We have audited the accompanying standalone financial statements of National Fertilizers Limited (hereinafter
referred to as “the Company") which comprise the standalone balance sheet as at 31st March 2026, the
standalone statement of profit and loss (including other comprehensive income), the standalone statement of
cash flows and the standalone statement of changes in equity for the year then ended and notes to the financial
statements including a summary of the material accounting policies and other explanatory information (herein
after referred to as “standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
standalone financial statements give the information required by the Companies Act, 2013 (“the Act") in the
manner so required and give a true and fair view in conformity with the Indian Accounting Standards (“IND AS")
prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended, and other accounting principles generally accepted in India, of the state of affairs of the company as at
31st March 2026, its Profit (including other comprehensive income), changes in equity and its cash flows for the
year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the standards on auditing
(“SAs") specified under section 143(10) of the Act. Our responsibilities under those standards are further
described in the auditor’s responsibilities for the audit of the standalone financial statements section of our report.
We are independent of the company in accordance with the Code of Ethics issued by the Institute of Chartered
Accountants of India (“ICAI") together with the ethical requirements that are relevant to our audit of the standalone
financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the
standalone financial statements.
Emphasis of Matter
We draw attention to Note No. 35(ii) & 35(iii) of the standalone financial statements with respect to recognition of
revenue as subsidy income of Rs 1479.97 Crores on DAP & TSP fertilizers for the year ended 31st March 2026 on
the basis of the operational guidelines issued by the Department of Fertilizers for implementation of various
provisions over and above NBS subsidy rates approved for Kharif 2025 for shipments arriving between 1st April
2025 to 30th September 2025 which was further extended till 31st March 2026.
Our opinion is not modified in respect of the above matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
standalone financial statements of the current period. These matters were addressed in the context of our audit of
the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. We have determined the matters described below to be the key audit matters
to be communicated in our report. Summary of the same is mentioned here under:
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S. No.
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Key Audit Matter
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Response to Key Audit Matter
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1
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Revenue Recognition
Recognition of subsidy is made on the basis of in¬
principle recognition/approval/orders settlement of
claims from Fertilizer Industry Coordination Committee
(FICC), Department of Fertilizers (DoF), Government of
India, while finalizing the financial statements. Also the
FICC regulates such subsidy and the bills raised on such
notifications. Escalation/de-escalation in notified rates is
estimated taking into account the effect of guidelines,
policies, instructions and clarifications given.
Since there is a time lag between actual expenditure
incurred and notification of concession rates for the year,
management exercises significant judgment in arriving at
the income entitled on account of same for the year.
Therefore, there is a risk of revenue being misstated on
account of estimation of concession/ Import Parity Price
(IPP) rates yet to be notified.
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Principal Audit Procedures
The following principal audit procedures
have been performed by us in relation to
revenue recognition:
a) We have reviewed the company's
material accounting policies for
Revenue Recognition (Refer Note No.
1.2.3 (b) of the standalone financial
statements), relevant Notifications and
Circulars issued by the DoF,
Government of India.
b) We have carried out substantive
procedures on sample basis for
evaluation of operating effectiveness of
key controls over subsidy and each
income stream, basis of management
estimation and their corresponding
disclosure.
c) We have reviewed directions of FICC,
various Notifications/orders issued from
time to time and management
assessment in relation to retailer margin.
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2
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Estimation of Provision & Contingent Liabilities
The company has its operations in various States within
India, exposing it to a variety of different Central and
State laws. Litigations and claims may arise from direct
and indirect tax proceedings. Resolution of litigations
and claims proceedings may span over multiple years
beyond 31st March 2026.
The determination of a provision or contingent liability
requires significant judgement by the company because
of the inherent complexity in estimating future liabilities.
The company has reported contingent liabilities
amounting to Rs. 923.64 Crores in Note No. 48 to
standalone financial statement.
The provisions and contingent liabilities are subject to
changes in the outcomes of litigations and claims over
time as new facts emerge as each legal case progresses
and positions taken by the company. There is an inherent
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Principal Audit Procedures
Our audit process involved understanding of
identification process relating to litigations,
claims and contingent liabilities.
We have evaluated the design and testing
the operating effectiveness of controls in
respect of process.
We have evaluated management’s
assessment of the likely outcome and
potential exposures arising from significant
contingencies subject to ongoing court
cases and arbitration proceedings and
considered the requirements for any
provision as per the best estimate of the
possible expenditure.
In respect of significant claims, we checked
the amount of claim, nature of issues
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S. No.
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Key Audit Matter
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Response to Key Audit Matter
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complexity in estimations of magnitude of potential
exposures. Significant judgment is required to estimate
the likelihood amount of cash outflows, timing based on
interpretations of the legal aspects, opinions, demand
notices, relevant judgements etc.
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involved, management submissions and
corroborated the same with external
evidence, where ever available.
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3
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Trade Receivables
Trade Receivables appearing in financial statement
consists of receivables from sale of products as well as
receivable from Government of India in the form
of subsidy. Trade Receivables amounting to Rs. 5411.24
crores including subsidy receivable of Rs. 5198.89
crores were outstanding as at 31st March 2026.
Refer Note No. 12 to the Standalone Financial
Statements.
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Principal Audit Procedures
Our audit approach was a combination of
test of internal controls and substantive
p ro ced ures which included the following:
a) In respect of Subsidy recoverable from
Government of India, as no confirmation
of balance is on record, we have relied
on the management’s assertion and
estimates on the recoverability.
As subsidy receivable is outstanding
from Department of Fertilizer,
Government of India (i.e. Sovereign
Authority) and is backed by the
approved claims generated from MFMS
(Mobile Fertilizer Management System),
amount outstanding as at balance sheet
d ate has been considered as
recoverable (net of provisions).
b) In respect of receivables other than
subsidy receivables, management have
sent request for confirmation from the
parties. The response to the request was
checked together, subsequent
realisation check was also performed
and long outstanding balances have
been reviewed.
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4
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Property, Plant and Equipment
Management judgment is applied for determining the
carrying value of property, plant and equipment,
intangible assets and their respective depreciation/
amortization rates. These include the decision to
capitalize or expense costs; the annual asset life review;
the timelines of the capitalization/decapitalization of
assets and the measurement and recognition criteria for
assets retired from active use.
Refer material accounting policy no 1.2.9 to the
Standalone Financial Statements.
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Principal Audit Procedures
a) Testing of controls in place over the fixed
assets cycle,
b) Evaluation of appropriateness of
capitalization process. Performed tests
to verify the capitalized costs,
c) Assessment of the timelines of the
capitalization of the assets and
assessed the derecognition criteria for
assets retired from active use.
d) We evaluated management’s
assessment of useful lives of assets and
the appropriateness of depreciation and
amortisation policies applied. In
performing these procedures, we
reviewed the judgments made by
management for the following:
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S. No.
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Key Audit Matter
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Response to Key Audit Matter
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(i) Identification of the nature of
underlying costs capitalized,
(ii) Determination of realizable value of
the assets retired from active use,
(iii) Appropriateness of asset lives
applied in the calculation of
depreciation/ amortization,
(iv) Useful lives of assets prescribed in
Schedule II of the Companies Act,
2013.
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Information Other than the Standalone Financial Statements and Auditor’s Report Thereon
The Company's Management and Board of Directors are responsible for the preparation of other information. The
other information comprises the Management Discussion and Analysis, Director's Report including annexures to
Director's Report, Business Responsibility Report, Corporate Governance, Performance at a Glance and
Chairman's Statement included in the annual report of the Company but does not include the standalone financial
statements and our auditor’s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially inconsistent
with the standalone financial statements or our knowledge obtained during the course of audit, or otherwise
appears to be materially misstated. On reading the annual report, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to those charged with governance and take
necessary actions as per applicable laws and regulations. We have nothing to report in this regard.
Responsibilities of Management and those charged with Governance for the Standalone
Financial Statements
The Company’s Management and Board of Directors is responsible for the matters stated in section 134(5) of the
Act with respect to the preparation of these standalone financial statements that give a true and fair view of the
financial position, financial performance including other comprehensive income, cash flows and changes in equity
of the Company in accordance with the accounting principles generally accepted in India, including the IND AS
prescribed under section 133 of the Act read with relevant rules issued thereunder. This responsibility also
includes maintenance of adequate accounting records in accordance with the provisions of the Act for
safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies; making judgements and estimates that are
reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to
the preparation and presentation of the standalone financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Company or to cease operations,
or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section 143(3)(I) of the Act, we are also responsible for
expressing our opinion on whether the company has adequate internal financial controls system in place and
the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management and the board of directors.
• Conclude on the appropriateness of the management and the board of directors’ use of the going concern
basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the ability of the company to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the standalone financial Statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements, including the
disclosures, and whether the standalone financial statements represent the underlying transactions and
events in a manner that achieve fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the standalone financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order") issued by the Central Government
of India in terms of section 143(11) of the Act, we give in the “Annexure A", a statement on the matters specified
in paragraph 3 and 4 of the order to the extent applicable.
2. As required by Section 143(5) of the Act, we have considered the directions issued by the Comptroller & Auditor
General of India. We give our report in the attached “Annexure B".
3. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it
appears from our examination of those books.
(c) The standalone balance sheet, the standalone statement of profit and loss (including Other
Comprehensive Income), the standalone statement of cash flows and the standalone statement of
changes in equity dealt with by this report are in agreement with the books of account.
(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting
Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015 as amended.
(e) Notification number G.S.R. 463(E) dated 5 June 2015 issued by the Ministry of Corporate Affairs, section
164(2) of the Act regarding disqualifications of directors is not applicable to the company, since it is a
Government Company.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the company and
the operating effectiveness of such controls, refer to our separate report in “Annexure C". Our report
expresses an unmodified opinion on the adequacy and operating effectiveness of the company’s internal
financial controls over financial reporting.
(g) Notification number G.S.R. 463 (E) dated 5 June 2015 issued by the Ministry of Corporate Affairs, section
197 of the Act regarding remuneration to director is not applicable to the company, since it is a Government
Company; and
(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The company has disclosed the impact of pending litigations on its financial position in its standalone
financial statements - Refer Note No. 48 to the standalone financial statements.
ii. The company did not have any long-term contract including derivative contracts for which there were
any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the company.
iv. (a) The management has represented that, to the best of its knowledge and belief, no funds have
been advanced or loaned or invested (either from borrowed funds or share premium or any
other sources or kind of funds) by the company to or in any other person or entity, including
foreign entities (“Intermediaries"), with the understanding, whether recorded in writing or
otherwise, that the Intermediary shall:
• directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the company (“Ultimate Beneficiaries");
• provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The management has represented, that, to the best of its knowledge and belief, no funds have
been received by the company from any persons or entities, including foreign entities (“Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the company
shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the funding party (“Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on the audit procedures that have been considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the
representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above,
contain any material mis-statement.
v. The final dividend paid by the Company during the year ended 31st March 2026 in respect of dividend
declared for the previous year is in accordance with section 123 of the Act to the extent it applies to
payment of dividend. The Company has not declared and paid interim dividend during the year ended
31st March 2026.
vi. As required, maintenance of audit trail in accounting software under Rule 11(g) of the Companies
(Audit and Auditor’s) Rules, 2014, we have to report as under;
Based on our examination which included test checks, the Company, in respect of financial year
commencing on 1st April 2025, has used accounting software for maintaining its books of account
which have a feature of recording audit trail (edit log) facility and the same have been operated
throughout the year for all relevant transactions recorded in the software.
Further, during the course of our audit we did not come across any instance of audit trail feature being
tampered with in respect of the accounting software where such feature is enabled. Furthermore, the
audit trail has been preserved by the Company as per the statutory requirements for record retention.
For Dassani & Associates LLP For R S P H & Associates
Chartered Accountants Chartered Accountants
Firm’s Registration No.: 009096C/C400365 Firm’s Registration No.: 003013N
Tushar Vaidya Tarun Kumar Batra
Partner Partner
M. No. 401841 M. No.: 094318
UDIN : 26401841UEZATU2159 UDIN : 26094318LCCIUV4588
Place: Noida
Date: 31-07-2026
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