Dhampur Bio Organics Auditors Report


To

The Members of

Dhampur Bio Organics Limited

Asmoli, Sambhal - U.P.

Report on the Audit of the Standalone financial statements Opinion

We have audited the accompanying standalone financial statements of Dhampur Bio Organics Limited ("the Company"), which comprise the Standalone Balance Sheet as at March 31, 2024, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year ended on that date and a summary of significant accounting policies and other explanatory information including notes to the standalone financial statements (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, as amended ("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, thereof ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024 and its profit (including other comprehensive loss), changes in equity and its cash flows 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 specified under section 143(10) of the Act (SAs). 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 made 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 obtained by us 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 matter described below to be the key audit matters to be communicated in our report.

Key Audit Matters

Auditor?s Response

I. Determination of Cost of Production (COP) and Net Realizable Value (NRV) of Finished Goods and By-Products for valuation of inventory :

As on March 31, 2024, the Company has inventory of finished goods, by-products and work in progress with an aggregate carrying value of H 1,058.15 Crores. The inventory of finished goods viz. Sugar and ethanol is valued at the lower of COP and NRV whereas the inventory of by-products viz. molasses and bagasse is valued at NRV/Derived NRV. We considered the value of the inventory of finished goods and by-products as a key audit matter given the relative value of inventory in the financial statements and significant judgement involved in the determination of COP and also the consideration of factors such as minimum sale price, monthly quota, and fluctuation in domestic and international selling prices in determination of NRV/ Derived NRV.

Principal Audit Procedures

We understood and tested the design and operating effectiveness of controls as established by the management in determination of COP and NRV/Derived NRV. We reviewed the cost records maintained by the management and examined the documents maintained by the management for computing the COP and NRV/ Derived NRV with reference to the principles prescribed under Ind AS-2 on "Inventories".

We considered various factors, including the prevailing unit specific domestic selling price of the products during and subsequent to the year end, yield of ethanol from "B" Heavy Molasses and from "C" Heavy Molasses having higher sucrose contents, value of sugar sacri_ced during the production of such Molasses, prevailing selling price of free and levy obligation of "C" Heavy Molasses having standard sucrose contents, contracted selling price of the products in respect of contracted sales, Molasses Policy of State Government for determination of levy obligation of molasses for the Molasses Year 2023-24, management plan to supply the grade of molasses for the fulfillment of stipulated "B" Heavy Levy Molasses obligation and initiatives taken by the Government with respect to sugar industry as a whole, for determination of NRV/ Derived NRV of the products.

Based on the above procedures performed, the managements determination of COP and NRV/ derived NRV of finished and by- products as at year-end and the comparison of COP with NRV for the valuation of inventory is considered to be reasonable

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 Management Discussion and Analysis, Directors? Report including Annexures to Directors? Report and Corporate Governance and Shareholder?s information, 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, changes in equity and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, thereof.

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; 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 is responsible for overseeing the Company?s financial reporting process.

Auditor?s 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 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 financial 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 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 the 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.

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 standalone 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 standalone 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 de_ciencies 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 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 "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, based on our audit, 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 of the aforesaid standalone financial statements; 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, statement of cash flow and the statement of changes in equity dealt with by this Report are in agreement with the relevant books of account; d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) relevant Rules, 2015, as amended, ; e) On the basis of the written representations received from the directors as on March 31, 2024 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 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 B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company?s internal financial controls with reference to standalone financial statements.

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: we report that 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, as amended, 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 litigation as at March 31, 2024 on its financial position in its standalone financial statements – Refer Note 40 to the standalone financial statements; ii. The Company does not have any long term contracts, including derivatives contracts, for which there were any material foreseeable losses as at March 31, 2024; 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 March 31, 2024. 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(which are material either individually or in aggregate) 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 persons or entities, 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 represented to us that, to the best of its knowledge and belief, other than as disclosed in the notes to the accounts, no funds ( which are material either individually or in aggregate) have been received by the company from any person(s) or entities, 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; (c) Based on our audit procedure conducted that have been considered reasonable and appropriate in the circumstances, nothing has come to our attention that has caused us to believe that the representation under sub- clause (i) and (ii) of Rule 11 (e) as provided under paragraph (2) (h) (iv) (a) & (b) above, contain any material misstatement. v. In our opinion and as per information and explanation given to us, the final dividend of H3.50 per share paid by the company during the year for the financial year 2022-23 and the final dividend of H2.50 per shares proposed by the Board of Directors in its meeting held on April 24, 2024 for the financial year 2023-24 are in accordance 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 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.

For Mittal Gupta & Co.
Chartered Accountants
Firm?s Registration No. 001874C
Bihari Lal Gupta
Partner
Place : New Delhi Membership No. 073794
Date : April 24, 2024 UDIN: 24073794BKEOBJ8619

Annexure A to the Independent Auditor?s Report to the members of Dhampur Bio Organics Limited on its standalone financial statements for the year ended March 31,2024.

Report on the matters specified in paragraph 3 of the Companies (Auditor?s Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of section 143(11) of the Companies Act, 2013 ("the Act") as referred to in paragraph 1 of ‘Report on Other Legal and Regulatory Requirements? section.

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that: i. (a) (A) The Company has maintained proper records showing full particulars including quantitative details and situation of property, plant and equipment and relevant details of right-of use assets.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) The property, plant and equipment and right-of use assets have been physically verified by the management according to the programme of periodical verification in a phased manner which, in our opinion, is reasonable having regard to the size of the company and the nature of its property, plant and equipment. The discrepancies, if any, noticed on such physical verification have been properly dealt with in the books of accounts.

(c) According to the information and explanation given to us and on the basis of our examination of the records of the Company, the title deed of immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee/demerged company), are held in the name of the company. However, as stated in the note no. 3 the mutation of certain properties are yet to be registered in the name of the company in the records of local authorities.

(d) The Company has not revalued its property, plant and equipment (including right-of use assets) and intangible assets during the year.

(e) There are no proceedings initiated or are pending against the Company as at March 31, 2024 for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) and rules made thereunder. ii. (a) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories, followed by the management, are reasonable and adequate in relation to the size of the Company and the nature of its business. The discrepancies noticed on verification between the physical stocks and the book records in each class of inventory is less than 10% and have been properly dealt with in the books of accounts.

(b) As disclosed in note 48 to the standalone financial statements, the Company has been sanctioned working capital limits in excess of Rupees five crores in aggregate from banks during the year on the basis of primary security of current assets of the Company but utilization of sanctioned limits has been allowed by the lenders based drawing power calculated on the value of stocks reported in the weekly stock statements. The management represented us that the value of stock, as stated in the stock statements and as recorded in the books at quarter-end, will always differ on account of differential valuation methods of inventories, which have been explained in details in the said note. It is further represented by the management that the value of receivables and creditors is reported in the stock statement based on provisional data, pending finalization of quarterly/yearly accounts and there might be some immaterial differences in the provisional and final figures. For the aforesaid reasons, there are differences in the amounts reported in the stock statements and the carrying amounts on the final books of accounts and the same have been reported in the aforesaid note by the management. We have verified the quantity of inventories and the value of spares and stores, debtors, creditors etc., as reported in the stock statements, as at the end of each quarter with the books of accounts and records maintained by the company and report that there exists no material differences in these figures. iii According to the information and explanations given to us, the Company has not made any investment in, or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms and limited liability partnership or any other parties during the year. However, during the year, the Company has provided guarantee and security to ICICI Bank Ltd. for issuing SBLC to secure working capital facilities of USD 5.60 million to be availed from foreign bank/branch by its wholly owned foreign subsidiary, Dhampur International Pte. Ltd., Singapore (DIPL). However, DIPL has not utilized the said facility during the year and there is no outstanding in the said SBLC backed facility at the year-end. In our opinion, the security and guarantee provided by the company during the year is not prejudicial to the company?s interest. The other provisions of reporting under clause 3 (iii) (a), (c) to (f ) of the Order is not applicable to the company. iv In our opinion and according to the information and explanations given to us, the Company has complied with provisions of Sections 185 and 186 of the Act in respect of Loans granted, Investments made and guarantees and securities provided, as applicable. v According to the information and explanations given to us, the Company has not accepted any deposits or amounts which are deemed to be deposits within the meaning of provisions of sections 73 to 76 or any other relevant provisions of the Act and the Rules framed there under. Accordingly, reporting under clause 3 (v) of the Order is not applicable to the Company. vi. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company as specified by the Central Government of India under section 148(1) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate and complete.

vii. (a) According to the records of the Company examined by us and as per the information and explanations given to us, in our opinion, the Company has generally been regular in depositing its undisputed statutory dues including provident fund, income-tax, goods and service tax, duty of excise, cess and any other material statutory dues, as applicable, with the appropriate authorities. Employees? state insurance, sales-tax, services tax, duty of customs and value added tax are not applicable on the company. Further, there were no undisputed amounts outstanding at the year-end for a period of more than six months from the date they became payable except income tax demand of H 0.05 Crores on processing of TDS returns.

(b) According to the information and explanations given to us and the records of the Company examined by us, the amounts of statutory dues, including the dues of duty of excise, service tax, value-added tax, sales taxes, entry tax, income tax and other statutory dues not deposited on account of dispute along with the forum where the dispute are pending are as follows:

Name of the Statute

Name of Dues Amount (Rs in Crore) Period to which the amount relates Forum where the dispute is pending
UP Trade Tax 1948 Trade Tax 0.05 1996-97 Hon?ble High Court of Allahabad

UP Value Added Tax, 2008

VAT 0.53 2009-10 and 2010-11 Hon?ble High Court of Allahabad

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax 0.88 2001-02 Hon?ble High Court of Allahabad

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax 1.77 2005-06 Hon?ble High Court of Allahabad

U.P. Tax on Entry of Goods into Local Area Act, 2007

Entry Tax 1.35 2006-07 Hon?ble High Court of Allahabad
U.P. Sugarcane (Purchase Tax) Cane 2.88 2017-18 Hon?ble High Court of Allahabad
Act,1961 Purchase Tax

The Indian Stamp Act, 1899

Stamp Duty 18.01 2012-13 Chief Controlling Revenue Authority , Allahabad
The Indian Stamp Act, 1899 Stamp Duty 0.25 2003-04 Hon?ble High Court of Allahabad
Income Tax Act, 1961 Income Tax 1.09 2022-23 Commissioner of Income tax

viii. According to the information and explanations given to us, Company has not surrendered or disclosed any transactions, previously unrecorded in the books of accounts, in the tax assessments under the Income Tax Act, 1961, as income during the year. Accordingly, the requirement to report on clause 3(viii) of the Order is not applicable to the Company. ix (a) According to the information and explanations given to us and as per the books and records examined by us, in our opinion, the Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender including the loans and interest which are repayable on demand.

(b) According to the information and explanations given to us and the records of the Company examined by us including representation received from the management, the Company has not been declared wilful defaulter by any bank, financial institution or other lenders or government or any government authority.

(c) Term loans were applied for the purpose for which the loans were obtained.

(d) On an overall examination of the standalone financial statements of the Company, prima facie, no funds raised on short-term basis have been used for long-term purposes by the Company.

(e) In our opinion and according to the information and explanation given to us, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiary.

(f ) In our opinion and according to the information and explanation given to us, the Company has not raised any loan during the year on pledge of security held in its subsidiary. x (a) According to the information and explanations given to us and as per the books and records examined by us, the company has not raised money by way of initial public offer or further public offer (including debt instruments). Accordingly, reporting under clause 3 (x) (a) of the Order is not applicable to the Company.

(b) According to the information and explanations given to us and as per the books and records examined by us, the company has not made any preferential allotment or private placement of shares or convertible debentures during the year. Accordingly, reporting under clause 3 (x) (b) of the Order is not applicable to the Company. xi (a) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year. Accordingly, reporting under clause 3 (xi) (a) and (b) of the Order is not applicable to the Company.

(b) No report under sub-section (12) of section 143 of Companies Act has been filed in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditor) Rules, 2014 with the Central Government during the year up to the date of this report.

(c) According to the information & explanations and representation made by the management, no whistle-blower complaints have been received during the year (and up to the date of the report) by the company. xii In our opinion, the Company is not a Nidhi Company. Accordingly, reporting under clause 3 (xii) (a) to (c) of the Order is not applicable to the Company. xiii According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act and details of such transactions have been disclosed in the standalone financial statements as required by applicable accounting standards. xiv (a) The Company has an internal audit system commensurate with the size and nature of its business.

(b) The internal audit reports of the Company issued till the date of the audit report, for the period under audit have been considered by us. xv In our opinion, and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him and hence the requirement to report on clause 3 (xv) of the Order is not applicable to the Company. xvi (a) The provisions of section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934) are not applicable to the Company. Further, the Company is not a Core Investment Company as defined in the regulations made by Reserve Bank of India. Accordingly, the requirement to report on clause 3 (xvi) (a) to (b) of the Order is not applicable to the Company.

(b) According to the information and explanations given to us, including representation from the management, there is not more than one core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016). xvii In our opinion, and according to the information and explanations provided to us, the Company has not incurred cash losses in the current financial year and in the immediate preceding financial year. xviii There has been no resignation of the statutory auditors during the year. Accordingly, provisions of clause (xviii) of the Order are not applicable to the Company. xix According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the company as and when they fall due. xx (a) In respect of other than ongoing projects, there are no unspent amounts that are required to be transferred to a fund specified in Schedule VII of the Act, in compliance with the second proviso to sub section 5 of section 135 of the Act.

(b) There are no unspent amounts pursuant to ongoing projects that are required to be transferred to a special account in compliance of the provision of sub section (6) of section 135 of the Companies Act.

For Mittal Gupta & Co.
Chartered Accountants
Firm?s Registration No. 001874C
Bihari Lal Gupta
Partner
Place : New Delhi Membership No. 073794
Date : April 24, 2024 UDIN: 24073794BKEOBJ8619

Annexure B" to the Independent Auditor?s Report to the members of Dhampur Bio Organics Limited (‘the Company?) on its standalone financial statements for the year ended March 31, 2024 .

Report on the Internal Financial Controls with reference to standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") as referred to in paragraph 2(f ) of ‘Report on Other Legal and Regulatory Requirements? section.

We have audited the internal financial controls with reference to standalone financial statements of Dhampur Bio Organics Limited ("the Company") as of March 31, 2024 in conjunction with our audit of the Ind AS standalone financial statements of the Company for the year ended on that date.

Management?s Responsibility for Internal Financial Controls

The Management and Board of Directors of the Company is responsible for establishing and maintaining internal financial controls based on the internal control with reference to financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company?s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor?s Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements of the Company based on our audit.

We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to standalone financial statements and their operating effectiveness.

Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor?s judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Company?s internal financial controls system with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to standalone financial statements

A Company?s internal financial control with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company?s internal financial control with reference to standalone financial statements includes those policies and procedures that: a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorization of management and directors of the company; and c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with reference to standalone financial statements

Because of the inherent limitations of internal financial controls with reference financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements for future periods are subject to the risk that the internal financial control with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal controls system with reference to standalone financial statements and such internal controls with reference to standalone financial statements were operating effectively as at March 31, 2024, based on the criteria for internal financial control with reference to standalone financial statements established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over the financial statements issued by the Institute of Chartered Accountants of India.

For Mittal Gupta & Co.
Chartered Accountants
Firm?s Registration No. 001874C
Bihari Lal Gupta
Partner
Place : New Delhi Membership No. 073794
Date : April 24, 2024 UDIN: 24073794BKEOBJ8619