xx) Provisions, Contingent Liabilities and Contingent Assets

Provision is recognised in the accounts when there is a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Show Cause notices issued by various Government Authorities are not considered as Obligation. When the demand notices are raised against such show cause notices and are disputed by the company, these are classified as disputed obligations.

The treatment in respect of disputed obligations, in each case, is as under:

i) a provision is recognized in respect of present obligations where the outflow of resources is probable

ii) all other cases are disclosed as contingent liabilities unless the Possibility of outflow of resources is remote.

Contingent Assets are not recognized in the financial statements, however where the inflow of economic benefits are probable as at the end of the reporting period, a brief description of the nature of the contingent assets along with its estimated financial effect is disclosed in the financial statements.

xxi) Non-current assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities are classified as held for sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use. Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any resultant loss on a disposal group is allocated first to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, and biological assets, which continue to be measured in accordance with the Group's other accounting policies. Losses on initial classification as held for sale and subsequent gains and losses on re-measurement are recognized in profit or loss. Once classified as held-for-sale, intangible assets, property, plant and equipment and investment properties are no longer amortized or depreciated.

xxii) Financial Instruments Financial Assets Classification

The Company classifies its financial assets in the following measurement categories, those to be measured subsequently at fair value (either through other comprehensive income, or through profit and loss), and those measured at a mortised cost.

The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses arising from fair valuation will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.

Measurement Initial recognition

The Company measures a financial asset at its fair value and, in the case of a financial asset not at fair value through profit or loss, at fair value including transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are recognised in profit and loss.

Subsequent Measurement

Subsequent measurement of financial assets depends on the Company's business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its financial assets:

Amortized Cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost.

Fair value through other comprehensive income (FVOCI)

Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other income. Fair value through Profit and Loss(FVTPL)

Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit and loss.

Investments in Joint Venture

Investment in Joint venture is recognised at fair value through FVOCI Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Financial Liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition as loans and borrowings, payables, derivatives and financial liabilities at fair value through profit or loss. The Company's financial liability consists of trade and other payables, loans and borrowings, bank overdrafts, financial guarantee contracts and derivative financial instruments.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs, if any.

Subsequent measurement

The subsequent measurement of financial liabilities of the Company depending on their classification is described below:

De-recognition

A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires.

Offsetting of financial instruments

Financial Assets and Financial liabilities are offset and the net amount is reported in the balance sheet, if there is a currently enforceable legal right to set off the recognized amounts and there is an intention to settle on net basis, to realize the assets and settle the liabilities simultaneously.

Loans and borrowings including bank overdrafts

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

This category generally applies to interest-bearing loans and borrowings.

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder of the guarantee for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognized less cumulative amortization.

xxiii) Exemption as per Ind AS 101

Company has elected to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition measured as per Indian GAAP and use that as its deemed cost as at date of transition to Ind AS. The same is applicable even for Investment property and intangible assets.

Company has also reviewed the necessary adjustments required to be done in accordance with paragraph D21 of the standard (i.e. adjustments arising on account of decommissioning or restoration liabilities) and has accordingly considered the impact of the same wherever applicable.

The Company has designated unquoted equity instruments held at 1st April 2016 as fair value through OCI.

xxiv) Statement of Cashflow

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

xxv) Earnings per share

Basic earnings per share is computed using the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of equity and dilutive equivalent shares outstanding during the period.

xxvi) Dividend

The Company recognizes a liability to pay dividend to shareholders when the distribution is authorized and the same is no longer at the discretion of the Company.Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors. A corresponding amount is recognized directly in equity.

xxvii) Exceptional Items

Exceptional items of income and expenses within profit or loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such items are disclosed separately as exceptional items.

Notes

1. Current Assets include inventories and trade receivables pledged as Primary Security for Fund/ Non Fund based Working Capital arrangement with Banks amounting to ' 118500.00 Lakh. The utilisation of this arrangement as on reporting date is.' 7834.86 lakhs ( Previous year ' 5113.56 Lakh)

2. Inventory of finished goods, raw material, stores and spares and work in progress are valued as per the Accounting Policy of the Company

3. Finished Goods includes 21.09 lakhs MT of saleable gypsum (bulk) (Previous Year 21.36 lakh MT) amounting to '12343.50 lakh (Previous year ' 11973.30 lakh). For assessing the closing stock of gypsum as on 31.03.2024, the saleable quantity has been assessed on the basis of physical verification conducted at the end of the financial year.

4. Stores & Spares in transit includes Stores & Spares at site pending inspection ' 281.93 lakh (Previous year ' 214.61 lakh )

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 lakhs. Company had provided for the entire amount of ' 218.50 lakhs. The Company has since realised an aggregate amount of ' 63.85 lakhs 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 ' 218.50 lakhs pending completion of investigation. Company has taken steps for recovery from transporters, dealers and warehouse (Refer Note. 13.3, 24.1,25.2, 27.1 )

6. 90% provision has been made for non-moving stock of stores & spares, ageing five years and more, as on 31.03.2024.

1. The bills discounted are secured against the corresponding trade receivables

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 ' 28273 lakhs 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 '183672.00 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 '177048.75 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 ' 177048.75 lakhs (previous year- ' 177048.75 lakhs) has been classified under Current Liabilities-Current maturities of Long term Debt. The outstanding principal and interest as on 31.03.2023 has been confirmed with the balance of Government of India.

2. Research and Development Expenditure includes expenditure towards salary ' 49.38 lakh (Previous year '35.39 lakh), chemicals & stores ' 3.43 lakh (Previous year ' 0.19 lakh) and depreciation ' 0.09 lakh (Previous year '0.09 lakh).

3. Miscellaneous Expenses includes Directors travel amounting to ' 20.70 lakh (Previous year ' 13.47 lakh)

4. Differences noticed ( Excess(-)/Shortage) on perpetual verification of stores and spares compared to book records have been adjusted in the books of accounts, which for Current year is ' 8.04 lakh (Previous year ' 7.68 lakh)

5. Provision for doubtful receivables & advances includes provision towards VAT reimbursement receivable on the RLNG procurement up to 31.03.2022 .Current year Nil ( Previous Year ' 18301.45 lakh).From the financial year 2022-23, the VAT incurred on RLNG procurement is being accounted as 'consumption of Raw material / fuel' in the Statement of Profit & loss (Refer Note 13.1).

6. Expenses towards Corporate Social Responsibility

The Company is liable to spend during the financial year 2023-24, ' 873.22 lakhs (Previous Year- ' 471.39 lakhs), on Corporate social responsibility, being 2% of the average net profit for the immediately preceding three financial years, as per section 198 of the Companies Act 2013. Company has spent an amount of ' 1662.46 lakhs (Previous year-' 35.31 lakhs)towards Corporate Social Responsibility projects pertaining to the financial year. The excess amount of ' 789.24 lakhs has been classified under 'Current Assets'.

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40. Fair Value Hierarchy

The management has assessed that 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.

Investment in Unquoted Equity Shares

The fair values of the unquoted equity shares have been estimated using NAV model.

Derivatives not designated as hedges

Foreign exchange forward contracts if entered in to, are valued using valuation techniques, which employs the use of market observable inputs (i.e. based on inputs/statement of position received from banks).

Investment Properties

The value of the investment properties are based on the information available in Government of Kerala fair value notification, market conditions etc.

B. Leases as lessee

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 IndAS 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 Willington Island and for Guest House facility at New Delhi

a) The following is the detailed breakup of Right-of-use assets (by class of underlying assets) disclosed in Note No. 2C

Credit risk is the risk of financial loss to the Company if a customer or counter party 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 ' 15813.73 lakh (Previous year ' 47887.48 lakh) of which ' 6750.04 lakh (previous year ' 40259.93 lakh) 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 subsidy receivables from Government of India, wherein allowance for loss is made after analysis of possibility of realisation.

The following table provides information about the exposure to credit risk and the provisions made

(ii) Cash and Cash equivalents and Other Bank Balances

The Company held cash and cash equivalents and other bank balances of ' 267932.29 lakhs at 31st March 2024 (31st March 2023: ' 238784.40 lakhs). 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 following are the remaining contractual maturities of significant financial liabilities at the reporting date.

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 prices, such as equity price risk and commodity risk. .

(i) Currency Risk

The Company's activities are exposed primarily to the financial risk of changes in foreign currency rates. To mitigate the foreign currency risk, the company is closely monitoring the market trend to take appropriate action

(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 Bank fixed deposits 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. The rate of interest on Intercorporate loan from Rashtriya Chemicals and Fertilisers Ltd is subject to change, based on the lowest cost of their working capital finance. The Intercorporate loan outstanding as on 31.03.2024 is '510 lakh and the applicable interest as on the reporting date is 7.82%.

(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 in to agreement with suppliers of one of the major raw materials, Regassified Liquified Natural Gas 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.

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 in to consideration the future capex requirements, the Company considers the payment of dividend at the appropriate rates.

43. Disclosure under Ind AS 24 on related party transactions are given below

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:

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 '5100 lakhs including 50% share of the Company '2550 lakhs 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 ' 2550 lakhs has been classified as Intercorporate loan. The principal amount outstanding as on 31.03.2024 is ' 510 lakh (Previous year ' 1020 lakh). Interest rate applicable on the loan for the year 2023-24 is 7.82 % p.a. (Previous year- 7.38% p.a).

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 ' 2925 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 ' 2925 lakh, FRBL had issued equity shares amounting to ' 1518 lakh towards gypsum supplied and other services provided by FACT during the period from 20102013. Further,FRBL during the year 2022-23 has allotted shares to FACT amounting to ' 235.70 lakhs. Balance Equity Shares against which gypsum and other services provided by FACT during 2014-2017, 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 lakh is still pending as on 31 March 2024 to complete the above additional investment.

National Company Law Tribunal (NCLT), Kochi Bench, vide its order dated 1 1.01.2024 in CP(IBC)/39/KOB/2023 filed by a financial creditor of FACT-RCF Building Products Ltd (FRBL) appointed an Interim Resolution Professional (IRP) for initiating Corporate Insolvency Resolution Proceedings against FRBL as per Insolvency & Bankruptcy Code, 2016. Accordingly, the Board of Directors of FRBL was superseded.The Resolution Professional commenced the proceedings and is in the process of publishing advertisement for Expression of interest from the prospective applicants for submission of resolution plan for FRBL.

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 ' 1 Crore 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 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.

2) Key Management Personnel

1. Shri S C Mudgerikar, Chairman & Managing Director ( From 23.02.2024)

2. Shri Kishor Rungta, Chairman and Managing Director (from 02.02.2019 to 01.02.2024)

3. Shri.Anupam Misra, Director (Marketing) (from 14.07.2020)

4. Shri.S.Sakthimani, Director (Finance) & Chief Financial Officer (From 08.03.2021)

5. Dr.Jayachandran.K, Director (Technical) (From 03.03.2023)

6. Smt.Susan Abraham, Company Secretary from 15.07.2022

46. EMPLOYEE BENEFITS

General Description of Defined Contribution Plan

ontributory Superannuation Scheme-The scheme is aimed to provide superannuation benefits to the employees. Every year company contributes '100 to the fund.

General Description of Defined Benefit Plan A Leave Encashment and Gratuity

The company operates gratuity plan where in 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 B 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 '1888.86 lakh ( Previous Year '1908.42 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, 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.

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 entiles the following risks that affect the liabilities and cash flows

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.

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.

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.

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 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.

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.

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 assumption than 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 assumption than 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 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 intervaluation period.

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.

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.

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

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 a increase in liability without corresponding increase in the asset). .Thus the Company is exposed to movement in interest rate (in particular the significant fall in interest Rates which should result in a increase in liability without corresponding increase in the asset).

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) Other disclosures GRATUITY-EMPLOYEES :

The company has started funding the liability through the medium of an insurance company and regular assessment is made by the Company of the increase in liability and contributions are being made to maintain the fund and is subject to the credit risk of the insurance company and asset liability mismatch risk of the investments .

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.

48.1 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 ? 178489.75 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 ?17308.04 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 ?2798.29 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 31.03.2024, amounting to ? 27734.43 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.

48.2. 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, ? 9777.70 lakhs (previous year- ? 4895.52 lakhs) being additional interest from financial year 2022-23 has been shown as contingent liability (refer Note 22.2)

48.3. ? 392.82 lakhs (Previous year- ? 392.82 lakhs) is claimed by a transport contractor in an arbitration petition filed by them in response to ? 298.02 lakhs withheld from the contractor bills and initiation to invoke bank guarantee of ?143.22 lakhs towards compensation for non-delivery of goods. Company filed a counter claim of ? 224.03 lakhs (including interest). ? 94.80 lakhs is included in the contingent liability towards the claim.

48.4 Contingent Liability as on 31.03.2024, includes ? 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. In response to the Execution petition filed by the party, the Hon'ble High Court issued an interim injunction attaching an amount of ? 175.64 lakhs in the Company's bank account. Challenging the same, we have filed objection petition which has been admitted by the Hon Court and interim stay has been granted vide order dt . 6.12.2023. vide order dt 12.7.2023 Hon'ble court has dismissed the EP as not pressed. In view of the dismissal of EP the OP has also been closed vide order dt 20.10.2023.

48.5 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

1. Contingent assets in respect of 'Suppliers and Contractors' includes ' 6468.65 lakhs (Previous year '5385.59 lakhs) for the year 2023-24 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 ' 2461.45 lakhs receivable from oil companies in respect of Re-gassified Liquified Natural Gas during the year 2019-20. This disputed matter is presently pending before Administrative Mechanism for Resolution of CPSEs Disputes ( AMRCD)

51. 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 ' 1012.21 lakh (Previous year ' 730.16 lakh ), and capital expenditure ' 850.09 lakh (Previous year ' 2267.82 lakh ).In the case of work being carried out by FACT Engineering and Design Organisation (FEDO), for National Institute of Technology ( NIT), Nagaland, 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 . As per technical evaluation ,70.70 %(previous year 52.46%) of work related to consultancy services by FEDO to NIT, has been completed as on 31.3.2024 and pro-rata credit of ' 986.40 lakh ( previous year '888.27 lakh) has been taken, after considering '360.40 lakh towards work in progress ( previous year '276.44 lakh). The value of construction work billed and certified during the year 2023-24 is taken as ' 541.40 lakh, (previous year Nil) and equivalent amount has been considered for direct charges on contract.

55. The standalone financial statements were authorized for issue in accordance with a resolution passed by the Board of Directors on 16.05.2024

56. 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.

57. The figures of the previous year have been re-arranged and regrouped wherever necessary and / or practicable to make them comparable with those of the current year.

58. Events occurring after the Balance sheet date

Board of Directors have recommended a final dividend of ? 0.97 per equity share of ? 10/- each (previous year ? 1.00 per equity share ) i.e. 9.70 % on paid up equity share capital of the Company for the financial year 2023-24 ( Previous year 10% on paid up equity share capital) which is subject to approval of Shareholders of the Company.

As per our Report of even date attached For G. Venugopal Kamath & Co

Chartered Accountants For and on behalf of the Board of Directors

Firm Registration No. 004674S

Sd/- Sd/- Sd/-

Vivek N Shenoy S Sakthimani S.C. Mudgerikar

Partner Director (Finance) & Chief Financial Officer Chairman & Managing Director

Membership No.217021 DIN 07482308 DIN 03498837

Sd/-

Place: Kochi Susan Abraham

Date: 16.05.2024 Company Secretary