We have audited the accompanying Standalone Financial
Statements of Zuari Industries Limited (the "Company”),
which comprise the Balance Sheet as at 31st March 2026, the
Statement of Profit and Loss (including other comprehensive
income), the Cash Flow Statement and the Statement of
Changes in Equity for the year ended on that date and notes
to the Standalone Financial Statements including a summary
of the material accounting policies and other explanatory
information (hereinafter referred to as the "Standalone
Financial Statements”).
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 prescribed under section 133 of the
Act read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended, ("Ind AS”) and accounting principles
generally accepted in India, of the state of affairs of the
Company as at 31st March, 2026, its profit, total comprehensive
income, 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)
specified under section 143(10) of the Act. Our responsibilities
under those Standards are further described in the Auditor's
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 (the "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 thereunder, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements and the ICAI's 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
judgment, were of most significance in our audit of the
standalone financial statements of the current period.
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:
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S No Key Audit Matter
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Auditor's Response
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1 Assessment of tax litigations, provisions and contingent
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Our audit procedures included, but were not limited to, the
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liabilities
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following:
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We refer to the Note 23, 38(i) and 40A of the standalone
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•
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We obtained an understanding of the management
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financial statements of the Company for the year ended
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process for identification of tax litigation matters
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31st March 2026 relating to current tax expense, Income Tax
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initiated against the Company and assessment of
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Assets, provisions and contingent liabilities.
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accounting treatment for such litigation under Ind AS 37.
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The Company has significant litigations outstanding as at 31st
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•
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We evaluated the design and tested the operating
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March 2026 in respect of direct tax matters.
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effectiveness of key controls around above process.
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The eventual outcome of these tax proceedings is
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•
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We obtained details of tax assessments and demands
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dependent on the outcome of future events and unexpected
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upto the year ended 31st March 2026 from Management.
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adverse outcomes could significantly impact the Company's
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•
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We obtained an understanding of the nature of litigations
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reported profits and balance sheet position.
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pending against the Company and discussed the key
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The amounts involved are material and the application of
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developments during the year with the Management.
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accounting principles as given under Ind AS 37, Provisions,
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•
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We assessed the appropriateness of methods used,
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Contingent Liabilities and Contingent Assets, in order to
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and the reliability of underlying data for calculations
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determine the amount to be recorded as a liability or to be
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made for quantifying the amounts involved. Tested the
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disclosed as a contingent liability, in each case, is inherently
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arithmetical accuracy of such calculations.
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subjective, and needs careful evaluation and judgement
to be applied by the Management. Key judgments are also
made by the management in estimating the amount of
liabilities, provisions and / or contingent liabilities related to
aforementioned litigations.
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•
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We evaluated management's assessment of the
likelihood of outflow of economic resources and the
consequent classification as provision or contingent
liability under Ind AS 37.
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S No
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Key Audit Matter
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Auditor's Response
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Considering the degree of judgment, significance of the
amounts involved and inherent high estimation uncertainty,
this matter has been identified as a key audit matter for the
current year audit.
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•
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We reviewed the disclosures made relating to
the provisions and contingent liabilities for their
appropriateness.
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2
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Impairment assessment of non-current investments and
loans in subsidiaries and joint ventures
We refer to note 7 and note 38(ii) of the standalone financial
statements of the Company for the year ended 31st March
2026 for the carrying value of the non-current investments
and loans in subsidiaries and joint ventures.
The Company has made significant investment and inter
corporate deposits in subsidiaries and Joint ventures.
Impairment assessment of these investments/ ICDs is
inherently subjective due to reliance on net worth of
investee, valuations of the assets held and cash flow
projections of these investee companies. Due to their
materiality, assessment of impairment losses on the carrying
value of investment in the subsidiaries and joint ventures has
been considered as be a key audit matter.
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Our audit procedures included, but were not limited to,
the following:
• We evaluated design and operating effectiveness of
controls implemented for identification of impairment
indicators and measurement of impairment provision.
• We compared the carrying value of all investments
and loans to the net assets of the respective entities,
to identify whether the net assets were more than their
carrying amount.
• Where the carrying value exceeded the investee's net
assets, we evaluated management's assessment of
recoverable amount.
• We evaluated the appropriateness of disclosures in
relation to investments in subsidiaries and joint ventures.
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3.
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Valuation of Inventory
We refer to Note 38(vii) and Note 11 of the financial statements
of the Company for the year ended 31st March 2026.
At the balance sheet date 31st March 2026, the Company
held INR 44,713.36 lakhs of Inventories.
Sugar manufacturing is an integrated process which leads
to generation of multiple products such as sugar, molasses,
bagasse, ethanol, power etc, which are either used for
generation of other products or sold in the market. The
valuation requires use of judgement and assumptions
regarding elimination of inter-divisional profits, allocation
of costs of production, subsequent inventory sale data,
current sale prices, notifications / press releases from
the government authorities, estimates of expected net
realisable value, etc. These assumptions are subject to
inherent uncertainties and are difficult to ascertain since
they are likely to be influenced by political and economic
factors including uncertainties that may affect the industry
on the whole.
Owing to the significance of the carrying value of
inventories, the complexities discussed above and the
fact that any changes in the management's judgement or
assumptions are likely to have a significant impact on the
ascertainment of carrying values of inventories, we have
considered this area as a key audit matter.
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Our audit procedures in relation to valuation of inventory
included, but were not limited to, the following:
• Tested the design and operating effectiveness of the
controls for inventory valuation.
• Assessed the appropriateness of the principles
used in the valuation of Inventory and analysed the
reasonableness of significant judgements / assumptions
used by the management in their valuation models
along with their consistency based on historical /
industrial data trends such as sugar recovery rates,
generation of Molasses, ethanol recovery rates, and
capacity utilisations of the plant etc.
• Verified net realisable value of various products based
on market rates obtained by the management.
• Reviewed cost sheets prepared by the management for
various processes.
• We also assessed the appropriateness of the disclosures
provided in respect of valuation of inventories.
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S No Key Audit Matter
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Auditor’s Response
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4. Recoverability of deferred tax assets
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Our audit procedures in relation to the recognition of
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We refer to note 22 and 38(v) of the financial statements of
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deferred tax assets included, but were not limited to, the
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the Company for the year ended 31st March 2026.
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following:
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At the balance sheet date, deferred tax assets recognized
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• Evaluated the design and tested the operating
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for carried forward tax losses and unabsorbed depreciation
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effectiveness of key controls implemented over
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amounted to INR 9,561.62 lakhs.
The assessment of meeting the recognition criteria as
well as assessment of recoverability of deferred tax assets
within the period prescribed under the tax laws involves
use of significant assumptions and estimates. Determining
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recognition of deferred tax assets based on the
assessment of Company's ability to generate sufficient
taxable profits in foreseeable future allowing the
utilisation of deferred tax assets within the time
prescribed by Income Tax laws.
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forecasts of future results and taxable profits include
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• Evaluated management's assessment of time period
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key assumptions such as future growth rate and market
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available for adjustment of such deferred tax assets
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conditions.
Any change in these assumptions could have a material
impact on the carrying value of deferred tax assets. These
assumptions and estimates are judgmental, subjective and
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as per provisions of the Income Tax Act, 1961 and
appropriateness of the accounting treatment with
respect to the recognition of deferred tax assets as per
requirements of Ind AS 12, Income Taxes.
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depend on the future market and economic conditions,
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• Re-computed the amount of deferred tax assets as
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including industry focused trade policies of the government
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appearing in the financial statements confirming
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and materialization of the Company's expansion plans.
Owing to the significance of the balances and complexities
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the amounts of carried forward tax losses and
unabsorbed depreciation.
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involved as described above, we have considered recoverability
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• Assessed the appropriateness of the disclosures in
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of such deferred tax assets recognised on carried forward tax
losses and unabsorbed depreciation as a key audit matter.
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respect of deferred tax balances
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Information Other than the Standalone Financial
Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the
other information. The other information comprises the
information included in the Annual Report, but does not
include the Standalone Financial Statements and our auditor's
report thereon.
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 the 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 and Those Charged
With Governance for the Standalone Financial
Statements
The Company's 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 Ind AS and other accounting principles
generally accepted in India. This responsibility also includes
maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of
the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation
and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to
the preparation and presentation of the 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, the Board of
Directors is responsible for assessing the Company's ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the Management either intends to liquidate
the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors are also responsible for overseeing the
Company's financial reporting process.
Auditor's Responsibilities for the Audit of 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 auditor's 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 judgment and maintain professional scepticism
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 Standalone
Financial Statements 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 management's 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 Company's ability
to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw
attention in our auditor's 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 auditor's 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 auditor's 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 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 other comprehensive income, the cash
flow statement and the 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 Ind AS specified under
Section 133 of the Act.
(e) On the basis of written representations received
from the directors as on 31st March 2026 and taken
on record by the Board of Directors, none of the
directors is disqualified as on 31st March 2026 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 with reference to standalone financial
statements of the Company and the operating
effectiveness of such controls, refer to our separate
report in “Annexure A”.
(g) With respect to the other matters to be included
in the Auditor's Report in accordance with the
requirements of section 197(16) of the Act, as
amended, in our opinion and to the best of our
information and according to the explanations
given to us, the remuneration paid / provided
by the Company to its directors during the year
is in accordance with the provisions of section
197 of the Act.
(h) With respect to the other matters to be included in
the Auditor's Report in accordance with Rule 11 of
the 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, if any,
of pending litigations on its financial position in
its standalone financial statements - Refer Note
No. 40 to the standalone financial statements.
ii. The Company did not have any long-term
contracts including derivative contracts for
which there were any material foreseeable
losses as at 31st March 2026.
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
31st March 2026.
iv. (A) The management has represented to us
that, to the best of its knowledge and
belief, other than as disclosed in the notes
to the accounts, no funds have been
advanced or loaned or invested (either
from borrowed funds or share premium
or any other sources or kind of funds) by
the company to or in any other person(s)
or entity(ies), 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 also represented
to us, that, to the best of its knowledge
and belief, other than as disclosed in the
notes to the accounts, no funds have
been received by the company from
any person(s) or entity(ies), 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; and
(C) Based on such audit procedures that we
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 (i) and (ii) of Rule 11(e) of
Companies (Audit and Auditors) Rules,
2014, as provided under (A) and (B) above,
contain any material misstatement.
v. The dividend declared or paid during the year
by the Company is in compliance with section
123 of the Act.
vi. Based on our examination which included
test checks, the Company has used an
accounting software for maintaining its books
of account for the financial 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. Further,
during the course of our audit, we did not
come across any instance of audit trail feature
being tampered with and the audit trail has
been preserved by the Company as per the
statutory requirements for record retention.
2. As required by the Companies (Auditor's Report) Order,
2020 ("the Order”) issued by the Central Government of
India in terms of Section 143(11) of the Act, we give in the
"Annexure B” a statement on the matters specified in the
paragraphs 3(xxi) of the said Order.
For V. Sankar Aiyar & Co.
Chartered Accountants
ICAI Firm Regn No. 109208W
(Ajay Gupta)
Partner
Place: Gurugram, Haryana Membership No. 090104
Date : 25th May 2026 ICAI UDIN : 26090104NVLPDO3729
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