To The Members, Arnold Holdings Limited,
We have audited the accompanying standalone Ind AS financial statements of ARNOLD HOLDINGS LIMITED (the Company), which comprise the Balance Sheet as at March 31, 2026, the Statement of Profit and Loss, including the statement of other comprehensive income, the cash flow statement and the statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2026, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the Financial Statements in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibility 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 provision of the Act and Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs 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 financial statements.
1. Expected Credit Loss (ECL) on Loan Portfolio (Refer Notes 6, 38 & 40)
As disclosed in Note 6 to the standalone financial statements, as at 31 March 2026, the Company has Gross Loans of ? 9,338.21 lakh (Previous Year: ? 8,270.92 lakh) against which an impairment allowance (Expected Credit Loss) of ? 192.73 lakh (Previous Year: ? 243.79 lakh) has been recognised, resulting in Net Loans of ? 9,145.48 lakh (Previous Year: ? 8,027.13 lakh). The loan portfolio represents the Companys principal financial asset and comprises a significant proportion of unsecured lending. The determination of impairment under Ind AS 109 requires significant management judgement relating to borrower creditworthiness, staging of financial assets, expected future cash flows, probability of default, loss given default, collateral valuation and identification of significant increase in credit risk. Considering the significance of the loan portfolio and the judgement involved in estimating Expected Credit Loss, this matter was considered to be a Key Audit Matter.
Our audit procedures included, among others: Obtained an understanding of the Companys Expected Credit Loss methodology and evaluated its compliance with Ind AS 109 and applicable RBI Directions. Evaluated the design, implementation and operating effectiveness of key controls relating to credit appraisal, loan monitoring, asset classification and impairment assessment. Tested the completeness and accuracy of borrower ageing reports, Days Past Due (DPD) reports and staging of loan accounts. Evaluated managements assessment of significant increase in credit risk and recoverability for selected borrowers. Examined loan agreements, security documents, repayment history and subsequent recoveries for selected loan accounts. Recomputed Expected Credit Loss for selected loan accounts and assessed the reasonableness of assumptions applied by management. Evaluated the adequacy and appropriateness of disclosures relating to impairment of financial assets in the standalone financial statements.
2. Assessment of Asset Quality and Movement in Non-Performing Assets (NPAs)
As disclosed in Notes 39 and 40 to the standalone financial statements, the Company reported gross NPA additions of ? 153.51 lakh during the year, representing loan accounts that moved from standard to NPA during the year. These NPAs were subsequently reduced or regularised, and the Company recognised a net write- off of ? 90.69 lakh in the Statement of Profit and Loss for FY 2025- 26. The movement in NPAs and the resulting asset quality at year- end required significant audit attention. We considered this matter to be a Key Audit Matter as the assessment of NPA classification and subsequent regularisation involved reviewing the ageing and repayment status of individual loan accounts, compliance with applicable RBI prudential requirements and the Companys approved loan write- off policy, and the supporting evidence for reductions in NPAs.
Our audit procedures included, among others: Obtaining account- wise details of the ? 153.51 lakh NPA additions and subsequent reductions during the year and reconciling these details with the underlying loan records. We examined selected loan accounts with reference to their ageing, repayment history and relevant supporting documents and assessed whether the NPA classification was appropriate. We also examined the basis for the subsequent reduction or regularisation of selected NPA accounts and verified the supporting evidence, including cash recoveries, wherever applicable. The net write- off of ? 90.69 lakh recognised in the Statement of Profit and Loss for FY 2025- 26 was verified with reference to the underlying loan accounts, supporting records and the Companys approved loan write- off policy. Further, we assessed the Companys compliance with applicable RBI requirements and its accounting policies and reviewed the adequacy of the related disclosures in the standalone financial statements.
3. Related Party Loan Transactions and Outstanding Balances (Refer Note 33)
As disclosed in Note 33 to the standalone financial statements, the Company entered into lending transactions with related parties during the year in the ordinary course of its business, comprising loan disbursements, repayments and recognition of interest income. During the year, the Company disbursed a loan of ? 500.00 lakh to Allwin Securities Limited, which was fully repaid during the same year, along with the corresponding recognition and receipt of interest. As at 31 March 2026, loans outstanding to related parties aggregated to ? 195.05 lakh, excluding accrued interest, comprising ? 190.05 lakh due from Mr. Pawan Kumar Mallawat and ? 5.00 lakh due from Mr. Sandeep Mallawat. These outstanding balances relate to loans carried forward from the preceding year.
Our audit procedures included, among others: Obtained an understanding of the Companys process for identification, approval, recording and monitoring of related party relationships and transactions. Reviewed the register of related parties, declarations provided by Directors and Key Managerial Personnel and reconciled the related party list with statutory records, Board minutes and Audit Committee minutes. Evaluated the design and operating effectiveness of key controls over the approval, recording and monitoring of related party transactions. Verified Board, Audit Committee and shareholder approvals, wherever applicable, in accordance with the Companies Act, 2013 and applicable SEBI (LODR) Regulations. Selected significant related party loan accounts, including Allwin Securities Limited, Mr. Pawan Kumar Mallawat and Mr. Sandeep Mallawat, and tested loan disbursements, repayments, interest accruals and TDS adjustments with reference to loan agreements, bank statements, ledger accounts and supporting documents. Examined the loan agreements and evaluated whether the interest income was recognised in accordance with the agreed contractual terms. Recomputed interest income on a sample basis and verified TDS credits with supporting records. Verified the year- end outstanding balances with the general ledger and assessed recoverability by examining repayment history, subsequent recoveries and managements assessment of the outstanding balances. Assessed compliance with the applicable provisions of Sections 177, 185, 186 and 188 of the Companies Act, 2013, wherever applicable, and the applicable requirements of SEBI (LODR) Regulations. Evaluated the adequacy, completeness and appropriateness of disclosures relating to related party transactions in the standalone financial statements.
4. Recognition of Revenue from Digital Lending Operations
As disclosed in the Statement of Profit and Loss, the Company has recognised Revenue from Operations of 16,689.35 lakhs, comprising Fees & Commission Income of 10,267.77 lakhs, Interest Income of 1,032.44 lakhs, Dividend Income of 46.38 lakhs, and Income from Sale of Securities of 5,342.75 lakhs. The Companys digital lending business is primarily carried out through its proprietary online platform, Tradofina, through which customers are onboarded and micro- loans are originated, processed and serviced. Fees & Commission Income, which primarily comprises micro- loan processing fees, commission income, MDR processing fees and related charges, constitutes the largest component of the Companys operating revenue. Revenue recognition requires management judgement regarding the nature of services provided, timing of recognition, contractual terms with customers and borrowers, and appropriate accounting under Ind AS 115 - Revenue from Contracts with Customers and Ind AS 109 - Financial Instruments. Considering the significance of revenue from operations and the judgement involved in its recognition, this matter was considered to be a Key Audit Matter.
Our audit procedures included, among others: Obtained an understanding of the Companys revenue recognition policies and evaluated their compliance with the applicable requirements of Ind AS 115 and Ind AS 109. Obtained an understanding of the revenue processes and key internal controls relating to transactions originating through the Tradofina platform. Evaluated the design and operating effectiveness of key controls over recognition of revenue from processing fees, commission income, interest income and sale of securities. Tested, on a sample basis, customer agreements, loan files, transaction records and supporting documentation for revenue recognised during the year. Verified the computation of processing fees, commission income and interest income in accordance with the underlying contractual terms and applicable accounting policies. Performed substantive analytical procedures over significant revenue streams and investigated unusual fluctuations and trends. Tested revenue transactions recorded near the year end to evaluate the appropriateness of cut- off and period- end recognition. Evaluated the adequacy, completeness and appropriateness of revenue- related disclosures in the standalone financial statements.
5. Assessment of Direct and Indirect Tax Litigations
As disclosed in the standalone financial statements, the Company is involved in certain litigations relating to Income Tax and Goods and Services Tax (GST), including proceedings before the Bombay High Court relating to Assessment Year 2013- 14 and GST proceedings before the Appellate Authority. The assessment of these matters requires significant judgement in evaluating the likelihood of outflow of economic resources, determination of whether provisions or contingent liabilities are required, and the adequacy of disclosures in accordance with Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets. Accordingly, this matter was considered to be a Key Audit Matter.
Our audit procedures included, among others: Obtained details of pending direct and indirect tax litigations from management and reconciled them with the litigation register maintained by the Company. Examined notices, assessment orders, appeal memoranda, legal opinions and other relevant correspondence relating to significant litigations. Discussed the status of significant tax matters with management and, where considered necessary, evaluated external legal opinions obtained by the Company. Assessed managements evaluation regarding the probability of outflow of economic resources and the appropriateness of recognition of provisions or disclosure of contingent liabilities in accordance with Ind AS 37. Evaluated the adequacy, completeness and appropriateness of disclosures relating to tax litigations in the standalone financial statements.
6. Classification and Valuation of Shares and Securities Held for Trading (Refer Note 8)
As disclosed in Note 8 to the standalone financial statements, the Company has recognised Shares and Securities amounting to 3,591.48 lakhs as inventory held for trading, arising from its activity of purchase and sale of securities on a delivery basis. The classification and valuation of such securities involve management judgement and consideration of the applicable requirements of the Indian Accounting Standards. Considering the significance of the amount involved and the audit attention required in assessing the classification and valuation of these securities, this matter was considered to be a Key Audit Matter.
Our audit procedures included, among others: Obtaining an understanding of the Companys business model and accounting practices relating to purchase and sale of shares and securities; evaluating the basis adopted by management for their classification and valuation; verifying the existence of securities through Demat statements, depository participant statements, contract notes and other relevant supporting records; assessing the basis of valuation and related supporting documentation; and evaluating the presentation and disclosures relating to shares and securities in the standalone financial statements.
The Companys 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, Boards Report including Annexure to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the Financial Statements and our auditors 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 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.
Our opinion is not modified in respect of this matter.
1. As required by 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, we give in the Annexure A statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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; c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account; d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended; e) On the basis of written representations received from the directors as on March 31, 2026 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2026, 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 with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in Annexure B to this report; 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 section 197 of the Act. 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, 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 standalone Ind AS financial statements. ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company i) Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the financial year ended March 31, 2026 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 the audit trail feature being tampered with.
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, 2026.
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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with 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.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 Ind AS 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 statement, management 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 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 responsible for overseeing the Companys financial reporting process.
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Companys preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companys Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
As part of an audit in accordance with Standards on Auditing 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 financial controls 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 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 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 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 auditors 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.
For & on behalf of, M/S AMIT RAY & COMPANY Chartered Accountants Firm Reg. No. 000483C
Sd/- FCA Nag Bhushan Rao Senior Partner Membership No: 073144 UDIN: 26073144XNWBRC5755
Place: Mumbai Date: 27.05.2026
(Referred to in paragraph 1 of our Independent Auditors Report of even date to the Members of Arnold Holdings Limited on the standalone financial statements for the year ended March 31, 2026)
In terms of the requirements of the Companies (Auditors Report) Order, 2020 (the Order), issued by the Central Government of India in terms of Section 143(11) of the Companies Act, 2013, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:
| Particulars | Auditors Remarks |
| 1. Property, Plant, Equipment and Intangible Assets | |
| (a) Whether the company is maintaining proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment and intangible assets. | According to the information and explanations given to us and based on our examination of the records of the Company, the Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment and intangible assets. |
| (b) Whether these Property, Plant and Equipment have been physically verified by the management at reasonable intervals and whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of account. | According to the information and explanations given to us, the Property, Plant and Equipment have been physically verified by the management during the year at reasonable intervals and no material discrepancies were noticed on such verification. |
| (c) Whether the title deeds of all the immovable properties disclosed in the financial statements are held in the name of the company. | According to the information and explanations given to us and based on our examination of the records of the Company, the title deeds of all immovable properties disclosed in the financial statements are held in the name of the Company. |
| (d) Whether the company has revalued its Property, Plant and Equipment (including Right-of-Use assets) or intangible assets or both during the year and, if so, whether the revaluation is based on the valuation by a Registered Valuer and specify the amount of change, if change is 10% or more in the aggregate of the net carrying value of each class of Property, Plant and Equipment or intangible assets. | According to the information and explanations given to us, the Company has not revalued its Property, Plant and Equipment (including Right-of-Use Assets) or intangible assets during the year. Accordingly, this clause is not applicable. |
| (e) Whether any proceedings have been initiated or are pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder. | According to the information and explanations given to us, no proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 and the rules made thereunder. |
| 2. Inventory and Working Capital Limits | |
| (a) Whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies were noticed. | According to the information and explanations given to us, the Company, being a Non-Banking Financial Company, does not hold any physical inventory. Accordingly, clause 3(ii)(a) of the Order is not applicable. |
| (b) Whether during any point of time of the year, the Company has been sanctioned working capital limits in excess of \u20b9 5 crore, in aggregate, from banks or financial institutions on the basis of security of current assets. | According to the information and explanations given to us and based on our examination of the records of the Company, the working capital facilities availed by the Company during the year were secured by pledge of Fixed Deposits and were not sanctioned on the basis of security of current assets. Accordingly, the reporting requirements under clause 3(ii)(b) of the Companies (Auditors Report) Order, 2020 are not applicable to the Company. |
| 3. Loans, Investments, Guarantees and Securities | According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has granted loans during the year. The reporting under this clause is as follows: |
| (a) Whether during the year the Company has provided loans or provided advances in the nature of loans, or stood guarantee, or provided security to any other entity and, if so, whether the aggregate amount during the year, and balance outstanding at the balance sheet date with respect to such loans or advances and guarantees or security to subsidiaries, joint ventures and associates is as follows: | According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not granted any loans or advances in the nature of loans, nor provided any guarantees or security to its subsidiaries, joint ventures or associates during the year. Accordingly, the aggregate amount granted/provided during the year and the balance outstanding as at 31 March 2026 in respect of subsidiaries, joint ventures and associates are Nil. |
| (b) Whether during the year the Company has provided loans or provided advances in the nature of loans, or stood guarantee, or provided security to any other entity and, if so, whether the aggregate amount during the year, and balance outstanding at the balance sheet date with respect to such loans or advances and guarantees or security to parties other than subsidiaries, joint ventures and associates is as follows: | According to the information and explanations given to us and based on our examination of the records of the Company, the Company has granted loans to parties other than subsidiaries, joint ventures and associates during the year. The aggregate amount of loans granted during the year was \u20b9 500.00 lakh, which was fully repaid during the year. As at 31 March 2026, the balance of loans outstanding to parties other than subsidiaries, joint ventures and associates was \u20b9 195.05 lakh, excluding accrued interest, comprising \u20b9 190.05 lakh due from Mr. Pawan Kumar Mallawat and \u20b9 5.00 lakh due from Mr. Sandeep Mallawat. These outstanding balances relate to loans granted in the preceding year. |
| (c) Whether the terms and conditions of the grant of loans or advances in the nature of loans, and guarantees or security provided are prejudicial to the Companys interest. | According to the information and explanations given to us and based on our examination of the records of the Company, the terms and conditions of the loans granted during the year are, prima facie, not prejudicial to the interest of the Company. |
| (d) In respect of loans and advances in the nature of loans, whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular. | According to the information and explanations given to us and based on our examination of the records of the Company, the schedule of repayment of principal and payment of interest has been stipulated for loans granted, except for certain loans repayable on demand. In respect of loans where repayment terms have been stipulated, receipts of principal and interest have generally been regular. However, in the case of the loan granted to Mr. Sand |
| e) If the amount is overdue for more than ninety days, whether reasonable steps have been taken by the Company for recovery of the principal and interest. | Based on our examination of the records of the Company, no loans or advances in the nature of loans which have been granted with specified terms or period of repayment were overdue for more than ninety days as at 31 March 2026. Loans granted by the Company that are repayable on demand or without specifying any terms or period of repayment cannot be regarded as overdue for the purpose of this clause. Accordingly, the requirement to comment on whether reasonable steps have been taken for recovery of the principal and interest does not arise. |
| (f) Whether any loan or advance in the nature of loan which has fallen due during the year has been renewed or extended or fresh loans granted to settle the overdue of existing loans. | According to the information and explanations given to us and based on our examination of the records, no loan or advance in the nature of loan which had fallen due during the year has been renewed or extended, nor has any fresh loan been granted to settle the overdue of existing loans. |
| (g) Whether the Company has granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment. If so, specify the aggregate amount, percentage thereof to the total loans granted and aggregate amount of loans granted to Promoters, Related Parties as defined in clause (76) of Section 2 of the Companies Act, 2013. | According to the information and explanations given to us and based on our examination of the records of the Company, the Company has granted loans repayable on demand to related parties. As at 31 March 2026, the aggregate outstanding principal of such loans amounted to \u20b9 195.05 lakh, comprising \u20b9 190.05 lakh due from Mr. Pawan Kumar Mallawat and \u20b9 5.00 lakh due from Mr. Sandeep Mallawat. The outstanding loans repayable on demand to related parties constitute 100% of the total outstanding loans of this nature as at the balance sheet date. |
| 4. Loans, Investments and Guarantees | According to the information and explanations given to us and based on our examination of the records of the Company, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of loans granted, investments made, guarantees given and securities provided, wherever applicable. |
| 5. Deposits | |
| Whether the Company has accepted deposits or amounts which are deemed to be deposits and, if so, whether the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder have been complied with. | According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not accepted any deposits or amounts deemed to be deposits within the meaning of Sections 73 to 76 of the Companies Act, 2013 and the Rules framed thereunder. Accordingly, clause 3(v) of the Order is not applicable. |
| 6. Cost Records | |
| Whether maintenance of cost records has been specified by the Central Government under Section 148(1) of the Companies Act, 2013 and whether such accounts and records have been so made and maintained. | According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Companies Act, 2013 for the activities carried on by the Company. Accordingly, clause 3(vi) of the Order is not applicable. |
| 7. Statutory Dues | |
| (a) Whether the Company is regular in depositing undisputed statutory dues including Goods and Services Tax, Provident Fund, Employees State Insurance, Income-tax, Sales-tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities and whether there were any undisputed amounts outstanding for more than six months. | According to the information and explanations given to us and based on our examination of the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Goods and Services Tax, Provident Fund, Employees State Insurance, Income-tax and other statutory dues applicable to it with the appropriate authorities. There were no undisputed statutory dues outstanding as at 31 March 2026 for a period exceeding six months from the date they became payable. |
| (b) Where statutory dues referred to in sub-clause (a) have not been deposited on account of any dispute. | According to the information and explanations given to us, there are no undisputed statutory dues remaining unpaid. However, the following statutory dues have not been deposited on account of disputes: Refer Enclosure - I. |
| 8. Unrecorded Income | |
| Whether any transactions not recorded in the books of account have been surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961 and, if so, whether such previously unrecorded income has been properly recorded in the books of account during the year. | According to the information and explanations given to us and based on our examination of the records of the Company, there were no transactions not recorded in the books of account which were surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961. Accordingly, clause 3(viii) of the Order is not applicable. |
| 9. Borrowings | |
| (a) Whether the Company has defaulted in repayment of loans or other borrowings or in the payment of interest thereon. | According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not defaulted in the repayment of loans or other borrowings or in the payment of interest thereon to any lender during the year. |
| (b) Whether the Company has been declared a wilful defaulter by any bank or financial institution or government authority. | According to the information and explanations given to us, the Company has not been declared a wilful defaulter by any bank, financial institution or other lender. |
| (c) Whether term loans were applied for the purpose for which the loans were obtained. | According to the information and explanations given to us and based on our examination of the records, the term loans obtained during the year were applied for the purposes for which they were obtained. |
| (d) Whether funds raised on short-term basis have been utilised for long-term purposes. | According to the information and explanations given to us and based on our examination of the records of the Company, no funds raised on a short-term basis have been utilised for long-term purposes. |
| (e) Whether the Company has taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures. | According to the information and explanations 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 subsidiaries, associates or joint ventures. Accordingly, this clause is not applicable. |
| (f) Whether the Company has raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies. | According to the information and explanations given to us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies. Accordingly, this clause is not applicable. |
| 10. Funds Raised by Public Offer / Preferential Allotment | |
| (a) Whether monies raised by way of initial public offer or further public offer (including debt instruments) were applied for the purposes for which those were raised. | The Company has not raised any money by way of initial public offer, further public offer (including debt instruments) during the year. Accordingly, this clause is not applicable. |
| (b) Whether the Company has made any preferential allotment or private placement of shares or convertible debentures during the year and whether the requirements of Section 42 and Section 62 have been complied with. | According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or convertible debentures during the year. Accordingly, this clause is not applicable. |
| 11. Fraud | |
| (a) Whether any fraud by the Company or any fraud on the Company has been noticed or reported during the year and, if yes, the nature and amount involved is to be indicated. | According to the information and explanations given to us and based on our examination of the books and records of the Company, no fraud by the Company or on the Company has been noticed or reported during the year. |
| (b) Whether any report under Section 143(12) of the Companies Act has been filed by the auditors in Form ADT-4 with the Central Government. | During the year, no report under Section 143(12) of the Companies Act, 2013 in Form ADT-4 was required to be filed by us or by any other auditor of the Company with the Central Government. |
| (c) Whether the auditor has considered whistle-blower complaints, if any, received during the year by the Company. | According to the information and explanations given to us, no whistle-blower complaints were received by the Company during the year. |
| 12. Nidhi Company | |
| Whether the Company is a Nidhi Company and if so, whether the Net Owned Funds to Deposits ratio is in compliance with the prescribed ratio and whether there has been any default in payment of deposits or interest thereon. | According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause 3(xii) of the Order is not applicable. |
| 13. Related Party Transactions | |
| Whether all transactions with the related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the financial statements as required by the applicable accounting standards. | According to the information and explanations given to us and based on our examination of the records of the Company, all transactions with related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013 and the details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards. |
| 14. Internal Audit System | |
| (a) Whether the Company has an internal audit system commensurate with the size and nature of its business. | In our opinion and according to the information and explanations given to us, the Company has an internal audit system commensurate with the size and nature of its business. |
| (b) Whether the reports of the Internal Auditors for the period under audit were considered by the statutory auditor. | According to the information and explanations given to us, the internal audit reports for the period under audit were not made available to us. Accordingly, we could not consider the same while conducting our audit. |
| 15. Non-Cash Transactions with Directors | |
| Whether the Company has entered into any non-cash transactions with directors or persons connected with them and, if so, whether the provisions of Section 192 of the Companies Act, 2013 have been complied with. | According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with its directors or persons connected with them. Accordingly, clause 3(xv) of the Order is not applicable. |
| 16. Registration under the Reserve Bank of India Act, 1934 | |
| (a) Whether the Company is required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934 and, if so, whether the registration has been obtained. | According to the information and explanations given to us, the provisions of Section 45-IA of the Reserve Bank of India Act, 1934 are applicable to the Company and the Company has obtained a valid Certificate of Registration from the Reserve Bank of India. |
| (b) Whether the Company has conducted any Non-Banking Financial or Housing Finance activities without obtaining a valid Certificate of Registration. | According to the information and explanations given to us, the Company has not conducted any Non-Banking Financial or Housing Finance activities without obtaining a valid Certificate of Registration from the Reserve Bank of India. |
| (c) Whether the Company is a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India and, if so, whether it continues to fulfil the criteria of a CIC. | According to the information and explanations given to us, the Company is not a Core Investment Company (CIC) as defined in the Core Investment Companies (Reserve Bank) Directions, 2016. Accordingly, this clause is not applicable. |
| (d) Whether the Group has more than one Core Investment Company as part of the Group. | According to the information and explanations given to us, the Group does not have any Core Investment Company. Accordingly, the reporting requirements under clause 3(xvi)(d) of the Order are not applicable. |
| 17. Cash Losses | |
| Whether the Company has incurred cash losses in the financial year and in the immediately preceding financial year and, if so, the amount of such cash losses. | According to the information and explanations given to us and based on our examination of the financial statements, the Company has not incurred cash losses during the current financial year as well as in the immediately preceding financial year. |
| 18. Resignation of Statutory Auditor | |
| Whether there has been any resignation of the statutory auditors during the year and, if so, whether the auditor has taken into consideration the issues, objections or concerns raised by the outgoing auditors. | There has been no resignation of the statutory auditors during the year. Accordingly, clause 3(xviii) of the Order is not applicable. |
| 19. Material Uncertainty | |
| On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements, the auditors knowledge of the Board of Directors and management plans, whether the auditor is of the opinion that no material uncertainty exists as on the date of the audit report that the Company is capable of meeting its liabilities existing at the balance sheet date as and when they fall due within a period of one year from the balance sheet date. | According to the information and explanations given to us and on the basis of our examination of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans, 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 the Company is not capable of meeting its liabilities existing as at the balance sheet date 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 existing up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within one year from the balance sheet date will get discharged by the Company as and when they fall due. |
| 20. Corporate Social Responsibility | |
| (a) Whether, in respect of other than ongoing projects, the Company has transferred the unspent amount to a Fund specified in Schedule VII to the Companies Act within six months of the expiry of the financial year. | According to the information and explanations given to us and based on our examination of Note 32 to the financial statements, there was no unspent amount relating to other than ongoing CSR projects requiring transfer to a Fund specified in Schedule VII to the Companies Act, 2013. Accordingly, clause 3(xx)(a) of the Order is not applicable. |
| (b) Whether any amount remaining unspent under Section 135(5) pursuant to any ongoing project has been transferred to a special account in compliance with Section 135(6). | According to the information and explanations given to us, there were no ongoing CSR projects requiring transfer of any unspent amount to a special account under Section 135(6) of the Companies Act, 2013. Accordingly, clause 3(xx)(b) of the Order is not applicable. |
| 21. Qualifications or Adverse Remarks in CARO Reports of Companies included in the Consolidated Financial Statements | |
| Whether there have been any qualifications or adverse remarks by the respective auditors in the CARO reports of the companies included in the Consolidated Financial Statements. | The Company is not required to prepare Consolidated Financial Statements under the Companies Act, 2013. Accordingly, the reporting requirements under clause 3(xxi) of the Order are not applicable. |
The matters referred to above are based on the information and explanations furnished to us by the management and the books and records produced before us for the purposes of our audit. Our reporting under the Companies (Auditors Report) Order, 2020 is based on the audit procedures performed in accordance with the Standards on Auditing specified under Section 143(10) of the Companies Act, 2013 and should be read in conjunction with our Independent Auditors Report of even date on the standalone financial statements of the Company.
For & on behalf of, M/S AMIT RAY & COMPANY Chartered Accountants Firm Reg. No. 000483C
Sd/- FCA Nag Bhushan Rao Senior Partner Membership No: 073144 UDIN: 26073144XNWBRC5755
Place: Mumbai Date: 27.05.2026
(Referred to in Clause 3(vii)(b) of Annexure A to the Independent Auditors Report pursuant to the requirements of the Companies (Auditors Report) Order, 2020, forming part of our report of even date on the standalone financial statements of Arnold Holdings Limited for the year ended March 31, 2026.)
| Name of Statute | Nature of Dues | Assessment Year / Period | Amount ( \u20b9 ) | Forum where dispute is pending | Auditors Remarks |
| Income-tax Act, 1961 | Income Tax | AY 2013-14 | \u20b9 1,91,65,464 | Proceedings before Bombay High Court / further writ proceedings | Matter pertains to reassessment proceedings under Sections 148/148A and remains under litigation. |
| GST Act | GST Demand (Tax, Interest & Penalty) | FY 2021-22 | \u20b9 22,54,009 | Appellate Authority (Appeal in Form APL-01) | Appeal filed on 25 March 2026 against GST demand. |
M/s AMIT RAY & COMPANY Chartered Accountants Firm Reg. No. 000483C
Sd/- FCA Nag Bhushan Rao Senior Partner Membership No: 073144 UDIN: 26073144XNWBRC5755
Place: Mumbai Date: 27.05.2026
(Referred to in paragraph 2(f) under the heading Report on Other Legal and Regulatory Requirements of our Independent Auditors Report of even date to the Members of Arnold Holdings Limited on the standalone financial statements for the year ended March 31, 2026)
We have audited the internal financial controls with reference to standalone financial statements of Arnold Holdings Limited (the Company) as of March 31, 2026 in conjunction with our audit of the standalone financial statements of the Company for the year then ended.
The Companys Management is responsible for establishing and maintaining internal financial controls based on 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 the 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.
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 as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, 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 judgment, 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 internal financial controls system over financial reporting of the company.
A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability 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:
Because of the inherent limitations of internal financial controls over 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 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.
In our opinion, the Company has, in all material respects, an adequate internal financial controls with reference to standalone financial statements and such internal financial controls were operating effectively as at March 31, 2026, based on the internal control with reference to standalone financial statements 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.
For & on behalf of, M/S AMIT RAY & COMPANY Chartered Accountants Firm Reg. No. 000483C
Sd/- FCA Nag Bhushan Rao Senior Partner Membership No: 073144 UDIN: 26073144XNWBRC5755
Place: Mumbai Date: 27.05.2026
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