Notes to Accounts of Paradeep Phosphates Ltd.

Mar 31, 2025

(xxi) Provisions

A provision is recognized when the Company has a present
obligation (legal or constructive) as a result of past event,
it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of
the obligation. If the effect of the time value of money is
material, provisions are discounted using a current preÂ¬
tax rate that reflects, when appropriate, the risks specific
to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised as
a finance cost. These provisions are reviewed at the end
of each reporting period and are adjusted to reflect the
current best estimates.

(xxii) Business combinations

The Company applies the acquisition method in accounting
for business combinations. The consideration transferred
by the Company to obtain control of a business is calculated
as the sum of the fair values of assets transferred and
liabilities assumed as at the acquisition date i.e. date on
which it obtains control of the acquiree. Acquisition-related
costs are recognised in the statement of profit and loss as
incurred, except to the extent related to the issue of debt or
equity securities.

Where the consideration transferred exceeds the fair
value of the net assets acquired and liabilities assumed,
the excess is recorded as goodwill. Alternatively, in case
of bargain purchase wherein the consideration transferred
is lower than the fair value of the net identifiable assets
and liabilities assumed, the difference as a gain in other
comprehensive income and accumulate the gain in equity
as capital reserve.

Identifiable assets acquired and liabilities assumed in a
business combination are measured initially at their fair
values on acquisition-date. Intangible Assets acquired in
a Business Combination and recognised separately from
Goodwill are initially recognised at their fair value at the
acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets
acquired in a Business Combination are reported at
cost less accumulated amortisation and accumulated
impairment losses, on the same basis as intangible assets
that are acquired separately.

(xxiii) Goodwill

After initial recognition, goodwill is measured at cost less
any accumulated impairment losses. For the purpose
of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each
of the cash-generating units that are expected to benefit
from the combination, irrespective of whether other assets
or liabilities of the acquiree are assigned to those units. A
cash generating unit to which goodwill has been allocated
is tested for impairment annually, or more frequently when
there is an indication that the unit may be impaired. If the
recoverable amount of the cash generating unit is less than
its carrying amount, the impairment loss is allocated first
to reduce the carrying amount of any goodwill allocated to
the unit and then to the other assets of the unit pro rata
based on the carrying amount of each asset in the unit. Any
impairment loss for goodwill is recognised in profit or loss.
An impairment loss recognised for goodwill is not reversed
in subsequent periods.

(xxiv) Declaration of Dividend

The Company recognises a liability to pay final dividend
to equity shareholders when the distribution is authorised,
and the distribution is no longer at the descretion of the
Company. As per the corporate laws in India, a final dividend
is authorised when it is approved by the shareholders. A
corresponding amount is recognised directly in the equity.

(xxv) Material accounting policy information

The Company adopted Disclosure of Accounting Policies
(Amendments to Ind AS 1) from April 1,2023. Although the
amendments did not result in any changes in the accounting
policies themselves, they impacted the accounting policy
information disclosed in the financial statements.

The amendments require the disclosure of ''material'' rather
than ''significant'' accounting policies. The amendments
also provide guidance on the application of materiality
to disclosure of accounting policies, assisting entities to
provide useful, entity-specific accounting policy information
that users need to understand other information in the
financial statements.

3A. 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. The changes in estimates are made
as the management becomes aware of such changes. The
changes in estimates are recognized in the period in which the
estimates are revised.

i) Defined benefit plans

The cost of the defined benefit gratuity plan, postÂ¬
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. 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
obligations are given in Note 32."

ii) Useful life of Property, plant and equipment

The management estimates the useful life and residual
value of property, plant and equipment based on technical
evaluation. These assumptions are reviewed at each
reporting date. Refer Note 4(a).

iii) Fair value measurement of financial instruments.

Refer Note 34 for information about fair value measurement.

iv) Revenue recognition

The Company provides various rebates and incentives to
the customers. In estimating the same, the Company is
required to use either the expected value method or the
most likely method. The Company determined that the
expected value method is the appropriate method for
determining estimates to recognize the impact of rebates
and other incentives on revenue. These estimates are made
based on historical experience and business forecast and
current market conditions. The model uses the historical
purchasing patterns and rebate entitlement of customers
to determine the expected rebate percentages and the
expected value thereof.

v) Provisions and contingencies

Refer Note 29 for key assumptions about likelihood and
magnitude of an outflow of economic resources in relation
to recognition and measurement of contingent liabilities.

3B. Standards issued but not yet effective

The Ministry of Corporate Affairs ("MCAâ) notifies new standards
or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to
time. For the year ended March 31, 2025, MCA has not notified
any new standards or amendments to the existing standards
applicable to the Company

The fair value of investments in mutual funds is based on the net asset value (NAV) as stated by the issuers of these mutual
fund units in the published NAV statements as at the Balance Sheet date. NAV represents the price at which the issuer will issue
further units of mutual fund and the price at which the issuer will redeem such units from the investors.

The fair value of derivatives is determined using quoted forward exchange rates at the reporting date.

There has been no transfer between level 1, level 2 and level 3 during the year.

Note 35: Financial risk management objectives and policies

The Companyâs 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 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 enters into derivative
contracts. The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the
management of these risks. The Company''s risk management is carried out by treasury department under policies approved by the
Board of Directors. The treasury department identifies, evaluates and hedges financial risks. The Board of Directors provides written
principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk,
credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

A Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from
its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other
financial instruments.

Financial assets

Credit risk from balances with banks and financial institutions is managed by the Companyâs treasury department in accordance
with the guidelines framed by the board of directors of the Company. Guidelines broadly covers the selection criterion and over
all exposure which the Company can take with a particular financial institution or bank. Further the guideline also covers the limit
of overall deposit which the Company can make with a particular bank or financial institution. The Company does not maintain
the significant amount of cash and deposits other than those required for its day to day operations.

Trade receivables

The Company receivables can be classified into two categories, one is from the customers into the market and second one is from the
Government in the form of subsidy. As far as Government portion of receivables are concerned, credit risk is nil. For market receivables
from the customers, 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 mitigates the credit risk to some extent.

B 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.

C Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk.
Financial instruments affected by market risk include borrowings and derivative financial instruments.

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 other market variables. Refer sensitivity analyses below.

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 at 31 March 2024 and 31 March 2023.

(a) 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.

Sensitivity analysis

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 Companyâs profit before tax and equity is due to changes
in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives. Refer Note 37 for
details on foreign currency exposure.

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company manages fund requirements and performs sensitivity analysis to keep
interest rate risk within limits.

Sensitivity analysis

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans
and borrowings affected. With all other variables held constant, the Companyâs profit before tax and equity 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.

The Company''s operating activities require the ongoing purchase of rock phosphates, phosphoric acid, sulphur and
muriatic potash. All being international commodities is subject to price fluctuation on account of the change in the demand
supply pattern and exchange rate fluctuations. The Company is not affected by the price volatility of the raw materials as
government on a time to time basis, revises the subsidy rates payable to the fertilizer industry based on the market trend.

Note 36: Capital management

For the purpose of the Companyâs capital management, capital includes issued equity share capital and all other equity reserves
attributable to the equity holders. The primary objective of the Companyâs capital management is to maximise 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 or issue new shares. The Company monitors capital keeping in view the adequate interest and debt
service coverage ratio.

In order to achieve this overall objective, the Companyâs capital management, amongst other things, aims to ensure that it meets
financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. 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 borrowing in the current year.

Note 37: Unhedged foreign currency exposure

(a) Forward contract outstanding as at 31 March 2025, against import of goods is H 426,117.87 (31 March 2024: H 198,038.68).

Note 39

a) The Company, in an earlier year, had received an Arbitration Award in its favour in the matter of Cargo Charges Tariff dispute with
Paradeep Port Trust (PPT) for the years 1993-1999. PPT in earlier year had appealed with the higher authorities against such
award which was confirmed by the Appellate Authority. However, as against the above order, the PPT went into further appeal
with the Honâble High Court of Odisha and the High Court in its interim order directed the Company not to execute award at this
stage. The Company has not recognized this award as income in the Statement of Profit and Loss.

b) Paradeep Port Trust (PPT) proposed a revision in scale of rates applicable to the Company for cargo handling in the captive berth
w.e.f. 1 April 1999. The matter was referred to Tariff Authority of Major Ports (TAMP) on mutual consent of the parties under the
direction of Honâble High Court of Odisha. During the previous year, TAMP had finalized the rates, but PPT had not agreed with the
order and proceeded with a writ petition before the Honâble High Court of Odisha against the said order. Pending disposal of the case,
the Company has not recognized the amount receivable from PPT towards the excess amount paid over the applicable TAMP order.

Note 40

During the year, a sum of H 173.68 (31 March 2024: H 162.01) including capital expenditure of H 53.71 (31 March 2024: H 45.22) was

spent on research and development (excluding depreciation charge).

Notes:

a The % change is primarily on account of higher profits earned during the year.

b The % change is primarily on account of higher profits earned during the year.

c The % change is primarily on account of increase in turnover during the year and better trade debtor collection.

d The % change is primarily on account of higher profits earned during the year.

Note 42 : Employee share based payment

Pursuant to the resolutions passed by the Board and by the Shareholders on 10 August 2021, the Company approved ''PPL Employees
Stock Option Plan 2021 ("ESOP 2021â)â is in compliance with the SEBI SBEB Regulations. The ESOP Scheme is for issue of employee
stock options to eligible employees. Upon exercise and payment of the exercise price, an option holder will be entitled to be allotted
one Equity Share per employee stock option.

Note 43

a) The Company, has not entered into any transactions with struck off companies, during the year ended 31 March 2025 ( previous
year ended 31 March 2024).

b) 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 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 to or on behalf of the Ultimate Beneficiaries. The Company has not received any fund from any party(s) (Funding Party) with
the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on
behalf of the Company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note 44(a): Impairment of goodwill

The Company has allocated the goodwill on business combination to Goa plant. The carrying amount of goodwill as at the end of the

reporting period is H 5,806.94 lakhs.

The recoverable amount has been calculated based on its value in use, estimated as the present value of projected future cash flows.

Following key assumptions were considered while performing impairment testing annually:

The projections cover a period of five years, as the Company believes this to be the most appropriate time period over which to review
and consider annual performances and thereafter fixed terminal value has been considered. Terminal growth rate considered is in
line with the GDP growth rate. The cashflows considered was based on expectation of future outcomes taking into account past
experience, adjusted for anticipated revenue growth.

Weighted Average Cost of Capital % (WACC) = Risk free return ( Market risk premium x Beta for the Company)

The goodwill is tested for impairment annually and based on such testing, no provision towards impairment has been considered
necessary in each of the year presented.

The Company has performed sensitivity analysis around the base assumptions and has concluded that no reasonable change in key
assumptions would result in the recoverable amount of the CGU to be less than the carrying value.

Note 44(b): Operating lease

The Company has entered into an operating lease with its related party Texmaco Rail & Engineering Limited to lease out 50 acres
freehold land for an initial lease term of 30 years with annual rent of H250.00 Lakh per annum with payment of 12 monthly equated
instalment subject to increase in rent of 7.5% in eavery 3 years. The company will receive total of H1,296.88 lakhs towards lease rent
for the next 5 years and H9,188.44 Lakhs for balance lease period.

The Company has recognised lease rent income of H125.00 lakhs for the year ended 31 March 2025.

Note 45

Pursuant to the scheme of merger dated 07 February 2024, subsequently modified on 25 November 2024, the Board considered
and approved a composite scheme of arrangement amongst Mangalore Chemicals & Fertilizers Limited ("Transferor Companyâ),
the Company and their respective creditors and shareholders ("Schemeâ), under Sections 230 to 232 of the Companies Act, 2013
("Companies Actâ) and other applicable laws, for, inter alia, the amalgamation of the Transferor Company with and into the Company
by way of a merger. Necessary accounting effect of the scheme would be given in due course upon receipt of requisite approvals.

Note 46: The Standalone Financial Statements were approved for issue by the board of directors on 6 May 2025.

As per our report of even date attached

For B S R & Co. LLP For and on behalf of the Board of Directors of

Chartered Accountants Paradeep Phosphates Limited

Firm''s Registration Number: CIN: L241290R1981PLC001020

101248W/W-100022

Jayanta Mukhopadhyay N. Suresh Krishnan S.K. Poddar Sachin Patil Bijoy Kumar Biswal

Partner Managing Director Chairman Company Secretary Chief Financial Officer

Membership No: 055757 DIN: 00021965 DIN: 00008654

Place: Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru

Date:- 6 May 2025 Date:- 6 May 2025 Date:- 6 May 2025 Date:- 6 May 2025 Date:- 6 May 2025

Mar 31, 2024

(xx) Contingent liabilities

A contingent liability is a possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the enterprise. A contingent liability is also a present obligation that arises from past events but outflow of resources embodying economic benefits is not probable.

(xxi) Provisions

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. These provisions are reviewed at the end of each reporting period and are adjusted to reflect the current best estimates.

(xxii) Business combinations

The Company applies the acquisition method in accounting for business combinations. The consideration transferred by the Company to obtain control of a business is calculated as the sum of the fair values of assets transferred and liabilities assumed as at the acquisition date i.e. date on which it obtains control of the acquiree. Acquisition-related costs are recognised in the statement of profit and loss as incurred, except to the extent related to the issue of debt or equity securities.

Where the consideration transferred exceeds the fair value of the net assets acquired and liabilities assumed, the excess is recorded as goodwill. Alternatively, in case of bargain purchase wherein the consideration transferred is lower than the fair value of the net identifiable assets and liabilities assumed, the difference as a gain in other comprehensive income and accumulate the gain in equity as capital reserve.

Identifiable assets acquired and liabilities assumed in a business combination are measured initially

at their fair values on acquisition-date. Intangible Assets acquired in a Business Combination and recognised separately from Goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a Business Combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

(xxiii) Goodwill

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

(xxiv) Declaration of Dividend

The Company recognises a liability to pay final dividend to equity shareholders when the distribution is authorised, and the distribution is no longer at the descretion of the Company. As per the corporate laws in India, a final dividend is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in the equity.

(xxv) Material accounting policy information

The Company adopted Disclosure of Accounting Policies (Amendments to Ind AS 1) from April 1, 2023. Although the amendments did not result in any changes in the accounting policies themselves, they impacted the accounting policy information disclosed in the financial statements.

The amendments require the disclosure of ''material'' rather than ''significant'' accounting policies. The amendments also provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to provide useful, entity-specific accounting policy information that users need to understand other information in the financial statements.

3A. 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. The changes in estimates are made as the management becomes aware of such changes. The changes in estimates are recognised in the period in which the estimates are revised.

i) 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. 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 obligations are given in Note 32.

ii) Useful life of Property, plant and equipment

The management estimates the useful life and residual value of property, plant and equipment based on technical evaluation. These assumptions are reviewed at each reporting date. Refer Note 4(a).

iii) Fair value measurement of financial instruments.

Refer Note 34 for information about fair value measurement.

iv) Revenue recognition

The Company provides various rebates and incentives to the customers. In estimating the same, the Company is required to use either the expected value method or the most likely method. The Company determined that the expected value method is the appropriate method for determining estimates to recognise the impact of rebates and other incentives on revenue. These estimates are made based on historical experience and business forecast and current market conditions. The model uses

the historical purchasing patterns and rebate entitlement of customers to determine the expected rebate percentages and the expected value thereof.

v) Fair value of assets and liabilities acquired on business combination

Refer Note 44 for information about fair values of assets and liabilities acquired on business combination.

vi) Provisions and contingencies

Refer Note 29 for key assumptions about likelihood and magnitude of an outflow of economic resources in relation to recognition and measurement of contingent liabilities.

3B. Standards issued but not yet effective

The Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company

Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on terms not lower than the amount payable under the Payment of Gratuity Act, 1976. The scheme is funded with Life insurance Corporation of India (LIC) in the form of qualifying insurance policy. The Company undertakes all the risk pertaining to the plan.

Post Retirement medical benefit plan

The Company has a defined benefit post retirement medical benefit plan, for its employees. The Company provides medical benefit to those employees who leave the services of the Company on retirement. As per the plan, retired employee and the spouse will be covered till the age of 85 years and the dependent children till they attain the age of 25 years. In case of death of retired employee, the spouse will be covered till the age of 85 years and the dependent children till they attain the age of 25 years. The plan is not funded by the Company.

Provident fund

The Company has set up provident fund trust wherein contributions are made and accordingly the same is considered as a defined benefit plan in accordance with Ind-AS 19, Employee Benefits, wherein 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 year, actuarial valuation of Provident Fund was carried out in accordance with the guidance note issued by the Institute of Actuaries.

NOTE 35: 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 enters into derivative contracts. The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s risk management is carried out by treasury department under policies approved by the Board of Directors. The treasury department identifies, evaluates and hedges financial risks. The Board of Directors provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

A Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Financial assets

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the guidelines framed by the board of directors of the Company. Guidelines broadly covers the selection criterion and over all exposure which the Company can take with a particular financial institution or bank. Further the guideline also covers the limit of overall deposit which the Company can make with a particular bank or financial institution. The Company does not maintain the significant amount of cash and deposits other than those required for its day to day operations.

Trade receivables

The Company receivables can be classified into two categories, one is from the customers into the market and second one is from the Government in the form of subsidy. As far as Government portion of receivables are concerned, credit risk is nil. For market receivables from the customers, 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 mitigates the credit risk to some extent.

C Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.

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 other market variables. Refer sensitivity analyses below.

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 at 31^st March 2024 and 31^st March 2023.

(a) 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.

Sensitivity analysis

The following tables demonstrate the sensitivity to a reasonably possible change in exchange rates of various currencies with '', with all other variables held constant. The impact on the Company''s profit before tax and equity is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives. Refer Note 37 for details on foreign currency exposure.

(c) Commodity price risk

The Company''s operating activities require the ongoing purchase of rock phosphates, phosphoric acid, sulphur and muriatic potash. All being international commodities is subject to price fluctuation on account of the change in the demand supply pattern and exchange rate fluctuations. The Company is not affected by the price volatility of the raw materials as government on a time to time basis, revises the subsidy rates payable to the fertiliser industry based on the market trend.

NOTE 36: CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity share capital and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise 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 or issue new shares. 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 borrowing in the current year.

a) The Company, in an earlier year, had received an Arbitration Award in its favour in the matter of Cargo Charges Tariff dispute with Paradeep Port Trust (PPT) for the years 1993-1999. PPT in earlier year had appealed with the higher authorities against such award which was confirmed by the Appellate Authority. However, as against the above order, the PPT went into further appeal with the Hon''ble High Court of Odisha and the High Court in its interim order directed the Company not to execute award at this stage. The Company has not recognised this award as income in the Statement of Profit and Loss.

b) Paradeep Port Trust (PPT) proposed a revision in scale of rates applicable to the Company for cargo handling in the captive berth w.e.f. 1^st April 1999. The matter was referred to Tariff Authority of Major Ports (TAMP) on mutual consent of the parties under the direction of Hon''ble High Court of Odisha. During the previous year, TAMP had finalised the rates, but PPT had not agreed with the order and proceeded with a writ petition before the Hon''ble High Court of Odisha against the said order. Pending disposal of the case, the Company has not recognised the amount receivable from PPT towards the excess amount paid over the applicable TAMP order.

a) The Company, has not entered into any transactions with struck off companies, during the year ended 31^st March 2024 (previous year ended 31^st March 2023).

b) 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 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 to or on behalf of the Ultimate Beneficiaries. The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

NOTE 44(A): BUSINESS COMBINATION (CONTINUED)

(c) Acquisition related costs amounting to '' 4.68 on legal fees, valuation fees, '' 3,069.91 as stamp duty have been recognised as legal and professional expense and rates and taxes respectively in the Standalone Statement of Profit and Loss within Other expenses.

(d) From the date of acquisition, the acquired business contributed '' 4,28,259.23 to total income and a profit of '' 3,453.74 to the standalone profit before tax. Had the business combination been effected at 1^st April, 2022, the total income of the Company would have been higher by '' 28,622.00 and profit before tax would have been lower by '' 1,522.00 .

(e) The goodwill recognised is attributable to expected synergies from combining operations of the Company and acquired business and would not be deductible for tax purposes.

(f) In relation to property, plant and equipment acquired through business combination fair valuation was determined based on the valuation model which considered market prices for similar items and depreciated replacement cost, as appropriate. Depreciated replacement cost reflects adjustments for physical deterioration as well as functional and economic obsolescence.

(g) Contingent liabilities was recognised on acquisition, the details of which are as under:-

The Company has performed sensitivity analysis around the base assumptions and has concluded that no reasonable change in key assumptions would result in the recoverable amount of the CGU to be less than the carrying value.

NOTE 45

Pursuant to the scheme of merger dated 7^th February 2024, the Board considered and approved a composite scheme of arrangement amongst Mangalore Chemicals & Fertilisers Limited ("Transferor Company"), the Company and their respective creditors and shareholders ("Scheme"), under Sections 230 to 232 of the Companies Act, 2013 ("Companies Act") and other applicable laws, for, inter alia, the amalgamation of the Transferor Company with and into the Company by way of a merger. Necessary accounting effect of the scheme would be given in due course upon receipt of the requisite approvals.

NOTE 46

The Standalone Financial Statements were approved for issue by the board of directors on 15^th May 2024.

As per our report of even date attached

For B S R & Co. LLP For and on behalf of the Board of Directors of

Chartered Accountants Paradeep Phosphates Limited

Firm''s Registration Number: 101248W/W-100022 CIN: L24129OR1981PLC001020

N. Suresh Krishnan S.K. Poddar

Managing Director Chairman

Jayanta Mukhopadhyay DIN: 00021965 DIN: 00008654

Partner Place: Bengaluru Place: Bengaluru

Membership No: 055757 Date:- 15^th May 2024 Date:- 15^th May 2024

Place: Bengaluru Date:- 15^th May 2024

Sachin Patil Bijoy Kumar Biswal

Company Secretary Chief Financial Officer

Place: Bengaluru Place: Bengaluru

Date:- 15^th May 2024 Date:- 15^th May 2024

Mar 31, 2023

a) Includes subsidy receivable from the Government of India amounting to '' 306,937.59 (31^st March 2022: '' 87,555.69)

b) Trade receivables are pledged against the borrowings obtained by the Company as further explained in Note 14(a) and 14(c).

c) Trade receivables are non-interest bearing and are generally on terms of 30 to 180 days.

d) No trade or other receivable are due from directors or other officers of the company either severally or jointly with any other person, nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

e) The Company''s exposure to credit and currency risks and loss allowances related to trade receivables are disclosed in Note 35.

Bank balances other than above are carried at amortised cost which are a reasonable approximation of their fair value. *Pledged with Executive Engineer, Mahanadi South Division as security deposit ''185.55 (31^st March 2022: ''343.89), against bank guarantee issued in favour of Regional Director, ESI Corporation, bhubaneswar ''5.51 (31^st March 2022: '' 5.00), against bank guarantee issued in favour of East Coast Railway : nil (31^st March 2022: ''291.16), cash margin fixed deposit issued against usance LC for supply of imported raw materials, capex and repayment of long term loan: '' 6,490.92 (31^st March 2022:''5,347.32).

(f) The Company has not issued any bonus shares or shares for consideration other than cash during the period of five years immediately preceding the reporting date.

(g) As per records of the company including its register of share holders/members and other declarations received from share holders regarding beneficial interest, the above share holding represents both legal and beneficial ownership of shares.

(h) Stock option schemes

Information relating to Employee Stock Option Plan, including details of options granted and lapsed during the financial year and options outstanding at the end of the reporting period is set out in Note 42(a).

i. The Land Policy of Port land has been revised as per the Land Policy Guidelines issued by the Ministry of Shipping, Government of India. Pursuant to the said policy and pending outcome of negotiation with Paradeep Port Trust, the Company has made provision towards ground rent, interest and taxes amounting to '' 2,876.70 (31^st March 2022: '' 2,693.56) against the demand raised by Paradeep Port Trust.

ii. In terms of meeting for amicable settlement of dispute the additional compensation to the land losers, under the chairmanship of the Collector and District Magistrate, Jagatsinghpur, it was decided to pay additional compensation at the rate fixed to the claimants through the Special Land Acquisition Officer (Spl. LAO), Government of Odisha. Since the disbursement process to land losers had started in the financial year 2010-11 through Spl. LAO, the Company had accounted for total estimated liability of '' 566.01 (including interest of '' 418.01) during the financial year 2010-11. The outstanding liability as on 31^st March 2023 stands at '' 250.18 (31^st March 2022: '' 250.18) after making payment to Spl. LAO.

iii. Employees'' State Insurance Corporation (ESIC) raised various demands against the Company in respect of both contract labourers and employees in earlier years, which were contested by the Company in various Courts and Authorities. The Company is continuing with the provision existing in the books as on 31^st March 2023 as '' 227.67 (31^st March 2022: '' 220.96)

a) Subsidy withheld

Department of Fertilizer, Government of India withheld the payment of subsidy on Imported DAP in one consignment amounting to '' 5352.12, being the subsidy amount including freight subsidy. The amount has been withheld on the basis of samples collected by the Department from Mundra Port which were reported to be deficient on account of water soluble P2O5 content as per Fertilizer Control Order (FCO) but there was no deficiency as regards to the nutrient content. The Company has represented to the Department of Fertilizers to re -examine the case on the following grounds - (a) Failure is on account of water solubility and not on account of nutrient content. The nutrient content on which the Nutrient Based Subsidy is paid meets the FCO specifications (b) Water Solubility is more than 85% of the total P2O5 (c) All precautions were taken at the load port on having an international recognized inspection agency based on which the goods were shipped and dispatched and (d) The intimation on the original sample failure as well as the referee sample failure were received long after materials were dispatched well beyond the dispatch of the material to various destinations. Based on the revised notification from GOI dated 6^th February 2017, water soluble P2O5 content of DAP is revised to 39.5% instead of 41%. DAP import for which the amount withheld has water soluble content of 39.53%. Further, vide Notification no 3-9/2008 Fert Law dated 18^th November 2011 in which Triple Super Phosphate (TSP) with total P2O5 content of 46% and water soluble content of only 36.8% has been allowed to be imported and paid subsidy for 46% of P2O5. Based on above, the Company has made a representation that as per revised notification, water soluble content is as per norms and further permitting a product with same total P2O5 and less water soluble P2O5 as standard and declaring a product imported by the Company with 39.53% as non- standard is not fair. The Company is confident to receive a favorable outcome.

b) Goods and service tax demand

Demand under GST Act in respect of erroneous refund of GST for the period July 2017 to January 2018 under inverted structure.

- Interest appropriation on Demand raised by CGST, Goa on account of GST refund on services under inverted duty structure from July 2017 to March 2018 towards financial year 2017-18.

- Penalty towards wrongful availment of Transitional credit.

d) Service tax demands

Service tax demands include service tax on mediation fee Nil for 31^st March 2023 (31^st March 2022: '' 45.79). Further it also includes service tax demand on water charges paid to State Government for the period 16^th April to 17^th June of '' 88.80 for 31^st March 2023 (31^st March 2022: '' 88.80).

e) Custom duty and counterveiling duty

- Countervailing Duty (CVD) paid and refund claimed on MOP and Sulphuric Acid, BCD on discount received and Custom duty on demurrage.

- Rejection of transaction value with respect to its import of MOP from unrelated party

- Denial of concessional rate basic custom duty

- Penalty towards denial of concessional rate Counter veiling duty

- Demand for wrongful availment on exemption notification based on SEIS scrips

f) Green Cess

Demand notice from commercial tax department Goa towards non-registration under Goa Green Cess Act, 2013 as being importer of natural gas.

Based on discussions with the solicitors / favorable decisions in similar cases / legal opinions taken by the Company, the management believes that the Company has a good chance of success in the above mentioned cases and hence, no provision is considered necessary. The above has been compiled based on the information and records available with the Company.

Note 31: Segment reporting Capital commitments

a. Basis of segmentation

The Company''s business activity falls within a single primary Operating Segment "Fertilizers and Other Trading Materialsâ, and thus no further disclosures are required in accordance with Indian Accounting Standard (Ind AS)- 10 "Operating Segmentâ.

b. Geographic information

The Company primarily operates in and therefore no geographical segment information has been provided herein.

Note 32: Disclosure pursuant to Indian Accounting Standard - 19 âEmployee Benefits''

Gratuity

Post Retirement medical benefit plan

Provident fund

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

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.

Note 35: Financial risk management objectives and policies

A Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Financial instruments and cash deposits

Trade receivables

The Company receivables can be classified into two categories, one is from the customers into the market and second one is from the Government in the form of subsidy. As far as Government portion of receivables are concerned, credit risk is nil. For market receivables from the customers, 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 mitigates the credit risk to some extent.

B 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.

C Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.

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 other market variables. Refer sensitivity analyses below.

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 at 31^st March 2023 and 31^st March 2022.

(a) 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.

Sensitivity analysis

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company manages fund requirements and performs sensitivity analysis to keep interest rate risk within limits.

Sensitivity analysis

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company''s profit before tax and equity 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.

The Company''s operating activities require the ongoing purchase of rock phosphates, phosphoric acid, sulphur and muriatic potash. All being international commodities is subject to price fluctuation on account of the change in the demand supply pattern and exchange rate fluctuations. The Company is not affected by the price volatility of the raw materials as government on a time to time basis, revises the subsidy rates payable to the fertilizer industry based on the market trend.

Note 37: Unhedged foreign currency exposure

(a) Forward contract outstanding as at 31^st March 2023, against import of goods is '' 334,293.05 (31^st March 2022: '' 305,346.85).

a) The Company, in an earlier year, had received an Arbitration Award in its favour in the matter of Cargo Charges Tariff dispute with Paradeep Port Trust (PPT) for the years 1993-1999. PPT in earlier year had appealed with the higher authorities against such award which was confirmed by the Appellate Authority. However, as against the above order, the PPT went into further appeal with the Hon''ble High Court of Odisha and the High Court in its interim order directed the Company not to execute award at this stage. The Company has not recognized this award as income in the Statement of Profit and Loss.

b) Paradeep Port Trust (PPT) proposed a revision in scale of rates applicable to the Company for cargo handling in the captive berth w.e.f. 1^st April 1999. The matter was referred to Tariff Authority of Major Ports (TAMP) on mutual consent of the parties under the direction of Hon''ble High Court of Odisha. During the previous year, TAMP had finalized the rates, but PPT had not agreed with the order and proceeded with a writ petition before the Hon''ble High Court of Odisha against the said order. Pending disposal of the case, the Company has not recognized the amount receivable from PPT towards the excess amount paid over the applicable TAMP order.

Note 40

During the year, a sum of '' 119.14 (31 March 2022: '' 112.46) including capital expenditure of '' 0.95 (31 March 2022: '' 0.76)

was spent on research and development (excluding depreciation charge).

Note 42(a) : Employee share based payment

Pursuant to the resolutions passed by the Board and by the Shareholders on 10^th August 2021, the Company approved ''PPL Employees Stock Option Plan 2021 ("ESOP 2021â)'' is in compliance with the SEBI SBEB Regulations. The ESOP Scheme is for issue of employee stock options to eligible employees, which may result in an issuance of a maximum number of 3,600,000 Equity Shares. Upon exercise and payment of the exercise price, an option holder will be entitled to be allotted one Equity Share per employee stock option.

Pursuant to the resolution passed by the Board on 29^th April 2022 the Company has granted 2,400,058 nos of options under ESOP Scheme at a exercise price of ''42 per option. The total number of options available under ESOP Scheme is 3,600,000 which are exercisable for 3,600,000 Equity Shares.

Note 42(b) : The utilisation of IPO proceeds out of fresh issue is summarized below:

During financial year 2022-23 the Company completed its Initial Public Offer (IPO) of 357,555,112 equity shares of face value of '' 10/- each for cash at an issue price of '' 42/- per equity share aggregating to '' 150,173.15, consisting of fresh issue of 239,047,619 equity shares aggregating to '' 100,400.00 and an offer for sale of 118,507,493 equity shares aggregating to ''49,773.15 by the selling shareholders. The equity shares of the Company were listed on BSE Limited and National Stock Exchange of India Limited on 27^th May 2022.

Note 43

a) The Company, has not entered into any transactions with struck off companies, during the year ended 31^st March 2023 (previous year ended 31^st March 2022).

b) 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 lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Further, no funds that have been received by the Company from any person(s) or entity(is), including foreign entities ("Funding

Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, 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

Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note 44 : Business combination

(a) During the year Company completed the acquisition of Goa plant and allied business of Zuari Agro Chemicals Limited ("ZACLâ) on a slump sale going concern basis pursuant to the business transfer agreement entered into by the Company with ZACL. The acquisition was completed and effective from 1^st June 2022 for a consideration of '' 168,797.46 which was paid to ZACL pursuant to the business transfer agreement. The Goa plant and allied business acquired by the Company is in the business of manufacture and sale of urea and complex fertilisers.

(c) Acquisition related costs amounting to '' 4.68 on legal fees, valuation fees, '' 3,069.91 as stamp duty have been recognized as legal and professional expense and rates and taxes respectively in the Standalone Statement of Profit and Loss within Other expenses.

(d) From the date of acquisition, the acquired business contributed '' 4,28,259.23 to total income and a profit of '' 3,453.74 to the standalone profit before tax. Had the business combination been effected at April 1,2022, the total income of the Company would have been higher by '' 28,622.00 and profit before tax would have been lower by '' 1,522.00 .

(e) The goodwill recognized is attributable to expected synergies from combining operations of the Company and acquired business and would not be deductible for tax purposes.

As at 31^st March 2023, there has been no change in the amount recognized as contingent liabilities on 1^st June 2022, as there has been no change in the probability of the outcome of the cases as noted above.

Note 45

The subsidy rates for phosphatic fertilizers under Nutrient Based Subsidy Scheme for the year ended 31^st March 2023 have been recognised based on management''s estimate, pending finalization by the Government of India.

Note 46: The Standalone Financial Statements were approved for issue by the board of directors on 17^th May 2023.

Mar 31, 2022

1) The Company has only one class of equity share having par value of '' 10 per share. Each holder of equity share is entitled to one vote per share. Refer note 28 for sub-division of shares post 31 March 2021.

2) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company in proportion to the number of equity shares held by the respective shareholders.

3) The shares held by the GOI have the following additional rights :

a) The GOI is entitled to nominate two directors on the Board of the Company so long as it holds at least 15.5% issued equity shares of the Company.

b) The presence of at least one GOI nominee director is required to constitute a quorum in a board meeting, failing which the meeting would be adjourned twice. Thereafter, in the absence of GOI nominee director, the directors present shall constitute the quorum.

c) The above requirement is also applicable to constitute a quorum in shareholder''s meeting.

d) The resolution for certain important matters cannot be passed in a board meeting / shareholders'' meeting without the affirmative vote of at least one GOI nominee director/shareholder.

4) The shares held by Zuari Maroc Phosphates Private Limited (ZMPPL) have the following additional rights :

a) ZMPPL is entitled to nominate maximum 6 directors on the Board of the Company.

b) The Chairman and the Managing Director shall be appointed from amongst the directors nominated by ZMPPL.

(f) The Company has not issued any bonus shares or shares for consideration other than cash during the period of five years immediately preceding the reporting date.

i. The Land Policy of Port land has been revised as per the Land Policy Guidelines issued by the Ministry of Shipping,

Government of India. Pursuant to the said policy and pending outcome of negotiation with Paradeep Port Trust, the

Company has made provision towards ground rent, interest and taxes amounting to '' 2,693.56 (31 March 2021: '' 2,516.20) against the demand raised by Paradeep Port Trust.

ii. In terms of meeting for amicable settlement of dispute the additional compensation to the land losers, under the chairmanship of the Collector and District Magistrate, Jagatsinghpur, it was decided to pay additional compensation at the rate fixed to the claimants through the Special Land Acquisition Officer (Spl. LAO), Government of Odisha. Since the disbursement process to land losers had started in the financial year 2010-11 through Spl. LAO, the Company had accounted for total estimated liability of '' 566.01 (including interest of '' 418.01) during the financial year 2010-11. The outstanding liability as on 31 March 2022 stands at '' 250.18 (31 March 2021: '' 250.18) after making payment to Spl. LAO.

iii. Employees'' State Insurance Corporation (ESIC) raised various demands against the Company in respect of both contract

labourers and employees in earlier years, which were contested by the Company in various Courts and Authorities. The

Company is continuing with the provision existing in the books as on 31 March 2022 as '' 220.96 (31 March 2021: '' 214.24)

a) Subsidy withheld

Department of Fertilizer, Government of India withheld the payment of subsidy on Imported DAP in one consignment amounting to '' 5352.12, being the subsidy amount including freight subsidy. The amount has been withheld on the basis of samples collected by the Department from Mundra Port which were reported to be deficient on account of water soluble P2O5 content as per Fertilizer Control Order (FCO) but there was no deficiency as regards to the nutrient content. The Company has represented to the Department of Fertilizers to re -examine the case on the following grounds - (a) Failure is on account of water solubility and not on account of nutrient content. The nutrient content on which the Nutrient Based Subsidy is paid meets the FCO specifications (b) Water Solubility is more than 85% of the total P2O5 (c) All precautions were taken at the load port on having an international recognized inspection agency based on which the goods were shipped and dispatched and (d) The intimation on the original sample failure as well as the referee sample failure were received long after materials were dispatched well beyond the dispatch of the material to various destinations. Based on the revised notification from GOI dated February 6, 2017, water soluble P2O5 content of DAP is revised to 39.5% instead of 41%. DAP import for which the amount withheld has water soluble content of 39.53%. Further, vide Notification no 3-9/2008 Fert Law dated 18 November 2011 in which Triple Super Phosphate (TSP) with total P2O5

content of 46% and water soluble content of only 36.8% has been allowed to be imported and paid subsidy for 46% of P2O5. Based on above, the Company has made a representation that as per revised notification, water soluble content is as per norms and further permitting a product with same total P2O5 and less water soluble P2O5 as standard and declaring a product imported by the Company with 39.53% as non- standard is not fair. The Company is confident to receive a favorable outcome.

b) Goods and service tax demand

Demand under GST Act in respect of erroneous refund of GST for the period July 2017 to January 2018 under inverted structure.

Note 31: Segment reporting

a. Basis of segmentation

The Company''s business activity falls within a single primary Operating Segment "Fertilizers and Other Trading Materials", and thus no further disclosures are required in accordance with Indian Accounting Standard (Ind AS)- 10 "Operating Segment".

b. Geographic information

The Company primarily operates in and therefore no geographical segment information has been provided herein Note 32: Disclosure pursuant to Indian Accounting Standard - 19 ''Employee Benefits''

Gratuity

Post Retirement medical benefit plan

Provident fund

Note 35: Financial risk management objectives and policies

A Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Financial instruments and cash deposits

criterion and over all exposure which the Company can take with a particular financial institution or bank. Further the guideline also covers the limit of overall deposit which the Company can make with a particular bank or financial institution. The Company does not maintain the significant amount of cash and deposits other than those required for its day to day operations.

Trade receivables

The Company receivables can be classified into two categories, one is from the customers into the market and second one is from the Government in the form of subsidy. As far as Government portion of receivables are concerned, credit risk is nil. For market receivables from the customers, 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 mitigates the credit risk to some extent.

B Liquidity risk

The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments as at 31 March 2022:

C Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.

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 other market variables. Refer sensitivity analyses below.

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 at 31 March 2022 and 31 March 2021.

(a) 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.

Sensitivity analysis

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 and equity is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives. Refer Note 37 for details on foreign currency exposure.

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company manages fund requirements and performs sensitivity analysis to keep interest rate risk within limits.

The Company''s operating activities require the ongoing purchase of rock phosphates, phosphoric acid, sulphur and mauratic potash. All being international commodities is subject to price fluctuation on account of the change in the demand supply pattern and exchange rate fluctuations. The Company is not affected by the price volatility of the raw materials as government on a time to time basis, revises the subsidy rates payable to the fertilizer industry based on the market trend.

Note 36: Capital management

a) The Company, in an earlier year, had received an Arbitration Award in its favour in the matter of Cargo Charges Tariff dispute with Paradeep Port Trust (PPT) for the years 1993-1999. PPT in earlier year had appealed with the higher authorities against such award which was confirmed by the Appellate Authority. However, as against the above order, the PPT went into further appeal with the Hon''ble High Court of Odisha and the High Court in its interim order directed the Company not to execute award at this stage. The Company has not recognized this award as income in the Statement of Profit and Loss.

b) Paradeep Port Trust (PPT) proposed a revision in scale of rates applicable to the Company for cargo handling in the captive berth w.e.f. 1 April 1999. The matter was referred to Tariff Authority of Major Ports (TAMP) on mutual consent of the parties under the direction of Hon''ble High Court of Odisha. During the previous year, TAMP had finalized the rates, but PPT had not agreed with the order and proceeded with a writ petition before the Hon''ble High Court of Odisha against the said order. Pending disposal of the case, the Company has not recognized the amount receivable from PPT towards the excess amount paid over the applicable TAMP order.

Note 40

During the year, a sum of '' 112.46 (31 March 2021: '' 151.28) including capital expenditure of '' 0.76 (31 March 2021: '' 59.02)

was spent on research and development (excluding depreciation charge).

a) The Company, has not entered into any transactions with struck off companies, during the year ended 31 March 2022 (previous year ended 31 March 2021).

party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Further, no funds that have been received by the Company from any person(s) or entity(is), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note 43

The Company, as on 1 March 2021, had entered into a Business Transfer Agreement (''BTA'') with Zuari Agro Chemicals Limited for acquisition of Goa plant and allied business of Zuari Agro Chemicals Limited (ZACL) on a slump sale basis. Pursuant to the BTA, the Company advanced '' 112,632.27 lakhs (including receivable of '' 72,732.27 lakhs) which is proposed to be adjusted against the purchase consideration payable to ZACL on consummation of the BTA.

Note 44

The Company has considered the possible risk that may result from the pandemic relating to COVID-19 and expects to recover the carrying amount of all its assets including inventories, receivables, investments and other financial and non-financial assets in the ordinary course of business based on internal and external information available upto the date of these financial results. The Company is continuously monitoring any material changes in future economic conditions.

Note 45: The Standalone Financial Statements were approved for issue by the board of directors on 28 May 2022.

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