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சென்செக்ஸ் 76,863.71 -1.72% ↓ நிஃப்டி 23,850.60 -1.69% ↓ தங்கம் ₹ 15,121/gm வெள்ளி ₹ 2,99,900/kg பெட்ரோல் ₹ 100.90 டீசல் ₹ 92.48 கச்சா எண்ணெய் $ 98.70 USD ₹ 92.20

The Fertilisers and Chemicals Travancore Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2025

3A.1. National Company Law Tribunal (NCLT), Kochi Bench, vide its order dated 11.01.2024 and 28.01.2025, has appointed Resolution Professionals (RP) for initiating Corporate Insolvency Resolution Proceedings against FACT-RCF Building Products Ltd (FRBL), in response to a petition filed by a financial creditor of FRBL, as per Insolvency & Bankruptcy Code, 2016. Accordingly, the powers of the Board of Directors of FRBL were superseded. The Resolution Professional commenced the proceedings and the same is in progress.

7.1. Current Assets include inventories and trade receivables pledged as Primary Security for Fund/ Non Fund based Working Capital arrangement with Banks amounting to '' 90,000.00 lakh. The utilisation of this arrangement as on reporting date is '' 16,955.38 lakh (Previous year '' 7,834.86 lakh).

7.2. Inventory of finished goods, raw material, stores and spares and work in progress are valued as per the Accounting Policy of the Company (Refer Note 1.3.(v)).

7.3. Finished Goods includes 21.01 lakh MT of saleable gypsum (bulk) (Previous year 21.09 lakh MT) amounting to ''13,157.84 lakh (Previous year '' 12,389.90 lakh). For assessing the closing stock of gypsum as on 31.03.2025, the saleable quantity has been assessed on the basis of physical verification conducted at the end of the financial year.

7.4. Stores & Spares in transit includes Stores & Spares at site pending inspection '' 235.33 lakh (Previous year '' 281.93 lakh )

7.5. During the year 2021-22, Company had detected irregularities in the physical stock to the tune of 543.60 MT of Factamfos and 60.50 MT in Ammonium Sulphate at Chikmagalur Depot valued at '' 218.50 lakh (including GST of '' 6.88 lakh). Company had provided for an amount of '' 211.62 lakh, being sale value (net of GST) and subsidy. Certain dealers have initiated legal proceedings claiming value of 235.50 MT of fertilizers pending supply to them. The Company has since realised an aggregate amount of '' 63.85 lakh being the sale value of 256.95 MT of Factamfos from various dealers during the year 2022-23 in connection with the above. However, the Company has maintained the provision of '' 211.62 lakh pending completion of investigation. Company has taken steps for recovery from transporters, dealers and warehouse (Refer Notes 13.3, 23.1,24.2 & 26.1).

7.6. 90% provision has been made for non-moving stock of stores (including unserviceable packing material) & spares, ageing five years and more, as on 31.03.2025.

7.7. Write down of work-in-progress recognised in the Statement of Profit and Loss (difference between cost & NRV) is '' 352.66 lakh (Previous year '' 136.08 lakh).

13.1. Dues from statutory authorities include :

(i) Value Added Tax (VAT) incurred on Regasified Liquified Natural Gas (RLNG) procurement upto 31.03.2025 amounting to '' 39,017.84 lakh (Previous year '' 34,303.01 lakh). In view of the uncertainty in the reimbursement of VAT paid on RLNG from Government of Kerala, the Company has made equivalent provision under the head "Provision for Doubtful Receivables" (Refer Note No. 29.2).

(ii) '' 64.83 lakh (Previous year '' 64.83 lakh) (net of provision) being KVAT refund receivables, and

(iii) '' 72.97 lakh (Previous year '' 72.97 lakh) towards the amount paid against disputed demands pending appeal.

13.2. Dues from Contractors include amount paid for materials supplied but rejected by the Company pending settlement '' 0.56 lakh (Previous year '' 15.21 lakh ) and an amount of '' 1,353.19 lakh (Previous year '' 1,353.19 lakh) including interest considered as recoverable on the basis of a bank guarantee invoked by the Company but stayed till the completion of arbitration. The Arbitration Award was passed during the year 2013-14, as per which the Company is entitled to adjust an amount of '' 2,798.29 lakh towards this advance and interest from the dues claimed by the contractor. The Company has gone on appeal against the award before the Hon'' District Court, Ernakulam which has since stayed the award. The case is transferred to Commercial Court. Accordingly, the Company demanded the banks to send the proceeds of encashment of bank guarantee along with interest. The bank rejected the claim and consequently the Company filed a suit against the bank before the Hon'' High court of Mumbai for realization of amount, which is pending. However, an amount of '' 1,353.19 lakh only has been retained pending disposal of the case.

13.3. Other Current Assets, dues from contractors include '' 476.89 lakh (Previous year '' 476.89 lakh) charged to transport contractor as per the terms and conditions of the contract, towards non delivery of goods to dealers at the assigned destinations. (Refer Note- 7.5, 23.1 & 24.2)

13.4. Other Current Assets include CSR expenditure of '' 250.37 lakh (Previous year '' 792.77 lakh) spent over and above the minimum amount as stipulated in The Companies Act,2013, after utilisation for the financial year 2024-25 (Refer Note- 35.5).

Retired assets held for disposal includes Ammonia and Urea Plant at Cochin Division, which the Company had decided to scrap during the year 2009-10. These retired assets are retained in books at the written down value of '' 4,065.02 lakh (Previous year- '' 4,065.02 lakh), which is lower than the estimated net realisable value. The Company could not complete the disposal process since the matter had been pending before the Court.

15.2. Rights, Preference and Restrictions attached to Shares:

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

15.4. Shares reserved for issue under options and contracts / commitments for the sale of shares /

disinvestment - NIL

15.5. Aggregate number and class of shares allotted for consideration other than cash, bonus shares and shares bought back - No such event has occurred during a period of five years immediately precedings the Balance Sheet date.

15.6. Terms of any securities convertible into equity / preferential shares issued along with the earliest date of conversion - NIL

21.1. A plan loan of ''1,00,000.00 lakh bearing interest @13.50% per annum was released by the Government of India (GOI) on 29th March 2016 to maintain the operations of the Company. As per the order of Government of India, '' 1,00,000.00 lakh along with the earlier loan '' 28,273 lakh and interest outstanding has been converted into a single loan carrying interest @ 13.50% per annum with one year moratorium. As per the letter dated 12.01.2016, of the Ministry of Finance, GOI, sanctioning the loan, the total outstanding liability of the Company is ''1,83,672.00 lakh. The Company entered into an agreement with the Department of Fertilizers(DOF), GOI, agreeing to mortgage 408 acres of Company''s land to secure repayment of the entire loan together with interest at the rate of 13.50% per annum on the amount outstanding as on 31.03.2017. The loan amount was reconciled and loan outstanding along with interest accumulated (upto 31.03.2017) has been arrived at ''1,77,048.75 lakh as on 31.03.2017. The loan along with interest is repayable in three or more equated instalments within a period of 5 years ending by 2022. Accordingly, the entire principal amount, being ''1,77,048.75 lakh (Previous year- ''1,77,048.75 lakh) has been classified under Current Liabilities-Current maturities of Long term Debt. The outstanding principal and interest as on 31.03.2025 has been confirmed with the balance of Government of India.

Company has submitted a Financial Restructuring proposal to Department of Fertilizers (DoF), Government of India (GoI), seeking approval for the waiver of interest on Government of India loan, conversion of loan amounting to ''28,273.00 lakh into equity and conversion of loan amounting to ''1,00,000.00 lakh as interest free loan, repayable in yearly installments. The financial restructuring proposal submitted by the Company is under the consideration of the Department of Fertilizers, Government of India. Pending approval by the Government of India, the loan taken from GoI and interest due thereon are accounted and disclosed as per the loan agreement dated March 3, 2016.

21.2. The Company and M/s.Rashtriya Chemicals & Fertilisers Ltd(RCF) had provided Corporate Guarantee to the lenders of M/s.FACT-RCF Building Products Ltd-the 50:50 joint venture between the Company and RCF. During the year 2018-19, RCF has settled the entire liability to the bankers, to the extent of '' 5,100 lakh including 50% share of the Company '' 2,550 lakh on the condition that the Company shall treat the amount paid by RCF on behalf of the Company as Inter-Corporate loan with a repayment period of five years, starting from the year 2020-21. The Company has paid the last instalment due of '' 510 lakh as per the agreement during the year. Interest rate applicable on the loan for the year 2024-25 is 7.73% p.a (Previous year- 7.82% p.a).

24.1. As per the decision of Government of India, during the year 2021-22, Company had framed a scheme for disbursement of wage revision arrears relating to the period from 01.01.1997 to 30.06.2001, in a phased manner, based on the direction of the Honourable Supreme Court of India. Dues to employees include '' 728.29 lakh (Previous year- '' 1,030.96 lakh) towards 1997 arrears, payable within one year.

24.2. Other liabilities include amount charged from transport contractors as per the terms and conditions of the contract, towards non delivery of goods to dealers at the assigned destinations and amount withheld from warehouse.(Also Refer Note 7.5, 13.3 & 23.1)

27.1. Consequent to the implementation of Direct Benefit Transfer (DBT) subsidy scheme, subsidy income on fertilizers is recognised at the time of sale to dealers. However, the subsidy claim is generated at the rate applicable on the date of sale of fertilizers to ultimate beneficiary based on acknowledgement. Considering substantial improvement in the acknowledgement over the period, the Company has reassessed the basis of recoverability and accordingly, subsidy portion of 95% (Previous year 90%) of P&K fertilizer stock with dealers pending sale to ultimate beneficiary as on 31.03.2025, '' 24,589.67 lakh (Previous year '' 21,820.08 lakh), has been considered in Revenue from Operations- Refer Notes

11.1. & 53.

35.3. Research and Development Expenditure includes expenditure towards salary '' 54.50 lakh (Previous year '' 49.38 lakh), chemicals & stores '' 2.18 lakh (Previous year '' 3.43 lakh) and depreciation '' 0.73 lakh (Previous year '' 0.09 lakh).

35.4. Miscellaneous Expense include Directors'' travel expenses amounting to '' 11.81 lakh (Previous year '' 20.70 lakh)

35.5. Expenses towards Corporate Social Responsibility

The Company is liable to spend during the financial year 2024-25, '' 668.47 lakh (Previous year - '' 873.22 lakh), on Corporate Social Responsibility, being 2% of the average net profits of the Company made during the three immediately preceding financial years, as per section 198 of the Companies Act 2013. Company has spent an amount of '' 125.12 lakh (Previous year - '' 1,662.46 lakh) towards Corporate Social Responsibility projects during the current financial year (excluding the amount spent towards the ongoing projects of the previous years). An amount of '' 543.35 lakh (Previous year - Nil ) has been utilised from the ''excess CSR spent'' amount of '' 792.77 lakh brought forward from the previous years. The remaining excess amount has been classified under ''Current Assets'' (Refer Note 13.4).

36.1. Refund receivable towards excess regasification charges paid by the Company in respect of Regasified Liquified Natural Gas (RLNG) procurement for the period May 2019-May 2020 has been disclosed as Contingent Asset in the previous years (Refer Note 51). Based on the communications received from suppliers of RLNG (Regasified Liquified Natural Gas), refund of excess regasification charges of ''2,461.45 lakh has become virtually certain. Accordingly, the same has been accounted as exceptional item during the financial year 2024-25 in the Statement of Profit and Loss (Previous year - Nil) in accordance with Ind AS 10.

36.2. The Government of India vide office memorandum No - 23011/1/2023- P&K dated 18th May 2023 has revised the Nutrient Based Subsidy for P&K fertilizers applicable for the period 01.01.2023 to 31.03.2023. Department of Fertilizers has recovered ''6,307.18 lakh towards this downward revision of subsidy for the quarter ended 31.03.2023 during the previous year 2023-24.

36.3. In line with guidelines issued by the Department of Fertilizers vide office memorandum No -23011/8/2018-MPR dated 15th November 2019 which restricts profit margin of the Fertilizer companies to 12% of the cost of sales, Company has made provision amounting to ''8,835.78 lakh in respect of the financial year 2022-23 during the previous year 2023-24 and the amount has been recovered during the year 2024-25.

36.4. Department of Fertilizers vide office memorandum No - 23011/8/2010-MPR dt 26th April 2024 has directed recovery of ''9,415.93 lakh based on the Final rates recommended by the Tariff commission towards Naphtha Compensation for the period 01.04.2010 to 04.10.2013. Provision towards the same has been made during the previous year 2023-24 and the amount has been recovered during the year 2024-25.

The Lease Liability is measured at the present value of remaining lease payments at the date of initial application and Right-of-Use asset has been recognized at an amount equal to Lease Liability adjusted by an amount of any prepaid expenses. Under Ind AS 116 "Leasesâ, at commencement of lease, the Company recognizes Right-of-Use asset and corresponding Lease Liability, at State Bank of India 1 year MCLR. Right-of-Use asset is depreciated over lease term on systematic basis and interest on Lease Liability is charged to Statement of Profit and Loss as Finance cost.

Recognition of Right-of-Use Asset and corresponding Lease Liability, as per Ind AS 116, has been made in respect of the property taken for lease (Operating lease) for the purpose of storage and handling of Raw Materials, at Willingdon Island and for Guest House facility at New Delhi.

41. Fair Value Hierarchy

The management has assessed that the fair value of its financial assets and liabilities like cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The following methods and assumptions were used to estimate the fair values for the given below financial assets.

a) Investment in Unquoted Equity Shares:

The fair values of the unquoted equity shares have been estimated using a Discounted Cash Flow (DCF) model. The Company avails the services of an external professional valuer for valuation of the same and the fair values so reported are based on a valuation report received from the investment valuation expert.

b) Derivatives not designated as hedges

Foreign exchange forward contracts if entered into, are valued using valuation techniques, which employs the use of market observable inputs (i.e. based on inputs/statement of position received from banks).

c) Investment Properties

The value of the investment properties are based on the information available in Government of Kerala fair value notification, market conditions etc.

Level 1: Level 1 hierarchy is for financial instruments with quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges are to be valued using the closing price as at the reporting period. The mutual funds are to be valued using the closing NAV. Company do not have any such investment, as on the reporting date of current year and previous year.

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

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in Level 3.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s trade and other receivables, cash and cash equivalents and other bank balances. The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their respective carrying amount.

(i) Trade and Other Receivables

Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and monitoring the creditworthiness of customers to allow credit terms in the normal course of business.

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to '' 28,347.61 lakh (Previous year '' 15,813.73 lakh) of which '' 25,829.42 lakh (Previous year '' 6,750.04 lakh) is due from Government of India relating to subsidy receivable. Trade receivables mainly constitute subsidy receivable from the Government of India and receivable from sale of petrochemical products.

Expected Credit Loss Assessment for Trade and Other Receivables

The Company has been consistently following a policy of creating 100% provision for the unsecured portion of the trade receivables that are more than three years old, except for subsidy receivables from Government of India, wherein allowance for loss is made after analysis of possibility of realisation.

(ii) Cash and Cash equivalents and Other Bank Balances

The Company held cash and cash equivalents and other bank balances of '' 2,77,736.62 lakh at the reporting date (Previous year- ''2,67,932.29 lakh). The cash equivalents are held with banks with good credit ratings and financial position. Also, the Company invests its short term surplus funds in bank fixed deposits, which carry no/low market risks for short duration and therefore, does not expose the Company to credit risk.

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

Liquidity risk is managed by Company through effective fund management. Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the company''s liquidity position and cash and cash equivalents on the basis of expected cash flows.

*The loan from Government of India along with interest is repayable in three or more equated installments within a period of 5 years ending by 2022. Company has submitted a Financial Restructuring proposal to Department of Fertilizers (DoF), Government of India (GoI), seeking approval for the waiver of interest on Government of India loan, conversion of loan amounting to ''28,273.00 lakh into equity and conversion of loan amounting to ''1,00,000.00 lakh as interest free loan, repayable in yearly installments. The financial restructuring proposal submitted by the Company is under the consideration of the Department of Fertilizers, Government of India. Pending approval by the Government of India, the loan taken from GoI and interest due thereon are accounted and disclosed as per the loan agreement dated March 3, 2016 . The management expects restructuring of the loan, whereby the Government shall grant sufficient time for the repayment of the loan and interest due thereon. Accordingly, the Company can manage the immediate liquidity requirement.

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 of the following types of risk: currency risk, interest rate risk, commodity rate risk and other price risks, such as equity price risk.

(i) Currency Risk

The Company undertakes transactions denominated in foreign currencies and consequently, exposure to the financial risk of fluctuations in foreign currency rates arises. The Company has a Foreign Exchange Risk Management Policy in place entailing parameters for hedging its foreign currency exposures. The Company manages its exchange rate exposures within the approved parameters of the hedging policy through forward contracts.

The Company has outstanding forward contract of '' 34,832.42 lakh as at the reporting date (Previous year '' 21,815.94 lakh) which has been undertaken to hedge its exposure to trade payables.

(ii) Interest Rate Risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings are measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

Exposure to Interest Rate Risk:

The Company''s investments are in fixed deposits with scheduled public and private sector banks wherein the interest rates are fixed, as on the reporting date.

The Company do not have any fund based borrowing with banks as on the reporting date. The interest rate on the Company''s borrowings from Government of India is not fluctuating.

(iii) Commodity Rate Risk

The Company''s profitability gets affected by the price differential (also known as margin) between prices of products (output) and the price of the raw materials used in production (input).

Company has entered into long term agreements with suppliers of major raw materials like Regasified Liquified Natural Gas (RLNG), Rock Phosphate and Sulphur, to mitigate the fluctuation in market price.

(iv) Price Risk

The Company''s exposure to equity investments price risk arises from investments held by the Company and classified in the financial statements at fair value through OCI. The Company intends to hold these investments for long-term for better returns and price risk will not be significant from a long term perspective.

44. Capital Management

The Company''s primary objective is to maximize the shareholders'' value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. Presently, the Company sources 100 % of its capex requirement from the internal accruals. The Company, being a Central Public sector undertaking, is governed by the guidelines of the Department of Investment & Public Asset Management (DIPAM), which specifies the minimum percentage of dividend to be declared. Taking into consideration the future capex requirements, the Company considers the payment of dividend at the appropriate rates.

45. Related Party Transactions (Disclosure under Ind AS 24 )

A. Transactions with Entities under the Control of the Same Government:

Since Government of India owns 90% of the Company''s equity share capital (under the administrative control of Ministry of Chemicals and Fertilizers), the disclosures relating to transactions with the Government and other Government controlled entities have been reported in accordance with para 26 of Ind AS 24.

Certain transactions are carried out with other government related entities for purchase of Gases, for procurement of Raw Materials / Finished Goods, Assets / Spare Parts from original equipment manufacturers, which are significant in terms of value, the details of which are as under:

(iv) The Company and M/s.Rashtriya Chemicals & Fertilisers Ltd(RCF) had provided Corporate Guarantee to the lenders of M/s.FACT-RCF Building Products Ltd-the 50:50 joint venture between the Company and RCF. During the year 2018-19, RCF had settled the entire liability to the bankers, to the extent of ''5,100 lakh including 50% share of the Company ''2,550 lakh on the condition that the Company shall treat the amount paid by RCF on behalf of the Company as Inter-Corporate loan. Accordingly, the amount of ''2,550 lakh has been classified as Intercorporate loan. The Company has paid the last instalment due of ''510 lakh as per the agreement during the year. Interest rate applicable on the loan for the year 2024-25 is 7.73% p.a. (Previous year- 7.82% p.a).

(v) Department of Fertilisers, Govt of India, had accorded the approval (16 November 2018) to The Fertilisers and Chemicals Travancore Limited (FACT) for additional investment of ''2,925 lakh to the equity share capital of FACT-RCF-Building Products Limited (FRBL). FRBL is a joint venture between FACT and Rashtriya Chemicals & Fertilisers Limited (RCF). FACT in its 75th Annual General Meeting approved the additional investment in FRBL. Against approval received for ''2,925 lakh, FRBL had issued equity shares amounting to ''1,518 lakh towards gypsum supplied and other services provided by FACT during the period from 2010-2013. Further, FRBL during the year 2022-23 has allotted shares to FACT amounting to ''235.70 lakh. Balance Equity Shares against which gypsum and other services provided by FACT during 2014-2017, amounting to ''1,171.30 lakh, are pending for allotment by FRBL. The same has been disclosed under advances to related parties. Further, supply of gypsum from FACT amounting to ''239.60 lakh is still pending as on 31 March 2025 to complete the above additional investment.

(vi) National Company Law Tribunal (NCLT), Kochi Bench, vide its order dated 11.01.2024 and 28.01.2025, has appointed Resolution Professionals (RP) for initiating Corporate Insolvency Resolution Proceedings against FACT-RCF Building Products Ltd (FRBL), in response to a petition filed by a financial creditor of FRBL, as per Insolvency & Bankruptcy Code, 2016. Accordingly, the powers of the Board of Directors of FRBL were superseded. The Resolution Professional commenced the proceedings and the same is in progress.

C. Key Management Personnel

(i) Name of Key Management Personnel

1 Shri S C Mudgerikar, Chairman & Managing Director (from 23.02.2024)

2 Shri.Anupam Misra, Director (Marketing) (from 14.07.2020)

3 Shri.S.Sakthimani, Director (Finance) & Chief Financial Officer (from 08.03.2021)

4 Dr.Jayachandran.K, Director (Technical) (from 03.03.2023)

5 Smt.Susan Abraham, Company Secretary (from 15.07.2022)

The whole time Directors have been allowed the use of company car and for private journey upto a ceiling of 9000 kms. per year, on payment as prescribed by the Government.

Gratuity and leave encashment benefit accrued to the Directors have not been disclosed as the contribution payable has been provided in the accounts and separate figures are not ascertainable.

D. Transactions with other entities- where Directors are interested:

(i) Rashtriya Chemicals and Fertilisers Limited (RCF) - Owing to Shri S. C. Mudgerikar, Chairman & Managing Director of RCF, holding additional charges as Chairman & Managing Director of the Company as per directives of DoF from 23rd February, 2024.

Transactions during the year - Refer Note 45.A

(ii) Madras Fertilizers Limited (MFL) - Owing to Dr Jayachandran K, Director (Technical), holding additional charges as Director (Technical) of MFL as per directives of DoF from 1st May, 2023.

Transactions during the year - Nil (Previous year -Nil)

(iv) During the year 2009-10, the Company has along with Department of Factories and Boilers, Government of Kerala, formed a society under the Travancore Literary Scientific and Charitable Societies Act 1955 with the objective of conducting courses relating to welding technologies with a grant of ''100 lakh from the Government of Kerala, under the name Kerala Institute of Welding and Research. The contribution from the Company is only provision of its existing facilities of Training School. The accounts of the society are not consolidated as society is formed with an objective of not obtaining any economic benefits from its activities and is considered immaterial to the Company''s activity.

*The unaudited financial statements of FRBL for the year 2024-25 has been considered since the financial statements for the year 2023-24 is not yet adopted in its AGM and statutory audit for the year 2024-25 is not completed.

** Owing to the Company''s share of losses exceeding its interest in the joint venture, recognising the share of loss stands discontinued. Accordingly ,Company has not recognized share of loss of ''81.88 lakh for the year (Previous year ''131.62 lakh) and ''11,058.19 lakh cumulatively upto the year ended 31.03.2025 ('' 10,976.31 lakh cumulatively upto the year ended 31.03.2024).

National Company Law Tribunal (NCLT), Kochi Bench, vide its order dated 11.01.2024 and 28.01.2025, has appointed Resolution Professionals (RP) for initiating Corporate Insolvency Resolution Proceedings against FACT-RCF Building Products Ltd (FRBL), in response to a petition filed by a financial creditor of FRBL, as per Insolvency & Bankruptcy Code, 2016. Accordingly, the powers of the Board of Directors of FRBL were superseded. The Resolution Professional commenced the proceedings and the same is in progress.

48. EMPLOYEE BENEFITS

I. DEFINED CONTRIBUTION PLAN

A. General Description of Defined Contribution Plan

Contributory Superannuation Scheme - The scheme is aimed to provide superannuation benefits to the employees. Every year Company contributes '' 100 to the fund.

II. DEFINED BENEFIT PLAN

A. General Description of Defined Benefit Plan

(i) Leave Encashment and Gratuity

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on death, separation from service or retirement, whichever is earlier. The benefit vests after five years of continuous service. The Company has been accounting for provision on account of leave encashment on retirement based on actuarial valuation carried out as at the balance sheet date.

During the year 2023-24, the Department of Fertilizers, Government of India has approved the proposal for enhancement of the age of retirement of below board level employees to 60 years from 58 years. During the year 2023-24, the Company amended (29 May 2023) leave rules and discontinued automatic encashment of Privilege Leave in excess of 300 days. Similarly, Company discontinued giving full DA during period of Half pay leave /encashment of Half pay leave during retirement.

(ii) Provident Fund

The Provident Fund contributions are made to Trusts administered by the Company. The interest rate payable to the members of the Trust shall not be lower than statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act 1952. During the year an amount of ''1,937.55 lakh (Previous year ''1,888.86 lakh) has been charged to Statement of Profit & Loss towards contribution by the Company. In terms of the Ind AS 19, the Provident Fund Trust set up by the Company is treated as Defined Benefit Plan since the Company has to meet the shortfall in the fund assets, if any.

During the year 2023-24, vide GO (P) No. 85/2023/ LBR dated 11.10.2023 Government of Kerala (appropriate authority as per Para 27A of Provident Fund and Miscellaneous Provisions Act, 1952) withdrew exemption granted for the Company in respect of The FACT Cochin Division Employees Provident Fund on account of three years continuous loss incurred by the Company. Company has challenged the same and filed a writ petition before the Hon'' High Court of Kerala and the notification has been stayed by the Honorable High Court. The matter is still pending.

During the year 2022-23, vide G.O(Rt.)No. 354/2023/LBR dated 23.03.2023 Government of Kerala (appropriate authority as per Para 27A of Provident Fund and Miscellaneous Provisions Act, 1952) withdrew exemption granted for the Company in respect of The FACT Employees Provident Fund, Udyogamandal Division on account of three years continuous loss incurred by the Company. Company has challenged the same and filed a writ petition before the Hon'' High Court of Kerala and the notification has been stayed by the Honorable High Court. The matter is still pending.

D. Gratuity - Other Disclosure Requirements

(i) Description of Plan Characteristics and Associated Risks:

The Gratuity scheme is a final salary defined benefit plan that provides for a lumpsum payment at the time of separation; based on scheme rules the benefits are calculated on the basis of last drawn salary and the period of service at the time of separation and paid as lumpsum. There is a vesting period of 5 years. The design entails the following risks that affect the liabilities and cash flows:

(a) Interest rates risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall the defined benefit obligation will tend to increase. Thus, the plan exposes the Company to the risk of fall in interest rates. Some times the fall can be permanent due to a paradigm shift in interest rate scenarios because of economic or fiscal reasons. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements). Even for funded schemes a paradigm downward shift in bond yields may affect the reinvestment yields and may increase ultimate costs.

(b) Salary inflation risk:

The present value of the defined benefit plan is calculated with the assumption of salary escalation rate (SER) which is applied to find the salary of plan participants in future at the time of separation. Higher than expected increases in salary will increase the defined benefit obligation and will have an exponential effect.

It should be noted that in case of employees above retirement age for the purpose of valuation it is assumed they will retire immediately & benefit is considered up to actual retirement age.

(d) Demographic risks:

Demographic assumptions are required to assess the timing and probability of a payment taking place. This is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition disability and retirement. The effects of this decrement on the DBO depend upon the combination of salary increase, discount rate and vesting criteria and therefore, not very straight

forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of a short serving employees will be less compared to long service employees.

(e) Asset Liability Mismatch:

This will come into play unless the funds are invested with a term of the assets replicating the term of the liability.

(f) Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience:

Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in Mortality Rates:

If actual mortality rates are higher than assumed mortality rate , then the Gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

Variability in Withdrawal Rates:

If actual withdrawal rates are higher than assumed withdrawal rate, then the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

(g) Investment Risk

For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

(h) Liquidity Risk

Employees with high salaries and long durations of service or those higher in hierarchy accumulate significant level of benefits. If some of such employees resign / retire from the company there can be strain on the cash flows.

(i) Market Risk

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate / government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

(j) Legislative Risk/ Regulatory Risk

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation / regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation. The new labour code is a case in point. And the same will have to be recognized immediately in the year when any such amendment is effective.

(ii) Sensitivity Analysis

How the DBO would have been affected by 100 basis points changes in the actuarial assumptions namely discount rates, salary growth Attrition & Mortality is shown below:

P.U.C method has been used. If an employee''s service in later years will lead to a materially higher level of benefit than in earlier years these benefits are attributed on a straight-line basis. The limitations are that in assessing the change other parameters are kept constant. As some of the assumptions may be correlated, it is unlikely that changes in assumptions will occur in isolation of one another.

There is no change from the previous period in the methods and assumptions used in the preparation of above analysis, except that the base rates have changed.

(iii) Asset Liability Matching Strategies

(a) Gratuity - Employees : Insurer Administered Fund

The Company has funded the liability with the insurance company. The entire investible assets are managed by the fund managers of the Insurance company and the Asset Values as informed by the Insurance Company has been taken for the valuation purpose. The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities.

Thus the Company is exposed to movement in interest rate (in particular the significant fall in interest rates which should result in an increase in liability without corresponding increase in the asset).

(b) Gratuity - Casual Labour (CLR) : Pay As You Go Method

The Company is only making book provisions for the entire Gratuity Liability on the valuation and follows a ''pay as you go'' system to meet the liabilities as and when they fall due. Therefore, the scheme is fully unfunded, and no assets are maintained by the Company and asset values are taken as zero; there is liquidity risk in that they may run out of cash.

(iv) Major Categories of Plan Assets

Gratuity for employees (other than CLR) is covered under a scheme of Life Insurance Corporation of India (LIC) which is basically a year-on-year cash accumulation plan. As part of the scheme, the interest rate is declared on yearly basis. The insurance company, as part of the policy rules, makes payment of all gratuity settlements during the year subject to sufficiency of funds under the policy.

(v) Other disclosures

(a) Gratuity - Employees :

The Company has started funding the liability through the medium of an insurance company and regular assessment is made by the insurance company of the increase in liability under certain assumptions and contributions are being made to maintain the fund. Subject to the credit risk of the insurance company and asset liability mismatch risk of the investments, the Company will be able to meet the past service liability on the valuation date that fall due during the next 3 years.

E. Leave Encashment - Other Disclosure Requirements

(i) Description of Plan Characteristics and Associated Risks:

The leave scheme is a final salary defined benefit plan, that provides for a lumpsum payment at the time of separation; based on scheme rules the benefits are calculated on the basis of last drawn salary and the leave count at the time of separation and paid as lumpsum.

The design entails the following risks that affect the liabilities and cash flows.

(a) Interest Rates Risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

(b) Salary inflation Risk:

Higher than expected increases in salary will increase the defined benefit obligation.

This is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition, disability and retirement. The effects of this decrement on the DBO depend upon the combination salary increase, discount rate, and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of short serving employees will be less compared to long serving employees.

(ii) Sensitivity Analysis

How the DBO would have been affected by 100 basis points changes in the actuarial assumptions namely discount rates, salary growth, Attrition & Mortality is shown below:

P.U.C method has been used for sensitivity analysis. If an employee''s service in later years will lead to a materially higher level of benefit than in earlier years, these benefits are attributed on a straight-line basis. The limitations are that in assessing the change other parameters are kept constant. As some of the assumptions may be correlated, it is unlikely that changes in assumptions will occur in isolation of one another.There is no change from the previous period in the methods and assumptions used in the preparation of above analysis, except that the base rates have changed.

iii. Other Disclosures

The Company has not started funding the leave liability & has been following pay as you go method for settlement of the liability.

(b) No charge or satisfaction of charges is pending to be registered with Registrar of Companies beyond the statutory period.

(d) There are no transactions that are not recorded in the books of account to be surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

(e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(f) No funds (which are material either individually or in the aggregate) 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 or entity, including foreign entity ("Intermediariesâ),with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiariesâ)or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(g) No funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("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;

(h) The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender.

50. Contingent Liabilities and Commitments (to the extent not provided for): (i) Contingent Liabilities		'' In Lakh
Particulars	As at 31^st March 2025	As at 31^st March 2024
Claims against the company not acknowledged as debts in respect of: Central Excise Act, 1944	5,039.94	11,612.91
Service Tax (Finance Act, 1994 )	402.64	388.75
Sales Tax / Value Added Tax/ Entry tax	292.50	287.69
Goods and Service Tax	450.88	215.10
Income Tax Act, 1961	4.26	4.26
ESI Act	127.83	127.83
Suppliers and contractors	29,655.09	28,024.64
Payment of Bonus Act,1965	33.59	33.59
Others	16,024.85	11,043.07

50.1. The contract for the barge transportation of Ammonia awarded to a private company has been cancelled void ab initio during 2004-05 by the Company. The Contractor claimed '' 1,78,489.75 lakh including interest till 31.03.2013 before the arbitrator .The arbitrator has passed an award during the year 2013-14 in favour of the contractor for ''17,308.04 lakh including interest as on 31.12.2013. As per the award, the mobilisation advance paid by the Company to the contractor along with interest of ''2,798.29 lakh is to be adjusted against the said award. The Company has not accepted the award on legal and factual grounds and has challenged the award before the Hon'' District Court , Ernakulam which has since stayed the award. During the year 2019-20, as per the directive of Hon'' District Court, Ernakulam, the Company has provided 80.50 acres of land as security for the award. Accordingly, the award amount along with interest up to 31.03.2025, amounting to ''28,751.98 lakh (Previous year - '' 27,734.43 lakh), without considering the adjustment of mobilisation advance and interest allowed under the arbitral award, is not considered as a liability and included under Contingent Liability. The case is transferred to Commercial Court.

50.2. A plan loan of ''100000.00 lakh bearing interest @13.50% per annum was released by the Government of India (GOI) on 29th March 2016 to maintain the operations of the Company. As per the order of Government of India, ''100000.00 lakh along with the earlier loan and interest outstanding has been converted into a single loan carrying interest @ 13.50% per annum with one year moratorium. As per the terms of sanction, Government reserves right to enhance the rate of interest to 16.25% in case of default in repayment. As no communication in this regard has been received from the Government, as on date, ''14,646.54 lakh (Previous year- ''9,777.70 lakh) being additional interest from financial year 2022-23 has been shown as contingent liability (Refer Note 21.1).

50.3. ''392.82 lakh is claimed by a transport contractor in an arbitration petition filed by them in response to ''298.02 lakh withheld from the contractor bills and initiation to invoke bank guarantee of ''143.22 lakh towards compensation for non-delivery of goods. Company filed a counter claim of ''224.03 lakh (including interest). ''94.80 lakh (Previous year- ''94.80 lakh) is included in the contingent liability towards the claim.

50.4. Contingent Liability as on 31.03.2025, includes ''116.94 lakh (Previous year- ''104.27 lakh) being the amount payable as per the Arbitration Award, to a customer whose contract for sale of bulk gypsum was terminated by the Company during the year 2016-17. Challenging the Award a petition has been filed by the Company before the Commercial Court, North Paravur. The Hon''ble Court granted stay of the operation of the Award subject to deposit of the 50% of the awarded amount or furnishing Bank Guarantee for the entire awarded amount. In compliance with the direction of the court, we have furnished Bank Guarantee for ''175.22 lakh which was valid till 02.03.2025.

50.5. As per the Presidential directive and the agreement entered into between the Company and the trade unions for implementation of the 2017 wage revision, the Company is not liable to pay arrears of salary and wages for the period from 01.01.2017 to 31.03.2022, in respect of managerial and nonmanagerial employees. Certain retired employees of FACT have filed Writ Petitions before the Hon. High Court of Kerala praying for a direction to the Company to disburse arrears of pay revision and other consequential benefits for the period from 01.01.2017 to the respective retirement dates of the petitioners. Since a verdict/ decision on payment of arrears relating is not taken, the amount of liability cannot be ascertained at this stage.

Contingent assets in respect of ''Suppliers and Contractors'' includes '' 19,623.74 lakh (Previous year '' 11,854.25 lakh) receivable from a contractor on the interest bearing mobilisation advance still retained by the party (refer Note 4.1,13.2). It also includes reduction in regasification charges Nil (Previous year '' 2,461.45 lakh) receivable from oil companies in respect of Regasified Liquified Natural Gas during the year 2019-20. This disputed matter is referred to Administrative Mechanism for Resolution of CPSEs Disputes (AMRCD). The Company has considered the amount receivable towards refund of excess regasification charges as Exceptional Income during the year and initiated steps for withdrawal of dispute referred to AMRCD (Refer Note 36.1).

52. Construction Contracts

(i) National Institute of Technology ( NIT), Nagaland - As per technical evaluation, 95% (Previous year 70.70%) of work related to consultancy services by FEDO to NIT has been completed as on 31.03.2025 and pro-rata credit of '' 603.42 lakh (Previous year '' 600.53 lakh) has been taken, after considering unearned income as '' 8.41 lakh (Previous year '' 11.30 lakh ). The value of construction work billed and certified during the FY 2024-25 is taken as '' 459.02 lakh (Previous year '' 541.40 lakh) and equivalent amount has been considered for direct charges on contract.

(ii) Kendriya Vidyalaya Harda (KV) - As per technical evaluation, 15% (Previous year 2%) of work related to consultancy services by FEDO to KV, has been completed as on 31.03.2025 and pro-rata credit of '' 48.66 lakh (Previous year '' 40.06 lakh) has been taken, after considering work in progress as Nil (Previous year -Nil ). The value of construction work billed and certified during the FY 2024-25 is taken as '' 283.08 lakh (Previous year -Nil) and equivalent amount has been considered for direct charges on contract.

53. Disclosure in respect of Changes in Accounting policies, Changes in Accounting Estimates and Errors.

During the year, the Company has reassessed the basis of recoverability of subsidy portion of P&K fertilizer stock with dealers pending sale to ultimate beneficiary from 90% to 95%, considering substantial improvement in DBT acknowledgement over the period. The impact on account of this change is increase in Revenue from Operations and Other Accrued Income by '' 1,294.00 lakh in the financial statements for the year ended 31.03.2025 . (Refer Notes 11.1 and 27.1.)

During the year, the Company has reviewed and reassessed the threshold limit for accounting of the errors and omissions in individual items of Income and Expenditure relating to earlier periods from '' 5 lakh to '' 50 lakh. The impact on account of this change is increase in restated profit before tax for the year ended 31.03.2024 and corresponding decrease in profit before tax for the year ended 31.03.2025 by '' 26.15 lakh. .

During the year, certain errors or omission were identified. Accordingly, previous year financial statements are restated, as per the provisions of Ind AS 8. The nature of restatements and its impact in the previous financial statements is as follows:

(i) Restatements of Previous Year Figures

(a) An amount of ''151.95 lakh booked under Repairs and Maintenance has been categorised to Capital Work in Progress .

(b) The undervaluation of Gypsum stock amounting to '' 54.28 lakh as on 31.03.2024 has been corrected.

(c) De-scoping of deposit work of NIT carried out by FEDO during the financial year 2023-24, impact being '' 371.27 lakh.

57 The standalone financial statements were authorized for issue in accordance with a resolution passed by the Board of Directors on 26.05.2025.

58 The financial statements as approved by the Board of Directors are subject to audit by Comptroller and Auditor General of India and final approval by the Shareholders.

59 The figures of the previous year have been regrouped wherever necessary to make them comparable with those of the current year.

60 Events occurring after the Balance Sheet date

(i) Board of Directors have recommended a final dividend of '' 0.20 per equity share of ''10/- each (Previous year '' 0.97 per equity share) i.e. 2.00% on paid up equity share capital of the Company for the financial year 2024-25 (Previous year 9.70% on paid up equity share capital) which is subject to approval of Shareholders of the Company.

(ii) The Company has received communications from suppliers of Regasified Liquified Natural Gas (RLNG) towards refund of excess regasification charges of '' 2,461.45 lakh paid by the Company in respect of RLNG procurement for the period May 2019-May 2020. Accordingly, the amount receivable has been accounted as exceptional item during the Financial year 2024-25 in the Statement of Profit and Loss- Refer Note 36.1.

Mar 31, 2024

xx) Provisions, Contingent Liabilities and Contingent Assets

Provision is recognised in the accounts when there is a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Show Cause notices issued by various Government Authorities are not considered as Obligation. When the demand notices are raised against such show cause notices and are disputed by the company, these are classified as disputed obligations.

The treatment in respect of disputed obligations, in each case, is as under:

i) a provision is recognized in respect of present obligations where the outflow of resources is probable

ii) all other cases are disclosed as contingent liabilities unless the Possibility of outflow of resources is remote.

Contingent Assets are not recognized in the financial statements, however where the inflow of economic benefits are probable as at the end of the reporting period, a brief description of the nature of the contingent assets along with its estimated financial effect is disclosed in the financial statements.

xxi) Non-current assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities are classified as held for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use. Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any resultant loss on a disposal group is allocated first to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, and biological assets, which continue to be measured in accordance with the Group''s other accounting policies. Losses on initial classification as held for sale and subsequent gains and losses on re-measurement are recognized in profit or loss. Once classified as held-for-sale, intangible assets, property, plant and equipment and investment properties are no longer amortized or depreciated.

xxii) Financial Instruments Financial Assets Classification

The Company classifies its financial assets in the following measurement categories, those to be measured subsequently at fair value (either through other comprehensive income, or through profit and loss), and those measured at a mortised cost.

The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses arising from fair valuation will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

Measurement Initial recognition

The Company measures a financial asset at its fair value and, in the case of a financial asset not at fair value through profit or loss, at fair value including transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are recognised in profit and loss.

Subsequent Measurement

Subsequent measurement of financial assets depends on the Company''s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its financial assets:

Amortized Cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost.

Fair value through other comprehensive income (FVOCI)

Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other income. Fair value through Profit and Loss(FVTPL)

Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit and loss.

Investments in Joint Venture

Investment in Joint venture is recognised at fair value through FVOCI Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Financial Liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition as loans and borrowings, payables, derivatives and financial liabilities at fair value through profit or loss. The Company''s financial liability consists of trade and other payables, loans and borrowings, bank overdrafts, financial guarantee contracts and derivative financial instruments.

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, if any.

Subsequent measurement

The subsequent measurement of financial liabilities of the Company depending on their classification is described below:

De-recognition

A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires.

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 set off the recognized amounts and there is an intention to settle on net basis, to realize the assets and settle the liabilities simultaneously.

Loans and borrowings including bank overdrafts

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 interest-bearing loans and borrowings.

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder of the guarantee for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognized less cumulative amortization.

xxiii) Exemption as per Ind AS 101

Company has elected to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition measured as per Indian GAAP and use that as its deemed cost as at date of transition to Ind AS. The same is applicable even for Investment property and intangible assets.

Company has also reviewed the necessary adjustments required to be done in accordance with paragraph D21 of the standard (i.e. adjustments arising on account of decommissioning or restoration liabilities) and has accordingly considered the impact of the same wherever applicable.

The Company has designated unquoted equity instruments held at 1st April 2016 as fair value through OCI.

xxiv) Statement of Cashflow

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

xxv) Earnings per share

Basic earnings per share is computed using the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of equity and dilutive equivalent shares outstanding during the period.

xxvi) Dividend

The Company recognizes a liability to pay dividend to shareholders when the distribution is authorized and the same is no longer at the discretion of the Company.Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors. A corresponding amount is recognized directly in equity.

xxvii) Exceptional Items

Exceptional items of income and expenses within profit or loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such items are disclosed separately as exceptional items.

Notes

1. Current Assets include inventories and trade receivables pledged as Primary Security for Fund/ Non Fund based Working Capital arrangement with Banks amounting to '' 118500.00 Lakh. The utilisation of this arrangement as on reporting date is.'' 7834.86 lakhs ( Previous year '' 5113.56 Lakh)

2. Inventory of finished goods, raw material, stores and spares and work in progress are valued as per the Accounting Policy of the Company

3. Finished Goods includes 21.09 lakhs MT of saleable gypsum (bulk) (Previous Year 21.36 lakh MT) amounting to ''12343.50 lakh (Previous year '' 11973.30 lakh). For assessing the closing stock of gypsum as on 31.03.2024, the saleable quantity has been assessed on the basis of physical verification conducted at the end of the financial year.

4. Stores & Spares in transit includes Stores & Spares at site pending inspection '' 281.93 lakh (Previous year '' 214.61 lakh )

5. During the year 2021-22, company had detected irregularities in the physical stock to the tune of 543.60 MT of Factamfos and 60.50 MT in Ammonium Sulphate at Chikmagalur Depot valued at '' 218.50 lakhs. Company had provided for the entire amount of '' 218.50 lakhs. The Company has since realised an aggregate amount of '' 63.85 lakhs being the sale value of 256.95 MT of Factamfos from various dealers during the year 2022-23 in connection with the above. However, the company has maintained the provision of '' 218.50 lakhs pending completion of investigation. Company has taken steps for recovery from transporters, dealers and warehouse (Refer Note. 13.3, 24.1,25.2, 27.1 )

6. 90% provision has been made for non-moving stock of stores & spares, ageing five years and more, as on 31.03.2024.

1. The bills discounted are secured against the corresponding trade receivables

2. A plan loan of ''.100000.00 lakh bearing interest @13.50% per annum was released by the Government of India (GOI) on 29th March 2016 to maintain the operations of the Company. As per the order of Government of India, ''100000.00 lakh along with the earlier loan '' 28273 lakhs and interest outstanding has been converted into a single loan carrying interest @ 13.50% per annum with one year moratorium. As per the letter dated 12.01.2016, of the Ministry of Finance, GOI, sanctioning the loan, the total outstanding liability of the Company is ''183672.00 lakh. The Company entered into an agreement with the Department of Fertilizers(DOF), GOI, agreeing to mortgage 408 acres of Company''s land to secure repayment of the entire loan together with interest at the rate of 13.50% per annum on the amount outstanding as on 31.03.2017. The loan amount was reconciled and loan outstanding along with interest accumulated (upto 31.03.2017) has been arrived at ''177048.75 lakh as on 31.03.2017. The loan along with interest is repayable in three or more equated instalments within a period of 5 years ending by 2022. Accordingly, the entire principal amount, being '' 177048.75 lakhs (previous year- '' 177048.75 lakhs) has been classified under Current Liabilities-Current maturities of Long term Debt. The outstanding principal and interest as on 31.03.2023 has been confirmed with the balance of Government of India.

2. Research and Development Expenditure includes expenditure towards salary '' 49.38 lakh (Previous year ''35.39 lakh), chemicals & stores '' 3.43 lakh (Previous year '' 0.19 lakh) and depreciation '' 0.09 lakh (Previous year ''0.09 lakh).

3. Miscellaneous Expenses includes Directors travel amounting to '' 20.70 lakh (Previous year '' 13.47 lakh)

4. Differences noticed ( Excess(-)/Shortage) on perpetual verification of stores and spares compared to book records have been adjusted in the books of accounts, which for Current year is '' 8.04 lakh (Previous year '' 7.68 lakh)

5. Provision for doubtful receivables & advances includes provision towards VAT reimbursement receivable on the RLNG procurement up to 31.03.2022 .Current year Nil ( Previous Year '' 18301.45 lakh).From the financial year 2022-23, the VAT incurred on RLNG procurement is being accounted as ''consumption of Raw material / fuel'' in the Statement of Profit & loss (Refer Note 13.1).

6. Expenses towards Corporate Social Responsibility

The Company is liable to spend during the financial year 2023-24, '' 873.22 lakhs (Previous Year- '' 471.39 lakhs), on Corporate social responsibility, being 2% of the average net profit for the immediately preceding three financial years, as per section 198 of the Companies Act 2013. Company has spent an amount of '' 1662.46 lakhs (Previous year-'' 35.31 lakhs)towards Corporate Social Responsibility projects pertaining to the financial year. The excess amount of '' 789.24 lakhs has been classified under ''Current Assets''.

^ lrÂ» I ^ 1/h

40. Fair Value Hierarchy

The management has assessed that its financial assets and liabilities like cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The following methods and assumptions were used to estimate the fair values for the given below financial assets.

Investment in Unquoted Equity Shares

The fair values of the unquoted equity shares have been estimated using NAV model.

Derivatives not designated as hedges

Foreign exchange forward contracts if entered in to, are valued using valuation techniques, which employs the use of market observable inputs (i.e. based on inputs/statement of position received from banks).

Investment Properties

The value of the investment properties are based on the information available in Government of Kerala fair value notification, market conditions etc.

B. Leases as lessee

The Lease Liability is measured at the present value of remaining lease payments at the date of initial application and Right-of-use asset has been recognized at an amount equal to Lease Liability adjusted by an amount of any prepaid expenses. . Under Ind AS 116 "Leasesâ, at commencement of lease, the Company recognizes Right-of-use asset and corresponding Lease Liability, at State Bank of India 1 year MCLR. Right-of-use asset is depreciated over lease term on systematic basis and Interest on Lease Liability is charged to Statement of Profit and Loss as Finance cost.

Recognition of right of use Asset and corresponding lease liability, as per IndAS 116, has been made in respect of the property taken for lease (Operating lease) for the purpose of storage and handling of Raw Materials, at Willington Island and for Guest House facility at New Delhi

a) The following is the detailed breakup of Right-of-use assets (by class of underlying assets) disclosed in Note No. 2C

Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s trade and other receivables, cash and cash equivalents and other bank balances. The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their respective carrying amount.

(i) Trade and other receivables

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to '' 15813.73 lakh (Previous year '' 47887.48 lakh) of which '' 6750.04 lakh (previous year '' 40259.93 lakh) due from Government of India relating to subsidy receivable. Trade receivables mainly constitute subsidy receivable from the Government of India and receivable from sale of petrochemical products Expected credit loss assessment for Trade and other receivables

The Company has been consistently following a policy of creating 100% provision for the unsecured portion of the trade receivables that are more than three years old, except subsidy receivables from Government of India, wherein allowance for loss is made after analysis of possibility of realisation.

The following table provides information about the exposure to credit risk and the provisions made

(ii) Cash and Cash equivalents and Other Bank Balances

The Company held cash and cash equivalents and other bank balances of '' 267932.29 lakhs at 31st March 2024 (31st March 2023: '' 238784.40 lakhs). The Cash equivalents are held with banks with good credit ratings and financial position. Also, the Company invests its short term surplus funds in bank fixed deposits, which carry no / low market risks for short duration and therefore does not expose the Company to credit risk.

The following are the remaining contractual maturities of significant financial liabilities at the reporting date.

(i) Currency Risk

The Company''s activities are exposed primarily to the financial risk of changes in foreign currency rates. To mitigate the foreign currency risk, the company is closely monitoring the market trend to take appropriate action

(ii) Interest rate risk

Exposure to interest rate risk:

The Company''s investments are in Bank fixed deposits wherein the interest rates are fixed, as on the reporting date.

The Company do not have any fund based borrowing with banks as on the reporting date. The interest rate on the Company''s borrowings from Government of India is not fluctuating. The rate of interest on Intercorporate loan from Rashtriya Chemicals and Fertilisers Ltd is subject to change, based on the lowest cost of their working capital finance. The Intercorporate loan outstanding as on 31.03.2024 is ''510 lakh and the applicable interest as on the reporting date is 7.82%.

(iii) Commodity rate risk

The Company''s profitability gets affected by the price differential (also known as Margin) between prices of products (output) and the price of the raw materials used in production (input). Company has entered in to agreement with suppliers of one of the major raw materials, Regassified Liquified Natural Gas and sulphur, to mitigate the fluctuation in market price

(iv) Price Risk

CAPITAL MANAGEMENT

The Company''s primary objective is to maximize the shareholders'' value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. Presently, the Company sources 100 % of its capex requirement from the internal accruals. The Company, being a Central Public sector undertaking, is governed by the guidelines of the Department of Investment & Public Asset Management (DIPAM), which specifies the minimum percentage of dividend to be declared. Taking in to consideration the future capex requirements, the Company considers the payment of dividend at the appropriate rates.

43. Disclosure under Ind AS 24 on related party transactions are given below

Certain transactions are carried out with other government related entities for purchase of Gases, for procurement of Raw Materials / Finished Goods, Assets / Spare Parts from Original equipment manufacturers, which are significant in terms of value, the details of which are as under:

The Company and M/s.Rashtriya Chemicals & Fertilisers Ltd(RCF) had provided Corporate Guarantee to the lenders of M/s.FACT-RCF Building Products Ltd-the 50:50 joint venture between the Company and RCF. During the year 2018-19, RCF had settled the entire liability to the bankers, to the extent of ''5100 lakhs including 50% share of the Company ''2550 lakhs on the condition that the Company shall treat the amount paid by RCF on behalf of the Company as Inter-Corporate loan. Accordingly, the amount of '' 2550 lakhs has been classified as Intercorporate loan. The principal amount outstanding as on 31.03.2024 is '' 510 lakh (Previous year '' 1020 lakh). Interest rate applicable on the loan for the year 2023-24 is 7.82 % p.a. (Previous year- 7.38% p.a).

Department of Fertilisers, Govt of India, had accorded the approval (16 November 2018) to The Fertilisers and Chemicals Travancore Limited (FACT) for additional investment of '' 2925 lakh to the equity share capital of FACT-RCF-Building Products Limited (FRBL).FRBL is a joint venture between FACT and Rashtriya Chemicals & Fertilisers Limited (RCF). FACT in its 75th Annual General Meeting approved the additional investment in FRBL. Against approval received for '' 2925 lakh, FRBL had issued equity shares amounting to '' 1518 lakh towards gypsum supplied and other services provided by FACT during the period from 20102013. Further,FRBL during the year 2022-23 has allotted shares to FACT amounting to '' 235.70 lakhs. Balance Equity Shares against which gypsum and other services provided by FACT during 2014-2017, are pending for allotment by FRBL. The same has been disclosed under advances to related parties. Further, supply of gypsum from FACT amounting to '' 239 lakh is still pending as on 31 March 2024 to complete the above additional investment.

National Company Law Tribunal (NCLT), Kochi Bench, vide its order dated 1 1.01.2024 in CP(IBC)/39/KOB/2023 filed by a financial creditor of FACT-RCF Building Products Ltd (FRBL) appointed an Interim Resolution Professional (IRP) for initiating Corporate Insolvency Resolution Proceedings against FRBL as per Insolvency & Bankruptcy Code, 2016. Accordingly, the Board of Directors of FRBL was superseded.The Resolution Professional commenced the proceedings and is in the process of publishing advertisement for Expression of interest from the prospective applicants for submission of resolution plan for FRBL.

During the year 2009-10, the Company has along with Department of Factories and Boilers, Government of Kerala, formed a society under the Travancore Literary, Scientific and Charitable Societies Act 1955 with the objective of conducting courses relating to welding technologies with a grant of '' 1 Crore from the Government of Kerala, under the name Kerala institute of Welding and Research. The contribution from the Company is only provision of its existing facilities of Training School. The accounts of the society are not as society is formed with an objective of not obtaining any economic benefits from its activities and is considered immaterial to the Company''s activity.

2) Key Management Personnel

1. Shri S C Mudgerikar, Chairman & Managing Director ( From 23.02.2024)

2. Shri Kishor Rungta, Chairman and Managing Director (from 02.02.2019 to 01.02.2024)

3. Shri.Anupam Misra, Director (Marketing) (from 14.07.2020)

4. Shri.S.Sakthimani, Director (Finance) & Chief Financial Officer (From 08.03.2021)

5. Dr.Jayachandran.K, Director (Technical) (From 03.03.2023)

6. Smt.Susan Abraham, Company Secretary from 15.07.2022

46. EMPLOYEE BENEFITS

General Description of Defined Contribution Plan

ontributory Superannuation Scheme-The scheme is aimed to provide superannuation benefits to the employees. Every year company contributes ''100 to the fund.

General Description of Defined Benefit Plan A Leave Encashment and Gratuity

The company operates gratuity plan where in every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on death , separation from service or retirement , whichever is earlier. The benefit vests after five years of continuous service. The company has been accounting for provision on account of leave encashment on retirement based on actuarial valuation carried out as at the balance sheet date B Provident Fund

The Provident Fund contributions are made to Trusts administered by the company. The interest rate payable to the members of the Trust shall not be lower than statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act 1952.

During the year an amount of ''1888.86 lakh ( Previous Year ''1908.42 lakh) has been charged to Statement of Profit & Loss towards contribution by the Company. In terms of the Ind AS 19 , the Provident Fund Trust set up by the company is treated as Defined Benefit Plan since the company has to meet the shortfall in the fund assets, if any.

During the year, vide GO (P) No. 85/2023/ LBR dated 11.10.2023 Government of Kerala (appropriate authority as per Para 27A of Provident Fund and Miscellaneous Provisions Act, 1952) withdrew exemption granted for the Company in respect of The FACT Cochin Division Employees Provident Fund on account of three years continuous loss incurred by the Company . Company has challenged the same and filed a writ petition before the Hon'' High Court of Kerala and the notification has been stayed by the Honorable High Court. The matter is still pending.

During the year 2022-23, vide, G.O (Rt.) No. 354/2023/LBR dated 23.03.2023 Government of Kerala (appropriate authority as per Para 27A of Provident Fund and Miscellaneous Provisions Act, 1952) withdrew exemption granted for the Company in respect of The FACT Employees Provident Fund, Udyogamandal Division on account of three years continuous loss incurred by the company . Company has challenged the same and filed a writ petition before the Hon'' High Court of Kerala and the notification has been stayed by the Honorable High Court. The matter is still pending.

GRATUITY- OTHER DISCLOSURE REQUIREMENTS

(i) Description of plan Characteristics and associated risks:

The Gratuity scheme is a final salary defined benefit plan that provides for a lumpsum payment at the time of separation; based on scheme rules the benefits are calculated on the basis of last drawn salary and the period of service at the time of separation and paid as lumpsum. There is a vesting period of 5 years. The design entiles the following risks that affect the liabilities and cash flows

Interest rates risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall the defined benefit obligation will tend to increase. Thus the plan exposes the Company to the risk of fall in interest rates. Some times the fall can be permanent due to a paradigm shift in interest rate scenarios because of economic or fiscal reasons. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements). Even for funded schemes a paradigm downward shift in bond yields may affect the reinvestment yields and may increase ultimate costs.

Salary inflation risk:

The present value of the defined benefit plan is calculated with the assumption of salary escalation rate(SER) which is applied to find the salary of plan participants in future at the time of separation Higher than expected increases in salary will increase the defined benefit obligation and will have an exponential effect.

Retirement age:

It should be noted that in case of employees above retirement age for the purpose of valuation it is assumed they will retire immediately & benefit is considered up to actual retirement age.

Demographic risks:

attrition disability and retirement. The effects of this decrement on the DBO depend upon the combination salary increase discount rate and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of a short serving employees will be less compared to long service employees.

Asset Liability Mismatch:

This will come into play unless the funds are invested with a term of the assets replicating the term of the liability.

Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date Investment Risk

For funded plans that rely on insurers for managing the assets the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the intervaluation period.

Liquidity Risk

Market Risk

Legislative risk/Regulatory risk

(ii) Sensitivity Analysis

How the DBO would have been affected by 100 basis points changes in the actuarial assumptions namely discount rates salary growth Attrition & Mortality is shown below

being a cash accumulation plan the duration of assets is shorter compared to the duration of liabilities. Thus the Company is exposed to movement in interest rate (in particular the significant fall in interest Rates which should result in a increase in liability without corresponding increase in the asset). .Thus the Company is exposed to movement in interest rate (in particular the significant fall in interest Rates which should result in a increase in liability without corresponding increase in the asset).

GRATUITY-CASUAL LABOUR (CLR)

Pay As You Go Method

The company is only making book provisions for the entire Gratuity Liability on the valuation and follows a ''pay as you go'' system to meet the liabilities as and when they fall due. Therefore the scheme is fully unfunded, and no assets are maintained by the company and asset values are taken as zero; there is liquidity risk in that they may run out of cash.

(iv) Other disclosures GRATUITY-EMPLOYEES :

The company has started funding the liability through the medium of an insurance company and regular assessment is made by the Company of the increase in liability and contributions are being made to maintain the fund and is subject to the credit risk of the insurance company and asset liability mismatch risk of the investments .

d) There are no transactions that are not recorded in the books of account to be surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

e) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

f) No funds (which are material either individually or in the aggregate)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 or entity, including foreign entity(''Intermediariesâ),with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company(''Ultimate Beneficiariesâ)or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

g) No funds (which are material either individually or in the aggregate)have been received by the Company from any person or entity, including foreign entity("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;

h) The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender.

48.1 The contract for the barge transportation of Ammonia awarded to a private company has been cancelled void ab initio during 2004-05 by the Company. The Contractor claimed ? 178489.75 lakh including interest till 31.03.2013 before the arbitrator .The arbitrator has passed an award during the year 2013-14 in favour of the contractor for ?17308.04 lakh including interest as on 31.12.2013 .As per the award, the mobilisation advance paid by the Company to the contractor along with interest of ?2798.29 lakh is to be adjusted against the said award. The Company has not accepted the award on legal and factual grounds and has challenged the award before the Hon'' District Court , Ernakulam which has since stayed the award. During the year 2019-20, as per the directive of Hon'' District Court, Ernakulam the Company has provided 80.50 acres of land as security for the award. Accordingly, the award amount along with interest up to 31.03.2024, amounting to ? 27734.43 lakh without considering the adjustment of mobilisation advance and interest allowed under the arbitral award is not considered as a liability and included under Contingent Liability. The case is transferred to Commercial Court.

48.2. A plan loan of ?.100000.00 lakh bearing interest @13.50% per annum was released by the Government of India (GOI) on 29th March 2016 to maintain the operations of the Company. As per the order of Government of India, ?100000.00 lakh along with the earlier loan and interest outstanding has been converted into a single loan carrying interest @ 13.50% per annum with one year moratorium. As per the terms of sanction , Government reserves right to enhance the rate of interest to 16.25% in case of default in repayment. As no communication in this regard has been received from the Government, as on date, ? 9777.70 lakhs (previous year- ? 4895.52 lakhs) being additional interest from financial year 2022-23 has been shown as contingent liability (refer Note 22.2)

48.3. ? 392.82 lakhs (Previous year- ? 392.82 lakhs) is claimed by a transport contractor in an arbitration petition filed by them in response to ? 298.02 lakhs withheld from the contractor bills and initiation to invoke bank guarantee of ?143.22 lakhs towards compensation for non-delivery of goods. Company filed a counter claim of ? 224.03 lakhs (including interest). ? 94.80 lakhs is included in the contingent liability towards the claim.

48.4 Contingent Liability as on 31.03.2024, includes ? 104.27 Lakh being the amount payable as per the Arbitration award , to a customer whose contract for sale of bulk gypsum was terminated by the Company during the year 2016-17. In response to the Execution petition filed by the party, the Hon''ble High Court issued an interim injunction attaching an amount of ? 175.64 lakhs in the Company''s bank account. Challenging the same, we have filed objection petition which has been admitted by the Hon Court and interim stay has been granted vide order dt . 6.12.2023. vide order dt 12.7.2023 Hon''ble court has dismissed the EP as not pressed. In view of the dismissal of EP the OP has also been closed vide order dt 20.10.2023.

48.5 As per the Presidential directive and the agreement entered into between the Company and the trade unions for implementation of the 2017 wage revision, the company is not liable to pay arrears of salary and wages for the period from 01.01.2017 to 31.03.2022, in respect of managerial and nonmanagerial employees. Certain retired employees of FACT have filed Writ Petitions before the Hon. High Court of Kerala praying for a direction to the company to disburse arrears of pay revision and other consequential benefits for the period from 01.01.2017 to the respective retirement dates of the petitioners. Since a verdict/decision on payment of arrears relating is not taken, the amount of liability

1. Contingent assets in respect of ''Suppliers and Contractors'' includes '' 6468.65 lakhs (Previous year ''5385.59 lakhs) for the year 2023-24 receivable from a contractor on the interest bearing mobilisation advance still retained by the party(refer Note 4.1, 13.2). It also includes reduction in regasification charges '' 2461.45 lakhs receivable from oil companies in respect of Re-gassified Liquified Natural Gas during the year 2019-20. This disputed matter is presently pending before Administrative Mechanism for Resolution of CPSEs Disputes ( AMRCD)

51. Construction Contracts

Income under services for own units reckoned by the Engineering and Consultancy Division (FEDO) and the Fabrication Division (FEW) is accounted by respective units under revenue expenditure '' 1012.21 lakh (Previous year '' 730.16 lakh ), and capital expenditure '' 850.09 lakh (Previous year '' 2267.82 lakh ).In the case of work being carried out by FACT Engineering and Design Organisation (FEDO), for National Institute of Technology ( NIT), Nagaland, as an executing agency, on a cost plus basis, as a deposit work , FEDO is eligible for certain percentage of fees of total project cost . As per technical evaluation ,70.70 %(previous year 52.46%) of work related to consultancy services by FEDO to NIT, has been completed as on 31.3.2024 and pro-rata credit of '' 986.40 lakh ( previous year ''888.27 lakh) has been taken, after considering ''360.40 lakh towards work in progress ( previous year ''276.44 lakh). The value of construction work billed and certified during the year 2023-24 is taken as '' 541.40 lakh, (previous year Nil) and equivalent amount has been considered for direct charges on contract.

55. The standalone financial statements were authorized for issue in accordance with a resolution passed by the Board of Directors on 16.05.2024

56. The financial statements as approved by the Board of Directors are subject to audit by Comptroller and Auditor General of India and final approval by the Shareholders.

57. The figures of the previous year have been re-arranged and regrouped wherever necessary and / or practicable to make them comparable with those of the current year.

58. Events occurring after the Balance sheet date

Board of Directors have recommended a final dividend of ? 0.97 per equity share of ? 10/- each (previous year ? 1.00 per equity share ) i.e. 9.70 % on paid up equity share capital of the Company for the financial year 2023-24 ( Previous year 10% on paid up equity share capital) which is subject to approval of Shareholders of the Company.

As per our Report of even date attached For G. Venugopal Kamath & Co

Chartered Accountants For and on behalf of the Board of Directors

Firm Registration No. 004674S

Sd/- Sd/- Sd/-

Vivek N Shenoy S Sakthimani S.C. Mudgerikar

Partner Director (Finance) & Chief Financial Officer Chairman & Managing Director

Membership No.217021 DIN 07482308 DIN 03498837

Sd/-

Place: Kochi Susan Abraham

Date: 16.05.2024 Company Secretary

Mar 31, 2023

1. Current Assets include inventories and trade receivables pledged as Primary Security for Fund/ Non Fund based Working Capital arrangement with Banks amounting to '' 78500.00 Lakh. The utilisation of this arrangement as on reporting date is '' 5113.56 Lakh.

2. Inventory of finished goods, raw material, stores and spares and work in progress are valued as per the Accounting Policy of the Company

3. Finished Goods includes 21.36 lakh MT of saleable gypsum (Previous Year 22.00 lakh MT) amounting to '' 11977.68 lakh (Previous year '' 10161.25 lakh). During the current year, Company has changed the accounting policy of assessing the closing stock of gypsum. For assessing the closing stock of gypsum as on 31.03.2023, the saleable quantity has been assessed on the basis of physical verification conducted at the end of the financial year, as against the prior policy of arriving year end stock based on the technical study as on 30.09.2018 as adjusted by the production, consumption, despatch and sales, till the year end. The increase in the value of inventory as on 31.03.2023 due to the change in the accounting policy is '' 98.49 lakhs. The retrospective application of the change in policy is impracticable.

4. Valuation of closing stock of factamfos and ammonium sulphate (at certain locations) is valued at net relaisable value, estimated with 50% of subsidy rate prevailing as on 31.03.2023, pending notification of new subsidy rates by the Government of India for the year 2023-24

5. Stores & Spares in transit includes Stores & Spares at site pending inspection '' 214.61 lakh (Previous year '' 116.13 lakh )

6. During the year 2021-22, company had detected irregularities in the physical stock to the tune of 543.60 MT of Factamfos and 60.50 MT in Ammonium Sulphate at Chikmagalur Depot valued at '' 218.50 lakhs. Company had provided for the entire amount of '' 218.50 lakhs. The Company has since realised an aggregate amount of '' 63.85 lakhs being the sale value of 256.95 MT of Factamfos from various dealers during the year in connection with the above. However, the company has maintained the provision of '' 218.50 lakhs pending completion of investigation. Company has taken steps for recovery from transporters, dealers and warehouse (Refer Note. 13.3, 24.1,25.2, 27.1 & 35.5)

7. During the year, '' 2235.79 lakhs additional provision is made on account of the change in the accounting estimate being followed for the provision for obselete /non moving stores & spares. 90% provision has been made for non-moving stock of stores & spares, ageing five years and more, as on 31.03.2023, as against ageing of 10 years and more, which was being followed. The effect of the change in future periods is not disclosed because estimating it is impracticable.

1. Dues from statutory authorities include (i) Nil (net of provision) (Previous year '' 18301.45 lakh) towards Kerala Value Added Tax paid on procurement of Regasified Liquified Natural Gas, (ii) '' 1411.12 lakhs (Previous year '' 1411.12 lakhs ) (net of provision) being KVAT refund receivables, and (iii) '' 72.97 lakh (Previous Year '' 72.97 lakh) towards the amount paid against disputed demands pending appeal. In view of the uncertainty in the reimbursement of Value Added Tax (VAT) paid on Regasified Liquified Natural Gas (RLNG) by the Government of Kerala, Company has made provision during the year, for the entire VAT receivables on RLNG, '' 27418.54 lakhs as on 31.03.2023. The VAT reimbursement receivable on the RLNG procurement up to 31.03.2022 '' 18301.45 lakh has been charged as ''Provision for doubtful receivables'' and VAT incurred on RLNG procurement during the year 2022-23, '' 9117.09 lakhs has been accounted as consumption of raw material / fuel in the Statement of Profit & loss.

2. Dues from Contractors include amount paid for materials supplied but rejected by the Company pending settlement '' 9.46 lakh (Previous year '' 1.32 lakh ) and an amount of ''1353.19 lakh (Previous year ''1353.19 lakh) including interest considered as recoverable on the basis of a bank guarantee invoked by the Company but stayed till the completion of arbitration. The Arbitration Award was passed during the year 2013-14, as per which the company is entitled to adjust an amount of '' 2798.29 lakh towards this advance and interest from the dues claimed by the contractor. The Company has gone on appeal against the award before the Hon'' District Court, Ernakulam which has since stayed the award. The case is transferred to Commercial Court. Accordingly the Company demanded the banks to send the proceeds of encashment of bank guarantee along with interest. The bank rejected the claim and consequently the Company filed a suit against the bank before the Hon. High court of Mumbai for realization of amount, which are pending. However an amount of ''1353.19 lakh only has been retained pending disposal of the case.

3. Other Current Assets, dues from contractors include '' 476.89 lakhs (previous year '' 476.89 lakhs) charged to transport contractor as per the terms and conditions of the contract, towards non delivery of goods to dealers at the assigned destinations. (Refer Note- 7.6, 24.1 & 25.2)

Retired assets held for disposal'' includes Ammonia and Urea Plant at Cochin Division, which the Company had decided to scrap during the year 2009-10. These retired assets are retained in books at the written down value of '' 4065.02 lakhs (previous year- '' 4065.02 lakhs), which is lower than the estimated Net realisable value. The Company could not complete the disposal process since the matter is pending before the Court.

The Company has only one class of equity shares having par value of '' 10 per share. Each share holder is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding

1. Rights, Preference and restrictions attached to each class of shares including restrictions on the distribution of dividends and the repayment of capital. - Nil / Not Applicable

1. The Company and M/s.Rashtriya Chemicals & Fertilisers Ltd(RCF) had provided Corporate Guarantee to the lenders of M/s.FACT-RCF Building Products Ltd-the 50:50 joint venture between the Company and RCF. During the year 2018-19, RCF has settled the entire liability to the bankers, to the extent of ''5100 lakh including 50% share of the Company '' 2550 lakh on the condition that the Company shall treat the amount paid by RCF on behalf of the Company as Inter-Corporate loan with a repayment period of five years, starting from the year 2020-21. The Company has paid three instalments due as per the agreement. The principal amount payable '' 510 lakhs (Previous year '' 510 lakhs) during the year 202324 has been classified under Current Liabilities - Financial Liabilities -Other Financial Liabilities . The remaining amount has been classified under Non Current Liabilities - Financial Liabilities - Borrowings. Interest rate applicable on the loan for the year 2022-23 is 7.38% p.a (Previous year- 6.50% p.a) 1. As per the decision of Government of India, during the year 2021-22 Company has framed a scheme for disbursement of wage revision arrears relating to the period from 01.01.1997 to 30.06.2001, in a phased manner, based on the direction of the Honourable Supreme Court of India. Dues to employees include Nil (previous year '' 2491.45 lakhs) towards 1997 arrears payable after one year (refer Note- 25.1 & 36.1)

1. The bills discounted are secured against the corresponding trade receivables

2. A plan loan of ''100000.00 lakh bearing interest @13.50% per annum was released by the Government of India (GOI) on 29th March 2016 to maintain the operations of the Company. As per the order of Government of India, ''.100000.00 lakh along with the earlier loan ''28273 lakhs and interest outstanding has been converted into a single loan carrying interest @ 13.50% per annum with one year moratorium. As per the letter dated 12.01.2016, of the Ministry of Finance, GOI, sanctioning the loan, the total outstanding liability of the Company is ''183672.00 lakh. The Company entered into an agreement with the Department of Fertilizers(DOF), GOI, agreeing to mortgage 408 acres of Company''s land to secure repayment of the entire loan together with interest at the rate of 13.50% per annum on the amount outstanding as on 31.03.2017. The loan amount was reconciled and loan outstanding along with interest accumulated (upto 31.03.2017) has been arrived at ''177048.75 lakh as on 31.03.2017. The loan along with interest is repayable in three or more equated installments within a period of 5 years ending by 2022. Accordingly, the entire principal amount, being ''177048.75 lakhs (previous year- ''177048.75 lakhs) has been classified under Current Liabilities-Current maturities of Long term Debt. The outstanding principal and interest as on 31.03.2022, has been confirmed with the balance of Government of India.

Company has submitted a Financial Restructuring proposal to Department of Fertilizers (DoF), Government of India (GoI), seeking approval for the waiver of interest on Government of India loan, conversion of loan amounting to ''28273.00 lakhs into equity and conversion of loan amounting to ''100000.00 lakhs as interest free loan, repayable in yearly installments. The financial restructuring proposal submitted by the Company is under the consideration of the Department of Fertilizers, Government of India. Pending approval by the Government of India, the loan taken from GoI and interest due thereon are accounted and disclosed as per the loan agreement dated March 3, 2016

1. As per the decision of Government of India, during the year 2021-22, Company has framed a scheme for disbursement of wage revision arrears relating to the period from 01.01.1997 to 30.06.2001, in a phased manner, based on the direction of the Honourable Supreme Court of India. Dues to employees include ''5036.14 lakhs (previous year- '' 4738.64 lakhs) towards 1997 arrears, payable with in one year (refer Note- 19.1 & 36.1)

2. Other liabilities include amount charged from transport contractors as per the terms and conditions of the contract, towards non delivery of goods to dealers at the assigned destinations and amount withheld from warehouse.(Also Refer Note 7.6, 13.3 & 24.1)

1. Consequent to the implementation of Direct Benefit Transfer (DBT) subsidy scheme, subsidy income on fertilisers is recognised at the time of sale to dealers. However, the subsidy claim is generated at the rate applicable on the date of sale of fertilisers to ultimate beneficiary. The subsidy portion of the 90% of the stock with dealers (considering the recoverability), pending sale to ultimate beneficiary as on 31.03.2023, estimated at 50% of the subsidy rates rate prevailing as on 31.03.2023, on account of fall in raw material prices, pending notification of new subsidy rates by the Government of India for the year 2023-24 is ''10278.27 lakh (Previous Year '' 49337.93 lakh).It will have an effect in the calculation of accrued income (subsidy) and Net Realisable Value of Finished Goods. (refer Note 11.1)

1. The contract for the barge transportation of Ammonia awarded to a private company has been cancelled void ab initio during 2004-05 by the Company. The Contractor claimed ''78489.75 lakh including interest till 31.03.2013 before the arbitrator .The arbitrator has passed an award during the year 2013-14 in favour of the contractor for ''17308.04 lakh including interest as on 31.12.2013 .As per the award, the mobilisation advance paid by the Company to the contractor along with interest of 2798.29 lakh is to be adjusted against the said award. The Company has not accepted the award on legal and factual grounds and has challenged the award before the Hon'' District Court ,Ernakulam which has since stayed the award Company has been accounting interest on mobilization advance and creating equivalent provision until 31.03.2022. Considering the uncertainty in the receipt of the interest on mobilization advance, Company has discontinued accounting of the interest income from the financial year 2022-23 and the corresponding provision thereon. The interest on mobilization advance for 2022-23 amounting to ''5385.59 lakhs has been disclosed as Contingent Asset under note No 50

2. Research and Development Expenditure includes expenditure towards salary '' 35.39 lakh (Previous year '' 75.21 lakh), chemicals & stores '' 0.19 lakh (Previous year 0.67 lakh) and depreciation '' 0.09 lakh (Previous year '' 0.09 lakh).

3. Miscellaneous Expenses includes Directors travel amounting to '' 13.47 lakh (Previous year '' 3.79 lakh)

5. During the year 2021-22, company noticed 543.60 MT of shortages in physical stock of Factamfos and 60.50 MT in Ammonium Sulphate in certain warehouses of Karnataka state. The value of the shortage ''218.50 lakhs had been provided during the year 2021-22. (Refer Note 7.6 & 27.1)

6. In view of the uncertainty in the reimbursement of Value Added Tax (VAT) paid on Regasified Liquified Natural Gas (RLNG) by the Government of Kerala, Company has made provision during the year, for the entire VAT receivables on RLNG, ''27418.54 lakhs as on 31.03.2023. The VAT reimbursement receivable on the RLNG procurement up to 31.03.2022 '' 18301.45 lakh has been charged as ''Provision for doubtful receivables'' (Refer Note 13.1)

7. Expenses towards Corporate Social Responsibility

The Company is liable to spend ''471.39 lakhs on Corporate social responsibility, being 2% of the average net profit for the immediately preceding three financial years, as per section 198 of the Companies Act 2013. The Company has an excess CSR expenditure of '' 50.21 lakhs carried forward from previous year 2021-22 eligible to be setoff during the current financial year. Company has spent an amount of '' 35.31 lakh towards Corporate Social Responsibility, during the current financial year 202223. '' 385.87 lakhs remaining unspent as on 31.03.2023, earmarked for identified projects have been transferred to a separate bank account named ''Unspent CSR Account 2022-23'' on 28.04.2023, as per the provisions of Section 135 (6) of the Companies Act

40. Fair Value Hierarchy

The following methods and assumptions were used to estimate the fair values for the given below financial assets.

Investment in Unquoted Equity Shares

The fair values of the unquoted equity shares have been estimated using NAV model.

Derivatives not designated as hedges

Foreign exchange forward contracts if entered in to, are valued using valuation techniques, which employs the use of market observable inputs (i.e. based on inputs/statement of position received from banks).

Investment Properties

The value of the investment properties are based on the information available in Government of Kerala fair value notification, market conditions etc.

Level 1 hierarchy is for financial instruments with quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges are to be valued using the closing price as at the reporting period. The mutual funds are to be valued using the closing NAV. Company do not have any such investment, as on the reporting date of current year and previous year.

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

If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in Level 3.

Operating Leases A. Leases as lessor

The Company leases out its investment property on operating lease basis

B. Leases as lessee

(i) Trade and other receivables

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to ¹ 47887.48 lakh (Previous year '' 17522.98 lakh) of which '' 40259.93 lakh (previous year '' 13011.42 lakh) due from Government of India relating to subsidy receivable. Trade receivables mainly constitute subsidy receivable from the Government of India and from services rendered.

Expected credit loss assessment for Trade and other receivables

(ii) Cash and Cash equivalents and Other Bank Balances

The Company held cash and cash equivalents and other bank balances of '' 231947.13 lakhs at 31st March 2023 (31st March 2022: '' 187646.39 lakhs). The Cash equivalents are held with banks with good credit ratings and financial position. Also, the Company invests its short term surplus funds in bank fixed deposits, which carry no / low market risks for short duration and therefore does not expose the Company to credit risk.

(i) Currency Risk

(ii) Interest rate risk

Exposure to interest rate risk:

The Company''s investments are in Bank fixed deposits wherein the interest rates are fixed, as on the reporting date.

The Company do not have any borrowing with banks, other than discounting of bills, as on the reporting date. The interest rate on the Company''s borrowings from Government of India is not fluctuating. The rate of interest on Intercorporate loan from Rashtriya Chemicals and Fertilisers Ltd is subject to change, based on the lowest cost of their working capital finance. The Intercorporate loan outstanding as on 31.03.2023 is '' 1020 lakh and the applicable interest as on the reporting date is 7.38%.

(iii) Commodity rate risk

The Company''s profitability gets affected by the price differential (also known as Margin) between prices of products (output) and the price of the raw materials used in production (input).

Company has entered in to agreement with suppliers of one of the major raw materials, Regassified Liquified Natural Gas and sulphur, to mitigate the fluctuation in market price.

(iv) Price Risk

CAPITAL MANAGEMENT

The Company''s primary objective is to maximize the shareholders'' value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. Presently, the Company sources 100 % of its capex requirement from the internal accruals. The Company, being a Public sector undertaking, is governed by the guidelines of the Department of Investment & Public Asset Management (DIPAM), which specifies the minimum percentage of dividend to be declared. Taking in to consideration the future capex requirements, the Company considers the payment of dividend at the appropriate rates.

43. Disclosure under Ind AS 24 on related party transactions are given below

The Company and M/s.Rashtriya Chemicals & Fertilisers Ltd(RCF) had provided Corporate Guarantee to the lenders of M/s.FACT-RCF Building Products Ltd-the 50:50 joint venture between the Company and RCF. During the year 2018-19, RCF had settled the entire liability to the bankers, to the extent of '' 5100 lakhs including 50% share of the Company '' 2550 lakhs on the condition that the Company shall treat the amount paid by RCF on behalf of the Company as Inter-Corporate loan. Accordingly, the amount of '' 2550 lakhs has been classified as Intercorporate loan. The principal amount outstanding as on 31.03.2023 is '' 1020 lakh (Previous year '' 1530 lakh). Interest rate applicable on the loan for the year 2022-23 is 7.38% p.a. (Previous year- 6.50% p.a).

Department of Fertilisers, Govt of India, had accorded the approval (16 November 2018) to The Fertilisers and Chemicals Travancore Limited (FACT) for additional investment of '' 2925 lakh to the equity share capital of FACT-RCF-Building Products Limited (FRBL).FRBL is a joint venture between FACT and Rashtriya Chemicals & Fertilisers Limited (RCF). FACT in its 75th Annual General Meeting approved the additional investment in FRBL. Against approval received for '' 2925 lakh, FRBL had issued equity shares amounting to '' 1518 lakh towards gypsum supplied and other services provided by FACT during the period from 20102013. Further, FRBL during the year 2022-23 has allotted shares to FACT amounting to '' 235.70 lakhs. Balance Equity Shares against which gypsum and other services provided by the FACT during 2014-2017, are pending for allotment by FRBL. The same has been disclosed under advances to related parties. Further, supply of gypsum from FACT amounting to '' 239 lakh is still pending as on 31 March 2023 to complete the above additional investment.

During the year 2009-10, the Company has along with Department of Factories and Boilers, Government of

Kerala, formed a society under the Travancore Literary, Scientific and Charitable Societies Act 1955 with the objective of conducting courses relating to welding technologies with a grant of '' 1 Crore from the Government of Kerala, under the name Kerala institute of Welding and Research. The contribution from the Company is only provision of its existing facilities of Training School. The accounts of the society are not consolidated as society is formed with an objective of not obtaining any economic benefits from its activities and is considered immaterial to the Company''s activity.

2) Key Management Personnel

1 Shri Kishor Rungta, Chairman and Managing Director (from 02.02.2019)

2 Shri.Anupam Misra, Director (Marketing) (from 14.07.2020)

3 Shri.S.Sakthimani, Director (Finance) & Chief Financial Officer (From 08.03.2021)

4 Shri.Kesavan Nampoori A.S, Director (Technical) (From 22.03.2021 to 30.09.2022)

5 Dr.Jayachandran.K, Director (Technical) (From 03.03.2023)

6 Shri K V Balakrishnan Nair, Company Secretary & Executive Director (Finance) up to 31.05.2022

7 Smt.Susan Abraham, Company Secretary from 15.07.2022 ** On payment basis

The whole time Directors have been allowed the use of company car and for private journey upto a ceiling of 9000 kms. per year, on payment as prescribed by the Government.

Gratuity and leave encashment benefit accrued to the Directors have not been disclosed as the contribution payable has been provided in the accounts and separate figures are not ascertainable.

1 "77 _

1. FACT-RCF BUILDING PRODUCTS LTD.:- A Joint venture Company with Rashtriya Chemicals and Fertilizers Limited (RCF) for manufacture of rapid building materials from Gypsum at Kochi.

2. Kerala Enviro Infrastructure Ltd. (KEIL) is a public limited company formed as Special Purpose Vehicle and promoted by the Kerala State Industrial Development Corporation (KSIDC) in association with various industries in the State for establishing Common Treatment, Storage and Disposal Facility (CTSDF) for solid hazardous industrial waste in the State of Kerala.

3. The percentage of Company''s shareholding in M/s.Kerala Enviro Infrastructure Limited as on 31.03.2022 was 21.75%. The Company''s percentage of share holding in the equity shares of Kerala Enviro Infrastructure Ltd as on 31.03.2023 has reduced to 15.91 %, on account of additional investment by other share holders.. As the investment as on 31.03.2023, is less than 20%, the investment has been re-classified as ''Other Investments''.

* Owing to the company''s share of losses exceeding its interest in the joint venture recognising the share of loss stands discontinued. Accordingly company has not recognized share of loss of '' 395.25 lakh for the year (Previous Year '' 470.50 lakh) and '' 10844.68 lakhs cumulatively upto the year ended 31.03.2023 ('' 10449.43 lakh cumulatively upto the year ended 31.03.2022).

46. EMPLOYEE BENEFITS

General Description of Defined Contribution Plan

Contributory Superannuation Scheme-The scheme is aimed to provide superannuation benefits to the employees. Every year company contributes '' 100 to the fund.

General Description of Defined Benefit Plan A Leave Encashment and Gratuity

B Provident Fund

During the year an amount of '' 1908.42 lakh ( Previous Year '' 1705.21 lakh) has been charged to Statement of Profit & Loss towards contribution by the Company. In terms of the Ind AS 19 , the Provident Fund Trust set up by the company is treated as Defined Benefit Plan since the company has to meet the shortfall in the fund assets , if any.

During the year, vide, G.O(Rt.)No. 354/2023/LBR dated 23.03.2023 Government of Kerala (appropriate authority as per Para 27A of Provident Fund and Miscellaneous Provisions Act, 1952) withdrew exemption granted for the Company in respect of The FACT Employees Provident Fund, Udyogamandal Division on account of three years continuous loss incurred by the company . Company has challenged the same and filed a writ petition before the Hon'' High Court of Kerala and the notification has been stayed by the Honorable High Court. The matter is still pending.

The Gratuity scheme is a final salary defined benefit plan that provides for a lumpsum payment at the time of separation; based on scheme rules the benefits are calculated on the basis of last drawn salary and the period of service at the time of separation and paid as lumpsum. There is a vesting period of 5 years. The design entiles the following risks that affect the liabilities and cash flows

Interest rates risk:

Salary inflation risk:

The present value of the defined benefit plan is calculated with the assumption of salary escalation rate(SER) which is applied to find the salary of plan participants in future at the time of separation Higher than expected increases in salary will increase the defined benefit obligation and will have an exponential effect.

Retirement age:

It should be noted that in case of employees above retirement age for the purpose of valuation it is assumed they will retire immediately & benefit is considered up to actual retirement age.

Demographic risks:

disability and retirement. The effects of this decrement on the DBO depend upon the combination salary increase discount rate and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of a short serving employees will be less compared to long service employees.

Asset Liability Mismatch:

This will come into play unless the funds are invested with a term of the assets replicating the term of the liability.

Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date Investment Risk

Liquidity Risk

Market Risk

Legislative risk/Regulatory risk

(ii) Sensitivity Analysis

How the DBO would have been affected by 100 basis points changes in the actuarial assumptions namely discount rates salary growth Attrition & Mortality is shown below

P.U.C method has been used. If an employee''s service in later years will lead to a materially higher level of benefit than in earlier years these benefits are attributed on a straight-line basis. The limitations are that in assessing the change other parameters are kept constant. As some of the assumptions may be correlated it is unlikely that changes in assumptions will occur in isolation of one another.

There is no change from the previous period in the methods and assumptions used in the preparation of above analysis, except that the base rates have changed

(iii) Asset Liability Matching Strategies GRATUITY-EMPLOYEES :

Insurer Administered Fund

Company has been taken for the valuation purpose. The policy thus mitigates the liquidity risk. However being a cash accumulation plan the duration of assets is shorter compared to the duration of liabilities. Thus the Company is exposed to movement in interest rate (in particular the significant fall in interest Rates which should result in a increase in liability without corresponding increase in the asset). .

Thus the Company is exposed to movement in interest rate (in particular the significant fall in interest Rates which should result in a increase in liability without corresponding increase in the asset).

GRATUITY-CASUAL LABOUR (CLR)

Pay As You Go Method

(iv) Other disclosures GRATUITY-EMPLOYEES :

The design entiles the following risks that affect the liabilities and cash flows,

Interest rates risk

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk:

Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risks:

There is no change from the previous period in the methods and assumptions used in the preparation of above analysis, except that the base rates have changed

(iii) Actuarial measurements as on March 31,2023

The company has not started funding the Leave liability & has been following pay as you go method for settlement of the liability

1RA -

48.1. Sales Tax/ Value Added Tax / Entry Tax includes Nil (previous year ''16614.87 lakh- including interest up to 31.03.2022) towards differential tax demand in respect of the year 2011-12 on the disputed turnover, consequent to withdrawal of the demand notice during the year, by the Assessing Authority in the rectification of the assessment order.

48.2. The contract for the barge transportation of Ammonia awarded to a private company has been cancelled void ab initio during 2004-05 by the Company. The Contractor claimed ''178489.75 lakh including interest till 31.03.2013 before the arbitrator .The arbitrator has passed an award during the year 2013-14 in favour of the contractor for 17308.04 lakh including interest as on 31.12.2013 .As per the award, the mobilisation advance paid by the Company to the contractor along with interest of

2. Inventory of finished goods, raw material, stores and spares and work in progress are valued as per the Accounting Policy of the Company

5. Stores & Spares in transit includes Stores & Spares at site pending inspection '' 214.61 lakh (Previous year '' 116.13 lakh )

1. Rights, Preference and restrictions attached to each class of shares including restrictions on the distribution of dividends and the repayment of capital. - Nil / Not Applicable

1. The bills discounted are secured against the corresponding trade receivables

Company has submitted a Financial Restructuring proposal to Department of Fertilizers (DoF), Government of India (GoI), seeking approval for the waiver of interest on Government of India loan, conversion of loan amounting to ''28273.00 lakhs into equity and conversion of loan amounting to ''100000.00 lakhs as interest free loan, repayable in yearly installments. The financial restructuring proposal submitted by the Company is under the consideration of the Department of Fertilizers, Government of India. Pending approval by the Government of India, the loan taken from GoI and interest due thereon are accounted and disclosed as per the loan agreement dated March 3, 2016

3. Miscellaneous Expenses includes Directors travel amounting to '' 13.47 lakh (Previous year '' 3.79 lakh)

7. Expenses towards Corporate Social Responsibility

40. Fair Value Hierarchy

The following methods and assumptions were used to estimate the fair values for the given below financial assets.

Investment in Unquoted Equity Shares

The fair values of the unquoted equity shares have been estimated using NAV model.

Derivatives not designated as hedges

Foreign exchange forward contracts if entered in to, are valued using valuation techniques, which employs the use of market observable inputs (i.e. based on inputs/statement of position received from banks).

Investment Properties

The value of the investment properties are based on the information available in Government of Kerala fair value notification, market conditions etc.

Mar 31, 2022

1. Current Assets include inventories and trade receivables pledged as Primary Security for Fund/ Non Fund based Working Capital arrangement with Banks amounting to D 45000.00 Lakh. The utilisation of this arrangement as on reporting date is D 1943.58 Lakh.

2. Inventory of finished goods, raw material, stores and spares and work in progress are valued as per the Accounting Policy of the Company

3. Finished Goods includes 22.00 lakh MT of saleable gypsum (Previous Year 22.51 lakh MT) amounting to D10161.25 lakh (Previous year D 9269.97 lakh)

4. Stores & Spares in transit includes Stores & Spares at site pending inspection D 116.13 lakh (Previous year D 295.41 lakh)

5. During the year, company has detected irregularities in the physical stock to the tune of 543.60 MT of Factamfos and 60.50 MT in Ammonium Sulphate at Chikmagalur Depot valued at D 218.50 lakhs. Company has provided for the entire amount of D 218.50 lakhs. The Company has since realised an aggregate amount of D 58.30 lakhs being the sale value of 234.95 MT of Factamfos from various dealers during the year in connection with the above. However, the company has maintained the provision of D 218.50 lakhs pending completion of investigation. Company has taken steps for recovery from transporters, dealers and warehouse (Refer Note. 13.3, 24.1,25.2, 27.1 & 35.5)

1. Dues from statutory authorities include (i) D 18301.45 lakh (Previous year 13458.13 lakh) towards Kerala Value Added Tax paid on procurement of Regasified Liquified Natural Gas, (ii) D 1411.12 lakhs (Previous year D 1411.12 lakhs ) (net of provision) being KVAT refund receivable, under dispute and (iii) D 72.97 lakh (Previous Year D 72.97 lakh) towards the amount paid against disputed demands pending appeal.

2. Dues from Contractors include amount paid for materials supplied but rejected by the Company pending settlement D1.32 lakh (Previous year D 2.71 lakh ) and an amount of D1353.19 lakh (Previous year D1353.19 lakh) including interest considered as recoverable on the basis of a bank guarantee invoked by the Company but stayed till the completion of arbitration. The Arbitration Award was passed during the year 2013-14, as per which the company is entitled to adjust an amount of D 798.29 lakh towards this advance and interest from the dues claimed by the contractor. The Company has gone on appeal against the award before the Honâ District Court, Ernakulam which has since stayed the award. The case is transferred to Commercial Court. Accordingly the Company demanded the banks to send the proceeds of encashment of bank guarantee along with interest. The bank rejected the claim and consequently the Company filed a suit against the bank before the Hon. High court of Mumbai for realization of amount, which are pending. However an amount of D1353.19 lakh only has been retained pending disposal of the case.

3. Other Current Assets, dues from contractors include D 476.89 lakhs charged to transport contractor as per the terms and conditions of the contract, towards non delivery of goods to dealers at the assigned destinations. (Refer Note- 7.5, 24.1 & 25.2)

During the year 2009-10, Company decided to scrap Ammonia and Urea Plant at Cochin Division. These retired assets are retained in books at the written down value of D 4065.02 lakhs, which is lower than the estimated Net realisable value. The Company could not complete the disposal process since the matter is pending before the Court.

1. A plan loan of D100000.00 lakh bearing interest @13.50% per annum was released by the Government of India (GOI) on 29th March 2016 to maintain the operations of the Company. As per the order of Government of India, D100000.00 lakh along with the earlier loan and interest outstanding has been converted into a single loan carrying interest @ 13.50% per annum with one year moratorium. As per the letter dated 12.01.2016, of the Ministry of Finance, GOI, sanctioning the loan, the total outstanding liability of the Company is D183672.00 lakh. The Company entered into an agreement with the Department of Fertilizers(DOF), GOI, agreeing to mortgage 408 acres of Companyâs land to secure repayment of the entire loan together with interest at the rate of 13.50% per annum on the amount outstanding as on 31.03.2017. The loan amount was reconciled and loan outstanding has been arrived at D177048.75 lakh as on 31.03.2017. The loan along with interest is repayable in three or more equated installments within a period of 5 years ending by 2022. As per the terms of the sanction of the loan the entire repayment can be made during the years 2020-21 and/or 2021-22 in three or more equated installments. Accordingly, the entire principal amount , being D 177048.75 lakhs (previous year- D177048.75 lakhs) has been classified under Current Liabilities-Current maturities of Long term Debt. The outstanding principal and interest as on 31.03.2020, has been confirmed with th e balance of Government of India.

Company has submitted a Financial Restructuring proposal to Department of Fertilizers (DoF), Government of India (GoI), seeking approval for the waiver of interest on Government of India loan, conversion of loan amounting to D 28273.00 lakhs into equity and conversion of loan amounting to D 100000.00 lakhs as interest free loan, repayable in 10 yearly installments commencing from the financial year 2022-23. The financial restructuring proposal submitted by the Company is under the consideration of the Department of Fertilizers, Government of India. Pending approval by the Government of India, the loan taken from GoI and interest due thereon are accounted and disclosed as per the loan agreement dated March 3, 2016

2. The Company and M/s.Rashtriya Chemicals & Fertilisers Ltd(RCF) had provided Corporate Guarantee to the lenders of M/s.FACT-RCF Building Products Ltd-the 50:50 joint venture between the Company and RCF. During the year 2018-19, RCF has settled the entire liability to the bankers, to the extent of D 5100 lakh including 50% share of the Company D 2550 lakh on the condition that the Company shall treat the amount paid by RCF on behalf of the Company as Inter-Corporate loan with a repayment period of five years, starting from the year 2020-21. The Company has paid two instalments due as per the agreement. The principal amount payable D 510 lakhs (Previous year D 510 lakhs) during the year 2022-23 has been classified under Current Liabilities - Financial Liabilities - Other Financial Liabilities . The remaining amount has been classified under Non Current Liabilities - Financial Liabilities - Borrowings. Interest rate applicable on the loan for the year 2021-22 is 6.50% p.a (Previous year- 6.50% p.a)

1. As per the decision of Government of India, during the year 2021-22 Company has framed a scheme for disbursement of wage revision arrears relating to the period from 01.01.1997 to 30.06.2001, in a phased manner, based on the direction of the Honourable Supreme Court of India. Dues to employees include D2491.45 lakhs (previous year-Nil) towards 1997 arrears payable after one year (refer Note- 25.1 & 36.1)

1. As per the decision of Government of India, during the year 2021 -22, Company has framed a scheme for disbursement of wage revision arrears relating to the period from 01.01.1997 to 30.06.2001, in a phased manner, based on the direction of the Honourable Supreme Court of India. Dues to employees include D4738.64 lakhs (previous year-Nil) towards 1997 arrears, payable with in one year (refer Note- 19.1 & 36.1)

2. Research and Development Expenditure includes expenditure towards salary D75.21 lakh (Previous year D59.17 lakh), chemicals & stores D0.67 lakh (Previous year Nil) and depreciation D0.09 lakh (Previous year D0.09 lakh).

3. Miscellaneous Expenses includes Directors travel amounting to D3.79 lakh (Previous year D 8.47 lakh) and D Nil (previous year D(-)4.51 lakh ) towards the cost of PoS machine distributed by the Company under Direct benefit Transfer Scheme.

5. During the year, company has noticed 543.60 MT of shortages in physical stock of Factamfos and 60.50 MT in Ammonium Sulphate in certain warehouses of Karnataka state. The value of the shortage D218.50 lakhs has been provided during the year. (Refer Note 7.5 & 27.1)

6. Expenses towards Corporate Social Responsibility

The Company is liable to spend D56.07 lakhs on Corporate social responsibility, being the average net profit for the

immediately preceding three financial years as per section 198 of the Companies Act 2013. The Company has

spent an amount of D106.28 lakh towards Corporate Social Responsibility, during the financial year.

40. Fair Value Hierarchy

The following methods and assumptions were used to estimate the fair values for the given below financial assets. Investment in Unquoted Equity Shares

The fair values of the unquoted equity shares have been estimated using NAV model.

Derivatives not designated as hedges

Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs (i.e. based on inputs/statement of position received from banks).

The Company leases out its investment property on operating lease basis i) Future minimum lease receivable

B. Leases as lessee

The Lease Liability is measured at the present value of remaining lease payments at the date of initial application and Right-of-use asset has been recognized at an amount equal to Lease Liability adjusted by an amount of any prepaid expenses. . Under Ind AS 116 âLeasesâ, at commencement of lease, the Company recognizes Right-of-use asset and corresponding Lease Liability. Right-of-use asset is depreciated over lease term on systematic basis and Interest on Lease Liability is charged to Statement of Profit and Loss as Finance cost.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs trade and other receivables, cash and cash equivalents and other bank balances. The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their respective carrying amount.

(i) Trade and other receivables

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to D 17522.98 lakh (Previous year D 10438.13 lakh) of which D 13011.42 lakh (previous year D 9446.49 lakh) due from Government of India relating to subsidy receivable. Trade receivables mainly constitute subsidy receivable from the Government of India and from services rendered.

Expected credit loss assessment for Trade and other receivables

The following table provides information about the exposure to credit risk and the provisions made

(ii) Cash and Cash equivalents and Other Bank Balances

The Company held cash and cash equivalents and other bank balances of D 187646.72 lakhs at 31st March 2022 (31st March 2021: D 166686.81 lakhs). The Cash equivalents are held with banks with good credit ratings and financial position. Also, the Company invests its short term surplus funds in bank fixed deposits, which carry no / low market risks for short duration and therefore does not expose the Company to credit risk.

Liquidity risk is managed by Company through effective fund management. Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows.

The following are the remaining contractual maturities of significant financial liabilities at the reporting date.

1. The loan from Government of India along with interest is repayable in three or more equated installments within a period of 5 years ending by 2022.Company has submitted a Financial Restructuring proposal to Department of Fertilizers (DoF), Government of India (Gol), seeking approval for the waiver of interest on Government of India loan, conversion of loan amounting to D 28273.00 lakhs into equity and conversion of loan amounting to D 100000.00 lakhs as interest free loan, repayable in 10 yearly installments commencing from the financial year 2022-23. The financial restructuring proposal submitted by the Company is under the consideration of the Department of Fertilizers, Government of India. Pending approval by the Government of India, the loan taken from GoI and interest due thereon are accounted and disclosed as per the loan agreement dated March 3, 2016 . The management expects restructuring of the loan, whereby the Government shall grant sufficient time for the repayment of the loan and interest due thereon. Accordingly, the Company can manage the immediate liquidity requirement.

(i) Currency Risk

The Companyâs activities are exposed primarily to the financial risk of changes in foreign currency rates. To mitigate the foreign currency risk, the company is closely monitoring the market trend to take appropriate action

(ii) Interest rate risk

The Companyâs investments are in Bank fixed deposits wherein the interest rates are fixed, as on the reporting date.

The Company do not have any borrowing with banks, other than discounting of bills, as on the reporting date. The interest rate on the Companyâs borrowings from Government of India is not fluctuating. The rate of interest on Intercorporate loan from Rashtriya Chemicals and Fertilisers Ltd is subject to change, based on the lowest cost of their working capital finance. The Intercorporate loan outstanding as on 31.03.2022 is D 1530 lakh and the applicable interest as on the reporting date is 6.50%.

(iii) Commodity rate risk

The Companyâs profitability gets affected by the price differential (also known as Margin) between prices of products (output) and the price of the raw materials used in production (input).

Company has entered in to agreement with suppliers of one of the major raw materials, Regassified Liquified Natural Gas, to mitigate the fluctuation in market price.

(iv) Price Risk

The Companyâs exposure to equity investments price risk arises from investments held by the Company and classified in the financial statements at fair value through OCI. The Company intends to hold these investments for long-term for better returns and price risk will not be significant from a long term perspective.

CAPITAL MANAGEMENT

The Companyâs objective is to maximize the shareholdersâ value.

43.Disclosure under Ind AS 24 on related party transactions are given below

Since Government of India owns 90% of the Companyâs equity share capital (under the administrative control of Ministry of Chemicals and Fertilizers), the disclosures relating to transactions with the Government and other Government controlled entities have been reported in accordance with para 26 of Ind AS 24.

The Company and M/s.Rashtriya Chemicals & Fertilisers Ltd(RCF) had provided Corporate Guarantee to the lenders of M/s.FACT-RCF Building Products Ltd-the 50:50 joint venture between the Company and RCF. During the year 2018-19, RCF had settled the entire liability to the bankers, to the extent of D 5100 lakhs including 50% share of the Company D 2550 lakhs on the condition that the Company shall treat the amount paid by RCF on behalf of the Company as Inter-Corporate loan. Accordingly, the amount of D 2550 lakhs has been classified as Intercorporate loan. The principal amount outstanding as on 31.03.2022 is D 1530 lakh (Previous year D 2040 lakh). Interest rate applicable on the loan for the year 2021-22 is 6.50% p.a. (Previous year- 6.50% p.a).

Department of Fertilisers, Govt of India, had accorded the approval (16 November 2018) to The Fertilisers and Chemicals Travancore Limited (FACT) for additional investment of D 2925 lakh to the equity share capital of FACT-RCF-Building Products Limited (FRBL).FRBL is a joint venture between FACT and Rashtriya Chemicals & Fertilisers Limited (RCF). FACT in its 75th Annual General Meeting approved the additional investment in FRBL. Against approval received for â 2925 lakh, FRBL had issued equity shares amounting to D 1518 lakh towards gypsum supplied and other services provided by FACT during the period from 2010-2013. Equity Shares amounting to D 1168 lakh against which gypsum and other services provided by the FACT during 2014-2017, are pending for allotment by FRBL. The same has been disclosed under advance against Equity Pending allotment and advances to related parties. Further, supply of gypsum from FACT amounting to D239 lakh is still pending as on 31 March 2022 to complete the above additional investment. FRBL, in its 68th Board meeting held on 04/05/2022, has decided to allot shares to FACT, for the share application money amounting to D235.70 lakhs.

During the year 2009-10, the Company has along with Department of Factories and Boilers, Government of Kerala, formed a society under the Travancore Literary, Scientific and Charitable Societies Act 1955 with the objective of conducting courses relating to welding technologies with a grant of D 1 Crore from the Government of Kerala, under the name Kerala institute of Welding and Research. The contribution from the Company is only provision of its existing facilities of Training School. The accounts of the society are not consolidated as society is formed with an objective of not obtaining any economic benefits from its activities and is considered immaterial to the Companyâs activity.

2) Key Management Personnel

1 Shri Kishor Rungta, Chairman and Managing Director

2 Shri.A.Ganesan, Director(Finance) & Chief Financial Officer (From 28.08.2019 up to 31.07.2020 )

3 Shri.S.Sakthimani, Director (Finance) & Chief Financial Officer (From 08.03.2021)

4 Shri.Kesavan Nampoori A.S, Director (Technical) (From 22.03.2021)

5 Shri.Anupam Misra, Director (Marketing) (from 14.07.2020)

6 Shri K V Balakrishnan Nair, Company Secretary & Executive Director (Finance)

46. EMPLOYEE BENEFITS

General Description of Defined Contribution Plan

Contributory Superannuation Scheme-The scheme is aimed to provide superannuation benefits to the employees. Every year company contributes D 100 to the fund.

General Description of Defined Benefit Plan A Leave Encashment and Gratuity

B Provident Fund

During the year an amount of D 1705.21 lakh ( Previous Year D 1697.75 lakh) has been charged to Statement of Profit & Loss towards contribution by the Company. In terms of the Ind AS 19 issued by the Institute of Chartered Accountants of India, the Provident Fund Trust set up by the company is treated as Defined Benefit Plan since the company has to meet the shortfall in the fund assets , if any.

GRATUITY - OTHER DISCLOSURE REQUIREMENTS

(i) Description of plan Characteristics and associated risks:

The Gratuity scheme is a final salary defined benefit plan that provides for a lumpsum payment at the time of separation; based on scheme rules the benefits are calculated on the basis of last drawn salary and the period of service at the time of separation and paid as lumpsum. There is a vesting period of 5 years. The design entiles the following risks that affect the liabilities and cash flows Interest rates risk:

Salary inflation risk:

The present value of the defined benefit plan is calculated with the assumption of salary escalation rate(SER) which is applied to find the salary of plan participants in future at the time of separation Higher than expected increases in salary will increase the defined benefit obligation and will have an exponential effect.

Retirement age:

It should be noted that in case of employees above retirement age for the purpose of valuation it is assumed they will retire immediately & benefit is considered up to actual retirement age.

Demographic risks:

Demographic assumptions are required to assess the timing and probability of a payment taking place. This is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition disability and retirement. The effects of this decrement on the DBO depend upon the combination salary increase discount rate and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of a short serving employees will be less compared to long service employees.

Asset Liability Mismatch:

This will come into play unless the funds are invested with a term of the assets replicating the term of the liability. Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Liquidity Risk

This is the risk that the Company is not able to meet the short-term gratuity pay outs. This may arise due to non availability of enough cash / cash equivalent to meet the liabilities or holding of ill iquid assets not being sold in time.. Employees with high salaries and long durations of service or those higher in hierarchy accumulate significant level of benefits. If some of such employees resign / retire from the company there can be strain on the cash flows.

Market Risk

Legislative risk/Regulatory risk

P.U.C method has been used. If an employeeâs service in later years will lead to a materially higher level of benefit than in earlier years these benefits are attributed on a straight-line basis. The limitations are that in assessing the change other parameters are kept constant. As some of the assumptions may be correlated it is unlikely that changes in assumptions will occur in isolation of one another.

There is no change from the previous period in the methods and assumptions used in the preparation of above analysis, except that the base rates have changed]

(iii) Asset Liability Matching Strategies GRATUITY-EMPLOYEES :

Insurer Administered Fund

The company has funded the liability with the insurance company. The entire investible assets are managed by the fund managers of the Insurance company and the Asset Values as informed by the Insurance Company has been taken for the valuation purpose. The policy thus mitigates the liquidity risk. However being a cash accumulation plan the duration of assets is shorter compared to the duration of liabilities. Thus the Company is exposed to movement in interest rate (in particular the significant fall in interest Rates which should result in a increase in liability without corresponding increase in the asset). .

GRATUITY-CASUAL LABOUR (CLR)

Pay As You Go Method

The company is only making book provisions for the entire Gratuity Liability on the valuation and follows a âpay as you goâ system to meet the liabilities as and when they fall due. Therefore the scheme is fully unfunded, and no assets are maintained by the company and asset values are taken as zero; there is liquidity risk in that they may run out of cash.

(iv) Other disclosures GRATUITY-EMPLOYEES :

The company has started funding the liability through the medium of an insurance company and regularassessment is made by the Company of the increase in liability and contributions are being made to maintain the fund and is subject to the credit risk of the insurance company and asset liability mismatch risk of the investments.

LEAVE ENCASHMENT - OTHER DISCLOSURE REQUIREMENTS

(i) Description of plan Characteristics and associated risks:

The leave scheme is a final salary defined benefit plan, that provides for a lumpsum payment at the time of seperation; based on scheme rules the benefits are calculated on the basis of last drawn salary and the leave count at the time of seperation and paid as lumpsum.

The design entiles the following risks that affect the liabilities and cash flows,

Interest rates risk

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk:

Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risks:

This is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition, disability and retirement. The effects of this decrement on the DBO depend upon the combination salary increase, discount rate, and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of a short caring employees will be less compared to long service employees.

(ii) SENSITIVITY ANALYSIS

How the DBO would have been affected by 100 basis points changes in the actuarial assumptions namely discount rates,salary growth, Attrition & Mortality is shown below

P.U.C method has been used for sensitivity analysis.If an employeeâs service in later years will lead to a materially higher level of benefit than in earlier years, these benefits are attributed on a straight-line basis. The limitations are that in assessing the change other parameters are kept constant. As some of the assumptions may be correlated, it is unlikely that changes in assumptions will occur in isolation of one another.

There is no change from the previous period in the methods and assumptions used in the preparation of above analysis, except that the base rates have changed

(iii) Acturial measurements as on March 31,2022

The company has not started funding the Leave liability & has been following pay as you go method for settlement of the liability

48. Contingent Liabilities and Commitments (to the extent not povided for): Contingent Liabilities		D In Lakh
Particulars	As at 31.03.2022	As at 31.03.2021
Claims against the company not acknowledged as debts in respect of:
Central Excise Act, 1944	12948.25	12583.50
Service Tax (Finance Act, 1994 )	347.93	334.52
Sales Tax / Value Added Tax/ Entry tax	16953.64	16113.47
Income Tax Act, 1961	4.26	4.26
ESI Act	127.83	127.83
Suppliers and contractors	26045.60	25167.15
Payment of Bonus Act,1965	33.59	33.59
Others	1138.23	1206.26

49.Sales Tax/ Value Added Tax / Entry Tax includes D 16614.87 lakh (including interest up to 31.03.2022) (previous year D 15779.52 lakh) towards differential tax demand in respect of the year 2011-12 on the disputed turnover. Against this order, Company obtained stay from Honâ High Court of Kerala.

50. The contract for the barge transportation of Ammonia awarded to a private company has been cancelled void ab initio during 2004-05 by the Company. The Contractor claimed D 178489.75 lakh including interest till 31.03.2013 before the arbitrator .The arbitrator has passed an award during the year 2013-14 in favour of the contractor for D17308.04 lakh including interest as on 31.12.2013 .As per the award, the mobilisation advance paid by the Company to the contractor along with interest of D2798.29 lakh is to be adjusted against the said award. The Company has not accepted the award on legal and factual grounds and has challenged the award before the Honâ District Court , Ernakulam which has since stayed the award. During the year 2019-20, as per the directive of Honâ District Court,Ernakulam the Company has provided 80.50 acres of land as security for the award. Accordingly, the award amount along with interest up to 31.03.2022, amounting to D 25699.33 lakh without considering the adjustment of mobilsation advance and interest allowed under the arbitral award is not considered as a liability and included under Contingent Liability. The case is transferred to Commercial Court.

51. Contingent Assets		D In Lakh
Particulars	As at 31.03.2022	As at 31.03.2021
Amounts estimated to be receivable in respect of:
Suppliers and Contractors	120.81	120.81
Delares and customers	15.05	4.75
	135.86	125.56
D In Lakh
	As at 31.03.2022	As at 31.03.2021
52. Estimated amount of contracts remaining to be
executed on capital account and not provided for.	56,417.27	4,635.80

53. Construction Contracts

In the case of work being carried out by FACT Engineering and Design Organisation (FEDO), for National Institute of Technology ( NIT), Nagaland, as an executing agency, on a cost plus basis, as a deposit work , FEDO is eligible for certain percentage of fees of total project cost . As per technical evaluation ,52.46 %(previous year 52.46%) of work related to consultancy services by FEDO to NIT, has been completed as on 31.3.2022 and pro-rata credit of â 862.73 lakh ( previous year D917.44 lakh) has been taken, after considering D264.27 lakh towards work in progress ( previous year D319.52 lakh). The value of construction work billed and certified during the year 2021 -22 is taken as D234.35 lakh, (previous year D 57.57 lakh) and equivalent amount has been considered for direct charges on contract.

57. The Company has a system of obtaining confirmation of balances from Vendors and Customers. Some of the parties confirmed the balances.

58. The Company has earned profit continuously from the financial year 2018-19 and consequently the networth of the Company has improved considerably.The networth of the company is positive as on 31.03.2022 The Company has achieved excellent production, marketing and financial performance during the last three years and the same trend is expected in the financial year 2022-23 also. Financial restructuring packages submitted by the company requesting approval for waiver of Govt of India interest and restructuring Govt of India loan is under the consideration of the Govt of India and the Company expects a favourable decision on the proposal. . Accordingly the accounts of the company are prepared on going concern basis

59. Spread of COVID 19 has affected the economic activity across the Globe, including India. However, the Government classified the Fertilizers business of the company as an âEssential Commodityâ and granted certain relaxations and guidelines so that production and distribution of the same will not be affected. The Company operated its plants during the year following the covid protocol and guidelines issued by the Government. Thus, the impact of Covid-19 on the Company for the year is minimal. The Company has considered the possible effects that may result from the pandemic on the carrying amounts of receivables, inventories and other financial assets, considering the available internal and external information up to the date of approval of these financial statements. Based on the nature of these assets, the company expects to recover the carrying amount of these assets as on March 31, 2022.

60. The standalone financial statements were authorized for issue in accordance with a resolution passed by the Board of Directors on 06.05.2022

61. The financial statements as approved by the Board of Directors are subject to audit by Comptroller and Auditor General of India and final approval by the Shareholders.

62. The figures of the previous year have been re-arranged and regrouped wherever necessary and / or practicable to make them comparable with those of the current year.

Mar 31, 2021

Company has agreed to mortgage 408 acres of land held vide patta no.7030 in survey no.205 in Puthencruz village, Ernakulam District .Kerala State to the Government of India against the plan loan sanctioned by the Government of India during the year 2015-16.

Out of 1498.97 acres (Previous year 1498.97 acres) of land held by the Company, 14.26 acres (for which right of use asset recognised amounting to ? 3269.11 lakhs as on 31.03.2021 Refer Note 1A) (Previous year 14.26 acres .value ? Nil) are held underlease hold right from Cochin Port Trust, for which lease agreement is under finalization. 80.50 acres of land has been provided as security towards arbitration award in the dispute between the Company and M/s.ABC & Sons (Refer Note.48).

The land held by the company also include 143.22 acres (value ? Nil) ( Previous year 143.22 acres, value ? Nil) under lease from Government of Kerala. During the year 2019-20, company had sold 481.79 acres of Land, as approved by Govt, of India at the rate of? 1 Crore per acre for 150 Acres (in lieu of free hold right accorded by the Government of Kerala over 143.22 acres of lease hold land) and remaining 331.79 acres @ ? 2.4758 Crore per acre as assessed by the District Collector to Government of Kerala / KINFRA. Government of Kerala had accorded freehold right to the Company over 143.22 acres of land vide G.O. (Ms) No. 99/2019/1D dated 13/11/2019. Pending issue of the title deed and other formalities in connection with the conversion, company continues the classification of said land as lease hold land.

Title deeds are yet to be registered/ received, in respect of 42.26 acres of Land. Certain land owners have since preferred extra compensation claims which are pending before Courts. The liability on this account is not ascertainable. Interest and legal expenses incurred on land acquisition cases are charged to Statement of Profit and Loss of the respective year.

Railway siding includes siding held jointly with M/s.Bharat Petroleum Corporation Limited (Kochi Refinery) with written down value ? 4.27 lakh (Previous year ? 4.27 lakh),

Company has given land ranging from 2.50 hectares to 4.1344 hectares to Kochi Metro Rail Limited on leave and license basis for the period from 22.10.2013 to 21.10.2021. Plowever, the leave and license agreement is pending execution.

Plant and Equipment includes value of 6 nos of Ammonia bullets fixed on the barges of contractor of the company for transportation of Ammonia, with net Written Down value of ? 2.66 lakh.

First charge has been created on 36.08 acres of land, in the State of Kerala, as security for Non Fund Based working capital arrangement with State Bank of India. (Previous year 432.60625 acres of land and buildings in the States of Kerala, Tamilnadu and Karnataka and First charge on certain Plant and Machinery permanently attached to the above land as a security for Fund based and Non-fund based working capital facilities with banks).

The above includes assets procured with EEC grant amounting to ? 56.79 lakh (previous year ? 57.73 lakh,)

The Company has adopted modified retrospective approach wherein, at the date of initial application, the lease liability is measured at the present value of remaining lease payments and Right of use asset has been recognised at an amount equal to lease liability adjusted by an amount of prepaid expenses. Accordingly, the comparitive information of previous period in the Financial Statements has not been restated.(Refer note 39)

The above includes, leased land from Cochin Port Trust taken for the purpose of storage, handling of raw materials and for setting up a dock for barge operations. The lease agreement is pending execution. The recognition of Right of use Asset and lease liability has been made based on the draft agreement agreed upon based on the sanction from Ministry of Shipping, Government of India, dated 14.11.2014.

During the year 2011-12 Company by way of leave and license basis, has made available to GAIL (India) Ltd, at Udyogamandal/Cochin Division, 2.40 acres of land and right to use of 0.33 acres for laying pipelines for a period of 35 years for an upfront premium of D 479 lakh and yearly license fee of D 100. The Leave and license agreement is yet to be executed.

As per the Joint Venture agreement with Rashtriya Chemicals & Fertilisers Ltd (RCF), the Company during 2008-09, has made available, 11 acres of land at Cochin Division on lease basis to FACT-RCF Building Products Ltd, for a period of 20 years for an upfront premium of D 1000 lakh and yearly rent of D 10.

Dues from statutory authorities include (i) D 13,458.13 lakh (Previous year 11,945.42 lakh) towards Kerala Value Added Tax paid on procurement of Regasified Liquified Natural Gas, (ii) D 1,411.12 lakhs (net of provision) (Previous year D 1,461.17 lakhs ) being CST refund receivable, under dispute and (iii) D 72.97 lakh (Previous Year D 72.97 lakh) towards the amount paid against disputed demands pending appeal.

Dues from Contractors include amount paid for materials supplied but rejected by the Company pending settlement D 2.71 lakh (Previous year D 19.92 lakh ) and an amount of D 1,353.19 lakh (Previous year D 1,353.19 lakh) including interest considered as recoverable on the basis of a bank guarantee invoked by the Company but stayed till the completion of arbitration. The Arbitration Award was passed during the year 2013-14, as per which the company is entitled to adjust an amount of D 2,798.29 lakh towards this advance and interest from the dues claimed by the contractor. The Company has gone on appeal against the award before the Honâ District Court, Ernakulam which has since stayed the award. Accordingly the Company demanded the banks to send the proceeds of encashment of bank guarantee along with interest. The bank rejected the claim and consequently the Company filed a suit against the bank before the Hon. High court of Mumbai for realization of amount, which are pending. However an amount of D1,353.19 lakh only has been retained pending disposal of the case.

1. A plan loan of D1,00,000.00 lakh bearing interest @13.50% per annum was released by the Government of India (GOI) on 29th March 2016 to maintain the operations of the Company. As per the order of Government of India, D 1,00,000.00 lakh along with the earlier loan and interest outstanding has been converted into a single loan carrying interest @ 13.50% per annum with one year moratorium. As per the letter dated 12.01.2016, of the Ministry of Finance, GOI, sanctioning the loan, the total outstanding liability of the Company is D1,83,672.00 lakh. The Company entered into an agreement with the Department of Fertilizers(DOF), GOI, agreeing to mortgage 408 acres of Companyâs land to secure repayment of the entire loan together with interest at the rate of 13.50% per annum on the amount outstanding as on 31.03.2017. The loan amount was reconciled and loan outstanding has been arrived at D1,77,048.75 lakh as on 31.03.2017. The loan along with interest is repayable in three or more equated installments within a period of 5 years ending by 2022. As per the terms of the sanction of the loan the entire repayment can be made during the years 2020-21 and/or 2021-22 in three or more equated installments. Accordingly, the entire principal amount (previous year-50% of the principal amount), being D1,77,048.75 lakhs (previous year- D 88,524.38 lakh) has been classified under Current Liabilities-Current maturities of Long term Debt. No amount has been classified under âNon Current Liabilities - Financial Liabilities - Borrowingsâ (Previous year- D 88,524.38 lakh). The outstanding principal and interest as on 31.03.2020, has been confirmed with the balance of Government of India.

Company has submitted a Financial Restructuring proposal to Department of Fertilizers (DoF), Government of India (GoI), seeking approval for the waiver of interest on Government of India loan, conversion of loan amounting to D 28,273.00 lakhs into equity and conversion of loan amounting to D 1,00,000.00 lakhs as interest free loan, repayable in 10 yearly installments commencing from the financial year 2022-23. The financial restructuring proposal submitted by the Company is under the consideration of the Department of Fertilizers, Government of India. Pending aproval by the Government of India, the loan taken from GoI and interest due thereon are accounted and disclosed as per the loan agreement dated March 3, 2016

2. The Company and M/s.Rashtriya Chemicals & Fertilisers Ltd(RCF) had provided Corporate Guarantee to the lenders of M/s.FACT-RCF Building Products Ltd-the 50:50 joint venture between the Company and RCF. During the year 2018-19, RCF has settled the entire liability to the bankers, to the extent of D 5,100 lakh including 50% share of the Company D 2,550 lakh on the condition that the Company shall treat the amount paid by RCF on behalf of the Company as Inter-Corporate loan with a repayment period of five years, starting from the year 2020-21. The first installment due during the year has been settled on 30.12.2020. The principal amount payable D 510 lakhs (Previous year D 510 lakhs) during the year 2021-22 has been classified under Current Liabilities - Financial Liabilities -Other Financial Liabilities . The remaining amount has been classified under Non Current Liabilities - Financial Liabilities - Borrowings. Interest rate applicable on the loan for the year 2020-21 is 8.50% p.a (Previous year- 8.50% p.a)

(a) The management has assessed that its financial assets and liabilities like cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The following methods and assumptions were used to estimate the fair values for the given below financial assets.

Investment in Unquoted Equity Shares

The fair values of the unquoted equity shares have been estimated using NAV model.

Derivatives not designated as hedges

Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs (i.e. based on inputs/statement of position received from banks).

Leases as lessee

Pursuant to Ministry of Corporate Affairs Notification dated 30^th March 2019, Ind AS 116 âLeasesâ applicable w.e.f 1st April 2019. However the Company adopted the standard with effect from 1^st April 2020 using modified retrospective method wherein, at the date of initial application, the Lease Liability is measured at the present value of remaining lease payments and Right-of-use asset has been recognized at an amount equal to Lease Liability adjusted by an amount of any prepaid expenses. Accordingly the comparative information of previous period in Financial Statements has not been restated. Under Ind AS 116 âLeasesâ, at commencement of lease, the Company recognizes Right-of-use asset and corresponding Lease Liability. Right-of-use asset is depreciated over lease term on systematic basis and Interest on Lease Liability is charged to Statement of Profit and Loss as Finance cost.

Recognition of right of use Asset and corresponding lease liability, as per IndAS 116, has been made in respect of the property taken for lease (Operating lease) for the purpose of storage and handling of Raw Materials,at Willington Island and for Guest House facility at New Delhi

f) The Company had exercised the following transition choices/practical expedients available under Ind AS 116 Leases

(i) The Company has elected below practical expedients for transition to Ind AS 116 âLeasesâ

1. Applied this Standard to contracts that were previously identified as containing a lease applying Ind AS 17.

2. Applied a single discount rate to a portfolio of leases with reasonably similar characteristics

(Such as leases with a similar remaining lease term for a similar class of underlying asset in a similar economic environment).

3. Not to apply the requirements to leases for which the lease term ends within 12 months from the date of initial application.

(ii) The Company has applied paragraph C5(b) of Appendix C of Ind AS 116 for transition which states that a lessee shall apply this standard to its leases retrospectively with the cumulative effect of initially applying the Standard recognized at the date of initial application. Accordingly,the Company measures lease liability at the present value of the remaining lease payments, discounted using the Company incremental borrowing rate at the date of initial application.

(iii) The Company recognizes right-of-use asset at the date of initial application for leases at an amount equal to the lease liability, adjusted by the amount of any prepaid expenses relating to that lease recognized in the balance sheet immediately before the date of initial application.

(iv) Transition Impact :

1. At the date of initial application i.e. 1^st April 2020, the Company has recognized D 3,176.38 Lakhs as Lease Liabilities in the books of accounts for those leases that were previously identified as leases as per Ind AS 17. Leases computed by discounting remaining lease payments as at 1^st April 2020 by incremental borrowing rate 7.75% p.a, based on remaining lease term as on 1^st April 2020.

2. Further, on transition, corresponding to lease liability stated above, the Company has also recognized Right-of-use assets D 3,452.84 Lakh after including an amount of D 276.46 Lakh recognized as prepaid expenses/ revenue advances in the Balance Sheet as at 31st March 2020

3. The application of this Standard has resulted in a net decrease in profit before tax of FY 2020-21 by D 124.47 lakh (Increase in Depreciation & amortization expenses, Finance cost and interest income by D 158.72 Lakh,D 245.15 Lakh and D 4.52 lakh, respectively and decrease in other expenses by D 274.88 Lakh).

4. Reconciliation between Operating lease commitments pertaining to non-cancellable leases disclosed as per Ind AS 17 Leases for FY 2019-20 discounted using incremental borrowing rate at the date of transition and Lease Liabilities recognized in books of accounts while disclosing minimum lease payments of certain leases in FY 2019-20.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs trade and other receivables, cash and cash equivalents and other bank balances. The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their respective carrying amount.

(i) Trade and other receivables

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to D 10438.13 lakh (Previous year D 39016.24 lakh) of which D 9446.49 lakh (previous year D 37327.75 lakh) due from Government of India relating to subsidy receivable. Trade receivables mainly constitute subsidy receivable from the Government of India and from services rendered.

Expected credit loss assessment for Trade and other receivables

(ii) Cash and Cash equivalents and Other Bank Balances

The Company held cash and cash equivalents and other bank balances of D 1,66,686.81 lakhs at 31st March 2021 (31st March 2020: D 68,471.73 lakhs). The Cash equivalents are held with banks with good credit ratings and financial position. Also, the Company invests its short term surplus funds in bank fixed deposits, which carry no / low market risks for short duration and therefore does not expose the Company to credit risk.

Liquidity risk is managed by Company through effective fund management. Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows.

1. The loan from Government of India along with interest is repayable in three or more equated installments within a period of 5 years ending by 2022.Company has submitted a Financial Restructuring proposal to Department of Fertilizers (DoF), Government of India (Gol), seeking approval for the waiver of interest on Government of India loan, conversion of loan amounting to D 28,273.00 lakhs into equity and conversion of loan amounting to D 1,00,000.00 lakhs as interest free loan, repayable in 10 yearly installments commencing from the financial year 2022-23. The financial restructuring proposal submitted by the Company is under the consideration of the Department of Fertilizers, Government of India. Pending aproval by the Government of India, the loan taken from Gol and interest due thereon are accounted and disclosed as per the loan agreement dated March 3, 2016 . The management expects restructuring of the loan, whereby the Government shall grant sufficient time for the repayment of the loan and interest due thereon. Accordingly, the Company can manage the immediate liquidity requirement.

(i) Currency Risk

The Companyâs activities are exposed primarily to the financial risk of changes in foreign currency rates.To mitigate the foreign currency risk, the Company is closely monitoring the market trend to take appropriate action

(ii) Interest rate risk

Exposure to interest rate risk:

The Companyâs investments are in Bank fixed deposits wherein the interest rates are fixed, as on the reporting date.

The Company do not have any borrowing with banks, as on the reporting date. The interest rate on the Companyâs borrowings from Government of India is not fluctuating. The rate of interest on Intercorporate loan from Rashtriya Chemicals and Fertilisers Ltd is subject to change, based on the lowest cost of their working capital finance. The Intercorporate loan outstanding as on 31.03.2021 is D 2,040 lakh and the applicable interest as on the reporting date is 8.50%.

(iii) Commodity rate risk

The Companyâs profitability gets affected by the price differential (also known as Margin) between prices of products (output) and the price of the raw materials used in production (input).

Company has entered in to agreement with suppliers of one of the major raw materials, Regassified Liquified Natural Gas, to mitigate the fluctation in market price.

(iv) Price Risk

42. Disclosure under Ind AS 24 on related party transactions are given below

The Company and M/s.Rashtriya Chemicals & Fertilisers Ltd(RCF) had provided Corporate Guarantee to the lenders of M/s.FACT-RCF Building Products Ltd-the 50:50 joint venture between the Company and RCF. During the year 2018-19, RCF had settled the entire liability to the bankers, to the extent of D 5,100 lakhs including 50% share of the Company D 2,550 lakhs on the condition that the Company shall treat the amount paid by RCF on behalf of the Company as Inter-Corporate loan. Accordingly, the amount of D 2,550 lakhs has been classified as Intercorporate loan. The principal amount outstanding as on 31.03.2021 is D 2,040 lakh (Previous year D 2,550 lakh). Interest rate applicable on the loan for the year 2020-21 is 8.50% p.a. (Previous year- 8.50% p.a).

During the year 2009-10, the Company has along with Department of Factories and Boilers, Government of Kerala, formed a society under the Travancore Literary, Scientific and Charitable Societies Act 1955 with the objective of conducting courses relating to welding technologies with a grant of D 1 Crore from the Government of Kerala, under the name Kerala institute of Welding and Research. The contribution from the Company is only provision of its existing facilities of Training School. The accounts of the society are not consolidated as society is formed with an objective of not obtaining any economic benefits from its activities and is considered immaterial to the Companyâs activity.

2) Key Management Personnel

1 Shri Kishor Rungta, Chairman and Managing Director (from 02.02.2019)

2 Shri.A.Ganesan, Director(Finance) & Chief Financial Officer (From 28.08.2019 up to 31.07.2020 )

3 Shri.S.Sakthimani, Director (Finance) & Chief Financial Officer (From 08.03.2021)

4 Shri.Kesavan Nampoori A.S, Director (Technical) (From 22.03.2021)

5 Shri D Nandakumar, Director (Marketing) ( up to 31.05.2019)

6 Shri.Anupam Misra, Director (Marketing) (from 14.07.2020)

7 Shri K V Balakrishnan Nair, Company Secretary & Executive Director (Finance)

8 Shri.Pradeep Kumar.C, Chief Financial Officer (from 29.01.2019 to 20.09.2019)

45. EMPLOYEE BENEFITS

General Description of Defined Contribution Plan

Contributory Superannuation Scheme-The scheme is aimed to provide superannuation benefits to the employees. Every year company contributes D 100 to the fund.

General Description of Defined Benefit Plan A Leave Encashment and Gratuity

The Company operates gratuity plan where in every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service.The same is payable on death , separation from service or retirement , whichever is earlier. The benefit vests after five years of continuous service.The company has been accounting for provision on account of leave encashment on retirement based on actuarial valuation carried out as at the balance sheet date.

B Provident Fund

During the year an amount of D1,697.75 lakh ( Previous Year D 1,693.67 lakh) has been charged to Statement of Profit & Loss towards contribution by the Company. In terms of the Ind AS 19 issued by the Institute of Chartered Accountants of India, the Provident Fund Trust set up by the company is treated as Defined Benefit Plan since the Company has to meet the shortfall in the fund assets, if any.

A Movement in net defined benefit (asset)/ liability in respect of Leave Encashment and Gratuity

GRATUITY - OTHER DISCLOSURE REQUIREMENTS

(i) Description of plan Characteristics and associated risks:

The Gratuity scheme is a final salary defined benefit plan that provides for a lumpsum payment at the time of seperation; based on scheme rules the benefits are calculated on the basis of last drawn salary and the period of service at the time of seperation and paid as lumpsum. There is a vesting period of 5 years. The design entiles the following risks that affect the liabilities and cash flows

Interest rates risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase. Thus the plan exposes the Company to the risk of fall in interest rates. Some times the fall can be permanent due to a paradigm shift in interest rate scenarios because of economic or fiscal reasons. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements). Even for funded schemes a paradigm downward shift in bond yields may affect the reinvestment yields and may increase ultimate costs.

Salary inflation risk:

The present value of the defined benefit plan is calculated with the assumption of salary escalation rate(SER) which is applied to find the salary of plan participants in future at the time of separation. Higher than expected increases in salary will increase the defined benefit obligation and will have an exponential effect.

Retirement age:

It should be noted that in case of employees above retirement age for the purpose of valuation it is assumed they will retire immediately & benefit is considered up to actual retirement age.

Demographic risks:

Demographic assumptions are required to assess the timing and probability of a payment taking place. This is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition disability and retirement. The effects of this decrement on the DBO depend upon the combination salary increase discount rate and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of a short serving employees will be less compared to long service employees.

Asset Liability Mismatch:

This will come into play unless the funds are invested with a term of the assets replicating the term of the liability. Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Investment Risk

Liquidity Risk

Market Risk

Legislative risk/Regulatory risk

(ii) Sensitivity Analaysis

How the DBO would have been affected by 100 basis points changes in the actuarial assumptions namely discount rates salary growth Attrition & Mortality is shown below

There is no change from the previous period in the methods and assumptions used in the preparation of above analysis, except that the base rates have changed

(iii) Asset Liability Matching Strategies

GRATUITY-EMPLOYEES :

Insurer Administered Fund

GRATUITY-CASUAL LABOUR (CLR)

Pay As You Go Method

(i) Description of plan Characteristics and associated risks:

The design entiles the following risks that affect the liabilities and cash flows,

Interest rates risk

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk:

Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risks:

This is the risk of volatility of results due to unexpected nature of decrements that include mortality attrition, disability and retirement. The effects of this decrement on the DBO depend upon the combination salary increase, discount rate, and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of a short caring employees will be less compared to long service employees.

(ii) SENSITIVITY ANALYSIS

How the DBO would have been affected by 100 basis points changes in the actuarial assumptions namely discount rates,salary growth, Attrition & Mortality is shown below

47.Sales Tax/ Value Added Tax / Entry Tax includes D 15,779.52 lakh (including interest up to 31.03.2021) (previous year D 14,944.17 lakh) towards differential tax demand in respect of the year 2011-12 on the disputed turnover. Against this order, Company obtained stay from Honâ High Court of Kerala.

48. The contract for the barge transportation of Ammonia awarded to a private company has been cancelled void ab initio during 2004-05 by the Company. The Contractor claimed D1,78,489.75 lakh including interest till 31.03.2013 before the arbitrator .The arbitrator has passed an award during the year 2013-14 in favour of the contractor for D17,308.04 lakh including interest as on 31.12.2013 .As per the award, the mobilisation advance paid by the Company to the contractor along with interest of D2,798.29 lakh is to be adjusted against the said award. The Company has not accepted the award on legal and factual grounds and has challenged the award before the Honâ District Court , Ernakulam which has since stayed the award. During the year 2019-20, as per the directive of Honâ District Court,Ernakulam the Company has provided 80.50 acres of land as security for the award. Accordingly, the award amount along with interest up to 31.03.2021, amounting to D 24681.79 lakh without considering the adjustment of mobilsation advance and interest allowed under the arbitral award is not considered as a liability and included under Contingent Liability.

49. As per the Presidential directive and the agreement entered into between the Company and the trade unions for implementation of the 1997 wage revision, the company is not liable to provide for arrears of salary and wages (net of interim relief paid) for the period from 01.01.1997 to 30.06.2001 and perquisites and other allowances for the period from 20.10.2000 to 30.06.2001, in respect of managerial and non-managerial employees. Certain retired employees of FACT have moved the Hon. High Court of Kerala and obtained a directive dated 31.3.2016, by which the court directed the Company to frame a scheme towards disbursement of the arrears in a phased manner. The company has appealed against the decision. The Board of Directors of the Company at its meeting held on 25-012018 decided to refer the matter to Department of Fertilisers, with a request to remove / review the criteria for payment of arrears. The Honâble High Court of Kerala vide its order dated 7th February 2019 directed the Secretary to the Ministry of Chemicals and Fertilizers, Department of Fertilizers to take a decision adverting to the request of the Company pursuant to Board resolution dated 25-01-2018 and to issue appropriate order / proceedings permitting the company to honour the commitments under the wage revision order on such terms as it may find fit to impose. The Secretary (Fertilizers), vide Order dated 09.07.2019 communicated his decision stating inability to relax / remove the criteria for payment of arrears. Against the order of the Secretary (Fertilizers), the retired employees has filed a contempt of court case. Thereafter Secretary (Fertilizers) filed Special Leave Petition before the Honâble Supreme Court and the same is pending. Since a review / decision on payment of arrears relating to 1997 pay revision is yet to be taken, the amount of liability cannot be ascertained at this stage.

52. Construction Contracts

In the case of work being carried out by FACT Enginering and Design Organisation (FEDO), for National Institute of Technology ( NIT), Nagaland, as an executing agency, on a cost plus basis, as a deposit work , FEDO is eligible for certain percentage of fees of total project cost . As per technical evaluation ,59.47 %(previous year 59.47%) of work related to consultancy services by FEDO to NIT, has been completed as on 31.3.2021 and pro-rata credit of D 941.28 lakh ( previous year D 942.56 lakh) has been taken, after considering D 343.35 lakh towards work in progress ( previous year D 344.45 lakh). The value of construction work done and certified during the year 202021 is taken as D 57.57 lakh, (previous year D 654.18 lakh) and equivalent amount has been considered for direct charges on contract.

56. The Company has a system of obtaining confirmation of balances from Vendors and Customers. Some of the parties confirmed the balances.

57. The Company has earned profit continuously from the financial year 2018-19 and consequently the networth of the Company has improved considerably. The Company has achieved excellent production, marketing and financial performance during the last two years and the same trend is expected in the financial year 2021-22 also. Financial restructuring packages submitted by the company requesting approval for waiver of Govt of India interest and restructuring Govt of India loan is under the consideration of the Govt of India and the Company expects a favourable decision on the proposal. Once the financial restructuring is approved, the networth of the company would become positive. Accordingly the accounts of the company are prepared on going concern basis

58. Spread of COVID 19 has affected the economic activity across the Globe, including India. However, the Government classified the Fertilizers business of the company as an âEssential Commodityâ and granted certain relaxations and guidelines so that production and distribution of the same will not be affected. The Company operated its plants during the year following the covid protocol and guidelines issued by the Government. Thus, the impact of Covid-19 on the Company for the year is minimal. The Company has considered the possible effects that may result from the pandemic on the carrying amounts of receivables, inventories and other financial assets, considering the available internal and external information up to the date of approval of these financial statements. Based on the nature of these assets, the company expects to recover the carrying amount of these assets as on March 31, 2021.

59. The standalone financial statements were authorized for issue in accordance with a resolution passed by the Board of Directors on 18.06.2021

60. The financial statements as approved by the Board of Directors are subject to audit by Comptroller and Auditor General of India and final approval by the Shareholders.

61. The figures of the previous year have been re-arranged and regrouped wherever necessary and / or practicable to make them comparable with those of the current year.

Mar 31, 2018

1. Corporate Information

The Company is a public limited company having registered office located at Eloor, Udyogamandal, Ernakulam 683501, Kerala. Its shares are listed in National Stock Exchange India Limited.

2. Basis for preparation of financial statements

The standalone financial statements of the Company have been prepared in accordance with accounting standards prescribed under Section 133 of the Companies Act, 2013 (the Act), Companies (Indian Accounting Standards) Rules, 2015 as amended by Companies (Indian Accounting Standards)(Amendment) Rules, 2016 and other relevant provisions of the Act.

The standalone financial statements have been prepared under the historical cost and on accrual basis, except for the following: -

- Certain financial assets and liabilities measured at fair value

- Certain provisions recognized using actuarial valuation techniques

- Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

The standalone financial statements are presented in Indian Rupees (â) and all values are rounded to the nearest lakh (Rs.00,000), except when otherwise indicated.

Note : Shares of Co-operative societies are retained at book value.

Company has adopted the carrying amount as per IGAAP as its deemed cost of its investment in joint ventures. The deemed cost of the investments has been arrived as under:

Provision for doubtful loans and advances include Rs.11514.60 lakh (Previous year Rs.9360.14 lakh, on 01.04.2016 Rs.7566.41 lakh) towards interest accrued on mobilisation advance given to a private company. Pending litigation, equivalent provision has been made towards interest beyond the amount considered recoverable .

Note : Capital advance include amount paid for items supplied but rejected by the Company pending settlement Rs.Nil (Previous year Rs.4.00 lakh, Rs.4.74 Lakh on 01.04.2016 )

Deferred tax assets (net)

The Company has deferred tax asset of Rs.212611 lakh (Previous year Rs.205581 lakh) as on 31.03.2018 because of unabsorbed depreciation and accumulated losses. The deferred tax liability as on 31.03.2018 is Rs.18824 lakh (Previous year Rs.14487 lakh). Since there is net deferred tax asset as on 31.03.2018, as a matter of prudence the deferred tax asset is not considered in the Accounts. The net impact (favourable) in tax on account of this comes to Rs.59880 lakh.(Previous year Rs.59048 lakh)

Notes

1. Inventories along with other Current Assets is pledged as Primary Security for Working Capital arrangement with Consortium of Banks amounting to Rs.114962 Lakh (Fund Based Rs.70250 lakh and Non Fund Based Rs.44712 lakh)

2. Inventory of raw material, stores and spares, Work in Progress are valued at cost and finished goods are valued at lower of cost or realisable value

3. Finished Goods includes 27.63 lakh MT of saleable gyspum (PY 31.22 lakh MT, on 01.04.2016 34.45 lakh MT) amounting to Rs.9119.39 lakh (Previous year Rs.7400.07 lakh, on 01.04.2016 Rs.11506.82 lakh - inclusive of Excise Duty) valued as per Accounting policy.

4. Stores & Spares in transit includes Stores & Spares at site pending inspection Rs. 218.81 lakh (Previous year Rs.177.83 lakh, Rs.269.71 lakh on 01.04.2016 )

The disclosure of provisions movement as required under Indian Accounting Standard âProvisions, Contingent Liabilities and Contingent Assetsââ

Provision towards obsolescence and storage losses (including provision towards Retired spares )

Dues from Contractors include amount paid for materials supplied but rejected by the Company pending settlement Rs.8.63 lakh (Previous year Rs.9.45 lakh, on 01.04.2016 Rs.22.52 lakh )

Due from Contractors includes an amount of Rs.1353.19 lakh (Previous year Rs.1353.19 lakh) including interest considered as recoverable on the basis of a bank guarantee invoked by the Company but stayed till the completion of arbitration. The Arbitration Award was passed during the year 2013-14, as per which the company is entitled to adjust an amount of Rs.2798.29 lakh towards this advance and interest from the dues claimed by the contractor. The Company has gone on appeal against the award before the Honâble District Court which has since stayed the award. Accordingly the Company demanded the bank to send the proceeds of encashment of bank guarantee along with interest. The bank rejected the claim and consequently the Company filed a suit against the bank before the Honâble High court of Mumbai for realization of amount, which is pending. However an amount of Rs.1353.19 lakh only has been retained pending disposal of the case. _r

Secured by (a) Hypothecation of current / movable assets viz. stock of raw materials, trade receivables, stores and spares, semi-finished goods, finished goods, receivables etc. (b) First charge on 520.47625 acres of land (Previous year 520.47625 acres, on 01.04.2016 520.47625 acres) and buildings in the States of Kerala, Tamilnadu and Karnataka (c) First charge on certain Plant and Machinery permanently attached to the above land. Rate of interest on Cash credit varies from 12 .00% to 13.65 % P.A (Previous year from 12.00 % to 14.00 % P A) and is repayable on Demand (Previous year- On demand).

Cash Credit includes Rs. 16149.00 lakh (previous year Rs.8337.25 lakh) towards working capital demand loan from State Bank of India at interest rate of 7.80% Per Annum (Previous year 8.00% Per Annum), secured by subsidy due for the months of September 2017 to December 2017(Previous year September 2016 and October 2016). As per Office Memorandum No.23011/11/2017-MPR dated 05.03.2018 ,,issued by the Government of India, interest at the rate of 0.96% Per Annum (Previous year 1.75% Per Annum) is to be borne by the company. The outstanding loan amount has been fully liquidated on 7th April 2018 (Previous year - on 7th April 2017) .

Note : Trade payables include Rs.34.24 lakh (Previous year Rs.22.70 lakh, Rs.15.55 lakh on 01.04.2016) payable to Small Scale Industrial Undertakings to the extent such parties have been identified from the available documents/ information. Dues owed by the Company to Small Scale Industrial Undertakings outstanding for more than 30 days is Rs.19.65 lakh (Previous year Rs.8.03 lakh, Rs.Nil on 01.04.2016)

Note : Interest of Rs.2154.46 lakh (Previous year Rs.1793.73 lakh) for the year 2017-18 receivable from the contractor on the interest bearing mobilisation advance still retained by the party, has been considered in the accounts. However a corresponding provision for doubtful interest has been made during the current year.

Excess provisions written back includes write back of interest expenditure amounting to Rs.1919.95 lakh, consequent to waiver of interest by suppliers and Rs.916.50 Lakh towards withdrawal of Provision for liability on corporate guarantee after considering Rs.300 lakh for remaining Contractual obligation

3. Research and Development Expenditure of Rs.114.17 lakh (Previous Year Rs.108.87 lakh) includes expenditure towards salary Rs.113.92 lakh (Previous year Rs.108.20 lakh) and depreciation Rs.0.10 lakh (Previous year Rs.0.20 lakh).

4. Miscellaneous Expenses includes Directors travel amounting to Rs.17.92 lakh (Previous year Rs.13.7 lakh).

5. Miscellaneous Expenses includes Rs.353.72 lakh (previous year Rs.6.51 lakh) towards the cost of PoS machine distributed by the Company under Direct benefit Transfer Scheme framed by the government of India.

6. Physical verification of stores and spares was carried out at all divisions as per the procedure laid down in the Stores Management Manual and the differences( Excess(-)/Shortage) over book figures has been adjusted in the accounts. Current year Rs.0.31 lakh (Previous year â(-) 11.98 lakh)

7. Physical verification of fuel was carried out at all divisions as per the procedure laid down in the Stores Management Manual and the differences( Excess(-)/Shortage) over book figures has been adjusted in the accounts. Current year Rs.3.86 lakh (Previous year Rs.79.17 lakh)

Explanatory Information on Financial Statements Note No. 36. Corporate Social Responsibility

The Corporate Social repsonsibility (CSR) provisions as per sec 135(1) of the Companies Act, 2013 is applicable to the Company. But due to the losses sufferred during the preceding Financial Years, the Company is not liable to spend any amount mandatorily on CSR.

Note No. 3. Caprolactam Operations:

Due to uneconomic price of one of the product namely Caprolactam in the market, the plant remained unproductive during the year. Certain segments of the Petro Chemical plant has been operated for production of Ammonium Sulphate through the direct neutralization method. The Caprolactam plant is maintained and preserved for commencement of production when required. Company has redeployed a section of the employees of the plant to other areas wherever required. The unabsorbed fixed cost pertaining to caprolactum plant charged to revenue during the year is Rs.2123.07 lakh.(Previous year Rs.2430.17 lakh) 39. Fair Value Hierarchy

The following methods and assumptions were used to estimate the fair values for the given below financial assets.

Unquoted Equity Shares of Indian Potash Limited

The fair values of the unquoted equity shares have been estimated using a weighted average of DCF, PE and NAV model.

Unquoted Equity Shares of Other Companies:

The fair values of the unquoted equity shares have been estimated using NAV model.

Derivatives not designated as hedges

Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs (i.e. based on inputs/statement of position received from banks).

Investment Properties

The value of the investment properties are based on the information available in Government of kerala fair value notification, market conditions etc.

Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV. Company do not have any such investment.

Operating Leases Leases as lessor

The Company leases out its investment property on operating lease basis

i) Future minimum lease receivable

At 31 March, the future minimum lease payments under non-cancellable leases are receivable as follows

In addition, the Company is exposed to credit risk in relation to financial guarantees given to the banks. The maximum exposure in this respect is the amount the Company would have to pay if the guarantee is called on is Rs.2550.00 lakh as at March 31, 2018 (Rs.3766.50 lakh as on 31.03.2017, as at 1st April 2016, Rs.3766.50 lakh).

(B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the companyâs liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows.

Financing arrangements

The company had access to the following undrawn fund based borrowing facilities at the end of the reporting period:

The Bank Overdraft/Cash Credit (CC)/Short term loan (STL) facilities may be drawn at any time and may be called back by the bank at their discretion. The credit facilities of Banks are subject to compliance with sanctioned terms & conditions. The credit facilities have an average maturity of 1 year.

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 risk. The Companyâs activities exposes itâs primarily to the financial risk of changes in foreign currency risk. To mitigate the foreign currency risk, the company is entering into forward contracts with Banks.

4. Disclosure under Ind AS 24 on related party transactions are given below

Consequent to full provision recognized towards the investments made in FRBL as per Indian GAAP, the carrying value as on the date of transition has been recognized as deemed cost of investment which is NIL as on the transition date .i.e. 1st April 2016.

The provision towards the amount given as material, Services and advances made in the earlier financial years continues. Similar Provision amounting to Rs.97.02 Lakh (Previous year Rs.170.38 lakh) has been made for the current year also.

Out of the guarantees given by the Company on behalf of FRBL to its bankers, guarantees amounting to Rs.3766.50 Lakh as a part of the Debt restructuring scheme, has been accounted for as a financial liability required to be measured at fair value and also tested for loss allowance. Expecting the liability of repayment of debt obligations of FRBL, bankers may devolve on the Company, the Company has provided for loss on impairment of its corporate guarantee amounting to Rs.3766.50 lakh towards term loan which has been adjusted to its opening reserves as at 1 st April 2016, the date of transition to Ind AS. During the year the said liability has been crystalised and agreed for alone time settlement for and amount of Rs.3030 lakh has been provided. The said liability towards financial guarantee is reported under other financial liabilities.

During the year 2009-10, the Company has along with Department of Factories and Boilers, Government of Kerala, formed a society under the Travancore Literary, Scientific and Charitable Societies Act 1955 with the objective of conducting courses relating to welding technologies with a grant of Rs.1 Crore from the Government of Kerala, under the name Kerala institute of Welding and Research. The contribution from FACT is only provision of its existing facilities of Training School. The accounts of the society are not consolidated as society is formed with an objective of not obtaining any economic benefits from its activities and is considered immaterial to the Companyâs activity.

2) Key Management Personnel

1 Shri Sushil Kumar Lohani, Chairman and Managing Director (upto 16.02.2018)

2 Shri Manoj Mishra, Chairman and Managing Director (from 21.02.2018)

3 Shri Suresh Warior, Director (Finance) (upto 30.11.2017)

4 Shri D Nandakumar, Director (Marketing) (from 13.09. 2017)

5 Shri U Saravanan, Director (Technical) (from 14.8.2017)

6 Shri Sanjai Maheshwari Director (Finance) (from 06.03.2018)

7 Shri K V Balakrishnan Nair, Company Secretary

* Owing to the companyâs share of losses exceeding its interest in the joint venture the share of loss stands discontinued. Accordingly company has not recognized share of loss of Rs.742.21 lakh for the year (P.Y. Rs.1201.06 lakh) and Rs.1857.92 lakh cumulatively upto the year ended 31.03.2018 (Rs.1967.79 lakh cumulatively upto the year ended 31.03.2017).

Kerala Enviro Infrastructure Ltd. (KEIL) is a public limited company formed as Special Purpose Vehicle and promoted by the Kerala State Industrial Development Corporation (KSIDC) in association with various industries in the State for establishing Common Treatment, Storage and Disposal Facility (CTSDF) for solid hazardous industrial waste in the State of Kerala.

5. NOTES FORMING PART OF FINANCIAL STATEMENTS

A General Description of Defined Contribution Plan

Contributory Superannuation Scheme-The scheme is aimed to provide superannuation benefits to the employees. Every year company contributes Rs.100 to the fund.

B General Description of Defined Benefit Plan

1 Provident Fund

During the year an amount of Rs.1747.02 lakh ( Previous Year Rs.1892.91 lakh) has been charged to Statement of Profit & Loss towards contribution by the Company. In terms of the Ind AS 19 issued by the Institute of Chartered Accountants of India, the Provident Fund Trust set up by the company is treated as Defined Benefit Plan since the company has to meet the shortfall in the fund assets , if any.

2 Gratuity and Leave Encashment

The company operates gratuity plan where in every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service.The same is payable on death , separation from service or retirement, whichever is earlier. The benefit vests after five years of continuous service.The company has been accounting for provision on account of leave encashment on retirement based on actuarial valuation carried out as at the balance sheet date.

6A. Explanatory Statement to Reconciliation of Equity a Property, Plant and Equipment:

This includes spares capitalised as per Ind AS Rs.1646.12 Lakh (Previous Year Rs.1250.88 Lakh) less Depreciation Reserve Rs.1561.52 lakh (Previous Year Rs.1119.74 Lakh) net Rs.84.60 lakh (previous Year Rs.131.14 lakh). These spares were shown as Inventories under IGAAP. Capitalisation of Decommissioning Expenses of installation in Cochin Port Rs.129.85 Lakh (Previous Year Rs.129.85 Lakh) less Depreciation Reserve Rs.4.64 Lac (Previous year NIL) Rs.125.21 Lakh (previous year Rs.129.85 lakh)

Land given on lease to FRBL (11 Acre) and GAIL (2.40 Acre in Udyogamandal and 0.33 Acre in Cochin Division) and building to CIPET were classified as Investment Property as per Ind AS valued at Rs.9.70 lakh (Previous Year Rs.9.80 lakh)

b Investment:

Under previous IGAAP, Company had accounted for long term investment in unquoted equity shares of Indian Potash Limited (IPL), Travancore Cochin Chemicals Limited (TCC), Capexil Agencies Limited and Kerala Enviro Insfrastructure Limited, at cost.

Under Ind AS, Company has designated this investment as FVTOCI financial asset. Ind AS requires such investments to be measured at fair value on every reporting date. As at the date of transition to Ind AS, the difference between the fair value and previous IGAAP carrying amount has been recognized as a separate component of equity, in the FVTOCI reserve amounting to Rs Rs.4204.98 lakh (as on 01.04.2016 Rs.4008.98 lakh). As on 31.03.2017 the value was increased by Rs.196.00 lakh

c Loans / Others

Capital advances Rs.55.40 lakh (previous year Rs.5 lakh) and Advance income Tax (net of Provision and TDS) Rs.212.36 lakh (Previous Year Rs.219.17 lakh) grouped under Loans and Advances as per IGAAP were regrouped to Other Non current Asset,

d Cash and cash equivalents

Unpaid interest warrant and Treasury deposit were regrouped from Cash and Cash Equivalent amounting to Rs.11.54 Lakh (previous year Rs.11.54 Lakh).

e Trade receivables Subsidy receivable on fertilisers from the Government of India Rs.49780.22 lakh (Previous year Rs.39848.95 Lakh) shown under other current asset under IGAAP regrouped under Trade receivable as per Ind AS.

Sales Tax Advance remittance pending appeal Rs.72.97 lakh (Previous year Rs.72.97 lakh)were regrouped under Dues fromDeposits under Ind AS.

f Retired Assets

Retired Assets which was shown under other current assets is disclosed under property, plant and equipment under Ind AS.

g Provisions:

Provision for Decommissioning of assets in Leasehold Property amouting to Rs.175.26 lakh (Previous year Rs.162.28 lakh)

Liability on Corporate Guarantee amounting to Rs.3766.50 lakh has been provided as per Ind AS.

Provision for Excise duty on finished product stock is classifed under other Current liabilities under Ind AS Excise duty on sales has been included under other expenses as per Ind AS instead of deduction from Sale of Product / service Upfront Premium received on lease of land to FRBL Rs.50 lakh and GAIL Rs.13.90 lakh has been amortised as per Ind AS h Unearned portion of upfront money received from FRBL and GAIL less due within 12 months shown under Non Current others liabilities.

i Cost of material Consumed

Packing Material consumed has been grouped under Cost of Material Consumed as per IndAS

j Forward Contract Premium

Unexpired portion of Premium on Forward Exchange contract, which was defered during previous years, has been considered and adjusted in the respective year of contract.

k Depreciation

Depreciation has been charged on Spares capitalised ( Rs.441.78 lakh) and Decommissioning Asset (Rs.4.63 lakh)

7. Excise duty demand of Rs.2.38 lakh on purchase of Raw material, pending appeal, has not been considered since the liability rests with supplier as per order terms.(PreviousYear Rs.2.38 lakh).

8. The contract for the barge transportation of Ammonia awarded to a private company has been cancelled void ab initio during 2004-05 by the Company. The Contractor claimed Rs.178489.75 lakh including interest till 31.03.2013 before the arbitrator. The arbitrator has passed an award during the year 2013-14 in favour of the contractor for Rs.17308.04 lakh including interest as on 31.12.2013. As per the award, the mobilisation advance paid by the Company to the contractor along with interest of Rs.2798.29 lakh is to be adjusted against the said award. The Company has not accepted the award on legal and factual grounds and has challenged the award before the Honâble District Court which has since stayed the award. Accordingly, the award amount along with interest up to 31.03.2018, amounting to Rs.21629.14 lakh without considering the adjustment of mobilsation advance and interest allowed under the arbitral award is not considered as a liability and included under Contingent Liability.

9. In view of the conditions in the directives of the Government of India ,while implementing the wage revision for the period 1997 to 2006, the company is not liable to provide for arrears of salary and wages (net of interim relief paid) for the period from 01.01.1997 to 30.06.2001 and perquisites and other allowances for the period from 20.10.2000 to 30.06.2001, in respect of managerial and non managerial employees. Certain retired managerial employees of FACT have moved the Honâble High Court of Kerala and obtained a directive dt 31.3.2016, by which the company has to frame a scheme towards disbursement of the arrears.The company has appealed against the decision and the same is pending before the Honâble High Court of Kerala.The amount involved is not ascertained at this stage.

10. Bank Guarantees given to various clients/ statutory authorities for performance of contracts/ obligations are not included, as the money value thereof cannot be ascertained.

11. Construction Contracts

In the case of work being carried out by FACT Enginering and Design Organisation (FEDO), for National Institute of Technology ( NIT), Nagaland, as an executing agency, on a cost plus basis, as a deposit work , FEDO is eligible for certain percentage of fees of total project cost . As per technical evaluation, 50%(previous year 46.75%) of work related to consultancy services by FEDO to NIT, has been completed as on 31.3.2018 and pro-rata credit of Rs.816.65 lakh ( previous year Rs.772.96 lakh) has been taken, after considering for Rs.204.81 lakh as work in Progress ( previous year Rs.161.93 lakh towards unearned income). The value of construction work done and certified during the FY 2017-18 is taken as Rs.866.66 lakh, (previous year Rs.3119.89 lakh) and equivalent amount has been considered for direct charges on contract.

12. The Company has a system of obtaining confirmation of balances from Vendors and Customers. Some of the parties confirmed the balances.

13. For all periods upto and including the year 31st March 2016 the company prepared its financial statements in accordance with the accounting standard prescribed under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

14. Company entered an agreement with M/s. Bharat Petroleum Corporation Limited for sale of 169.689 Acre of land @ Rs. 248 Lakh per acre at Ambalamedu. Transfer Deed for 150 Acre of land registered on 10th may 2018, registration of title deed for the balance land will be completed in a short period. In additions to the above, there is a MoU with Government of Kerala for transfer of 150 Acre of land @ Rs. 100 lakh per acre and 331.790 acres @Rs. 248 lakh per acre.

15. As the accumulated loss has exceeded the networth as on 31.3.2013,the Company has made a formal reference under Section 15 of the Sick Industrial Companies ( Special Provisions) Act , 1985 on adoption of duly audited accounts for the Financial Year 2012-13 in the Annual General Meeting held on 27.12.2013 to Board for Industrial and Financial Reconstruction (BIFR) during February 2014. Consequent to the commencement of provisions of Sick Industrial Companies (Special Provisions) Repeal Act, 2003, BIFR has been dissolved and all pending cases before BIFR stand abated. With effect from 1st December, 2016 provisions relating to corporate insolvency, under the Insolvency and Bankruptcy Code, 2016 have been commenced. The National Company Law Tribunal (NCLT) under the Companies Act, 2013 are also established to deal with inter-alia, matters relating to insolvency of companies. FACT is not required to file any case for insolvency resolution under the Insolvency and Bankruptcy Code 2016 before NCLT at present. During the financial year 2015-16 ,with the objective of carrying on the operations of the company without hindrance, the Government of India has disbursed a plan loan of Rs. 1000 crores on 29/3/2016.This helped the company to overcome its working capital constraints and improve the operations during the financial year 2016-17 and 2017-18. A comprehensive proposal for revival of the company is under the consideration of the Ministry. In view of the above, company does not foresee impairment of its operations as a going concern and hence the accounts are prepared on going concern basis.

16. The Standalone financial statements were authorized for issue in accordance with a resolution passed by the Board of Directors on 30th May 2018

17. The financial statements as approved by the Board of Directors are subject to audit by Comptroller and Auditor General of India and final approval by its Shareholders.

18. The figures as on the transition date and previous year have been re-arranged and regrouped wherever necessary and / or practicable to make them comparable with those of the current year.

Mar 31, 2017

1.1 A plan loan of Rs.1000 crore bearing interest @13.50% p.a subject to revision on annual basis was released by the Government of India on 29th March 2016 to maintain the operations of the company. As per the terms of sanction of the loan, the amount of Rs.1000 crore along with the earlier loan and interest outstanding has been converted to a single loan carrying interest @13.50% p.a with a one year morotorium for payment of interest. The loan along with interest is repayable in three or more equal instalments in a period of 5 years ending by 2022. Since there is no commitment to repay the loan / interest in the Financial Year 2017-18, the loan amount outstanding as at 31.03.2017 along with interest is shown under Long Term Liabilities as follows:- (Please refer Note 28.1 also)

2.1 Secured by (a) Hypothecation of current / movable assets viz. stock of raw materials, trade receivables, stores and spares, semifinished goods, finished goods, receivables etc. (b) First charge on 520.47625 acres of land (Previous year 520.47625 acres ) and buildings in the States of Kerala, Tamilnadu and Karnataka (c) First charge on certain Plant and Machinery permanently attached to the above land. Rate of interest on Cash credit varies from 12 .00% to 14 % p. a (Previous year from 13.30 % to 15 % p a) and is repayable on Demand (Previous year- On demand).

2.2 Cash Credit includesRs.8337.25 Lakh (previous year NIL) towards working capital demand loan from State Bank of India at interest rate of 8.00%, secured by subsidy due for the months of September and October 2016.

3.1 Trade payables include Rs.22.70 lakh (Previous year Rs.15.55 lakh) payable to Small Scale Industrial Undertakings to the extent such parties have been identified from the available documents/ information. Dues owed by the Company to Small Scale Industrial Undertakings outstanding for more than 30 days is Rs.8.03 lakh (Previous year Rs.NIL)

3.2 The amount unpaid towards vendors under the Micro,Small and Medium Enterprises Development Act 2006 is Rs.40.28 lakh (Previous year Rs.17.16 lakh) and interest thereon works out to Rs.1.16 lakh ( Previous year Rs.0.77 lakh)

4.1 Other Liabilities include Rs.236.03 lakh (Previous year Rs.143.15 lakh) towards amount retained from retired employees towards 25% increase in HRA and LTE paid pending approval from Government of India

4.2 During the year, the Company terminated a contract for sale of bulk gypsum. An amount of Rs.31.90 lakh payable to the contractor as per the contract terms is included in other liabilities.

5.1) Company has agreed to mortgage 408 acres of land vide patta no.7030 in survey no.205 in puthencruz, Ernakulam District, Kerala state to the Government of India against the plan loan sanctioned by the Government of India during the year 2015-16. (Refer Note no 3.1)

5.2) Out of the total 2150.50 acres (Previous year 2150.50 acres) of land held by the Company, 158.82 acres, value T Nil (Previous year 158.82 acres .value Rs. Nil) are held under lease hold right. Out of this, lease agreement in respect of 14.26 acres (Previous year 14.26 acres) of leasehold land belonging to Cochin Port Trust is under finalization.

5.3) Land for Rs. 510.77 lakh (Previous year Rs.510.77 lakh) in respect of which the title deeds are yet to be registered/received. Certain land owners have since preferred extra compensation claims which are pending before Courts. The liability on this account is not ascertainable. Interest and legal expenses incurred on land acquisition cases are charged to Statement of Profit and Loss of the year.

5.4) As per the Joint Venture agreement with M/s Rashtriya Chemicals and Fertilisers Limited (RCF), the company, during 2008-09, has made available 11 acres of land at Cochin Division on lease basis to M/s. FACT-RCF Building Products Limitedfor a period of 20 years on an upfront premium of Rs. 1000 lakh and an yearly rent of Rs.10 per year.

5.5) During the year 2011-12, the Company byway of leave and license basis, has made available to M/s Gas Authority of India Ltd, at Udyogamandal/Cochin Division, 2.40 acres of land and Right of Use of 0.33 acres for laying pipe lines for a period of 35 years for an upfront premium of Rs.479 lakh and an yearly license fee of Rs.100/-. Leave and license agreement is pending execution.

5.6) Cost of Railway siding includes Rs. 85.43 lakh (Previous year Rs.85.43 lakh), written down value Rs.4.27 lakh (Previous yearRs.4.27 lakh), held jointly with M/s.Bharat Petroleum Corporation Limited (Kochi Refinery)

5.7) During 2012-13, the Company has by way of leave and license basis, made available JNM hospital building (15300 sq.ft) and no.5 dormitory (25035 sqft) to M/s Central Institute of Plastics Engineering S Technology for 15 years for conducting academic classes /training /research and for providing hostel facilities.

5.8) During the year 2013-14, Company had given 4.0558 hectares of land to Kochi Metro Rail Limited on leave and license basis for a period of 2 years from 22.10.2013 to 21.10.2015. The lease has been extended from 22-10-2015 for a period of two years for a consideration of Rs. 46.2 lakh per hector for the year 2015-16 and Rs.50.82 lakh per hector for the year 2016-17. The area under lease from 22-10-2015 is 4.1344 hector.

5.9) Plant and Equipment includes value of 6 nos of Ammonia bullets fixed on the barges of contractor of the company for transportation of Ammonia, of original costRs.53.30 lakh and accumulated depreciation Rs.50.64 lakh, with net value of Rs.2.66 lakh.

5.10) Rs. 37.44 lakh has been withdrawn, shown as reduction from depreciation expenses in the Statement of Profit and Loss towards impairment loss during the FY 2016-17 and cumulative impairment loss is Rs. 330.76 lakhs.

6.1 Cash and bank balances include Rs.0.16 lakh (Previous Year Rs.0.17 lakh) being the balance of amount received from clients for execution of jobs on Total Responsibility basis and Rs.1217.82 lakh (Previous year Rs.52.23 lakh ) towards work on Deposit basis, lying in a specified account to meet the matching liabilities under Current Liabilities.

6.2 Details of Specified Bank Notes (SBN) held and transacted during the period from Novemeber 8, 2016 to December 30, 2016 as provided in the table below

7.1 Deposits includes Rs.73.47 lakh (Previous Year Rs.78.59 lakh) towards the amount paid against disputed demands pending appeal.

7.2 Advance to vendors include amount paid for materials supplied but rejected by the Company pending settlement Rs.9.45 lakh (Previous year Rs.22.52 lakh )

7.3 Advance to vendors includes an amount of Rs.1353.19 lakh (Previous year Rs.1353.19 lakh) including interest considered as recoverable on the basis of a bank guarantee invoked by the Company but stayed till the completion of arbitration. The Arbitration Award was passed during the year 2013-14, as per which the company is entitled to adjust an amount of Rs.2798.29 lakh towards this advance and interest from the dues claimed by the contractor. The Company has gone on appeal against the award before the Honâ District Court which has since stayed the award. Accordingly the Company demanded the bank to send the proceeds of encashment of bank guarantee along with interest. The bank rejected the claim and consequently the Company filed a suit against the bank before the Hon. High court of Mumbai for realization of amount, which is pending. However an amount of Rs.1353.19 lakh only has been retained pending disposal of the case. ( Also Refer Note no 18.6 ,21.1 and 29(1) (a)(vi))

7.4 Advance to employees include Rs.1.60 lakh (Previous year Rs.1.46 lakh) towards a portion of festival advance paid during 1996-97 and recoverable at the time of seperation from companyâs service during the year 2017-18.

7.5 The disclosure of provisions movement as required under Accounting Standard 29

7.6 Allowance for bad and doubtful loans and advances include Rs.9360.14 lakh (Previous year Rs.7566.41 lakh) towards interest accrued on mobilisation advance given to a private company. Pending litigation, equivalent provision has been made towards interest beyond the amount considered recoverable .( Also Refer Note no 18.3 , 21.1 and 29(1) (a)(vi))

8.1 Kerala Value Added Tax paid on procurement of Regasified Liquid Natural Gas during the period 18.07.2016 to 31.03.2017 has been accounted as refundable on account of announcement by the Honâble Finance Minister of Kerala in the State Legislative Assembly during the Budget Session.

8.2 During the year 2009-10, Company decided to scrap Ammonia and Urea Plant at Cochin Division. These retired assets are retained in books at written down value of Rs.4065.02 lakh, in anticipation of higher realisable value on disposal.

9.1 In the case of work being carried out by FACT Enginering and Design Organisation (FEDO), for National Institute of Technology ( NIT), Nagaland, as an executing agency, on a cost plus basis, as a deposit work , FEDO is eligible for certain percentage of fees of total project cost . As per technical evaluation, 46.75 %(previous year 35.10%) of work related to consultancy services by FEDO to NIT, has been completed as on 31.3.2017 and pro-rata credit of Rs.772.96 lakh ( previous year Rs.439.16 lakh) has been taken, after providing for Rs.161.93 lakh ( previous year Rs.119.97 lakh) towards unearned income. The value of construction work done and certified during the FY 2016-17 is taken as Rs.3119.89 lakh, ( previous year Rs.4404.79 lakh) and equivalent amount has been considered for direct charges on contract. Similar deposit work on cost plus basis done for Cochin University of Science And Technology (CUSAT) by FEDO, percentage of completion as per technical evaluation as on 31.3.2017 is 99.99% ( Previous year 97%) and pro-rata credit of Rs.24.14 lakh ( previous year Rs.21.78 lakh) has been taken, after providing for Rs.2.15 lakh ( previous year Rs.0.21 lakh) towards unearned income. The value of construction work done and certified during the FY 2016-17 is taken as Rs.28.20 lakh, ( previous year Rs.253.13 lakh) and equivalent amount has been considered for direct charges on contract .

10.1 Interest of Rs.1793.73 lakh (Previous year Rs.1493.41 lakh) for the year 2016-17 receivable from the contractor on the interest bearing mobilisation advance still retained by the party, has been considered in the accounts. However a corresponding provision for doubtful interest has been made during the current year. (Also Refer Note No. 18.3, 18.6 and 29 (1) (a) (vi))

11.1 The physical verification of raw materials has been carried out on or around 31st March 2017. The differences over book figures in the case of raw material has been adjusted in consumption (Excess(-) / Shortage). Current year Rs. (-)497.42 lakh (Previous year Rs.14.61 lakh ).

11.2 Related party disclosure (Accounting Standard 18)

List of related party

Key Managerial Personnel

Sri Jaiveer Srivastava, Chairman and Managing Director (Upto 02.11.2016)

Sri A.B. Khare, Chairman and Managing Director (from 02.11.2016)

Sri V.K.Anil, Director (Technical) (upto 27.06.2016)

Sri Sreenath V. Kamath CGM(CF) & CFO Sri K.V.Balakrishnan Nair, Company Secretary

Transactions with related parties:

Remuneration to key management personnel : Rs.68.25 lakh (Previous year Rs.91.63 lakh )

11.2 In view of the conditions in the directives of the Government of India ,while implementing the wage revision for the period 1997 to 2006, the company is not liable to provide for arrears of salary and wages (net of interim relief paid) for the period from 01.01.1997 to 30.06.2001 and perquisites and other allowances for the period from 20.10.2000 to 30.06.2001, in respect of managerial and non managerial employees. Certain retired managerial employees of FACT have moved the Hon.High Court of Kerala and obtained a directive dt 31.3.2016, by which the company has to frame a scheme towards disbursement of the arrears.The company has appealed against the decision and the same is pending before the Hon.High Court of Kerala.The amount involved is not ascertained at this stage.

1.3 General Description of Defined Benefit Plan

1 Gratuity and Leave Encashment

2 Provident Fund

During the year an amount of Rs.1892.91 lakh ( Previous Year Rs.1879.88 lakh) has been charged to Statement of Profit & Loss towards contribution by the Company. In terms of the revised AS 15 issued by the Institute of Chartered Accountants of India, the Provident Fund Trust set up by the company is treated as Defined Benefit Plan since the company has to meet the shortfall in the fund assets, if any.

3 General Description of Defined Contribution Plan

Contributory Superannuation Scheme-The scheme is aimed to provide superannuation benefits to the employees. Every year company contributes Rs.100 to the fund.

12.1 Physical verification of stores and spares was carried out at all divisions as per the procedure laid down in the Stores Management Manual and the differences( Excess(-)/Shortage) over book figures has been adjusted in the accounts. Current year Rs.(-)11.98 lakh (Previous year Rs.7.85 lakh)

12.2 Miscellaneous Expenses includes Directors travel amounting to Rs.13.71 lakh (Previous year Rs.28.78 lakh).

12.3 Research and Development Expenditure of Rs.108.87 lakh (Previous Year Rs.145.14 lakh) includes expenditure towards salary Rs.108.20 lakh (Previous year Rs.144.02 lakh) and depreciation Rs.0.20 lakh (Previous year Rs.0.20 lakh).

12.4 Physical verification of fuel was carried out at all divisions as per the procedure laid down in the Stores Management Manual and the differences( Excess(-)/Shortage) over book figures has been adjusted in the accounts. Current year Rs.79.17 lakh (Previous year Rs. Nil)

12.5 The Corporate Social repsonsibility (CSR) provisions as per sec 135(1) of the Companies Act, 2013 is applicable to the Company. But due to the losses sufferred during the preceding Financial Years, the Company is not liable to spend any amount mandatorily on CSR.

13 Exceptional items- (Income)/Expense

Write back of Interest on Government of India Loan (Refer Note No.28.1) Reversal of ineligible Cenvat Credit on Furnace Oil (Refer Note No.28.2) Refund of Kerala Value Added Tax paid on Regasified Liquid Natural Gas purchased from 4.2.2015 to 31.3.2015 due to retrospective exemption Net Exceptional items

13.1 Based on the directive of Department of Fertilisers during 2016-17, reconciliation of the interest on Government of India loan including penal interest outstanding as on 31.3.2016 was done. The interest including penal interest outstanding as on 31.3.2016 as per books was Rs.34551.30 lakh. However, during the year, the Government of India informed the Company that total loan and interest oustanding as per books of Government of India is only Rs.27717.08 lakh, and advised to reconcile. Consequent to the reconciliation, an amount of Rs.6834.22 lakh has been written back during the year.

13.2 During the year, Honâble High Court of Kerala vide order dated 01.09.2016 allowed the appeal of Department on availing cenvat credit on Furnace oil used for production of exempted products. Consequently, an amount of Rs.1698.13 lakhs has been reversed from Cenvat receivable. As per order, applicability of interest thereon if any has been remanded back to the original authority. As there is no quantified interest demand, it is not considered for provision / contingent liability.

13.3 Due to uneconomic price of one of the product namely Caprolactam in the market, the plant remained unproductive during major part of the year. During the year, as part of operation of the plant in a phased manner, the Lactam plant was operated from 11.10.2016 to 06.11.2016 and the existing stock of intemediaries was consumed to produce 770 MT of Caprolactam. Certain segments of the Petro Chemical plant has been operated for production of Ammonium Sulphate through the direct neutralization method. The Caprolactam plant is maintained and preserved for commencement of production when required. Company has redeployed a section of the employees of the plant to other areas wherever required. The unabsorbed fixed cost pertaining to caprolactum plant charged to revenue during the year is Rs.2430.17 lakh. (Previous year Rs.3377.52 lakh)

14 The Company has a system of obtaining confirmation of balances from third parties. Some of the parties have confirmed the balances.

15 As the accumulated loss has exceeded the networth as on 31.3.2013,the Company has made a formal reference under Section 15 of the Sick Industrial Companies ( Special Provisions) Act , 1985 on adoption of duly audited accounts for the Financial Year 2012-13 in the Annual General Meeting held on 27.12.2013 to Board for Industrial and Financial Reconstruction (BIFR) during February 2014. Consequent to the commencement of provisions of Sick Industrial Companies (Special Provisions) Repeal Act, 2003, BIFR has been dissolved and all pending cases before BIFR stand abated. With effect from 1st December, 2016 provisions relating to corporate insolvency, under the Insolvency and Bankruptcy Code, 2016 have been commenced. The National Company Law Tribunal (NCLT) under the Companies Act, 2013 are also established to deal with inter-alia, matters relating to insolvency of companies. FACT is not required to file any case for insolvency resolution under the Insolvency and Bankruptcy Code 2016 before NCLT at present. During the financial year 2015-16 ,with the objective of carrying on the operations of the company without hindrance, the Government of India has disbursed a plan loan of Rs. 1000 crores on 29/3/2016.This helped the company to overcome its working capital constraints and improve the operations during the financial year 2016-17. A comprehensive proposal for revival of the company is under the consideration of the Ministry. In view of the above, company does not foresee impairment of its operations as a going concern and hence the accounts are prepared on going concern basis.

16 Figures for the previous year have been regrouped and re-classified wherever necessary to correspond with the current year classification/ disclosure.

Mar 31, 2016

i) a provision is recognized in respect of present obligations where the outflow of resources is probable.

ii) all other cases are disclosed as contingent liabilities unless the Possibility of outflow of resources is remote.

d) Contingent assets are neither recognized nor disclosed in the financial statements.

Mar 31, 2015

1. Repayable in 10 equal yearly instalments after 2 year's moratorium.Defaulted payments are 79297.20 lakh (Previous year Rs 6469.90 lakh) towards principal from the year 2008-09 and interest (@ 11.50%/12.50% p.a) Rs 25272.32 lakh (Previous year 19485.24 lakh) from 2006-07, Defaulted amounts along with instalments due during the succeeding year has been shown under other current liabilities (Refer Note No.7).

2.Secured by (a) Hypothecation of current / movable assets viz. stock of raw materials, trade receivables, stores and spares, semi-finished goods, finished goods, receivables etc. (b) First charge on 533.608 acres of land (Previous year 533.608 acres) and buildings in the States of Kerala, Tamilnadu and Karnataka (c) First charge on certain Plant and Machinery permanently attached to the above land. Rate of interest varies from 13.90 % to 15% p.a (Previous year from 13.95 % to 15 % p.a). Cash credit is repayable on demand (Previous year- On demand) and buyers credit (Previous year- three to six months).

3. Trade payables include Rs 43.68 lakh (Previous year Rs 75.72 lakh) payable to Small Scale Industrial Undertakings to the extent such parties have been identified from the available documents/ information. Dues owed by the Company to Small Scale Industrial Undertakings outstanding for more than 30 days is Rs 13.23 lakh (Previous year 74.32 lakh)

4. The amount unpaid towards vendors under the Micro,Small and Medium Enterprises Development Act 2006 is Rs 62.56 lakh (Previous year 776.98 lakh) and interest thereon works out to 71.36 lakh (Previous year 70.57 lakh)

5. Financial reporting on interest in Joint Ventures

In the year 2008-09, a joint venture with Rashtriya Chemicals and Fertilisers Ltd.(RCF) for manufacture of Rapid Building materials from Gypsum has been formed. The Company has invested Rs 3287 lakh (Previous year Rs 3287 lakh) as its share in the Joint venture, including ' Nil (Previous Year Rs 1518 lakh) towards share application money pending allotment.Other details are:-

6. Deferred tax assets (net)

The Company has deferred tax asset of Rs143111 lakh (Previous year Rs 105036 lakh) as on 31.03.2015 because of unabsorbed depredation and accumulated losses. The deferred tax liability as on 31.03.2015 is 15874 lakh (Previous year Rs 13764 lakh). Since there is net deferred tax asset as on 31.03,2015, as a matter of prudence the deferred tax asset is not considered in the Accounts. The net impact (favourable) in taxon account of this comes to Rs 39316 lakh.(Previous year Rs 28203 lakh)

7. Capital advance to vendors include amount paid for items supplied but rejected by the Company pending settlement f 7.44 lakh (Previous year Rs 12.51 lakh)

8. Advance to employees include Rs 14.43 lakh (Previous year Rs 14.54 lakh) towards festival advance paid during 1996-97, and is being recovered at the time of seperation from company's service.

9. Finished Goods includes 37.51 lakh MT (Previous year 37.74 lakh MT) of Gypsum (out of 38.43 lakh MT stock on hand as on 31.03.2015) (Previous year 38.83 lakh MT) amounting to Rs 13917.98 lakh (Previous year Rs1524.31 lakh) valued at net realisable value(inclusive of Excise Duty).

10. The company provides for redundancy / obsolescence keeping in view the estimated realisable value, in respect of a)stores and spares lying in stores for more than 10 years b) stores and spares identified as surplus having an age of 5-10 years and c) all damaged stores and spares. Current year Rs 260.51 Lakh (Previous year Rs (426.09) lakh)

11. The disclosure of provisions movement as required under Accounting Standard 29 "Provisions , Contingent Liabilities and Contingent Assets" Provision towards obsolescence and storage losses (including provision towards Retired spares )

12. Stores & Spares in transit includes Stores & Spares at site pending inspection Rs 118.20 lakh (Previous year Rs 736.04 lakh)

13. Details of Work-in-proqess

14. Trade receivables includes Rs 124.16 lakh (Previous year: Rs 117.62 lakhs) towards amount receivable from Companies where the directors of the Company are also directors.

15. Balance with banks include Rs 0.24 lakh (Previous Year Rs 8.10 lakh) being the balance of amount received from clients for execution of jobs on Total Responsibility basis and Rs 2777,97 lakh(Previous year Rs 2500.00 lakh) towards work on Deposit basis, lying in a specified account to meet the matching liabilities under Current Liabilities,

16. Other loans and advances include unutilised certificates worth 76.07 lakh (Previous year 713.49 lakh) under Duty Entitlement Passbook Scheme (DEPB) and 7Nil (Previous year 7Nil) receivable under Duty Drawback scheme, effective from 01.10.2011, on export of Caprolactam.

17. Deposits includes 778.59 lakh (Previous Year 767.92 lakh) towards the amount paid against disputed demands pending appeal and 7462.34 lakh (Previous year 7462.34 lakh) towards security deposit with Kerala State Electricity Board,

18. Advance to vendors includes an amount of 71353.19 lakh (Previous year Rs 1353.19 lakh) including interest considered as recoverable on the basis of a bank guarantee invoked by the Company but stayed till the completion of arbitration. The Arbitration Award was passed during the year 2013-14, as per which the company is entitled to adjust an amount of Rs 2798.29 lakh towards this advance and interest, from the dues claimed by the contractor. The Company has gone on appeal against the award before the Hon' District Court which has since stayed the award. Accordingly the Company demanded the bank to send the proceeds of encashment of bank guarantee along with interest. The bank rejected the claim and consequently the Company filed a suit against the bank before the Hon. High court of Mumbai for realization of amount, which is pending. However an amount of Rs 1353.19 lakh only has been retained pending disposal of the case. (Also Refer Note no 18.7,21.1 and 29(1) (a)(vi))

19. Advance to vendors include amount paid for materials supplied but rejected by the Company pending settlement 75.56 lakh (Previous year Rs 22.35lakh)

20. Advance to employees include Rs 1.31 lakh (Previous year Rs 1.62 lakh) towards a portion of festival advance paid during 1996-97 and recoverable at the time of seperation from company's service during the year 2015-16.

21. Allowance for bad and doubtful loans and advances include 76073 lakh (Previous year 74829.63 lakh) towards interest accrued on mobilisation advance given to a private company. Pending litigation, equivalent provision has been made towards interest beyond the amount considered recoverable. (Also Refer Note no 18.3,21.1 and 29(1) (a)(vi))

22. During the year 2009-10 company has decided to scrap Ammonia & Urea plants at Cochin Division. These plants have been stated at estimated realisable value of 73245.03 lakh (Previous year 73245.03 lakh ) and included under Retired Plants held for sale.

23. Subsidy includes Rs Nil (Previous Year Rs 11656.72 lakh") on account of additional compensation for use of Naphtha which has since been discontinued with effect from 05.10.2013 by Department of Fertilisers.No credit has been taken for similar additional compensation towards use of higher cost Liquified Natural Gas (LNG) in lieu of Naphtha pending approval from Govt of India.

24. In the case of work being carried out by FACT Enginering and Design Organisation (FEDO), for National Institute of Technology (NIT), Nagaland, as an executing agency, on a cost plus basis, as a deposit work, FEDO is eligible for certain percentage of fees of total project cost. As per technical evaluation , 34.53% of work related to consultancy services by FEDO to NIT, has been completed as on 31.3.2015 and pro- rata credit of Rs 446.53 lakh has been taken, after providing for Rs 20.25 lakh towards unearned income. The value of construction work done is taken as 11510.54 lakh, to the extent of bills certified and paid during the Financial Year 2014-15 and equivalent amount has been considered for direct charges on contract.

25. Interest of Rs 1243.37 lakh (Previous year Rs 1035.19 lakh) for the year 2014-15 receivable from the contractor on the interest bearing mobilisation advance still retained by the party, has been considered in the accounts. However a corresponding provision for doubtful interest has been made during the current year. (Also Refer Note No. 18.3,18.7 and 29 (1) (a) (vi))

26. The physical verification of raw materials and finished products has been carried out on or around 31st March 2015. The differences overbook figures in the case of raw material has been adjusted in consumption ( Excess(-) / Shortage). Current year Rs -396.49 lakh (Previous yeart-446.10 lakh).

27. Related pariy disclosure (Accounting Standard 18)

List of related party

Key Management Personnel Sri Jaiveer Srivastava, Chairman and Managing Director. Sri P.Muthusamy, Director (Finance) Sri V.K.Anil, Director (Technical) Sri V. Subramanian, Director (Marketing) Transactions with related parties:

Remuneration to key management personnel: Rs 91.55 lakh (Previous year Rs 80.05 lakh )

28. The Company as on date is not liable to provide for the arrears of salaries and wages (net of interim relief paid) for the period 01.01,1997 to 30.06.2001 and perquisites and other allowances for the period 20.10.2000 to 30.06.2001, in respect of its managerial and unionised employees, in view of the conditions in the directives of the Government of India while implementing the wage revision. Accordingly no provision has been made in the accounts.

29. General Description of Defined Benefit Plan

A. Gratuity and Leave Encashment

The company operates gratuity plan where in every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service.The same is payable on death , separation from service or retirement , whichever is earlier. The benefit vests after five years of continuous service.The company has been accounting for provision on account of leave encashment on retirement based on actuarial valuation carried out as atthe balance sheet date.

B. Provident Fund

The Provident Fund contributions are made to Trusts administered by the company. The interest rate payable to the members of the Trust shall not be lower than statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous ProvisionsAct 1952.

During the year an amount of Rs 1907.99 lakh (Previous Year Rs 1897.27 lakh) has been charged to Statement of Profit & Loss towards contribution by the Company. In terms of the revised AS 15 issued by the Institute of Chartered Accountants of India, the Provident Fund Trust set up by the company is treated as Defined Benefit Plan since the company has to meet the shortfall in the fund assets, if any.

C. General Description of Defined Contribution Plan

Contributory Superannuation Scheme-The scheme is aimed to provide superannuation benefits to the employees. Every year company contributes Rs 100 to the fund.

30. Physical verification of stores and spares was carried out at all divisions as per the procedure laid down in the Stores Management Manual and the differences( Excess(-)/Shortage) over book figures has been adjusted in the accounts. Current year Rs 9.86 lakh (Previous year Rs 4.78 lakh)

31. Miscellaneous Expenses includes Directors travel amounting to Rs 31.63 lakh (Previous year Rs 41.90 lakh) and Directors sitting fee Rs Nil (Previous year Rs Nil).

32. Research and Development Expenditure of Rs 94.01 lakh (Previous Year Rs 71.65 lakh) includes expenditure towards salary Rs 92.33 lakh (Previous year 370.49 lakh) and depreciation Rs 0.98 lakh (Previous year Rs 0.49 lakh).

33. Securities and Exchange Board of India (SEBI) vide letter No.CFD/FAC/SKS/OW/11675/2015 dated 27.4.2015 advised the company to restate the financial results for the Financial year 2012-13 and 2013-14 (if the same qualification is repeated in 2013-14 also) and the effect of these restatement adjustments may be carried out in the annual accounts of the Financial year 2014-15 as a prior period item. The same qualification is, however, not repeated in the FY 2013-14 for similar treatment of valuation of gypsum. Without prejudice to the right of the company to approach the appropriate forum against the advice of SEBI, the company has given effect to the restatement adjustment on valuation of Gypsum during the financial year 2012-13 and 2013-14, as a prior period item in financial statements of 2014-15.However, there is no impact on the profit / loss due to such adjustment in the financial year 2014-15.

34. The Corporate Social repsonsibility (CSR) provisions as per sec 135(1) of the Companies Act, 2013 is applicable to the Company. But due to the losses suffered during the preceding Financial Years, the Company is not liable to spend any amount mandatorily on CSR.

35. Rate of additional compensation for use of Naphtha has been provisionally revised upwards with effect from 01.04.2012 during the Financial Year 2013-14 by Department of Fertilisers.Impact on the income for the Financial Year 2012-13 is shown above as exceptional item.

Due to uneconomic price of one of the product namely caprolactam in the market, the company did not produce caprolactam during the year. However certain segments of the petrochemical plant has been operated for production of Ammonium Sulphate through the direct neutralization method. The caprolactam plant is maintained and preserved for commencement of production when required. Company has redeployed a section of the employees of the plant to other areas wherever required. The fixed cost pertaining to the portion which has remained unproductive throughout the year charged to revenue during the year is Rs 4136.82 lakh (Previous year Rs 4974.66 lakh.)

During the year, the captive ammonia plant was not operated up to 17.2.2015 due to maintenance of ammonia plant and higher LNG prices.The unabsorbed costs due to non-operation of ammonia plant is Rs 5379.65 lakh (Previous year ' Nil)

36. Contingent Liabilities and As at 31.03.2015 As at 31.03.2014 Commitments (to the extent not povided for):

(1) Contingent Liabilities:

(a) Claims against the company not acknowledged as debts in respect of:

i) Central Excise Act, 1944 * 7541.33 7156.24

i) Finance Act, 1994 (Service Tax) 334.25 296.79

H) Sales Tax / Entry tax 108.17 522.66

iv) Income Tax Act, 1961 151.48 151.48

v) ESI Act 127.83 127.83

vi) Suppliers and contractors # 19279.59 18444.26

vii) Others 1333.34 1098.87

* Excise duty demand of Rs 36.92 lakh on purchase of Raw material, pending appeal, has not been considered since the liability rests with supplier as per order terms.(PreviousYear Rs 32.72 lakh).

# The contract for the barge transportation of Ammonia awarded to a private company has been cancelled void ab initio during 2004-05 by the Company. The Contractor claimed Rs 178489.75 lakh including interest till 31.03.2013 before the arbitrator .The arbitrator has passed an award during the year 2013-14 in favour of the contractor for Rs 17308.04 lakh including interest as on 31.12.2013.

As per the award, the mobilisation advance paid by the Company to the contractor along with interest of Rs 2798.29 lakh is to be adjusted against the said award. The Company has not accepted the award on legal and factual grounds and has challenged the award before the Hon' District Court which has since stayed the award. Accordingly, the award amount along with interest up to 31.03.2015, amounting to Rs 18576.50 lakh with out considering the adjustment of mobilsation advance and interest allowed under the arbitral award is not considered as a liability and included under Contingent Liability.(Refer Note No 18.3,18.7 and 21.1).

(b) Guarantees given to various clients/ statutory authorities for performance of contracts/ obligations are not included, as the money value thereof cannot be ascertained.

In addition company has provided Corporate Guarantee,

(i) for the term loan of M/s FACT-RCF Building Products Ltd. However the share of term loan

exposure as on 31.03.2015 is Rs 4024.99 lakh (50% of total loan exposure of Rs 8049.98 lakh). 3546.50 3546.50

(ii) To M/s.Cochin Shipyard Ltd to release balance payments against a fabrication work done

by the Company 72.03 -

(c) The contingent liability in respect of bills discounted with banks fully covered by buyers' letter of credit -

37. The Company has a system of obtaining confirmation of balances from third parties. Some of the parties have confirmed the balances.

38. As the accumulated loss has exceeded the networth as on 31.3.2013,the Company has become a sick industrial company with in the meaning of section 3(1) (o) of Sick Industrial Companies (Special Provisions) Act ,1985 as per duly audited accounts for Financial Year 2012-13 as adopted in the Annual General Meeting on 27.12.2013 .Accordingly company has submitted a formal reference under section 15 of Sick Industrial Companies (Special Provisions) Act ,1985 to Board for Industrial and Financial Reconstruction during February 2014.The financial restructuring proposal submitted by company had already been recommended by Board for Reconstruction of Public Sector Enterprises on 20.12.2013 and is awaiting the final approval of Gorvernment of India. Considering the likely approval of the financial restructuring proposal, company does not forsee impairment of its operations as a going concern and hence the accounts are prepared on going concern basis.

39. Figures for the previous year have been regrouped and re-classified wherever necessary to correspond with the current year classification/ disclosure.

Mar 31, 2013

1.1 Other loans and advances include unutilised certificates worth Rs. 13.49 lakh (Previous year Rs. 328.48 lakh) under Duty Entitlement Passbook Scheme (DEPB) and Rs.12.98 lakh (Previous year Rs.18.12 lakh) receivable under Duty Drawback scheme , effective from 01.10.2011, on export of Caprolactam.

1.2 Deposits includes Rs. 67.92 lakh (Previous Year Rs.70.38 lakh) towards the amount paid against disputed demands pending appeal and Rs.545.07 lakh (Previous year Rs. 544.51 lakh) towards security deposit with Kerala State Electricity Board.

1.3 Advance to vendors/dues from vendors include advances paid covered by Bank Guarantees and interest accrued upto the date of reiterating the claim under bank guarantee.Current year Rs. 1353.19 lakh (Previous year Rs.4285.76 lakh).The bank guarantee was invoked and the court has stayed the encashment till the arbitration award.

1.4 Advance to vendors include amount paid for materials supplied but rejected by the Company pending settlement Rs. 27.05 lakh (Previous year Rs.10.54 lakh )

1.5 Advance to employees include Rs. 1.79 lakh (Previous year Rs. 1.52 lakh) towards a portion of festival advance paid during 1996 97 and recoverable at the time of seperation from company''s service during the year 2013 14.

2.1 During the year 2009 10 company has decided to scrap Ammonia & Urea plants at Cochin Division. These plants have been stated at estimated realisable value of Rs. 3245.03 lakh (Previous year Rs. 3245.03 lakh) and included under Retired Plants held for sale.

3.1 The physical verification of raw materials and finished products has been carried out on or around 31st March 2013. The differences over book figures in the case of raw material has been adjusted in consumption ( Excess( ) / Shortage). Current year Rs.923.26 lakh (Previous year Rs.22.84 lakh ).

The whole time Directors have been allowed the use of company car and for private journey upto a ceiling of 9000 kms. per year , o n payment as prescribed by the Government.

Gratuity payable to the Directors has not been disclosed as the contribution payable has been provided in the accounts and separate figures are not ascertainable.

3.2 Related party disclosure on Joint Ventures (Accounting Standard 18) List of related party

Key Management Personnel

Sri Sham Lal Goyal IAS , Chairman and Managing Director.

Sri V.G.Sankaranarayanan, Director (Technical) (Upto 30.04.2011)

Sri P.Muthusamy, Director (Finance)

Sri V.K.Anil, Director (Technical)

Sri P.K.Chandrasekharan, Director (Marketing) Transactions with related parties: Remuneration to key management personnel : Rs. 55.49 lakh (Previous year Rs.54.01 lakh )

3.3 The Company as on date is not liable to provide for the arrears of salaries and wages (net of interim relief paid) for the period 01.01.1997 to 30.06.2001 and perquisites and other allowances for the period 20.10.2000 to 30.06.2001, in respect of its managerial and unionised employees, in view of the conditions in the directives of the Government of India while implementing the wage revision. Accordingly no provision has been made in the accounts.

4 The Company has a system of obtaining confirmation of balances from third parties. Some of the parties have confirmed the balances.

5 Company continues to fall under section 23 of Sick Industrial Companies (Special Provisions) Act, 1985. A report under section 23 of SICA was made in February 2004 to the Board for Industrial and Financial Reconstruction.

6 Earnings Per Share (Accounting Standard 20)

i) Earnings Rs. 35396.18 lakh [Previous year Rs.1979.81 lakh (profit)]

ii) Number of Shares Issued, Subscribed and Paid up 647071974 (Previous year 647071974)

iii) Earning Per Share Rs. 5.47 ( Previous year Rs.0.31 )

(Basic and Diluted)

7 Figures for the previous year have been regrouped and recast wherever necessary to conform with the current year classification.

Mar 31, 2012

1.1 Repayable in 10 equal yearly instalments after 2 year's moratorium.Defaulted payment of Rs. 4250.00 lakh (Previous year Rs. 2930.00 lakh) towards principal from the year 2007-08 and interest (@ 11.50% / 12.50% P.A.) Rs. 7272.89 lakh (Previous year Rs. 4650.00 lakh) from 2006-07. Defaulted amounts along with instalments due during the succeeding year has been shown under Other current liabilities.

1.2 Repayable on maturity period of 1/2/3 years. No default in payment of principal and interest(Previous year Rs. Nil). Rate of interest varies from 9% to 11% P.A. All outstanding amounts as on 31.03.2012 are due during the year 2012-13 and has been shown under Other current liabilities

1.3 Secured by (a) Hypothecation of current / movable assets viz. stock of raw materials, trade receivables, stores and spares, semi- finished goods, finished goods receivables etc. (b) First charge on 533.608 acres of land (Previous year 533.608 acres) and buildings in the States of Kerala, Tamilnadu and Karnataka (c) First charge on certain Plant and Machinery in Udyogamandal and Petrochemical Divisions. Rate of interest varies from 12.00% to 14.90 % P.A. (Previous year- from 12% to 13.75% P.A.). Defaulted amount during the year Rs. Nil ( Previous year Rs. Nil ) . Repayment period of Cash credit is one year ( Previous year - one year )and in respect of term loan is 3 months ( Previous year 16 quarterly instalments , last instalment was due on 07.04.2011).

1.4 Trade payables include Rs.16.37 lakh (Previous year Rs. 4.20 lakh)payable to Small Scale Industrial Undertakings to the extent such parties have been identified from the available documents/ information. Dues owed by the Company to Small Scale Industrial Undertakings exceeding Rs. 1 lakh which is outstanding for more than 30 days is Rs. Nil. (Previous year-Nil).

1.5 The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act 2006, and hence the disclosure relating to the amount unpaid together with interest paid/payable as at the year end has not been given.

1.6 Advance to vendors include advances paid covered by Bank Guarantees. Current year Rs. 22.37 lakh (Previous year Rs. Nil).

1.7 Advance to vendors include amont paid for items supplied but rejected by the Company pending settlement is Rs. 11.53 lakh (Previous year Rs.7.69 lakh).

1.8 Advance to employees include Rs. 17.99 lakh (Previous year Rs. 19.51 lakh) towards festival advance paid during 1996-97, and is being recovered at the time of seperation from company's service.

1.9 During the year 2010-11 the Government of India has decided to buyback the "Fertiliser Companies Government of India special bonds " (Fertiliser bonds- issued by it in an earlier year in lieu of subsidy dues) in two equal installments during 2010-11 and 2011-12 through Reserve Bank of India. Accordingly, the company sold the remaining 50% of the Fertilizer Bonds on 26-07-2011 for an amount of Rs. 11283.83 lakh. As per Government Notification, the company had also accounted an amount of Rs. 1848.38 lakh towards 50% of the loss due to the Sale of Fertilizer Bonds, as receivable from the Government. An amount of Rs. 1558.30 lakh has been received during 2011-12 against amount receivable of Rs. 1848.38 lakh and balance of Rs. 290.08 lakh is expected to be received .

1.10 Finished Goods includes 45.04 lakh MT (Previous year 37.00 lakh MT ) of Gypsum (out of 45.96 lakh MT stock on hand as on 31.03.2012 - Previous year 49.98 lakh MT) amounting to Rs. 18667.26 lakh (Previous year Rs.20353.70 lakh ) valued at net realisable value(inclusive of Excise Duty).

1.11 The company provides for redundancy / obsolescence keeping in view the estimated realisable value, in respect of a)stores and spares lying in stores for more than 10 years b) stores and spares identified as surplus having an age of 5-10 years and c) all damaged stores and spares. However no provision for redundancy / obsolescence is considered in respect of insurance spares. Current year Rs. 227.64 lakh (Previous year Rs. 235.43 lakh)

1.12 Stores & Spares in transit includes Stores & Spares at site pending inspection Rs. 411.63 lakh (Previous year Rs. 192.64 lakh)

1.13 Bills discounted amounting to Rs. 7343.18 lakh (Previous year Rs. 6297.09 lakh) is deducted from Other Trade receivables-Unsecured , considered good.

1.14 Balance with banks include Rs. 49.83 lakh (Previous Year Rs. 147.63 lakh) being the balance of amount received from clients for execution of jobs on Total Responsibility basis lying in a specified account to meet the matching liabilities under Current Liabilities.

1.15 Other loans and advances include unutilised certificates worth Rs. 328.48 lakh (Previous year Rs. 749.99 lakh) under Duty Entitlement Passbook Scheme (DEPB) and Rs. 18.12 lakh (Previous year Rs. Nil) receivable under Duty Drawback scheme, effective from 01.10.2011, on export of Caprolactam.

1.16 Deposits includes Rs. 70.38 lakh (Previous Year Rs. 70.15 lakh) towards the amount paid against disputed demands pending appeal and Rs. 544.51 lakh (Previous year Rs. 544.50 lakh) towards security deposit with Kerala State Electricity Board.

1.17 Advance to vendors/dues from vendors include advances paid covered by Bank Guarantees and interest accrued.Current year Rs. 4285.76 lakh (Previous year Rs. 3568.19 lakh).

1.18 Advance to vendors include amont paid for materials supplied but rejected by the Company pending settlement is Rs. 10.54 lakh (Previous year Rs. 12.81 lakh).

1.19 Advance to employees include Rs. 1.52 lakh (Previous year Rs. 1.20 lakh) towards festival advance paid during 1996-97, and is being recovered at the time of seperation from company's service in the succeeding 12 month period.

1.20 The disclosure of provisions movement as required under Accounting Standard 29 "Provisions, Contingent Liabilities and Contingent Assets"

Allowance for bad & doubtful Loans and advances

Provision at the beginning of the year 152.42 128.38

Provisions made during the year - 24.04

Written off during the year - 0.00

Released during the year 16.32 0.00

Provision at the end of the year 136.10 152.42

1.21 The physical verification of raw materials and finished products has been carried out on or around 31st March 2012. The differences over book figures in the case of raw material has been adjusted in consumption (Excess/ Shortage(-) ). Current year Rs. 22.84 lakh (Previous year Rs. 161.00 lakh )

1.22 Related party disclosure on Joint Ventures (Accounting Standard 18) List of related party

Key Management Personnel

Sri Sham Lal Goyal, IAS, Chairman and Managing Director.

Sri V.G.Sankaranarayanan, Director (Technical)-(Upto 30.04.2011)

Sri P.Muthusamy, Director (Finance)

Sri V.K.Anil, Director (Technical)-(From 28.06.2011 onwards)

Sri P.K.Chandrasekharan, Director (Marketing)-(From 30.11.2011 onwards)

Transactions with related parties:

Remuneration to key management personnel : Rs. 54.01 lakh (Previous year Rs. 61.84 lakh )

1.23 The Company as on date is not liable to provide for the arrears of salaries and wages (net of interim relief paid) for the period 01.01.1997 to 30.06.2001 and perquisites and other allowances for the period 20.10.2000 to 30.06.2001, in respect of its managerial and unionised employees, in view of the conditions in the directives of the Government of India while implementing the wage revision. Accordingly no provision has been made in the accounts.

1.24 Physical verification of stores and spares was carried out at all divisions as per the procedures laid down in the Stores Management Manual and the differences( Excess/ Shortage(-) ) over book figures has been adjusted in the accounts. Current year Rs. 16.55 lakh (Previous year Rs. 21.64 lakh)

1.25 Miscellaneous Expenses includes Directors travel amounting to Rs. 26.37 lakh (Previous year Rs. 16.92 lakh) and Directors sitting fee Rs. 2.70 lakh (Previous year Rs. 3.80 lakh)

1.26 Research and Development Expenditure includes depreciation of Rs. 0.69 lakh( Previous year Rs. 0.79 lakh) on Research and Development Assets.

Rs. in Lakh 31-03-2012 31-03-2011

2 Contingent Liabilities not provided for :

(i) Claims against the company pending before various legal/ statutory authorities and not acknowledged as debts in respect of:

a) Excise Duty 72.56 63.79

b) Service Tax 75.96 51.47

c) Sales Tax / Entry tax 472.20 446.97 d) Customs Duty 40.04 40.04

e) Income Tax 151.48 599.34

f) ESI 221.27 218.16

g) Suppliers and contractors # 178360.50 179569.57

h) Others 511.94 375.82

# The contract for the barge transportation of Ammonia awarded to a private company has been cancelled void ab initio during 2004-05 by the Company. The Contractor's claim for shortfall charges (for the period 01.04.2003 to 22.04.2008) and damages for Rs. 178101.42 lakh (Previous year Rs. 177713.07 lakh )which is pending before the Arbitrator has not been provided in the accounts and is included under Contingent liabilities based on the assessment of the management.

(ii) Excise duty demand of Rs. 28.52 lakh on purchase of Raw material , pending appeal, has not been considered since the liability rests with supplier as per order terms.(PreviousYear Rs. 26.42 lakh).

(iii) Guarantees given to various clients statutory authorities for performance of contracts obligations are not included, as the money value thereof cannot be ascertained. In addition company has provided Corporate Guarantee for the term loan of M/s FACT-RCF Building Products Ltd. However the share of term loan exposure as on 31.03.2012 is Rs.732.40 lakh (50% of total loan exposure of Rs.1464.81 lakh). 1750.00 1750.00

(iv) The contingent liability in respect of bills discounted with banks is fully covered by buyers' letter of credit 7343.18 6297.09

3 During the year 2010-11 company has charged interest amounting to Rs. 821.15 lakh as prior year adjustment under exceptional items in the Profit and loss statement.

4 The Company has a system of obtaining confirmation of balances from third parties. Some of the parties have confirmed the balances.

5 Company continues to fall under section 23 of Sick Industrial Companies (Special Provisions) Act, 1985. A report under section 23 of SICA was made in February 2004 to the Board for Industrial and Financial Reconstruction.

6 Earnings Per Share (Accounting Standard - 20)

i) Earnings Rs. 1979.81 Lakh [ Previous year Rs. 4932.67 lakh (loss) ]

ii) Number of Shares -Issued, Subscribed and Paid up -647071974 (Previous year 647071974)

iii) Earning Per Share Rs. 0.31 ( Previous year Rs. -0.76 ) (Basic and Diluted)

7 Figures for the previous year have been regrouped and recast wherever necessary to conform with the current year classification.

Mar 31, 2011

Rs. in Lakh

31.03.2011 31.03.2010

1 Contingent Liabilities not provided for :

(i) Claims against the company pending before various legal / statutory authorities and not acknowledged as debts in respect of:

a) Excise Duty 63.79 60.85

b) Service Tax 51.47 43.48

c) Sales Tax / Entry tax 446.97 421.74

d) Customs Duty 40.04 40.04

e) Income Tax 599.34 599.34

f) ESI 218.16 215.42

g) Suppliers and contractors 179569.57 178979.05

h) Others 375.82 398.15

(ii) Excise duty demand of Rs. 26.42 lakh on purchase of Raw material, pending appeal, has not been considered since the liability rests with supplier as per order terms (Previous Year Rs. 24.85 lakh).

(iii) Guarantees given to various Clients/ Statutory Authorities for performance of contracts /obligations are not included, as the money value thereof cannot be ascertained. In addition company has provided Corporate Guarantee for the term loan of M/s FACT-RCF Building Product Ltd. 1750.00 1750.00

2 Fixed Assets include:

a) Out of the total 2150.69 (Previous year 2150.69 acres ) acres of land held by the Company,158.82 acres (Previous year 158.82 acres ) are held under leasehold right. Out of this, lease agreement in respect of 15.47 acres (Previous year 15.47 acres ) of leasehold land belonging to Cochin Port Trust is under renewal.

b) Land for Rs. 504.17 lakh (Previous year Rs. 496.52 lakh) in respect of which the title deeds are yet to be registered/ received. Certain land owners have since preferred extra compensation claims which are pending before Courts. The liability on this account is not ascertainable. Interest and legal expenses incurred on land acquisition cases are charged to Profit and Loss account of the year.

d) As per the Joint Venture agreement with M/s Rashtriya Chemicals and Fertilisers Limited (RCF), the company, during 2008-09, has made available 11 acres of land at Cochin Division on lease basis to M/s. FACT-RCF Building Products Limited for a period of 20 years on an upfront premium of Rs. 1000 lakh and an yearly rent of Rs. 10 per year.

e) Underpass/ Overbridge on the newly constructed container terminal approach road on the land acquired by the National Highway Authority of India is meant for exclusive FACT use forming part of railway siding/approach road for movement of FACT products. Pending construction of railway siding / approach road, the expenditure of Rs. 335.08 lakh incurred on under pass/overbridge has been included in the capital work in progress, since it is having future economic benefits.

3 Cost of Railway siding includes Rs. 85.43 lakh (Previous year Rs. 85.43 lakh) ,written down value Rs. 4.27 lakh (Previous year Rs. 4.27 lakh), held jointly with M/s.Bharat Petroleum Corporation Limited (Kochi Refinery).

4 The cost of Licence fee and implementation of SAP ERP system software has been capitalised during the year 2009-10 as Intangible Asset and depreciated proportionately over a period of five years from the date of commissioning. Addition during the year is Rs. 15.39 lakh(Previous Year Rs. 1007.10 lakh) .

5 During the year 2009-10 company has decided to scrap Ammonia & Urea plants at Cochin Division. These plants have been restated at estimated realisable value of Rs. 3245.03 lakh (Previous year Rs. 2740.79 lakh ) under Retired Plant and Machinery. Similarly the value of spares on these plants have also been restated at realisable value of Rs. 104.97 lakh ( Previous year Rs. 88.66 lakh ) as against the orginal cost of Rs. 453.50 lakh (Previous year Rs. 453.50 lakh).

6 During the year the Government of India has decided to buyback the remaining "Fertiliser Companies Government of India special bonds " (Fertiliser bonds- issued by it in an earlier year in lieu of subsidy dues ) in two equal installments during 2010-11 and 2011-12 through Reserve Bank of India and also decided to share at least 50% of the loss on such sale of Fertiliser bonds. Accordingly the company has sold 50% of the Fertiliser bonds of each coupon rates held (Aggregate face value of Rs.13288.00 lakh) on 31st March 2011 and accounted for a loss of Rs. 846.30 lakh after recognising 50% compensation towards loss receivable from the Government of India. In respect of unsold bonds of face value of Rs. 13288.00 lakh the company has valued at fair value of Rs. 12285.91 lakh ,being the sale value realised on sale of said bonds on 26th July 2011 plus Rs. 1002.08 lakh being 50% compensation of the loss as per Government notification. The company has accounted for the loss of Rs.1002.09 lakh on this account.

7 During the year the Company received certificates worth for Rs. 749.99 lakh(Previous year Rs. 402.84 lakh) under Duty Entitlement Passbook Scheme (DEPB), on export of Caprolactam, to be used for duty free import of Rawmaterials,Stores and Spares etc. In respect of DEPB license received, Customs Duty entitlement amount is accounted under " Balance with Customs , Port Trust etc.-in Loans and Advances " and credited to " Other Income" . The Customs Duty due on imports during the year has been adjusted against the DEPB value and accounted with cost of respective material. The DEPB entitlement unutilized as on 31.03.2011 is Rs.749.99 lakh(Previous year Rs. 399.92 lakh).

8 (i) During the year 2008-09 company had paid Rs. 557.50 lakh towards instalments due on loans received from the Government of India .However the Government of India had adjusted this amount against interest due. Taking cognizance of the Government decision , the company has also adjusted the same during the year towards interest. Consequently the additional interest on the principal amount Rs. 184.33 lakh has been charged to Profit and Loss account during the year.

(ii) During the year company has provided Rs. 1303.95 lakh as penal interest on loans received from the Government of India. Of this Rs. 601.02 lakh has been provided as current year interest and Rs. 702.93 lakh has been provided as prior year adjustments.

9 (a) Loans and Advances unsecured considered good includes Rs. 70.15 lakh being amount paid against demands disputed pending appeals (Previous Year Rs. 72.98 lakh).

(b) Provision has been made under 'Other liabilities' with respect to Rs.5.12 lakh , being the amount deposited in court as per court order in OP 497/92 (Paul Mathew & Sons Vs FACT).

10 a) The contract for the barge transportation of Ammonia awarded to a private company has been cancelled void ab initio during 2004-05 by the Company. The Contractor's claim for shortfall charges (for the period 01.04.2003 to 22.04.2008) and damages for Rs. 177713.07 lakh (Previous year Rs. 177324.72 lakh )which is pending before the Arbitrator has not been provided in the accounts and is included under Contingent liabilities based on the assessment of the management. b) Interest of Rs. 597.42 lakh for 2010-11 receivable from the contractor on the interest bearing mobilisation advance still retained by the party, has been considered in the accounts (Previous year Rs. 497.40 lakh).

11 Sundry debtors shown as Considered good and Unsecured include Rs. Nil covered by Bank Guarantees (Previous Year Rs. 0.11 lakh)

12 Cash and Bank balances include Rs. 147.63 lakh (Previous Year Rs. 147.64 lakh) being the balance of amount received from clients for execution of jobs on Total Responsibility basis lying in a specified account to meet the matching liabilities under Current Liabilities.

g) Income under services for own units reckoned by the Engineering and Consultancy Division (FEDO) and the Fabrication Division (FEW) is accounted by respective units under revenue expenditure Rs. 558.34 lakh (Previous year Rs. 221.37 lakh ), and capital Rs. 451.59 lakh (Previous year Rs. 203.09 lakh ).

h) Excise duty on own division jobs is ascertained based on Cost Accounting Standard 4.

13 a) The Company as on date is not liable to provide for the arrears of salaries and wages (net of interim relief paid) for the period 01.01.1997 to 30.06.2001 and perquisites and other allowances for the period 20.10.2000 to 30.06.2001, in respect of its managerial and unionised employees, in view of the conditions in the directives of the Government of India while implementing the wage revision. Accordingly no provision has been made in the accounts.

The whole time Directors have been allowed the use of company car and for private journey upto a ceiling of 9000 kms. per year, on payment as prescribed by the Government.

Gratuity payable to the Directors has not been disclosed as the contribution payable has been provided in the accounts and separate figures are not ascertainable.

14 a. Sundry creditors include Rs. 4.20 lakh payable to Small Scale Industrial Undertakings to the extent such parties have been identified from the available documents/ information (Previous year Rs. 1.55 lakh). Dues owed by the Company to Small Scale Industrial Undertakings exceeding Rs. 1 lakh which is outstanding for more than 30 days is Rs. Nil (Previous year-Nil).

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

15 The Company has deferred tax asset of Rs. 85658 lakh (Previous year Rs. 91598 lakh) as on 31.03.2011 because of unabsorbed depreciation and accumulated losses. The deferred tax liability as on 31.03.11 is Rs. 23949 lakh (Previous year Rs. 25782 lakh). Since there is net deferred tax asset as on 31.03.2011, as matter of prudence the deferred tax asset is not considered in the Accounts. The net impact (favourable) in tax on account of this comes to Rs. 20500 lakh(Previous year Rs. 22371 lakh).

16 The Company has a system of obtaining confirmation of balances from third parties. Some of the parties have confirmed the balances.

17 Company continues to fall under section 23 of Sick Industrial Companies (Special Provisions) Act, 1985. A report under section 23 of SICA was made in February 2004 to the Board for Industrial and Financial Reconstruction.

Defined benefit plan

Gratuity fund is managed under Group Gratuity (Cash Accumulation) policy by M/s Life Insurance Corporation of India. The present value of obligation is determined on the basis of acturial valuation using projected unit credit method. The present value of obligations for leave encashment is recognised in the same manner.

18 RELATED PARTY DISCLOSURES (ACCOUNTING STANDARD 18)

List of related Parties

Joint Ventures

FACT-RCF Building Products Ltd.

Key Management Personnel

Sri A Asokan, Chairman and Managing Director (Upto 30.06.2010).

Sri K.Mathevan Pillai, Chairman and Managing Director (From 01.07.2010 to 31.08.2010).

Sri V.G.Sankaranarayanan, Chairman and Managing Director (From 01.09.2010 to 28.02.2011).

Sri Sham Lal Goyal, IAS , Chairman and Managing Director (From 01.03.2011 onwards).

Sri K.Mathevan Pillai, Director (Finance), (Upto 31.08.2010).

Sri P.Muthusamy, Director (Finance) ,(From 18.03.2011 onwards).

Sri V.G.Sankaranarayanan, Director (Technical).

Transactions with related parties:

Remuneration to key management personnel : Rs.61.84 lakh (Previous yearRs.40.92 lakh )

Share application money paid to Joint Venture during the year : Rs. 50 lakh (Previous year Rs. Nil)

Guarantees given to Joint Venture during the year: Rs. Nil (Previous year Rs. Nil)

Guarantees given to Joint Venture as on 31.03.2011: Rs. 1750 lakh(Previous year Rs. 1750 lakh)

Expenditure incurred on employees deputed to Joint Venture:Rs.82.97 lakh (Rs.47.00 lakh)

Receivables as on 31st March :Rs. 146.37 lakh (Previous year Rs.62.68 lakh)

Payables as on 31st March: Rs. Nil (Previous yearRs. Nil)

19 EARNINGS PER SHARE (ACCOUNTING STANDARD - 20)

i) Earnings Rs. 4932.67 Lakh (Loss) [ Previous yearRs. 10383.51 lakh (loss) ]

ii) Number of Shares -Issued, Subscribed and Paid up -647071974 (Previous year 647071974)

iii) Earning Per Share Rs.-0.76 ( Previous yearRs.-1.60 )

(Basic and Diluted)

20 FINANCIAL REPORTING ON INTEREST IN JOINT VENTURES (ACCOUNTING STANDARD 27) FACT-RCF Building Products Ltd.

In the year 2008-09 , a jointventure with Rashtriya Chemicals and Fertilisers Ltd.(RCF) for manufacture of Rapid Building materials from Gypsum has been formed. The company has invested Rs. 1500 lakh (Previous year Rs. 1500 lakh ) as its share in the Joint venture. Out of an additional share of Rs. 269 lakh (Previous year Nil ) , Rs. 50 lakh (Previous year Nil ) has been paid as share application money during the year and payment towards the remaining Rs. 219 lakh (Previous year Nil ) is pending. Shares for Rs. 50 lakh (Previous year Nil ) paid is pending allotment. Other details are:- Name : FACT-RCF Building products Ltd. Country of incorporation : India. Ownership interest : 50% (31.03.11).

21 Figures for the previous year have been regrouped and recast wherever necessary to conform with the current year classification.

Mar 31, 2010

Rs. in Lakh

31.03.2010 31.03.2009

1 Contingent Liabilities not provided for:

(i) Claims against the company pending before various legal / statutory authorities and not acknowledged as debts in respect of:

a) Excise Duty 60.85 58.01

b) Service Tax 56.15 33.95

c) Sales Tax/Entry tax 421.74 458.81

d) Customs Duty 40.04 40.04

e) Income Tax 599.34 619.02

f) ESI 215.42 18.68

g) Power 0.00 196.71

h) Suppliers and contractors 178979.05 178618.82

i) Others 405.16 990.17

(ii) Excise duty demand of Rs. 24.85 lakh on purchase of Raw material, pending appeal, has not been considered since the liability rests with supplier as per order terms.(PreviousYear Rs. 23.79 lakh).

(iii) Guarantees given to various clients / Statutory Authorities for performance of contracts / obligations are not included, as the money value thereof cannot be ascertained. In addition company has provided Corporate Guarantee amounting to X 1750 lakh for the term loan of M/s FACT-RCF Building Product Ltd.

2 Cost of Railway siding includes X 85.43 lakh (Previous year Rs. 85.43 lakh) .written down value Rs. 4.27 lakh (Previous year Rs. 4.72 lakh), held jointly with M/s.Bharat Petroleum Corporation Limited (Kochi Refinery)

3 During the year the company had implemented SAP ERP system, which is under stabilisation. The cost of Licence fee and implementation amounting to Rs. 1007.10 iakh has been capitalised as Intangible Asset and will be depreciated equally over a period of five yeas from the date of commissioning.

4 During the year company has decided to scrap Ammonia & Urea plants at Cochin Division. These plants have been restated at estimated realisable value of Rs. 2740.79 lakh under Retired Plant and Machinery. Loss on retirement amounting to Rs. 1324.23 lakh has been charged during the year. Accordingly excess provision for Impairment loss amounting to Rs. 2010.53 lakh was withdrawn during the year. Obsolescence provision on spares of these plants have been made for X 364.84 lakh as against the original cost ofRs. 453.50 lakh and balance being the estimated realisable value

5 Fertiliser bonds issued by the Government of India towards the settlement of subsidy dues to the tune of Rs. 26576.00 lakh has been considered under " Long term Investments" and are maturing in the year 2022/2023. The Market value as on 31st March 2010 is Rs. 23658 lakh resulting in dimunition in value of Rs. 2918 lakh ( previous year Rs. 2551 lakh). The decline in Market value is considered to be temporary in nature and hence no provision is made

6 During the year the company has allotted Equity Shares worth Rs. 29230.00 lakh(2923 lakh Equity shares of Rs.10/- each) to the Goverment of India towards conversion of loan given to the Company at par as directed by the Government of India after obtaining approval from the Securities Exchange Board of India, though the SEBI guidline value per share works out to Rs. 35.49 at the time of allotment.

7 (i) During 2009-10 the Company received certificates worth for Rs.402.84 lakh(Previous yearRs. 152.52 lakh) under Duty Entitlement Passbook Scheme (DEPB), on export of Caprolactam, to be used for duty free import of Raw-materials, Stores and Spares etc. The customs Duty due on importing during the year has been adjusted against the DEPB value and accounted with cost of respective material. The DEPB entitlement unutilized as on 31.03.2010 is Rs.399.92 lakh (Previous yearRs.49.59 lakh).

(ii) The balance of Duty Free Credit Entitlement (DFCE) amount available as on 31.03.2010 for duty free import of Raw-materials, Stores and Spares etc is Nil.(Previous year is * 10.75 lakh.)

8 (i) lntheyear2008-09 Rs. 557.50 lakh has been paid to the Government of India towards repayment of principal amount due. However the same has been adjusted by the Government towards interest due vide letter No 11/13/2008/PAO/Ferts/1114 dtd 06.02.2009. The company has taken up with the Government to adjust the amount paid towards principal as a part of financial relief. In case the final decision is for adjustment towards interest, there will be additional interest to the tune of Rs. 114.64 lakh. (Previous yearRs. 44.95 lakh.) (ii) As per terms of loans released by the Government of India, the Government reserves the right to raise the interest rate to a penal rate in case of default in payment of interest due and repayment of principal due. No order from the Government was received by the company towards raising the interest rate for default/ delay in payment. Accordingly penal interest amounting to Rs. 805.75 lakh is not considered in the accounts (Previous yearRs. 536.25 lakh).

9 Loans and Advances unsecured considered good includes Rs. 72.98 lakh being amount paid against demands disputed pending appeals (Previous Year Rs.10.51 lakh). Provision has been made under Other liabilities with respect to Rs. 5.12 lakh, being the amount deposited in Court as per Court Order in OP 497/92 (Paul Mathew & Sons Vs FACT). The expenses incurred on bids submitted by the Company to clients, not charged to revenue pending decision on such bids, Rs. Nil (Previous year Rs. 0.49 lakh).

10 The contract for the barge transportation of Ammonia has been cancelled void ab initio during 2004-05 by the Company. Accordingly the shortfall charges has not been provided in the accounts. The Contractors claim for shortfall charges (for the period 01.04.2003 to 22.04.2008) and damages forRs. 177324.72 lakh which is pending before the Arbitrator has been included under Contingent liabilities. Interest of Rs. 497.40 lakh for 2009-10 receivable from the contractor on the outstanding mobilisation advance has been provided in the accounts. (Previous year Rs. 414.12 lakh.)

11 Sundry debtors shown as Considered good and Unsecured include Rs. 0.11 lakh covered by Bank Guarantees (Previous Year Rs. 1.99 lakh).

12 Cash and Bank balances include Rs. 147.64 lakh (Previous Year Rs. 149.67 lakh) being the balance of amount received from clients for execution of jobs on Total Responsibility basis lying in a specified account for meeting matching liabilities under Current Liabilities and Rs. 2.06 lakh (Previous Year Rs. 1.89 lakh) deposited in pursuance of Court Orders.

13 Subsidy/Concession on Ammonium Sulphate for the full year (f 822.92 lakh) and Factamfos for the period July 2009 to March 2010 (Rs. 7493.15 lakh) has been accounted on the basis of estimates as per known policy parameters, pending notification by the Government of India.

14 The closing stock of Ammonium Sulphate, Factamfos & MOP at plant and in-transit are valued at cost, which is lower than net realisation including the newly introduced Nutrient Based Subsidy w.e.f 01.04.2010.

15 a) Government of India has approved revision of wages for all categories of employees notionally with effect from 1.1.2007 and payment to be made effective from 1.8.2008.

a) Those who have retired from service between 1.1.2007 and 31.7.2008 shall be paid the terminal benefits only like leave salary, gratuity at the revised scale of pay.

b) Those who retired from service between 1.8.2008 to 31.7.2010 shall be paid the arrears of salary as well as the terminal benefits at the revised scale of pay.

c) The arrears of salary from 1.8.2008 to 3:j .7.2010 shall be paid to the employees who are in service in eight equal quarterly installments starting from August 2010.

The Government has approved the implementation of the revised scale of pay without any revision for perquisites and risk pay. HRA is payable at the pre-revised salary at applicable rates. The Government have considered the projected operational results for the year 2010-2011 and 2011 -2012 to assess the affordability of the wage revision implementation and agreed for payment of arrears over a period of two years in 8 equal quarterly installments.

The liability on account of the above amounting to Rs. 4633.32 lakh has been provided in the accounts. Consequential liability on account of gratuity and leave encashment in respect of existing employees are not ascertainable at this stage, as the same has to be ascertained by approved actuarial valuer which is a time consuming process and hence not provided in the accounts.

b) The Company as on date is not liable to provide for the arrears of salaries and wages (net of interim relief paid) for the period 01.01.1997 to 30.06.2001 and perquisites and other allowances for the period 20.10.2000 to 30.06.2001, in respect of its managerial and unionised employees, in view of the conditions in the directives of the Government of India while implementing the wage revision.

16 a Sundry creditors include X 1.55 lakh payable to Small Scale Industrial Undertakings to the extent such parties have been identified from the available documents / information. (Previous year 11.48 lakh). There are no dues (Previous year-NIL) owed by the Company to Small Scale Industrial Undertaking exceeding Rs. 1 lakh which is outstanding for more than 30days. b The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence the disclosure relating to unpaid as at the year end together with interest paid / payable has not be given.

17 The Company has deferred tax asset of Rs. 91508 lakh (Previous year Rs. 84065 lakh) as on 31.03.2010 because of unabsorbed depreciation and accumulated losses.

The deferred tax liability as on 31.03.10 is Rs. 29170 lakh (Previous year Rs. 31711 lakh). Since there is net deferred tax asset as on 31.03.2010, as matter of prudence the deferred tax asset is not considered in the Accounts.

18 The Company has a system of obtaining confirmation of balances from third parties. Some of the parties have confirmed the balances.

19 Information available upto 3rd August 2010 has been considered in finalising the accounts

20 Figures for the previous year have been regrouped and recast wherever necessary to conform with the current year classification.

21 RELATED PARTY DISCLOSURES (ACCOUNTING STANDARD 18)

List of related Parties

Joint Ventures

FACT-RCF Building Products Ltd.

Key Management Personnel

Dr George Sleeba, Chairman and Managing Director.(Upto 30.11.2009)

Sri A Asokan, Chairman and Managing Director.(From 01.12.2009)

Sri K.Mathevan Pillai, Director (Finance)

Sri A Asokan, Director (Marketing)

Sri V.G.Sankaranarayanan, Director (Technical)

Transactions with related parties:

Remuneration to key management personnel: Rs. 40.92 lakh (Previous yearRs. 23.39 lakh)

Guarantees given to Joint Venture: Rs. Nil (Previous year Rs. 1750 lakh)

Expenditure incurred on employees deputed to Joint Venture:Rs. 47.00 lakh (Rs. 12.48 lakh)

Receivables as on 31 st March: Rs. 62.68 lakh (Previous year Rs. 15.66 lakh)

Payables as on 31st March: Rs. Nil (PreviousyearRs. Nil)

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