a. Out of total land of 2541.82 acres, land measuring 325.70 acres at Nangal (' 0.12 crore) had been symbolically possessed by the Punjab Government on 29.10.1998 without determination of consideration. Though the title of entire land including 325.70 acre vests with the Company in the records, the physical possession of 325.70 acres of land is not with the Company. Further, there is a litigation in respect of land measuring 1.7 acres approx. before Punjab & Haryana High Court, Chandigarh. The Regular Second Appeal (RSA) preferred by appellant is pending wherein Hon'ble High Court has ordered status-quo in the matter.

b. Ammonia Feed Stock Conversion Projects from 'LSHS/FO' to 'Gas' at Bathinda, Panipat & Nangal Unit under Government's policy for reimbursement of project cost to the Company over a period of five years from the date of commercial production have been capitalised on 11th March.2013, 28th March 2013 and 18th July 2013 respectively. Accordingly, Property, Plant & Equipment (Gross) include assets amounting to '3890.17 crore (CPLY '3890.68 crore) represented by capital grant as disclosed in Note: 26 & 34 relating to Deferred Government Grant and the net Property, Plant & Equipment of Ammonia Feed Stock Conversion Projects amount to '1925.20 crore (CPLY '2115.66 crore) as on 31.03.2023.

c. In terms of exemption granted under Ind AS 101, the company has opted to treat exchange difference arising from translation of long term foreign currency monetary items as addition/deletion to Property, Plant & Equipment. Accordingly, an exchange loss/(gain) of ' Nil crore (CPLY gain of ' Nil crore) has been included in the addition to Property, Plant & Equipment as on 31st March, 2023. The unamortized amount of exchange difference as on 31.03.2023 is '56.12 crore (CPLY '59.81 crore).

d. During the year, on 9th January 2023, Gas Turbine Generator (GTG) along with HRSG (Heat Recovery Steam Generator), a major part of PPE, installed at Bathinda Unit tripped during normal plant operation and a major component of GTG unit got completely damaged. After technical inspection by the OEM and as estimated by OEM and the company, 55% of the total cost of GTG plant needs replacement.

Accordingly, Gross Carrying amount of Rs. 73.58 Crores having a written down value (WDV) of Rs 67.65 crore, has been derecognized from ""Property Plant & Equipment"" in the financial statements for the FY 2022-23 and estimated salvage value of the damaged component amounting to Rs. 0.22 Crore has been considered as ""Non-Current Asset held for Sale"" w.e.f. 9th January 2023."

e. The Gross Carrying Amount and the Net Carrying Amount of Bearer Plant is '1404/-. Hence, Nil due to rounding off.

f. Title deeds of following Immoveable Properties are not held in the name of the Company:

Terms/Rights attached to equity shares

The Company has only one class of equity share having a face value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share and entitled to dividends. The dividend proposed by the Board of Director is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend, which is approved by the Board of Directors. In the event of liquidation of the company, the holders of equity share will be entitled to receive the remaining assets of the company, after distribution to creditors and all preferential amounts. The distribution will be in proportion to the number of equity shares held by each shareholder.

To meet the funding requirement of Energy Saving and other Capex Schemes, the company has entered into a Rupee Term Loan Agreement with SBI on 24.12.2018 for ' 1044 crore.

The borrowings of Rupee Term loan is secured by first pari-passu charge on the fixed assets (both movable and immovable) of the manufacturing units i.e. Nangal, Bathinda, Panipat, Vijaipur - I & Vijaipur - II and Corporate Office and over cash flow of the company.

A sum of ' 639.11 crore is outstanding as on 31.03.2023 out of which instalment due for payment upto 31st March 2024 amounting to ' 104.40 crore is disclosed on Note: 29 - Borrowings.

Repayment of sanctioned term loan would be repayable in 40 quarterly instalments of ' 26.10 crore each started from June 2020 and ending in March 2030. The rate of interest on the term loan is 6 months SBI MCLR plus spread of 0.15%. During the year, for the period upto 29th June 2022, interest Rate was 7.10 % p.a, from 30th June 2022 to 29th December 2022, interest rate was 7.50%, and from 30th December 2022 onwards, interest Rate was 8.45%.

# Includes Capital Grant from Govt. of India, Ministry of Chemicals & Fertilizers for Ammonia Feed Stock Conversion Project (AFCP) from 'LSHS/FO' to 'Gas' vide sanction letter no. 14016/2/2007-FP(Vol.M)(2) dated 08.02.2010 for Panipat Unit, sanction letter no.14016/2/2007-FP (Vol. II)(1) dated 08.02.2010 for Bathinda Unit and sanction letter no.14016/2/2007-FP (Vol. II)(3) dated 08.02.2010 for Nangal Unit. The grant has been accordingly accounted for as per Ind AS 20 Accounting for Government Grants'.

* Represents addition / adjustment to Property, Plant & Equipment in respect of Ammonia Feed Stock Conversion Projects from 'LSHS/FO' to 'Gas' at Bathinda, Panipat and Nangal units.

* Cash credit / Working Capital Demand Loan from Banks are secured by first charge ranking pari-pasu inter-se against hypothecation on the whole of the current assets of the borrower namely, Stocks of Raw Materials, Stocks in Process, Semi Finished and Finished Goods, Stores and Spares not relating to Plant & Machinery (Consumable Stores and Spares), Bills receivables and book debts and all other moveables, both present and future of the company.

$ Details in respect of Interest and terms of repayment of Rupee Term Loan are disclosed in Note : 22 Borrowings.

Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts

# The Capital Grant from Govt. of India, Ministry of Chemicals & Fertilizers for Ammonia Feed Stock Conversion Project (AFCP) from 'LSHS/FO' to 'Gas' vide sanction letter no. 14016/2/2007-FP(Vol.M)(2) dated 08.02.2010 for Panipat Unit, sanction letter no.14016/2/2007-FP (Vol. II)(1) dated 08.02.2010 for Bathinda Unit and sanction letter no.14016/2/2007-FP (Vol. II)(3) dated 08.02.2010 for Nangal Unit. The grant has been accordingly accounted for as per Ind AS 20 Accounting for Government Grants'.

Non Current Deferred Government Grant is disclosed in Note No. 26.

Revenue from operations (gross) (a) (b)

$ Subsidy includes Past Period Subsidy and differential amount for the earlier years notified during the current year

Pending sale of urea and P&K fertilizer totalling 10.616 lakh MT through POS device to beneficiaries as on 31.03.2023, subsidy of '3896.87 crore which has accrued on sale to dealers but shall become due for payment under DBT upon sale through POS device has been recognized in the current period (CPLY quantities 5.24 lakh MT and subsidy '1064.65 crore).

Pursuant to Department of Fertilizers notification dated 18-11-2022 conveying the extension of Revised Energy Norms of NUP-2015 for 14 Urea Manufacturing Units including 4 units of NFL i.e. Nangal, Bathinda, Panipat and Vijaipur-I, the Revenue from Operations for the current year includes estimated differential subsidy receivable for the period from 01-10-2020 to 31-03-2023 amounting to ' 928.37 crore which includes a sum of ' 211.29 crore for the FY 2022-23.

51.1.2 Provident Fund:

The Provident Fund contributions are made to a Trust. 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 ' 37.20 crore (CPLY ' 36.46 crore) has been charged to statement of Profit and loss towards contribution by the Company.

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. Further, having regard to the assets of the Fund and the Return on the Investments, the Company does not expect any deficiency in the foreseeable future. In terms of the guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of provident fund liability and determined that there is no shortfall as at 31st March, 2023.

The funds of the trust have been invested under various securities as prescribed by regulatory authorities.

a The Company has funded the gratuity liability through a separate Gratuity Fund. The fair value of the plan assets is mainly based on the information given by the insurance companies through whom the investment has been made by the fund. Gratuity liability of ' 56.65 crore (CPLY ' 190.64 crore) is unfunded as on 31st March, 2023. Other defined benefit obligations are unfunded.

51.1.4 Other Employee Benefit Schemes:

Provision of ' (0.40) crore (CPLY ' 0.27 crore) towards Employees' Family Economic Rehabilitation Scheme and Social Security Benefits Scheme has been charged on the basis of actuarial valuation and credited to the Statement of Profit and Loss account. A net liability of ' 15.96 crore (CPLY ' 16.36 crore) has been recognized in the Balance Sheet as at 31st March 2023 on account of these schemes.

51.1.5 Provident Fund:

12% of Basic Pay plus Dearness Allowance contributed to the Provident Fund Trust of the Company. The Company does not anticipate any further obligation in the near foreseeable future having regard to the amount of the fund and return on investment as confirmed by the actuary.

The Employee benefit of Provident Fund is administered through a separate NFL Employees Provident Fund Trust. Out of the investment made by PF trust in the past, one issuer of security has defaulted in payments. The value of Investment is ' 15.20 crore. Considering the Employers obligation to make good the loss in value of investment under Provident Fund Regulations, pending assessment of actual loss the Company has provided for 100% of value of investment amounting to ' 15.20 crore in the books of accounts.

Note 52 : Ind AS-108: Operating Segments

Ind AS-108 establishes standards for the way that public business enterprises report information about operating segments and related disclosures about product and services, geographical areas and major customers.

Company's primary business segments are

i) Own Fertilizers ( Urea, Bio Fertilizers and Bentonite Sulphur)

ii) Fertilizers Trading (Indigenous and Imported)

iii) Other Products & Services (Industrial Products, Agro Chemicals, Traded Seeds, Seeds under Seeds Multiplication Programme), and are reportable segments under Ind AS 108. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM).

D) Transactions with Related parties:

(i) During the year, there were transactions of ' 698.08 crore (CPLY ' 407.53 crore) with Ramagundam Fertilizers & Chemicals Limited towards subscription of Share capital of ' Nil crore (CPLY ' 43.83 crore) and others ' 698.08 crore (CPLY ' 363.70 crore). The amount recoverable from Ramagundam Fertilizers & Chemicals Limited as on 31.03.2023 is ' 113.29 crore (CPLY ' 47.83 crore) and amount payable to Ramagundam Fertilizers & Chemicals Limited as on 31.03.2023 is ' 140.51 crore (CPLY ' 50.21 crore)

(ii) Remuneration to Key Management Personnel at (C) above is ' 1.92 crore (CPLY ' 2.18 crore). In addition to the above, they are eligible for non monetary perquisites as per Government of India guidelines.

In accordance with Ind AS-36, the carrying amount of Property, Plant & Equipment have been reviewed at year-end for indication of impairment loss, if any, by considering assets of entire one plant as Cash Generating Unit. As there is no indication of impairment, no loss has been recognized during the year.

Note 55

As per requirements of the listing agreements with the stock exchanges, the requisite details of loans and advances in the nature of loans given by the Company are as under:

(i) There are no loans and advances in the nature of loans to any subsidiary.

(ii) No loans have been given (other than loans to employees), wherein there is no repayment schedule or repayment is beyond seven years; and

(iii) There are no loans and advances in the nature of loans to firms/companies in which Directors are interested.

Note 56

Misappropriation of seeds stock amount to Rs 0.64 crore by a ‘Wheat Seed Producer' under Warehousing and Processing of Wheat seed Agreement with the company has been reported in FY 2022-23 and police compliant has been filed. This amount has been debited to the Wheat Seed producer. Due to uncertainty of recovery, provision for doubtful recoverable amounting to Rs 0.58 crore after adjustment of advance and security deposit has been created in the Books of Accounts.

' 1.32 crore towards unspent amount of "Ongoing Project" has been transferred to a separate Bank Account as per the provisions of Section 135 (6) of the Companies Act, 2013.

Further, ' 22,365 towards unspent amount of “Other than Ongoing Project" shall be transferred to a fund specified in Schedule VII within a period of six months from the expiry of the financial year as per provisions of Section 135 (5) of the Companies Act, 2013.

Note 58-Remittance in foreign currencies for dividends

The Company has not paid any Dividend during Financial Year 2022-23.

Level 1: 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.

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 fair value 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.

There are no transfers between levels 1 and 2 during the year.

The company's policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.

(ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices or dealer quotes for similar instruments

- the fair value of foreign currency option contracts is determined using Black Scholes valuation model.

- the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

All of the resulting fair value estimates are included in level 3.

The carrying amounts of trade receivables, trade payables, borrowing, cash and cash equivalents and other current financial liabilities are considered to be the same as their fair values, due to their short-term nature.

The fair values for loans and security deposits were calculated based on cash flows discounted using a current lending rate. The discount rate considered for FY 2022-23 is 7.00% (CPLY 7.00%). They are classified as level 3 fair values in the fair value hierarchy since significant inputs required to fair value an instrument are not observable

The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy since significant inputs required to fair value an instrument are not observable

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

The company's risk management is carried out by Forex Risk Management Committee (FRMC) / central treasury department and marketing department under Co's policies approved by the Board of Directors. FRMC/Treasury identifies, evaluates and hedges financial risks. The Board provides policy for overall risk management, marketing manual, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, derivative financial instruments and investment of excess liquidity.

(A) Credit risk

Credit Risk refers to the risk of default on its obligations resulting in financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to ' 4158.97 crore and ' 2830.16 crore as of March 31, 2023 and March 31, 2022, respectively. Trade receivables mainly constitute subsidy receivable from Government of India and from sale of fertilizers to dealers. Trade receivables from dealers are partially secured. Credit risk is being managed through credit approvals, establishing credit limits and monitoring the creditworthiness of customers to allow credit terms in the normal course of business.

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 company's liquidity position (comprising the undrawn borrowing facilities given below) and cash and cash equivalents on the basis of expected cash flows.

(a) Risk management

The company's objectives when managing capital are to

• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

• maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt as per guidelines of Government of India

Consistent with others in the industry, the company monitors capital on the basis of the following gearing ratio:

Debt (long term borrowings) divided by

Total 'Equity' (as shown in the balance sheet).

During the financial year 1995-96, the company had given an advance of ' 130.69 crore (USD 37.62 million) to a foreign supplier M/s. Karsan Daanismanlik Turizm Sanayi Tiracet Ltd STI Turkey (M/s KARSAN) against import of urea, the supplies of which were not received and subsequently the contract was terminated. Pending litigation, a provision for doubtful recovery of advance was created during FY 1996-97 by way of direct appropriation from accumulated profit & loss having no impact on profitability/taxable income for the year 1996-97.

The outstanding amount of advance was shown in accounts under 'Loan and Advances Recoverable by netting off from provision for doubtful recovery created as above. As said provision was not debited to P&L account in that year, provision so created was neither claimed nor added to book profit while computing taxable income for the year 1996-97."

"The net amount of outstanding advance as on 01.04.2021 recoverable of ' 129.64 crore (net of actual recovery of ' 1.05 crore in earlier years) has continued to be shown in the accounts till FY 2021-22 under 'Other Non-Current Assets' separately indicating the equivalent amount of provision for doubtful advances from reserves and surplus.

Despite ongoing protracted litigation for recovery of advance amount for more than 25 years at various jurisdictional levels, the amount of ' 129.64 crore could not be recovered.

The company, after considering the fact of remote possibility of recovery in future, has decided to write off the outstanding amount of ' 129.64 crore in current financial year."

Consequent to write-off of this amount in current financial year, the provision of ' 129.64 crore made in earlier year(s) has been written back and credited to 'Statement of Profit and Loss'.

Note No. 63 Others

Restatement for the year 31st March 2022 and at 01st April 2021

During the financial year 1995-96, the company had given an advance of ' 130.69 crore (USD 37.62 million) to a foreign supplier M/s. Karsan Daanismanlik Turizm Sanayi Tiracet Ltd STI Turkey (M/s KARSAN) against import of urea, the supplies of which were not received and subsequently the contract was terminated. Pending litigation, a provision for doubtful recovery of advance was created during FY 1996-97 by way of direct appropriation from accumulated profit & loss having no impact on profitability/taxable income for the year 1996-97.

"An error had occurred during the FY 1996-97 while creating provision for doubtful recovery of advance which was appropriated directly from Profit & Loss Appropriation Account in place of debiting to the Profit & Loss Account.

The net amount of outstanding advance recoverable of ' 129.64 crore (net of actual recovery of ' 1.05 crore in earlier years) continues to be shown in the accounts under the head 'Other Non-Current Assets', separately indicating the equivalent amount of provision for doubtful advances."

During the FY 2022-23, the above error has been discovered. Therefore, for making the correction of error in prior period affecting the financial statements, based on opinion of an expert, the company has restated its balance sheet to show the corrected financial position for the prior periods. As per Ind AS8, the correction of a prior period error is excluded from profit & loss for the period in which the error is discovered. Hence, in this respect the company is presenting a third balance sheet as at the beginning of the preceding period i.e 01.04.2021 in addition to the minimum comparative financial statements in this respect.

"In line with the requirements of Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors' and Ind AS 1, 'Presentation of Financial Statements', the error has been corrected by retrospectively restating the opening balances of assets, liabilities and equity for the earliest period presented i.e. as of 01.04.2021 and 31.03.2022.

There is no impact on EPS of the previous period of the financial statement due to such restatement.

Note No. 64 Additional Regulatory Information

a) Details of Benami Property Held

The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property:

b) The Company has not been declared willful defaulter by any bank or financial institution or any other lender.

c) There are no material transactions with respect to struck off companies as mentioned under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

d) The Company does not have any charges or satisfaction of charges which are yet to be registered with ROC beyond the statutory period

e) Provision regarding the number of layers prescribed under Section of Section 2 (87) of the Act read with the Companies (Restriction on number of layers) Rules, 2017 is not applicable.

f) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of Income Tax Act, 1961).

g) The Company has not traded or invested in crypto currency or virtual currency during the respective financial year/period.

h) The Company does not have any scheme of arrangements which have been approved by the Competent Authority in terms of Section 230 to 237 of the Companies Act, 2013

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

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

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

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

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

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

Note No. 65 Others

The previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year