PNB Gilts Ltd Auditor Reports

M/s K Venkatachalam Aiyer & Co. Chartered Accountants 821, DLF Tower A, Jasola Vihar, New Delhi -110025

To

The Members of PNB Gilts Limited

Opinion

We have audited the accompanying financial statements of PNB Gilts Ltd. (the Company), which comprise the Balance Sheet as at 31st March

2026, the Statement of Profit and Loss (including

Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and notes statements to the financial of the material accounting policies and other explanatory information (hereinafter referred to as the financial statements).

In our opinion and to the best of our information and according to the explanations given to us, 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 Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (Ind AS) and other accounting principles generally accepted in India, of the state of affairs of the statements Company as at 31st March, 2026, its profit, total comprehensive income, its cash flows and the changes in for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing

(SAs) as specified under section 143(10) of the

Act. Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are Independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements, including a summary under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAls 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

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, 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 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.

Key Audit Matter	How the Key Audit matter was addressed in
	our audit
1. Classification and Valuation of	Financial Our audit approach / procedures included the
Instruments	following:
The Company holds a portfolio of financial -	Understanding and considering the
instruments including Government Securities,	company \u2019 s accounting policies for
Bonds, Debentures, Shares, derivative assets	classification and valuation of financial
and liabilities and other assets and liabilities,	instruments and assessing compliance with
which are measured at fair value.	the requirements of applicable accounting
	standards.

We identified valuation of these financial	- Understanding, evaluation and testing
instruments to be a key audit matter considering	the design and operating effectiveness of
the materiality of the balances involved and the	management \u2019 s key internal controls over
complexity associated with determining fair	the valuation process, valuation model and
values.	inputs of financial
The determination of fair value involves the use	derivatives.
of various valuation techniques that rely on both	- On sample basis, reperformance of the
observable market data and valuation models.	valuation of \u2018 level 1 \u2019 , \u2018 level 2 \u2019 and \u2018 level 3 \u2019
For financial instruments classified under Level	trading securities, which are primarily
1 and Level 2 of the fair value hierarchy, valuations	government and corporate debt securities,
are primarily derived from quoted market prices	by comparing the observable inputs,
and other observable inputs.	including quoted prices, to independently
	sourced market data.
However, where such observable data is not
available, as in the case of Level 3 financial	- Assessing the appropriateness, accuracy
instruments, fair value depend significantly	and adequacy of the related presentation
management \u2019 s judgement, assumptions, and	and disclosures in the financial statements
estimates.	as per the applicable accounting standards.
2. Information Technology (IT) systems and	Our approach of testing IT General Controls
controls	(ITGC) and IT Application Controls (ITAC) is risk
IT systems and controls followed by the	based and business centric:
company are material from a financial reporting	- Obtained an understanding of the
perspective, as large volume of transactions are	Company \u2019 s IT applications, databases and
processed through IT systems and reliance is	operating systems relevant to financial
placed on automated and IT dependent manual	reporting and the control environment.
controls. On account of these factors, there exists	- For testing ITGC, we reviewed on sample
a risk that gaps in the IT control environment	basis control areas such as User
could result in the financial accounting and Management, Change Management,
reporting records being materially misstated.	interface testing, Incident management,
Itis necessary that appropriate IT general	Physical & Environmental Security, Backup
controls and application controls are operating	and restoration and Business continuity and
effectively to ensure that such IT systems	Disaster Recovery.
are able to process the data, as required,	- For ITAC, tested on sample basis, the design
completely, accurately, and consistently for	and operating effectiveness of certain
reliable financial reporting.	automated controls that were considered
Due to the pervasive nature and complexity of	as key internal system controls over financial
the IT environment as well as its importance	reporting using various techniques such as
in relation to accurate and timely financial	inquiry, review of documentation / record /
reporting, we have ascertained IT systems and	reports, observation, and re-performance.
controls as a Key Audit Matter.	- Obtained management representation
	which included Information Systems audit
	report, report of internal auditor on testing
	of automated internal financial controls and
	also matching of the business logic with the
	system logic.
3. Evaluation of uncertain income tax positions:	Our audit approach / procedures included the
TheCompanyhasmaterialuncertainincometax	following:
positions including matters under dispute which	- Obtained summary of tax demand for
involves significant	various assessment judgmentto determinethe years, from the
possible outcome of these disputes. Refer Note	management and tax retainers of the
38 to the Financial Statements	Company, for reason of such demand of
	Income Tax, mitigation measures taken by
	the Company and result thereof.
	- We reviewed underlying assumptions of the
	management and the company \u2019 s income
	tax consultant in estimating the tax provision
	and the possible outcome of the disputes.

Information other than the Financial Statements and Auditor s Report thereon

The Company s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Annual Report comprising the Board s Report including Annexures to Board s Report, Business Responsibility & Sustainability 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 identified above 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. When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance as required under SA 720 The Auditor s responsibilities Relating to Other Information .

Responsibilities of Management and those charged with Governance for the Financial Statements

The Company s Board of Directors is responsible for the matters stated in Section 134(5) of the Act, with respect to preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance, including other comprehensive income, changes in equity and cash flows

Company in accordance with the accounting principles generally accepted in India including

Ind AS 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management and board of Directors are 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 the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The company s Board of Directors is responsible for overseeing the Company s financial reporting process.

Auditor s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements

As part of an audit in accordance with SAs, we exercise professional judgmentofthe and maintain professional scepticism 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 with reference to financial statements system in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of 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 compiled 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 independent, 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.

Other Matters

The comparative financial statements of the Company for the year ended March 31, 2025, were audited by Batra Deepak & Associates, Chartered Accountants, whose report dated May 02, 2025 expressed an unmodified opinion on those financial statements.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our audit we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns.

c. The books of accounts and proper returns of the company are maintained at head office. Hence, there is no separate branch audit report by any other auditor of any branch office. The audit of the company is conducted at head office only.

d. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the relevant books of account and returns.

e. In our opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.

f. We do not have any observation or comment on the financial transactions or matters which have any adverse effect on the functioning of the company.

g. On the basis of the written representations received from the directors as on March 31, 2026 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.

h. We do not have any qualification, reservation or adverse remark relating to the maintenance of accounts and other matters connected herewith.

i. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls with reference to the financial statements.

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

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements.- Refer note 38 of the financial statements.

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts. Refer note 18 of the financial statements.

(iii) There has been no delay in transferring amounts, 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, as disclosed in the notes to the accounts, 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 or in any other person(s) or entity(ies), including foreign entities (Intermediaries), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in any manner whatsoever by or on behalf of the Company (Intermediaries) 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, as disclosed in the notes to the accounts, no funds have been received by the company from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries and

c) Based on such audit procedures that have been considered reasonable and appropriate in the circumstances, performed by us, nothing has come to our notice that has caused to believe that the representations under subclause (i) and (ii) of Rule 11(e) ofthe Act, as provided under (a) and (b) above, contain any material misstatement.

(v) The dividend declared and paid during the year by the company is in compliance with Section 123 of the Act, as applicable.

(vi) Based on our examinations which included test checks, the company has used an accounting software for maintaining its books of account for the financial year ended 31st March 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 systems. Further during the course of our audit, basis the data received and verified on test check basis, we did not come across any instance of audit trail feature being tampered with and also that the audit trail has been preserved by the company as per the statutory requirements for record retention.

2. 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. 3. As required by the Companies (Auditors Report) Order, 2020 (the Order) issued by the Central Government of India in terms of subsection (11) of Section 143 of the Act, we give in Annexure B, a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable. 4. As required by the Comptroller and Auditor General of India through directions issued, we also enclose our report as per 143(5) of the Act, 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 by the management, in Annexure C. For K Venkatachalam Aiyer and Co.	For Raj Har Gopal and Co.
Chartered Accountants	Chartered Accountants
Firm \u2019 s Registration Number: 004610S	Firm \u2019 s Registration Number: 002074N
CA Chandhrabala P.	CA Gopal Krishan
Partner	Partner
Membership No. 235978	Membership No. 081085
UDIN: 26235978EXTSGT2634	UDIN: 26081085ERMTVS1134
Place: Delhi	Place: Delhi
Date: 20 th April 2026	Date: 20 th April 2026

Annexure-A to the Independent Auditors Report

(Referred to in paragraph (i) under Report on Other Legal and Regulatory Requirements section of our report to the Members of PNB Gilts Limited of even date)

Report on the Internal Financial Controls with reference to Financial Statements under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (the Act)

We have audited the internal financial controls over financial reporting of PNB Gilts Ltd. (the Company) as of 31st March, 2026 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Board of Directors of the Company are 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 respective 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 Act.

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 Act 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 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 Companys internal financial controls system over financial reporting with reference to financial statements.

Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding 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:

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

2. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and 3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting with reference to Financial Statements, 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.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2026, based on the internal control over financial reporting criteria approved by the Companys Board, 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 K Venkatachalam Aiyer and Co.	For Raj Har Gopal and Co.
Chartered Accountants	Chartered Accountants
Firm \u2019 s Registration Number: 004610S	Firm \u2019 s Registration Number: 002074N
CA Chandhrabala P.	CA Gopal Krishan
Partner	Partner
Membership No. 235978	Membership No. 081085
UDIN: 26235978EXTSGT2634	UDIN: 26081085ERMTVS1134
Place: Delhi	Place: Delhi
Date: 20 th April 2026	Date: 20 th April 2026

Annexure-B to the Independent Auditors Report

(referred to in paragraph 3 under Report on Other Legal and Regulatory Requirements section of our report to the Members of PNB Gilts Limited of even date

Based upon the information and explanations furnished to us and the books and records examined by us in the normal course of our audit, we report that:

a) (A) The Company has maintained proper records showing full particulars including quantitative details and situation of Property, Plant and Equipment and relevant details of Right of Use assets;(B) The Company has maintained proper records showing full particulars of intangible assets;

b) According to the information and explanations given to us and as represented by the management, the Property, Plant and Equipment were physically verified during the year in regular intervals by the company which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed or reported on such verification.

c) 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 the immovable properties disclosed in the financial statements are held in the name of the Company.

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

e) 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 rules made thereunder.

(i)

a) The Company is primarily dealing in financial securities ie financial instruments which are not covered under the definition of Inventory under Ind AS 2. The traded securities held as investments and in the custody of the Company have been verified by the Management with the statement of holdings provided by Custodian for Corporate Bonds, the Reserve Bank of India (RBI) and Clearing Corporation of India Limited (CCIL), for Government Securities, Treasury bills and Separate Trading of Registered Interest and Principal of Securities (STRIPS) in Subsidiary General Ledger (SGL) with the RBI or collateral with CCIL Such verification of securities conducted by the Management at regular intervals and in our opinion the coverage and the procedures of such verification is appropriate.

b) The Company has a working capital limit of ? 2,50,000 Lacs from Punjab National Bank against pledge of securities having market value of ? 25,237Lacs as on 31.03.2026. No returns or statements is required to be submitted to bank, hence no question of our verification of the Information submitted arises.

(ii) According to the information and explanations given to us and based on the audit procedures performed by us, we are of the opinion that since the Company is in the business of Primary Dealership which involves making investments including granting loans in the normal course of its business and further, as it has not provided any guarantee or security to companies, firms, limited liability partnerships or any other parties, the provisions of paragraph 3(iii) (a) to (f) are not applicable.

(iv) According to the information and explanations given to us and based on the audit procedures performed by us, the Company has not provided any loans, investments, guarantees, and security during the year under Section 185 and 186 of the Act.

(v) According to the information and explanations given to us and based on our examination, the Company has not accepted any deposits from the public within the meaning of Section 73 to 76 of the Companies Act, 2013 or any other relevant provisions of the Companies Act, 2013 and rules framed there under.

(vi) According to the information and explanations given to us and as per our understanding, maintenance of the cost records for the products/services/activities of the Company has not been prescribed by the Central Government under Section 148 (1) of the Companies Act, 2013.

(vii)

a) According to the information and explanations given to us and based on our examination, 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 to the appropriate authorities.

b) According to the information and explanations given to us and based on our examination, the Company has some disputes which have resulted into demands under the Income Tax Act, 1961 which have not been deposited. The details of which are given below:

Name of the Statute	Nature of Dues	Amount (in Lakhs)	Period to which, the amount relates (Assessment Year)	Forum where dispute is pending	Remarks, if any
Income Tax Act, 1961	Officer*Fringe benefit tax	1.62	2007 - 08	Jurisdictional Assessment
Income Tax Act, 1961	Fringe benefit tax	0.001	2008 - 09	Jurisdictional Assessment
Income Tax Act, 1961	*Income Tax	131.80	2016 - 17	Commissioner of (Appeals) Income Tax	Amount paid under protest (131.80 Lakhs)
Income Tax Act, 1961	Income Tax	36.09	2017 - 18	Commissioner of (Appeals) Income Tax	Amount paid under protest (36.09 Lakhs)
Income Tax Act, 1961	Income Tax	66.76	2018 - 19	Commissioner of (Appeals) Income Tax	Amount paid under protest (66.76 Lakhs)
Income Tax Act, 1961	Income Tax	498.82	2020 - 21	Jurisdictional Assessment	Rectification filed by the Office

* The term Fringe benefit tax and Income tax includes the amount of income/fringe benefit tax, and interest.

(vii) According to the information/explanation given to us and based on our examination, no transaction has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

(x)

a) According to the information and explanations given to us and based on our examination, the Company has not defaulted in repayment of loan or other borrowing or in payment of interest there on to any lender.

b) According to the information and explanations given to us and based on our examination, the Company is not declared willful defaulter by any bank or financial institution or other lender;

c) Term loans raised by the Company, were applied for the purposes for which those are raised.

d) The Company is RBI approved primary dealer of Gifts securities. As its principal line of business, company borrows funds from call money market, bankers, financial institution etc on overnight and short- term basis to invest in securities held for trading as well as long term investments. As at the close of the year, the company has long- term investment held at amortised cost amounting to ? 72,658.96 Lacs.

e) According to the information and explanations given to us and based on our examination, 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.

f) The Company has not raised any loan during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

a) According to the information and explanations given to us and based on our examination, the Company has not raised any money out of initial public offer or further public offer (including debt instruments) during the period under audit.

b) According to the information and explanations given to us and based on our examination, the Company has not made any preferential allotment or private placement of shares or convertible debentures during the year under audit.

a) According to the information and explanations given to us and based on our examination, we have neither come across any instance of fraud on or by the company noticed or reported during the year nor have we been informed of such case by the management during the course of our audit.

b) No report under sub- section (12) of section 143 of the Companies Act, 2013, has been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government;

c) According to the information and explanations given to us and based on our examination, there were no whistle blower complaint received by the company during the company.

(xii) The company is not a Nidhi Company, accordingly, the reporting under para 3(xii) of the Order is not applicable to the company.

(xiii) According to the information and explanations given to us and based on our examination, the Company has complied with requirements of section 177 of the Companies Act, 2013 and Section 188 of the Companies Act, 2013 in relation to the related parties. The company has also disclosed the requirements as laid down in the applicable accounting standards in the relation to the related parties in the financial statements in the Note no. 35A & 35B Related Party Information.

(xiv)

a) The Company has an adequate Internal audit system commensurate with the size and nature of its business.

b) The Internal audit reports of the company issued till the date of audit report, for the period under audit have been considered by us.

(xv) According to the information and explanations given to us and based on our examination, the Company has not entered into any non- cash transactions with the Directors or persons connected with it during the year under review.

(xvi)

a) According to the information and explanations given to us, the Company is a NBFI duly registered under section 45-1- A of the Reserve Bank of India Act, 1934.

b) The Company has a valid Certificate of Registration (CoR) from the Reserve Bank of India as per the Reserve Bank of India Act, 1934. c) The company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. d) There is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016). Accordingly, the reporting under para 3(xvi) (d) of the Order is not applicable

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

(xviii)There has been no resignation of the statutory auditors during the year. However, during the year, there has been change in the statutory auditors pursuant to appointment by the Comptroller and Auditor General of India (C&AG).

(xix) On the basis of the information provided, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date.

We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

a) The Company, in respect of other than on-going project, has fully spent the required amount towards Corporate Social Responsibility (CSR) and there are no unspent CSR amount for the year requiring a transfer to a Fund specified in Schedule VII to the Companies Act or special account in compliance with the second proviso to sub- section (5) of section 135 of the said Act. Accordingly, reporting under clause 3(xx)(a) of the Order is not applicable for the year.

b) As at balance sheet date, the Company does not have any amount remaining unspent under Section 135(5) of the Act in respect of ongoing project. Accordingly, reporting under clause 3(xx)(b) of the Order is not applicable.

For K Venkatachalam Aiyer and Co.	For Raj Har Gopal and Co.
Chartered Accountants	Chartered Accountants
Firm \u2019 s Registration Number: 004610S	Firm \u2019 s Registration Number: 002074N
CA Chandhrabala P.	CA Gopal Krishan
Partner	Partner
Membership No. 235978	Membership No. 081085
UDIN: 26235978EXTSGT2634	UDIN: 26081085ERMTVS1134
Place: Delhi	Place: Delhi
Date: 20 th April 2026	Date: 20 th April 2026

Annexure C to the Independent Auditors Report

(referred to in paragraph 4 under Report on Other Legal and Regulatory Requirements section of our report to the Members of PNB Gifts Limited of even date

Directions indicating the areas to be examined by the Statutory Auditors during the course of Audit of annual accounts of PNB Gifts Limited for the year 2025- 26 as issued by the Comptroller & Auditor General of India under Section 143(5) of the Companies Act, 2013.

SL No	Area Examined	Observations/Findings
1.	Assess the fair valuation of all the investments, both quoted and unquoted, made directly by the Company or through Trusts, for Post retirement benefits of the employees which includes valuation methodologies and consistency with Ind AS.	- The company accounts for its post-retirement benefit obligations (Gratuity, Leave Liability and Post-Retirement Medical Benefits) as defined benefit plans in accordance with Ind AS 19. - The valuation of these obligations is carried out using the Projected Unit Credit Method, supported by actuarial valuation reports obtained at each reporting date. - Gratuity is funded through a separate trust namely the PNB Gifts Limited Employees Group Gratuity Scheme administered by LLC, whereas Leave Encashment and Post-Retirement Medical Benefits are unfunded liabilities valued by an independent actuary.
2.	Whether the Company has a system in place to process all the accounting transactions through IT systemRs If yes, whether review of this system and controls that are significant to the Companies financial reporting process as well as cyber security has been done and material discrepancies found, if any, have been suitably reportedRs The implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications may also be reported.	- The company has system of processing of accounting transactions partially through IT system and partially with manual intervention. - The review of the system is critical and controls are significant to the financial reporting process of the company as all major operations of the company for trading in securities as well as borrowings are undertaken through the IT systems and software. - The management has represented that they consistently act on the alerts received from CERT-IN as well as Cyber Security and IT Risk (CSITE) Group of Reserve Bank of India for mitigating all the Cyber Security threats intimated to them. - Based on the information and explanations given to us no material discrepancies have been found that were required to be reported.

SL No	Area Examined	Observations/Findings
3.	Whether funds (grants/ subsidy etc.) received/receiveable for specific schemes from Central/ State Government or its agencies were properly accounted for as per the applicable accounting standards or norms and whether the received funds were utilised as per its terms and conditionsRs Whether accounting of interest earned on grants received has been done as per terms and conditions of the Grant List the cases of deviation.	The company has not received any grant/ subsidy.
4.	Whether the Company has identified the key Risk areasRs If yes, whether the Company has formulated any Risk Management Policy to mitigate these risksRs If yes, (a) whether the Risk Management Policy has been formulated considering global best practicesRs (b) whether the Company has identified its data assets and whether it has been valued appropriatelyRs	The company has identified Key Risk Areas and has in place a Board approved Risk Management policy. All the risks are defined as per the global best practices and mitigation strategies have been dealt with accordingly. Key risks covered are Credit Risk, Market Risk and aspects of Operational risk. According to the information and explanations given to us by the management, the company has no data assets that have been recognised in the financial statements in accordance with the applicable financial reporting framework and consequently these are not subject to valuation.
5.	Whether the Company is complying with the Securities and Exchange Board of India (SEBI) (Listing Obligation and Disclosure Requirements) Regulations, 2015, and other applicable rules and regulations of SEBI	The company is a NBFC registered with the Ministry of Corporate affairs. The company has a AD Category III registration with Reserve Bank of India. It is listed on the National Stock Exchange of India Limited as well as the BSE Limited. It is also a registered stock broker with SEBI

SL No	Area Examined	Observations/Findings
	Department of Investment and Public Asset Management - Ministry of Corporate Affairs - Department of Public Enterprises - Reserve Bank of India - Telecom Regulatory Authority of India - CERT-IN - Ministry of Electronics and Information Technology and National Payments Corporation of India wherever applicableRs If not, the cases of deviation may be highlighted.	- Based on the information and explanations given to us, secretarial audit report of the company and audit procedures carried out by us, the company is complying with the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015, and other applicable rules and regulations of SEBI, Reserve Bank of India, Ministry of Corporate Affairs, CERT-IN and Ministry of Electronics and Information Technology, Department of Investment and Public Asset Management, Department of Public Enterprises, Telecom Regulatory Authority of India and National Payments Corporation of India wherever applicable.

For K Venkatachalam Aiyer and Co.	For Raj Har Gopal and Co.
Chartered Accountants	Chartered Accountants
Firm \u2019 s Registration Number: 004610S	Firm \u2019 s Registration Number: 002074N
CA Chandhrabala P.	CA Gopal Krishan
Partner	Partner
Membership No. 235978	Membership No. 081085
UDIN: 26235978EXTSGT2634	UDIN: 26081085ERMTVS1134
Place: Delhi	Place: Delhi
Date: 20 th April 2026	Date: 20 th April 2026

RBI Master Direction - Non-Banking Financial Companies Auditor s Report (Reserve Bank) Directions, 2016

To The Board of Directors PNB Gilts Limited 5, Sansad Marg, New Delhi- 110001

In terms of Reserve Bank of India, Master Direction- Non- Banking Financial Companies Auditors Report (Reserve Bank) Directions, 2016 dated September 29, 2016 we report that

The Company is engaged in the business of Non- Banking Financial Institution as Primary Dealer (PD). The Company has received Registration Certificate No. 14,00007, as provided in Section 45- IA of the Reserve Bank of India Act, 1934 (2 of 1934) from Reserve Bank of India on February 10, 1998. The Company is entitled to continue to hold Certificate of Registration in terms of its Principal Business criteria (financial asset/income pattern) as on March 31, 2026.

The Company is meeting the required net owned fund required in terms of Master Direction - Reserve Bank of India (Non- Banking Financial Companies - Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025. A resolution for non- acceptance of any public deposits was passed in the meeting of the Board held on April 22, 2025 and the Company has not accepted any public deposits during the year ended March 31, 2026.

The Company has complied with the prudential norms relating to income recognition, accounting standards, assets classification and provisioning for bad and doubtful debts as applicable to it in terms of Master Direction - Reserve Bank of India (Non- Banking Financial Companies - Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025.

There is no requirement to file form NBS- 7 for the year under review. Hence, we are unable to comment on that.

For K Venkatachalam Aiyer and Co.	For Raj Har Gopal and Co.
Chartered Accountants	Chartered Accountants
Firm \u2019 s Registration Number: 004610S	Firm \u2019 s Registration Number: 002074N
CA Chandhrabala P.	CA Gopal Krishan
Partner	Partner
Membership No. 235978	Membership No. 081085
UDIN: 26235978EXTSGT2634	UDIN: 26081085ERMTVS1134
Place: Delhi	Place: Delhi
Date: 20 th April 2026	Date: 20 th April 2026