1. Corporate Information
Chambal Fertilisers and Chemicals Limited (the 'Company') is a public company domiciled in India and has been incorporated under the provisions of the Companies Act, 1956 having a CIN: L24124RJ1985PLC003293. Its equity shares are listed on two recognised stock exchanges in India. The registered office of the Company is located at Gadepan, District Kota, Rajasthan, PIN - 325208.
The Company is engaged in production of Urea and has three Urea plants. Apart from manufacture of Urea, the Company also deals in other fertilisers and Agri-inputs.
These financial statements were authorised for issuance by the Board of Directors of the Company at its meeting held on May 07, 2024.
2. (a) Basis of Preparation
These financial statements have been prepared in accordance with Indian Accounting Standards ("Ind AS") as prescribed under Section 133 of the Companies Act, 2013 ("the Act") and other relevant rules and provisions of the Act, as applicable. The financial statements have been prepared on an accrual basis and under the historical cost basis, except for the following material items those have been measured at fair value as required by relevant Ind AS:
- Derivative financial instruments;
- Certain financial assets and liabilities measured at fair value;
- Defined benefit plans and other long-term employee benefits;
- Share-based payment transactions; and
- Investment in debt instruments (i.e. preference shares).
The financial statements of the Company are presented in Indian Rupees (Rs.) and all values are presented in Crore, except when otherwise indicated.
The transactions and balances with values below rounding off norm adopted by the Company have been reflected as 0.00 in the financial statements.
Assets and Liabilities in the balance sheet have been classified as either current or non-current, except the following basis the normal operating cycle of the Company. Operating cycle of the Company is determined as 12 months.
- Deferred tax assets and liabilities are classified as non-current assets and liabilities.
- Leave encashment as the Company does not have an unconditional right to defer the settlement for at least twelve months after the reporting date.
New and amended standards adopted by the Company.
The Ministry of Corporate Affairs had vide its notification dated March 31,2023, notified the Companies (Indian Accounting Standards) Amendment Rules, 2023 which amended certain accounting standards, and are effective April 01,2023.
The Rules predominantly amend:
Disclosure of accounting policies - amendments to Ind AS 1 Definition of accounting estimates - amendments to Ind AS 8
Deferred tax related to assets and liabilities arising from single transaction - amendments to Ind AS 12 The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications.
These amendments did not have any impact on the amounts recognised in the current period and are not expected to significantly affect the future periods.
2. (b) Foreign Currency Translation
(i) Functional and Presentation Currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates ('the functional currency'). The financial statements are presented in Indian Rupees (Rs.), which is Company's functional and presentation currency.
(ii) Initial Recognition
Transactions in foreign currencies are recorded in the functional currency, by applying to the foreign currency amount, the exchange rate between the functional currency and the foreign currency at the date of the transaction.
(iii) Conversion
Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Nonmonetary items that are measured in terms of historical cost denominated in a foreign currency are translated using
the exchange rate at the date of the initial transaction. Non-monetary items, measured at fair value denominated in a foreign currency are translated using the exchange rates that existed when the fair value was determined.
(iv) Exchange Differences
Exchange differences arising on settlement or translation of monetary items are generally recognised in the Statement of Profit and Loss. (also refer note 22).
The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in other comprehensive income (OCI), or profit and loss are also recognised in OCI or profit and loss, respectively).
(v) Translation of Foreign Operations
As of now we do not have any foreign operations, the erstwhile shipping division of the Company was operating under foreign operations. Cumulative currency translation differences for foreign operations were deemed to be zero at the date of transition to Ind AS, viz., April 01, 2015. Gain or loss on subsequent disposal of any foreign operations excludes translation differences that arose before the date of transition but includes only translation differences arising after the date of transition.
2. (c) Treasury Shares
The Company has created CFCL Employees Welfare Trust ('ESOP Trust') for providing share-based payment to its employees. The ESOP Trust is used as a vehicle for distributing shares to employees under the Employees Stock Option Scheme. The ESOP Trust has bought shares of the Company from the market, for giving shares to employees. The ESOP Trust is treated as its extension and shares held by ESOP Trust are treated as treasury shares. Own equity instruments that are reacquired (treasury shares) have been recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue, or cancellation of the Company's own equity instruments. Any difference between the carrying amount and the consideration, if reissued, is recognised in capital reserve. Share options exercised during the reporting period are satisfied with treasury shares. 2. (d) Material Accounting policies
The material accounting policies used in preparation of the standalone financial statements have been included in the relevant notes to the standalone financial statements.
Note 3 : Property, Plant and Equipment and Right -of-Use Assets Accounting policy
Property, Plant and Equipment (PPE) are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, including import duties and non- refundable purchase taxes, borrowing costs, if recognition criteria are met and any directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Subsequent expenditure related to an item of PPE is capitalised only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Such cost includes the cost of replacing part of the plant and equipment. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the Statement of Profit and Loss as incurred.
Items of stores and spares that meet the definition of PPE are capitalized at cost. Otherwise, such items are classified as inventories. Catalysts which are used in commissioning of new plant are capitalized and are amortized based on the estimated useful life as technically assessed. Subsequent issues of catalysts, if any, are treated as inventory.
Gains or losses arising from derecognition of the assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
Depreciation on PPE is calculated using the straight-line method to allocate their cost, net of their residual values, over their useful lives estimated by the management based on technical evaluation, which are equal to the useful life prescribed under Schedule II to the Companies Act, 2013, other than the cases as mentioned in table below from S.No. (i) to (vi), where the useful lives are different from those prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used. A major portion of the plant and equipment of the Company has been considered as continuous process plant.
|