(xxi) Provisions
A provision is recognized when the Company has a present
obligation (legal or constructive) as a result of past event,
it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the
obligation. If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision due
to the passage of time is recognised as a finance cost. These
provisions are reviewed at the end of each reporting period
and are adjusted to reflect the current best estimates.
(xxii) Business combinations
The Company applies the acquisition method in
accounting for business combinations. The consideration
transferred by the Company to obtain control of a business
is calculated as the sum of the fair values of assets
transferred and liabilities assumed as at the acquisition
date i.e. date on which it obtains control of the acquiree.
Acquisition-related costs are recognised in the statement
of profit and loss as incurred, except to the extent related
to the issue of debt or equity securities.
Where the consideration transferred exceeds the fair
value of the net assets acquired and liabilities assumed,
the excess is recorded as goodwill. Alternatively, in case
of bargain purchase wherein the consideration transferred
is lower than the fair value of the net identifiable assets
and liabilities assumed, the difference as a gain in other
comprehensive income and accumulate the gain in equity
as capital reserve.
Identifiable assets acquired and liabilities assumed in a
business combination are measured initially at their fair
values on acquisition-date. Intangible Assets acquired in
a Business Combination and recognised separately from
Goodwill are initially recognised at their fair value at the
acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets
acquired in a Business Combination are reported at
cost less accumulated amortisation and accumulated
impairment losses, on the same basis as intangible assets
that are acquired separately.
(xxiii) Goodwill
After initial recognition, goodwill is measured at cost less
any accumulated impairment losses. For the purpose
of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to
each of the cash-generating units that are expected to
benefit from the combination, irrespective of whether
other assets or liabilities of the acquiree are assigned to
those units. A cash generating unit to which goodwill has
been allocated is tested for impairment annually, or more
frequently when there is an indication that the unit may be
impaired. If the recoverable amount of the cash generating
unit is less than its carrying amount, the impairment loss
is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets
of the unit pro rata based on the carrying amount of each
asset in the unit. Any impairment loss for goodwill is
recognised in profit or loss. An impairment loss recognised
for goodwill is not reversed in subsequent periods.
(xxiv) Declaration of Dividend
The Company recognises a liability to pay final dividend
to equity shareholders when the distribution is authorised,
and the distribution is no longer at the descretion of the
Company. As per the corporate laws in India, a final dividend
is authorised when it is approved by the shareholders. A
corresponding amount is recognised directly in the equity.
The Company adopted Disclosure of Accounting Policies
(Amendments to Ind AS 1) from April 1, 2023. Although the
amendments did not result in any changes in the accounting
policies themselves, they impacted the accounting policy
information disclosed in the financial statements.
The amendments require the disclosure of 'material' rather
than 'significant' accounting policies. The amendments
also provide guidance on the application of materiality
to disclosure of accounting policies, assisting entities to
provide useful, entity-specific accounting policy information
that users need to understand other information in the
financial statements.
3A. Significant accounting judgements, estimates
and assumptions
The preparation of the Company's financial statements
requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, the accompanying
disclosures and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment to
the carrying amount of assets or liabilities affected in
future periods. The changes in estimates are made as
the management becomes aware of such changes. The
changes in estimates are recognized in the period in
which the estimates are revised.
i) Defined benefit plans
The cost of the defined benefit gratuity plan, post¬
employment medical benefits and other defined benefit
plans and the present value of the obligation of defined
benefit plans are determined using actuarial valuations. An
actuarial valuation involves making various assumptions
that may differ from actual developments in the future.
These include the determination of the discount rate,
future salary increases and mortality rates. Due to the
complexities involved in the valuation and its long-term
nature, a defined benefit obligation is highly sensitive
to changes in these assumptions. All assumptions are
reviewed at each reporting date. The parameter most
subject to change is the discount rate. In determining the
appropriate discount rate for defined benefit plans, the
management considers the interest rates of government
bonds. The mortality rate is based on publicly available
mortality tables. Those mortality tables tend to change
only at interval in response to demographic changes.
Future salary increases are based on the expected future
inflation rates. Further details about the defined benefit
obligations are given in Note 32.
ii) Useful life of Property, plant and equipment
The management estimates the useful life and residual
value of property, plant and equipment based on technical
evaluation. These assumptions are reviewed at each
reporting date. Refer Note 4(a).
iii) Fair value measurement of financial instruments.
Refer Note 34 for information about fair value measurement.
iv) Revenue recognition
The Company provides various rebates and incentives to
the customers. In estimating the same, the Company is
required to use either the expected value method or the
most likely method. The Company determined that the
expected value method is the appropriate method for
determining estimates to recognize the impact of rebates
and other incentives on revenue. These estimates are made
based on historical experience and business forecast and
current market conditions. The model uses the historical
purchasing patterns and rebate entitlement of customers
to determine the expected rebate percentages and the
expected value thereof.
v) Provisions and contingencies
Refer Note 29 for key assumptions about likelihood and
magnitude of an outflow of economic resources in relation
to recognition and measurement of contingent liabilities.
3B. Standards issued but not yet effective
The Ministry of Corporate Affairs ("MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. On 31 March 2026, MCA
ammended the Companies (Indian Accounting Standards)
Ammendment Rules 2026, as below
Ind AS 1 - Presentation of Financial Statements -
For accounting periods beginning on or after 1 April 2026,
when an entity breaches any covenant of a long-term
loan arrangement on or before the end of the reporting
period with the effect that the liability becomes payable
on demand, it classifies the liability as current, even if
the lender agreed, after the reporting period and before
the approval of the financial statements for issue, not to
demand payment as a consequence of the breach. An
entity classifies the liability as current because, at the end
of the reporting period, it does not have the right to defer
its settlement for at least 12 months after that date.
However, an entity classifies the liability as non-current
if the lender agreed by the end of the reporting period to
provide a period of grace ending at least 12 months after
the reporting period, within which the entity can rectify
the breach and during which the lender cannot demand
immediate repayment.
This amendment is to be applied retrospectively for annual
reporting periods beginning on or after 1 April 2026, in
accordance with Ind AS 8, Accounting Policies, changes in
accounting Estimates and Errors.
The Company has issued 221,623,331 nos of equity shares having face value of H10 per share to the existing shareholders of
Managalore Chemicals and Fertilizers Limited pursuant to the approved scheme of arrangement.
(c) Terms/ rights attached to equity shares:
1) The Company has only one class of equity share having par value of H10 per share. Each holder of equity share is entitled
to one vote per share. The equity shareholders are entitled to receive dividend as declared from time to time.
2) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the
Company in proportion to the number of equity shares held by the respective shareholders.
(f) The Company has not issued any bonus shares or shares for consideration other than cash during the period of five years
immediately preceding the reporting date.
(g) As per records of the Companyincluding its register of share holders/members and other declarations received from share
holders regarding beneficial interest, the above share holding represents both legal and beneficial ownership of shares.
(h) Stock option schemes
Information relating to Employee Stock Option Plan, including details of options granted and lapsed during the financial year
and options outstanding at the end of the reporting period, is set out in Note 42.
i. The Land Policy of Port land has been revised as per the Land Policy Guidelines issued by the Ministry of Shipping, Government
of India. Pursuant to the said policy and pending outcome of negotiation with Paradeep Port Trust, the Company has made
provision towards ground rent, interest and taxes amounting to H 1,541.81 (31 March 2025: H 1,479.03) against the demand
raised by Paradeep Port Trust.
ii. Employees' State Insurance Corporation (ESIC) raised various demands against the Company in respect of both contract
labourers and employees in earlier years, which were contested by the Company in various Courts and Authorities. The
Company is continuing with the provision existing in the books as on 31 March 2026 as H 247.83 (31 March 2025: H 241.11)
Note 31: Operating Segments
a. Basis of segmentation
The Company’s business activity falls within a single Operating Segment "Fertilizers and Other Trading Materials”, and thus no
further disclosures are required in accordance with Indian Accounting Standard (Ind AS)- 108 "Operating Segment”.
b. Geographic information
The Company primarily operates in and therefore no geographical segment information has been provided herein.
Note 32: Disclosure pursuant to Indian Accounting Standard - 19 'Employee Benefits'
Gratuity
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity
on terms not lower than the amount payable under Labour Code. The scheme is funded with Life insurance Corporation of India (LIC)
in the form of qualifying insurance policy. The Company undertakes all the risk pertaining to the plan.
Post Retirement medical benefit plan
The Company has a defined benefit post retirement medical benefit plan, for its employees. The Company provides medical benefit
to those employees who leave the services of the Company on retirement. As per the plan, retired employee and the spouse will be
covered till the age of 85 years and the dependent children till they attain the age of 25 years. In case of death of retired employee,
the spouse will be covered till the age of 85 years and the dependent children till they attain the age of 25 years. The plan is not
funded by the Company.
Provident fund
The Company has set up provident fund trust wherein contributions are made and accordingly the same is considered as a defined
benefit plan in accordance with Ind-AS 19, Employee Benefits, wherein provident funds set up by employers, which requires interest
The weighted average duration of the defined benefit plan obligation relating to gratuity at the end of the reporting year is 6/10
years ( 31 March 2025: 5 years).
The Company expects to contribute H 3,361.11 (31 March 2025: H 2,601.63) and H 1,247.52 (31 March 2025: H 1,109.42) to
gratuity trust and provident fund trust respectively in the next financial year.
I. Risk exposure
Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary
overtime. Thus, the Company is exposed to various risks in providing the above defined benefit which are as follows:
The management assessed that cash and cash equivalents, other bank balance, trade receivables, other current financial
assets (except derivative financial assets), trade payables, short term borrowings and other current financial liabilities (except
derivative financial liabilities) approximate their fair value largely due to the short-term maturities of these instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale.
Note 35: Financial risk management objectives and policies
The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The
main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include
trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also enters into
derivative contracts. The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management
oversees the management of these risks. The Company’s risk management is carried out by treasury department under policies
approved by the Board of Directors. The treasury department identifies, evaluates and hedges financial risks. The Board of Directors
provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk,
interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of
excess liquidity.
A Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from
its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other
financial instruments.
Financial assets
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance
with the guidelines framed by the Board of directors of the Company. Guidelines broadly covers the selection criterion and over
all exposure which the Company can take with a particular financial institution or bank. Further the guideline also covers the limit
of overall deposit which the Company can make with a particular bank or financial institution. The Company does not maintain
the significant amount of cash and deposits other than those required for its day to day operations.
Trade receivables
The Company receivables can be classified into two categories, one is from the customers into the market and second one
is from the Government in the form of subsidy. As far as Government portion of receivables are concerned, credit risk is nil.
For market receivables from the customers, the Company extends credit to customers in normal course of business. The
Company considers factors such as credit track record in the market and past dealings for extension of credit to customers.
The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored.
The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in
several jurisdictions and operate in largely independent markets. The Company has also taken security deposits from its
customers, which mitigates the credit risk to some extent.
B Liquidity risk
The Company’s objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements at all times. The
Company relies on a mix of borrowings and excess operating cash flows to meet its needs for funds. The current committed
lines of credit are sufficient to meet its short to medium/ long term expansion needs. The Company monitors rolling forecasts
of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as commodity
risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.
The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates
of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant. The analysis
exclude the impact of movements in other market variables. Refer sensitivity analyses below.
The following assumptions have been made in calculating the sensitivity analysis:
- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is
based on the financial assets and financial liabilities held at 31 March 2026 and 31 March 2025.
(a) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes
in foreign exchange rates.
Sensitivity analysis
The following tables demonstrate the sensitivity to a reasonably possible change in exchange rates of various currencies
with H, with all other variables held constant. The impact on the Company’s profit before tax and equity is due to changes
in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives. Refer Note 37 for
details on foreign currency exposure.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company manages fund requirements and performs sensitivity analysis to keep
interest rate risk within limits.
Sensitivity analysis
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans
and borrowings affected. With all other variables held constant, the Company’s profit before tax and equity is affected
through the impact on floating rate borrowings, as follows:
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable
market environment.
(c) Commodity price risk
The Company’s operating activities require the ongoing purchase of rock phosphates, phosphoric acid, sulphur and
muriatic potash. All being international commodities is subject to price fluctuation on account of the change in the
demand supply pattern and exchange rate fluctuations. The Company is not affected by the price volatility of the raw
materials as government on a time to time basis, revises the subsidy rates payable to the fertilizer industry based on
the market trend.
Note 36: Capital management
For the purpose of the Company’s capital management, capital includes issued equity share capital and all other equity reserves
attributable to the equity holders. The primary objective of the Company’s capital management is to maximise the shareholder
value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment
to shareholders, return capital to shareholders or issue new shares. The Company monitors capital keeping in view the adequate
interest and debt service coverage ratio.
In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets
financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in
meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the
financial covenants of any interest-bearing loans and borrowing in the current year.
a) The Company, in an earlier year, had received an Arbitration Award in its favour in the matter of Cargo Charges Tariff dispute
with Paradeep Port Trust (PPT) for the years 1993-1999. PPT in earlier year had appealed with the higher authorities against
such award which was confirmed by the Appellate Authority. However, as against the above order, the PPT went into further
appeal with the Hon’ble High Court of Odisha and the High Court in its interim order directed the Company not to execute award
at this stage. The Company has not recognized this award as income in the Statement of Profit and Loss.
b) Paradeep Port Trust (PPT) proposed a revision in scale of rates applicable to the Company for cargo handling in the captive
berth w.e.f. 1 April 1999. The matter was referred to Tariff Authority of Major Ports (TAMP) on mutual consent of the parties
under the direction of Hon’ble High Court of Odisha. During the previous year, TAMP had finalized the rates, but PPT had
not agreed with the order and proceeded with a writ petition before the Hon’ble High Court of Odisha against the said order.
Pending disposal of the case, the Company has not recognized the amount receivable from PPT towards the excess amount
paid over the applicable TAMP order.
a) The Company, has not entered into any transactions with struck off companies, during the year ended 31 March 2026 ( previous
year ended 31 March 2025).
b) 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 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 to or on behalf of the Ultimate Beneficiaries. The Company has not received any fund from any party(s) (Funding
Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities
identified by or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
Note 44(a) : Business combination
The Scheme of Arrangement between Paradeep Phosphates Limited ("the Company” or "the Transferee Company”), Mangalore
Chemicals and Fertilizers Limited ("MCFL” or "the Transferor Company”) and their respective shareholders and creditors has been
approved by the Bangalore bench and Cuttack bench of the National Company Law Tribunal ("the NCLT”) on 24 September 2025 and
26 September 2025 respectively for a consideration of H 170,649.96 discharged by issue of 221,623,331 shares. The appointed date
of the scheme is 1 April 2024 which has been considered as the acquisition date. MCFL is engaged in the business of manufacture
and sale of urea, complex fertilisers and other allied products. As per the acquisition method prescribed in Ind AS 103, purchase
consideration has been allocated on a provisional basis, pending determination of the fair value of the acquired assets and liabilities.
The purchase price allocation is expected to be completed within one year from the date of acquisition.
(ii) Acquisition related costs amounting to H 2,500.00 as stamp duty have been recognized on provisional basis under rates and
taxes in the Standalone Statement of Profit and Loss for the year ended 31 March 2025 within Other expenses.
(iii) The goodwill recognized is attributable to expected synergies from combining operations of the Company and acquired
business and would not be deductible for tax purposes.
(iv) In relation to property, plant and equipment acquired through business combination fair valuation was determined based
on the valuation model which considered market prices for similar items and depreciated replacement cost, as appropriate.
Depreciated replacement cost reflects adjustments for physical deterioration as well as functional and economic obsolescence.
line with the GDP growth rate. The cashflows considered was based on expectation of future outcomes taking into account past
experience, adjusted for anticipated revenue growth.
Weighted Average Cost of Capital % (WACC) = Risk free return ( Market risk premium x Beta for the Company)
The goodwill is tested for impairment annually and based on such testing, no provision towards impairment has been considered
necessary in each of the year presented.
Note 45:
On 30 September 2025, Mangalore Chemicals and Fertilizers Limited (merged with the Company) completed the acquisition of a
part of business of Zuari Agro Chemicals Limited ("ZACL”) including its granulated single super phosphate plant situated at Mahad,
Maharashtra and certain related assets on slump sale basis. The fair value of assets and liabilities acquired have been accounted
for in accordance with Ind AS 103 'Business Combinations' and a resultant goodwill of H2.24 crores has been recognised.
Note 46:
On November 21, 2025, the Government of India notified four Labour Codes - the Code on Wages, 2019, the Industrial Relations Code,
2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 consolidating 29
hitherto existing labour laws. The Ministry of Labour & Employment published draft Rules and FAQs to enable assessment of the
financial impact due to these changes in regulations. The management has assessed and disclosed the incremental impact of
these changes as an "Exceptional item” in these financial statements for the year ended March 31,2026. The management will
continue to track and evaluate the impact of the rules notified by the Central/State Government post 31 March 2026 and consider
the appropriate accounting effect in the relevant periods, as needed.
Note 47:
The Standalone Financial Statements were approved for issue by the Board of directors on 11 May 2026
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