Hem Holdings & Trading Ltd Directors Report

PERFORMANCE REVIEW

The Board of Directors is making all efforts for the betterment of the company. Further, during the year 2025-26, the revenue of the company from operations is Rs. 71,34,000/- as compared to last year, i.e., Rs. 29,96,000/- Expenditure for the year has decreased to Rs. 10,18,000/- as compared to last year, which was Rs. 1,57,76,0000/-

STATE OF AFFAIRS / HIGHLIGHTS

The Company is an NBFC Company and is engaged in NBFC activities. The Board of Directors and the Management of the Company are working on various strategies to scale up the operations of the Company. During the year under review, there was no change in the nature of the business of the Company.

RESERVES

The Company has not transferred any amount to General Reserve during FY 2025-26

DIVIDEND

During the year under review, the Directors of the Company do not recommend any dividend for the financial year ended March 31, 2026.

SHARE CAPITAL

The Authorised Share Capital of the Company is Rs. 25,00,000/- (Rupees Twenty-Five Lac only) divided into 2,50,000 (Two Lac and Fifty Thousand) Equity Shares of face value of Rs. 10/- each. The Issued, Subscribed and Paid-up Capital of the Company is Rs. 24,00,000/- (Rupees Twenty-Four Lac only) divided into 2, 40,000 (Two Lac and Forty Thousand only) Equity Shares of face value of Rs. 10/- each. There has been no change in the Share Capital of the Company during the financial year under review.

PUBLIC DEPOSITS

During the year under review, the Company has not invited or accepted any deposits within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The provisions of Section 125(2) of the Companies Act, 2013 do not apply as the Company has not declared any dividend during the preceding years.

CHANGES IN NATURE OF BUSINESS (IF ANY)

There was no change in the nature of business during the financial year 2025-26.

RBI GUIDELINES

The Company continues to comply with all the requirements prescribed by the Reserve Bank of India (RBI) from time to time. The Board periodically reviews the policies and approves amendments as and when necessary.

DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS, EMPLOYEE STOCK OPTIONS & SWEAT EQUITY SHARES.

The Company has not issued any equity shares with differential voting rights or employee stock options, or sweat equity shares.

INFORMATION ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY

The Company does not have any Subsidiary, Joint Venture or Associate Company.

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92 of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return is available on the website of the Company on the following link: www.hemholdings.com

BOARD OF DIRECTORS AND KMP OF THE COMPANY

I. THE COMPOSITION OF BOARD OF DIRECTORS AS ON MARCH 31, 2026 IS AS

FOLLOWS:

II. CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under review, following changes has been taken place in the directorship:

III. RETIRE BY ROTATION

In terms of the provisions of Section 152 of the Companies Act, 2013, Mr. Shubham Arvind Kumar Jain (DIN: 10985882), is liable to retires by rotation at the forthcoming Annual General Meeting of the Company and on being eligible offers himself for re-appointment as Director of the Company.

A brief resume of the Director, the nature of expertise in specific functional areas and names of Companies in which they hold Directorship and/or Membership/Chairmanship of Committees of the Board, as stipulated under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Notice calling the Annual General Meeting of the Company.

IV. DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors of the Company have submitted their declaration of independence as required under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence under Section 149(6) of the Companies Act, 2013 and Regulation 16 (1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board is of the opinion that the Independent Directors fulfill the conditions specified in these Regulations and are independent of the management. There has been no change in the circumstances affecting their status as Independent Directors of the Company. Further, the Independent Directors of the Company possess requisite qualifications, experience and expertise in the field of finance and financial services and they hold the highest standards of integrity

The Board of Directors of the Company met 08 times during the financial year under review. The necessary quorum was present for all the Board Meetings. The maximum time gap between any of two consecutive meetings did not exceed one hundred and twenty days.

The notice and detailed agenda, and other material information were sent in advance to enable the Boardto discharge its responsibilities effectively and take informed decisions.

VI. ATTENDANCE OF DIRECTORS IN THE BOARD MEETING

VII. BOARD COMMITTEES

With a view to have a more focused attention on business and for better governance and accountability, the Board has constituted various committees. The Board Committees meet at regular intervals and took necessary steps to perform the duties entrusted by the Board. The terms of reference of these Committees are determined by the Board and their relevance reviewed from time to time.

Currently, the Board has the following committees:

A. Audit Committee;

B. Nomination & Remuneration Committee; C. Stakeholder Relationship Committee;

A. AUDIT COMMITTEE

The Audit Committee is constituted in accordance with the provisions of Section 177 of the Companies Act, 2013 and the provisions of Regulation 18 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulation”). The Committee comprises of members who possess financial and accounting expertise/exposure.

COMPOSITION

The Committees composition is in compliance with provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of the Listing Regulations.

The composition of the Audit Committee as of March 31, 2026, is as under:

There has been following changes in the constitution of the Audit Committee during the year under review.

MEETINGS & ATTENDANCE OF DIRECTORS

The Audit Committee met four times during the Financial Year 2025-26 on

30.05.2025, 11.08.2025, 14.11.2025 and 13.02.2026.

The necessary quorum was present for all Meetings. The details of attendance of the members of the Committee at the said meetings are as follows:

It can be seen from the above details that the frequency of the Committee Meetings was in compliance with the minimum limit prescribed under applicable regulatory requirements

B. NOMINATION AND REMUNERATION COMMITTEE (NRC)

The Nomination and Remuneration Committee is constituted in accordance with the provisions of Section 178 of the Companies Act, 2013 and the provisions of Regulation 19 of the Listing Regulation. COMPOSITION

The Committees composition is in compliance with provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations.

The composition of the Nomination & Remuneration Committee as on March 31, 2026, is as under:

There have been following changes in the constitution of the Nomination & Remuneration Committee during the year under review.

MEETINGS AND ATTENDANCE OF THE DIRECTORS

The Nomination & Remuneration Committee met 05 times during the Financial Year 2025-26 on

04.08.2025, 11.08.2025, 17.11.2025, 16.12.2025, And 05.03.2026

The necessary quorum was present for all the Meetings.

The details of attendance of the members of the Committee at the said meetings are as follows:

C. STAKEHOLDERS RELATIONSHIP COMMITTEE (SRC)

The Stakeholder Relationship Committee is constituted in accordance with the provisions of Section 178 of the Companies Act, 2013 and the provisions of Regulation 20 of the Listing Regulation.

COMPOSITION

There have been following changes in the constitution of the Stakeholder Relationship Committee during the year under review.

MEETINGS AND ATTENDANCE OF THE DIRECTORS

The Stakeholder Relationship Committee met four times during the Financial Year 2025-26 on

18.04.2025, 10.07.2025, 07. 10.2025, And 12.01.2026

The necessary quorum was present for all Meetings.

The details of attendance of the members of the Committee at the said meetings are as follows:

VIII. MEETING OF INDEPENDENT DIRECTORS

The meeting was held on 13^th October, 2025

IX. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments outstanding as on 31st March, 2026 are given in the notes to the financial statements.

X. RELATED PARTY TRANSACTION

There is no materially significant Related Party Transaction made by the Company during the year that would require shareholders approval under the Listing Regulations.

Details of the transaction with Related Parties are provided in accompanying financial statement. There was no transaction during the year which would require to be reported in form no AOC-2.

XI. MATERIAL CHANGES AND COMMITMENTS

There have been no material changes which have occurred between the end of the financial year and the date of this report, affecting the financial position of the Company

XII. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE AS PERSECTION 134 (3) (m) OF THE COMPANIES ACT, 2013

CONSERVATION OF ENERGY:

Since the Company is not engaged in any manufacturing activity, issues relating to conservation of energy and technology absorption are not relevant to its functioning.

TECHNOLOGY ABSORPTION:

The Company has not imported any technology. Hence, the particulars with respect to efforts made towards technology absorption and benefits derived, etc., are not applicable to the Company.

EXPORT ACTIVITIES:

There was no export activity in the Company during the year under review. The Company is not planning any exports in the near future as well.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

There were no Foreign Exchange earnings and outgo duringthe year under review.

XII. POLICIES AND CODE OF CONDUCT AND PROGRAMMEES

The Company has posted the following documents on its website:

1. Code of Conduct of Board of Directors

2. Code of conduct for Directors and senior management 3. Code of Internal procedure and conduct 4. Criteria for making payments to Non-Executive Directors 5. CSR Policy 6. Dividend Policy 7. Policy for determination of Materiality 8. Related Party Transactions Policy 9.Risk Management Policy 10. Terms and conditions for appointment of Independent Director 11. Whistle Blower Policy 12. Policy for determining material subsidiary

XIII. VIGIL MECHANISM POLICY

Pursuant to Section 177 of the Companies Act, 2013 and Regulation 22 of Listing Regulations, your Company has established a mechanism called ‘Vigil Mechanism (Whistle Blower Policy) for Directors, employees and Stakeholders of the Company to report to the appropriate authorities about unethical behaviour, actual or suspected, fraud or violation of the Companys code of conduct or ethics policy and provides safeguards against victimisation of employees who avail the mechanism.

The Whistle Blower can directly approach the Chairperson of the Audit Committee of the Company and make protective disclosures about the unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct in exceptional circumstances

XIV. RISK MANAGEMENT

The Company has a robust Risk Management framework to identify, measure and mitigate business risks and opportunities. This framework seeks to create transparency, minimise adverse impact on the business objective and enhance the Companys competitive advantage. This risk framework thus helps in managing market, credit and operations risks and quantifies exposure and potential impact at a Company level.

XV. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Board, on recommendation of the Nomination and Remuneration Committee, has framed a policy on Directors appointment and remuneration.

The policy, inter alia, provides a. the criteria for determining qualifications, positive attributes and independence of directors and b. policy on remuneration of directors, key managerial personnel and other employees. The policy is directed towards a compensation philosophy and structure that will reward and retain talent and provides for a balance between fixed and incentive pay reflecting short and long-term performance objectivesappropriate to the working of the Company and its goals.

XVI. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

XVII. INTERNAL CONTROL SYSTEM

The Company has an internal control system commensurate with the scale, size and the operation of the organization.

It evaluates the adequacy of all internal controls and processes, and ensures strict adherence to clearly laid down processes and procedures as well as to the prescribed regulatory and legal framework.

XVIII. AUDITORS

The Board appointed M/s. Harsh Jain & Associates, Chartered Accountants, Durg, having ICAI Firm Registration No. 007639C, has re-appointment as the Statutory Auditors of the Company to hold the office for a period of five year from the conclusion of this 40th Annual General Meeting till the conclusion of 45^th Annual General Meeting of the Company to be held in the year 2027.

However, M/s. Harsh Jain & Associates, Chartered Accountants, Durg, having ICAI Firm Registration No. 007639C, resigned w.e.f. November 17, 2025 and in place of him, M/s. B. M. Gattani & Co., Chartered Accountants (FRN: 113536W) has filled the casual vacancy raised due to the resignation of the previous auditor.

The Board of Directors of the Company has proposed the appointment of M/s. B. M. Gattani & Co., Chartered Accountants (FRN: 113536W) as Statutory Auditors of the Company for the next 5 Financial Years from this 44^th Annual General Meeting to 49^th Annual General Meeting to be held in FY 2031

XIX. ANNUAL EVALUATION

In terms of the provisions of the Act read with Rules issued thereunder and Listing Regulations, the Board of Directors in consultation with the Nomination and Remuneration Committee, has formulated a framework containing, inter alia, the criteria for performance evaluation of the entire Board of the Company, its committees and individual directors, for the Financial Year 2025-26. The Board Evaluation process was carried out to ensure that the Board and various Committees of the Board have an appropriate composition and they have been functioning collectively to achieve the business goals of the Company. Directors were evaluated on their contribution at Board/ Committee meetings and guidance & support to the management outside Board/Committee meetings and other parameters as specified by the Nomination and Remuneration Committee of the Company. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees.

XX. AUDITORS REPORT

Report of the Statutory Auditors on Annual Financial Statements along with schedules and notes to accounts thereto, for the year ended on 31^st March, 2026, is self-explanatory and contains no adverse remark and does not call for any comments.

XXI. EXPLANATION TO AUDITORS REMARKS

The comments on the Auditors Report are self-explanatory; thus, no explanation is required to be given.

XXII. INTERNAL FINANCIAL CONTROL

The Company has put in place adequate internal financial controls with reference to the financial statements, some of which are outlined below:

Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. These are in accordance with generally accepted accounting principles in India.

Changes in policies, if any, are approved by the Audit Committee in consultation with the Auditors.

XXIII. CORPORATE GOVERNANCE

In terms of Regulation 15(2)(a) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time (“SEBI LODR Regulations”), the compliance with the corporate governance provisions specified under Regulations 17, 17A, 18, 19, 20, 21, 22, 23, 24, 24A, 25, 26 and 27, clauses (b) to (i) of Regulation 46(2) and paragraphs C, D and E of Schedule V to the SEBI LODR Regulations is not applicable to a listed entity having paid-up equity share capital not exceeding 10 crore and net worth not exceeding 25 crore, as on the last day of the previous financial year.

As on March 31, 2026, the paid-up equity share capital of the Company was below 10 crore and its net worth was below 25 crore. Accordingly, the aforesaid provisions relating to Corporate Governance under the SEBI LODR Regulations were not applicable to the Company during the financial year ended March 31, 2026, and consequently, the Company was not required to prepare and disclose a separate Corporate Governance Report.

Notwithstanding the above non-applicability, the Company has, during the financial year ended March 31, 2026, continued to exercise due care and diligence in maintaining appropriate standards of transparency, accountability and sound management practices, with a view to ensuring effective governance and safeguarding the interests of its stakeholders. The Company remains committed to adopting good corporate governance practices in its operations, decision-making processes and overall management.

In this regard, a Certificate in respect of the above is annexed to and forms an integral part of this Annual Report.

XXIV. SECRETARIAL AUDITOR AND THEIR REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, M/s. Ajay Suresh Yadav, a Company Secretaries Firm in Practice was appointed to conduct the secretarial audit for 5 years.

The Secretarial Audit Report in MR-3, submitted by the Secretarial Auditor for the FY 2025-26, is annexed to the Directors Report as Annexure A.

XXV. BOARDS RESPONSE TO THE OBSERVATIONS/QUALIFICATIONS IN THE SECRETARIAL AUDIT REPORT

The Secretarial Auditors have submitted their report in form No. MR-3 and qualified their opinion/observations in respect of the Secretarial Audit conducted for the financial year 2025-26 and the Boards responses are given with respect to the qualification/ observation as follows:

The Company has overcome with the previous years discrepancies w.r.t the Compliances. However, the management ensures to do all the compliance in future.

XXVI. COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standard 1 (SS-1) relating to the meetings of the Board of Directors and Secretarial Standard 2 (SS-2) relating to the General meetings issued by the Institute of Company Secretaries of India and approved by the Central Government.

XXVII. PARTICULARS OF EMPLOYEES

A. The ratio of the remuneration of each director to the median employees remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of theCompanies (Appointment and remuneration of Managerial Personnel) Rules, 2014, are forming part ofthis report and is annexed as “Annexure - B” to this Report.

B. The statement containing particulars of employees as required under Section 197(12) of the

Companies Act, 2013, read with Rule 5(1) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report. In terms of Section 136 of the Companies Act, 2013 the same is open for inspection at the Registered Office of the Company. Copies of this statement may be obtained by the members by writing to the Company Secretary.

C. There are no employees employed throughout the financial year in receipt of remuneration of one crore and two lakh rupees or more or employed for part of the year in receipt of eight lakh and fifty thousand rupees per month or more, to be reported under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

D. There are no employees employed throughout the financial year or part thereof, was in receipt of remuneration in that year, which, in the aggregate, is in excess of that drawn by the managing director and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.

XXVIII. CORE SKILLS/EXPERTISE/COMPETENCIES

As stipulated under Schedule V of the Listing Regulations, 2015, core skills/expertise/competencies, the board has identified the skills/expertise/competencies for its effective functioning as required in the context of the business and sector, and those actually available with the Board.

XXIX. MANAGEMENT DISCUSSION & ANALYSIS REPORT

As stipulated under Regulation 34 read with Part B of Schedule V of Listing Regulations, the details pertaining to Internal Financial Control systems and their adequacy have been disclosed in the Management Discussion and Analysis Report forming part of this Annual Report.

XXX. COST AUDIT

Cost Audit specified under Section 148 of the Companies Act, 2013 does not apply to the Company since the turnover of the Company is less than the limit prescribed.

XXXI. LISTING

The equity shares of the Company are listed with BSE Limited with Scrip Code No. 539983.

XXXII. TRADING IN SHARES OF THE COMPANY

The Equity Shares of your Company are presently listed on BSE Limited (BSE).

XXXIII. CORPORATE SOCIAL RESPONSIBILITY

As the provisions relating to the Corporate Social Responsibility (CSR) as prescribed under Section 135 of the Companies Act, 2013, along with Rules made thereunder, are not applicable to our Company and therefore, neither the CSR Committee nor the CSR Policy are required to be framed by the Company.

XXXIV. GREEN INITIATIVES

Electronic copies of the Annual Report 2025-26, along with the Notice of the 44^th AGM, are sent to all members whose email addresses are registered with the Company/depository participants. For members who have not registered their email addresses, physical copies are sent in the permitted mode.

XXXV. FRAUD REPORTING (REQUIRED UNDER THE COMPANIES (AMENDMENT) ACT, 2015)

The Auditors of the Company have not observed any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013.

XXXVI. DETAILS OF APPLICATION / ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

Neither any application was made nor any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year under review.

XXXVII. DETAILS OF DIFFERENCE BETWEEN THE AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS, ALONG WITH THE REASONS THEREOF

As the Company has not done any one-time settlement during the year under review hence no disclosure is required.

XXXVIII. DIRECTORS RESPONSIBILITY STATEMENT

As required under clause (c) of sub-section (3) of section 134 of the Act, the directors of your Company, to the best of their knowledge and belief, state that:

1. In the preparation of the annual accounts for the financial year ended on 31 March 2026, the applicable accounting standards had been followed along with a proper explanation relating to material departures;

2. They have 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 as at 31 March 2026 and of the profit and loss of your Company for the financial year ended 31 March 2026;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. the annual accounts for the financial year ended on 31 March 2026 have been prepared on a going concern basis;

5. they have laid down internal financial controls to be followed by the Company and that, to the best of their knowledge, examination and analysis, such internal financial controls have been adequate and were operating effectively and

6. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that, to the best of their knowledge, such systems were adequate and were operating effectively.

XXXIX. ORDERLY SUCCESSION TO BOARD AND SENIOR MANAGEMENT

One of the key functions of the Board of Directors is selecting, compensating, monitoring and, when necessary, replacing the members of the Board of Directors and the senior managerial personnel, including the KMPs. Further, the Nomination and Remuneration Committee is instrumental in identifying successors for Board members and senior management, thereby aligning the succession plans with the Companys strategic and long-term goals. Pursuant to regulation 17(4) of the Listing Regulations, 2015, the framework of succession planning for the Board and senior management was placed before the Board for its review. During the year under review, the Board of the Company has satisfied itself that the plans are in place for the orderly succession of such appointments.

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

The Company has zero tolerance for sexual harassment at workplace and has set up Committee for safety of women employees at workplace. During the year Company has not received any complaint of harassment.

XLI. GENDER-WISE EMPLOYEE STRENGTH (AS ON MARCH 31, 2026)

XLII. MATERNITY BENEFIT ACT 1961

“The Company confirms that it is in compliance with the applicable provisions of the Maternity Benefit Act, 1961, including provisions relating to maternity leave, nursing breaks, and the establishment of creche facilities, wherever required.”

ACKNOWLEDGEMENT

“Your directors place on the record their sincere appreciation for the significant contribution made by the employees through their dedication, hard work and commitment, and the trust reposed in them and also acknowledge with gratitude the excellent cooperation extended by Bankers and Vendors. They are looking forward to their support in all future endeavours.”