Zuari Agro Chemicals Ltd Auditor Reports

To the Members of Zuari Agro Chemicals Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the Standalone Financial Statements of Zuari Agro Chemicals Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss including the statement of other comprehensive income, the Statement of Cash Flows and the Statement of changes in Equity for the year then ended, and Notes to the Standalone Financial Statements, including a Summary of significant accounting policies and other explanatory information.

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, as amended ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, its loss including other comprehensive income and its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs) as specified under section 143(10) of the Companies Act, 2013. 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 (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone financial statements under the provisions of the Act and the Rules there-under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements for the financial year ended 31st March, 2025. 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.

• Key Audit Matter	How our audit addressed the key audit matter
Revival of Mahad Plant Operations.	Our audit procedures included among the others, the following:
During the year, the companys manufacturing plant at Mahad was shut down from 26th January 2025 due to delays in raw material procurement. The management has formulated a revival plan that includes ordering of critical raw materials (such as rock phosphate), commencement of plant maintenance activities, engagement with customers, and consideration of additional capital expenditure. Management expects to resume operations by the first week of June 2025.	• Assessing the reasonableness of managements revival plan including procurement schedules and maintenance timelines.
	• Obtaining supporting documentation for the placement of rock phosphate orders and delivery schedules of other raw materials.
This matter was considered to be of most significance in our audit due to the operational and financial implications of the plant shutdown and the inherent uncertainty associated with the successful execution of the revival plan.	• Reviewing evidence of maintenance activities undertaken and readiness status of key equipment.
	• Discussing with the marketing team and reviewing communications with key customers to assess the likelihood of sales resumption.
	• Evaluating the status of any planned capital expenditure and financing arrangements, if applicable.
	• Assessing the impact of government subsidy enhancement and its appropriateness in future profitability assumptions.
	• Evaluating the adequacy of related disclosures in the financial statements regarding the plant shutdown and revival status.

 

Recognition, measurement, presentation and disclosures of revenue from operations.	Our audit procedures included among the others, the following:
The Companys revenue from operations comprises of sale value of Granulated, Powdered, Zincated & Boronated SSPs and the Subsidy received from Govt of India.	• Verified various applicable Govt notifications under which the subsidy was notified.
We identified this as a Key Audit Matter since the recognition of subsidy revenue and the assessment of recoverability of the related subsidy receivables is subject to significant judgements of the management.	• Verified the sales made and related claims for subsidy with the records/ certificates submitted to the Government.
Since the sale and the eligible subsidy are interlinked and further the claim for subsidy depends on various government notifications issued from time to time, it is important to verify the correctness of the revenue from operations recognised in the books of account.	• Performed analytical procedures for reasonableness of revenue and subsidy recognised vis a vis the sales made.
Refer Note 21 in the standalone financial statements.	• We evaluated the managements assessment regarding reasonable certainty of complying with the relevant conditions as specified in the notifications/policies.
	• We evaluated adequacy of disclosures in the Standalone Ind AS Financial Statements.

 

Estimates with respect to recognition of deferred tax assets on unused tax losses.	Our audit procedures included among the others, the following:
For the year ended 31st March, 2025, the company has not recognized deferred tax expense/income in the Standalone financial statements.	• Gained an understanding of the deferred tax assessment process and assessed the design and tested the operating effectiveness of controls over recognition of deferred tax.
Deferred tax assets are recognized on unabsorbed tax losses when it is probable that taxable profit will be available against which such tax losses can be utilized. The Companys ability to recognize deferred tax assets on unabsorbed tax losses is assessed by the management at the end of each reporting period, taking into account forecasts of future taxable profits and the assumptions on which such projections are determined by the management.	• Discussed and evaluated managements assumptions and estimates like projected revenue growth, margins, etc. in relation to the probability of generating future taxable income to support the utilization of deferred tax on unabsorbed tax losses with reference to forecast taxable income and performed sensitivity analysis.
Given the degree of estimation based on the projection of future taxable profits, managements decision to not create deferred tax assets on unabsorbed tax losses has been identified to be a key audit matter.	• Tested the arithmetical accuracy of the model.
	• Assessed the related disclosures in respect of the deferred tax assets in the Standalone financial statements.

Emphasis of Matter paragraph

We draw attention to Note 49 to the accompanying Standalone Financial Statements, which describes that during the year, the Company along with other noticees (3 former and 1 present Key Managerial Personnels), have received a Show Cause Notice (SCN) dated 14th January, 2025 from the Securities and Exchange Board of India ("SEBI") under the Securities and Exchange Board of India Act, 1992 ("SEBI Act") and Regulations issued by SEBI thereunder alleging certain irregularities in the financial statements for earlier years. The Company has filed a joint settlement application on behalf of all the noticees named in the SCN, including the Company, for settlement under the SEBI (Settlement Proceedings) Regulation, 2018, without admitting or denying the finding of fact and conclusions of law. The matter is pending and settlement order from SEBI is awaited.

Our opinion is not modified in respect of this matter.

Other Information

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Annual Report, but does not include the Standalone Financial Statements and Auditors Report thereon. The companys annual report is expected to be made available to us after the date of this auditors 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 and, in doing so, consider whether such other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our 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. We have nothing to report in this regard.

Responsibilities of Management for the Standalone Financial Statements

The Companys Board of Directors is 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 financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements 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 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 financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

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 influence 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 judgement and maintain professional skepticism throughout the audit. We also:

• 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 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 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 financial statements 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 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 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.

• 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.

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 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 benefits of such communication.

Report on 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 the "Annexure 1", a statement on the matters specified in paragraphs 3 and 4 of the said Order, to the extent applicable.

2. 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 purposes of our audit.

b. 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 Balance Sheet, the Statement of Profit and Loss including statement of other Comprehensive Income, Cash Flow Statement and Statement of Changes in Equity dealt with by this Report, are in agreement with the books of account.

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

e. On the basis of the written representations received from the directors as on March 31, 2025 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2025 from being appointed as a director in terms of Section 164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report.

g. In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act.

The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

Further, At the 14th Annual General Meeting held on 27th September 2023, the shareholders of the Company, have approved the waiver of recovery of excess remuneration of Rs. 81 Lakh paid to Mr. Sunil Sethy, Ex-Managing Director during the financial year 2019-20. The Company has filed an application under Section 454 read with Section 441 of the Companies Act, 2013 for adjudication of penalties/ compounding of offence under Section 197 of the Companies Act, 2013. Vide Order of Adjudication of Penalty dated 16th August, 2024, a penalty of Rs. 5 Lakh was imposed on the Company which the Company has paid on 10th October, 2024.

h. 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 me/us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements refer note 34 of Standalone Financial Statements

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

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2025.

iv. a) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note 53 (v) to the standalone financial statements, 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 or entity, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, • whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or • provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note 53 (vi) to the standalone financial statements, no funds have been received by the Company from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall,

• whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or

• provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; c) Based on such audit procedures performed that have been 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 (a) and (b) of clause iv above contain any material misstatement.

v. The company has neither declared nor paid any interim dividend or final dividend during the year.

Therefore, reporting under rule 11 (f) of companies (Audit and Auditors) Rules 2014 is not applicable.

vi. The company has used an accounting software for maintaining its books of accounts which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all the transactions recorded in the software and the audit trail feature has not been tampered with. The audit trail has been preserved by the company as per the statutory requirements for record retention.

ANNEXURE 1 TO THE INDEPENDENT AUDITORS REPORT REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE.

(i) a. (A) The company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

(B) As the company is not having any intangible assets, reporting under clause 3(i)(a)(B) of the Order is not applicable.

b. The Property, Plant and Equipment have been physically verified by the management at reasonable intervals.

According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us and based on the examination of records of the company and the registered sale deeds / transfer deeds / conveyance deeds provided to us, we report that the title deeds of all the immovable properties, comprising of land and building, are in the name of the company except below mentioned for which title deeds are not in the name of the company and conveyance deeds in respect of the same are yet to be executed in the name of the company.

Particulars	Description	Gross Carrying Value (INR in Lakhs)	Title Deed in the name of	Whether title deed holder is promoter, director or relative	Date of Property held	Reason for not held in the name of the company
Freehold Land	Land	2.97	Jose Robello	No	2011-12	Mutation is in Process

d. The Company has not revalued any of its Property, Plant and Equipment and Right of Use assets or intangible assets during the year. e. Based on the information and explanation furnished to us, no proceedings have been initiated on the Company under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) and Rules made there under.

(ii) a. As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and in our opinion, the coverage and procedure of such verification is appropriate. Based on the information and explanation furnished to us, material discrepancies in excess of 10% or more in the aggregate for some classes of inventory were noticed on physical verification. The same has been adjusted in the books of account appropriately.

b. During the year, the company has not availed, at any point of time of the year, working capital limits from banks on the basis of security of current assets. Hence reporting under clause 3(ii)(b) of the Order is not applicable to the Company.

(iii) During the year the Company has not made investments in, provided loans, advances in the nature of loans, stood guarantee or provided security to Companies, Firms, Limited Liability Partnerships or any other parties. Hence, the requirement to report under clause 3(iii) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the company has not granted any loans or provided any guarantees or given any security or made any investments to which the provision of Sections 185 and 186 of the Companies Act, 2013 attract. Hence, clause 3(iv) of the order is not applicable.

(v) The Company has not accepted any deposit, within the meaning of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended) during the year hence, the reporting under clause 3(v) of the order is not applicable. (vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act, 2013 and we are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same. a. According to the information and explanations given to us and according to the books and records as produced and examined by us, in respect of statutory dues, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Goods & Service Tax, Cess and other material statutory dues as applicable with the appropriate authorities. As at last day of financial year, there were no amounts payable in respect of the aforesaid statutory dues outstanding for a period of more than six months from the date they became payable.

b. 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 statutory dues relating to Goods and Service Tax, Provident Fund, Employees State Insurance, Income-tax, Sales tax, Service tax, Duty of Customs, Value added tax, Cess or other statutory dues which have not been deposited on account of any dispute except for following:

(INR in lakhs)

Name of the Statute	Name of the Dues	Amount (in INR lacs)- CARO 31.03.2025	Period to which amount relates	Forum Where Dispute is pending
Income Tax Act, 1961	Disallowance of claim under section 115JB(2C) and disallowance of depreciation on Goodwill.	12.95	2017-18	Commissioner of Income Tax (Appeals)
Income Tax Act, 1961	Addition of Income on account of
	- u/s 36(1)(iii) of the I.T. Act,	4102.53	2021-22	Commissioner of Income
	- Long Term Capital Gain &			Tax (Appeals)
	- u/s 50C of the Income tax Act
Income Tax Act,1961	Disallowance on account of
	- Interest paid to various parties	636.32	2019-20	Commissioner of Income Tax (Appeals)
	- under section 14A
	- Advances written off
	- Depreciation on intangible asset (goodwill)
	- Depreciation under section 32(1) (iia)
MVAT Act 2002	Demand on suppression of sale and disallowance of ITC on purchases	290.36	2016-17	Maharashtra Sales Tax Tribunal
MVAT Act 2002	Demand on suppression of sale and disallowance of ITC on purchases	15.27	2017-18	Maharashtra Sales Tax Tribunal
Goods and Service Tax Act, 2017, UP	Demand for disallowance of ITC availed on purchases	35.95	2017-18 to 2018-19	Commissioner (Appeals) GST
Goods and Service Tax Act, 2017, Maharashtra	Demand for disallowance of ITC availed on purchases	46.14	2019-20	Commissioner (Appeals) GST
Goods and Service Tax Act, 2017, Telangana	Demand for disallowance of ITC availed on purchases	34.83	2017-18	Commissioner (Appeals) GST
Goods and Service Tax Act, 2017, Assam	Demand for disallowance of ITC availed on purchases	14.51	2018-19	Commissioner (Appeals) GST
Goods and Service Tax Act, 2017, West Bengal	Demand for disallowance of ITC availed on purchases	11.28	2017-18 to 2018-19	Commissioner (Appeals) GST
Goods and Service Tax Act, 2017, Chattisgarh	Demand for disallowance of ITC availed on purchases	33.24	2017-18	Commissioner (Appeals) GST
Goods and Service Tax Act, 2017, Bihar	Demand for disallowance of ITC availed on purchases	31.55	2018-19	Commissioner (Appeals) GST
Goods and Service Tax Act, 2017, Odisha	Demand for disallowance of ITC availed on purchases	11.88	2017-18 & 2019-20	Commissioner (Appeals) GST
Goods and Service Tax Act, 2017, Haryana	Demand for disallowance of ITC availed on purchases	9.13	2017-18	Commissioner (Appeals) GST
Customs Tariff Act, 1975	Short levy of Duty on goods	0.45	2019-20	Commissioner of Customs

(viii) 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 surrendered or disclosed any transaction, previously unrecorded in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year.

(ix) (a) According to the books and records of the Company examined by us, the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender.

(b) According to the information and explanation given to us and on the basis of our audit procedure, we report that the company has not been declared wilful defaulter by any bank or financial institution or other lenders.

(c) In our opinion, and according to the information and explanations given to us, the company has utilized the money obtained by way of term loans during the year for the purposes for which they were obtained.

(d) On an overall examination of the financial statements of the company, we report that no funds raised on short-term basis have been used for long-term purposes by the Company.

(e) On an overall examination of the 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, associates or joint ventures. Hence, the requirement to report on clause 3(ix)(e) of the Order is not applicable to the Company.

(f) On an overall examination of the financial statements of the company, we report that the company has raised loans during the year on the pledge of securities held in its subsidiary. Details of which are given below. Further, the company has not defaulted in repayment of such loans raised.

Nature of Loan taken	Amount of loan (In Lakhs)	Name of Subsidiary	Details of Security pledged	Outstanding balance as on 31.03.2025 (In Lakhs)	Name of Lender
Term Loan	4000.00	Mangalore Chemicals & Fertilizers Limited	Pledge of Equity Shares- 51,00,000 Nos.	4000.00	STCI Finance Ltd
Intercorporate Deposit	900.00	Mangalore Chemicals & Fertilizers Limited	Pledge of Equity Shares- 14,50,000 Nos.	900.00	Imperial Solutions Pvt ltd
Intercorporate Deposit	500.00	Mangalore Chemicals & Fertilizers Limited	Pledge of Equity Shares- 7,50,000 Nos.	500.00	A J Tea House Pvt Ltd
Intercorporate Deposit	500.00	Mangalore Chemicals & Fertilizers Limited	Pledge of Equity Shares- 9,00,000 Nos.	0.00	Hind Filter Pvt Ltd
Intercorporate Deposit	500.00	Mangalore Chemicals & Fertilizers Limited	Pledge of Equity Shares- 9,00,000 Nos.	500.00	Tirumala Balaji Alloys Pvt Ltd
Intercorporate Deposit	2000.00	Mangalore Chemicals & Fertilizers Limited	Pledge of Equity Shares- 31,00,000 Nos.	2000.00	Jagrani Leasing and Finance Co Pvt Ltd
Intercorporate Deposit	500.00	Mangalore Chemicals & Fertilizers Limited	Pledge of Equity Shares- 10,00,000 Nos.	500.00	Frazer goods and Supply Pvt Ltd.

(x) a. The Company has not raised any money during the year by way of initial public offer / further public offer (including debt instruments). Hence, reporting under clause 3(x)(a) of the Order is not applicable to the Company. b. According to the information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares / fully or partially or optionally convertible debentures during the year under audit and hence, the requirement to report on clause 3(x)(b) of the Order is not applicable to the Company.

(xi) a. To the best of our knowledge and according to the information and explanations given to us and on the basis of examination of the books and records of the Company, carried out in accordance with generally accepted auditing practices in India, no fraud by the Company or on the Company was noticed or reported during the year.

b. According to the information and explanations given to us, no report under sub-section (12) of Section 143 of the Companies Act has been filed 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 given to us including the representation made to us by the management of the Company, no whistle-blower complaints were received by the Company during the year and hence, reporting under clause 3(xi)(c) of the Order is not applicable to the Company.

(xii) a. The Company is not a Nidhi company and hence, reporting under clause 3(xii)(a), (b) and (c) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 where applicable and the details thereof have been disclosed in the standalone financial statements, as required by the applicable Accounting Standards.

(xiv) a. In our opinion and based on our examination, the company has an internal audit system which is commensurate with the size and nature of its business. b. We have considered the reports of Internal Auditor of the company issued for the period under audit. (xv) In our opinion and according to the information and explanations given to us, during the year, Company has not entered into any non-cash transactions with its directors or persons connected with him and accordingly, the reporting under clause 3(xv) of the Order is not applicable to the Company.

(xvi) a. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. b. In our Opinion and based on our examination, the Company is not engaged in any Non-Banking Financial or Housing Finance activities, hence reporting under clause xiv(b) of the order is not applicable. c. In our opinion and based on our examination, the Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. d. According to the information and explanations given by the management, the group does not have more than one CIC as a part of group. Accordingly, the reporting under Clause 3(xvi)(d) is not applicable to the Company.

(xvii) Based on our examination of books of accounts, the company has incurred cash losses in the current year and however it had not incurred cash losses in the immediately preceding financial year.

The details of the cash losses for the financial year 2024-25 is as follows

(INR in lakhs)

Particulars	FY 2024-25	FY 2023-24
Loss after Tax	7,310.15	NIL
Less: Depreciation and amortization	316.17	NIL
Less: Write off of Fixed Assets	107.85	NIL
Less: Write off of Inventory	178.33	NIL
Add: Liabilities Written Back	467.36	NIL
Cash Loss for the year	7,175.16	NIL

(xviii) There has been no resignation of the statutory auditors during the year.

(xix) On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the plans of the Board of Directors and management 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 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) a. The provision of section 135 is not applicable to the company. Accordingly, reporting under clause 3(xx)(a) & (b) of the Order is not applicable to the Company.

ANNEXURE 2 TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF ZUARI AGRO CHEMICALS LIMITED Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 ("the Act") Opinion

We have audited the internal financial controls with reference to standalone financial statements of Zuari Agro Chemicals Limited ("the Company") as of March 31,2025 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

In our opinion, the Company has maintained, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2025, 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 of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. However, the existing policies, systems, procedures and internal controls followed by the Company have to be completely and appropriately documented.

Managements Responsibility for Internal Financial Controls

The Companys Management 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 issued by the Institute of Chartered Accountants of India ("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 the 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.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, as specified under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by ICAI. 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 these standalone financial statements 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 financial controls with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to these standalone financial statements, 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 judgement, including the assessment of the risks of material misstatement of the financial statements, 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 audit opinion on the Companys internal financial controls with reference to these standalone financial statements.

Meaning of Internal Financial Controls with Reference to these Standalone Financial Statements

A companys internal financial controls with reference to standalone financial statements 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 with reference to standalone financial statements 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 authorisations of management and directors of the company; and

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

Inherent Limitations of Internal Financial Controls with Reference to these Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to standalone financial statements, 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 with reference to standalone financial statements to future periods are subject to the risk that the internal financial control with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For K.P.Rao & Co

Chartered Accountants

Firm Reg. No. 003135S

Prashanth S

Partner

Membership Number: 228407

UDIN: 25228407BMOJLU8413

Place: Bangalore

Date : 14-05-2025