Zuari Agro Chemicals Limited – Legal Notice Over Water/Sewerage Charges

Date of Announcement: 29 April 2026

Key Points

• Demand Notice: Received on 28 Apr 2026 from the Office of the Executive Engineer, WD IV DDW Fatorda, Goa.
• Amount Claimed: Rs 296,45,99,341 (≈ Rs 296 crore).
• Company Position: Disputes the claim, asserts no prior defaults, and will contest the notice through legal channels.
• Regulatory Disclosure: Filed under Regulation 30 of SEBI (LODR) 2015; details provided in Annexure A.

Financial Implications

• Contingent Liability: Potential exposure of ~Rs 300 crore.
• Current Impact: No immediate cash outflow; the amount is not yet recognized as a provision.
• Potential Scenarios:
  • Best case: Successful contest → liability dismissed, no impact.
  • Worst case: Claim upheld → need to provision for the full amount, affecting earnings and cash reserves.

Strategic & Regulatory Context

• The notice pertains to operational utility charges (water/sewerage) linked to the company's manufacturing facilities in Goa.
• Zuari emphasizes compliance with all applicable laws, indicating a broader commitment to regulatory adherence.
• The matter is being disclosed promptly, reflecting transparency under SEBI regulations.

Risks & Opportunities

• Risks:
  • Legal uncertainty and possible financial provisioning.
  • Potential reputational impact if the dispute is perceived as a compliance lapse.
• Opportunities:
  • If the company prevails, it avoids a large outflow and may reinforce its standing with regulators.
  • The dispute highlights the importance of robust utility management, prompting possible operational efficiencies.

Investor Take‑aways

• Monitor court proceedings and any subsequent disclosures regarding provisions or settlements.
• Assess the company's liquidity position to gauge its ability to absorb a large, unexpected liability.
• Consider the contingent nature of the risk when evaluating valuation multiples and forward earnings estimates.

Prepared on 29 April 2026 for Zuari Agro Chemicals Limited investors.