ZR2 Bioenergy Limited (formerly known as Gujchem Distillers India Limited) has filed its Monitoring Agency (MA) Report for the quarter ended March 31, 2026, with BSE Limited, pursuant to Regulation 32 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The report was issued by Crisil Ratings Limited and was duly reviewed by the Audit Committee and taken on record by the Board of Directors via a Circular Resolution passed on May 15, 2026. The filing was signed by Jimmy Olsson, Managing Director of ZR2 Bioenergy Limited.

Key Qualification: Deviation in Deployment of Unutilized Proceeds

Crisil Ratings Limited has raised a significant qualification in its report. During the quarter ended December 31, 2024, the Company deployed unutilized issue proceeds amounting to Rs 18.50 crore into a short-term deposit arrangement with Sukhmehar Finance Private Limited, a non-deposit-taking Non-Banking Finance Company (NBFC) as per the Reserve Bank of India's list of registered NBFCs dated December 31, 2024. This deployment is noted as a variation from the standard industry practice of placing unutilized proceeds in low-risk liquid instruments such as fixed deposits with scheduled commercial banks or low-risk mutual funds.

Additionally, the notice to shareholders dated May 16, 2024, filed by the Company did not disclose the mode for deployment of unutilized proceeds, as required by BSE Notice No: 20221213-47 dated December 13, 2022. As of the quarter ended March 31, 2026, the Rs 18.50 crore deposit arrangement with Sukhmehar Finance Private Limited remains in place. The Monitoring Agency has noted that this variation may have implications on the availability of proceeds for future utilization towards the objects of the issue. The maturity of the deposit has been revised to June 30, 2026, as the management determined there was no immediate requirement for the funds.

Revised Issue Size and Object-Wise Cost Revision

The original total issue proceeds stood at Rs 248.77 crore. Following forfeiture of warrant subscription amounts due to non-exercise of conversion rights by some proposed allottees, the Board of Directors approved a revision in issue proceeds to Rs 122.40 crore via a resolution dated February 14, 2026. The cost of objects was revised accordingly, as detailed below:

Progress in Utilization of Issue Proceeds

The Monitoring Agency reported no fresh utilization of issue proceeds during the quarter ended March 31, 2026. The following table summarizes the utilization status as at the end of the quarter:

The repayment of the unsecured loan was fully utilized during the December 2024 quarter. No utilization was reported for the biorefinery acquisition and expansion object or the Working Capital and GCP object during the reported quarter.

Deployment of Unutilized Proceeds

The Rs 18.50 crore in unutilized proceeds continues to be deployed as follows:

The two HSBC Bank capital markets accounts, maintained for receiving issue proceeds from international and domestic subscribers respectively, have now been closed. Any funds received in the future are to be credited to alternate accounts.

Delay in Implementation and Additional Observations

The Monitoring Agency noted a delay in the utilization of funds earmarked for General Corporate Purposes (GCP). Against the revised allocation of Rs 21.05 crore for GCP, only Rs 2.55 crore has been utilized to date, with the balance Rs 18.50 crore remaining deployed with Sukhmehar Finance Private Limited. The delay is attributed to the phased receipt of issue proceeds and the subsequent revision of final utilization plans by the Board following non-receipt of balance warrant subscription amounts. The Board has approved a revision in the estimated date for utilization of these proceeds to FY 2027 and has ratified the delay in utilization towards GCP for FY 2026.

The Monitoring Agency also noted that the Company issued warrants at a price of Rs 65.00 per share (as per the Notice of EGM dated May 16, 2024), while the market price per share as on May 13, 2026, stood at Rs 154.50. Furthermore, the Company received approval from the Department of Cooperation, Marketing and Textile, Government of Maharashtra, vide a Resolution dated July 21, 2025, for the construction of various projects on a Build-Own-Operate-Transfer basis, including an arrangement for warrant subscription by PVSKL. The statutory auditor's certificate referenced in this report was dated May 13, 2026, issued by M/s Bagaria & Co. LLP, Chartered Accountants (Firm Registration Number: 113447W/W-100019).

ZR2 Bioenergy Limited (formerly known as Gujchem Distillers India Limited) has announced the forfeiture of Rs. 42,12,32,500 following the non-exercise of warrant conversion options by multiple investors. The forfeiture became effective after the 18-month conversion deadline expired on February 13, 2026.

Warrant Allotment Background

The company had initially allotted 2,59,22,000 convertible warrants on May 10, 2024, on a preferential basis to acquirer alias proposed promoter and strategic investors (non-promoters). The warrants were issued at Rs. 65 each, aggregating to a total amount of Rs. 168,49,30,000. At the time of allotment, the company received Rs. 42,12,32,500 as the initial subscription amount, representing 25% of the total warrant value.

Forfeiture Details

Under Regulation 169(3) of Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, the entire initial subscription amount has been forfeited due to non-exercise of conversion options within the prescribed timeframe.

Regulatory Compliance

The forfeiture has been communicated to BSE Limited under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Managing Director Jimmy Olsson signed the disclosure on February 14, 2026, confirming compliance with applicable regulations. The disclosure will also be made available on the company's website at www.rushil.com for public access.