A R C Finance Ltd Directors Report

To

The Members,

The Directors have pleasure in presenting before you the 43^rd Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2025.

1. FINANCIAL PERFORMANCE OF THE COMPANY

The performance during the period ended 31^st March, 2025 has been as under:

(Rs. In Hundred)

Particular	2024-25	2023-24
Revenue from operations	23,29,604.08	9,23,573.48
Other Income	-	633.16
Total Income	23,29,604.08	9,24,206.64
Less: Expenditure	16,93,064.5	8,58,794.27
Profit before Interest, Depreciation and Tax	6,36,539.58	65,412.37
Less: Interest	1,68,686.48	8,546.97
Less: Depreciation & Amortisation cost	20,224.39	20,196.52
Profit before Tax	4,47,628.72	36,668.88
Less: Tax Expense:		9533.91
Current Tax	1,16,383.47
Deferred Tax
Net Profit after Tax	3,31,245.25	27,134.97

2. REVIEW OF OPERATIONS

The Total Income of the Company stood at 2329.60 lacs for the year ended March 31, 2025 as against 924.20 lacs in the previous year. The Company made a net profit of 331.245 lacs for the year ended March 31, 2025 as compared to the net profit of 27.13 lacs in the previous year.

3. TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES ACT, 2013

The Board has decided not to transfer any amount to the Reserves for the year under review.

4. DIVIDEND:

The Company has not declared any Dividend during the period under review.

5. TRANSFER OF UNPAID AND UNCLAIMED DIVIDENDS TO INVESTOR EDUCATION AND PROTECTION FUND

The Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

6. SHARE CAPITAL

The paid-up equity capital as on March 31, 2025 was Rs. 87,15,09,623 . During the year under review there is a change in the share capital of the Company , there was a Rights Issue of Rs. 36,65,59,623 increasing the share capital from Rs. 50,49,50,000 to Rs. 87,15,09,623.

7. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT

Managements Discussion and Analysis Report for the year under review, in terms of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations") and SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 (the "Amended Listing Regulations"), is presented in a separate section forming part of the Annual Report.

8. CHANGE IN NATURE OF BUSINESS, IF ANY

There has been no change in nature of business of the Company during the FY under review.

9. FRAUD REPORTING

There have been no frauds reported by the Auditors of the Company to the Audit Committee or the Board of Directors under sub-section (12) of section 143 of the Companies Act, 2013 during the financial year.

10 . DISCLOSURES BY DIRECTORS

The Board of Directors have submitted notice of interest in Form MBP 1 under Section 184(1) as well as intimation by directors in Form DIR 8 under Section 164(2) and declarations as to compliance with the Code of Conduct of the Company.

11. REMUNERATION POLICY:

The Company has framed a Nomination and Remuneration Policy pursuant to Section 178 of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 details of which along with the roles and responsibilities of respective members have been placed on the website of the company viz. http://arcfinance.in/policies.html as "Committees of Board of Directors"

12. MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments, which affect the financial position of the Company which have occurred between the end of the FY and the date of this Report.

13. EXTRACT OF ANNUAL RETURN:

The Annual Return of the Company as on 31st March, 2025 will be available on the website of the Company at http://arcfinance.in/corp.html

14 . FAMILIARISATION PROGRAMME FOR DIRECTORS

As a practice, all Directors (including Independent Directors) inducted to the Board go through a structured orientation programme. Presentations are made by Senior Management giving an overview of the operations, to familiarise the new Directors with the Companys business operations. The Directors are given an orientation on the products of the business, Board constitution and procedures, matters reserved for the Board, and the major risks and risk management strategy of the Company.

During the year under review, no new Independent Directors were inducted to the Board.

15. DIRECTORS AND KEY MANANGERIAL PERSONNEL

Since April 1, 2024 till the date of this Report, the following changes took place in the Board of Directors and the Key Managerial Personnel (in the order of their occurrence):

(a) Mrs. Neha Gandhi was appointed as the Company Secretary of the Company w.e.f. 10^th February, 2024. Further, she has resigned from the Company w.e.f. 26^th April, 2024. (b) Mrs. Sweety Agarwal was appointed as the Company Secretary of the Company w.e.f. 2^nd September, 2024. (c) Mr. Surojit Sarkar, Executive Director of the Company has resigned from the Company w.e.f. 11^th March, 2025. (d) Mrs. Shikha Singhal was appointed as an Additional Director w.e.f. 11^th March, 2025. Thereafter, her appointment will be approved in the Annual General Meeting held on 20^th September,2025.

16. BOARD MEETINGS:

The Company held nine meetings of its Board of Directors during the year on April 26, 2024, May 29, 2024, August 13, 2024, September 2, 2024 , October 4, 2024, October 17, 2024, February 10, 2025, March 8, 2025 and March 11, 2025.

17. BOARD EVALUATION:

Your Board has devised an Evaluation Policy for evaluating the performance of the Board, its Committees, Executive Directors, and Independent Directors. Based on the same, the performance was evaluated for the financial year ended March 31, 2025. As part of the evaluation process, the performance of Non- Independent Directors, the Chairman and the Board was conducted by the Independent Directors. The performance evaluation of the respective Committees and that of Independent and Non- Independent Directors was done by the Board excluding the Director being evaluated.

The policy inter alia provides the criteria for performance evaluation such as Board effectiveness, quality of discussion, contribution at the meetings, business acumen, strategic thinking, time commitment, and relationship with the stakeholders, corporate governance practices, contribution of the committees to the Board in discharging its functions etc.

The Board carried out formal annual evaluation of its own performance and that of its Committees viz., the Audit Committee,

Stakeholders Relationship Committee, Nomination and Remuneration Committee (NRC). The Board also carried out the performance evaluation of all the individual directors including the Chairman of the Company.

18. CORPORATE SOCIAL RESPONSIBILITY

The Company does not fall under the criteria laid under the provisions of Section 135 of the Act and rules framed there under. Therefore, the provisions of Corporate Social Responsibility are not applicable to the Company.

19. AUDITORS:

i. Statutory Auditors:

Pursuant to the provisions of Section 139 of the Companies Act, 2013, the Companies (Audit and Auditors) Rules, 2014, (including any re-enactment or modification thereto), and such other applicable provisions, if any, M/s. SSRV & Associates, Chartered Accountants, Mumbai with Firm Registration Number 135901W were appointed as the Statutory Auditors of the Company at a remuneration as may be mutually agreed to, between the Board of Directors and M/s. SSRV & Associates, Chartered Accountants, to hold office of Statutory Auditor for the period of 5 years till the conclusion of Annual Meeting of the Company to be held in the year 2027. ii. Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Akhil Agarwal, Company Secretary in Practice (CP No. 16313), to undertake the Secretarial Audit of the Company for the F.Y. 2024-25. The Secretarial Audit Report for F.Y. 2024-25 is annexed herewith as "Annexure A".

iii. Cost Auditor:

Cost Audit is not applicable to the Company as per provisions of Section 148 of the Companies Act, 2013.

iv. Internal Auditor:

The Board of Directors, based on the recommendation of the Audit Committee and pursuant to the provisions of section 138 of the Act read with the Companies (Accounts) Rules, 2014, has appointed M/s. O P Khajanchi & Co, Chartered Accountants, Kolkata as the Internal Auditors of the Company for the financial year 2024-25.

20. AUDITORS REPORT:

(a) Statutory Auditors Report:

The Board has duly reviewed the Statutory Auditors Report on the Accounts for the year ended March 31, 2025 and has noted that the same does not have any reservation or adverse remarks.

(b) Secretarial Audit Report:

The Board has duly reviewed the Secretarial Audit Report on the Compliances according to the provisions of section 204 of the Companies Act 2013, and the same does not have any reservation, qualifications or adverse remarks.

21. PARTICULARS OF EMPLOYEES AND REMUNERATION

During the period under review, no employee of the Company drew remuneration in excess of the limits specified under the provisions of section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and hence no disclosure is required to be made in the Annual Report.

22. VIGIL MECHANISM:

In pursuance of the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and Employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at http://arcfinance.in/policies.html .

23. INTERNAL CONTROL SYSYEM AND THEIR ADEQUACY

The Company has in place adequate internal financial controls system with reference to financial statements. The scope of work includes review of process for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. During the year, such controls were tested and no reportable weakness in the design or operation was observed.

24. RISK ASSESSMENT AND MANAGEMENT:

Our Company has been on a continuous basis reviewing and streamlining its various operational and business risks involved in its business as part of its risk management policy. Our Company also takes all efforts to train its employees from time to time to handle and minimize these risks.

25. LISTING WITH STOCK EXCHANGES:

ARC Finance Limited continues to be listed on BSE Limited & CSE Limited. It has paid the Annual Listing Fees for the year 2025-26 to BSE Limited.

26. COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company is complying with the Secretarial Standards issued by the Institute of Company Secretaries of India with respect to Meetings of the Board of Directors and General Meetings.

27. POLICIES AND DISCLOSURE REQUIREMENTS:

In terms of provisions of the Companies Act, 2013 the Company has adopted policies which are available on its website http://arcfinance.in/policies.html .

28. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

The required information as per rule 8(3) of the companies (Accounts) Rules, 2014 is provided hereunder:

A. Conservation of Energy:

Our Companys operations are not energy intensive. Adequate measures have been taken to conserve energy wherever possible by using energy efficient computers and purchase of energy efficient equipment.

B. Technology Absorption:

1. Research and Development (R&D): NIL

2. Technology absorption, adoption and innovation: NIL

C. Foreign Exchange Earnings and Out Go:

Foreign Exchange Earnings: NIL Foreign Exchange Outgo: NIL

29. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

During the Financial Year, no Guarantees given by the company under section 186 of the Companies Act, 2013. Details of Loans and investments, outstanding as on 31^st March, 2025 are given in the notes to the financial statements.

30. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. Thus, Disclosure in form AOC-2 is not required. Further, during the year, the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. All related party transactions are placed before the Audit Committee and Board for review and approval, if required. The details of the related party transactions are set out in Note to the financial statements forming part of this Annual Report.

31. DEPOSITS:

Your Company did not accept / hold any deposits from public / shareholders during the year under review.

32. RELATED PARTY TRANSACTIONS:

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arms length basis. During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the policy of the company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website at www.arcfinance.in

33. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS:

During the period under review, there were no significant and material orders passed by the regulators or Courts or Tribunals impacting the going concern status and the companys operations in future.

34. HUMAN RESOURCES:

Our Company has established an organization structure that is agile and focused on delivering business results. With regular communication and sustained efforts, it is ensuring that employees are aligned on common objectives and have the right information on business evolution.

35. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has a policy of zero tolerance for sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under.

The following is the summary of sexual harassment complaints received and disposed during the calendar year.

No. of complaints received:	Nil
No. of complaints disposed off:	Nil

36. CORPORATE GOVERNANCE:

Pursuant to SEBI (LODR) Regulations, 2015, the report on Corporate Governance during the period under review with the Certificate issued by Akhil Agarwal., Practicing Company Secretaries, on compliance in this regards forms part of this Annual Report.

37. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The Directors had prepared the annual accounts on a going concern basis; and

(e) The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

38. CAUTIONARY STATEMENTS:

Statements in this Annual Report, particularly those which relate to Management Discussion and Analysis as explained in the

Corporate Governance Report, describing the Companys objectives, projections, estimates and expectations may constitute ‘forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied in the statement depending on the circumstances.

39. ACKNOWLEDGEMENTS:

Our Directors would like to express deep sense of appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders and for the devoted service by the Executives, staff and workers of the Company. The Directors express their gratitude towards each one of them.

FORM MR -3

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2025

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members,

ARC Finance Limited

18, Rabindra Sarani, Poddar Court, Gate No. 4,4^th Floor, Room No.3, Kolkata-700001

I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by ARC Finance Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing my opinion thereon.

Based on our verification of the Companys books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of secretarial audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31, 2025 complied with the statutory provisions listed hereunder and also that the Company has proper board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2025 according to the provisions of:

1. The Companies Act, 2013 (the Act) and the rules made there under;

2. The Securities Contracts (Regulation) Act, 1956 (SCRA) and the rules made there under;

3. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

4. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of

Foreign Direct Investment and Overseas Direct Investment; - (Not Applicable to the Company during the Audit Period).

5. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act,

1992 (SEBI Act):

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

c)The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015; (SEBI LODR);

d) The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018;

e)The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 f)The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993- Not applicable to the Company during the review period;

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 Not applicable to the Company during the review period;

h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 Not applicable to the Company during the review period;

i)The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2014; Not applicable to the company during the review period

j)The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Not applicable to the Company during the review period.

I have also examined compliance with the applicable clauses of the following: -

Secretarial Standards issued by The Institute of Company Secretaries of India;

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015;

I further report that

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors.

Proper notice is given to all Directors to schedule the Board meetings, agenda and detailed notes on agenda were sent at least seven days in advance for meetings other than those held at shorter notice, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Majority decisions of the Board and committee meetings are carried out unanimously. There were no dissenting views by any member of the Board of Directors during the period under review.

I further report that there are adequate systems and processes in the Company, commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the year under review, the following events or actions had a major bearing on the Companys affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc.

Note: This report is to be read with our letter of even date which is annexed as "Annexure A" and forms an integral part if this report.

" ANNEXURE-1"

To,

The Members,

ARC Finance Limited

18, Rabindra Sarani, Poddar Court, Gate No. 4,4^th Floor, Room No.3, Kolkata-700001

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial records is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on the test basis to ensure that correct facts are reflected in Secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and books of accounts of the Company.

4. Where ever required, we have obtained the Management representation about compliance of laws, rules and regulations and happenings of events etc.

5. The compliance of provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of the management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of efficacy or effectiveness with which the management has conducted the affairs of the Company.