Please find enclosed herewith the monitoring agency report issued by Care Ratings Limited, Monitoring Agency, in respect of utilization of proceeds raised through qualified institutions placement by the Company for the 2nd quarter ended September 30, 2025

Azad Engineering raised ₹700 crore through a Qualified Institutions Placement (QIP) in February–March 2025. As of September 30, 2025, the company has utilized ₹376.71 crore of the proceeds, leaving ₹323.29 crore unutilized (parked in fixed deposits with HDFC Bank and monitoring/escrow accounts). During Q2 FY26 alone, ₹128.37 crore was deployed towards capital expenditure, ₹44.80 crore for general corporate purposes, and ₹0.71 crore for issue expenses. The full ₹156.21 crore earmarked for general corporate purposes has now been completely utilized, while ₹311.32 crore of the original ₹525 crore capex allocation remains pending deployment. CARE Ratings, the monitoring agency, confirmed there are no deviations from the stated objects of the issue. However, it flagged that the company did not obtain prior Board or committee approval for using GCP funds as required under the placement document, and noted commingling of funds in the current account for which it relied on CA certification. The Board has subsequently taken note of these observations at its November 1, 2025 meeting.