Ballarpur Industries Ltd Auditor Reports

To the members of Ballarpur Industries Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of Ballarpur Industries Limited ("the Company"), which comprise the Standalone Balance Sheet as at March 31, 2026, and the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Cash Flows and the Standalone Statement of Changes in Equity for the year then ended, and a summary of material accounting policies, notes forming part of financial statements and other explanatory information (hereinafter referred to as "the SFS").

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid SFS give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2026, and its loss (including other comprehensive loss), its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

1. The National Stock Exchange of India Limited (NSE) and BSE Ltd have imposed fines on the Company for delays compliance pertaining to various regulations under the Listing Regulations. These fines pertain to the financial period from June 30, 2020, to September 30, 2024. The Company has submitted waiver applications to both stock exchanges and as a result the NSE has waived off SOP fines for non-compliance till March 31, 2023, vide their letter ref: NSE/LIST/SOP/1123 dated October 9, 2024. According to the Listing Regulations, a penalty of 5,000 per day per stock exchange is imposed for nonadoption of financial results. The Company has filed an Interlocutory Application (IA) before the Honble National Company Law Tribunal (NCLT), Mumbai Bench seeking an extension/ exemption for statutory filings which includes the quarterly and yearly financial statements for the period ended March 31, 2025. The aforesaid IA is currently pending with the NCLT for which the Company is hopeful of obtaining relief and accordingly has not made provision for the same in their books of accounts. Consequently, the loss for the Year ended March 31, 2026, has been understated, and the reserves and surplus overstated to that extent. Our opinion was also modified in respect of this matter for the quarter ended March 31, 2025, June 30, 2025, September 30, 2025, and December 2025.

Material Uncertainty Relating to Going Concern

The accompanying SFS have been prepared on the going concern basis considering the fact that the New Management has taken over the controls and operations of the Company and there has been substantial funds infusion by them to settle the dues of the financial and operational creditors as per the resolution plan being implemented by them. They have been infusing additional funds for the Capital and Operating Expenditure activities for reviving the operations of the factory and started the commercial production from December 01, 2025. Based on the aforesaid plans and actions, the Management believes that the Company will generate sufficient cash flows to meet its obligations and, accordingly, the SFS do not include any adjustments that might result from the outcome of this uncertainty.

Our opinion is not modified in respect of this matter.

Emphasis of Matter Paragraph

1. We invite attention to Note 33 of the audited SFS regarding non-current assets amounting to Rs. 44,372.11 lakhs which have been classified as held for sale. As per Ind AS 105 - Non-current Assets Held for Sale and Discontinued Operations, such classification is appropriate when the sale of the asset is highly probable and expected to be completed within one year from the date of classification. Although the assets have remained classified as held for sale for a period exceeding one year, management has represented that active efforts to sell the assets are ongoing and that the sale is considered highly probable. Based on the information made available to us and managements representation, no adjustment has been made to reclassify the asset.

2. We invite attention to Note 31 of the audited SFS, which describes that the Company has sold one of its land parcels classified under "Assets Held for Sale", having a carrying amount of Rs. 4,356.38 lakhs. The sale has been accounted for in accordance with the applicable Indian Accounting Standards.

3. We invite attention to Note 10 of the audited SFS stating that Company has two Dividend Warrant Accounts carrying aggregate balance of Rs. 16.24 lakhs as at March 31, 2026. As per clause 6 of Section 124 of Companies Act, 2013, the entire amount in these accounts is required to be transferred to the Investor Education and Protection Fund (IEPF) since a period of 7 years has lapsed. The management is in the process of obtaining and verifying the investor details and has submitted the requisite documentation for Re-KYC and account reactivation to enable resolution of the matter.

Our opinion is not modified in respect of the above matters.

Information other than the SFS and auditors report thereon

The Companys management and Board of Directors is responsible for the preparation of other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to the Boards Report and Directors Report, but does not include the SFS and our auditors report thereon. The Board report and Directors report is expected to be made available to us after the date of this audit report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to communicate the matter to those charged with governance as required under SA 720 The Auditors responsibilities relating to other information and take necessary actions, as applicable under the relevant laws and regulations.

We have nothing to report in this regard.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the SFS for the year ended March 31, 2026. These matters were addressed in the context of our audit of the SFS as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matters	How Our Audit Addressed It
1. Revenue Recognition
Pursuant to the implementation of the Resolution Plan approved by the Honble National Company Law Tribunal (NCLT) Mumbai, the Company recommenced its manufacturing business operations during the year, and commercial sales were recognised for the first time from December 1, 2025, following the completion of the trial run/testing phase.	• Assessed the Companys revenue recognition policy, including treatment of discounts and rebates, for compliance with Ind AS 115.
• Revenue is recognised when control of goods sold transfers to the customer, net of discounts and rebates, in accordance with IND AS 115.	• Evaluated the basis and managements determination of the cut-off date for commencement of commercial production, including examination of trial run reports, production records, capacity utilisation levels, and correspondence/approvals evidencing readiness for
• Since this is the first year of commercial operations post-revival, significant judgement was involved in determining the cut-off date between the trial run phase (output/sales of which were adjusted against Capital Work-in-Progress) and the commencement of commercial production (from which revenue is recognised in the Statement of Profit and Loss).	• commercial operations, to assess whether revenue recognised from December 01, 2025 onwards was appropriately classified as commercial sales (and not trial run output).
• This has been considered a Key Audit Matter because "revenue is a key performance indicator closely monitored by the Company and external stakeholders, which could create an incentive for higher revenue to be recognised (throughout the period i.e. before the control of underlying goods have been transferred to the customer.	• Evaluated the design and tested the implementation and operating effectiveness of internal controls over revenue recognition and computation of discounts/rebates in the general ledger system.
	• Performed substantive testing, including period-end cut-off testing, on a statistical sample of revenue transactions against sales invoices and shipping/delivery documents.
	• Tested statistical samples of discount and rebate accruals and accounts receivables, and verified discounts and rebates against underlying policies/agreements
	• Given the absence of comparable prior-period data (being the first year of commercial sales post-revival), performed month-on-month trend analysis of revenue, discounts, and rebates from December 2025 to March 2026.
	• Assessed journal entries posted to revenue to identify unusual items.
	• Evaluated adequacy of related disclosures in the financial statements.
	• Circulated balance confirmations to a sample of customers and reviewed discrepancies.
2. Capital Expenditure on Property, Plant & Equipment and Capital Work-in-Progress	• Obtained an understanding of the Companys capital expenditure programme, project monitoring process, and managements basis for determining "ready for intended use" for each major class of asset.
• The Company has incurred substantial capital expenditure, resulting in a significant Capital Work-in-Progress (CWIP) and additions to Property, Plant and Equipment (PPE) during the year. Determination of the capitalization cut-off date i.e., the date on which each asset/project became "ready for its intended use" and was transferred from CWIP to PPE, involves significant management judgement, particularly given the trial-run to commercial-production transition in December 01, 2025.	• Verified the cut-off for capitalization from CWIP to PPE with reference to commercial production commencement certificate/Board approvals, statutory approvals (e.g., factory licence, pollution control consents), and actual commercial dispatch records from December 01, 2025.
	• Tested design and operating effectiveness of controls over capital expenditure and capitalization of assets.
• Judgement is also involved in the allocation of directly attributable costs (including pre-operative expenses and borrowing costs eligible for capitalization under Ind AS 23) to the cost of qualifying assets.	• Tested a sample of additions to PPE and CWIP by examining underlying purchase orders, contractor invoices, completion certificates, and physical existence through site visits.
	• Evaluated managements assessment of useful lives and residual values of major asset categories (plant and machinery, buildings) against Schedule II of the Companies Act, 2013, and assessed consistency with actual usage patterns and physical condition.
	• Verified the computation and allocation of borrowing costs capitalized during the year with reference to the requirements of Ind AS 23, including the capitalization rate applied to general borrowings and the period of capitalization.
• Given the materiality of the amounts involved, the degree of estimation uncertainty, and the specific risk profile of a revived company, this has been considered a Key Audit Matter.	• Verified allocation of indirect/pre-operative expenses (including employee benefit expenses, depreciation, and administrative overheads during the construction/development period) to the cost of qualifying assets.
	• Assessed whether indicators of impairment existed under Ind AS 36, having regard to capacity utilisation trends, industry conditions, and any plant-specific disruptions.
	• Evaluated the adequacy and appropriateness of disclosures made in the financial statements regarding PPE additions, CWIP ageing, capitalization of borrowing costs, and impairment assessment.
3. Valuation and Existence of Inventory	• Obtained an understanding of the Companys inventory valuation policy and assessed its compliance with Ind AS 2.
The Company holds inventory comprising raw materials, work-in-progress, finished goods, and stores and spares, which has built up following the resumption of manufacturing operations and commencement of commercial sales in December 01, 2025.	• Attended physical inventory counts at the Companys manufacturing locations and warehouses, and performed test counts to assess the accuracy of the underlying records, reconciled count results with the books of account and evaluated variances noted, if any.
• Inventory is measured at the lower of cost or net realisable value (NRV) in accordance with Ind AS 2, and represents a material item in the financial statements.	• For inventory items carried over from the pre-CIRP period, performed verification procedures, specifically examined ageing reports and discussed with management the physical condition, usability, and salability of such items, to assess the adequacy of the provision for slow-moving/obsolete/damaged inventory.
• There is a risk that certain inventory of stores & spares which were carried over from the pre-CIRP period may be slow-moving, obsolete, or damaged, requiring judgement in estimating an appropriate provision.	• Tested, on a sample basis, the net realisable value of finished goods by comparing with subsequent selling prices/net realisable value, and evaluated the reasonableness of managements estimates of selling expenses and costs to complete.
• Determination of NRV involves judgement and estimation regarding selling prices, estimated costs of completion, and costs necessary to make the sale.	• Assessed journal entries and adjustments relating to inventory provisions to identify any unusual items.
• Given the materiality of inventory balances, the degree of estimation involved in NRV and obsolescence provisioning, and the specific risks arising from the Companys recent revival, this has been considered a Key Audit Matter.	• Evaluated the adequacy and appropriateness of disclosures made in the financial statements regarding inventory valuation policies, provisions for slow-moving/obsolete inventory.

Responsibility of Management and Those Charge with Governance for the

SFS

In accordance with the Insolvency & Bankruptcy Code, 2016 the Honble National Company Law Tribunal, Mumbai ("NCLT") on January 17 2020, admitted Corporate Insolvency Resolution Process application against the Company and appointed an Interim Resolution Professional. Subsequently, Resolution Professional was appointed by the NCLT on May 27, 2020. The Resolution Plan was approved by the Honble National Company Law Tribunal, Mumbai ("NCLT") on March 31, 2023. During the period from May 27, 2020 till March 31, 2023, the power and responsibilities of the Board of Directors were suspended and vested with the Resolution Professional ("RP") under the provisions of the Code. Post approval and implementation of the Resolution Plan, new management has taken over the powers and responsibilities of the Board of Directors.

The Companys management & Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these SFS that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the IND AS and other accounting principles generally accepted in India, including the Indian Accounting Standards prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the SFS that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the SFS, management and the Board of Directors is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management and the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors responsibility for the Audit of the SFS

Our Objectives are to obtain reasonable assurance about whether the SFS as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these SFS.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the SFS, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to SFS in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the SFS or, if such disclosures are inadequate, to modify our opinion. Our opinion is based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the SFS, including the disclosures, and whether the SFS represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the SFS that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the SFS may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the SFS.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the SFS of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on the other legal and regulatory requirements

1) As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in "Annexure A" a statement on the matters specified in paragraph 3 and 4 of the said Order, to the extent applicable.

2) As required by section 143(3) of the Act, based on our audit we report to the extent applicable that:

a) We have sought & obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit, except for the matters described in the Basis for Qualified Opinion section above.

b) Except for the possible effects of the matters described in the Basis for Qualified Opinion section above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, the Standalone Statement of Cash Flows and Standalone Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.

d) Except for the possible effects of the matters described in the Basis for Qualified Opinion section above, in our opinion the aforesaid SFS comply with the IND AS specified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules, 2014.

e) On the basis of the written representations received from the directors as on March 31, 2026 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2026 from being appointed as director in terms of sec 164(2) of the Act.

f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our remarks in paragraph 2(i)(vi) below on reporting under Rule 11 (g) of the rules.

g) With respect to the adequacy of the internal financial controls with reference to the SFS of the company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".

h) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the managerial remuneration paid by the company to its directors during the year ended March, 31 2026 is in accordance with the provisions of section 197 of the Act.

i) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has no pending litigations as on March 31,2026

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

(iii) The Company has not transferred the amount of Rs. 16.24 lakhs pertain to two dividend warrant accounts to the Investor Education and Protection Fund. The management is in the process of obtaining and verifying the investor details and has submitted the requisite documentation for Re-KYC and account reactivation to enable resolution of the matter.

(iv)

a) The Management has represented that, to the best of its knowledge and belief, as disclosed in the notes to the accounts, to the SFS no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(s), including foreign entities (‘Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly tend 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.

b) The Management has represented, that, to the best of its knowledge and belief, as disclosed in the notes to accounts to the SFS, no funds have been received by the Company from any person(s) or entity(s), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, 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.

c) Based on audit procedures that have been considered reasonable and appropriate in the circumstances, except for the possible effects of the matters described in the Basis of Qualified Opinion section above, nothing has come to our notice that has caused us to believe that the representations under sub clause (I) & (II) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

(v) The Company has not declared any dividend for current financial year ended March 31,2026.

(vi) Based on our examination which included test checks, the Company has used Tally Prime accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. In the absence of any information on existence of Audit trail (edit logs) for any changes made at the application level or database level in the aforesaid systems, we are unable to comment on whether the audit trail feature of the said system/software was enabled and operated throughout the year.

Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with in respect of the accounting software.

For Batliboi & Purohit Chartered Accountants FRN: 101048W

Parag Hangekar Partner

Membership No. 110096 UDIN: 26110096RLKCNC7892

Date: 22^nd May, 2026 Place: Mumbai

Annexure A referred to the Independent Auditors Report to the members of the company on the SFS for the year ended March 31, 2026 we report that:

(Referred to para 1 under ‘Report on Other Legal and Regulatory Requirements section of our report of even date)

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that:

i.

(a) A. According to the information and explanation given to us and on the basis of examination of records of the company, the Company has generally maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment, capital work in progress & Right of Use Assets.

B. According to the information and explanation given to us and on the basis of examination of records of the company, the Company doesnt have Intangible Assets other than Intangible Assets Under Development.

(b) According to the information and explanation given to us, the Property, Plant and Equipment (Including ROU Asset) have been physically verified by the Management during the year in accordance with a phased programme of verification, which is in our opinion is reasonable having regard to the size of the company and the nature of its assets. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanation given to us and on the basis of examination of records of the company, the title deeds of all the immovable properties (other than immoveable properties where the company is the lessee and the lease agreements are duly executed in favour of the company) disclosed in the SFS are held in the name of the company.

(d) According to the information and explanation given to us and on the basis of examination of records of the Company, the Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year.

(e) According to the information and explanation given to us and on the basis of examination of records of the company, no proceedings have been initiated or are pending against the company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made there under during the year.

ii.

(a) According to the information and explanation given to us the Inventory has been physically verified by the management at reasonable intervals during the year.

(b) According to the information and explanation given to us and on the basis of examination of records of the company, the company has not been sanctioned working capital limits in excess of five crore rupees, in aggregate from banks or financial institutions. Accordingly, clause 3(ii)(b) of the order is not applicable.

iii. As informed, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, clause 3 (iii)(a), 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable to the Company.

iv. Based on information and explanation given to us, the Company has not granted any loans or made any investments to parties covered under section 185 and section 186 of the Act. Accordingly, clause 3(iv) of the order is not applicable.

v. According to the information and explanations given to us, the Company has not accepted the deposits from the public within the meaning of the directives issued by Reserve Bank of India, in contravention to provisions of Section 73 to 76 of the act, any other relevant provisions of the act and the relevant rules framed thereunder.

vi. To the best of our knowledge and according to the information and explanations given to us, the company is not required to maintain cost records pursuant to Companies (Cost Records and Audit) Rules 2014, as amended, prescribed by the Central Government under section 148(1) of the Companies Act, 2013.

vii.

(i) According to the information and explanation given to us and on the basis of examination of the records of the company, we have observed that the Company is generally regular in depositing undisputed statutory dues including provident fund, tax deducted at source, Goods & Service Tax and other applicable statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid statutory dues were in arrears as at March 31, 2026, for a period of more than six months from the date they became payable.

(ii) According to the information and explanations given to us and on the basis of examination of the records of the company, there are no statutory dues referred to in sub clause (a) which have not been deposited on account of any dispute as at March 31, 2026.

viii. According to the information and explanation given to us and on the basis of

examination of records of the company, the company has not surrendered

or disclosed previously undisclosed transactions as income during the year

in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

Accordingly, clause 3(viii) of the Order is not applicable to the Company.

ix. In respect of loans and borrowings of the Company:

a) According to the information and explanation given to us and on the basis of examination of records of the Company, the Company has not defaulted in the repayment of loans or other borrowings or in the payment of interest thereon to any lender during the year.

b) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

c) According to the information and explanation given to us and on the basis of examination of records of the Company, the Company has availed loan from financial institution. The amount of loan was applied for the purpose for which loan was obtained.

d) According to the information and explanation given to us and on the basis of examination of records of the company, we report that, prima facie, no funds raised on short term basis have been used by the company for long-term purposes.

e) According to the information and explanation given to us and based on our audit procedures, the company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures during the year. The provisions of clause 3(ix) (e) is not applicable.

f) According to the information and explanation given to us and on the basis of examination of records of the company, the Company has not raised loans during the year on the pledge of securities held in its subsidiaries or joint ventures.

x.

a) According to the information and explanation given to us and on the basis of examination of records of the company, the Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) during the year. Accordingly, clause 3(x)(a) of the Order is not applicable to the Company.

b) According to the information and explanation given to us and on the basis of examination of records of the company, the Company has made private placement of Non-Convertible Non-Cumulative Redeemable Preference Shares during the year. The company has complied with the provisions of section 42 and section 62 of the Companies Act,2013, in respect of these allotments. Further, the funds raised have been used for the purposes for which they were raised.

xi.

a) During the course of our examination of the books & records of the company, carried out in accordance with generally accepted auditing practices in India and according to the information and explanation given to us, we have neither come across any instances of material fraud by the Company or on the Company by its officers or employees noticed or reported during the year nor have we been informed of any such case by the Management.

b) To the best of our knowledge, no report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT- 4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the (Audit and Auditors) Rules, 2014 with the Central Government upto the date of this report.

c) As represented to us by the management, there are no whistle blower complaints received by the company during the year.

xii. The Company is not a Nidhi Company. Accordingly, clause 3(xii)(a) to 3(xii)(c) of the Order is not applicable to the Company.

xiii. As per the information and explanation given to us and on the basis of our examination of the records of the Company, all the transactions with related parties are in compliance with section 177 and 188 of Companies Act 2013, wherever applicable, and all the details have been disclosed in SFS as required by the applicable Indian Accounting Standards.

xiv.

a) In our opinion and according to the information and explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business.

b) We have considered the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures.

xv. According to the information and explanation given to us and on the basis of our examination of the records of the company, the Company has not entered into any non-cash transactions, within the meaning of Section 192 of the Act, with directors or persons connected with them.

xvi. In our opinion and according to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clause 3 (xvi)(a) to 3(xvi)(d) of the Order is not applicable to the Company.

xvii. According to the information and explanation given to us and on the basis of our examination of the records of the company, the Company has incurred a cash loss of Rs. 12,695 98 Lakhs during the financial year covered by our audit and Rs.5,638.04 Lakhs in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors of the company during the year. Accordingly, clause 3(xviii) of the Order is not applicable to the Company.

xix. According to the information and explanation given to us including the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the SFS and our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that material uncertainty exists as on the date of the audit report indicating that the company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. The Provisions of section 135 towards corporate social responsibility are not applicable on the company in the FY 2025-26 accordingly; the provisions of clause 3(xx) of the order are not applicable.

For Batliboi & Purohit Chartered Accountants FRN: 101048W

Parag Hangekar Partner

Membership No. 110096 UDIN: 26110096RLKCNC7892

Date: 22^nd May, 2026 Place: Mumbai

Annexure - B to the Independent Auditors Report on the SFS of Ballarpur Industries Limited for the year ended March 31. 2026

Report on the Internal Financial Controls with reference to the aforesaid SFS under Clause (i) of Sub-section 3 of Section 143 of the Act

(Referred to in paragraph 2(i1 under ‘Report on Other Legal and Regulatory Requirements section of our report of even date)

We have audited the internal financial controls over financial reporting of Ballarpur Industries Limited ("the Company") as at March 31, 2026 in conjunction with our audit of the SFS of the Company for the year ended on that date.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial control over financial reporting and such internal financial controls with reference to SFS were operating effectively as at March 31, 2026 based on the criteria for internal financial control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note.

Managements and Board of Directors Responsibility for Internal Financial Controls

The Companys Management & Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ("the Guidance Note") issued by the Institute of Chartered Accountants of India ("the ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 ("the Act").

Auditors responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit in accordance with the Guidance Note and the Standards on Auditing prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements. Those Standards and the Guidance note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to SFS included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the SFS, whether due to fraud or error.

We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our opinion on the Companys internal financial controls with reference to SFS.

Meaning of internal financial controls over financial reporting

A companys internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls over financial reporting includes those policies and procedures that:

1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For Batliboi & Purohit Chartered Accountants FRN: 101048W

Parag Hangekar Partner

Membership No. 110096 UDIN: 26110096RLKCNC7892

Date: 22^nd May, 2026 Place: Mumbai