(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.

(xxv) Material accounting policy information

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. For the year ended March 31, 2025, MCA has not notified
any new standards or amendments to the existing standards
applicable to the Company

The fair value of investments in mutual funds is based on the net asset value (NAV) as stated by the issuers of these mutual
fund units in the published NAV statements as at the Balance Sheet date. NAV represents the price at which the issuer will issue
further units of mutual fund and the price at which the issuer will redeem such units from the investors.

The fair value of derivatives is determined using quoted forward exchange rates at the reporting date.

There has been no transfer between level 1, level 2 and level 3 during the year.

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
on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants
(where applicable) on any of its borrowing facilities.

C Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as 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 2024 and 31 March 2023.

(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 INR, 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.

(b) Interest rate risk

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.

Note 37: Unhedged foreign currency exposure

(a) Forward contract outstanding as at 31 March 2025, against import of goods is H 426,117.87 (31 March 2024: H 198,038.68).

Note 39

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.

Note 40

During the year, a sum of H 173.68 (31 March 2024: H 162.01) including capital expenditure of H 53.71 (31 March 2024: H 45.22) was

spent on research and development (excluding depreciation charge).

Note 43

a) The Company, has not entered into any transactions with struck off companies, during the year ended 31 March 2025 ( previous
year ended 31 March 2024).

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): Impairment of goodwill

The Company has allocated the goodwill on business combination to Goa plant. The carrying amount of goodwill as at the end of the

reporting period is H 5,806.94 lakhs.

The recoverable amount has been calculated based on its value in use, estimated as the present value of projected future cash flows.

Following key assumptions were considered while performing impairment testing annually:

The projections cover a period of five years, as the Company believes this to be the most appropriate time period over which to review
and consider annual performances and thereafter fixed terminal value has been considered. Terminal growth rate considered is in
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.

The Company has performed sensitivity analysis around the base assumptions and has concluded that no reasonable change in key
assumptions would result in the recoverable amount of the CGU to be less than the carrying value.

Note 44(b): Operating lease

The Company has entered into an operating lease with its related party Texmaco Rail & Engineering Limited to lease out 50 acres
freehold land for an initial lease term of 30 years with annual rent of H250.00 Lakh per annum with payment of 12 monthly equated
instalment subject to increase in rent of 7.5% in eavery 3 years. The company will receive total of H1,296.88 lakhs towards lease rent
for the next 5 years and H9,188.44 Lakhs for balance lease period.

The Company has recognised lease rent income of H125.00 lakhs for the year ended 31 March 2025.

Note 45

Pursuant to the scheme of merger dated 07 February 2024, subsequently modified on 25 November 2024, the Board considered
and approved a composite scheme of arrangement amongst Mangalore Chemicals & Fertilizers Limited ("Transferor Company”),
the Company and their respective creditors and shareholders ("Scheme”), under Sections 230 to 232 of the Companies Act, 2013
("Companies Act”) and other applicable laws, for, inter alia, the amalgamation of the Transferor Company with and into the Company
by way of a merger. Necessary accounting effect of the scheme would be given in due course upon receipt of requisite approvals.

Note 46: The Standalone Financial Statements were approved for issue by the board of directors on 6 May 2025.

As per our report of even date attached

For B S R & Co. LLP For and on behalf of the Board of Directors of

Chartered Accountants Paradeep Phosphates Limited

Firm's Registration Number: CIN: L241290R1981PLC001020

101248W/W-100022

Jayanta Mukhopadhyay N. Suresh Krishnan S.K. Poddar Sachin Patil Bijoy Kumar Biswal

Partner Managing Director Chairman Company Secretary Chief Financial Officer

Membership No: 055757 DIN: 00021965 DIN: 00008654

Place: Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru Place: Bengaluru

Date:- 6 May 2025 Date:- 6 May 2025 Date:- 6 May 2025 Date:- 6 May 2025 Date:- 6 May 2025