We have audited the accompanying Standalone financial
statements of Dharani Sugars and Chemicals Limited

(“the Company”), which comprise the balance sheet as
at March 31, 2023, and the statement of profit and loss
(including other comprehensive income), the statement
of changes in equity and the statement of cash flows
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, subject to the
effects of the matter described in the Basis for Qualified
Opinion section of our report, 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, except Ind AS 19
“Employee Benefits” as more fully described in clause
(e) of Basis for Qualified Opinion section of the report,
prescribed under section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules, 2015,
as amended, (“Ind AS”) and other accounting principles
generally accepted in India, of the state of affairs of
the Company as at March 31, 2023, and its loss, total
comprehensive income, the changes in equity and its
cash flows for the year ended as on that date.

Basis for Qualified Opinion

We draw attention to the following matters:

a) Note 46 to the Standalone Financial Statements
regarding the fact that all the banks and financial
institutions have classified the borrowings of the
Company as non-performing assets. All the banks
and financial institutions have also issued notice
calling back the loans. Considering the above, as
in the previous periods, the Company has not (a)
provided interest on the outstanding borrowings from
banks and financial institutions; and (b) not restated
the foreign currency loans. In the opinion of the
management, in view of the One Time Settlement
(“OTS”) of the loans sought by the Company, there
will be no further interest liability on the Company
from the NPA date.

However, the Hon'ble NCLT, Chennai Bench,
admitted the CIRP application filed by a financial
creditor of the Company and we were informed by
the Resolution Professional that the financial and
operating creditors have lodged claims of principal
and interest due.

b) As more fully explained in Note 51 to the financial
statements, we were also informed by the RP that

i. the IRP reconvened the 1st CoC meeting on May
2, 2022 and pursuant to the decision made in the
1st CoC meeting, IRP issued 'Form G' - Public
Announcement inviting Expression of Interest
(EoI) to submit Resolution Plans. As on last date
for receipt of EoI., i.e. June 1, 2022, 7 EoIs were
received. As per Regulation 35 of IBC, IRP has
appointed two sets of IBBI Registered Valuers to
estimate the fair value and the liquidation value,
which shall be shared with the members of CoC on
receipt of resolution plans. The physical verification
of inventory and fixed assets were carried out by
the Valuers;

ii. in the 6th CoC meeting held on September 28,

2022, the last date for submission of the final
revised resolution plan was decided as October 15,
2022 and 3 revised final resolution plans from the
Resolution Applicants were received as on date;

iii. further as per the e-voting results dated September
22, 2022 CoC approved the appointment of
Mr. Mahalingam Suresh Kumar, Insolvency
Professional as Resolution Professional subject to
approval by the Adjudicating Authority for which an
application is being filed by the CoC members with
NCLT; and

iv. On February 8, 2023 RP convened the 11th CoC
meeting in which the members decided to file
an appropriate application before the Hon'ble
NCLT, Chennai Bench seeking extension of CIRP
period by 30 days beyond the maximum timelines
specified under Section 12 of the IBC, 2016.The
case was heard by the NCLT on 3rd March 2023
and was posted for further hearing on 29th May

2023.

v. As the decision making on the plan is very crucial
taking into consideration various factors, the lenders
seek these 60 days additional timeline to decide on
the options either by themselves or through NARCL
suitably. RP also informed the COC members that
the chairman of the Dharani Sugars have filed a
Caveat Petition, that in case liquidation petition is
filed by the RP it shall be brought to their attention.

c) Note 50 to the Standalone Financial Statements
which explains that during June 2020 quarter, a
CIRP was admitted and a resolution professional
was appointed in the case of one of the major
investees of the Company by the Hon'ble NCLT,
Chennai Bench vide its order dated May 5, 2020.
The carrying amount of the investments as atMarch
31, 2023 is INR 1,455.53 Lakhs

The Hon'ble NCLT has passed an order approving
the resolution plan submitted by one of the resolution
applicants. Aggrieved by this Order, the investee
has filed an application before the Hon'ble National
Company Law Appellate Tribunal (“NCLAT”)

payables, advances received/ paid and for deposits
received/ paid, as the necessary information was not
made available by the Company to us. Accordingly,
we are unable to comment on adjustment, if any,
that may be required had we circulated and received
direct confirmation for the aforesaid balances.

g) The Company has a program of verification to
cover all the items of property, plant and equipment
in a phased manner over a period of three years.
However, no physical verification has been carried
on by the management during the year. Accordingly,
we were unable to comment on whether any material
discrepancies were noticed on such verification and
whether they are properly dealt with in the financial
statements.

h) The Company has not filed the quarterly/ annual
financial results with the stock exchanges within
the stipulated time for certain quarters of the last
year and the current year. However, no provision
has been made in the financial statements towards
penalty payable for the aforesaid non- compliances.

i) Our audit report on the Standalone financial
statements is qualified in respect of matters referred
to clauses (a) to (h) above. The matters referred
to in clauses (a) to (c) have been qualified in the
earlier years as well by the previous auditors.

We conducted our audit 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 (“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 opinion.

Material Uncertainty Related to Going Concern

The Company has no operations during the financial
year. The Company has incurred huge losses during the
period under consideration and also during the earlier
periods/ years, due to which the Company's net worth
is negative. The Company has not met its operating
liabilities, including employee dues due to negative
cashflows. The Company's ability to continue as a going
concern depends on the possible decisions that may be
taken on OTS/ CIRP [as more fully explained in the Para
(a) and (b) of the basis for qualification section of this
report] and further inflow of funds for the working capital
requirements of the Company. All the above matters
materially depend on future events.

The above factors cast significant doubt on the
Company's ability to continue as a going concern.
However, pending resolution of the above uncertainties,
the Company has prepared the aforesaid Statement on
a going concern basis.

Key audit matters

Key audit matters are those matters that, in our
professional judgment, were of most significance in our
audit of the financial statements of the current period.
These matters were addressed in the context of our
audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a
separate opinion on these matters.

In our opinion and based on the information and
explanations given to us, we have determined that
matters described below, to be the key audit matters
over and above those described in the Basis for Qualified
Opinion and in the Material Uncertainty Related to Going
Concern sections our report on the Standalone financial
statements to be communicated in our report:

Presentation and disclosure of additional information
pursuant to the amendments to Schedule III to the
Companies Act, 2013

With a view to facilitate enhanced disclosures and
transparency in operations by companies in India, the
Ministry of Corporate Affairs (MCA) has issued a batch
of amendments to the Schedule III to the Companies
Act, 2013 relating to presentation and disclosures in
the financial statements. The Company has evaluated
the requirements and made the relevant disclosures,
including restatement of the disclosures made in the
comparative period.

Principal Audit Procedures

• We assessed the Company's process to
identify, assess, and respond to risks of material
misstatement in the disclosure requirements
pursuant to the aforesaid amendments to Schedule
III to the Companies Act, 2013.

• As part of the evaluation of whether sufficient
appropriate audit evidence has been obtained,
we have evaluated the appropriateness of our
initial risk assessments and revised previous risk
assessments in for certain financial statement
areas like claims and final settlement of financial
and operating creditors, carrying amount of
property, plant and equipment, capital work in
progress, intangible assets comprisingof, including
related disclosure requirements under the Act and
respective Indian Accounting Standards.

• We have designed, performed additional
procedures, including verification of the source and
completeness of data used by the management for
making proper disclosures as required by the Act.

• We have considered the basis of management
judgment in making the disclosures taking into
consideration the date of the financial statements,
the facts and circumstances pertaining to the entity,
and the conditions that existed at, or arose after, that
date. We have considered all subsequent events
and transactions to substantiate our conclusions on
the appropriateness of management's disclosures
in accordance with the requirements of the
amendments.

• We have audited the management's estimates
required in the standalone financial statements,
including but not limited to estimates related to
expected credit loss, fair value of various assets
taken over and liabilities assumed, inventory
obsolescence, impairment of non-financial assets
etc. by checking the reasonableness of underlying
assumptions in making those key estimates.

• We have carried out a detailed analysis of data
and performed additional analytical procedures for
validating the management's disclosures.

Information other than the financial statements and
auditors' report thereon

The Company's board of directors is responsible for
the preparation of the other information. The other
information comprises the information included in the
Management Discussion and Analysis, Board's Report
including Annexures to Board's Report, Business
Responsibility Report, Corporate Governance and
Shareholder's Information, but does not include the
financial statements and our auditor's report thereon.

Our opinion on the Standalone financial statementsdoes
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 as the other information
is not made available to us by the Company.

Management's responsibility for the 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 Indian
Accounting Standards (Ind AS), except Ind AS 19
“Employee Benefits” as more fully described in clause
(e) of Basis for Qualified Opinion section of the report,
prescribed under section 133,of the Act read with the
Companies (Indian Accounting Standards) Rules, 2015,
as amended from time to time, 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 of 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,
management 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
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.

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 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
skepticism throughout the audit. We also:

• Identify and assess the risks of material
misstatement of the 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 controls relevant
to the audit in order to design audit procedures
that are appropriate in the circumstances. Under
section 143(3)(i) of the Companies Act, 2013, we
are also responsible for expressing our opinion
on whether the company has adequate internal
financial controls system 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 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 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 financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the
Standalone financial statements that, individually or
in aggregate, makes it probable that the economic
decisions of a reasonably knowledgeable user of the
financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i)
planning the scope of our audit work and in evaluating
the results of our work; and (ii) to evaluate the effect of
any identified misstatements in the financial statements.

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 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 the Companies (Auditor's 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
Annexure “A” a statement on the matters specified in
clauses 3 and 4 of the Order.

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, except for the matters
referred to in the basis for qualified opinion
section of this report;

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, except for the matters referred to
in the basis for qualified opinion section of this
report;

c) The balance sheet, the statement of profit and
loss including other comprehensive income,
statement of changes in equity and the statement
of cash flow dealt with by this report are in
agreement with the books of account, except for
the matters referred to in the basis for qualified
opinion section of this report;

d) In our opinion, the aforesaid financial statements
comply with the Indian Accounting Standards
specified under Section 133 of the Act, except for
the matters referred to in the basis for qualified
opinion section of this report;

e) We have not received any written representations
from the directors as on March 31, 2023 and
minutes of the meeting in which it was taken on
record by the Board of Directors. We have also
observed that the Director Identification Number
(DIN) of certain directors of the Company have

been deactivated by the Ministry of Corporate
Affairs as on the date of our report. We could
not merely rely on the certificate issued by a
practising company secretary in respect of the
above compliance, in the absence sufficient
appropriate audit evidence to corroborate with
the aforesaid certificate. Accordingly, we could
not comment on whether any of the directors
of the Company is disqualified as on March 31,
2023 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 B”. Our report expresses a
modified opinion on the adequacy and operating
effectiveness of the Company's internal financial
controls over financial reporting;

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 by the
Company to its directors during the year is in
accordance with the provisions of section 197 of
the Act; and

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 of
pending litigations on its financial position in
its financial statements-Refer Note 40 to the
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;

iv. The management has represented that, to the
best of its knowledge and belief, other than
as disclosed in the notes to the accounts;

a. 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

c. Based on audit procedures carried out by
us, that we have considered reasonable
and appropriate in the circumstances,
nothing has come to our notice that has
causedus believe that the representations
under sub-clause (a) and (b) contain any
material misstatement.

v. The Company has not declared or paid any
dividends during the year and accordingly
reporting on the compliance with section 123
of the Companies Act, 2013 is not applicable
for the year under consideration.

For Srivatsan & Associates
Chartered Accountants

Firm Registration Number 014921S

N Srivatsan

Partner

Place: Chennai Membership Number 230195

Date: May 27, 2023 UDIN: 23230195BGUNMT6462