Hindustan Organic Chemicals Ltd Auditor Reports

To the Members of

M/s. Hindustan Organic Chemicals Limited

Revised Report on the Audit of the Standalone Financial Statements

This is the revised Audit Report on the standalone nancial statements of HINDUSTAN ORGANIC CHEMICALS LIMITED (CIN: L99999KL1960GOI082753) ("the Company") which comprises of the Balance Sheet as at 31st March, 2026, the Statement of Pro t and Loss (including Other Comprehensive Income) for the year ended 31st March 2026, the Cash Flow Statement, the Statement of Changes in Equity for the year ended and notes to the Standalone Financial Statements including material accounting policies and other explanatory information. Our Independent Auditors Report dated 15 May 2026 on the Standalone Financial Statements of the Company for the year ended 31st March 2026 has been revised solely to correct certain typographical errors and omission to include a point in the additional disclosure as per the directions of Comptroller and Auditor General of India crept in the aforesaid audit report. Except for the aforesaid corrections there is no change in the audited Standalone Financial Statements, the audit procedures performed by us, or the audit opinion expressed in our report dated 15 May 2026.

Opinion

1. We have audited the accompanying Standalone Financial Statements of HINDUSTAN ORGANIC CHEMICALS LIMITED (CIN: L99999KL1960GOI082753) ("the Company") which comprises of the Balance Sheet as at 31st March, 2026, the Statement of Pro t and Loss (including Other Comprehensive Income) for the year ended 31st March 2026, the Cash Flow Statement, the Statement of Changes in Equity for the year ended and notes to the Standalone Financial Statements including material accounting policies and other explanatory information (hereinafter referred to as "the Standalone Financial Statements").

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements 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 (Ind AS) speci ed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2026, and its loss (including other comprehensive income), its cash ows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs) speci ed under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Companies Act,

2013 and the Rules thereunder, and we have ful lled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is suf cient and appropriate to provide a basis for our opinion.

Emphasis of Matters.

4. Attention is drawn to note no. 32(b) of the accompanying standalone nancial statements. The company has advanced loan amounting to Rs. 453.01 lakhs to its subsidiary at an interest rate ranging from 10.25 to 14.50 %. As the subsidiary has failed to pay interest, the company has stopped charging interest on the loan from the year 2023-24. During the year, the subsidiary company repaid Rs. 1,075.05 lakhs towards interest and Rs. 286.98 lakhs towards loan repayment.

5. Attention is drawn to note no. 41 of the accompanying standalone nancial statements regarding composition of the Board of Directors which is not in compliance with the provisions of the Companies Act 2013 and SEBI (LODR) Regulations, 2015.

6. Attention is drawn to note no. 42 of the accompanying standalone nancial statements detailing the status of implementation to the Government approved restructuring plan.

Our opinion is not modi ed in respect of the above matters.

Key Audit Matters

7. Key audit matters are those matters that, in our professional judgement, were of most signi cance in our audit of the Standalone Financial Statements for the nancial year ended 31st March, 2026. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

The Key Audit Matter	How the matter was addressed in our audit
Valuation of Inventory	Our audit procedures included and were not limited to the following: ·
See Note 6 to the Standalone Financial Statements
The veri cation and valuation of semi- nished, good for captive consumption and nished goods is a meticulous manual undertaking involving various reports, parameters, estimations and judgements.·	Obtaining an understanding of the system controls and designs for production and inventory monitoring.
	Reviewing data from software used by the company such as Distributed Control System for plant operations, independent PLC for the safety of the Plant, Tank Level Monitoring System "LMS" for the detailed statistics about stock of raw materials, nished products, and intermediate products along with various alarms, warnings and history of the tank operations etc. Testing the design, implementation and operating effectiveness of key internal nancial controls, including controls over valuation of inventory.
Indirect production costs are estimated and integrated into inventory costs, involving judgment and estimation.
The inventory levels of major raw materials, nished goods, semi- nished goods are monitored through meters installed in the tanks.
The meter readings are recorded on daily basis.
Inventories are valued at lower of cost and net realizable value except by- products.	Testing and cross verifying on sample basis the accuracy of inventory levels in inventory valuation with BOMs issued and meter reading generated from inventory tanks by the respective departments.
In addition, management exercises judgment in identifying and evaluating obsolete inventories and slow-moving stock items, while also estimating the appropriateness of necessary provisions.
	Testing on a sample basis the accuracy of cost for inventory by verifying the actual purchase cost. ·
	Testing the net realizable value by comparing actual cost with most recent selling price.
	Being a party to the physical veri cation of monitoring meters installed for raw materials, nished products and semi- nished products at the end of the nancial year.
	Based on the above procedures performed, we did not identify any material exceptions in the measurement of inventory.
Evaluation of Provisions, disclosures a n d a n a l y s i s w i t h r e s p e c t Contingencies, including litigations and tax	Our audit procedures included and were not limited to the following:
Refer Note 2.2(d) and note 35 to the nancial statements.	Assessing the managements processes and tested the internal controls implemented for the identi cation, recognition and measurement of legal and tax positions and its assessment of the potential impact on the Company.
The Company has various disputes/litigations related to shut- down of its operations, school and land held by the company at Rasayani.
	We received a statement of all ongoing disputes/litigations along with the necessary documentation and from the companys in-house legal team who is an advocate.
The Company also has various disputes/litigations related to direct and indirect taxes in various states and at various levels of appellate authorities.
	We evaluated managements assessments including advice/ opinion obtained from external consultants/legal advisors with respect to prospects of success of appeals and tax proceedings.
The evaluation of the Companys position and determination of possible outcome of these disputes and provisions and related disclosures, if any, required to be made in the books involves signi cant management judgment.
	We involved our internal experts to challenge the managements position on the select litigations and to consider legal precedence and other rulings in evaluating managements position on these tax positions.

Information Other than the Standalone Financial Statements and

Auditors Report thereon:

8. The Companys management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companys annual report, but does not include the Standalone Financial Statements and our auditors report thereon. The said other information is expected to be made available to us after the date of this audit report.

Our opinion on the Standalone 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 Standalone Financial Statements, our responsibility is to read the other information when made available to us and, in doing so, consider whether the other information is materially inconsistent with the Standalone 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 report that fact.

Responsibility of Management and Those Charged with Governance

for Standalone Financial Statements:

9. The Companys Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the nancial position, nancial performance including other comprehensive income, cash ows and change in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards speci ed under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015. 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 nancial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, management 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 either intends 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 nancial reporting process.

Auditors Responsibility for the Audit of Standalone Financial Statements:

10. Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements 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 in uence the economic decisions of users taken on the basis of these Standalone Financial Statements.

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

l Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is suf cient 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.

l Obtain an understanding of internal 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 nancial controls system in place and the operating effectiveness of such controls.

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

l Conclude on the appropriateness of managements use of the going concern basis of accounting in preparation of Standalone Financial Statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signi cant 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 Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are 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.

l Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

11. Materiality is the magnitude of misstatements in the Standalone Financial Statements, that individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be in uenced. We consider quantitative materiality and qualitative factors in;

(a) Planning the scope of our audit work and in evaluating the results

of our work and;

(b) To evaluate the effect of any identi ed misstatements in the

Standalone Financial Statements.

12. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and signi cant audit ndings, including any signi cant de ciencies in internal control that we identify during our audit.

13. 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.

14. From the matters communicated with those charged with governance, we determine those matters that were of most signi cance in the audit of the Standalone Financial Statements 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 bene ts of such communication.

Report on other legal and regulatory requirements

15. As required by the Companies (Auditors Report) Order, 2020 ("The Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give a statement on the matters speci ed in paragraphs 3 and 4 of the Order to the extent applicable attached as "Annexure 1".

16. As required by the directions and sub directions issued by the of ce of the Comptroller & Auditor General of India under section 143 (5) of the Act, we give in the "Annexure 2" a statement on the matters referred in those directions.

17. As required by Section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

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

d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards speci ed under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015.

e) As per Noti cation No. G.S.R. 463(E) dated June 5, 2015, the Government Companies are exempted from provisions of section 164(2) of the Act. Accordingly, we are not required to report whether any directors are disquali ed in terms of provisions contained in the said section

f) The report on internal nancial control as required under clause (i) of sub section 3 of section 143 of the Act is attached as Annexure 3;

g) Being a Government company, the provisions of section 197 of the Act with respect to the matters to be included in the Auditors Report is not applicable vide noti cation no. G.S.R. 463(E) dated June 5, 2015 and as amended by noti cation no. G.S.R. 582(E) dated June 13, 2017 issued by the Ministry of Corporate Affairs.

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

(i) The company has disclosed the impact of pending litigations on

its nancial position in its nancial statement.

(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 made provisions, as required under any law or Indian accounting standard, for material foreseeable losses, if any, on the long-term contracts including derivative contracts;

(iv) There were no amounts which were required to be transferred to Investor Education and Protection Fund by the company.

(v)

l The management has represented that, to the best of its knowledge and belief, 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 persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall

directly or indirectly lend or invest in other persons or entities identi ed in any manner whatsoever by or on behalf of the company ("Ultimate Bene ciaries") or

l provide any guarantee, security or the like on behalf of the

Ultimate Bene ciaries;

(b) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the company shall

l directly or indirectly, lend or invest in other persons or entities identi ed in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Bene ciaries") or

l provide any guarantee, security or the like on behalf of the Ultimate Bene ciaries;

(c) Based on such audit procedures considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (v)(a) and (v)(b) contain any material misstatement.

(vi) The company has not declared or paid dividend during the year 2025-26. Hence, section 123 of companies Act, 2013 is not applicable for the purpose.

(vii) Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the nancial year ended 31st March, 2026 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 except that audit trail was not enabled at the database level to log direct data changes, if any. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with.

For Balan & Co.

Chartered Accountants

FRN 340S

M. Venugopal

Partner

Membership No. 244882

UDIN: 26244882GDUBCK6852

Place: Ernakulam

Date: 08.07.2026

ANNEXURE 1 TO THE INDEPENDENT AUDITORS REPORT

Referred to in Paragraph 15 under Report on Other Legal and Regulatory Requirements section of our report to the Members of HINDUSTAN ORGANIC CHEMICALS LIMITED:

i. In respect of the Companys Property Plant and Equipment and

Intangible Assets:

(a) (A) The Company maintains proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment;

(B) The Company has maintained proper records showing full particulars of intangible assets;

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has a regular programme of physical veri cation of its property, plant and equipment by which all property, plant and equipment are veri ed in a phased manner over a period of three years. In accordance with this programme, certain property, plant and equipment were veri ed during the year. In our opinion, this periodicity of physical veri cation is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such veri cation.

(c) We were not provided with the title deeds of immovable properties held by the Company at Rasayani- Maharashtra (closed unit) for our veri cation.

According to the information and explanation provided to us and based on the valuation report of the immovable property held by the company in Maharashtra from an independent valuer, we are informed that, 22.717 acres of land owned by the Company at Rasayani, Maharashtra, has been encroached. Further, 10.576 acres of land at Rasayani, Maharashtra and 0.91 acres of land at Panvel, Maharashtra, has been acquired for public road and hence could not be considered as the assets owned by the Company. Further, 32.547 acres of land at Rasayani, Maharashtra, is under the disputed possession of various other entities. The Company has not considered the above extent of lands while considering the carrying value of land disclosed in the Standalone Financial statements.

According to the information and explanation provided to us, the company has title to 352.45 Ares of land. For 109.75 Ares out of the aforementioned land, company is in possession of land award letter under form 9 of land acquisition act 1894, further the company has also obtained possession certi cate certi ed by the Village Of cer of Puthencruz for the land and has been paying taxes in name of the company.

2.27 Ares of land situated in the township was transferred to health center department for operating a health center. During the year the company had valued 258.85 Ares of land that was in actual possession of the company situated in the township.

A digital survey was conducted by Kerala State Revenue Department that identi ed excess area of 6.44 Ares of land, The Revenue Authorities have further informed that the excess land will be regularized in favor of the Company. The relevant documents are

yet to be received, and the matter is currently under process.

2.046 acres of land are outside the boundary walls of Ernakulam factory land and were not included in the re-survey and land tax is paid for land inside the boundary wall though the title deeds are not in the name of the company. Details are as follows:

Description of property	Extend of land (in acres)	Gross carrying value	Held in name of	Whether promoter, director or their relative or employee	Period held -indicate range, where appropriate
Freehold Land	2.046	Not Available	Unascertained	No	Not ascertainable

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has revalued its land during the year by a registered valuer. However, there is no change in the value of the property as per the valuation report.

(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no proceedings initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

ii. (a) The inventory, except inward goods-in-transit, has been physically veri ed by the internal auditors and management during the year. For goods-in-transit, subsequent evidence of receipts has been linked with inventory records. In our opinion, the frequency of such veri cation is reasonable, and the procedures and coverage followed by management were appropriate. No discrepancies were noticed on veri cation between the physical stocks and the book records that were more than 10% in the aggregate of each class of inventory.

(b) According to the information and explanations provided to us and on the basis of our examination of the records of the Company, the Company has been sanctioned working capital limits in excess of Rs. 5 crores, in aggregate, during the year, from banks in the form of cash credit facilities secured against current assets of the company. According to the terms of the working capital limit, the Company is required to submit quarterly statements or returns to the bank regarding this facility which has not submitted as on the date of this report.

iii. (a) According to the information and explanations provided to us and on the basis of our examination of the records of the Company, during the year the Company has not provided loans, advances in the nature of loans, stood guarantee or provided security to companies, rms, Limited Liability Partnerships or any other parties, Accordingly, requirement to the report on clause 3(iii)(a) of the order is not applicable to the company.

(b) According to the information and explanations provided to us and based on the audit procedures carried on by us:

1. The Company has provided loans to its subsidiary, secured against the immovable properties of the said subsidiary, during the earlier years which is "overdue" for more than 3 years, and the balance outstanding as at the balance sheet date is Rs 2,910.10 lakhs, out of which Rs. 2,744.07 lakhs were non-interest-bearing. During the year, the subsidiary company repaid Rs. 1,075.05 lakhs towards interest and Rs. 286.98 lakhs towards loan repayment.

2. The Rasayani unit of the company provided an unsecured advance of Rs. 65 lakhs to M/s. Smith Stanitstreet Pharmaceuticals Ltd during the nancial year 1991-92. However, this advance has remained outstanding for more than three years, and company had charged interest amounts to Rs 106.08 lakhs up to 2012-13, but we have not provided with the documents for verifying whether terms and conditions are prejudicial for companys interest. The Company has made a 100% provision for doubtful debts for the above- mentioned advance and interest amounts to Rs. 171.08 lakhs.

3. Attention is drawn to note no.32. The Company has invested Rs. 1,106 lakhs in its subsidiary during previous years. During the current nancial year pursuant to the delisting of shares of the subsidiary, the company being the acquirer has acquired 22,75,084 number of shares at Rs. 17.76 amounting to Rs 404.05 lakhs in the subsidiary which are currently being held by the Broker/Registrar and Transfer Agent on behalf of the company, however the business of the subsidiary has been discontinued completely.

According to the information and explanations given to us, in our opinion, the repayments or returns from the above loans, advances and investments were not proper and hence the recoverability or realizability of the same depends on the realizability of the assets secured, if any.

(c) According to the information and explanations provided to us and on the basis of our examination of the records of the Company, in respect of the loans and advances given to its subsidiary as speci ed in clause (iii)(b)(1) report, the Company has established repayment schedules for both principal or and interest for loan with outstanding balance of Rs. 2,910.10 lakhs In respect of the loan speci ed in the (iii)(b)(2) we have not provided with term of the arrangement, stipulation of schedule for repayment of principal and repayment of interest, hence we are unable to make speci c comments on the regularity of repayment of principal and interest are required to be reported under this clause.

(d) According to the information and explanations provided to us and on the basis of our examination of the records of the Company, in respect of the loans and advances as speci ed in clause (iii)(b)(1) of this report, the total amount overdue for more than 90 days is Rs. 2,910.10 lakhs. The Company has indicated that these amounts will be recovered upon the full realization of the assets secured against the loans. In respect of the advances speci ed in clause (iii)(b)(2) mentioned above, the total amount overdue for more than 90 days is Rs. 65 lakhs. Despite this, the Company has not initiated any actions to recover the amount.

(e) According to the information and explanations provided to us and on the basis of our examination of the records of the Company, during the year, the Company has not renewed or extended or granted fresh loans to settle the overdue of the existing loans given to any of the parties. Hence the provisions of the clause 3(iii)(e) of the order, is not applicable to the Company.

(f) Based on the information and explanations provided to us, and on the basis of our examination of the Companys records, the company has not granted any loans or advances in the nature of loans, either repayable on demand or without speci ed terms or repayment periods. However, with respect to the advance referred to in clause (iii)(b)(2) above, amounting to Rs. 65 lakhs, the Company has charged interest of Rs. 106.08 lakhs. We were not provided with terms of the arrangement, stipulation of schedule for repayment of principal and repayment of interest, therefore, we are unable to comment on compliance with the requirements of this clause in relation to the aforementioned advance.

The Company has made a 100% provision for doubtful recovery for the above-mentioned advance and interest amounting to Rs. 171.08 lakhs.

iv. According to the information and explanations provided to us, and based on our examination of the Companys records, in our opinion the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of loans granted, investments made, and guarantees and securities provided made by it during the year. However, attention is drawn to note no 10 and 11 to the accompanying standalone nancial statement, regarding interest free loans given to its subsidiary company amounting to Rs. 2,744.07 lakhs and advances to another company amounting to Rs.65 as mentioned in the clause (iii)(b)(2). We are informed that, these loans/ advances are given before enactment of Section 186(7) and hence is not violative of the Act. Further, for the interest-bearing loan amounting to Rs. 453.01 advanced to it subsidiary during the FYs 2005-06, 2006-07, 2012-13, we are informed that the company has waived off the interest on the interest-bearing loans with effect from 01.04.2023, as per the recommendation of Inter-Ministerial Committee Meeting dated 20.12.2023 and that the Companies Act, 2013 does not restrict the company to make any change in the interest rates on the existing loans appeared in the books of the company and there is no explicit provision/clause in the said section that restricts waiver of loan/interest thereon . Hence, the company waived off the interest on the interest-bearing loan considering the operations of subsidiary have already been closed as per CCEA approval dated 29th Jan 2020.

v. According to the information and explanations given to us in our opinion and, the Company has not accepted any deposits during the year and does not have any unclaimed deposits as at 31st March, 2026 except in case of deposits given below that are outstanding for a period exceeding 365 days and might be classi ed as deposits by virtue of Rule 2(xii) of the Companies (Acceptance of Deposits) Rules, 2014.

Nature of Deposit	Note Wo: in Financial* Statements	Amount " (Rs. in lakhs)
Advances from customers	20(1)	17.15

vi. We have broadly reviewed the accounts and records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act, read with Companies (Cost Records & Audit) Rules, 2014, as amended and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate and complete.

vii. (a) According to the information and explanations provided to us, and based on our examination of the Companys records, the Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including Goods and Service Tax, Provident Fund, Employees State Insurance, Income-Tax, Sales-Tax, Service Tax, Duty of customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues applicable to it. According to the information and explanations provided to us, no undisputed amounts payable in respect of Goods and Service Tax, Provident Fund, Employees State Insurance, Income-Tax, Sales- Tax, Service Tax, Duty of customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues applicable to it, were outstanding, as on the last day of the nancial year, for a period of more than six months from the date they became payable.

(b) According to the information and explanations provided to us, and based on our examination of the Companys records, the dues of goods and services tax, provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of custom, value added tax, cess and other statutory dues that have not been deposited on account of any dispute, are as follows:

Sl. No.	Name of the Statute	Nature of Dues	Period to Which the amount related	Amount of Dispute (Rs. in lakhs)	Forum where the dispute is pending
1	Central Excise Act, 1944	Exemption not allowed	2006-07	104.63	Customs, Excise & Services Tax Appellate Tribunal
2	Income Tax Act, 1961	Penalty Dues	2001-02	70.49	High Court
3	Income Tax Act, 1961	Penalty Dues	2010-11	21.50	The Commissioner of Income Tax
4	Goods and Services Tax, 2017	Excess Credit Claimed	2017-18	41.97	The Joint Commissioner
5	Employee State Insurance Act 1948	Default in contribution	1992-93	2.17	ESIC Court Ernakulam
6	Payment of Gratuity Act 1972	Payment of Gratuity	Up to March 1997	75.31	Bombay High Court
7	Employees Provident Fund and Miscellaneous Provision Act, 1952	Delayed remittance	2013-2018	38.44	CGIT Ernakulam

viii. According to the information and explanations provided to us, and based on our examination of the Companys records, there were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the year.

ix. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not defaulted in the repayment of loans or borrowings or in the payment of interest thereon to any lender. Accordingly, clause 3(ix)(a) of the Order is not applicable.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not been declared a willful defaulter by any bank or nancial institution or government or government authority. Accordingly, clause 3(ix)(b) of the Order is not applicable.

(c) In our opinion and according to the information and explanations given to us by the management, the Company has not obtained term loan during the year and accordingly clause 3 (ix) (c) of the Order is not applicable to the company.

(d) According to the information and explanations given to us and on an overall examination of the company records, funds which have been raised on short term basis by the company has not been utilized for long term purposes.

(e) According to the information and explanations given to us and on an overall examination of the Standalone Financial Statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, as de ned in the Act. The Company does not hold any investment in any associate or joint venture (as de ned in the Act) during the year ended 31st March, 2026. Accordingly, clause 3(ix)(e) of the Order is not applicable.

(f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries (as de ned under the Act). Accordingly, clause 3(ix)(f) of the Order is not applicable.

x. (a) The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). Accordingly, clause 3(x)(a) of the Order is not applicable.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, clause 3(x)(b) of the Order is not applicable.

xi. (a) Based on examination of the books and records of the Company and according to the information and explanations given to us, considering the principles of materiality outlined in the Standards on Auditing, we report that no fraud by the Company or on the Company has been noticed or reported during the course of the audit.

(b) According to the information and explanations provided to us, and based on our examination of the Companys records, no report under sub-section (12) of Section 143 of the Companies Act, 2013 has been led during the year by the auditors in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government.

(c) According to the information and explanations provided to us, and based on our examination of the Companys records, we report that the Company has not received any whistle blower complaints during the year.

xii. According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.

xiii. Except for the matters discussed in point no 5 of the Emphasis of matter paragraph to this report and according to the information and explanation provided to us, in our opinion all transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in Note 36 to the standalone nancial statements as required by the applicable Indian accounting standards.

xiv. (a) Based on information and explanations provided to us and our audit procedures, in our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business.

(b) We have considered, the internal auditors 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. In our opinion and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected to its directors and provisions of Section 192 of the Act are not applicable to the Company. Hence clause xv of the Order is not applicable.

xvi.(a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clauses 3(xvi)(a) of the Order is not applicable.

(b) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clauses 3(xvi)(b) of the Order is not applicable.

(c) The Company is not a Core Investment Company (CIC) as de ned in the regulations made by the Reserve Bank of India. Accordingly, clause 3(xvi)(c) of the Order is not applicable.

(d) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Hence, reporting under clause 3(xvi)(d) of the Order are not applicable.

xvii.The Company has incurred cash losses in the current year amounting to Rs. 1,800.21 lakhs. In the immediately preceding nancial year, the Company had incurred cash losses amounting to Rs. 10,907.18 lakhs.

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

xix.On the basis of nancial ratios, ageing and expected dates of realization of nancial assets and payment of nancial liabilities, other information accompanying the Standalone Financial Statements, 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 any material uncertainty exists as on the date of the audit report 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, however, state that this is not an assurance as to the future viability of the Company. 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. Based on examination of the books and records of the Company and according to the information and explanations provided to us, there are no amounts which are required to be spent in accordance with the provisions of section 135 of the Act and accordingly, clause 3(xx) of the Order is not applicable.

	For Balan & Co.
	Chartered Accountants
	FRN 340S
	M. Venugopal
	Partner
	Membership No. 244882
Place: Ernakulam	UDIN: 26244882GDUBCK6852
Date: 08.07.2026

ANNEXURE 2 TO THE INDEPENDENT AUDITORS REPORT (Referred to in Paragraph 16 under Report on Other Legal and Regulatory Requirements section of our report to the Members of Hindustan Organic Chemicals Limited of even date)

Supplementary report u/s. 143(5) of the Companies Act, 2013 in "Annexure 2" referred to in our Independent Auditors Report to the members of HINDUSTAN ORGANIC CHEMICALS LIMITED (the Company) for the year ended 31st March, 2026.

A. Directions

S l. No C & AG Direction	Statement of Statutory Auditor
1 Assess the fair valuation of all the investments, b o t h q u o t e d a n d unquoted, made directly by the Company or through Trusts, for Post- retirement bene ts of the employees. This includes verifying valuation methodologies, ensuring consistency with Ind AS and reviewing supporting documentation. The auditor shall provide a brief note on the valuation a p p r o a c h , i t s reasonability, and c o m p l i a n c e w i t h applicable regulations, reporting any material d e v i a t i o n s o r misstatements.	The Company has created a separate Trust for management of gratuity obligations towards employees. The valuation of investments under the said Trust is carried out by LIC in accordance with the applicable regulatory norms and guidelines. The Company relies on the statements and reports provided by LIC and Actuary for accounting and disclosure purposes which are in agreement with the applicable provisions of Ind AS. Based on the information, explanation and valuation report provided by LIC and Independent Actuary, the amounts disclosed against post-retirement bene ts are true and fair and no material deviations or misstatements from the applicable regulations were noticed.
2 Whether the Company has a system in place to process all the accounting transactions through lT system? if yes, whether review of this system and c o n t r o l s t h a t a r e s i g n i c a n t t o t h e Companies nancial reporting process as well as cyber security has been done by information S e c u r i t y A u d i t i n g O r g a n i z a t i o n s empanelled by Cert-ln at a minimum frequency of once in a year and material discrepancies found, if any, have been suitably reported? The implications of processing o f a c c o u n t i n g transactions outside lT system on the integrity of the accounts along with the nancial implications may also be reported:	All the companys accounting transactions are processed through Tally prime ERP, however xed asset records are maintained outside the ERP, payroll management is handled by the separate HRM software system, Unit trial balance consolidation is conducted through MS of ce excel utility. Companys IT infrastructure undergoes a cyber security audit by CERT-In- Empanelled information security Agency once every three years. No accounting transactions are processed outside the system.
S l. No C & AG Direction	Statement of Statutory Auditor
3 Whether funds (Grants/ s u b s i d y e t c . ) received/receivable from speci c scheme from C e n t r a l / S t a t e Government or its agencies were properly accounted for as per the applicable accounting standards or norms and whether the received funds were utilised as per its terms and conditions? Whether accounting of interest earned on grants received has been done a s p e r t e r m s a n d conditions of the Grant. List the cases of deviation	Not applicable, since the Company has not received any funds during the year from Central/State Government or its agencies for speci c schemes.
4 Whether the Company has identi ed the key Risk areas? If yes, whether the Company has formulated any Risk Management Policy to mitigate these risks? If yes, (a) whether the Risk Management P o l i c y h a s b e e n formulated considering global best practices? (b) Whether the Company has identi ed its data assets and whether it has b e e n v a l u e d appropriately?	No, the company has not identi ed key risk areas as the provision is applicable only for top 1000 listed companies.
5 Whether the Company is complying with the Securities and Exchange Board of India (SEBI) (Listing Obligation and D i s c l o s u r e R e q u i r e m e n t s ) Regulations, 2015, and other applicable rules and regulations of SEBI, Department of Investment a n d P u b l i c A s s e t Management, Ministry of Corporate Affairs, Department of Public Enterprises, Reserve Bank of India, Telecom Regulatory Authority of India, CERT-IN, Ministry of Electronics and Information Technology and National Payments Corporation of India wherever applicable? If not, the cases of deviation may be highlighted.	Based on the information, explanation provided to us by the management, the company is complying with all the applicable rules and regulations except with regard to SEBI LODRR, there is a non- compliance to Regulation 17(1) (b) regarding the requirement of half of the total Boards strength as independent Directors. As HOCL is a Government Company appointment o f D i r e c t o r s a r e d o n e b y Administrative Ministry. Accordingly, this non-compliance is beyond the control of the company.

B. Sub Directions

S l. No C & AG Direction	Statement of Statutory Auditor
1 State the area of land under encroachment and brie y explain the steps taken by the C o m p a n y t o r e m o v e encroachment	1. According to the information and explanations given by the management, 22.71 acres of land at the Rasayani Unit, Maharashtra, of the Company has been identi ed as under encroachment.
	With respect to this, the following steps taken by the management to remove the encroachment,
	T h e C o m p a n y i s c o n s t a n t l y communicating with the Senior Government of cials of Govt. of Maharashtra for taking prompt steps for removing encroachment by the farmers at the land at Rasayani Unit. The Company is also coordinating with the M i n i s t r y o f C h e m i c a l s a n d Petrochemicals, Government of India, for the speedy resolution in the above case. The above recommendations include various proposals including settlement arrangements with the encroachers The Company has also led suits in some instances. The principal secretary with DCPC and of cials of GoM/HOCL/BPCL, wherein it was agreed to conduct a survey to identify the extent of encroachment. The state government completed the survey of all eight villages in November 2025, and the nal survey report was submitted by GoM to DCPC on 09.01.2026. Post submission, DCPC and HOCL have sought clari cations from the state government for certain aspects of the encroachments, and GoMs response is presently awaited. Upon receipt of clari cations and closure of survey related issues, the decision on compensation/ payment and subsequent actions towards permeant resolution of encroachment and transfer/ disposal will be progress as per Govt directions
	2. According to the information and explanations given 32.574 acres of land at Rasayani Unit, Maharashtra, are under the possession of various entities such as MIDC, MSEB, HIL, MES etc. With respect to this, the following steps taken by the management to remove the encroachment,
	The Company is constantly following up with the concerned of cials for the recovery or registration of the said land possessed by such entities In case of the land leased out to MES, the Company has issued the notice of termination of lease to the party. However, the property is still under the possession of the lessee -MES. The matter is pending before Arbitration authority and the proceedings are under progress 10.576 acres of land at the Rasayani Unit and 0.91 acres of land at Panvel Maharashtra has been acquired by Governmental authorities and public road has been constructed. Hence, the Company does not have possession as well as ownership with respect to the said land.
	With respect to the land available at Panvel, DPE advised that disposal of HOCL Panvel land must me under taken in line with CCEA approval. Accordingly, CMD, HOCL sought action plan from NBCC, designated land management agency as per the CCEA mandate.
	NBCC informed that they are no longer conducting e-auctions and proposed that the disposal of Panvel land be undertaken through the development route. The above proposal is to be placed before the administrative ministry in the upcoming review for guidance and approval.
	4. According to the information and explanations given, 2.046 acres of land are outside the boundary walls of Ernakulam factory land and were not included in the re- survey and land tax is paid for land inside the boundary wall.
2 Whether there is any effective system for follow up of a c c u m u l a t e d t r a d e receivables especially which are more than three years old?	The Company has trade receivables amounting to Rs. 972.11 lakhs, which is more than three years old. The Company has assessed and provided a sum of Rs. 972.11 lakhs as provision for bad and doubtful assets.
	Based on the information provided to us, the management is following up with the above debtors for the recovery and has initiated legal proceedings against some of such cases.
3 Whether there was an adequate system for watching actual consumption against norms in case of raw materials, Intermediaries and utilities?	Based on the information and explanation provided to us, the Company prepares monthly statements comparing the actual consumption of raw material, intermediaries and utilities against the established norms as MIS Report and the system is adequate.

For Balan & Co.

	Chartered Accountants
	FRN 340S
	M. Venugopal
	Partner
Place: Ernakulam	Membership Nso. 244882
Date: 08.07.2026	UDIN: 26244882GDUBCK6852

ANNEXURE 3 TO THE INDEPENDENT AUDITORS REPORT

Referred to in Paragraph 17(f) under Report on Other Legal and Regulatory Requirements section of our report to the Members of HINDUSTAN ORGANIC CHEMICALS LIMITED

Report on the internal nancial controls under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 (the Act)

We have audited the internal nancial controls over nancial reporting of M/s. HINDUSTAN ORGANIC CHEMICALS LIMITED (the company) as of 31st March, 2026 in conjunction with our audit of the Standalone Financial Statements of the company for the year ended on that date.

Managements responsibility for Internal Financial Controls

The companys management is responsible for establishing and maintaining internal nancial controls based on the internal control over nancial reporting criteria established by the company considering the essential components of internal control stated in the guidance note on audit of internal nancial controls over nancial reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal nancial controls that were operating effectively for ensuring the orderly and ef cient 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 accounting records and the timely preparation of reliable nancial information as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal nancial controls over nancial reporting based on our audit. We conducted our audit in accordance with the guidance note on audit of internal nancial controls over nancial reporting (the Guidance Note) and the standards on auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013 to the extent applicable to an audit of internal nancial controls, both applicable to an audit of internal nancial controls and, both issued by the Institute of Chartered Accountants of India. Those standards and the Guidance Notes require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal nancial controls over nancial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain Audit evidence about the adequacy of the internal nancial controls system over nancial reporting and their operating effectiveness. Our audit of internal nancial controls over nancial reporting included obtaining an understanding of internal nancial controls over nancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal controls based on the assessed risk. The procedures selected depend on the auditors judgment including the assessment of risks of material misstatement of the Financial Statements, whether due to fraud or error,

We believe that the audit evidence we have obtained is suf cient and appropriate to provide a basis for our audit opinion on the companys internal nancial control systems over nancial reporting.

Meaning of internal nancial controls over nancial reporting

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

(1) pertain to the maintenance of the records that, in reasonable detail, accurately and fairy re ect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that the transactions are recorded as necessary to permit preparation of Financial Statements in accordance with generally accepted accounting principles, and that the 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 the prevention or timely deduction 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 nancial controls over nancial reporting, including the possibility of collusion of 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 nancial controls over the nancial reporting to future periods are subject to the risk that the internal nancial control over nancial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the company has, in all material respects, an adequate internal nancial controls system over nancial reporting and such internal nancial controls over nancial reporting were operating effectively as at 31st March, 2026, based on the internal control over the nancial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of internal Financial Reporting issued by the Institute of Chartered Accountants of India.

	For Balan & Co.
	Chartered Accountants
	FRN 340S
	M. Venugopal
	Partner
Place: Ernakulam	Membership No. 244882
Date: 08.07.2026	UDIN: 26244882GDUBCK6852

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF HINDUSTAN ORGANIC CHEMICALS LIMITED FOR THE YEAR ENDED 3I MARCH2O26

The preparation of nancial statements of Hindustan Organic Chemicals Limited for the year ended 3l March 2026 in accordance with the nancial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the management of the Company. The Statutory Auditor appointed by the Comptroller and Auditor General of India under section 139(5) of the Act is responsible for expressing opinion on the nancial statements under Section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Revised Audit Report dated 8 July 2026 which supersedes their earlier Audit Report dated 15 May 2026.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit of the nancial statements of Hindustan Organic Chemicals Limited for the year ended 3l March 2026 under section l43(6)(a) of the Act. This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditor and is limited primarily to inquiries of the Statutory Auditor and company personnel and a selective examination of some of the accounting records. The Audit Report has been revised by the statutory auditor to give effect to some of my audit observations raised during supplementary audit.

In addition, I would like to highlight the following signi cant matters under section 143(6)(b) of the Act which have come to my attention and which in my view are necessary for enabling a better understanding of the nancial statements and the related audit report.

A. Comments on Pro tability

A.1 Liabilities Current Liabilities

Provisions (Note No.21): .1,554.92 lakh

(I) The above does not include provision of .116.74 lakh on account of penalty/ nes levied by BSE Limited for various non-compliances with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act 2013 regarding non-ful lment of requirements relating to the composition of the Board of Directors, appointment of Independent Directors, quorum of Board meetings and functioning of statutory committees.

Hindustan Organic Chemicals Limited (HOCL/Company) submitted waiver application to BSE, which was not acceded to by the Internal Regulatory Oversight and Review Group (IRORG) of BSE in its meeting held on 20 February 2026. The Company again submitted (19 March 2026) a consolidated waiver application for an amount of .130.65 lakh. The BSE communicated (11 May 2026) approval of waiver of .31.72 lakh and con rmed the balance liability of .98.93 lakh plus GST, aggregating to .116.74 lakh.

Since there is an obligation to pay the aforesaid balance liability of Rs.116.74 lakh (including GST), necessary provision for the same should have been made in the books of accounts as per the requirements of Para 14 of Ind AS 37 (Provisions, Contingent Liabilities and Contingent Assets) and Para 8 of Ind AS l0 (Events after the Reporting Period) which provides that, an entity shall adjust the amounts recognized in its nancial statements to re ect adjusting events after the reporting period.

It was, however, observed that no provision for the aforesaid balance liability was provided for by the Company in its nancial statements for the year 2025-26 which resulted in understatement of Provisions and Loss for the year by .116.74 lakh each.

(ii) A reference is invited to Note 35(a)(vi) relating to GST demand amounting to .41.97 lakh. The said Note, inter-alia, states that an appeal against the demand was led before the Joint Commissioner (Appeals), Central Tax & Central Excise, Kochi Commissionerate on 27 .02.2024.

In this regard, it was noticed that Commissioner (Appeals) passed (29 October 2025) the order, wherein a demand of .7.55 lakh together with applicable interest thereon and a penalty of

.10,000 was con rmed. Accordingly, the liability of the Company worked out to Rs. 12.57 lakh (Tax .7.55 lakh plus interest .4.92 lakh plus penalty .10,000) as on 31.03.2026. Against this, the Company had remitted (26 February 2024) .1.98 lakh to the tax authorities, and the balance liability of .10.59 lakh remained payable.

Since the aforesaid order was passed on 29 October 2025, issued on 6 May 2026 and was received by the company on 11 May 2026 (i.e. prior to the nalisation of the nancial statements for the year 2025-26), necessary provision of .10.59 lakh should have been made in the books of accounts as per the requirements of Para 14 of Ind AS 37 (provisions, Contingent Liabilities and Contingent Assets) and Para 8 of Ind AS 10 (Events after the Reporting Period) which provides that, an entity shall adjust the amounts recognized in its nancial statements to re ect adjusting events after the reporting period.

It was, however, observed that no provision for the aforesaid balance liability was provided or by the Company in its consolidated nancial statements for the year 2025-26 which resulted in understatement of Other Expenses and Loss for the year by .10.59 lakh each. consequently, Provisions were also understated by .10.59 lakh.

Further, as the liability had crystallised pursuant to the appellate order dated 29.10.2025,the continued disclosure of the matter as a contingent liability under Note 35(a)(vi), was not in conformity with the requirements of Para 19 of Ind AS 10 (Events after the Reporting Period), which stipulates that, if an entity receives information after the reporting period about conditions that existed at the end of the reporting period, it shall update disclosures that relate to those conditions, in the light of the new information. Accordingly, Note No. 35(a)(vi) is de cient to that extent.

B Comments on Consolidated Financial Position B.1 Assets Current Financial Assets

(iii) Bank Balances other than (ii) above (Note 9): 23,385.49 lakh Non-Current Financial Assets (v) Other Financial Assets (Note 4b): 258.91 lakh

A reference is invited to Schedule Ill to the Companies Act 2013 which provides that, "An entity shall classify an asset as current when it (a) it expects to realize the asset, or intends to sell it or consume it in its normal operating cycle, or (b) it holds the asset primarily for the purpose of trading, or (c) it expects to realize the asset within twelve months after the reporting date: or (d) the asset is (lash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets shall be classi ed as non-current".

It was, however, observed that Fixed Deposit amounting to .242.26 lakh having maturity period of more than 12 months was booked under Current Financial Assets (Bank balances Other than Cash and Cash Equivalents) instead of booking under Non-Current Assets (Other Financial Assets).

This has resulted in overstatement of Current Financial Assets (Bank balances Other than Cash and Cash Equivalents) and understatement of Non-Current Assets (Other Financial Assets) by

. 242.26 Lakh each

For and on behalf of the Comptroller & Auditor General of India
	Sd/-
	(Dr. Pawan Kumar Kanda)
Place: New Delhi	Principal Director of Audit
Date: 29 JUL 2026	(Industry & Corporate Affairs)
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