C2C Advanced Systems Ltd Auditor Reports

To the Members of C2C ADVANCED SYSTEMS LIMITED Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying financial statements of C2C Advanced Systems Limited ( the Company ), which comprises the Balance Sheet as at March 31, 2026 and the Statement of Profit and Loss, Statement of Changes in Equity and Statement of Cash Flows for the year then ended and a summary of significant accounting policies, notes to accounts and other explanatory information.

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 section of our report, the aforesaid 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 Accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2026 and its profit and other comprehensive income, changes in equity and cash flow for the year then ended.

Basis of Qualified Opinion

1. We draw attention to Note 27 of the notes accompanying the Financial Statements with respect to Corporate Social Responsibility. The Company has recognized Corporate Social Responsibility (CSR) expenses by issuing cheques that have resulted in a Book Overdraft as reported in Note No. 16 of the notes to the Financial Statements. As on the date of signing this Report, these cheques have not yet been presented for payment. In our view, the underlying statutory obligation under Section 135 of the Companies Act, 2013, is effectively discharged only upon the actual clearance from bank and therefore our opinion is qualified on this matter.

2. We draw attention to Note 26 of the notes accompanying the Financial Statements with respect to Contingent Liability. The Company has certain outstanding undisputed statutory payments that remain unpaid. Till date of signing this report, company has not filed any appeal in respect of these matters. The financial results do not include provisions for any potential interest and penal consequences that may arise from these delays. In the absence of a management assessment of the exact quantum of these charges, we are unable to determine the consequential impact on the reported current liabilities and the financial results for the period. Further, there has been certain delays in filing the statutory tax returns with various authorities due to which company had to face interest and penalties. Weak Internal controls in this respect has also been pointed out by the internal auditor of the company.

3. We draw attention to Note 22 of the notes accompanying the Financial Statements with respect to Employee Benefit Expenses. The Company has not assessed the financial impact, if any, nor revised its salary structures to comply with the new Labour Code introduced by the Government of India in November 2025. The Management has represented to us that the implementation of these codes is pending since the State of Karnataka, where the Company s operations are primarily based, is yet to notify the relevant rules. However, any expert opinion was not produced before us to support this opinion of management. In the absence of an empirical or actuarial assessment by the management of the potential

impact on employee benefit obligations (including wage structures, provident fund, and gratuity), we are

unable to determine the quantum of understatement, if any, of these liabilities and its resultant effect on the financial results for the period.

4. We draw attention to Note 26 of the notes accompanying the Financial Statements with respect to Contingent Liability. The Company has not realized the receivables from overseas customers within the timelines prescribed by RBI and the company has not yet submitted any application to RBI for regularization/extension of these delayed receivables. Further, the company has made application for SOFTEX registration which is still pending to be approved. In the absence of this application and a formal assessment of potential regulatory levies, the financial results omit provisions for any anticipated penal consequences that may arise from these delays. Consequently, we are unable to determine the impact, if any, on the current liabilities and results for the period.

Emphasis of Matter

We draw attention to Note No. 36(e) of the Financial Statements of the company. Based on some complaints, National Stock Exchange ( NSE ) had ordered a limited review of the company through an Independent Auditor. NSE had appointed BDO ( reviewer ) for the same and the report of the reviewer is available on the portal. Thereafter, NSE sought clarifications from the company on the observations of the reviewer as mentioned in their report for which company has given detailed submission to NSE with relevant supporting documents/evidences and opinions in March 2026. No action or any monetary penalty has been ordered by NSE as on date of signing of Ind AS Financial Statements.

Our Opinion is not modified in respect of this matter.

Material uncertainty related to Going Concern

We draw attention to the Note No. 29(B)(b) notes accompanying the Financial Statements with respect to Liquidity Risk. The Company has undisputed statutory dues pending to be paid. Further, there has been no material recovery from Trade Receivables. At this time, the Company is highly reliant on borrowings from promoter entities for operational fund requirement. Though the Management has prepared the financial results on a going concern basis, we express reasonable doubt on the Company s ability to continue as a going concern. The carrying values of the assets and liabilities may have been different, if the preparation of financial were to be on liquidation basis.

Our opinion is modified in this matter.

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. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. No. Key Audit Matter	Audit Approach
1. Revenue Recognition	The principal audit procedures performed by us in respect of this key audit matter is summarized as below:
The Company has recognized revenue with respect to sale of goods and services during the year ended 31 March 2026.	Obtained an understanding of the terms and to conditions of the contract with the customers.
Revenue from sale of goods/services customers is recognized when control of the goods/software is transferred to the customer or the service has been rendered at an amount that reflects the consideration entitled in exchange for those goods. Considering the materiality of revenue to the financial statements and the inherent risk associated with revenue recognition, including the risk of revenue being recognized without transfer o f control (occurrence), and the risk o f revenue being recorded in an incorrect accounting period, particularly around the year-end (cut-off), this matter is considered to be a Key Audit Matter.	Evaluated the Companys revenue recognition policy with respect to its compliance with Ind AS 115 (Revenue from Contracts with Customers) including determination of performance obligation at a point of time or over a period of time.
	Evaluated the design and implementation and tested operating effectiveness of controls with regards to the revenue recognition as per the terms mentioned in the contracts with the customers.
	Performed test of details on sample basis:
	a) Perused the terms of the contract with respect to identification o f d istinct performance o b ligations and criteria for transfer of control of the goods to the customer for recognition of revenue.
	b) Examined supporting documents such as dispatch records, the proof of delivery and customer acknowledgments to assess whether revenue has been recognized in accordance with the contractual terms governing transfer of control.
	c) Performed cut-off procedures by testing revenue transactions recorded before and after the year-end date, including examination of dispatch documents, proof of delivery, and invoice dates, to assess whether revenue has been recognized in the appropriate accounting period.
	d) Verified regulatory compliances in respect of revenue. In our verification we found that company has not filed SOFTEX forms for export of software/services. The company has applied for registration for the same and said registration is pending to be approved.
	Evaluated the adequacy of the disclosures in the financial statements by comparing them with the requirements of the applicable Ind AS For the revenue details of the overseas branch (i.e. USA Branch) we have relied on the audited financials of that branch and have not performed any additional procedure on the same.

2. Trade Receivables	The principal audit procedures performed by us in respect of this key audit matter is summarized as below:
Trade receivables (net of ECL) is the largest amount o f the asset group amounting to Rs. 24,029.55 Lakhs and forms approximately 64% of the total assets of the company. Considering the materiality of the amount, this matter is considered to be the Key Audit Matter.
	Evaluated the contract with the customer to verify the payment terms.
	Evaluated the companys policy in respect of recognizing the Expected Credit Loss. T h e company h recognized the ECL as per industry standards.
	Evaluated the regulatory compliances in respect of amount receivable from overseas customers. Our opinion is modified in this matter and has been reported under the para Basis for Qualified Opinion
	For trade receivables o f Indian operations, we sent a confirmation mail to those customers whose outstanding balance as at year end was more than Rs. 10 Lakhs.
	Till date of signing of the financial statements, we h ave received confirmation from the customers amounting to approximately 76% of the trade receivables and the remaining confirmations are yet to be received.
	For trade receivables of the USA Branch, we have relied on the audited financials of that branch and have nor performed any additional audit procedure for the same.

3. Inventory	Our audit procedure included, among others:
As of March 31, 2026, inventories appear in the Financial Statements for an amount of Rs. 6,205.28 Lakhs constitutes 16.60% of the total assets of the Company. Inventories are valued at the lower of cost and net realizable value.	Reviewing the Companys process and procedure for physical verification of the Inventories, identification of non- moving and o b solete items and accounting for the same.
The Company may recognize an inventory allowance if inventory items are damaged, if the selling price has declined, or if the estimated costs to completion or to be incurred to make the sale have increased.	Discussing with the Management about the Control checks performed by them
	Assessing the methods used to record & value inventories and ensuring the consistency of accounting methods.
We considered this matter as key audit matter due to the Significance of the inventories balance and the method of maintaining inventory records.	Testing, by sampling, the effectiveness of the controls set up by Management to prevent or detect possible errors in valuation of inventories.
	Analyzing the companys assessment of net realizable value and calculations for stock obsolescence.
	Verifying the completeness o f disclosure in the Standalone Financial Statements as per Ind AS 2.
	Obtaining representation letter from the management as p er SA 5 80 (revised) Written representations.

The Company s Management 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 Annexure 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 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 therein, we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the relevant laws & regulations. We have nothing to report in this regard.

Responsibility of Management and Those Charged with Governance for the Standalone Financial Statements

The Company s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act. 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the 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.

Board of Directors are also responsible for overseeing the company s financial reporting process.

Auditor s Responsibility for 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 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 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 in the standalone financial statements made by the Management and Board of Directors.

- Conclude on the appropriateness of the Management and Board of Directors 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 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 Financial Statements that, individually or in the aggregate, make 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 evaluating the results of our work, and (ii) evaluating 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 the mall relationships and other matters that may reasonably be thought to bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our 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.

Report on Other Legal and Regulatory Requirements

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, the Statement of Profit and Loss, Statement of changes in equity & Statement of Cash Flow 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 Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(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 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 provision of section 197 of the Act.

(g) With respect to the other matters to be included in the Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company 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.

iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv) a) The management has represented that, to the best of its knowledge and belief, 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 or entity, 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 person or entity identified in any manner whatsoever by or behalf of the company ( ultimate beneficiaries ) or provide any guarantee, security or the like on behalf of the Ultimate beneficiaries.

b) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the company from any person or entity 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 person or entity identified in any manner whatsoever by

or behalf of the Funding Party ( Ultimate Beneficiaries ) or provide any guarantee, security or the like on behalf of the ultimate beneficiaries; and

c) Based on such audit procedures that were considered reasonable and appropriate in the circumstances, nothing has come to the notice that has caused us to believe that representations under sub-clause (a) and (b) contain any material misstatement.

v) The Company has neither declared nor paid any dividend during the year.

vi) Based on our examination, the company has used accounting software for maintaining of its books of account which has the feature of recording audit trail (edit log) facility in terms of the Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 and the same was used throughout the year for all relevant transactions except for Maintaining the inventory records, for which the company is using spreadsheets.

(h) As required by the Companies (Auditor s Report) Order, 2020 ( the Order ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure-A a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(i) With respect to the adequacy of the Internal Financial Controls with reference to the financial statements of the company and the operating effectiveness of such controls, refer to our separate report in Annexure- B.

CA Rohit Gupta
Partner
Membership No. 571943
Place: New Delhi
Date: 18 th July 2026
UDIN: 26571943WUGLMF3114

For LABS & Associates
Chartered Accountants
Firm Registration No. 021131C

Referred to in clause (h) of Report on other legal & regulatory requirements section of the Independent Auditors Report of even date to the members of C2C Advanced Systems Limited on the financial statements as of and for the year ended March 31, 2026.

In terms of the information and explanations sought by us and furnished by the Company, and the books of account and records examined by us during the course of our audit, and to the best of our knowledge and belief, we report that:

i. (a) (A) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of Property, Plant and Equipment.

(B) The Company is maintaining proper records showing full particulars of its intangible assets.

(b) The Property, Plant and Equipment are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the Property, Plant and Equipment has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) Company doesn t hold any immovable property (other than properties where the company is lessee and the lease agreement are duly executed in favour of the lessee) as disclosed in Note-1 on Property, Plant and Equipment and Intangible Assets (Right to use asset). Hence reporting under this clause is not applicable.

(d) The Company has not revalued its Property, Plant and Equipment or intangible assets during the year. Accordingly, the reporting under Clause 3(i)(d) of the Order is not applicable.

(e) Based on the information and explanations furnished to us, no proceedings have been initiated on or are pending against the Company for holding benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) (formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)) and Rules made thereunder, and therefore the question of our commenting on whether the Company has appropriately disclosed the details in the standalone financial statements does not arise.

ii. (a) The physical verification of inventory has been conducted at reasonable intervals by the Management during the year and, in our opinion, the coverage and procedures of such verification by Management is appropriate. The discrepancies noticed on physical verification of inventory as compared to book records were not 10% or more in aggregate for each class of inventory.

(b) During the year, the Company has not been sanctioned working capital limits in excess of Rs. 5 crores, in aggregate, in aggregate, at any points of time during the year, from banks or financial institutions on the basis of security of current assets and hence reporting under clause 3(ii)(b) of the Order is not applicable.

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

(a) The Company has not provided loans and advances in the nature of loan during the year.

(b) The company has not made any investment or granted any loan during the year and hence reporting under this clause is not applicable.

(c) In respect of loans and advances in nature of loans, no schedule of repayment of principle and interest is

stipulated and hence reporting under this clause is not applicable.

(d) The company has not granted loan during the year and hence reporting under this clause is not applicable.

(e) There are no loans granted by the Company which has fallen due during the year and have been renewed and extended. Hence, reporting under clause 3(iii)(e) is not applicable.

(f) The Company has not given any loans either repayable on demand or without specifying any terms or period of repayment hence reporting under this clause is not applicable.

(iv) The Companies has complied with the provisions of sections 185 and 186 of the Companies Act in respect of loans, investments, guarantees, and security provided, as applicable.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits. Therefore, the reporting of clause 3(v) of the Order is not applicable to the Company.

(vi) The maintenance of cost records has not 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. Hence, reporting under clause (vi) of the order is not applicable to the company.

(vii) According to the information and explanations are given to us and on the basis of our examination of the records of the Company, in respect of statutory dues;

(a) In our opinion, except for the instances mentioned below, the company has been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, GST and other statutory dues to the relevant authorities. According to the information and explanations given to us, no undisputed amounts, except the dues mentioned below, payable in respect of Goods and Service Tax, Provident Fund, Employee s State Insurance, Income-tax, Duty of Customs and other statutory dues were in arrears, as at March 31, 2026 for a period of more than six months from the date they became payable.

Name of the Statute	Nature of Dues	Amount (in INR Lakhs)	Period to which amount relates	Date of Payment
Income Tax Act, 1961	Demand u 143(1)(a)	3.47 /s	AY 2023-24	Not paid yet
Income Tax Act, 1961	Demand u/s 154	0.02	AY 2021-22	Not paid yet
Income Tax Act, 1961	Demand u 143(1)(a)	3.10 /s	AY 2025-26	Not paid yet

or any government authority.

(c) The Company has not taken any term loan during the year and therefore reporting under this clause is not applicable.

(d) On an overall examination of the financial statements of the company, the company has not raised unsecured short term funds from NBFC and hence reporting under this clause is not applicable.

(e) On an overall examination of the financial statements of the Company, the Company has not taken Inter Corporate Deposit from the holding company on account of or to meet the obligations of its subsidiaries and hence reporting under this clause is not applicable.

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

(x) (a) The Company has not raised any moneys by way of an Initial Public Offer or Further Public Offer (including debt instruments) during the year. However, in respect of the initial public offer raised in the previous financial year (i.e. FY 2024-25) amounting to INR 99.07, the company has spent INR 98.96 Crores for the purpose for which the funds were raised. The unutilized balance of INR 0.11 Crores as at the year-end is lying in Escrow Account.

(b) During the year, the Company has made preferential allotment of shares amounting to INR 19.01 Crores and share warrants amounting to INR 2.60 Crores (amount received from issue of warrants till balance sheet date). In respect of the same, the requirements of section 42 and section 62 of the Companies Act, 2013 have been complied with, and the funds have been used for the purpose for which the funds were raised.

(xi) (a) To the best of our knowledge and according to information and explanations given to us, No fraud by the Company and on the company has been noticed or reported during the year.

(b) No report under sub-section (12) of section 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 upto the date of this report.

(c) As informed, the Company has not received any whistle-blower complaints during the year and upto the date of this report.

(xii) The company is not a Nidhi company, therefore the provisions of paragraph 3(xii) of the order is not applicable.

(xiii) In our opinion, the Company is in compliance with sections 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 financial statements as required by the applicable accounting standards.

(xiv) (a) In our opinion, company has an internal audit system commensurate with the size and nature of its business.

(b) The reports of the Internal Auditor for the period under audit have been considered by us.

(xv) The Company has not entered into any non-cash transaction with directors or persons connected with him and therefore the provisions of section 192 of the Companies Act 2013 are not applicable to the Company.

(xvi) 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) 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)(c) & (d) of the Order is not applicable.

(xvii) The Company has not incurred cash losses in the current and in the immediately preceding financial year.

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

(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, we believe that 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. Unpaid statutory dues (undisputed), Outstanding CSR dues, Non-compliances in respect of FEMA, borrowing from promoter entities to carry on day to day operations are some of the major reasons that cause us to believe that company may not be able to continue as going concern

(xx) Corporate Social Responsibility

(a) The company was required to spend INR 40.50 Lakhs during the year as required under section 135(5) of the Act. The amount remained unspent is required to be transferred to a fund specified in Schedule VII of the Companies Act (the Act), in compliance with second proviso to sub section 5 of section 135 of the Act. Disclosure for the same is made by the company in Note-27 of the Financial Statement.

(b) The company has issued cheques for the payment of CSR which has resulted in book overdraft as reported in Note 16 of the Financial Statements. These cheques have not been presented for payments till the date of signing of financial statements. Our opinion is modified in this matter and the same is reported in Basis of Qualified Opinion para of our report.

(c) Outstanding amount of INR 51.90 Lakhs (including Rs. 11.40 Lakhs pertaining to previous financial year) under sub-section (5) of section 135 of the Companies Act, has not been transferred to special account in compliance with the provision of sub-section (6) of section 135 of the said Act.

(xxi) There is no consolidation of financial statements, accordingly reporting under this clause is not applicable.

For LABS & Associates
Chartered Accountants
Firm Registration No. 021131C

CA Rohit Gupta
Partner
Membership No. 571943
Place: New Delhi
Date: 18 th July 2026
UDIN: 26571943WUGLMF3114

Annexure-B to Independent Auditors Report

Referred to in clause (i) of Report on other legal & regulatory requirements section of the Independent Auditors Report of even date to the members of C2C Advanced Systems Limited on the financial statements as of and for the year ended March 31, 2026.

Report on the internal financial controls over financial reporting under clause (i) of sub - section 3 of section 143 of the Companies Act, 2013 ( the Act )

We have audited the internal financial controls over financial reporting of C2C Advanced Systems Limited ( the Company ) as at March 31, 2026, in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management s responsibility for internal financial controls

The Board of Directors of the Company 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, 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 internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note ) issued by the Institute of Chartered Accountants of India and the standards on auditing prescribed under Section 143 (10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system 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 auditor s judgement, including the assessment of the risks of material misstatement in 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 Company s internal financial control system over financial reporting.

Meaning of internal financial controls over financial reporting

A company s 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 company s internal financial control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) 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 authorisations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company s 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 of 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.

Basis for Qualified Opinion

According to the information and explanations given to us and based on our audit procedures, which included a review of the reports submitted by the Internal Auditor of the Company, the following material weakness has been identified in the operating effectiveness of the Company s internal financial controls over financial reporting as of March 31, 2026:

- Weakness in Controls over Statutory Compliances: The Company did not have an effective internal control system to ensure timely and accurate computation, deduction, payment, and return filing of various statutory dues (including but not limited to Goods and Services Tax, Tax Deducted at Source, Payment of Income Tax, Payment of CSR, FEMA Compliance, Provident Fund, and Employee State Insurance). The absence of effective review and reconciliation mechanisms in this area, as also highlighted by the Internal Audit function, could result in unrecorded penal liabilities, interest obligations, and potential material misstatements in the recording of statutory liabilities and related expenses in the financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companys annual or interim financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

In our opinion, except for the effects/possible effects of the material weakness described in the Basis for Qualified Opinion paragraph above, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31, 2026, 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 issued by the ICAI.

We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the financial statements of the Company for the year ended March 31, 2026, and this material weakness has not affected our opinion on the financial statements of the Company.

For LABS & Associates
Chartered Accountants
Firm Registration No. 021131C

CA Rohit Gupta
Partner
Membership No. 571943
Place: New Delhi
Date: 18 th July 2026
UDIN: 26571943WUGLMF3114