 lacs has been recognized in the statement of profit and loss for the year ended March 31, 2016 with a corresponding decrease in ''Retained earnings''. Thus, the cumulative impact on Retained earnings was (negative) Rs.2,026.26 lacs as on March 31, 2016.

iv. Fair valuation of investments

Under the previous GAAP, investment in equity shares and debt securities were classified as long-term investments based on the intended holding period. Long-term investments were carried at cost less provision for other than temporary diminution in the value of such investments. Under Ind AS, these investments are required to be measured either at fair value or carried at previous GAAP values.

The Company has carried out fair valuation of its investment in Joint venture (Indo Maroc Phosphore S.A. (IMACID)), investment in subsidiary company namely CFCL Infrastructure Ventures Limited and investment in Upper Ganges Sugar & Industries Limited on the

Mar 31, 2016

1. Segment Information

Primary Segment : Business Segment

The Company has identified the business segment as its primary reportable segment as the Company''s risks and rates of return are affected predominantly by differences in the products and services produced.

The Company''s operating businesses are organized and managed separately according to the nature of products manufactured, traded and services provided. The two identifiable reportable segments are viz. Fertilisers and other Agri inputs and Shipping. A description of the types of products and services provided by each reportable segment is as follows:

Fertilisers and other Agri-inputs segment includes manufacture and marketing of Urea, Single Super Phosphate (SSP) and purchase and sale of other fertilisers and Agri-inputs.

Shipping Segment includes transportation of crude oil and liquid products through vessels owned and/ or hired by the Shipping Division.

2. Gratuity and other Post Employment Benefit Plans :

(a) Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @ 15 days (15 to 30 days in case of Shipping Division) salary (last drawn salary) for each completed year of service. The Scheme is funded with insurance companies in the form of a qualifying insurance policies except in the case of crew employees of the Shipping division.

(b) Provident Fund

The Company has set up provident fund trusts, which are managed by the Company in respect of Fertiliser and Shipping division of the Company and as per the Guidance Note on implementing AS-15, Employee Benefits (revised 2005) issued by the Accounting Standard Board (ASB), provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. The actuarial valuation of Provident Fund was carried out in accordance with the guidance note issued by Actuarial Society of India and provided the interest shortfall of Provident Fund liability in the books of accounts.

3. Government Grants and Subsidies

(a) Nitrogenous Fertilizers are under the Concession Scheme including freight as per the New Pricing Scheme (NPS- Stage III) and New Investment Policy 2008 (for the period from April 1, 2015 to May 31, 2015), New Urea Policy 2015 (from June 1, 2015 onwards) and Uniform Freight Policy. The concession price and freight has been accounted for on the basis of notified prices, further adjusted for input price escalation/ de-escalation and as estimated by the management based on the prescribed norms in line with known policies parameters.

Contribution from sale of surplus ammonia has been accounted for in accordance with the known policy parameters. Current year''s subsidy income of Urea is inclusive of Rs.968.69 lacs (Previous year Rs.628.16 lacs) being the subsidy income, pertaining to earlier years, but determined during the year.

(b) Subsidy on traded fertilisers (other than Gypsum) has been accounted for as per concession rates based on Nutrient Based Subsidy Policy as notified by the Government of India.

(c) Subsidy on Gypsum has been accounted as notified by the Government of Rajasthan.

4. Leases

(a) The lease payment made during the year amounts to Rs. 92.08 Lacs (Previous year Rs.92.08 lacs ), out of which Rs.41.21 lacs (Previous year Rs.31.45 lacs) has been adjusted against Principal and Rs.50.87 lacs (Previous year Rs.60.63 lacs) has been shown as Interest expenses. The interest rate on finance leases is around 27.34% p.a. There is no renewal and escalation clause as well as restriction imposed in the lease agreement. There are no sub-leases.

5. Employees Stock Option Scheme

The shareholders of the Company had approved CFCL Employees Stock Option Scheme, 2010 on August 27, 2010 which was amended by the shareholders on September 13, 2013. Consequent upon promulgation of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("ESOP Regulations"), the shareholders of the Company had approved the revised CFCL Employees Stock Option Scheme, 2010 on September 15, 2015 in compliance with the ESOP Regulations. As per the Plan, 41,62,000 Stock Options can be issued to Managing Director and other specified categories of employees of the Company. The options are to be granted at market price. As per SEBI Guidelines, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Each option, upon vesting, shall entitle the holder to acquire 1 equity share of Rs.10.

The Company, in its annual general meeting held on September 15, 2015, also modified the exercise period of all the outstanding stock options, by increasing it from 5 years to 8 years, effective from September 15, 2015. The Company has accounted for this change in accordance with the Guidance Note on "Accounting for Employee Share-based Payments" issued by the Institute of Chartered Accountants of India.

6. Pending receipt of appeal effect orders for the assessment years where appeals have been decided in favour of the Company by the Commissioner of Income Tax (Appeals) and/ or Income Tax Appellate Tribunal, interest on income tax refund has not been recognized thereof as the amount is presently not reasonably determinable. Interest income on this refund shall be recognized in the year the appeal effect order is received from Income Tax Department.

7. The current tax is net of tax on dividend received from a foreign subsidiary to the extent of dividend distribution tax on dividend distributed to shareholders of the Company as per the provision of Section 115-O of the Income Tax Act,1961.

8. The Company has, during the year, accounted for income tax credit of Rs.661.14 lacs (including tax credit of Rs.190.48 lacs pertaining to earlier years) against income tax paid on profits by its subsidiary company M/s India Steamship Pte. Ltd. Singapore in proportion to the dividend received from the said subsidiary. The income tax credit is available in line with Article 25(2) of the Double Taxation Avoidance Agreement between India and Singapore.

9. In pursuance of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, the Company has discontinued the consolidation of accounts of CFCL Employees Welfare Trust (Trust) with the accounts of the Company. Accordingly, the Company has not made downward adjustment of Rs.225.34 lacs, on account of the face value of equity shares held by Trust, in the paid up share capital of the Company as at March 31, 2016. Further, the downward adjustment of Rs.1389.91 lacs, earlier appearing in the reserves of the Company, representing the cost of acquisition of shares held by ESOP Trust (net of dividends) in excess of face value of such shares, has been added back to the reserves as at March 31, 2016.

10. During the year, the Company has obtained the approval of shareholders of the Company for sale or disposal of one or more than one or all 5 ships/ Vessels or entire shipping undertaking/business of the Company. The Company has entered into an agreement for sale of the ship - Ratna Puja in March 2016 and the ship was delivered to the buyer in April 2016. Thus, the Company has made a provision for impairment loss of Rs.11199.17 lacs as a result of sale transaction of the aforesaid ship. Further action regarding sale of other ships shall be taken after considering best available options and market conditions.

11. Previous Year''s figures have been regrouped and/or rearranged wherever necessary to conform to this year''s classification. However, current year figures are not strictly comparable with those of previous year due to sale of Textile division w.e.f April 1, 2015.

Mar 31, 2015

1. Corporate Information

The Company is one of the largest manufacturer of Urea in private sector in India and is also into the trading of fertilisers and other agri inputs. The Company is also into manufacturing of Synthetic and Cotton Yarn. Shipping Division of the Company is engaged in the business of running of ships for cargo.

2. Basis of Preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rule 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention except for derivative financial instruments and investment acquired in exchange for another asset which have been measured at fair value.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

a) Reconcilation of the shares outstanding at the beginning and at the end of the reporting period There is no movement in the shares outstanding at the beginning and at the end of the reporting period.

b) Terms / rights attached to equity shares

The Company has only one class of shares having a par value of Rs.10 per share fully paid up. Each holder of equity shares is entitled to one vote per share and will rank pari passu with each other in all respects. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing annual general meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after payment of all liabilities.

3 (A) Contingent liabilites (not provided for) in respect of parent company

a) (Rs. in Lacs)

S. Particulars 2014-15 2013-14 No.

i) Demand raised by Service Tax, Sales Tax 624.07 469.79 and Income Tax (IT) authorities being disputed by the Company*

ii) Penalty levied by FERA Board under appeal 1.30 1.30 before the Calcutta High Court

iii) Claim against Nihat Shipping Company Limited - 222.04 in legal suits /notices, in which the Parent Company has been made a party, is being contested, since the Company acted as Agents / Technical

iv) Various labour cases Amount Amount not not ascerta ascerta -inable -inable

v) Other claims against the Company not 402.93 386.77 acknowledged as debts

* Brief description of liabilities for (ii) above:

(Rs. in Lacs)

s. partliculars 2014-15 2013-14 no Income tax:

Demand raised by IT authorities on account of various disallowances for AY 2003-04 including 1.28 1.28 penalties.

Demand raised by IT authorities on account of various disallowances for AY 2004-05 including 5.87 5.87 penalties.

Demand raised by IT authorities on account of various disallowances for AY 2008-09 including 123.23 123.23 penalties.

1 Demand raised by IT authorities on account of various disallowances for AY 2009-10. 98.50 98.50

Demand raised by IT authorities on account of various disallowances for AY 2010-11. 70.33 70.33

Demand raised by IT authorities on account of various disallowances for AY 2011-12. 104.37 104.37

Demand raised by IT authorities on account of various disallowances for AY 2012-13. 154.22

Demand raised by IT authorities on account of short deduction of TDS and interest thereon for AY 2008-09 to 2012-13. 1.05 0.99

Sales Tax:

2 Disallowance of VAT credit on raw materials 22.18 22.18 used in the manufacturing of finished goods and lying in stock on April 1, 2006.

Miscellaneous Rajasthan Sales Tax and Central Sales Tax demand. 38.47 38.47

Service tax:

3 Service Tax demand received on services from foreign parties in respect of service tax not paid on Tax deducted at source (TDS) portion. 4.57 4.57

Total 621.07 469.79

(b) The Company had received a demand of Rs.352.34 lacs (Previous year Rs.352.34 lacs) from Sales Tax Department, Kota in an earlier year towards use of natural gas for ammonia fuel, power and steam generation for the period April, 1996 to May, 2001. The Company has obtained a stay from Hon'ble High Court of Rajasthan, Jodhpur on 11th July, 2001. However, in the event of the Company having to pay the above, it is reimbursable by Fertiliser Industry Coordination Committee (FICC) of Ministry of Chemicals and Fertilisers, the Government of India under Subsidy Scheme.

(c) The Company as well as other users of natural gas under HBJ Gas Pipeline had in earlier years received letters from GAIL (India) Limited (erstwhile Gas Authority of India Ltd), informing about the possibility of levy of excise duty on natural gas (presently not levied) with retrospective effect. The amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by Fertiliser Industry Coordination Committee (FICC) of Ministry of Chemicals and Fertilisers, the Government of India under Subsidy Scheme.

(d) The Company as well as other users of Natural Gas under HBJ Gas Pipeline had received a letter in an earlier year from GAIL (India) Limited (erstwhile Gas Authority of India Ltd), informing about the possibility of levy of Central Sales Tax. The Company has been taking the delivery of Gas in the State of Rajasthan and has been accordingly paying Rajasthan Sales Tax on the supply. Therefore, the Company feels that no Central Sales Tax is payable by it. Further, the amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by Fertiliser Industry Coordination Committee (FICC) of Ministry of Chemicals and Fertilisers, the Government of India under Subsidy Scheme.

(e) Under the Jute Packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specified percentage of fertilisers dispatched were required to be supplied in Jute bags up to 31.8.2001. The provisions of the said Act were challenged in the Supreme Court, which upheld the constitutional validity of this Act in its judgment in 1996. In spite of making conscious efforts to step up use of jute packaging material, the Company had been unable to adhere to the specified percentage, due to strong customer resistance to use of jute bags. The Company had received show cause notice from the Office of the Jute Commissioner, Kolkata, for levying a penalty of Rs.7380.36 lacs (Previous year Rs.7380.36 lacs) for non compliance of the provisions of the said Act. The Company has obtained a stay order from Delhi High Court against the above show cause notice and has been advised that the said levy is not tenable in law and accordingly no provision has been considered.

Based on favorable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (a) (ii) to (vi) and (b) to (e) above and hence no provision is considered necessary against the same.

(B) The Company is involved in various litigations, the outcomes of which are considered probable, and in respect of which the Company has made aggregate provision of Rs.15050.73 lacs as at March 31, 2015.

4 Segment Information

Primary Segment : Business Segment

The group has identified the business segment as its primary reportable segment as the group's risks and rates of return are affected predominantly by differences in the products and services produced.

The group's operating businesses are organized and managed separately according to the nature of products manufactured, traded and services provided. The three identifiable reportable segments are viz. Fertilisers and other Agri inputs, Textile and Shipping. A description of the types of products and services provided by each reportable segment is as follows:

Fertilisers and other Agri-inputs segment includes manufacture and marketing of Urea, SSP and purchase and sale of Fertilisers and Agricultural inputs. During the beginning of financial year, the Company has changed the policy of reporting of its segment information. The segment information is now being reported into three business segments (Fertilisers and other Agri-inputs, Shipping and Textile) by merging 'Own manufactured Fertiliser' and 'Traded Goods' segments into one business segment, namely Fertilisers and other Agri-inputs. The change has been made to reflect the Company's segment revenue, results and capital employed more appropriately as it caters to the same geography, market, customers and needs of the farmers. The new segment information namely Revenue, Results and Capital Employed is derived by a simple arithmetic additions of the aforesaid particulars of the consolidating segments and as such there is no financial effect of the change.

Textile segment includes manufacturing and sale of synthetic and cotton yarn.

Shipping segment includes transportation of crude oil and liquid products through vessels owned and/ or hired by the Shipping Division.

Secondary Segment : Geographical Segment

The analysis of geographical segment is based on the geographical location i.e., domestic and overseas markets, of the customers. Secondary Segment Reporting (by Geographical Segments)

5 Gratuity and other Post Employment Benefit Plans:

(a) Gratuity

The company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure @ 15 days (15 to 30 days in case of Shipping Division) salary (last drawn salary) for each completed year of service. The Scheme is funded with insurance companies in the form of a qualifying insurance policies except in the case of crew employees of the Shipping division.

(b) Provident Fund

The Company has set up provident fund trusts, which are managed by the Company in respect of Fertiliser and Shipping division of the Company and as per the Guidance Note on implementing AS-15, Employee Benefits (revised 2005) issued by the Accounting Standard Board (ASB), provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. The actuarial valuation of Provident Fund was carried out in accordance with the guidance note issued by Actuarial Society of India and provided the interest shortfall of Provident Fund liability in the books of accounts.

The following tables summarise the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the balance sheet for the respective plans.

(c) Post Retirement Medical Benefits Plan

The Company has post retirement benefit schemes in the nature of defined benefit plan which is unfunded. The following table summarises the components of net benefit/ expense recognised in the Statement of Profit and Loss and Balalnce Sheet for the plan.

6 Related Party Disclosures

During the year, the group has entered into transactions with the related parties. Those transactions along with related balances as at March 31, 2015 and for the year then ended are presented below.

List of related parties under Accounting Standard- 18 along with nature and volume of transactions:

(a) Subsidiaries

CFCL Overseas Limited, Cayman Islands (under liquidation) # Chambal Infrastructure Ventures Limited, India India Steamship Pte. Limited, Singapore India stearnship Limited. India CFCL Technologies Limited, Cayman Islands (w.e.f. 25.03.2015)

Subsidiary of CFCL Overseas Limited, Cayman Islands

CFCL Technologies Limited, Cayman Islands (till 24.03.2015) Step-down subsidiaries of CFCL Technologies Limited

* CFCL Ventures Limited, Cayman Islands * ISGN Corporation, USA

Subsidiaries and step-down subsidiaries of ISGN Corporation, USA

ISGN Solutions Inc, USA

* Richmond Investors, LLC, USA

* Richmond Title Genepar, LLC, USA

* Richmond Title Services, LP , USA

* ISGN Fulfillment Services, Inc. (Pennsylvania, USA)

* ISGN Fulfillment Services, Inc (AZ, USA)

* ISGN Fulfillment Agency, LLC (DE, USA)

* ISGN Fulfillment Agency, of Alabama, LlC (AL, USA)

Subsidiaries and step-down subsidiaries of CFCL Ventures Limited

ISG Novasoft Technologies Limited, India Inuva Info Management Private Limited, India

Subsidiaries of Chambal Infrastructure Ventures Limited

Chambal Energy (Chhattisgarh) Limited Chambal Energy (Orissa) Limited

Subsidiaries of India Steamship Pte. Limited, Singapore

India Steamship International FZE, UAE

7 Government Grants and Subsidies

(a) Nitrogenous Fertilizers are under the Concession Scheme including freight as per New Pricing Scheme (NPS-Stage III), Uniform Freight Policy and New Investment Policy 2008. The concession price and freight has been accounted for on the basis of notified prices, further adjusted for input price escalation/ de-escalation and as estimated by the management based on the prescribed norms in line with known policy parameters. The NPS - Stage III policy was applicable for the period from October 1,2006 to March 31,2010, which has been extended thereafter provisionally till further orders. Accordingly, the impact of revised concession price has been accounted for.

Contribution from sale of surplus ammonia has been accounted for in accordance with the known policy parameters.

Current year's subsidy income is inclusive of Rs. 628.16 lacs (Previous year Rs. 2872.89 lacs) being the subsidy income, pertaining to earlier years, but determined during the year.

(b) Subsidy on traded fertilisers (other than Gypsum) has been accounted based on Nutrient Based Policy as notified by the Government of India. Current year's subsidy income is inclusive of NIL (Previous year Rs. -1014.87 lacs) being the subsidy income, pertaining to earlier years but determined during the year.

(c) Subsidy on traded fertilisers (Gypsum) has been accounted as notified by the Government of Rajasthan.

(d) The Textile Division of the Company is eligible for interest concession under the TUFS (Technology Upgradation Fund Scheme) of the Government of India. Accordingly, the Company has availed interest concession of Rs.158.20 lacs (Previous year Rs. 242.65 lacs) during the year and reduced the same from interest expenses.

8 Leases

(a) The lease payment made during the year amounts to Rs. 92.08 Lacs (Previous year Rs. 92.16 lacs ), out of which Rs. 31.45 lacs (Previous year Rs. 24.00 lacs) has been adjusted against Principal and Rs. 60.63 lacs (Previous year Rs. 68.16 lacs) has been shown as Interest expenses. The interest rate on finance leases is around 27.34% p.a. There is no renewal and escalation clause as well as restriction imposed in the lease agreement. There are no sub-leases.

(b) The lease payments, other than cases covered in point no. (b) above i.e. non - cancelable leases, recognized in the Statement of Profit and Loss during the year amounts to Rs. 1090.67 lacs (Previous year Rs.1721.25 lacs). The renewal of leases will be as per the mutual understanding of lessee and lessor and there is no escalation clause. There are no restrictions imposed by lease arrangements.

9 Employees Stock Option Scheme

In terms of approval of shareholders accorded at the Annual General Meeting held on 27th August, 2010 and in accordance with Securities and Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999, (SEBI Guidelines) the Company formulated CFCL Employees Stock Option Scheme, 2010 ("Plan") for specified categories of employees and managing director of the Company. The Nomination and Remuneration Committee comprising of majority of independent directors administer the Plan. As per the Plan, 41,62,000 Stock Options can be issued to managing director and other specified categories of employees of the Company. The options are to be granted at market price. As per SEBI Guidelines, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Each option, upon vesting, shall entitle the holder to acquire 1 equity share of Rs.10 . Details of the scheme are as under:

10 Pending receipt of appeal effect orders for the assessment years where appeals have been decided in favour of the Company by the Commissioner of Income Tax (Appeals) and/ or Income Tax Appellate Tribunal, interest on income tax refund has not been recognized thereof as the amount is presently not reasonably determinable. Interest income on this refund shall be recognized in the year the appeal effect order is received from Income Tax Department.

11 The Deferred Tax charge and dividend distribution tax for the current year ended March 31,2015 includes additional charge of Rs.760.85 lacs and Rs. 28.75 lacs respectively. This is due to increase in rate of surcharge of income tax as proposed in the Finance Bill, 2015.

12 Based on the favourable decision by Income Tax Appellate Tribunal (ITAT) and CIT (Appeals), the Company had, during the previous year, reversed the amount of provision for Income Tax relating to Section 80-IA of Income Tax Act, 1961 for various years aggregating to Rs. 5975.82 lacs. The same was shown as Income tax credit related to earlier years.

13 The Company had during the previous year consolidated the financial statements of CFCL Employees Welfare Trust ('Trust') with the standalone financial statements of the Company as per the opinion of Expert Advisory Committee (EAC) of Institute of Chartered Accountant of India (issued in the month of March 2014). The Trust had acquired in the past equity shares of the Company from the secondary market for transfer to the eligible employees as per the CFCL Employees Stock Option Scheme of the Company. Consequently, the Shareholders' Funds of the Company had been adjusted by Rs.1656.92 lacs i.e. (a) downward adjustment in share capital by Rs.225.34 lacs being the face value of 2,253,402 equity shares held by the Trust, (b) downward adjustment in reserves by Rs.1518.79 lacs representing the purchase price in excess of face value of such equity shares; and (c) increase in reserves by Rs.87.21 lacs towards the accumulated profits of the Trust till 31.03.2013 and dividend received by the Trust during the year 2012-13. Further, the amount of loan of Rs.1665.10 lacs outstanding in the name of Trust in the books of the Company as at 31.03.2014 had been eliminated against the amount of loan outstanding in the name of Company appearing in the books of Trust as at 31.03.2014.

14 discontining operation

In view of the Company's strategy to focus more on its core business, Board of Directors of the Company at its meeting held on March 14, 2015, inter alia, has approved the transfer of its textile business i.e. Birla Textile Mills (non core business) located in Himachal Pradesh, to Sutlej Textiles and Industries Limited, as a going concern on slump sale basis w.e.f. April 01,2015 at a consideration not less than the book value of assets.The aforesaid transaction is subject to requisite approvals as may be required. Further, the Company has already received a sum of Rs. 500 lacs as an advance towards the aforesaid sale.

15 Previous Year's figures have been regrouped and/or rearranged wherever necessary to conform to this year's classification.

Mar 31, 2014

1. Corporate Information

The Company is one of the largest manufacturer of Urea in private sector in India and is also into the trading of fertilisers and other agri inputs. The Company is also into manufacturing of Synthetic and Cotton Yarn. Shipping Division of the Company is engaged in the business of running of ships for cargo.

2. Basis of Preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular 8/2014 dated April 04, 2014, issued by the Ministry of Corporate Affairs. The financial statements have been prepared on an accrual basis and under the historical cost convention except for derivative financial instruments which have been measured at fair value.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policies explained below.

NOTE 3 :SHORT-TERM BORROWINGS

i Rupee loans include Rs.80893.07 lacs (Previous year Rs.33053.05 lacs) from consortium of Banks under Special Banking Arrangement against the subsidy on Urea and Phosphatic and Potassic (P&K) fertilisers receivable from the Government of India. The Banks have charged interest @ 10.40% p.a. (including 8% p.a. paid by Government of India directly to banks). Accordingly, Rs.327.35 lacs (Previous year 30.63 lacs) (at the rate of 2.40% p.a.) have been charged as interest expense. These loans are secured by hypothecation of subsidy receivables upto Rs.80900.00 lacs (Previous year Rs. 33600.00 lacs) from Government of India.

ii Rupee loans of Rs. 65000.00 lacs are to be secured by second charge on the Company''s current assets (except assets of Shipping Division), carry interest @ 10.40% p.a.

iii Rupee loans of Rs. 43500.00 lacs (Previous year Rs. 28000.00 lacs) carrying interest in the range of 10.15% - 10.30% p.a. and Cash credit facilities carrying interest in the range of 9.95% - 14.95% p.a., from banks are secured by hypothecation of all the Company''s current assets including all stocks and book debts and other movables, both present & future (except assets of Shipping Division). These loans are further secured by second charge on all the immovable properties (except assets of Shipping Division) of the Company.Rupee loans, Foreign currency loans and Packing credit foreign currency loans carry interest in the range of 10.15% - 10.25% p.a., 0.63% - 1.89% p.a.and 2.33% - 3.49% p.a. respectively. Maximum amount of commercial papers outstanding during the year - Rs.172500.00 lacs (Previous year Rs.117500.00 lacs).

NOTE 4 : REVENUE FROM OPERATIONS

# Excise duty on sales amounting to Rs.2322.98 lacs (Previous year Rs.2095.99 lacs) has been reduced from sales in statement of profit and loss and excise duty on increase/ (decrease) in stock amounting to Rs.(51.63) lacs (Previous year Rs.35.53 lacs) has been considered as (income)/ expense as per note no. 29 of the financial statements.

5. (a) CONTINGENT LIABILITES (NOT PROVIDED FOR) IN RESPECT OF :

(Rs. in Lacs)

S.No. Particulars 2013-14 2012-13

i) Outstanding amount against corporate guarantee given to Bank on account of loans given by such Bank to stepdown subsidiary Company. (refer note no.15) 13182.40 11943.80

ii) Bills discounted with bank and remaining outstanding as on date. - 153.06

iii) Demand raised by Customs, Sales Tax and Income Tax (IT) authorities being disputed by the Company.* 469.79 582.74

iv) Penalty levied by FERA Board under appeal before the Calcutta High Court. 1.30 1.30

v) Claim against Nihat Shipping Company Limited in legal suits / notices, in which the Company has been made a party, is being contested, since the Company acted as Agents / Technical & Operational Managers. 222.04 222.04

vi) Various labour cases Amount not Amount not ascertainable ascertainable

vii) Other claims against the Company not acknowledged as debts. 386.77 343.75

* Brief description of liabilities for (iii) above :

(b) The Company had received a demand of Rs.352.34 lacs (Previous year Rs.352.34 lacs) from Sales Tax Department, Kota in an earlier year towards use of natural gas for ammonia fuel, power and steam generation for the period April, 1996 to May, 2001. The Company has obtained a stay from Hon''ble High Court of Rajasthan, Jodhpur on 11th July, 2001. However, in the event of the Company having to pay the above, it is reimbursable by Fertiliser Industry Coordination Committee (FICC) of Ministry of Chemicals and Fertilisers, the Government of India under Subsidy Scheme.

(c) The Company as well as other users of natural gas under HBJ Gas Pipeline had in earlier years received letters from GAIL (India) Limited (erstwhile Gas Authority of India Ltd), informing about the possibility of levy of excise duty on natural gas (presently not levied) with retrospective effect. The amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by Fertiliser Industry Coordination Committee (FICC) of Ministry of Chemicals and Fertilisers, the Government of India under Subsidy Scheme.

(d) The Company as well as other users of Natural Gas under HBJ Gas Pipeline had received a letter in an earlier year from GAIL (India) Limited (erstwhile Gas Authority of India Ltd), informing about the possibility of levy of Central Sales Tax. The Company has been taking the delivery of Gas in the State of Rajasthan and has been accordingly paying Rajasthan Sales Tax on the supply. Therefore, the Company feels that no Central Sales Ta x is payable by it. Further, the amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by Fertiliser Industry Coordination Committee (FICC) of Ministry of Chemicals and Fertilisers, the Government of India under Subsidy Scheme.

(e) Under the Jute Packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specified percentage of fertilisers dispatched were required to be supplied in Jute bags up to 31.8.2001. The provisions of the said Act were challenged in the Supreme Court, which upheld the constitutional validity of this Act in its judgment in 1996. In spite of making conscious efforts to step up use of jute packaging material, the Company had been unable to adhere to the specified percentage, due to strong customer resistance to use of jute bags. The Company had received show cause notice from the Office of the Jute Commissioner, Kolkata, for levying a penalty of Rs.7380.36 lacs (Previous year Rs.7380.36 lacs) for non compliance of the provisions of the said Act. The Company has obtained a stay order from Delhi High Court against the above show cause notice and has been advised that the said levy is not tenable in law and accordingly no provision has been considered.

Based on favorable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (a) (iii) to (vii) and (b) to (e) above and hence no provision is considered necessary against the same.

6. SEGMENT INFORMATION

Primary Segment : Business Segment

The Company has identified the business segment as its primary reportable segment as the Company''s risks and rates of return are affected predominantly by differences in the products and services produced.

The Company''s operating businesses are organized and managed separately according to the nature of products manufactured, traded and services provided. The four identifiable reportable segments are viz. Own Manufactured Fertilizers, Trading, Textile and Shipping. A description of the types of products and services provided by each reportable segment is as follows:

Own Manufactured Fertilizer segment includes manufacture and marketing of Urea & SSP. Urea price is fully controlled by the Government of India (GOI) and distribution is partly controlled.

Trading segment includes the purchase and sale of Fertilizers and Agricultural Inputs and this activity, though different in risk perception from own manufactured urea, is carried out mainly with an objective of providing Fertilizers/ Agricultural Inputs under one roof.

Textile segment includes manufacturing and sale of synthetic and cotton yarn.

Shipping segment includes transportation of crude oil and liquid products through vessels owned and/ or hired by the Shipping Division.

Secondary Segment : Geographical Segment

The analysis of geographical segment is based on the geographical location i.e., domestic and overseas markets, of the customers.

Secondary Segment Reporting (by Geographical Segments)

The following is the distribution of the Company''s revenue from operation (net) by geographical markets, regardless of where the goods were produced :

7. GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS :

(a) Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days'' (15 to 30 days in case of Shipping Division) salary (last drawn salary) for each completed year of service. The Scheme is funded with insurance companies in the form of a qualifying insurance policies except in the case of crew employees of the Shipping Division.

(b) Provident Fund

The Company has set up provident fund trusts, which are managed by the Company in respect of Fertiliser and Shipping division of the Company and as per the Guidance Note on implementing AS-15, Employee Benefits (revised 2005) issued by the Accounting Standard Board (ASB), provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. The actuarial valuation of Provident Fund was carried out in accordance with the guidance note issued by Actuarial Society of India and provided the interest shortfall of Provident Fund liability in the books of accounts.

The following tables summarise the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the balance sheet for the respective plans.

(c) Post Retirement Medical Benefits Plan

The fertiliser division of the Company has post retirement medical benefits scheme in the nature of defined benefit plan which is unfunded. The following table summarises the components of net benefit/ expense recognised in the statement of Profit and Loss and Balalnce Sheet for the plan.

8. RELATED PARTY DISCLOSURES

During the year, the Company has entered into transactions with the related parties. Those transactions along with related balances as at March 31, 2014 and for the year then ended are presented below.

List of related parties along with nature and volume of transactions:

(a) Subsidiaries

CFCL Overseas Limited, Cayman Islands

Chambal Infrastructure Ventures Limited, India

India Steamship Pte. Limited, Singapore

India Steamship Limited, India

Subsidiaries and step-down subsidiaries of CFCL Overseas Limited CFCL Technologies Limited, Cayman Islands

* CFCL Ventures Limited, Cayman Islands

* ISGN Corporation, USA

Subsidiaries and step-down subsidiaries of ISGN Corporation, USA NITC GmbH (Germany) dissolved w.e.f. January 03, 2013 ISGN Solutions Inc, USA

* Richmond Investors, LLC, USA

* Richmond Title Genepar, LLC, USA

* Richmond Title Services, LP , USA

* ISGN Fulfillment Services, Inc. (Pennsylvania, USA)

* ISGN Fulfillment Services, Inc (AZ, USA)

* ISGN Fulfillment Agency, LLC (DE, USA)

* ISGN Fulfillment Agency, of Alabama, LLC (AL, USA) dissolved w.e.f. July 30, 2013

Subsidiaries and step-down subsidiaries of CFCL Ventures Limited ISG Novasoft Technologies Limited, India Inuva Info Management Private Limited, India Subsidiaries of Chambal Infrastructure Ventures Limited Chambal Energy (Chhattisgarh) Limited Chambal Energy (Orissa) Limited

Subsi diaries of India Steamship Pte. Limited, Singapore India Steamship International FZE, UAE

9. INTEREST IN JOINT VENTURE

The Company has 33.33% ownership interest in Indo Maroc Phosphore S.A. Morocco, which is engaged in manufacturing of phosphoric acid.

The Company''s share of the assets, liabilities, income and expenses (each without elimination of the effect of transaction between the Company and the Joint Venture) of the jointly controlled entity are as follows :

10. GOVERNMENT GRANTS AND SUBSIDIES

(a) Nitrogenous Fertilizers are under the Concession Scheme including freight as per New Pricing Scheme (NPS-Stage III), Uniform Freight Policy and New Investment Policy 2008. The concession price and freight has been accounted for on the basis of notified prices, further adjusted for input price escalation/ de-escalation and as estimated by the management based on the prescribed norms in line with known policy parameters. The NPS - Stage III policy was applicable for the period from October 1, 2006 to March 31, 2010, which has been extended thereafter provisionally till further orders. Accordingly, the impact of revised concession price has been accounted for.

Contribution from sale of surplus ammonia has been accounted for in accordance with the known policy parameters.

Current year''s subsidy income is inclusive of Rs.2872.89 lacs (Previous year Rs.4964.36 lacs) being the subsidy income, pertaining to earlier years, but determined during the year.

(b) Subsidy on traded fertilisers (other than Gypsum) has been accounted based on Nutrient Based Policy as notified by the Government of India.

Current year''s subsidy income is inclusive of Rs.(-)1014.87 lacs (Previous year Rs.477.52 lacs) being the subsidy income, pertaining to earlier years but determined during the year.

(c) Subsidy on traded fertilisers (Gypsum) has been accounted as notified by the Government of Rajasthan.

(d) The Textile Division of the Company is eligible for interest concession under the TUFS (Technology Upgradation Fund Scheme) of the Government of India. Accordingly, the Company has availed interest concession of Rs. 242.65 lacs (Previous year Rs.318.23 lacs) during the year and reduced the same from interest expenses.

11. LEASES

(a) The lease payment made during the year amounts to Rs.92.16 (Previous year Rs.92.23 lacs ), out of which Rs.24.00 lacs (Previous year Rs.18.31 lacs) has been adjusted against Principal and Rs.68.16 lacs (Previous year Rs.73.92 lacs) has been shown as Interest expenses The interest rate on finance leases is around 27.34%. There is no renewal and escalation clause as well as restriction imposed in the lease agreement. There are no sub-leases.

(c) The lease payments, other than cases covered in point no. (b) above i.e. non - cancelable leases, recognized in the Statement of Profit and Loss during the year amounts to Rs.1721.25 lacs (Previous year Rs.1420.43 lacs). The renewal of leases will be as per the mutual understanding of lessee and lessor and there is no escalation clause. There are no restrictions imposed by lease arrangements.

12. EMPLOYEES STOCK OPTION SCHEME

In terms of approval of shareholders accorded at the Annual General Meeting held on 27th August, 2010 and in accordance with Securities and Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999, (SEBI Guidelines) the Company formulated CFCL Employees Stock Option Scheme, 2010 ("Plan") for specified categories of employees and managing director of the Company. The Company has constituted a Compensation Committee comprising of majority of independent directors to administer the Plan. As per the Plan, 41,62,000 Stock Options can be issued to managing director and other specified categories of employees of the Company. The options are to be granted at market price. As per SEBI Guidelines, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Each option, upon vesting, shall entitle the holder to acquire 1 equity share of Rs.10 . Details of the scheme are as under:

The expected volatility was determined based on historical volatility data. For calculating volatility, the Company has considered the daily volatility of the stock prices of the Company on National Stock Exchange over a period prior to the date of grant, corresponding with the expected life of the options.

Since the Company used the intrinsic value method, the impact on the reported net profit and earnings per share by applying the fair value based method

In March 2005, the ICAI has issued a guidance note on "Accounting for Employees Share Based Payments" applicable to employee based share plan, the grant date in respect of which falls on or after April1, 2005. The said guidance note requires the Proforma disclosures of the impact of the fair value method of accounting of employee stock compensation in the financial statements. Applying the fair value based method defined in the said guidance note, the impact on the reported net profit and earnings per share would be as follows:

In FY 2010-11, CFCL Employees Welfare Trust ("Trust") was constituted, inter alia, for the purpose of subscribing/ acquiring equity shares of Chambal Fertilisers and Chemicals Limited from the Company /Secondary market , to hold the shares and to allocate/ transfer these shares to eligible employees of the Company from time to time on the terms and conditions specified under the Plan. The Board of Directors at its meeting held on May 8, 2010 had approved grant of financial assistance upto Rs.3,000 lacs by the Company to Trust in such manner and on such terms as agreed between the trustee(s) of the Trust and Managing Director of the Company for the purpose of subscribing/acquiring shares of the Company. The outstanding loan to the trust as at March 31, 2014 is Rs.1665.10 lacs (Previous year Rs.1,710.10 lacs). Trust has purchased 2,442,202 equity shares (Previous year 2,442,202 equity shares) of the Company from the open market, out of interest free loan provided by the Company till March 31, 2014.

In the last year, SEBI vide its circular no.CIR/CFD/DIL/3/2013 dated 17.01.2013, prohibited listed entities to frame or continue ESOP schemes through trust formed for the purpose of acquiring its own shares for the purpose of the scheme. For the existing schemes SEBI had earlier given a time limit upto June 30, 2013 to comply with the circluar. In view of the same, advance given to ESOP trust was considered as short term in the last year and accordingly based on prudence, provision of Rs.573.98 lacs towards diminution was made in the books in the last year. During the year, SEBI vide its circular no. CIR/CFD/DIL/7/2013 dated May 13, 2013 permitted companies to continue to hold the already acquired shares through Trust to meet its ESOP obligation. Accordingly, provision of Rs.573.98 lacs made in the last year against diminution of the value has been written back in the current year.

13. Pending receipt of appeal effect orders for the assessment years where appeals have been decided in favour of the Company by the Commissioner of Income Tax (Appeals) and/ or Income Tax Appellate Tribunal, interest on income tax refund has not been recognized thereof as the amount is presently not reasonably determinable. Interest income on this refund shall be recognized in the year the appeal effect order is received from Income Tax Department.

14. The current tax is net of tax on dividend received from a foreign subsidiary, to the extent of dividend distribution tax on such dividend distributed to shareholders of the Company, as per the provisions of Section 115-O of the Income Tax Act,1961.

15. Based on the favourable decision by Income Tax Appellate Tribunal (ITAT)/ and CIT (Appeals), the Company has, during the year, reversed the amount of provision for Income Tax relating to Section 80-IA of Income Tax Act, 1961 for various years aggregating to Rs.5,975.82 lacs. The same has been shown as Income Tax credit related to earlier years.

16. The Company has during the year consolidated the financial statements of CFCL Employees Welfare Trust (Trust) with the standalone financial statements of the Company as per the recent opinion of Expert Advisory Committee (EAC) of Institute of Chartered Accountant of India (issued in the month of March 2014). The Trust has acquired in the past equity shares of the Company from the secondary market for transfer to the eligible employees as per the CFCL Employees Stock Option Scheme of the Company. Consequently, the Shareholders'' Funds of the Company has been adjusted by Rs.1656.92 lacs i.e.

(a) downward adjustment in share capital by Rs.225.34 lacs being the face value of 2,253,402 equity shares held by the Trust,

(b) downward adjustment in reserves by Rs.1518.79 lacs representing the purchase price in excess of face value of such equity shares; and (c) increase in reserves by Rs.87.21 lacs towards the accumulated profits of the Trust till last year and dividend received by the Trust during the year. Further, the amount of loan of Rs.1665.10 lacs outstanding in the name of Trust in the books of the Company at the year end has been eliminated against the amount of loan outstanding in the name of Company appearing in the books of Trust at the year end.

17. Previous Year''s figures have been regrouped and/or rearranged wherever necessary to conform to this year''s classification.

Mar 31, 2013

1. Corporate Information

The Company is the largest manufacturer of Urea in private sector in India and is also into the trading of fertilisers and other agri inputs. The Company is also into manufacturing of Synthetic and Cotton Yarn. Shipping Division of the Company is engaged in the business of running of ships for cargo.

2. Basis of Preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention except for derivative financial instruments which have been measured at fair value.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below:

3 SEGMENT INFORMATION

Primary Segment : Business Segment

The Company has identified the business segment as its primary reportable segment as the Company''s risks and rates of return are affected predominantly by differences in the products and services produced. The Company''s operating businesses are organized and managed separately according to the nature of products manufactured, traded and services provided. The four identifiable reportable segments are viz. Own Manufactured Fertilizers, Trading, Textile and Shipping. A description of the types of products and services provided by each reportable segment is as follows: Own Manufactured Fertilizer segment includes manufacture and marketing of Urea & SSP. Urea price is fully controlled by the Government of India (GOI) and distribution is partly controlled.

Trading segment includes the purchase and sale of Fertilizers and Agricultural Inputs and this activity, though different in risk perception from own manufactured urea, is carried out mainly with an objective of providing Fertilizers/ Agricultural Inputs under one roof.

Textile segment includes manufacturing and sale of synthetic and cotton yarn. Shipping segment includes transportation of crude oil and liquid products through vessels owned and/ or hired by the Shipping Division.

4 Gratuity and other Post Employment Benefit Plans :

(a) Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days'' (15 to 30 days in case of Shipping Division) salary (last drawn salary) for each completed year of service. The Scheme is funded with insurance companies in the form of a qualifying insurance policy except in the case of crew employees of the Shipping division.

(b) Provident Fund

The Company has set up provident fund trusts, which are managed by the Company in respect of Fertiliser and Shipping division of the Company and as per the Guidance Note on implementing AS-15, Employee Benefits (revised 2005) issued by the Accounting Standard Board (ASB), provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. The actuarial valuation of Provident Fund was carried out in accordance with the guidance note issued by Actuary Society and provided the shortfall of Provident Fund liability in the books of accounts.

The following tables summarises the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the balance sheet for the respective plans.

5. Related Party Disclosures

During the year, the Company entered into transactions with the related parties. Those transactions along with related balances as at March 31, 2013 and for the year then ended are presented below. List of related parties along with nature and volume of transactions:

(a) Subsidiaries

CFCL Overseas Limited, Cayman Islands Chambal Infrastructure Ventures Limited, India India Steamship Pte. Limited, Singapore India Steamship Limited, India Subsidiaries and step-down subsidiaries of CFCL Overseas Limited CFCL Technologies Limited, Cayman Islands *CFCL Ventures Limited, Cayman Islands *ISGN Corporation, USA Subsidiaries and step-down subsidiaries of ISGN Corporation, USA NITC GmbH (Germany) dissolved w.e.f. January 03, 2013 ISGN Solutions Inc, USA

*Richmond Investors, LLC, USA *Richmond Title Genepar, LLC, USA *Richmond Title Services, LP , USA *ISGN Fulfillment Services, Inc. (Pennsylvania, USA) *ISGN Fulfillment Services, Inc (AZ, USA) *ISGN Fulfillment Agency, LLC (DE, USA) *ISGN Fulfillment Agency, of Alabama, LLC (AL, USA) Subsidiaries and step-down subsidiaries of CFCL Ventures Limited ISG Novasoft Technologies Limited, India Inuva Info Management Private Limited, India Subsidiaries of Chambal Infrastructure Ventures Limited Chambal Energy (Chhattisgarh) Limited Chambal Energy (Orissa) Limited Subsidiaries of India Steamship Pte. Limited, Singapore India Steamship International FZE, UAE

6. Government Grants and Subsidies

(a) Nitrogenous Fertilizers are under the Concession Scheme as per New Pricing Scheme (NPS-Stage III) implemented w.e.f. 1st April, 2003. The concession price and freight has been accounted for on the basis of notified prices, further adjusted for input price escalation/ de-escalation, as per known policy parameters of NPS - Stage III, applicable for the period from October 1, 2006 to March 31, 2010, extended thereafter provisionally till further orders. Accordingly, the impact of revised concession price has been accounted for.

Contribution from sale of surplus ammonia has been accounted for in accordance with the known policy parameters.

Current year''s subsidy income is inclusive of Rs.4964.36 lacs (Previous year Rs.4442.38 lacs) being the subsidy income, pertaining to earlier years, but determined during the year.

(b) Subsidy on traded fertilisers (other than Gypsum) has been accounted based on Nutrient Based Policy as notified by the Government of India.

Current year''s subsidy income is inclusive of Rs.477.52 lacs (Previous year Rs.0.62 lac) being the subsidy income, pertaining to earlier years but determined during the year.

(c) Subsidy on traded fertilisers (Gypsum) has been accounted as notified by the Government of Rajasthan. "Current year''s subsidy income is inclusive of Rs.Nil (Previous year Rs.0.31 lac) being the subsidy income, pertaining to earlier years but, determined during the year.

(d) The Textile Division of the Company is eligible for interest concession under the TUFS (Technology Upgradation Fund Scheme) of the Government of India. Accordingly, the Company has availed interest concession of Rs.318.23 lacs (Previous year Rs.380.97 lacs) during the year and reduced the same from interest expenses.

7. Leases

(a) The lease payment made during the year amounts to Rs.92.23 lacs (Previous year Rs.103.55 lacs), out of which Rs.18.31 lacs (Previous year Rs.22.07 lacs) has been adjusted against Principal and Rs.73.92 lacs (Previous year Rs 81.84 lacs) has been shown as Interest expenses. The interest rate on finance leases is around 28%. There is no renewal and escalation clause as well as restriction imposed in the lease agreement. There are no subleases.

8. During the year, the Company has revised the estimated useful life of software and other assets based on technical estimates made by the management. Accordingly, additional depreciation of Rs.108.39 lacs has been accounted for in the financial statements.

Had the Company continued to use the earlier basis of providing depreciation, the charge to the Statement of Profit and Loss for the current year would have been lower by Rs.73.22 lacs (net of tax of Rs.35.17 lacs) and the net block of fixed assets would correspondingly have been higher by Rs.108.39 lacs.

9. Employee Stock Option Plan

In terms of approval of shareholders accorded at the Annual General Meeting held on 27th August, 2010 and in accordance with Securities and Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999, (SEBI Guidelines) the Company formulated CFCL Employees Stock Option Scheme, 2010 ("Plan") for specified categories of employees and managing director of the Company. The Company has constituted a Compensation Committee comprising of majority of independent directors to administer the Plan. As per the Plan, 41,62,000 Stock Options can be issued to managing director and other specified categories of employees of the Company. The options are to be granted at market price. As per SEBI Guidelines, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Each option, upon vesting, shall entitle the holder to acquire 1 equity share of Rs.10 . Details of the scheme are as under:

10. Pending receipt of appeal effect orders for the assessment years 2003-04, 2004-05 and 2009-10 where appeals have been decided in favour of the Company by the Commissioner of Income Tax (Appeals) and/ or Income Tax Appellate Tribunal, interest on income tax refund has not been recognized thereof as the amount is presently not reasonably determinable. Interest income on this refund shall be recognized in the year the appeal effect order is received from Income Tax Department.

11. The Deferred Tax charge for the current year ended March 31, 2013 includes additional charge for deferred tax liability of Rs.1891.35 lacs. Further, tax on proposed equity dividend includes additional charge of Rs.61.09 lacs. These are due to increase in rate of surcharge of income tax as proposed in the Finance Bill, 2013.

12. During the Previous year, the Shipping Division of the Company had opted out of Tonnage Tax Scheme under the Income Tax Act, 1961 and therefore was assessed under the normal tax regime w.e.f. April 01, 2011. The computation of current tax and deferred tax for the previous year was done accordingly. Consequent to the above, the Company had accounted for net deferred tax liability on the difference between the written down value of the fixed assets pertaining to the shipping division as per books of accounts and the Income Tax Act, 1961 as on April 1, 2011 amounting to Rs.18420.67 lacs and the same had been disclosed as ''Exceptional Deferred tax charge'' in the statement of Profit and Loss.

13. Previous Year''s figures have been regrouped and/or rearranged wherever necessary to conform to this year''s classification.

Mar 31, 2012

1. CORPORATE INFORMATION

The Company is the largest manufacturer of Urea in private sector in India and is also into the trading of fertilisers and other agri inputs. The Company is also into manufacturing of Synthetic and Cotton Yarn. Shipping Division of the Company is engaged in the business of running of ships for cargo.

2. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

3 (a) CONTINGENT LIABILITIES (NOT PROVIDED FOR) IN RESPECT OF :

(Rs.in Lacs)

Sl. No. Particulars 2011-12 2010-11

i) Outstanding amount against corporate guarantee given to Bank on account of loans 11193.60 - given by such Bank to step down subsidiary Company. (Refer Note No.15)

ii) Bills discounted with bank and remaining outstanding as on date. 529.65 1306.93

iii) Demand raised by Customs, Sales Tax and Income Tax (IT) authorities being disputed 595.98 6285.91 by the Company.

iv) Other claims against the Company not acknowledged as debts. 4.24 4.24

v) Claim against Nihat Shipping Company Limited in legal suits / notices, in which the 222.04 222.04 Company has been made a party, is being contested, since the Company acted as Agents / Technical & Operational Managers.

vi) Penalty levied by FERA Board under appeal before the Calcutta High Court. 1.30 1.30

vii) Various labour cases Amount not Amount not ascertainable ascertainable

Based on favorable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (iii) to (vii) above and hence no provision is considered necessary against the same.

(b) The Company had received a demand of Rs.352.34 lacs (Previous year Rs.352.34 lacs) from Sales Tax Department, Kota in an earlier year towards use of natural gas for ammonia fuel, power and steam generation for the period April, 1996 to May, 2001. The Company has obtained a stay from Hon'ble High Court of Rajasthan, Jodhpur on 11th July, 2001. However, in the event of the Company having to pay the above, it is reimbursable by Fertiliser Industrial Coordination Committee (FICC) / Government of India under Subsidy Scheme.

(c) The Company as well as other users of natural gas under HBJ Gas Pipeline had in earlier years received letters from GAIL (India) Limited (erstwhile Gas Authority of India Ltd), informing about the possibility of levy of excise duty on natural gas (pres- ently not levied) with retrospective effect. The amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by Fertiliser Industry Coordination Committee (FICC) of Ministry of Chemicals and Fertilisers, the Government of India under Subsidy Scheme.

(d) The Company as well as other users of Natural Gas under HBJ Gas Pipeline had received a letter in an earlier year from GAIL (India) Limited (erstwhile Gas Authority of India Ltd), informing about the possibility of levy of Central Sales Tax. The Company has been taking the delivery of Gas in the State of Rajasthan and has been accordingly paying Rajasthan Sales Tax on the supply. Therefore, the Company feels that no Central Sales Tax is payable by it. Further, the amount of such levy is not ascer- tainable. However, in the event of its levy, it is reimbursable by Fertiliser Industry Coordination Committee (FICC) of Ministry of Chemicals and Fertilisers, the Government of India under Subsidy Scheme.

(e) Under the Jute Packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specified percentage of fertilisers dispatched were required to be supplied in Jute bags up to 31.8.2001. The provisions of the said Act were challenged in the Supreme Court, which upheld the constitutional validity of this Act in its judgment in 1996. In spite of making conscious efforts to step up use of jute packaging material, the Company had been unable to adhere to the specified percentage, due to strong customer resistance to use ofjute bags. The Company had received show cause notice from the Office of the Jute Commissioner, Kolkata, for levying a penalty of Rs.7380.36 lacs (Previous year Rs. 7380.36 lacs) for non compliance of the provisions of the said Act. The Company has obtained a stay order from Delhi High Court against the above show cause notice and has been advised that the said levy is not tenable in law and accordingly no provision has been considered.

4. SEGMENT INFORMATION

Primary Segment : Business Segment

The Company's operating businesses are organized and managed separately according to the nature of products manufactured, traded and services provided. The four identifiable reportable segments are viz. Own Manufactured Fertilizers, Trading, Textile and Shipping. A description of the types of products and services provided by each reportable segment is as follows:

Own Manufactured Fertilizer segment includes manufacture and marketing of urea for which price is fully controlled by the Government of India (GOI) and distribution is partly controlled.

Trading segment includes the purchase and sale of Fertilizers and Agricultural Inputs and this activity, though different in risk perception from own manufactured urea, is carried out mainly with an objective of providing Fertilizers/ Agricultural Inputs under one roof. Textile segment includes manufacturing and sale of synthetic and cotton yarn.

Shipping segment includes transportation of crude oil and liquid products through vessels owned and/ or hired by the Shipping Division.

The Company has common fixed assets in India for producing in India goods for Domestic Market and Overseas Market. Hence, separate figures for asset/additions to fixed asset cannot be furnished.

5. GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS :

(a) Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days (15 to 30 days in case of Shipping Division) salary (last drawn salary) for each completed year of service. The Scheme is funded with insurance companies in the form of a qualifying insurance policy in respect of Fertiliser and Shipping Division of the Company.

(b) Provident Fund

The Company has set up provident fund trusts, which are managed by the Company in respect of Fertiliser and Shipping Division of the Company and as per the Guidance Note on implementing AS-15, Employee Benefits (revised 2005) issued by the Accounting Standard Board (ASB), provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. During the current financial year, actuarial valuation of Provident Fund for financial year 2011-12 was carried out in accordance with the guidance note issued by Actuary Society and provided the shortfall of Provident Fund liability in the books of accounts. There was no actuarial valuation carried out till last year pending issuance of guidance note in this regard and there was no shortfall in the provident fund liability as ascertained by the Company during the last year. In veiw of this, comparable figures for earlier years have not been given.

6. RELATED PARTY DISCLOSURES

During the year, the Company entered into transactions with the related parties. Those transactions along with related balances as at March 31, 2012 and for the year then ended are presented below.

List of related parties along with nature and volume of transactions:

(a) Subsidiaries

CFCL Overseas Limited., Cayman Islands Chambal Infrastructure Ventures Limited, India India Steamship Pte. Limited, Singapore India Steamship Limited,India Subsidiaries and step-down subsidiaries of CFCL Overseas Limited CFCL Technologies Limited, Cayman Islands

* CFCL Ventures Limited, Cayman Islands

* ISGN Corporation, USA

Subsidiaries and step-down subsidiaries of ISGN Corporation, USA

NITC GmbH (Germany) (formerly known as NovaSoft Information Technology Corporation Gmbh,)

ISGN Solutions Inc, USA

* Richmond Investors, LLC, USA

* Richmond Title Genepar, LLC, USA

* Richmond Title Services, LP , USA

* Flex Agents Signing Team, LLC , USA dissolved w.e.f. February 14, 2012

* Richmond Title Services, LLC (Alabama) , USA dissolved w.e.f. October 28, 2011

* ISGN Fulfillment Services, Inc. (Pennsylvania, USA)

* ISGN Fulfillment Services, Inc (AZ, USA)

* ISGN Fulfillment Services, South Inc (FL, USA) dissolved w.e.f. November 02, 2011

* ISGN Fulfillment Services, of Alabama LLC (AL, USA) dissolved w.e.f. November 10, 2011

* ISGN Fulfillment Services, of Maryland Inc. (MD, USA) dissolved w.e.f. February 10, 2012

* ILS Services, LLC (DE, USA) dissolved w.e.f. November 10, 2011

* ISGN Fulfillment Agency, LLC (DE, USA)

* ISGN Fulfillment Agency, of Alabama, LLC (AL, USA)

7. GOVERNMENT GRANTS AND SUBSIDIES

(a) Nitrogenous Fertilizers are under the Concession Scheme as per New Pricing Scheme (NPS-Stage III) implemented w.e.f. 1st April, 2003. The concession price and freight has been accounted for on the basis of notified prices, further adjusted for input price escalation/ de-escalation, as per known policy parameters of NPS - Stage III, applicable for the period from October 1, 2006 to March 31, 2010, extended thereafter provisionally till further orders. Accordingly, the impact of revised concession price has been accounted for. Contribution from sale of surplus ammonia has been accounted for in accordance with the known policy parameters.

Current year subsidy income is inclusive of Rs.4442.38 lacs (Previous year Rs.1138.84 lacs) being the subsidy income, pertaining to earlier years, but determined during the year.

(b) Subsidy on traded fertilisers (other than Gypsum) has been accounted based on Nutrient Based Policy as notified by the Government of India. Current year subsidy income is inclusive of Rs.0.62 lacs (Previous year Rs.167.61 lacs) being the subsidy income, pertaining to earlier years but determined during the year.

(c) Subsidy on traded fertilisers (Gypsum) has been accounted as notified by the Government of Rajasthan. Current year subsidy income is inclusive of Rs.0.31 lacs (Previous year Nil) being the subsidy income, pertaining to earlier years but, determined during the year.

(d) The Textile Division of the Company is eligible for interest concession under the TUFS (Technology Upgradation Fund Scheme) of the Government of India. Accordingly, the Company has availed interest concession of Rs.380.97 lacs (Previous year Rs.433.40 lacs) during the year and reduced the same from interest expenses.

8. LEASES

(a) The lease payment made during the year amounts to Rs.103.55 lacs (Previous year Rs.181.59 lacs), out of which Rs.22.07 lacs (Previous year Rs.69.62 lacs) has been adjusted against Principal and Rs.81.48 lacs (Previous year Rs111.97 lacs) has been shown as Interest expenses

The interest rate on finance leases is around 28%. There is no renewal and escalation clause as well as restriction imposed in the lease agreement. There are no subleases.

The break up of minimum lease payment outstanding as at March 31, 2012 is as follows:

(c) The lease payments, other than cases covered in point no. (b) above i.e. non - cancelable leases, recognized in the Statement of Profit and Loss during the year amounts to Rs. 401.12 lacs (Previous year Rs. 327.42 lacs). The renewal of leases will be as per the mutual understanding of lessee and lessor and there is no escalation clause. There are no restrictions imposed by lease arrangements.

9. DURING THE YEAR, THE COMPANY HAS REVISED THE ESTIMATED USEFUL LIFE OF VEHICLES BASED ON TECHNICAL ESTIMATES MADE BY THE MANAGEMENT. ACCORDINGLY, ADDITIONAL DEPRECIATION OF RS.125.26 LACS HAS BEEN ACCOUNTED FOR IN THE FINANCIAL STATEMENTS.

Had the Company continued to use the earlier basis of providing depreciation, the charge to the Statement of Profit and Loss for the current year would have been lower by Rs.84.62 lacs (net of tax of Rs.40.64 lacs) and the net block of fixed assets would correspondingly have been higher by Rs.125.26 lacs.

Notes :

(a) Unhedged Loans of Rs.112754.28 lacs (Previous year Rs. 114189.86 lacs) are not payable within next one year.

(b) The hedging of Foreign Currency outflows is decided after considering the extent of natural hedge available from foreign currency inflows from export of goods and shipping activities.

(c) In case of hedged transactions mentioned in (a) above, all losses, wherever applicable, as of March 31, 2012 have been provided for.

(d) Previous year figures have been given in brackets.

10. EMPLOYEE STOCK OPTION PLAN

In terms of approval of shareholders accorded at the Annual General Meeting held on 27th August, 2010 and in accordance with Securities and Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999, (SEBI Guidelines) the Company formulated CFCL Employees Stock Option Scheme, 2010 ("Plan") for specified categories of employees and Managing Director of the Company. The Company has constituted a Compensation Committee comprising of majority of independent directors to administer the Plan. As per the Plan, 41,62,000 Stock Options can be issued to managing director and other specified categories of employees of the Company. The options are to be granted at market price. As per SEBI Guidelines, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Each option, upon vesting, shall entitle the holder to acquire 1 equity share of Rs.10. Details of the scheme are as under:

In FY 2010-11, CFCL Employees Welfare Trust ("Trust") was constituted, inter alia, for the purpose of subscribing / acquiring equity shares of Chambal Fertilisers and Chemicals Limited from the Company / Secondary market , to hold the shares and to allocate/ transfer these shares to eligible employees of the Company from time to time on the terms and conditions specified under the Plan. The Board of Directors at its meeting held on May 8, 2010 had approved grant of financial assistance upto Rs.3000 lacs by the Company to Trust in such manner and on such terms as agreed between the trustee(s) of the Trust and Managing Director of the Company for the purpose of subscribing/acquiring shares of the Company. The outstanding loan to the trust as at March 31, 2012 is Rs.1610.10 lacs. (Previous year Rs.677.10 lacs) Trust has purchased 22,42,202 equity shares (Previous year 8,47,002 equity shares) of the Company from the open market, out of interest free loan provided by the Company till March 31, 2012.

Current value of the shares outstanding as on March 31, 2012 is Rs.1587.28 lacs based on last closing price, whereas value of shares purchased in the trust books stand to Rs.1603.53 lacs resulting into temporary diminution of Rs.16.25 lacs. However, such loss has not been accounted for in the books of accounts, as such investment by the trust has been considered as long term investment as per AS 13, "Accounting for investments" notified by the Companies (Accounting Standards) Rules, 2006.

11 Tax related to earlier years' represents income-tax credit amounting to Rs.5,604.94 lacs (Previous year Nil) substantially on certain benefits allowed by Income Tax Appellate Tribunal, Jaipur and reversal of excess income tax provision for earlier years and provision for income-tax pertaining to earlier years amounting to Rs.1,146.40 lacs (Previous year Nil), which has been recognized during the current year.

12 Pending receipt of appeal effect orders for the assessment years 2003-04, 2004-05 and 2008-09, where appeals have been decided in favour of the Company by the Commissioner of Income Tax (Appeals) and/ or Income Tax Appellate Tribunal, interest on income tax refund has not been recognized thereof as the amount is presently not reasonably determinable. Interest income on this refund shall be recognized in the year the appeal effect order is received from Income Tax Department.

13 Till the year ended March 31, 2011, the Company was preparing its accounts based on the Schedule VI to the Companies Act 1956, During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year's classification.

14 During the year, the Shipping Division of the Company has opted out of Tonnage Tax Scheme under the Income Tax Act, 1961 and therefore will be assessed under the normal tax regime w.e.f. April 01, 2011. The computation of current tax and deferred tax for the year has been done accordingly. Consequent to the above, the Company has accounted for net deferred tax liability on the difference between the written down value of the fixed assets pertaining to the shipping division as per books of accounts and the Income Tax Act, 1961 as on April 1, 2011 amounting to Rs.18,420.67 lacs and the same has been disclosed as 'Exceptional Deferred tax charge' in the statement of Profit & Loss.

Mar 31, 2011

1. Contingent Liabilities

(a) Contingent liabilities (not provided for) in respect of:

(Rs. in Lacs)

Sl. No. Particulars 2010-11 2009-10

i) Outstanding amount against counter guarantees given to Banks/ Financial Institutions on account of loans given by the said Banks/ Financial Institutions to Bodies Corporate. - 314.30

ii) Demand raised by Customs, Sales Tax and Income Tax (IT) authorities being disputed by the Company 6285.91* 5835.84*

iii) Various labour cases Amount not Amount not ascertainable ascertainable

iv) Other claims against the Company not acknowledged as debts. 4.24 4.24

v) Claim against Nihat Shipping Company Limited in legal suits/ notices, in which the Company has been made a party, is being contested, since the Company acted as Agents/ Technical & Operational managers. 222.04 222.04

vi) Penalty levied by FERA Board under appeal before the Calcutta High Court. 1.30 1.30

* Brief Description of liabilities as per (ii) above:

(Rs. in Lacs)

Sl. No. Particulars 2010-11 2009-10

1. Income Tax: Demand raised by IT authorities on account of various disallowances for A.Y. 2002-03 including penalties. 70.26 838.92

Demand raised by IT authorities on account of various disallowances for A.Y. 2003-04 including penalties. 2808.10 4674.78

Demand raised by IT authorities on account of various disallowances for A.Y. 2004-05 including penalties. 2320.91 135.21

Demand raised by IT authorities on account of various disallowances for A.Y. 2006-07 including penalties. 28.93 28.93

Demand raised by IT authorities on account of various disallowances for A.Y. 2008-09 including penalties. 481.48 -

Demand raised by IT authorities on account of short deduction of TDS and interest thereon for A.Y 2008-09 & 2009-10. 508.93 -

2. Sales Tax: Disallowance of VAT credit on raw materials used in the manufacturing of finished goods and lying in stock on April 1, 2006 22.18 22.18

Miscellaneous RST & CST demand 38.47 38.90

3. Land Tax: Demand raised by Registrar for usage of land other than specifi ed purposes. - 92.33

4. Service Tax/ Excise Duty/ Custom Duty:

Service Tax demand received on services from foreign parties in respect to service tax not paid on Tax deducted at source (TDS) portion. 4.59 4.59

Show cause notice dated 16.03.11 related to non payment of service tax on "Renting Income" received during FY 2009-10 for Rs. 2.54 lac. 2.06 -

Total 6285.91 5835.84

Based on favourable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (ii), (iv), (v) and (vi) above and hence no provision is considered necessary against the same.

(b) The Company had received a demand of Rs.352.34 lacs from Sales Tax Department, Kota in an earlier year towards use of natural gas for ammonia fuel, power and steam generation for the period of April, 1996 to May, 2001. The Company has obtained a stay from Hon'ble High Court of Rajasthan, Jodhpur on 11th July, 2001. However, in the event of the Company having to pay the above, it is reimbursable by Fertiliser Industry Coordination Committee (FICC)/ Government of India under Subsidy Scheme.

(c) The Company as well as other users of natural gas under HBJ Gas Pipeline had in earlier years received letters from GAIL (India) Limited (erstwhile Gas Authority of India Ltd), informing about the possibility of levy of excise duty on natural gas (presently not levied) with retrospective effect. The amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by FICC of Ministry of Fertilisers, the Government of India under Subsidy Scheme.

(d) The Company as well as other users of Natural Gas under HBJ Gas Pipeline had received a letter in an earlier year from GAIL (India) Limited (erstwhile Gas Authority of India Ltd), informing about the possibility of levy of Central Sales Tax. The Company has been taking the delivery of Gas in the State of Rajasthan and has been accordingly paying Rajasthan Sales Tax on the supply. Therefore, the Company feels that no Central Sales Tax is payable by it. Further, the amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by FICC of Ministry of Fertilisers, the Government of India under Subsidy Scheme.

(e) Under the Jute Packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specifi ed percentage of fertilisers dispatched were required to be supplied in Jute bags up to 31.8.2001. The provisions of the said Act were challenged in the Supreme Court, which upheld the constitutional validity of this Act in its judgment in 1996. In spite of making conscious efforts to step up use of jute packaging material, the Company had been unable to adhere to the specifi ed percentage, due to strong customer resistance to use of jute bags. The Company had received show cause notice from the Offi ce of the Jute Commissioner, Kolkata, for levying a penalty of Rs.7380.36 lacs for non compliance of the provisions of the said Act. The Company has obtained a stay order from Delhi High Court against the above show cause notice and has been advised that the said levy is not tenable in law and accordingly no provision has been considered.

6. Segment Information

Primary Segment: Business Segment

The Company's operating businesses are organized and managed separately according to the nature of products manufactured, traded and services provided. The four identifi able reportable segments are viz. Own Manufactured Fertilizers, Trading, Textile and Shipping. A description of the types of products and services provided by each reportable segment is as follows:

Own Manufactured Fertilizers segment includes manufacture and marketing of urea for which price is fully controlled by the Government of India (GOI) and distribution is partly controlled.

Trading segment includes the purchase and sale of Fertilizers and Agricultural Inputs and this activity, though different in risk perception from own manufactured urea, is carried out mainly with an objective of providing Fertilizers/ Agricultural Inputs under one roof.

Textile segment includes manufacturing and sale of synthetic and cotton yarn.

Shipping segment includes transportation of crude oil and liquid products through vessels owned and/ or hired by the Shipping Division.

Secondary Segment: Geographical Segment

The analysis of geographical segment is based on the geographical location i.e., domestic and overseas markets, of the customers.

7. Gratuity and Other Post Employment Benefit Plans:

a) Gratuity

The Company has a defi ned benefit gratuity plan. Every employee who has completed fi ve years or more of service gets a gratuity on departure at 15 days (15 to 30 days in case of Shipping Division) salary (last drawn salary) for each completed year of service. The Scheme is funded with an insurance company in the form of a qualifying insurance policy in respect of Fertiliser and Shipping division of the Company.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the respective plans.

b) Provident fund

The Company has set up provident fund trust, which is managed by the Company in respect of Fertiliser and Shipping division of the Company and as per the Guidance Note on implementing AS-15, Employee Benefits (revised 2005) issued by the Accounting Standard Board (ASB), provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defi ned benefit plan. Pending the issuance of the Guidance Note from the Actuarial Society of India, the Company's actuary has expressed his inability to reliably measure the provident fund liability. However, the Company has ascertained that at the year end there is no shortfall in the Provident Fund Trust.

8. Related Party Disclosures

During the year, the Company entered into transactions with the related parties. Those transactions along with related balances as at March 31, 2011 and for the year then ended are presented in the following table. List of related parties along with nature and volume of transactions is given below:

(a) Subsidiaries

CFCL Overseas Limited, Cayman Island

Chambal Infrastructure Ventures Limited, India India

Steamship Pte. Limited., Singapore

Subsidiaries and Step-down Subsidiaries of CFCL Overseas Limited

* CFCL Technologies Limited, Cayman Islands

* CFCL Ventures Limited, Cayman Islands

* ISGN Corporation, USA

Subsidiaries and Step-down Subsidiaries of ISGN Corporation, USA

* NITC GmbH (Germany) (formerly known as NovaSoft Information Technology Corporation GmbH,)

* Dynatek Inc., USA (merged with ISGN Corporation w.e.f. April 1, 2009)

* ISGN Solutions Inc,USA

* Richmond Investors, LLC ("Investors"),USA

* Richmond Title Genepar, LLC, USA

* Richmond Title Services, LP , USA

* Flex Agents Signing Team, LLC , USA

* Richmond Title Services, LLC (Alabama) , USA

* ISGN Fulfi llment Services, Inc. (Pennsylvania, USA) (acquired along with step down subsidiaries w.e.f. December 12, 2009) (formerly known as Fiserv Fulfi llment Services, Inc)

* ISGN Fulfi llment Services, Inc (AZ, USA) (formerly known as Fiserv Fulfi llment Services, Inc (AZ, USA))

* ISGN Fulfi llment Services, South Inc (FL, USA) (formerly known as Fiserv Fulfi llment Services, South Inc (FL, USA))

* ISGN Fulfi llment Services, of Alabama LLC (AL, USA) (formerly known as Fiserv Fulfi llment Services, of Alabama LLC (AL, USA))

* ISGN Fulfi llment Services, of Maryland, Inc (MD, USA)( formerly known as Fiserv Fulfi llment Services, of Maryland, Inc (MD, USA))

* ILS Services, LLC (DE, USA)

* ISGN Fulfi llment Agency, LLC (DE, USA) (formerly known as Fiserv Fulfi llment Agency, LLC (DE, USA))

* ISGN Fulfi llment Agency of Alabama, LLC (AL,USA)(formerly known as Fiserv Fulfi llment Agency of Alabama, LLC (AL,USA)

Subsidiaries and Step-down Subsidiaries of CFCL Ventures Limited

* ISG NovaSoft Technologies Limited, India

* Inuva Info Management Private Limited, India

* ISGN Solution Ltd, Ireland (Liquidated in May 2009)

Subsidiaries of Chambal Infrastructure Ventures Limited

* Chambal Energy (Chhattisgarh) Limited

* Chambal Energy (Orissa) Limited

(d) Key Management Personnel and their relatives

Mr. Anil Kapoor

Mrs. Deepali Kapoor (Spouse)

Mr. Hemant Kapoor (Son)

Ms. Priyanka Kapoor (Daughter)

10. Investments

a) The Company has made further investment of Rs.4480.14 lacs in its wholly owned subsidiary CFCL Overseas Limited, Cayman Island.

b) During the year, the Company has fully sold the stake in "Zuari Investments Limited" at a consideration of Rs.1060.97 lacs and recognized gain on sale of investment of Rs.436.87 lacs.

c) The Company has investments of Rs.31114.13 lacs in the Share Capital of CFCL Overseas Limited, Cayman Islands. CFCL Overseas Limited, in turn has investment in CFCL Ventures Ltd., India and ISGN Corporation, USA through its wholly owned subsidiary CFCL Technologies Ltd. In turn CFCL Ventures Limited has further invested in its wholly owned subsidiary ISG Novasoft Technologies Limited, India. As per the latest financial statements of ISG NovaSoft Technologies Limited, India and ISGN Corporation USA, their accumulated losses have resulted in erosion of signifi cant portion of the net worth of these companies. These being long-term strategic investments and also in view of projected profitable operations of these companies in near future, in the opinion of management, no provision for diminution in value of investment is required to be made as per Accounting Standard 13 "Accounting for Investment" notifi ed by Companies (Accounting Standards) Rules, 2006 (as amended).

12. Government grants and subsidies

a) Nitrogenous Fertilizers are under the Concession Scheme as per New Pricing Scheme implemented w.e.f. 1st April, 2003. The concession price and freight has been accounted for on the basis of notifi ed prices, further adjusted for input price escalation/ de-escalation, as per known policy parameters of NPS - Stage III, applicable for the period from October 1, 2006 to 31st March, 2010, extended thereafter provisionally till further orders. Accordingly, the impact of revised concession price has been accounted for.

Contribution from sale of surplus ammonia has been accounted for in accordance with the known policy parameters. The current year subsidy income is inclusive of Rs.1138.84 lacs (Previous Year Rs.3734.27 lacs) being the subsidy income, pertaining to earlier years, determined during the year.

b) Subsidy on traded fertilisers has been accounted based on Nutrient Based Policy as notifi ed by the Government of India. The current year subsidy income is inclusive of Rs.167.61 lacs (Previous Year Rs. Nil) being the subsidy income, pertaining to earlier years, determined during the year.

c) The Textile Division of the Company is eligible for interest concession under the TUFS (Technology Upgradation Fund Scheme) of the Government of India. Accordingly, the Company has availed interest concession of Rs.433.40 lacs (Previous year Rs.455.66 lacs) during the year and reduced the same from interest expenses.

13. During the year, Government of India has come up with guidelines for buy back of fertilizer bonds issued to the industry in two tranches and would also compensate part of loss suffered by the industry on these bonds. Accordingly, the Company has sold 50% of its holding of "Fertilizer Companies Government of India Special Bonds" at a specifi ed price as determined by the Reserve Bank of India (RBI) which has resulted into a loss of Rs.2681.55 lacs, against which the Company had already provided for mark to market losses of Rs.2155.00 lacs. However, loss of differential amount has not been charged to Profit and Loss Account as the Company is hopeful of getting at least the differential amount reimbursed by the Government of India.

Further, since the mechanism for determination of such compensation has not been notifi ed by Government of India, the Company has not accounted for entire compensation as it is not prudent in terms of Accounting Standard 9- Revenue Recognition / Accounting Standard 12-Accounting for Government Grants, notifi ed by Companies (Accounting Standards) Rules, 2006 (as amended) till the time of fi nal determination of compensation.

14. Leases

(a) The lease payment made during the year amounts to Rs.181.59 lacs (Previous year Rs.125.90 lacs), out of which Rs.69.62 lacs (Previous year Rs.91.06 lacs) has been adjusted against Principal and Rs.111.97 lacs (Previous year Rs.34.81 lacs) has been shown as Finance Lease Charges. Further, during the year, the Company has renegotiated the terms of the fi nance lease with the lessor. Accordingly, the fi xed assets taken on fi nance lease amounting to Rs.176.65 lacs (Previous Year Rs. Nil) have been decapitalised in the books of account. The interest rate on various fi nance leases is around 10% to 28%. There is no renewal and escalation clause as well as restriction imposed in the lease agreement. There are no subleases.

(c) The lease payments, other than cases covered in point no. (b) above i.e. non - cancelable leases, recognized in the statement of Profit and Loss Account during the period amounts to Rs.376.58 lacs (Previous year Rs.727.49 lacs). The renewal of leases will be as per the mutual understanding of lessee and lessor and there is no escalation clause. There are no restrictions imposed by lease arrangements.

3) In case of hedged transactions mentioned in (A) above, all losses, wherever applicable, as of March 31, 2011 have been provided for.

4) Previous year fi gures have been given in bracket.

17. Employee Stock Option Plan

In terms of approval of shareholders accorded at the Annual General Meeting held on 27th August, 2010 and in accordance with Securities and Exchange Board of India (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999, (SEBI Guidelines) the Company formulated CFCL Employees Stock Option Scheme, 2010 ("Plan") for specifi ed categories of employees and managing director of the Company. The Company has constituted a Compensation Committee comprising of majority of independent directors to administer the Plan. As per the Plan, 4,162,000 Stock Options can be issued to managing director and other specifi ed categories of employees of the Company. The options are to be granted at market price. As per SEBI Guidelines, the market price is taken as the closing price on the day preceding the date of grant of options, on the stock exchange where the trading volume is the highest. Each option, upon vesting, shall entitle the holder to acquire 1 equity share of Rs.10 . Details of the scheme are as under:

Stock Options granted

The weighted average fair value of stock options granted during the year was Rs. 27.29. The Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:

The expected volatility was determined based on historical volatility data. For calculating volatility, the Company has considered the daily volatility of the stock prices of the Company on National Stock Exchange over a period prior to the date of grant, corresponding with the expected life of the options.

Since the Company used the intrinsic value method, the impact on the reported net profit and earnings per share by applying the fair value based method

In March 2005 the ICAI has issued a guidance note on "Accounting for Employees Share Based Payments" applicable to employee based share plan, the grant date in respect of which falls on or after April1, 2005. The said guidance note requires the Proforma disclosures of the impact of the fair value method of accounting of employee stock compensation in the financial statements. Applying the fair value based method defi ned in the said guidance note, the impact on the reported net profit and earnings per share would be as follows:

In FY 2010-11, CFCL Employees Welfare Trust ("Trust") was constituted, inter alia, for the purpose of subscribing/ acquiring equity shares of Chambal Fertilisers and Chemicals Limited from the Company /Secondary market , to hold the shares and to allocate/ transfer these shares to eligible employees of the Company from time to time on the terms and conditions specifi ed under the Plan. The Board of Directors at its meeting held on May 8, 2010 had approved grant of financial assistance upto Rs.3,000 lacs by the Company to Trust in such manner and on such terms as agreed between the trustee(s) of the Trust and Managing Director of the Company for the purpose of subscribing/acquiring shares of the Company. The outstanding loan to the trust as at March 31, 2011 is Rs.677.10 lacs. Trust has purchased 847,002 equity shares of the Company from the open market, out of interest free loan provided by the Company till March 31, 2011. 18. Excise duty on sales amounting to Rs.341.67 lacs (Previous year Rs.189.77 lacs) has been reduced from sales in profit & loss account & excise duty on increase/decrease in stock amounting to Rs.59.80 lacs (previous year Rs. Nil) has been considered as expense in schedule 22 of the financial statements.

j) Shipping activity:

Shipping activities are not capable of being expressed in generic units. Hence quantitative details and related information required to be given under paragraphs 3 and 4C of part II of Schedule VI of the Companies Act, 1956 are not applicable to this business. Further, the Ministry of Corporate Affairs, Government of India, has exempted the shipping companies from the disclosure of quantitative details in respect of financial year ending on or after 31st March, 2011 in compliance of paragraphs 4 D (a) (b) (c) & (e) of part II of Schedule VI to the Companies Act 1956 as amended, vide Notifi cation dated the 8th February, 2011.

20. Previous Year's figures have been regrouped and/or rearranged wherever necessary to confirm to this year's classifications.

Mar 31, 2010

A. Nature of Operations

The Company is the largest manufacturer of Urea in private sector in India. The Company is also into manufacturing of Synthetic and Cotton Yarn. Shipping Division of the Company is engaged in the business of running of ships for cargo.

1. Contingent Liabilities

(a) Contingent liabilities (not provided for) in respect of following: (Rs. in Lacs)

S. No. Particulars 2009-10 2008-09

i) Outstanding amount against counter guarantees given to Banks/Financial

Institutions on account of loans given by the said Banks/Financial Institutions to bodies Corporate. 314.30 690.35

ii) Demand raised by Customs, Sales-Tax and Income Tax authorities being disputed by the Company 5835.84* 6871.01*

iii) Differential amount of custom duty in respect of machinery imported under EPCG Scheme including interest thereon. - 796.16

iv) Various labour cases Amount not Amount not ascerta- inable ascerta- inable

v) Other claims against the Company not acknowledged as debts. 4.24 4.24

vi) Claim against Nihat Shipping Company Ltd. in legal suits/notices, in which the Company has been made a party, is being contested, since the Company acted as Agents/Technical & Operational managers. 222.04 222.04

(Rs. in Lacs)

S. No. Particulars 2009-10 2008-09

1. Income Tax:

Demand raised by IT authorities on account of various disallowances for A.Y 2002-03 including penalties. 838.92 1290.62

Demand raised by IT authorities on account of various disallowances for A.Y. 2003-04 including penalties. 4674.78 4673.35

Demand raised by IT authorities on account of various disallowances for A.Y. 2004-05 including penalties. 135.21 _

Demand raised by IT authorities on account of various disallowances for A.Y. 2006-07. 28.93 560.84

2. Sales-Tax:

Disallowance of VAT credit on raw materials used in the manufacturing of finished goods and lying in stock on April 1, 2006 22.18 22.18

Miscellaneous RST & CST demand 38.90 39.01

3. Land Tax:

Demand raised by Registrar for usage of land other than specified purposes. 92.33 140.08

4. Service-Tax/Excise Duty/Custom Duty: Service-tax demand raised by authorities on non payment of service-tax on services received from Non-Residents. - 18.33

Show cause notice received on services under intellectual property rights from foreign parties received by the Company. - 126.60

Show cause notice received on services from foreign parties in respect to service tax not paid on Tax deducted at services (TDS) portion. 4.59 _

Total 5835.84 6871.01

Based on favourable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed in (b), (d), (e) and (f) above and hence no provision is considered necessary against the same.

(b) The Company had received a demand of Rs.352.34 Lacs from Sales Tax Department, Kota in an earlier year towards use of natural gas for ammonia fuel, power and steam generation for the period of April, 1996 to May, 2001. The Company has obtained a stay from HonÃble High Court of Rajasthan, Jodhpur on 11th July, 2001. However, in the event of the Company having to pay the above, it is reimbursable by FICC/Government of India under Subsidy Scheme.

(c) The Company as well as other users of natural gas under HBJ Gas Pipeline had in earlier years received letters from GAIL (India) Ltd. (erstwhile Gas Authority of India Ltd), informing about the possibility of levy of excise duty on natural gas (presently not levied) with retrospective effect. The amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by Fertilisers Industry Coordination Committee (FICC) of Ministry of Fertilisers, the Government of India under Subsidy Scheme.

(d) The Company as well as other users of Natural Gas under HBJ Gas Pipeline had received a letter in an earlier year from GAIL (India) Ltd. (erstwhile Gas Authority of India Ltd), informing about the possibility of levy of Central Sales Tax. The Company has been taking the delivery of Gas in the State of Rajasthan and has been accordingly paying Rajasthan Sales Tax on the supply. Therefore, the Company feels that no Central Sales Tax is payable by it. Further, the amount of such levy is not ascertainable. However, in the event of its levy, it is reimbursable by Fertlisers Industry Coordination Committee (FICC) of Ministry of Fertilisers, the Government of India under Subsidy Scheme.

(e) Under the Jute Packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specified percentage of fertilisers dispatched were required to be supplied in Jute bags up to 31.08.2001. The provisions of the said Act were challenged in the Supreme Court, which upheld the constitutional validity of this Act in its judgement in 1996. In spite of making conscious efforts to step up use of jute packaging material, the Company had been unable to adhere to the specified percentage, due to strong customer resistance to use of jute bags. The Company had received show cause notice from the Office of the Jute Commissioner, Kolkata, for levying a penalty of Rs.7380.36 Lacs for non compliance of the provisions of the said Act. The Company has obtained a stay order from Delhi High Court against the above show cause notice and has been advised that the said levy is not tenable in law and accordingly no provision has been considered.

2. Particulars

Estimated amount of contracts remaining to be executed on capital account (net of advances)

3. Managerial remuneration

Notes:

a. Remuneration to Managing Director is paid within the limits of Schedule XIII of Companies Act, 1956.

b. Managing Director is covered under the CompanyÃs Group Gratuity Scheme along with other employees of the Company. The Gratuity and leave liability is determined for all the employees on an overall basis based on the actuarial valuation done by an independent actuary. The specific amount of gratuity and leave liability for Managing Director can not be ascertained separately, except for the amount actually paid.

4. Pre-operative expenditure

The Company has incurred some expenditure related to construction of fixed assets (including new ship in Shipping Division) and accordingly capitalised the same to the gross value of assets to which they pertain. The break up of expenditures is as follows:

5. Details of investments purchased and sold during the year are given below:

6. Segment Information

Primary Segment: Business Segment

The CompanyÃs operating businesses are organized and managed separately according to the nature of products manufactured

and services provided. The four identifiable reportable segments are viz. Own Manufactured Fertilisers, Trading, Textile and

Shipping. A description of the types of products and services provided by each reportable segment is as follows:

Own Manufactured Fertilisers segment includes manufacture and marketing of Urea for which price is fully controlled by the Government of India (GOI) and distribution is partly controlled.

Trading segment includes the purchase and sale of Fertilisers and Agricultural Inputs and this activity, though different in risk perception from own manufactured Urea, is carried out mainly with an objective of providing Fertilisers/Agricultural Inputs under one roof.

Textile segment includes manufacturing and sale of synthetic and cotton yarn.

Shipping segment includes transportation of crude oil and liquid products through vessels owned and/or hired by the Shipping division.

Secondary Segment: Geographical Segment

The analysis of geographical segment is based on the geographical location i.e., domestic and overseas markets, of the customers.

7. Gratuity and Other Post Employment Benefit Plans: a) Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The Scheme is funded with an insurance company in the form of a qualifying insurance policy in respect of Fertiliser and Shipping division of the Company. The following tables summarise the components of net benefit expense recognised in the Profit and Loss Account and the funded status and amounts recognised in the balance sheet for the respective plans.

Profit and Loss Account

b) Provident fund

The Company has set up provident fund trust, which is managed by the Company in respect of Fertiliser division of the Company and as per the Guidance Note on implementing AS-15, Employee Benefits (revised 2005) issued by the Accounting Standard Board (ASB), provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. Pending the issuance of the Guidance Note from the Actuarial Society of India, the CompanyÃs actuary has expressed his inability to reliably measure the provident fund liability. However, the Company has ascertained that at the year end there is no shortfall in the Provident Fund Trust.

8. Related Party Disclosures

During the year, the Company entered into transactions with the related parties. Those transactions along with related balances as at March 31, 2010 and for the year then ended are presented in the following table. List of related parties along with nature and volume of transactions is given below:

(a) Subsidiaries

CFCL Overseas Ltd., Cayman Islands Chambal Infrastructure Ventures Ltd., India India Steamship Pte. Ltd., Singapore

Subsidiaries and Step-down Subsidiaries of CFCL Overseas Ltd.

* CFCL Technologies Ltd., Cayman Islands

* CFCL Ventures Ltd., Cayman Islands

* ISGN Corporation, USA

Subsidiaries and Step-down Subsidiaries of ISGN Corporation, USA

* NovaSoft Information Technology Corporation GmbH, Germany

* NovaSoft Information Technology (Europe) Ltd., UK (ceased w.e.f. March 24, 2009)

* Dynatek Inc., USA (merged with ISGN Corporation w.e.f. April 1, 2009) *ISGN Solutions Inc.,USA

* Richmond Investors, LLC, USA

* Richmond Title Genepar, LLC, USA

* Richmond Title Services, L P, USA

* Flex Agents Signing Team, LLC, USA

* Richmond Title Services, LLC, USA

* Fiserv Fulfi llment Services, Inc., USA (Pennsylvania) (acquired along with step down subsidiaries w.e.f. December 12, 2009)

* Fiserv Fulfi llment Services, Inc., USA (Arizona)

* Fiserv Fulfi llment Services, South, Inc., USA

* Fiserv Fulfi llment Services,of Alabama, LLC, USA

* Fiserv Fulfi llment Services, of Maryland, Inc., USA

* ILS Services, LLC, USA

* Fiserv Fulfi llment Agency, LLC, USA

* Fiserv Fulfi llment Agency of Alabama, LLC, USA

Subsidiaries and Step-down Subsidiaries of CFCL Ventures Ltd.

* ISG NovaSoft Technologies Ltd., India

* Inuva Info Management Private Ltd., India

* ISGN Solutions Ltd., Ireland (liquidated in May 2009)

Subsidiaries of Chambal Infrastructure Ventures Ltd.

* Chambal Energy (Chhattisgarh) Ltd., India

* Chambal Energy (Orissa) Ltd., India

* Gulbarga Cement Ltd., India (ceased w.e.f. December 30, 2008)

9. Details of loans and advances to fi rms/companies in which directors are interested and Investments by the loanee in the shares of the Company (as required by Clause 32 of Listing Agreement).

10. Investments

a) The Company has made further investment of Rs.6096.29 Lacs in its wholly owned subsidiary CFCL Overseas Ltd., Cayman Islands.

b) During the year, the Company has sold partial stake in its associate "Zuari Investments Ltd." at a consideration of Rs.1060.96 Lacs and recognized gain on sale of investment of Rs.436.87 Lacs.

c) The Company has investments of Rs.26633.99 Lacs in the Share Capital of CFCL Overseas Ltd., Cayman Islands. CFCL Overseas Ltd., in turn has investment in CFCL Ventures Ltd., India and ISGN Corporation, USA through its wholly owned subsidiary company CFCL Technologies Ltd. In turn CFCL Ventures have further invested in its wholly owned subsidiary ISG NovaSoft Technologies Ltd., India. As per the latest financial statements of ISG NovaSoft Technologies Ltd., India and ISGN Corporation USA, their accumulated losses have resulted in erosion of significant portion of the net worth of these companies. These being long-term strategic investments and also in view of projected profitable operations of these companies in near future, in the opinion of management, no provision for diminution in value of investment is required to be made as per Accounting Standard 13 "Accounting for Investment" notified by Companies (Accounting Standards) Rules, 2006 (as amended).

11. Interest in joint venture

The Company has 33.33% ownership interest in Indo Maroc Phosphore S.A. IMACID, which is engaged in manufacturing of phosphoric fertilisers.

12. Government grants and subsidies

a) Nitrogenous Fertilisers are under the Concession Scheme as per New Pricing Scheme implemented w.e.f. 1st April, 2003. The concession price and freight has been accounted for on the basis of notified prices, further adjusted for input price escalation/de-escalation as per known policy parameters. The Government of India has provisionally notified the concession price of Urea under the NPS - Stage III effective from October 1, 2006. Accordingly, the impact of revised concession price has been accounted for.

Contribution from sale of surplus Ammonia has been accounted for in accordance with the known policy parameters. The current year subsidy income is inclusive of Rs.3734.27 Lacs (Previous Year Rs.5470.17 Lacs) being the subsidy income pertaining to earlier years, determined during the year.

b) Subsidy on traded products has been accounted based on monthly concession rate as notified by the Government of India. Pending notification of the final concession price applicable for the period July 2009 to March 2010, the same has been accounted for on an estimated basis in line with the known policy parameters.

c) The Textile division of the Company is eligible for interest concession under the TUFS (Technology Upgradation Fund Scheme) of the Government of India. Accordingly, the Company has availed interest concession of Rs.455.66 Lacs (Previous year Rs.475.21 Lacs) during the year and reduced the same from interest expenses.

13. Excise duty on sales amounting to Rs.189.77 Lacs (Previous year Rs.146.66 Lacs) has been reduced from sales in Profit & Loss Account.

14. Leases

(a) The Fertiliser division of the Company has taken certain fixed assets during the year on fi nance lease of Rs.487.63 Lacs (Previous year Rs.18.01 Lacs). The lease payment made during the year amounts to Rs.125.90 Lacs (Previous yearRs. 97.85 Lacs), out of which Rs.91.10 Lacs (Previous year Rs. 76.49 Lacs) has been adjusted against Principal and Rs.34.81 Lacs (Previous year Rs. 21.36 Lacs) has been shown as Finance Lease charges. The interest rate on various fi nance leases is around 10% to 13%. There is no renewal and escalation clause as well as restriction imposed in the lease agreement. There are no subleases.

(b) The Company has entered into Operating Lease Agreements for the premises which are non- cancelable. The lease payments recognized in the statement of Profit and Loss Account during the period amounts to Rs. 425.02 Lacs (Previous year Rs.121.27 Lacs). The renewal of lease will be as per the mutual understanding of lessee and lessor and there is no escalation clause. There are no restrictions imposed by lease arrangements and there are no subleases. The break up of minimum lease payment outstanding as at March 31, 2010 is as follows:

(c) The lease payments, other than cases covered in point no. (b) above i.e. non - cancelable leases, recognized in the statement of Profit and Loss Account during the period amounts to Rs.750.09 Lacs (Previous year Rs.1006.33 Lacs). The renewal of leases will be as per the mutual understanding of lessee and lessor and there is no escalation clause. There are no restrictions imposed by lease arrangements.

(d) Sub lease income amounting to Rs.26.85 Lacs (Previous year Rs.29.50 Lacs) has been recognized in the statement of Profit & Loss Accounts.

15. During the year, the Company has revised the estimated useful life of few of its fixed assets based on technical estimates made by the management. Accordingly, additional depreciation of Rs.332.58 Lacs has been accounted for in the financial statements. Had the company continued to use the earlier basis of providing depreciation, the charge to the Profit and Loss Account for the current year would have been lower by Rs.219.54 Lacs (net of tax of Rs.113.04 Lacs) and the net block of fixed assets would correspondingly have been higher by Rs.332.58 Lacs.

16. Details of dues to Micro and Small Enterprises as per MSMED Act, 2006:

17. Derivative Instruments:

c) Shipping activity:

Shipping Division of the Company is engaged in the business of shipping activities. Shipping activities are not capable of being expressed in generic units. Hence quantitative details and related information required to be given under paragraphs 3 and 4C of Part II of Schedule VI of the Companies Act, 1956 are not applicable to this business. Further, the Company has applied to the Ministry of Corporate Affairs, Government of India, from the disclosure of quantitative details (in respect of the Shipping division for the financial year ending on 31st March, 2010) in compliance of paragraph 4D(a), (b), (c), (e) of Part ÃII of Schedule VI to the Companies Act, 1956 as amended vide Notifi cation No. GSR 494(E), dated the 30th October, 1973.

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article