Zuari Agro Chemicals Ltd Directors Report

To the Members,

1. Your Directors place before you the Sixteenth Annual Report of the Company together with Statement of Accounts for the financial year ended 31^st March, 2025.

2 . Financial Highlights:

( In Lakhs)

Particulars	Standalone		Consolidated
	2024-25	2023-24	2024-25	2023-24
Profit/ (Loss) for the year before depreciation, exceptional item and taxation	(6,862.89)	2,464.52	25,430.02	32,234.81
Less:Depreciation for the year	316.17	324.47	10,150.08	9,481.44
Exceptional Expenses	-	-	-	-
Share of Profit / (Loss) of an associate and a joint venture	-	-	15,032.96	2,303.78
Profit/(loss) before tax	(7,179.06)	2,140.05	30,312.90	25,057.15
Less : Provision for taxation – Current Tax	-	-	6,278.37	4,310.00
Income Tax Credit of earlier years	131.1	-	131.1	33.3
Deferred Tax Charges (Credit)	-	-	807.83	3,618.90
Profit /(Loss) after tax	(7,310.16)	2,140.05	23,095.60	17,094.95
Other Comprehensive Income(Loss)	579.11	1,146.74	330.6	1,002.83
Total Comprehensive Income/ (Loss)	(6,731.05)	3,286.79	23,426.20	18,097.78
Proposed Dividend : NIL (PY NIL) (in case of a subsidiary 1.50 (PY 1.50)	-	-	1,777.73	1,777.73
Tax on dividend (Including Surcharge)	-	-	-	-
Earnings per equity shares (EPS) (In )
Basic and diluted from continuing and discontinued operations	(17.38)	5.09	39.18	23.74

A. Review of Operations:

The revenue from operations (Standalone) for the year ended 31^st March, 2025 was 4,779.74 Lakhs as compared to 8,300.26 Lakhs for the previous year.

The profit before tax for the year ended 31^st March 2025 was (7,179.06) Lakhs as compared to 2,140.05 Lakhs for the previous year. The profit after Tax stood at (7,310.16) Lakhs for the year ended 31st March, 2025 as compared to 2,140.05 Lakhs for the previous year. The revenue from operations (Consolidated) for the year ended 31^st March, 2025 was 4,43,608.70 Lakhs as compared to 4,59,545.85 Lakhs for the previous year. The consolidated profit before tax for the year ended 31^st March 2025 was 30,312.90 Lakhs as compared to 25,057.15 Lakhs for the previous year. The profit after tax stood at 23,095.60 Lakhs for the year ended 31^st March, 2025 as compared to 17,094.95 Lakhs for the previous year.

B. Reserves:

The net deficit in the statement of Profit and Loss and General Reserves as on 31^st March, 2025 was 61,758.33 Lakhs, as against 54,459.92 Lakhs net deficit in the statement of profit and loss as on 31^st March, 2024.

C. Material changes and commitments affecting financial position between the end of the financial year and date of the report:

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year to which the financial statements relates and date of the approval of the Boards Report.

3. Dividend:

The Directors do not recommend any dividend in view of loss during the year under review.

The Dividend Distribution Policy of the Company is displayed on the Companys website. The weblink for the same is:

http://www.zuari.in/assets/files/corporate-governance/Dividend-Distribution-Policy_ZACL-14aug2021n.pdf

4. Conservation of Energy/Technology Absorption/Foreign Exchange Earnings and Outgo: A. Conservation of Energy:

(i) The steps taken or impact on conservation of energy

– Not Applicable

(ii) The steps taken by the Company for utilizing alternate sources of energy – Not Applicable (iii) The capital investment on energy conservation equipment – Not Applicable No energy savings / conservation schemes implemented during the year 2024-25.

B. Technology Absorption:

(i) The efforts made towards technology absorption - Not Applicable (ii) The benefits derived like product improvement, cost reduction, product development or import substitution – Not Applicable (iii) Imported technology (imported during the last 3 years reckoned from the beginning of the financial year) -Not Applicable (iv) The expenditure incurred on Research and Development - Not Applicable No new technology was absorbed during the year 2024-25.

C. F oreign Exchange earnings and Outgo:

The expenditure in foreign currency for the year ended 31^st March, 2025 was Nil as compared to NIL during the previous year. The foreign exchange earnings for the year ended 31^st March, 2025 was NIL as compared to NIL during the previous year.

5. Environment, Health and Safety:

The Company remains committed to its environment and safety initiatives. Our Fertilizer Plant operates as a ‘Zero Effluent Discharge Plant and adheres to all statutory requirements as specified in the consent to operate.

In the past year, our Quality Control Laboratory, received NABL Accreditation Certificate from the Quality Council of India NABL-Board, Gurugram, Haryana for two years effective from 06/09/ 2024.

Last year, the Company obtained a New Consent on 29/11/2024 for the utilization of hazardous waste in accordance with Rule 9 of the Hazardous and Other Wastes (Management and Transboundary movement) Rules, 2016, for Utilization of spent sulphuric acid (SSA) [generated from Linear Alkyl Benzene Sulphonic Acid (LABSA) process] in the production of Single Super Phosphate.

Additionally, the Company was granted Registration Certificate for Brand Owner on 25^th January, 2025. This Registration issued under the PWM Rules, 2016 from Central Pollution Control Board (Ministry Of Environment, Forest and Climate Change, Govt. of India) Parivesh Bhawan, East Arjun Nagar Delhi authorises us for the disposal of Plastic waste generated due to plastic packaging introduced by us in the market.

As part of our green initiatives, the Company plan to conduct approximately 200 plantings during the FY-2025-26 monsoon season around the factory compounds periphery.

The Company continuously conducts safety training and refresher programs for its employees and workers. Notably, there were no fatal incidents reported at the factory over the past year. The Company has also organized numerous activities related to Safety, Health & Environment during National Safety Week, National Road Safety Month, World Environment Day, National Fire Service Day and Chemical Disaster Prevention Day.

6. Industrial Relations:

The Industrial Relations scenario in the Plant was normal.

7. Annual Return:

Annual Return referred to in Section 92(3) of the Companies Act, 2013 is available on the website of the Company at http://www.zuari.in/investor/annual_return

8. Related Party Transactions:

All related party transactions that were entered into during the financial year, were on an arms length basis. All related party transactions are approved by the Audit Committee and the Board of Directors. The details of related party transactions in Form AOC-2 are enclosed as Annexure- ‘K.

9. Particulars of Loans, Guarantees or Investments:

The details of Loans given, Corporate Guarantees provided and Investments made by the Company under the provisions of Section 186 of the Companies Act, 2013 are given in Note No. 42 of the financial statements.

10. Nomination & Remuneration Policy and Disclosures on Remuneration:

The Board on the recommendation of the Nomination & Remuneration Committee has framed a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and employees in the Senior Management including the criteria for determining qualification, positive attributes, independence of director and other matters as required under Section 178(3) of the Companies Act, 2013. More details of the same including the composition of the Committee are given in the Report on Corporate Governance enclosed as Annexure ‘A to this report.

The nomination and remuneration policy is displayed on the Companys website. The weblink for the same is:

http://www.zuari.in/assets/files/corporate-governance/NominationandRemunerationPolicy-02022022.pdf

The disclosure related to the employees under Section 197(12) read with Rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure ‘I to this Report.

The information required pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is enclosed as Annexure ‘J.

11. Vigil Mechanism/Whistle Blower Policy:

The Company in accordance with the provisions of Section 177(9) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has established a vigil mechanism for directors and employees to report genuine concerns to the management viz. instances of unethical behavior, actual or suspected, fraud or violation of the Companys Code of Conduct or Ethics Policy. The Company has also formulated a Whistle Blower Policy ("Policy") which provides for adequate safeguard against victimization of persons and has a provision for direct access to the Chairperson of the Audit Committee. The Company has not denied any person from having access to the Chairman of the Audit Committee.

Weblink for the policy: http://www.zuari.in/assets/files/corporate-governance/Whistle-Blower-Policy-08.02.2019n.pdf

12. Corporate Social Responsibility (‘CSR):

The Board of Directors has constituted a CSR Committee and also approved the CSR Policy. CSR Committee comprised of Executive Director, one Independent Director and one Non-Executive Director as on 31^st March, 2025. The Board has designated Mrs. Asheeba Pereira, Company Secretary as Secretary of the Committee. During the year under review, 1 meeting of the Committee was held on 24^th May, 2024. The Composition of Committee & their attendance at the meetings are as follows:

Mr. Athar Shahab retires by rotation at the forthcoming Annual General Meeting and is eligible for re-appointment. A brief profile and details of other directorships of Mr. Athar Shahab are given in the Report on Corporate Governance attached as Annexure ‘A to this report.

Mrs. Reena Suraiya was re-appointed as a Non-Executive and Independent Director of the Company for a second term of 3 years w.e.f. 24th June, 2024 to 23rd June, 2027. Approval of the shareholders by way of postal ballot was obtained on 9th July, 2024 for her re-appointment and continuation of her directorship pursuant to Regulation 17(1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Mr. Amandeep was re-appointed as a Non-Executive and Independent Director of the Company for a second term of 3 years w.e.f. 29th May, 2025 to 28th May, 2028 and the approval of the shareholders was obtained through Postal Ballot on 29th April, 2025 for his re-appointment.

Mr. Manoj Dere, ceased to be a Company Secretary & Compliance Officer and Key Managerial Personnel of the Company w.e.f. 30^th September, 2024.

Mrs. Asheeba Pereira, was appointed as Company Secretary & Compliance Officer and Key Managerial Personnel of the Company w.e.f. 1^st October, 2024.

A statement regarding opinion of the Board, with regard to integrity, expertise and experience (including proficiency) of the Independent Directors appointed during the year is given in Corporate Governance Report annexed as Annexure ‘A.

Names of Members	Status	Nature of Directorships	No of meetings attended
Mr. Amandeep	Chairman	Independent Director	1
Mr. Akshay Poddar	Member	Non-Executive Director	1
Mr. Nitin M. Kantak	Member	Executive Director	1

The policy is displayed on the Companys website. The weblink for the same is: http://www.zuari.in/assets/files/corporate-governance/CSR-Policy-13feb2021.pdf The CSR Committee formulates and recommends to the Board a CSR Policy which shall indicate the activities to be undertaken by the Company, as specified in Schedule VII of the Companies Act, 2013. The Committee also recommends the amount of expenditure to be incurred on the CSR activities and monitors the CSR Policy of the Company from time to time.

The detailed report on CSR activities as required under The Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure ‘H to this report.

13. Directors and Key Managerial Personnel:

The Board comprises of three Non-Executive Directors, one Executive Director and four Independent Directors. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of SEBI (LODR) Regulations, 2015.

In accordance with the provisions of Regulation 25(7) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company organizes familiarization programme for the Independent Directors as and when required.

Mr. Nitin M. Kantak, Executive Director, Mrs. Asheeba Pereira, Company Secretary and Mr. Manish Malik, Chief Financial Officer have been designated as Key Managerial Personnel in accordance with provisions of Section 203 (1) of the Companies Act, 2013.

14. Performance Evaluation:

Pursuant to the Provisions of Section 134, 178 and Schedule IV of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the following performance evaluations were carried out; a. Performance evaluation of the Board, Chairman and Non-Independent Directors by the Independent Directors; b. Performance evaluation of the Board, its committees and Independent Directors by the Board of Directors; and c. Performance evaluation of every director by the Nomination and Remuneration Committee.

The details of Annual Performance evaluation carried out are given in the Corporate Governance Report attached as Annexure ‘A to this report.

15. a. Board Meetings:

During the year, six Board Meetings were held on 25^th May, 2024, 3^rd August, 2024, 1^st October, 2024, 6^th November, 2024, 25^th November, 2024 and 6^th February, 2025. The details of the composition of the Board and attendance of the Directors at the Board Meetings, are provided in the Corporate Governance Report.

b. Audit Committee:

During the year under review, five Audit Committee Meetings were held and all the recommendations of the Audit Committee were accepted by the Board. The details of the composition of the Audit Committee and details of committee meetings are given in the Corporate Governance Report.

16. Fixed Deposits:

The Company has not accepted fixed deposits during the year under review.

17. Details of significant and material orders passed by the Regulators or Courts:

There are no significant material orders passed by the Courts/ Regulators or Tribunals impacting the going concern status and Companys operations in future. The details pertaining to various demand notices from various statutory authorities are disclosed in Note No. 34 of financial statements under the heading – Contingent Liabilities.

18. Adequacy of internal financial controls with reference to financial statements:

The Company has adequate systems of internal control in place, which is commensurate with its size and the nature of its operations. The Company has designed and put in place adequate Standard Operating Procedures and Limits of Authority Manuals for conduct of its business, including adherence to Companys policies, safeguarding its assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

These documents are reviewed and updated on an ongoing basis to improve the internal control systems and operational efficiency. The Company uses a state-of-the-art ERP (SAP HANA) system to record data for accounting and managing information with adequate security procedure and controls.

19 . Disclosure Requirement:

Your Company has complied with all the mandatory requirements of Schedule V of SEBI (LODR) Regulations, 2015. The Report on Corporate Governance is enclosed as Annexure ‘A to this report. A Certificate on compliance of Corporate Governance by a Practicing Company Secretary is enclosed as Annexure ‘B. Declaration by the Executive Director is enclosed as Annexure ‘C, the Management Discussion and Analysis is enclosed as Annexure ‘E and Secretarial Audit Report is enclosed as Annexure ‘F to this report.

20. Statutory Auditors:

As per Section 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 and Rules made thereunder and pursuant to the recommendations of the Audit Committee, M/s. K.P. Rao & Co., Chartered Accountants, (FRN 003135S), were appointed as Statutory Auditors of the Company at the 12^th Annual General Meeting, to hold office from the conclusion of 12^th Annual General Meeting until the conclusion of the 17^th Annual General Meeting.

The Auditors Report on Standalone & Consolidated Financial Statements contained no qualifications.

During the year under review, there were no frauds reported by the Auditors to the Audit Committee or the Board under Section 143 (12) of the Companies Act, 2013.

21. Cost Records & Cost Audit:

The Company is required to maintain cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013, and accordingly such accounts are made and records are maintained. The Cost Audit Report for the year ended 31^st March, 2024 was filed by the Company with the Ministry of Corporate Affairs on 9^th August, 2024.

22. Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Shivaram Bhat, Practicing Company Secretary as Secretarial Auditor, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year 2024-25 is enclosed as Annexure ‘F to this Boards Report. The Secretarial Audit Report does not contain any qualification. Pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Secretarial Audit Report of the Material Unlisted Subsidiary Zuari Farmhub Limited for the financial year 2024-25 is enclosed as Annexure ‘G.

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the LODR Regulations, upon the recommendation of the Audit Committee, the Board of Directors approved and recommended for shareholders approval, the appointment of Mr. Shivaram Bhat, Company Secretary in Practice (ACS No. 10454, Certificate of Practice No. 7853, PR 1775/2022) for a term of 5 (five) years beginning from FY 2025-26, to carry out the Secretarial Audit of the Company.

23. Disclosure as per Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

Your Company has complied with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There were no complaints/cases filed/ pending under the Act with the Company during the financial year.

24. Employees Stock Option Scheme:

Though the Employees Stock Option Scheme (ESOPS) was approved by the shareholders in the Annual General Meeting held on 7^th August, 2012, no options were issued pursuant to the same.

25. Non-Convertible Debentures (NCDs):

As per the terms of NCDs, the Company has made early redemption of 500 senior, secured, unrated, unlisted, redeemable, non-convertible debentures, Debentures of 10 Lakh each, aggregating to 50 Crore on 15^th April, 2025.

26. The details of application made or any proceeding pending under the insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year alongwith their status as at the end of the financial year:

No application was received or any proceedings filed under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year 2024-25.

27 . Details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof:

Not Applicable

28. Consolidated Financial Statements under Section 129 of the Companies Act, 2013:

The Consolidated Financial Statements of the Group has been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standard) (Amendment) Rules, 2016 which forms part of this Annual Report.

The Company shall place the financial statements of subsidiaries on its website in pursuance of Section 136 of the Companies Act, 2013. The Annual Accounts of the Subsidiary Companies shall be made available to the shareholders for inspection at the Registered Office of the Company.

29. Subsidiaries:

A brief review of the subsidiaries of the Company is given below:-(a) Mangalore Chemicals & Fertilizers Limited:

Mangalore Chemicals & Fertilizers Limited (MCFL) is a subsidiary of the Company and the Company holds 54.03% total voting rights in MCFL.

MCFL has only one major business segment, viz. Fertilizers. It manufactures both Nitrogenous and Phosphatic fertilizers and is the only manufacturer of fertilizers in the State of Karnataka. About 72% of the Companys products are sold in the State of Karnataka, which meets about 11% of the needs of the farmers in the State. MCFL maintains a good share of the market in Kerala and a modest share in the neighbouring States of Tamil Nadu, Andhra Pradesh, Telangana and Maharashtra.

The revenue from operations for the year ended 31^st March, 2025 was 3,33,189.59 Lakhs as compared to

3,79,544.16 Lakhs for the year ended 31^st March, 2024.

The profit before tax for the year ended 31^st March, 2025 was 20,604.69 Lakhs as compared to 24,067.02 Lakhs for the year ended 31st March, 2024. Total Comprehensive Income stood at 14,277.55 Lakhs for the year ended 31^st March, 2025 compared to 15,427.33 Lakhs for the previous year.

(b) Zuari Farmhub Limited :

"Zuari Farmhub Limited (ZFL) continues to be a subsidiary of the Zuari Agro Chemicals Limited.

The following are the businesses carried out by ZFL:

The Specialty Nutritients Business:

In order to support the market & farmers need with timely supply of quality products, ZFL manufactures, source & promotes high quality Water Soluble Fertilizers, Micronutrients, Organic Products, Soil Conditioners & Agri. fluids to offer complete plant nutrient solution to farmers. The Specialty Fertilizer Division facility in Baramati manufacturing highest quality Water Soluble Fertilizer mixtures has greatly helped in growth of the business.

Plant Protection Chemicals

ZFL offer services to farmers by offering such protection measures, wide range of agri. Crop protection chemicals are marketed by ZFL under their own brands sourced from reputed manufacturers. ZFL also adopted a collaborative approach for marketing the products of reputed pesticide companies in their brands through their channel partner network.

Agri Retail Business - Jai Kisaan Junction

ZFL has conceptualized and operate a targeted platform which is company owned company operated retail multi brand store chain - Jaikisaan Junctions , to deliver quality farm inputs and services at reasonable prices to the farmers. Under the motto of One-Stop-Solution, highest quality products / brands are sourced right from manufacturer itself for Jaikissan Junctions to offer an entire range of Agri. products and services to the farmers.

Analytical and Advisory Service

ZFL promotes the concept of Integrated Nutrient Management. Six Agricultural Development Labs (ADLs) established at different locations strive to provide solution to the pressing needs of the farmers in 14 out of 15 agro climatic zones in India. Through this facility, analysis of samples pertaining to our customers is done and appropriate recommendations for soil health and crop management are given.

The Agri Services and R&D is involved in imparting training to internal customers and channel partners. Adventz Agri Innovation Centre at Solapur is a platform where agricultural technologies are screened based on adaptation and assessing their relative advantage, compatibility, complexity and replicability.

The revenue from operations for the year ended 31^st March, 2025 was 1,10,735.83 Lakhs as compared to

78,167.61 Lakhs for the year ended 31^st March, 2024.

The profit before tax for the year ended 31^st March, 2025 was 3,467.44 Lakhs as compared to loss of 1,821.95 Lakhs for the year ended 31^st March, 2024. Total Comprehensive Income stood at 2,560.05 Lakhs for the year ended 31^st March, 2025 compared to loss 1217.98 Lakhs for the previous year.

30. Joint Venture:

A brief review of the joint venture of the Company is given here below: Zuari Maroc Phosphates Private Limited:

Zuari Maroc Phosphates Private Limited (ZMPPL), a 50:50 joint venture with OCP S.A., was established as a Special Purpose Vehicle (SPV) for acquisition of stake in Paradeep Phosphates Limited (PPL). At present, ZMPPL is holding 56.05% of the equity stake in PPL.

ZMPPLs total revenue from operations for the year ended 31^st March, 2025 was 6884.06 Lakhs as against 2949.70 Lakhs during the previous year.

The profit before exceptional Items and tax for the year ended 31^st March, 2025 was 2678.23 Lakhs as against profit before exceptional Items and tax of 2595.66 Lakhs during the previous year. Profit after tax for the year was 1996.89 Lakhs as compared to profit after tax of 1935.73 Lakhs in the previous year.

31. Risk Management:

The details pertaining to Risk Management are included in the Corporate Governance Report enclosed as Annexure ‘A.

32. Business Responsibility and Sustainability Report :

Pursuant to Regulation 34 (2) (f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015, the Business Responsibility and Sustainability Report for the financial year 2024-25 is not applicable to the Company.

33. Directors Responsibility Statement :

To the best of our knowledge and belief and according to the information and explanation obtained by us, your Directors make the following statements in terms of provisions of Section 134 (5) of the Companies Act, 2013, and hereby confirm that:

(a) in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation material departures;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and the loss of the company for that period;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

34. Compliance of Secretarial Standards:

The Company has complied with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

35. Acknowledgements:

Your Directors wish to place on record their appreciation for the dedication, commitment and contribution of all stakeholders and employees of your Company.

For and on behalf of the Board
Nitin M. Kantak	Athar Shahab
Executive Director	Non-Executive Director
DIN: 08029847	DIN: 01824891
Date: 14th May, 2025