Auditor Report of Paradeep Phosphates Ltd.

Mar 31, 2025

We have audited the standalone financial statements of
Paradeep Phosphates Limited (the "Companyâ) which
comprise the standalone balance sheet as at 31 March 2025,
and the standalone statement of profit and loss (including
other comprehensive income), standalone statement of
changes in equity and standalone statement of cash flows
for the year then ended, and notes to the standalone financial
statements, including material accounting policies and other
explanatory information.

In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Companies Act,
2013 ("Actâ) in the manner so required and give a true and fair view
in conformity with the accounting principles generally accepted
in India, of the state of affairs of the Company as at 31 March
2025, and its profit and other comprehensive loss, changes in
equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing
(SAs) specified under Section 143(10) of the Act. Our responsibilities
under those SAs are further described in the Auditor''s Responsibilities
for the Audit of the Standalone Financial Statements section of our
report. We are independent of the Company in accordance with the
Code of Ethics issued by the Institute of Chartered Accountants of
India together with the ethical requirements that are relevant to our
audit of the standalone financial statements under the provisions
of the Act and the Rules thereunder, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the
Code of Ethics. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion on the
standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the standalone
financial statements of the current period. These matters were
addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.

Recognition of subsidy revenue

See Note 20 to standalone financial statements

The key audit matter

How the matter was addressed in our audit

The Company recognizes the subsidy revenue from the
Department of Fertilisers, Government of India (''GoI''). The
revenue is recognised as per Nutrient Based Subsidy Policy
(''NBS Policy'') for Phosphatic and Potassic fertilisers and
New Pricing Scheme for Urea at the time of sale of goods
to its customers.

Subsidy revenue is recognized on the basis of rates
notified from time to time by the Department of Fertilisers,
Government of India in accordance with NBS Policy
and New Pricing Scheme. It is recognised on the basis
of quantity of fertilisers sold by the Company. Further,
recognition and realisability of subsidy income is subject
to various conditions as per the GoI Policy. During the year,
the Company has recognised H 660,470.11 lakhs as subsidy
revenue and out of this an amount of H 199,973.35 lakhs is
receivable as on 31 March 2025.

In view of the significance of subsidy revenue and
significant judgements involved around the interpretation
and satisfaction of conditions specified in GoI policy, we
have considered recognition of subsidy income as a key
audit matter.

In view of the significance of the matter, we performed the following

procedures:

â¢ evaluated the design, implementation and operating effectiveness
of internal controls for recognition and recoverability of
subsidy revenue

â¢ read the relevant notifications and circulars issued by the GoI from
time to time with regard to subsidy policies

â¢ tested the subsidy rates considered by the Company for the
product subsidy with the applicable circulars and notifications and
relevant available pricing data of fertilisers and raw materials

â¢ reconciled the sales quantity considered for subsidy revenue with
the actual sales quantity made by the Company

â¢ reconciled the quantities considered for estimation of
subsidy revenue with quantities as per Integrated Fertilizer
Management System

â¢ evaluated the Company''s assessment regarding compliances with
relevant conditions as specified in the notifications and policies
relating to subsidy

â¢ understood and challenged the basis of judgements made in
relation to the relevant notifications/circulars including past
precedence and subsequent evidence, as applicable

The key audit matter

How the matter was addressed in our audit

The Company tests goodwill for impairment annually or
more frequently when there is an indication of impairment
of the cash generating unit to which goodwill relates.

The annual impairment testing of goodwill involves
significant estimates and judgment due to the inherent
uncertainty involved in forecasting and discounting future
cash flows. Accordingly, impairment assessment of
goodwill is considered a key audit matter

â¢ Our audit procedures relating to impairment testing
included the following:

â¢ Evaluated design and implementation and tested operating
effectiveness of controls.

â¢ Assessed the valuation methodology and challenged the
assumptions such as discount rate, revenue growth rate, terminal
growth rate used with the assistance of our valuation specialists.

â¢ Performed sensitivity analysis of key assumptions.

â¢ Evaluated the adequacy of disclosures in respect of the same in
the financial statements.

Impairment of Goodwill

See Note 44(a) to standalone financial statements

Information Other than the Financial Statements and
Auditor''s Report Thereon

The Companyâs Management and Board of Directors are
responsible for the other information. The other information
comprises the information included in the Companyâs directors''
report, but does not include the financial statements and
auditorâs report thereon.

Our opinion on the standalone financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.

In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the standalone financial statements
or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing
to report in this regard.

Management''s and Board of Directors'' Responsibilities
for the Standalone Financial Statements

The Companyâs Management and Board of Directors are
responsible for the matters stated in Section 134(5) of the Act
with respect to the preparation of these standalone financial
statements that give a true and fair view of the state of affairs,
profit/ loss and other comprehensive income, changes in
equity and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the
Indian Accounting Standards (Ind AS) specified under Section
133 of the Act. This responsibility also includes maintenance of
adequate accounting records in accordance with the provisions
of the Act for safeguarding of the assets of the Company and for
preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and
design, implementation and maintenance of adequate internal

financial controls, that were operating effectively for ensuring
the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the standalone
financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the
Management and Board of Directors are responsible for
assessing the Companyâs ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Board
of Directors either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the
Companyâs financial reporting process.

Auditor''s Responsibilities for the Audit of the
Standalone Financial Statements

Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to
issue an auditorâs report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with SAs will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
standalone financial statements.

As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:

risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under Section 143(3)

(i) of the Act, we are also responsible for expressing our
opinion on whether the company has adequate internal
financial controls with reference to financial statements in
place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by the Management and
Board of Directors.

â¢ Conclude on the appropriateness of the Management
and Board of Directors use of the going concern basis of
accounting in preparation of standalone financial statements
and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions
that may cast significant doubt on the Companyâs ability to
continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our
auditorâs report to the related disclosures in the standalone
financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditorâs
report. However, future events or conditions may cause the
Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content
of the standalone financial statements, including the
disclosures, and whether the standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditorâs report unless law or
regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order,
2020 ("the Orderâ) issued by the Central Government of
India in terms of Section 143(11) of the Act, we give in
the "Annexure Aâ a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.

2 A. As required by Section 143(3) of the Act, we report that:

a. We have sought and obtained all the information
and explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit.

b. In our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination
of those books except for the matter stated
in the paragraph 2B(f) below on reporting
under Rule 11(g) of the Companies (Audit and
Auditors) Rules, 2014.

c. The standalone balance sheet, the standalone
statement of profit and loss (including other
comprehensive income), the standalone
statement of changes in equity and the
standalone statement of cash flows dealt
with by this Report are in agreement with the
books of account.

d. In our opinion, the aforesaid standalone financial
statements comply with the Ind AS specified
under Section 133 of the Act.

e. On the basis of the written representations
received from the directors as on 31 March 2025
and 1 April 2025 taken on record by the Board
of Directors, none of the directors is disqualified
as on 31 March 2025 from being appointed as a
director in terms of Section 164(2) of the Act.

f. the modification relating to the maintenance
of accounts and other matters connected
therewith are as stated in the paragraph 2A(b)
above on reporting under Section 143(3)(b) of
the Act and paragraph 2B(f) below on reporting
under Rule 11(g) of the Companies (Audit and
Auditors) Rules, 2014.

g. With respect to the adequacy of the internal
financial controls with reference to financial
statements of the Company and the operating
effectiveness of such controls, refer to our
separate Report in "Annexure Bâ.

B. With respect to the other matters to be included in
the Auditorâs Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in
our opinion and to the best of our information and
according to the explanations given to us:

a. The Company has disclosed the impact of
pending litigations as at 31 March 2025 on its
financial position in its standalone financial
statements - Refer Note 29 to the standalone
financial statements.

b. The Company has made provision, as required
under the applicable law or accounting
standards, for material foreseeable losses, if
any, on long-term contracts including derivative
contracts - Refer Note 15 to the standalone
financial statements.

c. There were no amounts which were required
to be transferred to the Investor Education and
Protection Fund by the Company.

d (i) The management has represented that,
to the best of its knowledge and belief,
as disclosed in the Note 43(b) to the
standalone financial statements, no
funds have been advanced or loaned or
invested (either from borrowed funds or
share premium or any other sources or
kind of funds) by the Company to or in any
other person(s) or entity(ies), including
foreign entities ("Intermediariesâ), with
the understanding, whether recorded in
writing or otherwise, that the Intermediary
shall directly or indirectly lend or invest in
other persons or entities identified in any
manner whatsoever by or on behalf of
the Company ("Ultimate Beneficiariesâ) or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries.

(ii) The management has represented that,
to the best of its knowledge and belief,
as disclosed in the Note 43(b) to the
standalone financial statements, no funds
have been received by the Company from
any person(s) or entity(ies), including
foreign entities ("Funding Partiesâ), with
the understanding, whether recorded in
writing or otherwise, that the Company
shall directly or indirectly, lend or invest in
other persons or entities identified in any
manner whatsoever by or on behalf of the
Funding Parties ("Ultimate Beneficiariesâ)
or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries.

(iii) Based on the audit procedures that
have been considered reasonable and
appropriate in the circumstances, nothing
has come to our notice that has caused us
to believe that the representations under
sub-clause (i) and (ii) of Rule 11(e), as
provided under (i) and (ii) above, contain
any material misstatement.

As stated in Note 13 to the standalone financial
statements, the Board of Directors of the
Company has proposed final dividend for
the year which is subject to the approval of
the members at the ensuing Annual General
Meeting. The dividend declared is in accordance
with Section 123 of the Act to the extent it
applies to declaration of dividend.

f. Based on our examination which included test
checks, the Company has used an accounting
software for maintaining its books of account
which has a feature of recording audit trail (edit
log) facility except that that audit trail was not
enabled at the database level for accounting
software to log any direct data changes. For
accounting software for which audit trail feature
is enabled, the audit trail facility has been
operating throughout the year for all relevant
transactions recorded in the software and we
did not come across any instance of audit trail
feature being tampered with during the course
of our audit. Additionally, the audit trail has been
preserved by the Company as per the statutory
requirements for record retention.

C. With respect to the matter to be included in the
Auditorâs Report under Section 197(16) of the Act:

In our opinion and according to the information and
explanations given to us, the remuneration paid by
the Company to its directors during the current year
is in accordance with the provisions of Section 197
of the Act. The remuneration paid to any director is
not in excess of the limit laid down under Section 197
of the Act. The Ministry of Corporate Affairs has not
prescribed other details under Section 197(16) of the
Act which are required to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants
Firmâs Registration No.:101248W/W-100022

Jayanta Mukhopadhyay

Partner

Place: Bengaluru Membership No.: 055757

Date: 06 May 2025 ICAI UDIN:25055757BMNSGZ3260

Mar 31, 2024

We have audited the standalone financial statements of Paradeep Phosphates Limited (the "Company") which comprise the standalone balance sheet as at 31 March 2024, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including material accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2024, and its profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of

Recognition and recoverability of subsidy revenue

See Note 8 and 20 to standalone financial statements

the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter

How the matter was addressed in our audit

The Company recognizes the subsidy revenue from the Department of Fertilisers, Government of India (''GoI''). The revenue is recognised as per Nutrient Based Subsidy Policy (''NBS Policy'') for Phosphatic and Potassic fertilisers and New Pricing Scheme for Urea at the time of sale of goods to its customers.

Subsidy revenue is recognized on the basis of rates notified from time to time by the Department of Fertilisers, Government of India in accordance with NBS Policy and New Pricing Scheme. It is recognised on the basis of quantity of fertilisers sold by the Company. Further, recognition and realisability of subsidy income is subject to various conditions as per the GoI Policy. During the year, the Company has recognised '' 591,975.29 lakhs as subsidy revenue and out of this an amount of '' 190,560.66 lakhs is receivable as on 31 March 2024.

In view of the significance of the matter, we performed the

following procedures:

â¢ evaluated the design, implementation and operating effectiveness of internal controls for recognition and recoverability of subsidy revenue

â¢ read the relevant notifications and circulars issued by the GoI from time to time with regard to subsidy policies

â¢ tested the subsidy rates considered by the Company for the product subsidy with the applicable circulars and notifications and relevant available pricing data of fertilisers and raw materials

â¢ reconciled the sales quantity considered for subsidy revenue with the actual sales quantity made by the Company

â¢ reconciled the quantities considered for estimation of subsidy revenue with quantities as per Integrated Fertilizer Management System

The key audit matter

How the matter was addressed in our audit

In view of the significance of subsidy revenue and significant judgements involved around the interpretation and satisfaction of conditions specified in GoI policy, we have considered recognition and recoverability of subsidy income as a key audit matter.

â¢ evaluated the Company''s assessment regarding compliances with relevant conditions as specified in the notifications and policies relating to subsidy

â¢ understood and challenged the basis of judgements made in relation to the relevant notifications/circulars including past precedence and subsequent evidence, as applicable

â¢ for evaluating the recoverability of receivables, tested the ageing analysis and assessed the information used to determine the recoverability of receivables by considering the historical trends and subsequent collections

Impairment of Goodwill

See Note 44(b) to standalone financial statements

The Company tests goodwill for impairment annually or more frequently when there is an indication of impairment of the cash generating unit to which goodwill relates.

The annual impairment testing of goodwill involves significant estimates and judgment due to the inherent uncertainty involved in forecasting and discounting future cash flows. Accordingly, impairment assessment of goodwill is considered a key audit matter

Our audit procedures relating to impairment testing included

the following:

â¢ Evaluated design and implementation and tested operating effectiveness of controls.

â¢ Assessed the valuation methodology and challenged the assumptions such as discount rate, revenue growth rate, terminal growth rate used with the assistance of our valuation specialists.

â¢ Performed sensitivity analysis of key assumptions.

â¢ Evaluated the adequacy of disclosures in respect of the same in the financial statements.

Information Other than the Financial Statements and Auditor''s Report Thereon

The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s directors'' report, but does not include the financial statements and auditor''s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information,

we are required to report that fact. We have nothing to report in this regard.

Management''s and Board of Directors Responsibilities for the Standalone Financial Statements

The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting

policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section

143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

â¢ Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2 A. As required by Section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books except for the matters stated in the paragraph 2(B)(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

c. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors on 31 March 2024 and 01 April 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 from being appointed as a director in terms of Section 164(2) of the Act.

f. the modification relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph b above on reporting under Section 143(3)(b) and paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

g. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

a. The Company has disclosed the impact of pending litigations as at 31 March 2024 on its financial position in its standalone financial statements - Refer Note 29 to the standalone financial statements.

b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

d. (i) The management has represented that,

to the best of its knowledge and belief, as disclosed in the Note 43(b) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

e. The final dividend paid by the Company during the year, in respect of the same declared for the previous year, is in accordance with Section 123 of the Act to the extent it applies to payment of dividend. As stated in Note 13 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.

software to log any direct data changes. Further the feature of audit trail was not enabled at the application layer of the accounting software for data changes performed by certain users. For accounting software for which audit trail feature is enabled, the audit trail facility has been operating throughout the year for all relevant transactions recorded in the software and we did not come across any instance of audit trail feature being tampered with during the course of our audit.

C. With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants Firm''s Registration No.:101248W/W-100022

Jayanta Mukhopadhyay

Partner

Place: Bengaluru Membership No.: 055757

Date: 15 May 2024 ICAI UDIN:24055757BKEYKL7284

Mar 31, 2023

Paradeep Phosphates Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Paradeep Phosphates Limited (the "Companyâ) which comprise the standalone balance sheet as at 31 March 2023, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2023, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Recognition and recoverability of subsidy revenue

See Note 8 and 20 to standalone financial statements

The key audit matter

How the matter was addressed in our audit

The Company recognizes the subsidy revenue from the Department of Fertilisers, Government of India (''GoI''). The revenue is recognised as per Nutrient Based Subsidy Policy (''NBS Policy'') for Phosphatic and Potassic fertilisers and New Pricing Scheme for Urea at the time of sale of goods to its customers.

Subsidy revenue is recognized on the basis of rates notified from time to time by the Department of Fertilisers, Government of India in accordance with NBS Policy and New Pricing Scheme. It is recognised on the basis of quantity of fertilisers sold by the Company. Further, recognition and realisability of subsidy income is subject to various conditions as per the GoI Policy. During the year, the Company has recognised '' 856,302.14 lakhs as subsidy revenue and out of this an amount of '' 306,937.59 lakhs is receivable as on 31 March 2023.

In view of the significance of subsidy revenue and significant judgements involved around the interpretation and satisfaction of conditions specified in GoI policy, we have considered recognition and recoverability of subsidy income as a key audit matter.

In view of the significance of the matter, we performed the

following procedures:

â¢ evaluated the design, implementation and operating effectiveness of internal controls for recognition and recoverability of subsidy revenue

â¢ read the relevant notifications and circulars issued by the GoI from time to time with regard to subsidy policies

â¢ tested the subsidy rates considered by the Company for the product subsidy with the applicable circulars and notifications and relevant available pricing data of fertilisers and raw materials

â¢ reconciled the sales quantity considered for subsidy revenue with the actual sales made by the Company

â¢ reconciled the quantities considered for estimation of subsidy revenue with quantities as per Integrated Fertilizer Management System

â¢ evaluated the Company''s assessment regarding compliances with relevant conditions as specified in the notifications and policies relating to subsidy

The key audit matter	How the matter was addressed in our audit
	â¢ understood and challenged the basis of judgements made in relation to the relevant notifications/ circulars including past precedence and subsequent evidence, as applicable â¢ for evaluating the recoverability of receivables, tested the ageing analysis and assessed the information used to determine the recoverability of receivables by considering the historical trends and subsequent collections
Business combination See Note 44 to standalone financial statements
The key audit matter	How the matter was addressed in our audit
During the year ended 31 March 2023, the Company completed the acquisition of Goa plant and allied business of Zuari Agro Chemicals Limited on 1 June 2022. The Company has accounted for this acquisition as a business combination as per Ind AS 103 with effect from the date of acquisition. The Company carried out a purchase price allocation as of the acquisition date. It accounted for its assets, liabilities and disclosed contingent liabilities as of the acquisition date. The excess of purchase price paid over net assets has been recognized as goodwill. The Company has involved external valuers for determination of fair value of land, buildings and other property, plant and equipment using relevant valuation models. Given the complexity and judgements involved in fair value measurement of the acquisition, we have considered this as a key audit matter.	Our audit procedures included the following: â¢ read the business transfer agreement for the business purchase to understand the key terms and conditions â¢ assessed the accounting treatment followed is in compliance with Ind AS 103 â¢ inspected the work of the experts by examining the valuation reports â¢ evaluated the purchase price allocation and checked valuation of tangible assets by involving our internal valuation specialists â¢ assessed the adequacy of the Company''s disclosure is in line with Ind AS 103

Information Other than the Financial Statements and Auditor''s Report Thereon

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is

a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s and Board of Directors Responsibilities for the Standalone Financial Statements

for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)

(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

â¢ Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2 A. As required by Section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on 31 March 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023 from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure Bâ.

B. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: a. The Company has disclosed the impact of pending litigations as at 31 March 2023 on its financial position in its standalone financial statements - Refer Note 29 to the standalone financial statements.

b. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts -Refer Note 15 to the standalone financial statements.

c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

d (i) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the Note 43 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(ii) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the Note 43 to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(iii) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement. e. As stated in Note 13 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.

f. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only with effect from 1 April 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable.

C. With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act: In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants Firm''s Registration No.:101248W/W-100022

Jayanta Mukhopadhyay

Partner

Place: Bengaluru Membership No.: 055757

Date: 17 May 2023 ICAI UDIN:23055757BGYIHM4408

Mar 31, 2022

To the Members of Paradeep Phosphates LimitedReport on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Paradeep Phosphates Limited (the "Company"), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Description of Key Audit Matter
The key audit matter	How the matter was addressed in our audit
Recognition and recoverability of subsidy	In view of the significance of the matter, we performed the
revenue (refer notes 8 and 20 to the Standalone	following procedures:
Financial Statements)	â¢	Evaluated the design, implementation and operating
The Company recognizes the subsidy revenue from		effectiveness of internal controls for recognition and
the Department of Fertilisers, Government of India		recoverability of subsidy revenue.
(''GoI''). The revenue is recognised as per Nutrient Based Subsidy Policy (''NBS Policy'') for Phosphatic and Potassic fertilisers at the time of sale of goods to its	â¢	Read the relevant notifications and circulars issued by the GoI from time to time with regard to subsidy policies.
customers.	â¢	Tested the NBS rates considered by the Company for the
Subsidy revenue is recognized on the basis of rates		product subsidy with the applicable circulars and notifications.
notified from time to time by the Department of	â¢	Reconciled the sales quantity considered for subsidy revenue
Fertilisers, Government of India in accordance		with the actual sales made by the Company.
with NBS Policy. It is recognised on the quantity of fertilisers sold by the Company. Further, recognition and realisability of subsidy income is subject to various conditions as per the GoI Policy. During the year, the	â¢	Evaluated the Company''s assessment regarding compliances with relevant conditions as specified in the notifications and policies relating to subsidy.
Company has earned '' 397,722.70 lakhs from subsidy	â¢	Understood and challenged the basis of judgements made in
revenue and balance recoverable as at 31 March 2022		relation to the relevant notifications/circulars including past
is '' 87,555.69 lakhs.		precedence and subsequent evidence, as applicable.
In view of the significance of subsidy revenue	_â¢	For evaluating the recoverability of receivables, tested the
and significant judgements involved around the		ageing analysis and assessed the information used to determine
interpretation and satisfaction of conditions specified		the recoverability of receivables by considering the historical
in GoI policy, we have considered recognition and recoverability of subsidy income as a key audit matter.		trends and subsequent collections.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s Board of Director''s Report, but does not include the standalone financial statements and our auditor''s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s and Board of Directors'' Responsibilities for the Standalone Financial Statements

The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation

of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.