We have audited the accompanying financial
statements of Dharani Finance Limited, (“the
Company”), which comprise of the Balance Sheet as
at March 31, 2024, 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 material 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
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, 2024, 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) (i) Note 40 which explains that a corporate
insolvency resolution process (CIRP) and
the appointment of a resolution professional
were admitted in the case of one of the major
customers of the Company by the Hon'ble
National Company Law Tribunal (NCLT),
Chennai Bench vide its order dated May 5,
2020. The Hon'ble NCLT has approved the
resolution plan vide its Order No. 1A/1410/2022
dated December 20, 2023. Hence, as per the
Order, the Company is expected to receive the
balance Inter Corporate Deposit of Rs. 415
Lakhs along with accrued interest in the normal
course of business, preferably within 365 days
from the date of NCLT Order.

(ii) Note 40 - The Company has not received
interest on inter-corporate deposits for Rs.
200 Lakhs given to M/s. Aryav Exports Private
Limited on July 14, 2017. Hence no interest is
accrued for the financial year 2023-24.

b) Note 41 which explains that the Hon'ble
National Company Law Tribunal, Chennai
Bench vide its order dated July 29, 2021
admitted a corporate insolvency resolution
process (CIRP) and approved the appointment
of an interim resolution professional, in one of
the investee companies. The carrying amount
of investments as at March 31, 2023 was Rs.
21.99 Lakhs. The investee company went into
liquidation vide Order passed by the Hon'ble
NCLT on June 27, 2023. Accordingly, the
carrying value of investments was made nil in
the books of account. The investee company
had filed an appeal before the Hon'ble National
Company Law Appellate Tribunal which was
dismissed vide its Order dated July 11, 2023.
Subsequently, the investee company had filed
an appeal before the Hon'ble Supreme Court.
The Hon'ble Supreme Court vide its Order dated
March 18, 2024 had set aside the Tribunal's
Order of liquidation and remitted back the matter
to the Hon'ble NCLT, to examine and follow
the procedures established by law in terms of
Section 12A of IBC, 2016. The Hon'ble NCLT,
vide its Order dated May 9, 2024, has restored
the powers back to the Board of Directors of the
investee Company.

c) Had the Company considered making provision
for the outstanding balance referred to in (a)
above, the net owned funds of the Company as
at March 31, 2024 will be lower than the limits
prescribed under Section 45-IA of the Reserve
Bank of India Act, 1934 for a Non-Banking
Financial Services Company (NBFC). Thus,
the Company's ability to continue as an NBFC
and as a going concern may depend on infusion
of further capital to meet the minimum net
owned funds criteria as per RBI norms within
the prescribed time limit and on identification of
alternative business plans.

d) The matters referred to in (a) to (c) also cast
a significant doubt on the Company's ability to
continue as a going concern and accordingly, we
are unable to comment on the appropriateness
of management's assumption of preparing the
standalone financial statements on a going
concern basis.

Our opinion on the financial statements is qualified
in respect of the matters (a) to (d) referred above.
The above matters have also been qualified in the
audit opinion on the audited financial statements of
earlier years.

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
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 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 matters more fully explained in the Basis for
Qualification Section of our opinion cast a significant
doubt on the Company's ability to continue as a going
concern. Considering the management estimate
of recovering the entire outstanding from the major
customer, we were informed that these financial
statements have been prepared on a going concern
basis. This is a matter of qualification in our opinion on
these 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 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.

Dues from a major customer

In our opinion and 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 morefully described in the basis of qualified
opinion paragraph of our report which describes the
uncertainties arising regarding repayment by the major
customers.

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 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 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.

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 Companies
Act, 2013 (“the Act”) with respect to the preparation of
these financial statements that give a true and fair view
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) prescribed under
Section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended, 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 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 financial statements that
give a true and fair view and are free from material
misstatement, whether due to fraud or error.

In preparing the 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’ responsibility for the audit of the financial
statements

Our objectives are to obtain reasonable assurance
about whether the 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 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 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

As required by the Companies (Auditor's Report)
Order, 2020 (“the Order”) issued by the Central
Government in terms of Section 143 (11) of the Act,
we give in Annexure “A” a statement on the matters
specified in clauses 3 and 4 of the Order.

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;

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 stated in the paragraph
v below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014;

c) In our opinion, subject to our comments in the basis
for qualified opinion section above, the balance
sheet, the statement of profit and loss (including
other comprehensive income), the statement of
changes in equity and the statement of cash flows
comply with the Companies (Indian Accounting
Standards) Rules, 2015 (Ind AS), as amended
from time to time, prescribed under Section 133 of
the Companies Act, 2013;

d) The balance sheet, the statement of profit and
loss (including other comprehensive income), the
statement of changes in equity and the statement
of cash flows dealt with by this report are in
agreement with the books of account;

e) On the basis of the written representations
received from the directors of the Company as
on March 31, 2024 taken on record by the board
of directors, none of the directors are 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 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 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 auditors' 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 does not have any pending
litigation which would impact its financial
position;

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

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 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 the audit procedures that
have been considered reasonable and
appropriate in the circumstances, nothing
has come to our notice that has caused us
to believe that the representations under
sub-clause (i) and (ii) of Rule 11(e), as
provided under (a) and (b) above, contain
any material misstatement.

v. Based on our examination, the Company has
used accounting software for maintaining its
books of account for the financial year ended
March 31,2024 but the accounting software did
not have a feature of recording audit trial (edit
log) facility.

As proviso to Rule 3(1) of the Companies
(Accounts) Rules, 2014 is applicable from
April 1, 2023, reporting under Rule 11(g) of
the Companies (Audit and Auditors) Rules,
2014 on preservation of audit trail as per the
statutory requirements for record retention
is not applicable for the financial year ended
March 31,2024.

vi. 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 17, 2024 UDIN:24230195BJZYUR6530