Dharani Sugars & Chemicals Ltd Auditor Reports

To The Members Of Dharani Sugars And Chemicals Limited

Qualified Opinion

We have audited the accompanying standalone financial statements of Dharani Sugars and Chemicals Limited (“the Company”),which comprise the Balance Sheet as of 31st March 2025, 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 ended 31st March 2025 and notes to financial statements, including summary of 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, except for the matters described in the Basis for Qualified Opinion in 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 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 2025, and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We draw attention to the following matters being described in this report,

1. We draw attention to Note 1 in the financial statements, which indicates that the Company has come out of the CIRP process during year of audit vide Honorable National Company Law Tribunal (NCLT) vide order dated 9^th May 2024 and states that the Company has initiated necessary revival plan to recommence commercial operations by restoring production capabilities, ensuring the companys ability to meet its obligations and sustain its business activities in the foreseeable future. As stated in Note No.2 the Company has accumulated losses and it indicates that the Company has negative net worth as on the balance sheet date. Except for these events or conditions, along with other matters as set forth in other Notes to financial statements the standalone financials are prepared on going concern basis. Our opinion is not modified in this matter.

2. We draw attention to Note No.5 to the standalone financial statements which explains the Companys the investment in Appu Hotels Limited (“investee Company”). The carrying amount of investment as at 31st March 2025 is INR 1455.39 Lakhs. In the opinion of the management the carrying amount of investments is reflective of fair value of investments and is recoverable; thus, no adjustments were made in the carrying value of investments in financial statements. In our opinion the carrying value of investments is not reflective of fair value of investments as per the “IND AS 113 - Fair Value Measurements”.

3. We were not provided with balance confirmations as at 31st March 2025 for trade receivables, trade payables, advances received/ paid and for deposits received/ paid. Based on the above we are unable to report the impact on standalone financial statements due to non-receipt of confirmations.

4. We draw attention to Note No.41, where in the balance unsustainable debt of INR. 33,465 Lakhs has been disclosed as contingent liability (which is contingent upon remission of liability as per the fulfillment terms of repayment as provided in a MRA).

5. We draw attention to Note 16 & 20 of the financial statements, which discloses borrowings from directors & Inter corporate Loans from related parties. The Company has not provided for interest expense on these borrowings as per the agreed terms. In our view, the omission of such a provision has resulted in an understatement of finance costs and current liabilities. The total outstanding loans from Directors and Related Parties stands at INR 16,586.91 Lakhs as on 31^st March 2025.

We conducted our audit of the 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 Auditors Responsibilities for the Audit of 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules there under and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the 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.

In our opinion, based on the information and explanations given to us, there are no other key audit matters to be communicated in our report, other than those more fully described in the Basis for Qualified Opinion section of our report on the standalone financial statements.

Information Other than the Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards report including Annexures to Boards Report but does not include the standalone financial statements and our auditors 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 in 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 Statement

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“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 and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Ind AS specified under Section 133 of the Act. This responsibility also includes the maintenance of adequate accounting records in accordance with the

provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 and Board of Directors is responsible for assessing the Companys 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 Board of Directors, management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the companys financial reporting process.

Auditors Responsibility for the Audit of the 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 auditors 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 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 with reference to Standalone Financial Statements 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 managements 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 Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors 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 auditors report. However, future events or conditions and outcome of revival plan 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 deficiencies in internal financial controls 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.

Report on Other Legal and Regulatory Requirements

1. The Companies (Auditors Report) Order, 2020 (“the

Order”) issued by the Central Government of India in

terms of sub-section (11) of section 143 of the Act is

applicable for the company.

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 purpose of our audit.

b. In our opinion, proper books of account a 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 Changes in Equity and the Statement of Cash Flows 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, except for the matters referred to in the basis for qualified opinion section of this report.

e. On the basis of the written representations received from the directors as on March 31, 2025 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2025 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 an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls with reference to Standalone Financial Statements.

g. With respect to the other matters to be included in the Auditors 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 section197 of the Act; and

h. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014as 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 litigations on its financial position in its financial statements - Refer Note 41 - Commitments and Contingent Liability to the financial statements.

i. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

ii. There has been no delay in transferring amounts, required to be transferred, to the investor education and protection fund by the Company;

iii. 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 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; and

b. 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.

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 caused us to believe that there presentations under sub-clause (a) and (b) contain any material misstatement.

iv. 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.

v. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining the Books of Accounts using accounting software which has a feature of recording Audit Trail (edit log) facility is applicable to the company with effect from 1st April 2023 and accordingly reporting under Rule 11(g) of Companies (Audit and Auditors) Rules 2014 is applicable for the financial year ended 31st March 2025.However, the Company did not have this feature of recording of audit trail for all transactions recorded in the software and in its accounting software.

“Annexure A” to the Independent Auditors Report

(Referred to in Paragraph 1(f) under Report on Other Legal and Regulatory Requirements section of our report to the members of Dharani Sugars and Chemicals Limited of even date)

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) In respect of the Companys property, plant and

equipment, right-of-use assets and intangible

assets:

(a) (A) The Company has maintained proper

records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

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

(b) The Company has carried out physical verification of the property, plant and equipment and right-of-use assets during the year. Accordingly, we were not reported with any material discrepancies during the year.

(c) Based on our examination of the property tax receipts, sale deed/transfer deed/ conveyance deed provided to us, we report that, the title in respect of immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favor of the lessee), disclosed in the financial statements included under Property, Plant and Equipment are held in the name of the Company as at the balance sheet date.

In respect of immovable properties given as collateral for loans from banks and financial institutions, the title deeds were deposited with the said banks/ financial institutions and the Company is in the process of obtaining a confirmation from the said banks that the title deeds are in the name of the Company.

(d) The Company has not revalued any of its property, plant and equipment (including right-of-use assets) and intangible assets during the year.Accordingly, clause 3 (i) (d) of the Order is not applicable.

(e) No proceedings have been initiated during the year or are pending against the Company as at March 31, 2025 for holding any benami

property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

(ii) (a) Based on our examination of the records of the

Company, physical verification of i nventory has been conducted by the company during the financial year but the company has not undertaken any commercial operations during the year.

(b) The borrowings availed from the consortium of the Banks in the earlier years has been assigned to National Asset Reconstruction Company Limited (“NARCL”) via Joint Assignment Agreement dated 30th September 2023 and subsequently during the current year company has entered into a Master Restructuring Agreement (“MRA”) with NARCL dated 22nd May 2024 specifying the restructured terms for the debt.

(iii) The Company has not made investments in, Companies and granted unsecured loans to other parties, during the year, in respect of which:

(a) The Company has not provided any loans or advances in the nature of loan or stood guarantee or provided security to any other entity during the year. Hence reporting under clause 3(iii)(a) of the Order is not applicable.

(b) In our opinion, the investments made and the terms and conditions of the grant of loans, during the year are, prima facie, not prejudicial to the Companys interest.

(c) In respect of loans granted by the Company, the schedule of repayment of principal and payment of interest has been stipulated and the repayments of principal amounts and receipts of interest are generally regular as per stipulation.

(d) In respect of loans granted by the Company, there is no overdue amount remaining outstanding as at the balance sheet date.

(e) No loan granted by the Company which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the overdue of existing loans given to the same parties.

(f) The Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment during the year. Hence reporting under clause 3(iii)(f) is not applicable.

The Company has not made investments in Firms and Limited Liability Partnerships during the year. Further the Company has not provided any guarantee or security or granted any advances in the nature of loans, secured or unsecured, to Companies, Firms, Limited Liability Partnerships or any other parties.

(iv) The Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 respect of loans granted, investments made and guarantees and securities provided, as applicable.

(v) The Company has not accepted any deposit or amounts which are deemed to be deposits. Hence, reporting under clause 3(v) of the Order is not applicable.

(vi) The maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act 2013 for the business activities carried out by the Company but the same is not applicable for the year. Hence, reporting under clause (vi) of the Order is not applicable to the Company.

(vii) In respect of statutory dues:

(a) In our opinion, the Company has not been regular in depositing undisputed statutory dues, including Goods and Services tax,Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, duty of Custom, duty of Excise, Value Added Tax, and other material statutory dues applicable to it with the appropriate authorities. Consequently, there are statutory outstanding dues for more than six months and those are listed in Annexure 1.

(b) Details of statutory dues which have not been deposited as on March 31,2025, on account of disputes are given in Annexure 2.

(viii) There were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

(ix) a. According to the information and explanations given to us and on the basis of our examination of the

records of the company, the company has defaulted in repayment of dues to banks and financial institutions and all the lenders have classified the loans as non-performing assets and also issued notices calling back the loans. Such Loans were assigned by consortium of Banks to the National Asset Reconstruction Company Limited (“NARCL”) and a Master Restructuring Agreement (MRA) has been entered into between the Company and India Debt Resolution Company Limited (acting on behalf of National Asset Reconstruction Company Limited as Trustee).

The company during the year as part of unsustainable debt portion to NARCL as per MRA, issued1,708 Secured Non-Convertible Debentures (NCDs) with issue price of INR 1,00,000 each, interest at the rate 12% per annum compounded annually redeemable on 21st May 2029 along with interest. The NCDs issued are for consideration other than cash.

b. In our opinion, and according to the information and explanations given to us, the Company has not defaulted on repayment due to banks and financial institutions during the year. However, the defaulted loans in the earlier years have been assigned to NARCL during the previous year vide assignment agreement dated 30th September 2023 and a Master Restructuring Agreement (MRA) has been entered into between the Company and India Debt Resolution Company Limited (IDRCL).The Company has not been declared as a willful defaulter.

c. In our opinion and according to the information and explanations given to us, no new term loans have been obtained during the year. Also refer the basis for qualification section of our report on the standalone financial statements.

d. In our opinion and according to the information and explanations given to us and subject to our comments in the basis for qualification section of our report on the standalone financial statements, funds raised on short term basis have not been utilised for long term purposes

e. On an overall examination of the financial statements of the Company, the Companyhas not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries.

f. The Company has not raised any loans during the year and hence reporting on clause 3(ix)(f) of the Order is not applicable.

(x) a. The Company has not raised moneys by way of initial public offer or further public offer (including debt

instruments) during the year and hence reporting under clause 3(x)(a) of the Order is not applicable.

b. During the year, the Company made a preferential allotment of 83,14,328 fully paid-up equity shares of ?10 each, aggregating to ?8,31,43,280, for consideration other than cash, pursuant to a Master Restructuring Agreement dated 22nd May 2024. The shares were issued to National Asset Reconstruction Company Limited (NARCL), with India Debt Resolution Company Limited (IDRCL) acting as its trustee, towards settlement of outstanding debt. The allotment was duly authorized by the Board of Directors and approved by shareholders under Section 62(1)(c) of the Companies Act, 2013.

However, as on 31st March 2025, the said shares had not been issued in dematerialised form and were pending for in-principle approval from the stock exchanges. Consequently, the share capital issued against the debt remains neither dematerialised nor listed as of the reporting date.

In our opinion and according to the information and explanations given to us, the Company has complied with the requirements of Sections 42 and 62 of the Companies Act, 2013 in respect of the said allotment, except for the pending listing and dematerialization due to regulatory approval.

(xi) a. No fraud by the Company and no material fraud on the Company has been noticed or reported during the

year.

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

c. According to the information and explanations given to us including the representation made to us by the management of the Company, there are no whistle-blower complaints received by the Company during the year.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

(xiii) In our opinion, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 with respect to applicable transactions with the related parties and the details of related party transactions have been disclosed in the Standalone Financial Statements as required by the applicable accounting standards subject to the qualification made in the Audit Report.

(xiv) a. In our opinion, the Company has an adequate internal audit system commensurate with the size and

nature of its business.

b. We have considered, the internal audit reports for the year under audit, issued to the Company during the year and till in determining the nature, timing and extent of our audit procedures.

(xv) In our opinion, during the year the has not entered into any non-cash with its Directors or persons connected withdirectors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

(xvi) a. In our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of

India Act, 1934. Hence, reporting under clause 3(xvi)(a), (b) and (c) of the Order is not applicable.

b. In our opinion, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under clause 3(xvi)(d) of the Order is not applicable.

(xvii) The company has incurred cash losses of INR 6281.94 lakhs during the financial year INR and the cash losses during the immediately preceding previous year is INR 1,239.91 I akhs.

(xviii) There has been no resignation of the statutory auditors of the Company during the year. Accordingly, clause 3 (xviii) of the Order is not applicable.

(xix) 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 financial statements and 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 indicating 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 fall due.

(xx) The provisions of section 135 of the Act are not applicable to the Company during the year and accordingly, clause 3 (xx) of the Order is not applicable.

(xxi) In our opinion and according to theinformation and explanations given to us, the Company does not have investments in subsidiaries/associates or joint venture companies. Accordingly, clause 3 (xxi) of the Order is not applicable.

Annexure 1

Name of the statute	Nature of Dues	INR in Lakhs	Period
Employees Provident Fund Scheme,1952	Provident Fund	517.47	November 2019 till March 2025
Employees State Insurance Act,1948	ESI dues	1.03	April 2021 till March 2025
IncomeTaxAct,1961	Tax deducted at source	72.17	April 2020 till March, 2025
Tamilnadu Tax on Consumption or Sale of Electricity Act, 2003	Power Generation Tax	496.76	November 2018 till March 2025
The Tamilnadu Profession Tax on Profession, Calling, Trade and Employment Act, 1992	Profession Tax	44.12	November 2018 till March 2025

Annexure 2

Statute	Nature of Dues	Amount (in lakhs)	Period to which the amount relates	Forum where the Dispute is pending
Central Excise Act,1944	CENVAT credit on Capital goods	53.66	Sep 2008 to Feb 2010	CESTAT-Chennai
Goods & Services Act,2017	Reversal of Input Tax credit	113.83	April 2017 to June 2017	ACIT - GST & Central Excise - Chennai
Civil Case	Delay in Cane Payment	0.19	Year 2005	High Court of Madras
Civil Case	Delay in Transport Payment & interest due	0.33	Year 2000	Civil Court - Aarani
Civil Case	Delay in Transport Payment	45.00	Feb 1995 to Sep 1996	High Court of Madras
Civil Case	Labour Wages Overdue	15.81	Year 2009	High Court of Madras
Tamilnadu Tax on Consumption or Sale of Electricity Act	Tariff change claims by TANGEDCO under dispute	818.19	Dec. 2017 to Jan. 2020	Honble High Court of Madras
Tamilnadu Tax on Consumption or Sale of Electricity Act, 2003	TNEB Parallel charges	194.64	May 2014 to Jan. 2020	Honble High Court of Madras

“annexure b” to the independent auditors report

(KeTerrea to in paragrapn 2 (T) under Report on other legal and regulatory requirements section to our report to the Members to Dharani Sugars and Chemicals Limited to even Date)

Report on the Internal Financial Controls under Clause (i) to sub-section 3 to Section 143 to the Companies Act, 2013 (the Act)

We have audited the Internal Financial Controls over Financial Reporting of “Dharani Sugars and Chemicals Limited (“the Company”) as of March31, 2025 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based the internal control over 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. 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 companys 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 Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting 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, issued

by ICAI and deemed to be prescribed under section143 (10)of the Companies Act, 2013, 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 over financial reporting was 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 over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, 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 auditors judgement, including the assessment of the risks of material misstatement of the 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 Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding there liability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A companys internal financial control over financial reporting includes those policies and procedures that,

(1) pertains to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company.

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) 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 financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management over ride 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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting 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 financial controls with reference to Standalone Financial Statements and such internal financial controls with reference to Standalone Financial Statements were operating effectively as at March 31,2025, 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 Financial Reporting issued by the ICAI.