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 Accordingly, the powers of the Board of Directors of FRBL were superseded.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:

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.

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 "Leases”, 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.

(c) 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.

(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

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 liquid 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.

(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.

(c) 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 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.

(c) There is no Scheme of Arrangements that has been approved in terms of sections 230 to 237 of the Companies Act 2013.

(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 ("Intermediaries”),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 Beneficiaries”)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 Parties”),with the understanding, whether recorded in writing or otherwise, that the Company shall, whether ,directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

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

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

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 ' 708.14 lakh (Previous year ' 1012.21 lakh) and capital expenditure ' 591.18 lakh (Previous year ' 850.09 lakh). In the case of work being carried out by FACT Engineering and Design Organisation (FEDO) 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.

(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.