Sadbhav Engineering Ltd Auditor Reports

INDEPENDENT AUDITORS REPORT

To the Members of

Sadbhav Engineering Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of Sadbhav Engineering Limited ("the Company"), which comprises of the balance sheet as at March 31, 2026, the statement of profit and loss (including other comprehensive income), the statement of changes in equity and statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of material accounting policies and other explanatory information (hereinafter referred to as standalone financial statements).

In our opinion and to the best of our information and according to the explanations given to us, except for the matters described in the "Basis for Qualified Opinion" section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2026, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Qualified Opinion

We draw attention to Note No. 47 to the accompanying standalone financial statements with respect to termination of concession agreement by Rohtak Panipat Tollway Private Limited step-down subsidiary of the Company. As at March 31, 2026, aggregate amount of Rs 20,178.30 lakhs is outstanding towards loan, trade receivable and reimbursement of expenses as receivable from the said step-down subsidiary (RPTPL). The said step-down subsidiary has issued notice of termination of concession agreement to National Highway Authority of India (NHAI) on account of Force Majeure Event as per concession agreement. As explained in the said note, the Company has carried out impairment assessment of outstanding balance in this step-down subsidiary duly considering the expected payment arising out of aforesaid termination and other claims filed with NHAI and based on the above assessment, management has concluded that no impairment/adjustment to the carrying value of the loan, and other receivables balance is necessary as at March 31, 2026.

However, we have not been able to corroborate the managements contention of realizing the carrying value of loan, trade and other receivables of Rs. 20,178.30 Lakhs as on the reporting date, related to the said step-down subsidiary.

Accordingly, we are unable to comment on appropriateness of the carrying value of such loan, trade and other receivables and the consequential impact on the standalone financial statements of the Company as at reporting date and for the year ended on March 31, 2026.

We draw attention to Note No. 48 to the accompanying standalone financial statements regarding impairment assessment of investment of Rs. 54,864.44 Lakhs, stated at cost and outstanding loan (including interest accrued) of Rs. 32,938.49 lakhs as at March 31, 2026 to one of the subsidiary, Sadbhav Infrastructure Project Limited. It is noted that the subsidiarys consolidated net worth as at March 31, 2026, is substantially eroded. Management asserts that the investment and loan outstanding are fully recoverable, based on factors outlined in the said note.

However, we are unable to obtain sufficient appropriate audit evidence to substantiate the significant judgments and estimates made by management regarding the underlying assumptions adopted by the management for impairment assessment. Consequently, we are unable to provide a conclusive comment on the adjustments, if any, necessary to the carrying value of the said investment and loan and the consequential impact, if any, on the standalone financial statement of the Company for the year ended March 31, 2026.

We draw attention to Note No. 51 to accompanying Standalone Financial statements regarding expected recoverability of Contract Assets amounting to Rs 35,019.32 lakhs outstanding as at March 31, 2026 which represent receivables in respect of closed/ substantially closed/ suspended projects. The Company is at various stages of negotiation/ discussion with the clients or matters under arbitration/litigation in respect of aforementioned receivables.

Considering the contractual tenability, progress of negotiations/ discussions/ arbitration/litigations and as legally advised in certain contentious matters, the Management has represented that these contract assets amounting to Rs 35,019.32 lakhs are fully recoverable within a period of one year, based on factors detailed in the said note and hence classified under other current assets in the financial statement.

However, we were unable to obtain sufficient appropriate audit evidence to substantiate the significant judgments and estimates made by the management in relation to the expected recoverability of these contract assets within a period of one year. Accordingly, we are unable to determine whether any adjustments are required to the carrying value of the said contract assets and the consequential impact, if any, on the standalone financial statements of the Company for the year ended March 31, 2026.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone 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 standalone financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the standalone financial statements.

Emphasis of Matter

We draw attention to Note No. 49 to the accompanying standalone financial statements, wherein it is stated that some of vendors have initiated legal proceeding including application to National Company Law Tribunal (NCLT). The company has sought confirmations of balance from some of the vendors. As confirmation from the vendors are still awaited and hence these outstanding balances under trade payable are subject to reconciliation and consequential adjustments upon determination/receipt of such confirmation.

Our Opinion is not modified in respect of this matter.

Material uncertainty related to going concern

We draw attention to Note No. 53 to the accompanying standalone financial statements, which indicates that the Company currently has no EPC contracts in hand, has not mobilized for any new EPC work, and consequently there is no operational cash inflow from EPC activities as at the reporting date. The Company is incurring operating losses, primarily due to fixed costs, interest on debt, and low/no revenue from core operations. These events or conditions along with other matters as set forth in the said note indicate that a material uncertainty exists that may cast significant doubt on the Companys ability to continue as a going concern. Managements evaluation of the events and conditions and managements plans regarding these matters are also described in the said note.

Our opinion is not modified in respect of 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 standalone financial statements of the current year. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matters described in the Basis for Qualified Opinion section and the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be key audit matters to be communicated in our report. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the Standalone Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Standalone Financial Statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Standalone Financial Statements.

Key Audit Matter Description	Response to Key Audit Matter
D. Measurement of Contract assets in respect of unbilled amounts and evaluation of recoverability of the carrying value of Contract Assets:
The Company, as at March 31, 2026, has Contract Assets (unbilled work-in-progress) amounting to Rs. 65,946.48 Lakhs which represent various receivables in respect of closed, suspended or terminated projects.	Our audit procedures to address this key audit matter included, but were not limited to the following:
The Company is in process of arbitration or litigation with the customers in respect of the aforementioned Contract Assets.	• Obtaining an understanding of the Companys processes and evaluating the design and testing the effectiveness of key internal financial controls, including those related to review and approval of contract estimates.
The Management, based on contractual tenability, progress of the negotiations, discussions, arbitration, litigation has determined that after making necessary written off of irrecoverable amount, no further provision is required to be recognized for the aforementioned receivables.	• Assessed the reasonability of judgements exercised and estimates made by management with respect to the recoverability of the Contract Assets and validated them with corroborating evidence.
Considering the materiality of the amounts involved, uncertainty associated with the outcome of the arbitration or litigation process and significance of management judgement involved in assessing the recoverability, the matter has been determined as a key audit matter in the audit of the standalone financial statements.	• Verified contractual arrangements to support managements position on the tenability and recoverability of these receivables;
	• Reviewed legal and contracting experts reports received on certain contentious matters;
Refer Note No. 18.2 to the standalone financial statements.	• Evaluated the appropriateness and adequacy of the disclosures related to contract revenue and costs in the standalone financial statements
Key Audit Matter Description	Response to Key Audit Matter
E. Provision and Contingent Liabilities
The Company is involved in various legal disputes in respect of tax matters and claims from various parties, the outcomes of which are uncertain and may result in significant liabilities.	Our audit procedures to address this key audit matter included, but were not limited to the following:
Assessing the risks related to these litigations involves complex assumptions and requires significant judgment, particularly in evaluating uncertainties around the likely outcome of the proceedings and the adequacy of related disclosures in the Standalone Financial Statements.	• Evaluated the processes and relevant controls established by the Company for identifying legal, tax litigations, and pending proceedings.
Given the level of judgment involved, the potential material impact of such litigations, and the complexity of the assessment process, this matter has been identified as a key audit matter in our audit.	• Assessed the assumptions used by the Companys legal and tax departments in evaluating potential legal and tax risks, considering legal precedents and rulings in similar matters.
	• Held inquiries with the Companys legal and tax departments on the status of significant disputes and inspected supporting documentation.
	• Reviewed the adequacy and appropriateness of disclosures relating to these matters in the notes to the Standalone Financial Statements.
Refer Note No.38 of the standalone financial statements	• Considered the requirements of Ind AS 37 to assess whether provisions or contingent liabilities were correctly recognized or disclosed.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Business Responsibility Report, Corporate Governance and Shareholders Information, but does not include the standalone financial statements and our auditors report thereon. The other information report is expected to be made available to us after the date of this auditors report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

When we read the other information report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

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

The Companys management and Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of 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 these standalone financial statement 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 those charged with governance are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditors Responsibilities for the Audit of the Standalone Financial Statements

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

As part of an audit in accordance with SAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal 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 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 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.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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

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

a. We have sought and except for the matter described in the Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. Except for the matter described in the Basis for Qualified Opinion paragraph and matters stated in Paragraph (vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, 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 including the Statement of Other Comprehensive income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act;

e. The matter described in the Basis for Qualified Opinion paragraph and the matter described in the Material Uncertainty Related to Going Concern section above, in our opinion, may have an adverse effect on the functioning of the Company;

f. 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;

g. With respect to the adequacy of the internal financial controls with reference to the standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure A". Our report expresses a qualified opinion on the operating effectiveness of the Companys internal financial controls with reference to financial statements.

h. The reservation relating to the maintenance of accounts and other matters connected therewith are as stated in Basis for Qualified Opinion Section and paragraph (b) above on reporting under Section 143(3)(b) and paragraph 1(j)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

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

i. the Company has disclosed the impact, wherever necessary, of pending litigations on its financial position in its standalone financial statements; Refer Note No 38 to the standalone financial statements;

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

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;

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 persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall: directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries;

The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall: directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries; and (c) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

The Company has not declared or paid dividend during the year covered by our audit. Hence reporting requirement for compliance with Section 123 of the Act is not applicable.

Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account, which has feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software except that the feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes to certain noneditable fields/tables of the accounting software used for maintaining general ledger and books of accounts. Further, during the course of our audit, we did not come across any instance of the audit trail feature being tampered with subject to above. The audit trail has been preserved by the Company as per the statutory requirements for record retention.

Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account, which has feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective software except that the feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes to certain noneditable fields/tables of the accounting software used for maintaining general ledger and books of accounts. Further, during the course of our audit, we did not come across any instance of the audit trail feature being tampered with subject to above. The audit trail has been preserved by the Company as per the statutory requirements for record retention.

In our opinion, the managerial remuneration for the year ended March 31, 2026 paid/provided by the Company to their directors is in accordance with the provisions of section 197 of the Act read with Schedule V to the Act;

As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure B, a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

For Manubhai & Shah LLP

Chartered Accountants

Firm Registration No.: 106041W/W100136

Devansh Gandhi

Partner

Membership No.: 129255

UDIN: 26129255MYOFXC9603

Place: Ahmedabad

Date: May 30, 2026

(Referred to in paragraph 1(g) under "Report on Other legal and Regulatory Requirements" section of our report the member of Sadbhav Engineering Limited of even date)

Report on the Internal Financial Controls with reference to standalone financial statements under clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act")

We have audited the internal financial controls with reference to standalone financial statements of Sadbhav Engineering Limited ("the Company") as of March 31, 2026 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls with reference to the standalone financial statements

The management of the Company is responsible for establishing and maintaining internal financial controls based on the internal controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the "ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements 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 ICAI 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 with reference to the standalone financial statements. 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 with reference to standalone financial statements 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 with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone financial statements, 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 standalone 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 qualified audit opinion on the Companys internal financial controls system with reference to these standalone financial statements.

Meaning of Internal Financial Controls with reference to the Standalone Financial Statements

A Companys internal financial control with reference to the standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the standalone financial statements for external purposes in accordance with generally accepted accounting principles.

A Companys internal financial control with reference to standalone financial statements includes those policies and procedures that 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 the standalone 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 standalone financial statements.

Inherent Limitations of Internal Financial Controls with reference to the Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may financial statement occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial control with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified in the operating effectiveness of the Companys internal financial controls with reference to standalone financial statements as at March 31, 2026:

The Companys internal financial control system towards estimating the carrying value of loan, trade and other receivables and investment in the step down subsidiary company and subsidiary company as explained in Note 47 and Note 48 respectively to the standalone financial statements were not operating effectively which could potentially lead to non provision for impairment, if any, that may be required to the carrying values of loan, trade and other dues recoverable from such step down subsidiary company as well as carrying value of investment in a subsidiary and its consequential impact on the earnings, other equity and related disclosures in the standalone financial statements.

• The Companys internal financial control system towards estimating time of recoverability of contract assets as explained in Note No. 51 to the standalone financial statements were not operating effectively which could potentially lead to non provision for impairment, if any, that may be required to the carrying values Contract Assets and its consequential impact on other equity and related disclosures in the standalone financial statements.

• There was weakness in operating effectiveness over system processing of invoices and obtaining balance confirmation from vendors and processing of journal entries into accounting software due to absence of maker checker mechanism could result into possible adjustments of transactions/balances.

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

In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to standalone financial statements as at March 31, 2026 based on the internal control with reference to the standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI, and except for the possible effects of the material weakness described above on the achievement of the objectives of the control criteria, such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2026.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company for the year ended on March 31, 2026, and these material weaknesses have affected our opinion on the standalone financial statements of the Company and we have issued qualified opinion on the standalone financial statements.

In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to standalone financial statements as at March 31, 2026 based on the internal control with reference to the standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI, and except for the possible effects of the material weakness described above on the achievement of the objectives of the control criteria, such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2026.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company for the year ended on March 31, 2026, and these material weaknesses have affected our opinion on the standalone financial statements of the Company and we have issued qualified opinion on the standalone financial statements.

For Manubhai & Shah LLP

Chartered Accountants

Firm Registration No.: 106041W/W100136

Devansh Gandhi

Partner Membership No.: 129255

UDIN: 26129255MYOFXC9603

(Referred to in paragraph 3 under "Report on Other Legal and Regulatory Requirements" section of our report the members of Sadbhav Engineering Limited of even date)

Report on the Companies (Auditor Report) Order, 2020, issued in terms of section 143 (11) of the Companies Act, 2013(the Act) of Sadbhav Engineering Limited (the Company)

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that:

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

(B) The Company has maintained proper records showing full particulars of intangible assets. Further the company does not have any intangible assets as at March 31, 2026.

Property, Plant and Equipment were physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed/transfer deed/conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties (other than immovable properties where the Company is lessee and the lease agreements are duly executed in favor of the lessee), disclosed in the standalone financial statements included under Property, Plant and Equipment are held in the name of the Company as at the balance sheet date.

d. The Company has not revalued any of its Property, Plant and Equipment (including Right of use assets) during the year.

e. No proceedings have been initiated during the year or are pending against the Company as at March 31, 2026 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.

(ii) a. The inventories were physically verified during the year by the Management at year end. In our opinion and according to the information and explanations given to us, the coverage and procedure of such verification by the Management is appropriate having regard to the size of the Company and nature of its operations and No discrepancies of 10% or more in the aggregate for each class of inventories were noticed on such physical verification of inventories when compared with books of account.

b. According to the information and explanations given to us, the Company has been sanctioned working capital limits in excess of Rs. 5 crores, in aggregate, at points of time during the year, from banks or financial institutions on the basis of security of current assets. The Company has not filed quarterly returns or statements, with the banks or financial institution for the period from April 1, 2025 to March 31, 2026; Hence we are unable to comment on the same (Refer Note No. 61 of Financial Statement).

iii) a. The Company has provided loans or advances in the nature of loans, during the year and details of which are given below:

				(Rs. In Lakhs)
Particulars	Loans	Advances in nature of loans	Guarantees	Security
(A) Aggregate amount granted/provided during the year:
- Subsidiaries	13,698.51	-	-	-
- Step-Down Subsidiaries	-	-	-	-
- Others	-	-	-	-
(B) Balance outstanding as at balance sheet date in respect of above cases
- Subsidiaries	36,510.94	-	-	-
- Step-Down Subsidiaries	-	-	-	-
- Others	-	-	-	-

The Company has not provided any guarantee or security to any other entity during the year.

b. In our opinion and according to the information and explanations given to us, the investments made, guarantees provided, security given and the terms and conditions of the grant of all loans and advances in the nature of loans are not prejudicial to the Companys interest. However, attention is invited to Basis of Qualified Opinion paragraph of our Main Audit Report.

c. In respect of loans granted, the terms of arrangements do not stipulate any repayment schedule of principal and interest. The loans are repayable on demand except interest free term loan of Rs. 7795.63 Lakhs (having present value of Rs. 5914.82 lakhs) given to one of the subsidiary companies which is repayable as on November 27, 2028.

d. Since the loans are repayable on demand, reporting under this clause in respect of overdue balances is not applicable except loan aggregating to Rs. 12,335.58 Lakhs given to subsidiaries which have not fallen due for repayment.

e. Loan given to Sadbhav Infrastructure Projects Limited (SIPL), one of the subsidiaries amounting to Rs. 7795.63 lakhs fell due on November 27, 2025. The said loan was renewed for a period of three years.

1. The Company has granted Loans or advances in the nature of loans which are repayable on demand or without specifying any terms or period of repayment details of which are given below.

Particulars	Others (Rs.)	Related Parties (Rs.)
Aggregate amount of loans/ advances in nature of loans
- Repayable on demand (A)	1,025.72	38799.50
- Agreement does not specify any terms or period of repayment (B)	0.00	6420.76
Total (A+B)	1,025.72	45,220.26
Percentage of loans/ advances in nature of loans to the total loans	1.97%	86.69%

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186 of the Act, with respect to the loans granted, investments made and guarantees and securities provided, as applicable.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits (including deemed deposits) from the public within the meaning of provisions of sections 73 to 76 of the Act and the rules framed there under and hence reporting under clause (v) of paragraph 3 of the Order is not applicable. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal against the Company in this regard.

(vi) The Central Government has prescribed maintenance of cost records under section 148(1) of the Act. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, carried out a detailed examination of the same.

(vii) a. Undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax and any other statutory dues have not been regularly deposited with the appropriate authorities during the year.

According to the information and explanations given to us and basis our audit procedures to check the outstanding statutory dues, in our opinion no undisputed amounts payable in respect of statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales tax, Value Added Tax, Service Tax, Custom Duty, Excise Duty, Cess, Goods and Service Tax and other statutory dues applicable to it were in arrears as at the balance sheet date for a period of more than six months from the date they became payable except interest of Rs. 86.34 Lakhs as worked out by the management on tax deducted at source.

b. Details of statutory dues referred to in sub-clause (a) above which have not been deposited as on March 31, 2026 on account of disputes are given below:

Sr. No. Name of the Statue	Nature of the Dues	Period to which the amount relates	Forum where Dispute is pending	Amount (Rs.in Lakhs)
1. Goods and Service Tax Act, 2017	Goods & Service Tax	2017-18	Assistant Commissioner of State Tax (Appeals) Maharashtra	171.31
2. Goods and Service Tax Act, 2017	Goods & Service Tax	2017-18	Assistant Commissioner of Central Tax (Appeals in Tribunal) Andra Pradesh	62.90
3. Goods and Service Tax Act, 2017	Goods & Service Tax	2017-18	Deputy Commissioner of State Tax (Appeals in Tribunal) Karnataka	1,043.19
4. Goods and Service Tax Act, 2017	Goods & Service Tax	2017-18	Joint Commissioner of State Tax (Appeals) Madhya Pradesh	345.51
5. Goods and Service Tax Act, 2017	Goods & Service Tax	2017-18	High Court-Haryana	665.77
6. Goods and Service Tax Act, 2017	Goods & Service Tax	2018-19	Assistant Commissioner of State Tax (Appeals) Maharashtra	405.04
7. Goods and Service Tax Act, 2017	Goods & Service Tax	2018-19	Assistant Commissioner of CGST (Appeals) Haryana	243.60
8. Goods and Service Tax Act, 2017	Goods & Service Tax	2018-19	Assistant Commissioner of Commercial Taxes (Appeals in Tribunal) Karnataka	204.84
9. Goods and Service Tax Act, 2017	Goods & Service Tax	2018-19	Joint Commissioner of CGST & Central Excise (Appeals) Madhya Pradesh	197.52
10. Goods and Service Tax Act, 2017	Goods & Service Tax	2018-19	Joint Commissioner of CGST & Central Excise (Appeals) Madhya Pradesh	184.05
11. Goods and Service Tax Act, 2017	Goods & Service Tax	2018-19	Joint Commissioner of State Tax (Appeals) Rajasthan	56.04
12. Goods and Service Tax Act, 2017	Goods & Service Tax	2018-19	Deputy Commissioner of State Tax (Appeals) Uttarakhand	1,044.37
13. Goods and Service Tax Act, 2017	Goods & Service Tax	2019-20	Commercial Tax Officer (Appeals) Karnataka	160.72
14. Goods and Service Tax Act, 2017	Goods & Service Tax	2019-20	Joint Commissioner of CGST & Central Excise (Appeals) Madhya Pradesh	86.59
15. Goods and Service Tax Act, 2017	Goods & Service Tax	2019-20	Deputy Commissioner of State Tax (Appeals) Uttarakhand	285.05
16. Goods and Service Tax Act, 2017	Goods & Service Tax	2019-20	State Tax Officer Rachi (Appeals) Jharkhand	12.30
17. Goods and Service Tax Act, 2017	Goods & Service Tax	2019-20	Assistant Commissioner of State Tax (Appeals) Rajasthan	53.53
18. Goods and Service Tax Act, 2017	Goods & Service Tax	2019-20	Assistant Commissioner of State Tax (Appeals) Rajasthan	113.03
19. Goods and Service Tax Act, 2017	Goods & Service Tax	2019-20	Assistant Commissioner of CGST (Appeals) Haryana	148.05
20. Goods and Service Tax Act, 2017	Goods & Service Tax	2019-20	Assistant Commissioner of Commercial Taxes (Appeals) Maharashtra	162.82
21. Goods and Service Tax Act, 2017	Goods & Service Tax	2020-21	Additional Commissioner of State Tax (Appeals) Andra Pradesh	1203.10
22. Goods and Service Tax Act, 2017	Goods & Service Tax	2020-21	Assistant Commissioner of Commercial Taxes (Appeals) Karnataka	663.10
23. Goods and Service Tax Act, 2017	Goods & Service Tax	2020-21	Deputy Commissioner of State Tax (Appeals) Chhattisgarh	76.44
24. Goods and Service Tax Act, 2017	Goods & Service Tax	2020-21	Deputy Commissioner of State Tax (Appeals) Uttarakhand	30.50
25. Goods and Service Tax Act, 2017	Goods & Service Tax	2020-21	Assistant Commissioner of State Tax (Appeals) Rajasthan	22.41
26. Goods and Service Tax Act, 2017	Goods & Service Tax	2020-21	Assistant Commissioner of Commercial Taxes (Appeals) Maharashtra	307.83
27. Goods and Service Tax Act, 2017	Goods & Service Tax	2020-21	Assistant Commissioner of Commercial Taxes (Appeals) Maharashtra	0.93
28. Goods and Service Tax Act, 2017	Goods & Service Tax	2020-21	Assistant Commissioner of Commercial Taxes (Appeals in Tribunal) Karnataka	1,278.86
29. Goods and Service Tax Act, 2017	Goods & Service Tax	2021-22	Assistant Commissioner of State Tax (Appeals) Odisha.	14.85
30. Goods and Service Tax Act, 2017	Goods & Service Tax	2021-22	Assistant Commissioner of State Tax (Appeals in Tribunal) Uttar Pradesh	11.87
31. Goods and Service Tax Act, 2017	Goods & Service Tax	2021-22	Assistant Commissioner of Commercial Taxes (Appeals) Maharashtra	61.75
32. Goods and Service Tax Act, 2017	Goods & Service Tax	2023-24	Assistant Commissioner of Commercial Taxes (Appeals) Maharashtra	157.40
33. Goods and Service Tax Act, 2017	Goods & Service Tax	2024-25	Assistant Commissioner of Commercial Taxes (Appeals) Karnataka	161.62
34. Goods and Service Tax Act, 2017	Goods & Service Tax	2024-25	Assistant Commissioner of Commercial Taxes (Appeals) Karnataka	81.51
35. Goods and Service Tax Act, 2017	Goods & Service Tax	2024-25	Assistant Commissioner of Commercial Taxes (Appeals) Karnataka	3.04
36. Goods and Service Tax Act, 2017	Goods & Service Tax	2017-18 to 2021-22	Joint Commissioner of Central GST & CE (Appeals) Gujarat	2,714.54
37. Goods and Service Tax Act, 2017	Goods & Service Tax	2017-18 to 2021-22	Joint Commissioner of Central GST & CE (Appeals) Gujarat	469.85
38. Goods and Service Tax Act, 2017	Goods & Service Tax	2019-20 to 2020-21	Assistant Commissioner of CGST (Appeals) Haryana	58.83
39. Goods and Service Tax Act, 2017	Goods and Service Tax	2019-20	Assistant Commissioner of State Tax (Appeals) Maharashtra	176.70
40. The Finance Act, 1994	Service Tax	2005-06	Supreme Court of India	67.29
41. The Finance Act, 1994	Service Tax	2007-08 and 2008-09	Central Excise and Service Tax Appellant Tribunal, Ahmedabad	545.05
42. Gujarat Value Added Tax Act, 2003	Value Added Tax	2006-07	Gujarat Value Added Tax Tribunal	321.96
43. Jharkhand Value Added Tax Act, 2005	Value Added Tax	2010-11	Commissioner Appeal (Commercial Tax), Jharkhand	77.40
44. Maharashtra Value Added Tax Act,2002	Value Added Tax	2011-12	Deputy Commissioner of Sales Tax/ Joint Commissioner of Sales Tax	505.93
45 Maharashtra Value Added 45 Tax Act,2002	Value Added Tax	2012-13	Deputy Commissioner of Sales Tax / Joint Commissioner of Sales Tax	190.07
46 Maharashtra Value Added 46 Tax Act,2002	Value Added Tax	2013-14	Deputy Commissioner of Sales Tax / Joint Commissioner of Sales Tax	477.63
47 Madhya Pradesh Value Added Tax Act,2002	Value Added Tax	2016-17	Government of Madhya Pradesh , Commercial Taxes Department	965.04
48 Madhya Pradesh Value Added Tax Act,2002	Value Added Tax	2016-17	Government of Madhya Pradesh , Commercial Taxes Department	340
Mines and Minerals 49. (Development and Regulation) Act,1957	Royalty	2015-2016 to 2021-22	Joint Director, Department of Mining & Geology Mysore	11,036.37
Mines and Minerals 50. (Development and Regulation) Act,1957	Royalty	2018- 2019 2019- 2020	Additional Director, Department of Mining & Geology Gujarat	18,615.51
51 The Maharashtra Land Revenue Act ,1966	Royalty	2017-18	Office of Shree S.P Mule, Sub-Divisional officer ,umarkheed	1,515.40
Mines and Minerals 52. (Development and Regulation) Act,1957	Royalty	2019-20	Department of Geology and minerals Gandhinagar , Gujarat	725.08
53 Customs Act, 1962	Customs, Excise & Service Tax	2017-18	The Directorate of Revenue Intelligence, Lucknow	237.89
54. The Income Tax Act, 1961	Income Tax	2004-05 to 2006-07	High Court of Gujarat	189.19
55. The Income Tax Act, 1961	Income Tax	2007-08	High Court of Gujarat	279.85
56. The Income Tax Act, 1961	Income Tax	2006-07 to 2010-11	High Court of Gujarat	1,204.88
57. The Income Tax Act, 1961	Income Tax	2010-11	ITAT (APPEAL)	136.32
58. The Income Tax Act, 1961	Income Tax	2011-12	High Court of Gujarat	4.62
59. The Income Tax Act, 1961	Income Tax	2011-12	High Court of Gujarat	81.23
60. The Income Tax Act, 1961	Income Tax	2012-13	High Court of Gujarat	413.88
61. The Income Tax Act, 1961	Income Tax	2013-14	High Court of Gujarat	73.53
62. The Income Tax Act, 1961	Income Tax	2013-14	High Court of Gujarat	1,048.50
63. The Income Tax Act, 1961	Income Tax	2014-15	High Court of Gujarat	113.97
64. The Income Tax Act, 1961	Income Tax	2014-15	CIT (APPEAL)	15.38
65. The Income Tax Act, 1961	Income Tax	2015-16	CIT (APPEAL)	96.51
66. The Income Tax Act, 1961	Income Tax	2016-17	High Court of Gujarat	573.19
67. The Income Tax Act, 1961	Income Tax	2016-17	CIT (APPEAL)	21.71
68. The Income Tax Act, 1961	Income Tax	2017-18	High Court of Gujarat	198.31
69. The Income Tax Act, 1961	Income Tax	2017-18	CIT (APPEAL)	306.46
70. The Income Tax Act, 1961	Income Tax	2018-19	CIT (APPEAL)	811.11
71. The Income Tax Act, 1961	Income Tax	2019-20	CIT (APPEAL)	369.45

(viii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not surrendered or disclosed any transactions, previously unrecorded as income in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year.

(ix) a. During the year there were delays in the repayment of loans and payment of interest to banks as per the details given hereunder:

Name of lender	Aggregate amount not paid on due date (Rs. in Lakhs)	Whether Principal or Interest	Period of delay *
Term loan for Machinery Finance from Banks
1	4478.19	Principal
Axis Bank Limited	355.71	Interest	1-989 Days
Working Capital Demand Loan from Bank **
Axis Bank Limited	5,468.59	Principal
	2,100.06	Interest	1-1185 Days
	2,449.56	Principal
Bank of India	1,147.94	Interest	1-1185 Days
ICICI Bank	6,711.44	Principal
IDBI Bank	1,325.94	Principal
	755.67	Interest	1-1185 Days
	25,614.97	Principal
Punjab National Bank commerce (OBC)	1,090.65	Interest	1-1185 Days
	4,194.98	Principal
	173.76	Interest	1-1185 Days
	9,659.29	Principal
State Bank of India	7,627.97	Interest	1-1185 Days
	14,749.49	Principal
Union Bank of India	2,809.13	Interest	1-1185 Days
Standard Chartered Bank	11,262.90	Principal
	3,418.56	Interest	1-1185 Days
Karur Vysya Bank	864.09	Principal	1-1185 Days

* Period of delay has been considered till the date of restructuring that is march 25, 2026 report and includes defaults in repayment of principal and interest as at Same date. Considering the number of instances of delay, the particulars of the delay are given in terms of range of days.

** Period of delay in case of Working Capital demand Loan from Bank is calculated from date of execution of Inter Creditor Agreement (ICA) dated December 26, 2022.

b. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company is not declared a willful defaulter by any bank or financial institution or government or government authority.

c. The Company has not taken any term loan during the year and there are no unutilised term loans at the beginning of the year. Hence, reporting under clause (ix)(c) of the Order is not applicable.

d. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term purposes by the Company.

e. According to the information and explanations given to us and on an overall examination of the standalone financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries or associates as defined under the Act. The Company does not hold any investment in any joint venture (as defined under the Act) during the year ended March 31, 2026.

(x) a. The Company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause (x) (a) of the Order is not applicable.

b. The Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partially or optionally) during the year and hence reporting under clause (x) (b) of the Order is not applicable to the Company.

(xi) a. Based on examination of the books and records of the Company and according to the information and explanations given to us, we report that no fraud by the Company or on the Company has been noticed or reported during the year.

b. According to the information and explanations given to us, no report under sub-section (12) of Section 143 of the Act 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. As represented to us by the Management, there were no whistle-blower complaints received by the Company during the year.

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

(xiii) Transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

(xiv) a. In our opinion and based on our examination, the Company has an internal audit system which is commensurate with the size and nature of its business

b. We have considered the reports of the internal auditors for the year under audit.

(xv) The Company has not entered into non-cash transactions with directors or persons connected with its directors. Hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

(xvi) a. In our opinion, the Company is not required to be requirement under section 45-IA of the Reserve Bank of India Act, 1934.

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

(xvii) The Company has incurred cash losses amounting to Rs. 7,532.43 lakhs during the financial year 2025-26 and Rs. 13,020.22 Lakhs in the immediately preceding financial year 2024.

(xviii) There has been no resignation of the statutory auditors during the year.

(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 standalone financial statements and our knowledge of the Board of Directors and management plans (refer note no 52 to the standalone financial statements) and based on our examination of the evidence supporting the assumptions, which causes us to believe that material uncertainty exists as on the date of the audit report indicating that the 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 further 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. (Attention is invited to Note No. 52 to the standalone financial statement and material uncertainty related to going concern paragraph in the main Audit Report)

(xx) The Company did not have a net profit of rupees five crore or more during the immediately preceding financial year and hence, provisions of Section 135 of the Act are not applicable to the Company during the year. Accordingly, reporting under clause 3(xx) of the Order is not applicable.

For Manubhai & Shah LLP
Chartered Accountants
Firm Registration No.: 106041W/W100136
Devansh Gandhi
Partner
Membership No.: 129255	Place: Ahmedabad
UDIN: 26129255MYOFXC9603	Date: May 30, 2026