m) Provisions and contingencies
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a 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. The expense relating to a provision is presented in the statement
of profit and loss net of any reimbursement.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which
will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of the Company or a present obligation that arises from past events where it is either not probable that an outflow
of resources will be required to settle or a reliable estimate of the amount cannot be made.
n) Retirement and other employee benefits
Retirement benefit in the form of Provident Fund is a defined benefit contribution scheme. The Company has no obligation
other than the contribution payable to the Provident Fund. The Company recognizes contribution payable to the Provident
Fund scheme as an expenditure, when an employee renders the related service. If the contribution payable to the scheme
for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme
is recognized as a liability.
The employee's gratuity fund scheme and post-retirement medical benefit schemes are Company's defined benefit plans.
The contributions under the plans are made to separately administered funds. The cost of providing benefits under such
defined benefit plans is determined based on the actuarial valuation using the Projected Unit Credit Method as at the date
of the Balance sheet. In case of funded plans, the fair value of plan asset is reduced from the gross obligation under the
defined benefit plans, to recognize the obligation on the net basis.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in
net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest
on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding debit or credit
to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss
in subsequent periods.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognizes
the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:
- Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine
settlements; and
- Net interest expense or income
Accumulated leave, which is expected to be utilised within the next twelve months, is treated as short term employee
benefits. The Company measures the expected cost of such absence as the additional amount that is expected to pay as
a result of the unused entitlement that has accumulated at the reporting date. The Company treats accumulated leave
expected to be carried forward beyond twelve months as long term compensated absences which are provided for based
on actuarial valuation as at the end of the period. The actuarial valuation is done as per Projected Unit Credit Method and
all gains / losses due to actuarial valuation are immediately recognised in profit or loss in the period in which they arise.
o) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in case of financial asset not recorded at fair value through
profit and loss, transaction cost that are attributable to the acquisition of the financial assets.
The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics
and the Company's business model for managing them. With the exception of trade receivables that do not contain
a significant financing component or for which the Company has applied the practical expedient are measured at the
transaction price determined under Ind AS 115. Refer to the accounting policies in section (e) for Revenue from contracts
with customers.
The Company's business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows,
selling the financial assets or both. Financial assets classified and measured at amortised cost are held within a business
model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified
and measured at fair value through OCI are held within a business model with the objective of both holding to collect
contractual cash flows and selling.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise
to cash flows that are solely payment of principal and interest (SPPI) on the principal amount outstanding. This assessment
is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI
are classified and measured at fair value through profit or loss, irrespective of the business model.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or
convention in the market place (regular way trades) are recognised on the trade date. i.e. the date that the Company
commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in three categories:
(i) Financial assets measured at amortized cost (debt instrument)
(ii) Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (equity instruments)
(iii) Financial assets measured at fair value through profit or loss (FVTPL)
(i) Financial assets measured at amortized cost (debt instrument)
A 'financial asset' is measured at amortized cost if both the following conditions are met:
(a) the financial asset is held within a business model whose objective is to hold assets in order to collect contractual
cash flows, and
(b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest (SPPI) on the principal amount outstanding.
This category generally applies to cash and bank balances, trade receivables, investments in unquoted equity shares
of subsidiary entity and associate entity, investment in G-sec, loans & advances and other financial assets of the
Company (Refer note 50 for further details).
This category is most relevant to the Company. After initial measurement, such financial assets are subsequently
measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking
into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR
amortization is included in interest income in the profit or loss.
(ii) Financial assets designated at fair value through OCI (equity instruments)
All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for
trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election
to present in other comprehensive income subsequent changes in the fair value. The Company makes such election
on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument,
excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale
of investment / de- recognition of investment on restructuring by investee. However, the Company may transfer the
cumulative gain or loss into retained earnings within equity. Equity instruments designated at fair value through OCI
are not subject to impairment assessment.
(iii) Financial assets at fair value through profit or loss (FVTPL)
Financial assets at fair value through profit or loss include financial assets held for trading, debt securities and financial
assets designated upon initial recognition at fair value through profit or loss. Financial assets at fair value through
profit or loss are carried in the balance sheet at fair value with net changes in fair value recognised in the statement
of profit and loss.
FVTPL is a residual category for financial assets. Any financial asset, which does not meet the criteria for categorization
as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a financial asset, which otherwise meets amortized cost or fair
value through other comprehensive income criteria, as at fair value through profit or loss. However, such election is
allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as 'accounting
mismatch'). The Company has designated Loans to employees, investments in Government Securities, Debentures
and State Development Loans and other advances. (Refer note 50 for further details).
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised (i.e. removed from the Company's balance sheet) when :
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either
(a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither
transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither
transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the
Company continues to recognize the transferred asset to the extent of the Company's continuing involvement. In that
case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured
on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum amount of consideration that the Company could be required to
repay.
On Derecognition of a financial asset, (except as mentioned in (ii) above for financial assets measured at FVTOCI), the
difference between the carrying amount and the consideration received is recognized in the Statement of Profit and Loss.
Impairment of financial assets
The Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following
financial assets and credit risk exposure;
a) Financial assets that are debt instruments, and are measured at amortized cost e.g. loans, debt securities, deposits
and bank balances.
b) Financial assets that are equity instruments and are measured at fair value through other comprehensive income
(FVTOCI)
c) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that
are within the scope of Ind AS 115.
The Company follows 'simplified approach' for recognition of impairment loss allowance on trade receivables or contract
revenue receivables.
Under the simplified approach, the Company does not track changes in credit risk. Rather, it recognizes impairment loss
allowance based on lifetime ECLs at each reporting date, right from its initial recognition. Lifetime ECL are the expected
credit losses resulting from all possible default over the expected life of a financial instrument.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether
there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly,
12 month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is
used.The Company uses the practical expedient in Ind AS 109 for measuring expected credit losses for trade receivables
using a provision matrix based on ageing of receivables. This amount is reflected under the head "Other Expense / Other
Income" in the P&L.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss. Loans,
borrowings and payables are subsequently measured at amortised cost whereas derivatives are measured at fair value
through profit and loss.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.
The Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and
derivative financial instruments.
Subsequent measurement
For the purpose of subsequent measurement, financial liabilities are classified into two categories:
(i) Financial liabilities measured at fair value through profit or loss
(ii) Financial liabilities measured at amortised cost (loans and borrowings)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading
if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial
instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined
by Ind AS 109.
Gains or losses on liabilities held for trading are recognized in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the
initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value
gains / losses attributable to changes in own credit risk are recognized in OCI. These gains / losses are not subsequently
transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair
value of such liability are recognized in the statement of profit or loss.
Financial liabilities measured at amortised cost (loans and borrowings)
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR
method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR
amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.
This category generally applies to borrowings.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in
the statement of profit and loss.
Reclassification of financial assets and liabilities
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no
reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which
are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets.
Changes to the business model are expected to be infrequent. The Company's senior management determines change
in the business model as a result of external or internal changes which are significant to the Company's operations. Such
changes are evident to external parties. A change in the business model occurs when the Company either begins or
ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the
reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period
following the change in business model. The Company does not restate any previously recognized gains, losses (including
impairment gains or losses) or interest.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realise the
assets and settle the liabilities simultaneously.
p) Derivative financial instruments
Initial recognition and subsequent measurement
The Company uses derivative financial instruments, such as forward currency contracts to hedge its foreign currency
risks. Such derivative financial instruments are initially recognized at fair value through profit or loss (FVTPL) on the date
on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivative financial instrument or on settlement of such derivative
financial instruments are recognized in statement of profit and loss and are classified as Foreign Exchange (Gain) / Loss
except those relating to borrowings, which are separately classified under Finance Cost.
q) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original
maturity of three months or less, that are readily convertible to a known amount of cash and subject to an insignificant
risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consists of cash and short-term deposits, as
defined above, net of outstanding bank overdrafts and cash credit facilities as they are considered an integral part of the
Company's cash management.
r) Cash dividend to equity holders of the Company
The Company recognizes a liability to pay dividend to equity holders of the parent when the distribution is authorized and
the distribution is no longer at the discretion of the Company. As per the corporate laws in I ndia, a distribution is authorized
when it is approved by the shareholders. A corresponding amount is recognized directly in equity.
s) Earnings per share
Basic earnings per share are calculated by dividing the profit for the period attributable to equity shareholders by the
weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the profit for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential
equity shares.
t) Segment Accounting
The Chief Operational Decision Maker monitors the operating results of its business Segments separately for the purpose
of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on
profit or loss and is measured consistently with profit or loss in the financial statements. The Operating segments have
been identified on the basis of the nature of products/services.
The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment
revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their
relationship to the operating activities of the segment. Inter segment revenue, if any, are recognised at sales price. Profit
or loss on inter segment transfer are eliminated at the Company level. Revenue, expenses, assets and liabilities which
relate to the Company as a whole and are not allocated to segments on a reasonable basis have been included under
"unallocated revenue / expenses / assets / liabilities".
The identified reportable segments are Fertilizers, Chemicals and Others in terms of the requirements of Ind AS 108
"Operating Segments" as notified under section 133 of the Companies Act, 2013.
2.3 Recent accounting pronouncements
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, 2025, MCA has notified Ind AS - 117
Insurance Contracts and amendments to Ind AS 116 - Leases, relating to sale and leaseback transactions, applicable to the
Company w.e.f. April 1, 2024. The Company has reviewed the new pronouncements and based on its evaluation has determined
that it does not have any significant impact in its financial statements.
Significant accounting judgement, estimates and assumptions
The preparation of the Company's Ind AS Financial Statements requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and 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.
Judgements
In the process of applying the Companies accounting policies, management has made the following judgements which have the
most significant effects on the amounts recognised in the financial statements.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year,
are described below. The Company based its assumptions and estimates on parameters available when the financial statements
were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes
or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they
occur.
Taxes
Deferred tax assets are recognized for unused tax credits to the extent that it is probable that taxable profit will be available
against which the credits can be utilised. Significant management judgment is required to determine the amount of deferred
tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax
planning strategies. Further details on taxes are disclosed in Note 26.
Defined benefit plans (gratuity benefits and other post-employment medical benefits)
The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of these
obligations 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, medical
cost escalations and mortality rates etc. 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 plans operated in
I ndia, the management considers the interest rates of government bonds / securities in currencies consistent with the currencies
of the post- employment benefit obligation.
The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change
only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future
inflation rates and Company's obligation under Long Term Wage Settlement which is evaluated in block of four years. Medical
cost escalations are based on expected future medical expenditure.
Further details about gratuity and post-employment medical benefits obligations are given in Note 41.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on
quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to
these models are taken from observable markets where possible, but where this is not feasible, a degree ofjudgment is required
in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in
assumptions about these factors could affect the reported fair value of financial instruments. Refer Note 50 for further disclosures.
The Company has invested in the equity instruments of various companies. The valuation exercise of unquoted equity instruments
carried out by the Company with the help of an independent valuer, etc. has estimated fair value at each reporting period based
on available historical annual reports and other information in the public domain.
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the
higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on
available data for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use
calculation is based on a Discounted Cash Flow (DCF) model. The cash flows are derived from the budget for the future years
and do not include restructuring activities that the Company is not yet committed to or significant future investments that will
enhance the asset's performance being tested. The cash flow projections, beyond period covered by the most recent budget /
forecast, the Company extrapolates cash flow projections taking base of budget working using a steady or declining growth rate
for subsequent years unless an increasing trend can be justified. The recoverable amount is sensitive to the discount rate used
for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.
Leases - Estimating the incremental borrowing rate
The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate
(IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar
term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar
economic environment. The IBR therefore reflects what the Company 'would have to pay', which requires estimation when no
observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company
estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-
specific estimates.
Evaluation of uncertain tax demand positions and other legal litigation
The Company has material uncertain tax demand positions including matters under dispute which involves significantjudgment
to determine the possible outcome of these disputes and significant open legal proceedings under arbitration and courts for
various matters with its contractors / vendors and in Government departments, continuing from earlier years which are part
of Contingent Liability. The Company has made estimates to recognize the provisions mainly for probable claims arising out of
litigations / disputes pending with authorities under various statutes and with other parties. The probability and the timing of
the outflow with regard to these matters depend on the outcome of the litigations/disputes. Hence, the Company is not able to
reasonably ascertain the timing of the outflow.
* Amount nullified on conversion to ' crores.
@ The Company is carrying physical share certificate in respect of this investment.
# M/s Ecophos GNFC India Private Limited (EGIPL) is the joint venture company formed by the Company and M/s Ecophos S.A - a
Belgium based company for manufacturing of Di-Calcium Phosphate (DCP) at Dahej location. The Company holds 15% shareholding
of EGIPL at issued value of ' 24.21 crores. During the FY 2019-20, M/s Eophos S.A. (shareholder) holding 85% shareholding of
EGIPL had applied for bankruptcy. Consequently all the nominee directors of EGIPL, Managing Director and Company Secretary of
EGIPL resigned. Plant installation for manufacturing of DCP didn't commenced. Accordingly, the Company valued such investment
as at March 31, 2025 and as at March 31, 2024 at the nominal consideration of ' 1.
$ The Company had acquired various securities from GNFC-EPFT which includes investments in various long term secured/unsecured
Non-Convertible Debentures (NCD) issued by IL&FS Group. Such investments have been recorded at the nominal fair values of
' 4.94 only (i.e. ' 1 for each security reduced by the amount received till date) as against total face value of ' 26.07 crores as
on 31.03.2025.
Further, during the year, the Company has received ' 3.56 crores from Reliance Capital as full and final settlement towards
investments in its two non-convertible debentures series. The Company had already made good the loss while transferring the PF
corpus to the Employees' Provident Fund Organisation (EPFO) by considering the fair value of securities at ' 1 each. Total face
value of investments was ' 6 crores.
& During the previous year, investments in one of the NCDs of AP Power Fin Corp Ltd was matured however the maturity amount
was not received till the 31.03.2024. Accordingly, the Company had fair valued the total investment of ' 7.50 crores (including the
NCD of ' 1.50 crores, which was yet not matured) made in Ap Power Fin Corp Ltd at ' 2 as on 31.03.2024. During the current
year, the Company has received the maturity amount of the said investments along with interest thereon.
*** During the year, the Company received 2,00,000 units of Roadstar Infra Investment Trust (RIIT) having a face value of ' 100 per
unit, aggregating to ' 2 crores, under Round 2 and Round 3 of interim distribution from IL&FS. Although these units are listed on
the stock exchange, there has been no active trading and fair price discovery remains pending. Consequently, the Company has
recognised the investment at a nominal fair value of ' 0.22 as on 31.03.2025.
(a) The fair value of the quoted equity investments are derived from quoted market prices in active market.
Note 39 : Leases:
Company as a lessee
The Company has taken various land, warehouses, godowns, guest houses, office premises and vehicles used in its operations. These
are generally cancellable having a term between one to three year extendable for further period as per the terms of rental agreements.
The Company also has certain leases of warehouses, godowns, office premises and vehicles with lease terms of 12 months or less.
The Company applies the 'short-term lease' recognition exemptions for these leases.
Company as a lessor
The Company has entered into operating leases on its investment property portfolio consisting of certain office. Rent income also
includes rentals received from lease of office premises. These leases is generally for a period of three to four years. There are no
restrictions imposed by lease arrangements.
Future minimum rentals receivable under non-cancellable operating leases as at March 31 are as follows:
Note (a) :
The shortfall in CSR expenditure for the financial year ended March 31,2025 and March 31,2024, has been deposited into the designated
'Unspent CSR Account' by April 30, 2025 and April 30, 2024 respectively, in accordance with Section 135(6) of the Companies Act, 2013
Note (b) :
The CSR expenditure has been incurred towards implementation of various developmental projects and community-centric initiatives
across multiple thematic areas including sectors like Women Empowerment, Rural Development, Livelihood Enhancement, Preventive
Healthcare, Promoting Education, Disaster Management, Environmental Sustainability, Promoting Gender Equality.
All projects undertaken fall within the scope of Schedule VII of the Companies Act, 2013 and are aligned with the Sustainable
Development Goals (SDGs).
Note (c) :
Represents contribution to Narmadanagar Rural Development Society (NARDES), the CSR implementation arm of the Company for
execution of the CSR programs across operational geographies.
B. Defined benefit plans:
The Company has following post employment benefits which are in the nature of defined benefit plans:
(a) Gratuity
(b) Post retirement medical benefit
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity
as per payment of Gratuity Act, 1972. The Scheme is funded with Gratuity Trust, which in turn makes contribution to Life Insurance
Corporation of India (LIC) in the form of qualifying insurance policy for future payment of gratuity to the employees.
Each year the management reviews the level of funding in the gratuity fund. Such review includes the asset - liability matching
strategy. The management decides its contributions based on the results of this review. The management aims to keep annual
contributions relatively stable at a level such that no plan deficit (based on valuation performed) will arise.
The plan for the Post retirement medical benefit is unfunded.
The following table summarises the components of net benefit expense recognised in statement of profit and loss and the funded
status and amounts recognised in the balance sheet for the respective plans:
NOTE: 43 (A)
In earlier year, Hon'ble high Court of Gujarat sanctioned the Scheme of Arrangement and Demerger for transfer of VSAT and ISP
Gateway Business of the Company to ING Satcom Ltd., an unlisted Company against case consideration of ' 6 crores vide its Common
Oral Order dated 15th June, 2012.
The "Appointed Date" of the Scheme is 1st April, 2010.
Pursuant to the Order of the Hon'ble High Court of Gujarat sanctioning the Scheme of Demerger, the Company submitted two separate
applications dated 31st January, 2013 to the Department of Telecommunications (DoT) for transfer of VSAT and ISP License in the
name of the Transferee Company viz. ING Satcom Limited.
However, the License Transfer Applications remained pending with DoT and as per the legal opinion and assessment, though the
Scheme of Demerger was sanctioned by the Hon'ble High Court, the Scheme of Demerger is subject to and conditional upon the
approval of DoT for transfer of Licenses from the Company to ING Satcom Limited.
Therefore, vide an Agreement-Cum-Indemnity Bond dated 12.04.2014 executed between the Company and ING Satcom Limited, the
assets of demerged business (other than the licenses) were transferred to ING Satcom, subject to certain terms and conditions, inter
alia, including the terms for settling the Transaction in the eventuality of non-transfer of Licenses.
Even though, both VSAT and ISP License have expired and the transfer of licenses to ING Satcom is now out of question, settlement of
Demerger Transaction with ING Satcom, as per the terms and conditions of the Agreement-Cum- Indemnity Bond dated 12.04.2014,
is still pending and therefore, no accounting treatment is given in the books of the Company since 2014-15 till the financial year
ended 31.03.2025.
Necessary accounting treatment will be given in the books of accounts of the Company either on disposal of applications for transfer
of Licences in the name of ING Satcom Limited by the competent authorities or on finalization of settlement of transaction with ING
Satcom Limited. The amount received is classified under other current liabilities (refer Note 24).
NOTE: 43(B) - Demand Notice from Department of Telecommunication (DoT)
I n the Financial Year (FY) 2014-15, the Company received a demand of ' 2,752 crores from the Department of Telecommunications
(DoT), Ministry of Telecommunications, Government of India, towards License Fee, including interest and penalty, for the "Very Small
Aperture Terminal (VSAT) License" and "Category A - Internet Service Provider (ISP) - IT License." This demand pertained to the period
from FY 2009-10 to FY 2013-14. The Company challenged the demand before the Telecom Disputes Settlement and Appellate Tribunal
(TDSAT), which subsequently stayed the demand and restrained DoT from taking any coercive recovery action against the Company.
Subsequently, in FY 2019-20, the Hon'ble Supreme Court of I ndia, in the case of Union of I ndia v. Association of Unified Telecom Service
Providers of India, (2020) 3 SCC 525 ("AGR Judgment"), upheld DoT's interpretation of Adjusted Gross Revenue (AGR) affirmed that
AGR includes revenue from both licensed as well as unlicensed activities.
Pursuant to the Supreme Court ruling, DoT issued revised demand notices dated December 23, 2019, March 05, 2020 and July 15,
2022, amounting to ' 15,020 crores, ' 16,359 crores and ' 21,370 crores, respectively. The demand period was retrospectively extended
to encompass the period FY 2005-06 through FY 2019-20.
Aggrieved by these revised demands, the Company submitted representations to DoT on January 06, 2020, February 21, 2020,
April 03, 2020 and March 04, 2022, requesting reconsideration and withdrawal of the demands. In its representations, the Company
underscored that revenues from its Fertilizers & Chemicals business, which is entirely unrelated to VSAT and ISP-IT Licenses, should
not be included in computation of AGR and License Fees.
Subsequent legal & regulatory developments, such as distinction between non-Telecom PSUs and Core Telecom Companies, duly
recognized by both DoT and the Hon'ble Supreme Court; the TDSAT Judgment in the case of Union of India Vs M/s Netmagic Solutions
Pvt. Ltd, Civil Appeal 9012/2022 ("Netmagic Judgment") and; the 2021 Telecom Reforms, have carved out several exceptions to the
interpretation of the term "AGR" and computation of AGR and the License Fees.
These exceptions provide critical relief, particularly for the similar category of licensees and the non-telecom / non-licensed revenue
streams.
Based on a detailed and meticulous legal assessment in consultation with eminent Senior Advocates, the Company firmly believes that
it has strong grounds to contest the demands raised by DoT. Consequently, the Company has neither provided for this amount in its
Books of Accounts nor recognized it under Contingent Liability.
Note 46 : Segment Information
Operating Segments
The identified reportable segments are Fertilizers, Chemicals and Others in terms of the requirements of Ind AS 108 "Operating
Segments" as notified under section 133 of the Companies Act, 2013. Other Segment mainly includes Information Technology division
activities and neem product related activities.
Identification of Segments:
The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making
decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is
measured consistently with profit or loss in the financial statements, Operating segment have been identified on the basis of nature
of products and other quantitative criteria specified in the Ind AS 108.
Segment revenue and results:
The expenses and income which are not directly attributable to any business segment are shown as unallocable expenditure and
unallocable income.
Segment assets and liabilities:
Segment assets include all operating assets used by the operating segment and mainly consist of property, plant and equipment, trade
receivables, inventory and other operating assets. Segment liabilities primarily include trade payable and other liabilities. Common
assets and liabilities which cannot be allocated to any of the business segments are shown as unallocable assets / liabilities.
Inter Segment transfer:
Inter Segment revenues are recognised at sales price. The same is based on market price and business risks. Profit or loss on inter
segment transfer are eliminated at the Company level.
Summary of segment information is given below:
* The SOTP approach is normally used for valuing a firm by separately assessing the value of each business segment or subsidiary
or associate companies or Investments and adding them up to get the total value of the firm. The valuation approach used to
value each Business/Investment Companies are Cost Approach/Market Approach/Income Approach. The appropriate approach /
method with appropriate adjustment is used considering size, nature and complexities of business/investment.
c) Financial Instrument measured at amortised cost
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a
reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly
different from the values that would eventually be received or settled.
50.3 : Financial Risk objective 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
loans, deposits, investments, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The
Company also holds FVTOCI & FVTPL investments and enters into derivative transactions.
In the ordinary course of business, the Company is mainly exposed to risks resulting from exchange rate fluctuation (currency risk),
interest rate movements (interest rate risk) collectively referred as Market Risk, Credit Risk, Liquidity Risk and other price risks such as
equity price risk and commodity price risk. The Company's senior management oversees the management of these risks. It manages
its exposure to these risks through derivative financial instruments by hedging transactions as required. It uses derivative instruments
such as foreign currency forward contract to manage currency risks. These derivative instruments reduce the impact of both favourable
and unfavourable fluctuations.
The Company's risk management activities are subject to the management, direction and control of the management of the Company
under the guideline of the Board of Directors of the Company. The management ensures appropriate financial risk governance
framework for the Company through appropriate policies and procedures and that financial risks are identified, measured and managed
in accordance with the Company's policies and risk objectives. It is the Company's policy that no trading in derivatives for speculative
purposes may be undertaken.
The decision of whether and when to execute derivative financial instruments along with its tenure can vary from period to period
depending on market conditions and the relative costs of the instruments. The tenure is linked to the timing of the underlying exposure,
with the connection between the two being regularly monitored. The Company is exposed to losses in the event of non-performance
by the counterparties to the derivative contracts. All derivative contracts are executed with counterparties that, in management's
judgment, are creditworthy. The outstanding derivatives are reviewed periodically to ensure that there is no inappropriate concentration
of outstanding to any particular counterparty.
Further, all currency and interest risk as identified above is measured on a daily basis by monitoring the mark to market (MTM) of open
and hedged position. For year ends, the MTM for each derivative instrument outstanding is obtained from respective banks. All gain
/ loss arising from MTM for open derivative contracts and gain / loss on settlement / cancellation / roll over of derivative contracts is
recorded in statement of profit and loss.
a) 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 equity price risk
and commodity price risk. Financial instruments affected by market risk include loans and borrowings, FVTOCI investments and
derivative financial instruments. The sensitivity analysis in the following sections relate to the position as at March 31, 2025 and
March 31, 2024
The sensitivity analysis have been prepared on the basis that the amount of net debt, interest rates of the debt and derivatives
are all constant as at March 31, 2025. The analysis exclude the impact of movements in market variables on the carrying values
of gratuity and other post-retirement obligations and provisions.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 March 31, 2025 and March 31, 2024.
(i) Interest rate risk
The Company is exposed to changes in market interest rates due to financing, investing and cash management activities.
The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's short-term debt
obligations.
(ii) Foreign currency risk
Exchange rate movements, particularly the United States Dollar (USD) and Euro (EUR) against Indian Rupee (INR), have an
impact on the Company's operating results. The Company manages its foreign currency risk by entering into various foreign
exchange contracts to mitigate the risk arising out of foreign exchange rate movement on trade payables. Further, to hedge
foreign currency future transactions in respect of which firm commitment are made or which are highly probable forecast
transactions (for instance, foreign exchange denominated income) the Company has entered into foreign currency forward
contracts as per the policy of the Company.
The details of exposures hedged using forward contracts and the details of unhedged exposures are given as part of
Note 49.
The Company is mainly exposed to changes in USD and EURO. The below table demonstrates the sensitivity to a 5% increase
or decrease in the respective foreign currency rates against INR, with all other variables held constant. The sensitivity analysis
is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents management's assessment
of reasonably possible change in foreign exchange rate.
(iii) Commodity price risk
The Company's operating activities require the ongoing purchase of natural gas. Natural gas being an international commodity
is subject to price fluctuation on account of the change in the crude oil prices, demand supply pattern of natural gas and
exchange rate fluctuations. The Company is not affected by the price volatility of the natural gas to the extent consumed for
Urea as under the Urea pricing formula the cost of natural gas is pass through if the consumption of natural gas is within the
permissible norm for manufacturing of Urea.
The Company also deals in purchase of other feed stock materials (i.e. Rock phosphate, Toluene and Denatured Ethyl Alcohol)
which are imported by the Company and used in the manufacturing of Ammonium Nitro Phosphate, Toluene Di-isocyanate
and Ethyl Acetate. The import prices of these materials are governed by international demand and supply pattern. There is
a price and material availability risk, which is managed by senior management team through sensitivity analysis, commodity
price tracking.
(iv) Equity price risk
The Company's investment in listed and non-listed equity securities are susceptible to market price risk arising from uncertainties
about future values of the investment securities. The Company manages the equity price risk through diversification and by
placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company's senior
management on a regular basis. The Company's Board of Directors reviews and approves all equity investment decisions.
At the reporting date, the exposure to unlisted equity securities at fair value was ' 392.27 crores. Sensitivity analyses of these
investments have been provided in Note 50.2(b).
At the reporting date, the exposure to listed equity securities at fair value was ' 478.92 crores. A decrease of 5% on the
BSE market price could have an impact of approximately ' 23.95 crores on the OCI or equity attributable to the Group. An
increase of 5% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect
on profit or loss.
b) 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 other
financial assets) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial
instruments.
Customer credit risk is managed by the Company's established policy, procedures and control relating to customer credit risk
management. Credit quality of a customer is assessed based on an extensive evaluation and individual credit limits are defined
in accordance with this assessment.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number
of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on
exchange losses historical data.
Credit risk from balances with banks and non-banking finance companies is managed by the Company's treasury department in
accordance with the Company's policy. I nvestments of surplus funds are made only with approved counterparties and within credit
limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company's Board of Directors on an annual
basis, and may be updated throughout the year subject to approval of the Company's management. The limits are set to minimize
the concentration of risks and therefore mitigate financial loss through counterparty's potential failure to make payments.
Trade receivables
The Company's receivables can be classified into two categories, one is from the customers/ dealers in the market and second
one is from the central and state Government in the form of subsidy. As far as Government portion of receivables is concerned,
credit risk is Nil except where there are uncertainties due to non-acknowledgement of claims. In respect of market receivables
from the customers/ dealers, the Company extends credit to customers in normal course of business. The Company considers
factors such as credit track record in the market and past dealings for extensions 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 for certain products it extends rolling credit to its customers, against
the collateral.
Trade receivables, other than subsidy receivables are secured to the extent of interest free security deposits and bank guarantees
received from the customers amounting to ' 21.63 crores and ' 23.97 crores as at 31st March, 2025 and 31st March, 2024
respectively. (Refer Note No. 11 for Trade Receivables outstanding).
The Company follows a 'simplified approach' (i.e. based on lifetime ECL) for recognition of impairment loss allowance on Trade
receivables, other than those receivables from the Government of India. For the purpose of measuring lifetime ECL allowance for
trade receivables, the company estimates irrecoverable amounts based on the ageing of the receivable balances and historical
experience in respect of certain categories of the customers. I ndividual trade receivables are written off when management deems
them not to be collectible
c) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial
instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial
asset quickly at close to its fair value.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term
funding and liquidity management requirements. The Company's exposure to liquidity risk arises primarily from mismatches of
the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash
and bank balances. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to
meet all its normal operating commitments in a timely and cost-effective manner.
The table below analyses derivative and non-derivative financial liabilities of the Company into relevant maturity groupings based
on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows.
50.4 : Capital Management:
For the purposes of the Company's capital management, capital includes issued capital and all other equity. The primary objective of the
Company's capital management is to maximize shareholder value. The Company manages its capital structure and makes adjustments
in the light of changes in economic environment and the requirements of the financial covenants.
The Company monitors capital using gearing ratio, which is net debt (total debt less cash and bank balance) divided by total capital
plus net debt.
Since net debt is negative, same is considered as zero.
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 period. No changes were made in the objectives,
policies or processes for managing capital during the years ended March 31, 2025 and March 31, 2024.
Note 51 : Additional disclosures required as per Schedule III to the Companies Act, 2013;
(i) The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31, 2025 and March
31, 2024.
(ii) No proceedings have been initiated or pending against the Company for holding any benami property under the Benami Transactions
(Prohibition) Act, 1988 and rules made thereunder, as at March 31, 2025 and March 31, 2024.
(iii) The Company is not a declared wilful defaulter by any bank or financial Institution or other lender, in accordance with the guidelines
on wilful defaulters issued by the Reserve Bank of India, during the year ended March 31, 2025 and March 31, 2024.
(iv) The Company did not have any material transactions with companies struck off under Section 248 of the Companies Act, 2013
or Section 560 of Companies Act, 1956 during the year ended March 31, 2025 and March 31, 2024.
(v) There have been no transactions which have not been recorded in the books of accounts, that have been surrendered or disclosed
as income during the year ended March 31, 2025 and March 31, 2024, in the tax assessments under the Income Tax Act, 1961.
There have been no previously unrecorded income and related assets which were to be properly recorded in the books of account
during the year ended March 31, 2025 and 31 March 31, 2024.
(vi) The Company has taken borrowings from banks and financial institutions and utilised them for the specific purpose for which they
were taken as at the Balance sheet date. Quarterly statements of current assets filed by the Company with Bank are in agreement
Notes:
Note-1 : Liability towards accrued expenses not considered in returns / statements submitted to bank.
Note-2 : reclassification adjustments after submission of stock statement not considered in returns / statements submitted to bank.
(vii) Based on the Ministry of Corporate Affairs (MCA) portal, charges aggregating to ' 0.46 crore are appearing as "Open" as of March
31, 2025 which were executed with Banks (the lender) in relation to securing repayment of loan facility related to year 1990. The
Company is in process to obtain the No Objection Certificates from the Banks. Once the same is received, the Company will file
the "Satisfaction of Charge" with the Registrar of Companies (ROC).
(viii) Utilisation of borrowed funds and share premium
I. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Company (Ultimate Beneficiaries) or
b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
II. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Funding Party (Ultimate Beneficiaries) or
b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
Note 52 : Code on Social Security
The Indian Parliament has approved & the President has accorded the assent the Code on Social Security, 2020 ('Code') in September,
2020. The Code might impact the contributions by the Company towards Provident Fund, Gratuity and other employment and post¬
employment employee benefits. The Code has been published in the Gazette of India. However, the date on which the Code will come
into effect has not been notified and the final rules have not yet been issued. The Company will assess the impact of the Code when
it comes into effect and will record the impact, if any, in the period in which the Code becomes effective.
Note 53 :
Balances of certain trade receivables, advances given and trade payables are subject to confirmation/ reconciliation, if any. The
management does not expect any material difference affecting the financial statements on such reconciliation / adjustments.
Note 54 : Event occurred after the Balance Sheet Date:
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approval of the
financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial
statements. As of May 23, 2025 there were no material subsequent events to be recognized or reported that are not already previously
disclosed.
Note 55 :
The previous year's figures have been regrouped / reclassified, wherever necessary, to conform to the figures of the current year
presentation.
For and on behalf of the Board of Directors,
D. V. Parikh Rajesh Pillai Dr. T. Natarajan, IAS Pankaj Joshi, IAS
Executive Director & CFO Company Secretary Managing Director Chairman
(ICSI M. No. : ACS 27145) (DIN : 00396367) (DIN : 01532892)
As per our report of even date
For Suresh Surana & Associates LLP
Place : Gandhinagar Chartered Accountants
Date : 23-05-2025 (Firm Registration No.: 121750W/W100010)
Ramesh Gupta
Place : Gandhinagar Partner
Date : 23-05-2025 Membership No. 102306
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