Vardhan Capital & Finance Ltd Auditor Reports

TO MEMBERS OF

VARDHAN CAPITAL AND FINANCE LIMITED

Report on the Audit of Financial Statements

Opinion

We have audited the financial Statements of VARDHAN CAPITAL AND FINANCE LIMITED (hereinafter referred to as ,the Company*), which comprise the Balance Sheet as at March 31, 2026 and the Statement of Profit & Loss (including other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (collectively referred to as Financial Statements).

In our opinion and to the best of our information and according to the explanations given to us, the Financial Statements give the information required by the Companies Act, 2013 (hereinafter referred to as ,the Act*) in the manner 50 required and give a true and fair view in conformity with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015, and amended and other accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at March 31, 2026, and its net Loss including other comprehensive income, the changes in equity and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters:

? Related Party Loans and Advances

As at 31 March 2026 the Company has outstanding loans and advances aggregating approximately Rs.

8.54 crore granted to related parties (group concerns). These balances are described by management as strategic long-term exposures linked to underlying projects that have faced significant regulatory and operational delays. During the year the Company discontinued the accrual and recognition of interest income (and corresponding interest expense on reciprocal balances). Management has also not recognised any impairment loss or Expected Credit Loss (ECL) provision against these exposures, stating that a settlement plan is under finalisation and that any resulting gains or losses will be accounted for only upon absolute execution of the Settlements. In the absence of a binding Settlement agreement and given the prolonged delays, the recoverability of these balances and the appropriateness of the non-recognition of interest and impairment remain subject to significant uncertainty.

? Statutory Dues and Compliance

The Company has outstanding undisputed Statutory dues of approximately 2.23 crore {primarily Tax Deducted at Source on interest of 2.22 crore relating to financial years 2021-22 to 2024-25, together with smaller amounts of Professional Tax). These dues have remained unpaid for periods exceeding Six months as at the balance-sheet date.

Management attributes the defaults to temporary liquidity constraints and has represented that the dues will be Settled Shortly. No provision has been made for interest, penalty or other consequential liabilities that may arise under the applicable tax laws. The impact, if any, of these unpaid dues on the financial position and results of the Company is presently undetermined.

? NBFC Regulatory Compliance

As explained by management, the Company is in the process of regularising certain filings and returns required under the Reserve Bank of India Master Directions applicable to Non-Banking Financial Companies. A number of returns remained pending as on the date of this report.

Our opinion is not modified in respect of these matters.

Basis for Opinion

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

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 statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

Information other than the financial statements and auditors report thereon

The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditors report thereon.

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

In connection with our audit of the Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in the 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 the fact. We have nothing to report in this regard.

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

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to preparation of these 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 Ind AS and other accounting principles generally accepted in India. This responsibility also includes

maintenance of adequate accounting records in accordance with provisions of the Act for safeguarding 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 accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 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 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 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 appropriateness of the accounting policies used and reasonableness of accounting estimates and related disclosures made by management.

? Conclude on 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 disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) Planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the Financial Statements.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

? As required by the Companies (Auditors Report) Order, 2020 (,the Order) issued by the Central Government in terms of Section 143 (11) of the Act, we give in, *Annexure A, a statement on the matters Specified in paragraphs 3 and 4 of the Order.

? As required by section 143(3) of the Act, we report that:

? 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;

? In eur opinion, proper books of account as required by law have been kept by the Company, so far as appears from our examination of those books;

? The Balance Sheet, the Statement of Profit and Loss including other comprehensive income, the Statement of Changes in Equity and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

? In our opinion, the aforesaid Ind AS Standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

? On the basis of written representations received from the directors as on March 31, 2026, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2026, from being appointed as a director in terms of Section 164 (2) of the Act;

? 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 tous, the Company has not paid or provided any managerial remuneration;

? With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure B.

? 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, we report that:

? The Company does not have any pending litigations which would impact its financial position other than those mentioned in the notes to the accounts;

? The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

? iii)There were no amounts which were required to be transferred to the Investors Education and Protection Fund by the Company;

? iv)(a) The Management has represented that, to the best of its knowledge and belief, other than as disclosed in note 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 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 on behalf of the Ultimate Beneficiaries;

? The Management has represented that, to the best of its knowledge and belief, as disclosed in note to the accounts, 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 by or on behalf of the Funding Parties (Ultimate Beneficiaries) or provide any guarantee, Security or the like on behalf of the Ultimate Beneficiaries;

? Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and

(ii) contain any material mis- statement.

? The company has not declared or paid any dividend during the year in contravention of the provisions of section 123 of the Companies Act, 2013.

? Based on our examination which included test checks, the Company, in respect of financial year commencing on 1 April 2024, has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all relevant transactions recorded in the software. Further, during our audit we did not come across any instance of audit trail feature being tampered with. Furthermore, the audit trail records are maintained in the software as per audit trail facility configured. However, the preservations of audit trail were not maintained independently.

For and on behalf of M/s. JM T & ASSOCIATES

Chartered Accountants

FRN. 104167W

SD/-

Place: Mumbai Sanjay Pichholia

Dated: 26 May 2026 Membership No.122651

UDIN:26122651BRVHWK2116