Sharda Motor Industries Ltd Directors Report

Dear Members

Your directors have pleasure in presenting the 41^st Board Report on the business and operations of the Company together with the financial statements for the financial year ended on March 31, 2026.

FINANCIAL SUMMARY

				Rs. In Lakhs
Particular	Standalone	Consolidated
	Year Ended March 31, 2026	Year Ended March 31, 2025	Year Ended March 31, 2026	Year Ended March 31, 2025
Revenue from operations	339677.10	283657.09	339677.10	283657.09
Other Income	8598.79	8328.09	8598.79	8328.09
Total Revenue	348275.89	291985.18	348275.89	291985.18
Profit before Financial Charges, Depreciation	50475.12	47969.97	50473.07	47964.91
Less: Financial Costs	433.15	393.33	433.15	393.33
Profit before Depreciation, Exceptional Items & Taxes	50041.97	47576.64	50039.92	47571.58
A. Depreciation	6345.64	5822.62	6345.64	5822.62
B. Exceptional items	1815.22	-	1815.22	-
Taxation
- Current Tax	10733.61	10174.98	10733.61	10174.98
- Deferred Tax Charged/ (Released)	526.63	322.64	526.63	322.64
Income tax for earlier year	96.29	7.35	96.29	7.35
Profit for the year before share of profit/ (loss) of associates and joint venture	34155.02	31249.05	34152.97	31243.99
Share of profit/(loss) of associate (net of tax)	0.00	-	34.39	68.09
Share of profit/(loss) of Joint venture (net of tax)	0.00	-	353.00	179.53
Non-Controlling interest	0.00	-	0.53	0.32
Profit for the year	34155.02	31249.05	34540.89	31491.93
Other comprehensive income (net of tax)	(85.23)	(36.02)	(85.23)	(36.02)
Add: Profit brought forward from previous	104950.80	80891.68	103270.35	78968.35
year
Profit available for appropriation	139020.59	112104.71	137726.01	110424.26
Appropriations
Dividend	9328.75	2847.42	9328.75	2847.42
Taxes & Transaction cost on buy back of equity shares	-	4306.49	-	4306.49
T ransferred to General Reserves	-	-	-	-
Balance carried forward to Balance Sheet	129691.84	104950.80	128397.26	103270.35
Paid-up equity share capital (Face value of Rs. 2/- each)	1148.16	574.08	1148.16	574.08

Operational Performance

Performance

During the year under review, the Company recorded total income of Rs.3,48,275.89 lakhs, including other income, as against Rs.2,91,985.18 lakhs in the previous year, registering a growth of 19.28%. The Profit Before Tax (PBT) stood at Rs.45,896.89 lakhs, as compared to Rs.41,996.58 lakhs in the previous year, registering an increase of 9.29%. The Net Profit After Tax (PAT) also increased by 9.68% on a year-on-year basis.

Dividend and Dividend Distribution Policy

The Board of Directors of the company at its meeting held on May 21, 2026, recommended the final dividend of Rs. 20/- per equity share of face value of Rs. 2 each (i.e. equivalent to 1000 percent of face value) for the financial year 2025-26, subject to the approval of the shareholders at the ensuing Annual General Meeting of the company.

The company has complied with the Dividend Distribution Policy of the company, a copy of which is available on the website of the company at: https://www.shardamotor.com/wp-content/uploads/2021/07/DIVIDEND- DISTRIBUTION-POLICY.pdf.

The said Policy provides shareholders a clear understanding of the company?s dividend framework, outlining the following key parameters:

• the circumstances under which the shareholders of the listed entities should or should not expect dividends;

• the financial parameters that shall be considered while declaring a dividend;

• internal and external factors that shall be considered for declaration of dividend; policy as to how the retained earnings shall be utilized.

Reserves

During the year under review, the company has not transferred any amount to the reserves.

Change in the Nature of Business

During the year under review, there was no change in the nature of the business of the Company.

Share Capital

During the year under review, there was no change in the authorised share capital of the Company.

The Company does not have any equity shares with differential rights. Accordingly, no disclosure is required under Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014.

During the year under review, the Company did not issue any sweat equity shares. Accordingly, no disclosure is required under Rule 8(13) of the Companies (Share Capital and Debentures) Rules, 2014.

During the year under review, no options were granted under the Company?s employee stock option scheme. Accordingly, no disclosure is required under Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014.

During the year under review, the Company issued and allotted 2,87,03,853 bonus equity shares of Rs. 2 each in the ratio of 1:1. The said bonus equity shares rank pari passu in all respects with the existing fully paid-up equity shares of the Company. Pursuant to the bonus issue, the issued and paid-up equity share capital of the Company increased to Rs. 11,48,15,412 divided into 5,74,07,706 equity shares of Rs. 2 each.

Transfer to Investor Education and Protection Fund

Section 124 of the Companies Act, 2013, read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the Rules”), as amended, requires the companies to transfer the dividend that has remained unclaimed/unpaid for a period of seven years from the date of transfer to the unpaid dividend account to the Investor Education and Protection Fund (IEPF). Further, the said Rules also mandate that the shares on which a dividend has remained unclaimed/unpaid for seven consecutive years or more be transferred to the demat account of the IEPF Authority.

During the financial year under review, the unclaimed/unpaid dividend for the financial year 2017-18 amounting to Rs. 5,83,388 was transferred to IEPF Authority along with the 2,49,170 equity shares of the Company, in respect of which dividend had not been claimed by the shareholders for seven or more consecutive years. The details of unpaid/unclaimed dividends are available on the website of the Company at https://www.shardamotor.com

Disclosure with respect to Demat Suspense Account/Unclaimed Suspense Account

During the financial year under review, the company had made Bonus allotment on July 07, 2025, pursuant to Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 and Listing Regulations, the allotment of shares in bonus issue was made only in dematerialized form. Accordingly, in the case of members who hold equity shares in physical form, the bonus equity shares were transferred to “Sharda Motor Industries Limited - Bonus 2025 Unclaimed Suspense Account”.

The details required pursuant to Regulation 34 read with Schedule V of Listing Regulations are disclosed in the Corporate Governance Report.

The members are requested to note that the voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares. The Details of Unclaimed Shares are available under the Investor Section on the website of the Company at https://www.shardamotor.com/investor-relations/unclaimed- unpaid-divident-iepf/

Subsidiaries, Joint Arrangements and Associate Companies

During the year under review, no company has become or ceased to be a subsidiary, joint venture or associate Company. The details of Subsidiaries, Joint Ventures and Associate Companies as on March 31, 2026, are as under:

Subsidiary Companies

Uddipt Mobility Private Limited

Associate/Joint Venture Companies

Relan Industries Finance Limited Exhaust Technology Private Limited

Consolidated financial Statements

The consolidated financial statements of the Company and its subsidiaries for FY 2025-26 have been prepared in compliance with the applicable provisions of the Act and Listing Regulations as well as in accordance with the Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015. The audited consolidated financial statements together with the Independent Auditor?s Report thereon form part of this Annual Report.

Pursuant to Section 129(3) of the Act, a statement containing the salient features of the Financial Statement of the subsidiary companies is attached to the Financial Statement in Form AOC-1.

Further, pursuant to the provisions of Section 136(2) of the Act, the Company will make available the said financial statement of the subsidiary companies upon a request by any Member of the Company or its subsidiary company. The members can send an e-mail to investorrelations@shardamotor.com upto the date of the AGM and the same would also be available on the Company?s website https://www.shardamotor.com/ investor-relations/subsidiary/

Directors and Key Managerial Personnel

The existing composition of the Board of Directors is in full conformity with the applicable provisions of the Companies Act, 2013 (“the Act”) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), including any statutory modification(s), amendment(s) or re-enactment(s) thereof, for the time being in force. Further, all the Directors of the Company have furnished declarations confirming that they are not debarred or disqualified from being appointed, reappointed or continuing as Directors of the Company by virtue of any order passed by the Securities and Exchange Board of India (“SEBI”), the Ministry of Corporate Affairs (“MCA”) or any other statutory or regulatory authority.

The company has received a declaration from all the Independent Directors confirming that they meet the criteria of Independence as prescribed under Section 149(6) of the Act read with the schedules and rules made thereunder along with the declaration for compliance with Regulation 16 of the Listing Regulations. In the opinion of the Board, the Independent Directors possess the requisite expertise and experience in their respective fields and are persons of high integrity and repute. They fulfill the conditions specified in the Act and Listing Regulations to act as Independent Directors.

The names of Independent Directors are included in Independent Director?s data bank maintained with the Indian Institute of Corporate Affairs (‘IICA?) in terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014, as amended from time to time.

None of the Directors are disqualified for being appointed as Director as specified in Section 164(1) & (2) of the Act and Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

During the year under review, following changes have taken place in the Board of Directors and Key Managerial Personnel of the company;

(1) Shri Ghan Shyam Dass, was appointed as Chief Financial Officer of the company with effect from April 01, 2025 on the recommendation of the Nomination and Remuneration and Audit committees.

(2) Smt. Sarita Dhuper (DIN: 08776286) was re-appointed as Independent Director of the Company for a second term of five (5) consecutive years commencing from June 29, 2025 to June 28, 2030 (both days inclusive). The same was approved by the members of the company through Postal Ballot on June 25, 2025.

The members of the Company at its 40^th AGM held on September 18, 2025 had approved:

• Re-appointment of Shri Nitin Vishnoi (DIN: 08538925) as Director of the company liable to retire by rotation.

After the closure of the financial year 2025-26, the following changes took place in the Board of Directors and Key Managerial Personnel:

• The Board of Directors, on the recommendation of the Nomination and Remuneration Committee and in accordance with the applicable provisions of the Companies Act, 2013 (“the Act”) and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), has re-appointed Shri Ajay Relan (DIN: 00257584) as Whole-time Director of the Company, designated as Executive Chairperson, for a term of five years with effect from September 1, 2026, subject to the approval of the members of the Company.

• Pursuant to section 152 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on August 10, 2026 considered and recommended the re-appointment of Shri Kishan N. Parikh (DIN: 00453209), who retires by rotation at ensuing Annual General Meeting and being eligible has offered himself for re-appointment, to the members of the company for re-appointment as a Director liable to retire by rotation.

The resolution seeking the approval of the members for his re-appointment forms part of the Notice convening the ensuing Annual General Meeting. The disclosures required pursuant to Regulation 36(3) of the Listing Regulations and the Secretarial Standard on General Meetings (SS-2) have been provided in the Explanatory Statement annexed to the said Notice.

Number of Board Meeting

Details of the Board and Committee Meetings held during the year, including the dates of such meetings and the attendance of each Director, are provided in the Report on Corporate Governance forming part of this Annual Report The interval between any two consecutive meetings was in compliance with the requirements of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, and read together with the circulars, notifications, and amendments issued by the Ministry of Corporate Affairs and SEBI.

Committees of Board

The Board of Directors of the Company has constituted the following Committees to focus on specific areas and take informed decisions in the best interests of the Company within the authority delegated to each of the Committees:

(a) Audit Committee;

(b) Nomination and Remuneration Committee;

(c) Stakeholders Relationship Committee;

(d) Corporate Social Responsibility Committee; and

(e) Risk Management Committee.

The details of the composition of the said Committee(s), their terms of reference, meetings held and attendance of the Committee members during the financial year 2025-26 are disclosed in the Corporate Governance Report annexed as “Annexure V”.

All the recommendations made by the Committees during the year were accepted by the Board of Directors.

Board-Level Performance Evaluation

The evaluation of the Board/Committees and directors was carried out in accordance with the provisions of the Act and Listing Regulations, and the guidance note issued by SEBI in this regard. A suggestive evaluation questionnaire for the performance evaluation, based on the approved criteria, was provided to all the directors for their feedback on the performance of the Board, its Committees, the Chairperson and the Directors.

A separate meeting of independent directors was held on March 26, 2026, where they reviewed and discussed the feedback on the functioning of the Board, it?s Committees, the chairperson and other directors including the executive directors.

Based on the approved evaluation criteria, the Nomination and Remuneration Committee, at its meeting held on May 21, 2026, evaluated the performance of the Board, its Committees, individual Directors and the Chairperson. Thereafter, at the meeting held on May 21, 2026, the Board considered and reviewed the outcome of the performance evaluation and noted that the performance of the Board as a whole, its Committees, the Chairperson and the individual Directors was satisfactory.

Policy For Nomination, Remuneration, Evaluation and orderly succession

Pursuant to Section 134(3) read with Section 178 of the Act, Policy for Nomination, Remuneration, Evaluation and orderly succession of the company lays down the criteria for determining qualifications, competencies and positive attributes for the employees of the company. It also lays down the criteria of independence for the appointment of directors and policy of the company relating to remuneration of directors, Key Managerial Personnel (“KMP”) and other employees. The said policy is available on the website of the company at https:// www.shardamotor.com/wp-content/uploads/2018/08/NRC-policy.pdf.

The Board has also developed the criteria for orderly succession pursuant to Regulation 17(4) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 to ensure that interests of investors of a listed company does not suffer on account of sudden or unplanned gaps in management of the company.

Auditors and Audit Report

Statutory Auditors & Auditors Reports

M/s. S. R. Dinodia & Co., LLP, Chartered Accountants (Firm Registration No. 001478N/N500005) were appointed as Statutory Auditors of the Company by the members of the company pursuant to the provisions of Section 139 and other applicable provisions of the Act and the Companies (Audit and Auditors) Rules, 2014, for a term of 5 (five) consecutive years, from the conclusion of the 37^th Annual General Meeting of the Company held on September 20, 2022, till the conclusion of the 42^nd Annual General Meeting of the Company to be held in the year 2027.

The Auditors? Reports on the Standalone and Consolidated Financial Statements to the Shareholders do not contain any qualification, reservation adverse remarks or disclaimer of opinion. The notes to the financial statements referred to in the Auditors? Report are self-explanatory and therefore, do not require any further clarifications.

The Statutory Auditors of the company have not reported any matter in section 143(12) of the Act.

Secretarial Auditors & Auditors Reports

M/s. VKC & Associates, Company Secretaries (Unique Identification No. P2018DEO77000), were appointed as Secretarial Auditors of the Company, pursuant to section 204 of the Act and the Rules made there under and Regulation 24A of the Listing Regulations, by the members of the company to hold office for a term of 5 (Five) consecutive years, commencing from the Financial Year 2025-26 till Financial Year 2029-30.

The Secretarial Audit Report (in form MR-3) for the financial year ended March 31, 2026 is annexed as Annexure I to this Report. The Secretarial Audit Report does not contain any qualification.

Cost Auditors & Cost Audit Report

Pursuant to the provisions of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, and based on the recommendation of the Audit Committee, the Board of Directors approved the appointment of M/s. Gurdeep Singh & Associates, Cost Accountants (Membership No. 9967), as the Cost Auditors of the Company for conducting the audit of cost records for the financial year 2025-26. The remuneration payable to the Cost Auditors was duly ratified by the Members at the 40^th Annual General Meeting of the Company.

Further, at its meeting held on August 10, 2026, the Board of Directors, based on recommendation of Audit Committee, considered and approved the appointment of M/s. Gurdeep Singh & Associates (Memebership No. 9967), as Cost Auditors of the company for conducting the cost audit for the financial year 2026-27. The remuneration payable to the Cost Auditors, as approved by the Board, is being placed before the members for ratification at the ensuing Annual General Meeting.

The Company has received the written consent from the Cost Auditors confirming their eligibility and compliance with the applicable requirements of Rule 6 of the Companies (Cost Records and Audit) Rules, 2014, including that they are not disqualified from appointment as Cost Auditors, that their proposed appointment is within the prescribed limits and that they satisfy the applicable criteria under Section 141 of the Act.

The cost accounts and records of the Company are duly prepared and maintained as required u/s 148 of the Companies Act, 2013.

Employees? Stock Option Scheme

Pursuant to the approval of Members through postal ballot on July 08, 2022, the Company adopted the “Sharda Motor Industries Limited stock option scheme 2022” {ESOP Scheme}, in order to retain and incentivize key talent for driving long-term objectives of the Company whilst simultaneously fostering ownership behavior and collaboration amongst employees. The brief outlines of the Scheme are as follows:

1. Persons eligible for the Scheme: Employees of the company working in India or Outside India and their tenure, performance and contribution to the growth of the company.

2. Total number of shares reserved under the scheme and under grant: The Nomination and Remuneration Committee may from time-to-time grant options to one or more employee(s), which may include recurring options to the same employee. The aggregate number of shares underlying an option that may be granted under the plan shall be decided by the Nomination and Remuneration Committees and shall not exceed 3,00,000 equity shares of face value of Rs. 2, each fully paid up, of the company.

3. Pricing: The exercise price per option shall be equal to the market price of the shares on the Grant Date or at such discount to the market price as may be determined by the Nomination and Remuneration Committee subject to applicable laws.

4. Vesting Period under Scheme: Options granted under ESOP 2022 would vest after expiry of a minimum of 1 (One) year but not later than a maximum of 6 (Six) years from the Grant Date of such options. The minimum Vesting Period of one year shall not apply to cases of separation from employment due to death or permanent disability.

5. The Exercise Period: Vested Options shall be a maximum of 5 (Five) years from the date of vesting of such options. From the date of approval of “Sharda Motor Industries Limited Stock Option Scheme 2022”, till the end of financial year 2025-26, “No option” was granted therefore disclosure required under the Rule of the Companies (Share Capital and Debentures) Rule 2014 is not applicable.

In terms of Regulation 13 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the Company has not granted or issued any employee stock options under the ESOP Scheme till date. The certificate dated August 10, 2026, issued by the Secretarial Auditors of the Company in relation to the implementation of the Scheme shall be made available for inspection by the members at the ensuing Annual General Meeting.

Application / Any Proceeding Under The Insolvency and Bankruptcy Code, 2016

During the year under review, the Company has not made any Application and nor any proceeding pending under the Insolvency and Bankruptcy Code, 2016.

Details of the difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking a loan from the banks or financial institutions along with the reasons thereof

Not Applicable

Corporate Social Responsibility

The Annual Report on CSR activities, as required under Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure II to the Directors? Report. A copy of the CSR Policy is available on the Company?s website at https://www.shardamotor.com/ wp-content/uploads/2016/07/Corporate-Social-Responsibility-Policy-1.pdf

Sharda Motor Industries Limited (SMIL) firmly believes that sustainable business growth is intrinsically connected to the well-being and progress of society. Guided by this philosophy, the Company?s Corporate Social Responsibility (CSR) initiatives are strategically designed to create long-term, meaningful impact in the areas of healthcare, education, and community development.

The Company implements most of its CSR programs through the Sharda CSR Foundation Trust, its dedicated philanthropic arm. Operating across various regions of India, the Trust drives social transformation through its flagship initiatives—Sharda Health and Sharda Education. By adopting a community-centric approach, the Company focuses on improving the quality of life of people residing in and around its manufacturing locations, ensuring that interventions are relevant, sustainable, and responsive to local needs.

Flagship Initiatives

Sharda Health

The Sharda Health initiative is committed to strengthening healthcare infrastructure and enhancing access to quality medical services in underserved communities. Significant achievements under this program include the establishment of the Sharda Medical Clinic in Nashik, which provides comprehensive health check-ups, diagnostic services, and essential medicines to beneficiaries. The Trust has also contributed to the development of a hospital at Sewah, Panipat, thereby expanding healthcare accessibility in the region.

In addition to infrastructure support, the initiative extends humanitarian assistance through activities such as the distribution of winter clothing to underprivileged children living in urban slums. Emergency healthcare support is further strengthened through the provision of ambulance services for timely medical assistance.

Sharda Education

Recognizing education as a catalyst for social and economic empowerment, the Sharda Education initiative focuses on creating opportunities for underprivileged children and youth. The Trust provides financial assistance to educational institutions, supports the development of school and college infrastructure, and promotes digital inclusion through the establishment of modern computer laboratories.

Through these efforts, the initiative aims to enhance learning outcomes, bridge the digital divide, and equip students with the knowledge and skills required to thrive in an increasingly technology-driven world.

Commitment to Sustainable Development

Through its focused CSR interventions, Sharda Motor Industries Limited continues to contribute towards inclusive and sustainable development. By investing in healthcare, education, and community welfare, the Company strives to create enduring social value while fostering stronger, healthier, and more resilient communities.

Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return for the financial year March 31, 2026 is uploaded on the website of the company and the same is available on https://www.shardamotor.com/investor-relations/annual-report/

Particulars of Employees and Senior Management

The disclosures relating to the percentage increase in remuneration, the ratio of the remuneration of each Director to the median remuneration of the employees and other particulars as required under Section 197(12) of the Companies Act, 2013 (“the Act”), read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure III to this Report..

The statement containing the particulars of employees as required under Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to the provisions of Section 136(1) of the Act, the Annual Report is being sent to the members of the Company excluding the aforesaid statement. Any member interested in obtaining a copy of the said statement may write to the Company Secretary or the Compliance Officer of the Company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are annexed herewith marked as Annexure IV to this Report.

Particulars of Loans, Guarantees or Investments

The particulars of Loans, guarantees, and investments under section 186 have been disclosed in the financial statements forming part of the Annual Report.

Particulars of Contracts or Arrangements with Related Parties

All related party transactions entered into by the Company during FY 2025-26 were in the ordinary course of business and on an arm?s length basis and were undertaken with the prior approval of the Audit Committee, including pursuant to omnibus approvals, wherever applicable. None of the related party transactions, either individually or taken together with previous transactions during the financial year, exceeded the applicable materiality threshold prescribed under Regulation 23(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and, accordingly, the Company did not enter into any material related party transaction requiring approval of the members under Regulation 23(4) of the Listing Regulations. The details of related party transactions entered into during the year, including transactions with entities/persons belonging to the promoter and promoter group having 10% or more shareholding in the Company, are disclosed in the notes to the financial statements.

During FY 2025-26, there were no material transaction of the Company with any of its related parties in terms of Section 134 read with Section 188 Act, therefore, the director of the Related Party Transaction (RPTs?) as required under section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2025-26 and hence same is not required to provided.

The policy on materiality of and dealing with related party transactions is available on the company?s website at https://www.shardamotor.com/wp-content/uploads/2016/07/RPT-Policy.pdf

Corporate Governance

We strive to attain high standards of corporate governance while dealing with all our stakeholders and have complied with all the mandatory requirements relating to Corporate Governance as stipulated in Para C of Schedule V of Listing Regulations. The “Report on Corporate Governance” forms an integral part of this report and is set out as a separate section to this annual report. A certificate from S.R. Dinodia & Co., LLP, certifying compliance with the conditions of corporate governance stipulated in Para E of Schedule V of Listing Regulations, is annexed with the report on corporate governance.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) read with Para B of Schedule V of the Listing Regulations, is presented in a separate section forming part of this Annual Report.

Vigil Mechanism

The company has a vigil mechanism for all Stakeholders of the Company excluding the shareholders (who have a mechanism to report their concerns to the Company through the Investor Grievance mechanism as laid down under the Listing Regulations) to report their genuine concerns. The Vigil Mechanism / Whistle Blower Policy is available on the company?s website at https://www.shardamotor.com/wp-content/ uploads/2026/05/2_Whistle-Blower-Policy.pdf

Public Deposits

During the year under review, the company has not accepted any deposits from the public covered under chapter V of the Act and no amount was outstanding as on the date of the Balance Sheet.

Material Changes and Commitments, if any, affecting the Financial Position of the Company

There were no material changes and commitments subsequent to the close of the financial year that could affect the financial position of the company.

The Details of Significant and Material Orders Passed by the Regulators or Courts or Tribunals

During the year under review, no material orders were passed by the Regulators, Courts or Tribunals that would impact the going concern status of the company and its operations in the future.

Risk Management

The Board of Directors of the Company has constituted a Risk Management Committee to formulate, implement, monitor and review the Risk Management Plan and to ensure its effectiveness. The Company has formulated a Risk Management Policy to identify and assess key risks and to establish appropriate processes and measures for the mitigation. The Risk Management Committee periodically reviews the identified risks and the effectiveness of the measures implemented to mitigate such risks and recommends appropriate actions, wherever required.. Details on the Company?s risk management framework, including risk identification, assessment, evaluation and mitigation, are provided in the Management Discussion and Analysis Report forming part of this Report.

The details regarding the constitution of the Risk Management Committee are provided in the Corporate Governance Report and the Risk Management Policy is available on the company?s website at https://www. shardamotor.com/wp-content/uploads/2021/07/Revised-Risk-Management-Policy-Clean-Version.pdf. The said Policy provides the shareholders with an understanding of key risk factors and parameters and the process adopted by the Company for monitoring, managing and mitigating such risks.

Disclosure in terms of Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The company values the dignity of individuals and strives to provide a safe and respectable work environment to all its employees. The company is committed to provide an environment, which is free of discrimination, intimidation and abuse. The company believes that it is the responsibility of the organisation to protect the dignity of its employees and also to avoid conflicts and disruptions in the work environment due to such cases.

The company has put in place a ‘Policy on Redressal of Sexual Harassment at Work Place? as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH”). As per the policy, employees may report their complaint to the Internal Complaints Committee (ICC) at all the units, constituted with due compliance under the POSH.

During the year review, no complaint was received / filed by any person and no complaint is pending to be resolved as at the end of the year.

The following is a summary of complaints received and resolved during the reporting period.

a. Number of complaints of sexual harassment received in the year: Nil

b. Number of complaints disposed of during the year: Nil

c. Number of cases pending for more than ninety days: Not Applicable

Business Responsibility and Sustainability Report

Pursuant to Regulation 34(2)(f) of Listing Regulations, the company has prepared Business Responsibility and Sustainability Report detailing the various initiatives taken by the company on the environment, social, governance and various other factors, which form an integral part of the Annual Report as Annexure VI.

Directors? Responsibility Statement In terms of Section 134(3)(c) and (5) of the Act, it is hereby stated that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed;

b) Appropriate accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2026 and of the profit and loss of the company for the year ended on that date;

c) Proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern basis;

e) Internal financial controls have been laid down to be followed by the company and that such internal financial controls are adequate and were operating effectively;

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

Internal Financial Control Systems and their Adequacy

The details in respect of internal financial controls and their adequacy are included in the Management Discussion and Analysis Report, which forms part of the Annual Report.

Secretarial Standards

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors? and ‘General Meetings?, respectively, have been duly followed by the company during the year under review.

SEBI (Prevention of Insider Trading) Regulation, 2015

In compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (the ‘SEBI (PIT) Regulations?) on prevention of insider trading, your Company has developed “SMIL Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders” including a policy for determination of legitimate purposes for prevention of insider trading and policy and procedures for inquiry in case of leak of unpublished price sensitive information or suspected leak of unpublished price sensitive information for regulating, monitoring and reporting of trading by Designated Persons and their immediate relatives. The said Code lays down guidelines, which guide Designated Persons on the procedures to be followed in dealing with the shares of the Company. The said code is available on the website of the Company at https:// www. shardamotor.com/wp-content/uploads/2020/02/insider-trading-code.pdf.

Further, your Company has put in place an adequate and effective system of internal controls and standard processes have been set to ensure compliance with the requirements given in these regulations to prevent insider trading. To increase awareness on the prevention of insider trading in the organisation and to help the Designated Persons to identify and fulfill their obligations, the Company imparted training to all Designated Persons. The email and text messages for closure of the trading window and submission of periodic disclosures are also sent. The Company has also maintained the Structure Digital Database (SDD) of persons with whom the UPSI was shared in compliance with SEBI (PIT) Regulations.

Maternity Benefits provided by the Company under the Maternity Benefit Act, 1961

Sharda Motor Industries Limited hereby affirms that it is in full and continued compliance with the provisions of the Maternity Benefit Act, 1961, and all amendments thereto, as applicable. The Company ensures that all eligible women employees are granted the statutory rights and benefits as contemplated under the Act, which include, but are not limited to:

• Paid maternity leaves as per the prescribed duration, - Continuity of employment and wages during the period of such leave, - Protection from dismissal or discharge during maternity leave, except on grounds expressly permitted under the Act,

• Provision of nursing breaks and post-maternity support, including flexible working hours and work-from home arrangements, subject to operational feasibility. The Company remains committed to maintaining a safe, inclusive, and legally compliant workplace and undertakes all necessary measures to uphold the rights, dignity, and welfare of its female workforce in accordance with the applicable statutory framework.

Code of Conduct for Board and Senior Management Personnel

Pursuant to Regulation 17(5) of the Listing Regulations, the Company has implemented a Code of Conduct for Directors and Senior Management Personnel (SMPs). This code outlines the fundamental principles for ethical and transparent behavior by the Directors and SMPs of the Company to further promote fairness and orderliness within the organisation. All Directors and SMPs have affirmed their adherence to the code for the FY 2025-26 and a declaration by the MD to this effect forms part of Report on Corporate Governance annexed with the Board?s Report. The Company?s Code of Conduct for Directors and SMPs can be accessed on the website of the Company at https://www.shardamotor.com/wp-content/uploads/2018/08/code-of-conduct- for-board-members.pdf

Website

As per provisions of the Regulation 46 of the Listing Regulations necessary information as required to be given to the shareholders/stakeholders, is available at https://www.shardamotor.com.Shareholders/ stakeholders are requested to refer to investor section.

Acknowledgments

Your Directors wish to place on record their sincere appreciation for the continued trust and support extended by all stakeholders, including customers, OEM partners, dealers, suppliers, bankers, shareholders, and regulatory authorities. The Directors also acknowledge the invaluable contribution of the Company?s suppliers and business associates in ensuring a resilient and efficient supply chain.

Your Directors place special appreciation on record for the Company?s Research & Development teams for their continuous efforts in innovation, product development, cost optimisation, and advancement of technology.

The Board expresses its deep appreciation for the commitment, skill, and dedication demonstrated by employees at all levels, whose efforts continue to drive operational excellence, innovation, and customer satisfaction in a competitive and evolving automotive industry.

The Board also acknowledges the support and guidance received from government authorities and industry bodies and looks forward to their continued cooperation in the future.

	On behalf of the Board of Directors
	For Sharda Motor Industries Limited
	Kishan N Parikh
Date: August 10, 2026	Chairperson
Place: New Delhi	(DIN:00453209)