Smart Finsec Ltd Directors Report

To,

The Members,

Smart Finsec Limited

Your Directors are pleased to presents the 30th Annual Report along with the Audited Financial Statement of the company for the year ended March 31, 2025 (FY 2024-25).

• FINANCIAL PERFORMANCE

The highlights of the financial performance of the Company are summarized herein below:

(Rs. In Lakhs)

Particulars	F.Y. ended 31.03.2025	F.Y. ended 31.03.2024
Revenue from Operation	236.77	2,507.10
Other Income	Nil	Nil
Total Income	236.77	2,507.10
Total Expenditure	86.70	2198.35
Profit before Tax	150.08	308.75
Tax Expenses (including Current tax, Deferred Tax & provisions of earlier years)	32.69	72.22
Profit after Tax	117.39	236.53

• REVIEW OF OPERATIONS AND STATE OF THE COMPANYS AFFAIRS

During the Financial Year under review, Companies Revenue from operations has been ?2,36.77 Lakhs, lower by 18.48% over the previous years revenue from operations of ?2,507.10 Lakhs.

The Profit before Tax lowered to ?32.69 Lakhs for FY 2024-25 vis–a-vis ?72.22 Lakhs for the FY 2024-25. The Companys Profit after Tax ("PAT") on a standalone basis decreased to 117.39 Lakhs in FY 2024-25 from 236.53 Lakhs in FY 2023- 24. The companys major income during the previous year was derived from trading in shares and securities. However, increased market volatility significantly impacted profitability, resulting in a decline in overall performance.

The Company is expected to improve well in the foreseeable future.

• TRANSFER TO RESERVE

Under Section 45-IC (1) of Reserve Bank of India ("RBI") Act, 1934, non-banking financial companies ("NBFCs") are required to transfer a sum not less than 20% of its net profit every year to reserve fund before declaration of any dividend. Accordingly, your Company has transferred a sum of Rs. 23.57 Lakhs to Statutory Reserve.

• DIVIDEND

The Board of Directors do not recommend any dividend for the financial year ended on 31st March, 2025 in order to conserve resources for the development of business of the company.

• SHARE CAPITAL

There are no changes in the authorized share capital and paid-up share capital during the period under review. The paid-up Equity Share Capital as at 31 March, 2025 stood at 3,00,00,000 /- (Rupees Three Crore Only) divided into 3,00,00,000 (Three Crore) equity shares of Rs. 1/- (Rupees One Only) each.

During the year under review, no shares with differential rights were issued, and no employee stock options were granted.

• CHANGE IN THE NATURE OF BUSINESS

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

• MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY.

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year of the company, i.e. March 31, 2025, and the date of this report.

• DEPOSIT

Your company is a Non-Deposit Taking–Non-Systematically Important NBFC. Being a non-deposit taking Company, your Company has not accepted any deposits from the public during the year under review.

• TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, your Company was not required to transfer any funds or shares to the Investor Education and Protection Fund established by Central Government.

• LISTING ON STOCK EXCHANGE

The shares of the Company are listed on main platform of BSE Limited. The International Securities Identification Number (ISIN) of company is INE766D01020 and the Scrip code is 539494.

• BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

As on March 31, 2025, the Board comprises of 6 Directors, viz 4 (four) Non-Executive/Independent Directors including Woman Director and 2 (two) Executive Directors.

Change in the Board and Key Managerial Personnel

The Board of Directors of the Company at its meeting held on October 07, 2024 appointed Mr. Rajinder Kumar Arora, as Additional Director (Whole-Time) of the Company, not liable to retire by rotation, for a period of one (1) year with effect from October 08, 2024, after taking into consideration recommendations of the Nomination & Remuneration Committee of the Company and subject to requisite approval of the shareholders. The shareholders of the Company through Postal Ballot concluded on November 09, 2024 regularized and approved the appointment of Mr. Rajinder Kumar Arora as Whole Time Director of the Company for a period of one (1) year with effect from October 08, 2024.

Further, during the year under review, the proposal for re-appointment of Mr. Arun Khera, was placed before the shareholders at the 29th Annual General Meeting held on September 27, 2024. However, the resolution for his re-appointment, which was proposed as an Ordinary Resolution, did not receive the requisite majority of votes and was not passed. Therefore, Mr. Arun Khera discontinued to be the Managing Director of the Company.

There has been no other change in the Directors and Key Managerial Personnel of the Company during the financial year under review.

Director liable to retire by rotation

Pursuant to the provisions of the Companies Act 2013, Mr. Sachit Khera, Non-Executive Director, is

liable to retire by rotation at the ensuing AGM and being eligible, has offered himself for re- appointment. The resolution seeking members approval for his re-appointment forms part of the AGM Notice. The Board of Directors of your Company has recommended his re-appointment.

During the year under review, Mrs. Vimmi Sachdev who was liable to retire by rotation was reappointed by the members vide ordinary resolution at the AGM held on September 27, 2024.

• INDEPENDENT DIRECTORS

The Independent Directors of the Company have been appointed by the members for a fixed term of 5 (five) consecutive years from their respective dates of appointment in the AGM and they are not liable to retire by rotation as per the requirements of the Act and Listing Regulations, 2015.

In terms of Section 149 of the Companies Act, 2013, as on 31 March, 2025, your company had following Independent Directors:

• Mr. Vishesh Chaturvedi
• Mrs. Parul Pathak

Declaration by Independent Directors

The Company has received necessary declaration from all the independent directors that they meet the criteria of Independence throughout the year as provided under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations.

There has been no change in the circumstances affecting their status as Independent Directors of the Company.

Meeting of Independent Director

The Independent Directors met once during the year as on 24th March, 2025 without the attendance of Non- Independent Directors and the members of the Management.

The Independent Directors, inter alia, reviewed the performance of Non- Independent Directors and the Board as a whole; the performance of the Chairman of the Company and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

• MEETINGS OF BOARD OF DIRECTORS

Seven Board Meetings were held during the year under review and the maximum gap between any two meetings did not exceed one hundred and twenty (120) days. The necessary quorum was present for all the meetings.

The details relating to Board Meeting held during the year and the attendance of Board members in meeting are as under:

Name of Director	AGM Sep 27, 2024	Dates of Board Meeting							No. of Meetings Held during the FY	No. of Meetings Attended during the FY
		1	2	3	4	5	6	7
		May 21, 2024	Aug 13, 2024	Aug 26, 2024	Oct 07, 2024	Nov 14, 2024	Feb 03, 2025	Mar 24, 2025
Rajinder Kumar Arora	NA	NA	NA	NA	NA	P	P	P	7	3
Arun Khera	P	P	P	P	A	P	P	A	7	5

 

Vimmi Sachdeva	A	P	P	P	P	P	P	P	7	7
Sachit Khera	P	P	P	P	P	P	P	A	7	6
Parul Pathak	P	P	P	P	P	P	P	P	7	7
Vishesh Chaturvedi	P	P	P	P	P	P	P	P	7	7

P = Present; A = Absent, NA = Not Applicable

• COMMITTEES OF BOARD

The Board has constituted necessary Committees pursuant to the provisions of the Companies Act, 2013, rules framed there under and SEBI (Listing Obligations and Disclosure Requirements), Regulation 2015. The Committees of the Board comprises of Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee.

The details about Composition of Committees and their Meetings are given below:

Audit Committee

The Company has constituted Audit Committee as per requirement of Section 177 of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. The terms of reference of Audit Committee are broadly in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. During the year the committee met on following dates viz., May 21, 2024, August 13, 2024, August 26, 2024, October

07, 2024, November 14, 2024, February 03, 2025, and March 24, 2025.

Composition and Attendance of Members at the meetings of the Audit Committee held during the financial year 2024-25 are mentioned below:

Name of the Member	Category	No. of meetings held	No. of meetings attended
Mr. Vishesh Chaturvedi	Chairman, Independent Director	7	7
Ms. Parul Pathak	Member, Independent Director	7	7
Mr. Sachit Khera	Member, Non-Executive Director	7	7

All the members of Audit Committee are independent directors except Mr. Sachit Khera, who is Non- Executive Director of the Company.

During the year under review, Mr. Sachit Khera was appointed as the member of Audit Committee

w.e.f. October 07, 2024 and Mr. Arun Khera ceased to be the member of the committee.

Nomination and Remuneration Committee

The Company has constituted Nomination & Remuneration Committee as per requirement of Section 178 of the Companies Act 2013 and of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. The terms of reference of Nomination & Remuneration Committee are broadly in accordance with the provisions of Companies Act, 2013. During the year the committee met on 21st May, 2024, 26th August, 2024 and 07th October, 2024.

Composition and Attendance of Members at the meetings of the Nomination & Remuneration

Committee held during the financial year 2024-25 are mentioned below:

Name of the Member	Category	No. of meetings held	No. of meetings attended
Mr. Vishesh Chaturvedi	Chairman, Independent Director	3	3
Ms. Parul Pathak	Member, Independent Director	3	3
Ms. Vimmi Sachdev	Member, Non-Executive Director	3	3

Stakeholders Relationship Committee

As required under Section 178 of the Companies Act, 2013, the Board has in place Stakeholders Relationship Committee to specifically look into the mechanism of redressal of grievances of shareholders. During the year the committee met once on 03rd February, 2025.

Composition and Attendance of Members at the meetings of the Stakeholders Relationship Committee held during the financial year 2024-25 are mentioned below:

Name of the Member	Category	No. of meetings held	No. of meetings attended
*Mrs. Parul Pathak	Chairman, Non-Executive Director	1	1
Mr. Vishesh Chaturvedi	Member, Independent Director	1	1
Mr. Sachit Khera	Member, Non-Executive Director	1	1

During the year under review, Mrs. Parul Pathak was elected as the member and chairman of Stakeholder Relationship Committee w.e.f. October 07, 2024. Mr. Sachit Khera ceased to be the chairman of the Committee we.f. October 07, 2024 and Mr. Arun Khera ceased to be the member of the committee.

• ANNUAL EVALUATION OF DIRECTORS, COMMITTEES AND THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.

The performance of the Board as a whole was evaluated by the Board after seeking inputs from all the Directors based on criteria such as structure of the Board, meetings of the Board, functions of the Board, effectiveness of the board processes, professional development etc.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members based on criteria such as composition of committees, effectiveness, Committee meetings, independence of committee from the Board, etc.

The performance of the individual Directors was evaluated by Nomination and Remuneration Committee as well as the Board after seeking inputs from all the Directors except the Director being evaluated based on criteria such as qualifications, experience, knowledge & competency, ability to function as a team, initiative, availability and attendance, commitment, contribution, integrity, etc.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole was evaluated, taking into account the views of the Executive Directors and Non- Executive Directors.

• VIGIL MECHANISM

In accordance with the provisions of Section 177(9) of the Companies Act, 2013, read with Companies (Meeting of the Board and its Powers) Rules, 2014 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has framed a "Whistle Blower Policy" which provides a mechanism to ensure adequate safeguards against victimization of Directors and Employees and ensures that the activities of the Company and its employees are conducted in a fair and transparent manner. The Employees of the Company have the right/option to report their concerns/grievances to the Chairperson of the Audit Committee.

During the year under review, the Company had not received any complaint under Whistle Blower Policy and no complaint was pending as on March 31, 2025.

• DIRECTOR RESPONSIBILTY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Act:

• that in preparation of the annual financial statements for the year ended March 31, 2025, the applicable accounting standards have been followed along with proper explanation relating to material departures;
• that appropriate accounting policies have been selected & applied consistently & judgments and estimates made are reasonable & prudent so as to give a true & fair view of the state of affairs of the Company at the end for the financial year and of the profits of the Company for the financial year ended March 31, 2025;
• that proper & sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company & for preventing & detecting fraud & other irregularities;
• that the annual accounts have been prepared on a going concern basis;
• that the Company had laid down internal financial controls to be followed and that such internal financial controls are adequate and were operating effectively; and
• that systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

• REMUNERATION TO DIRECTORS

Remuneration to Non-Executive Directors and Non-Executive Independent Directors for the year ended 31 March, 2025.

Name	Designation	Sitting Fees (? in Lakhs)	Commission Paid / payable (? in Lakhs)	No. of Ordinary (Equity) Shares held as on 31st March, 2025.
Mrs. Vimmi Sachdev	Non-Executive Director	Nil	Nil	Nil
Mr. Sachit Khera	Non-Executive Director	Nil	Nil	9,00,000 Equity Shares of Rs. 1/- each
Mrs. Parul Pathak	Non-Executive Independent Director	0.25	Nil	Nil
Mr. Vishesh	Non-Executive	0.25	Nil	Nil

Chaturvedi

Independent Director

Remuneration paid/payable to Executive Director and Whole Time Director for the year ended 31 March, 2025.

Name	Designatio n	Salary (? in Lakhs)	Perquisi te (? in Lakhs)	Commission Paid / payable (? in Lakhs)	Total (? in Lakhs)	No. of Ordinary (Equity) Shares held as on 31st March, 2025
Mr. Rajinder Kumar Arora	Whole Time Director	9.12	Nil	Nil	9.12	Nil
Mr. Arun Khera	Executive Director	Nil	Nil	Nil	Nil	83,85,270 Equity Shares of Rs. 1/- each

• The remuneration of Whole Time Director of the Company has been approved by the shareholders of the Company through Postal Ballot concluded on November 09, 2024 by passing special resolution for a period of one (1) year with effect from October 08, 2024.
• The agreement may be terminated by either party by giving to the other party one months notice of such termination.
• No Compensation shall be payable to either of the parties on such termination.
• The Whole Time Director and Executive Director shall not be paid any sitting fees for the attending the meeting of the Board of Directors or Committee.

Notes:

• The Company has not granted any stock option to directors of the company as on 31 March, 2025.
• No sitting fees has been paid to the Executive Director during the year under review.
• Non-Executive Independent Directors did not have any pecuniary relationship or transactions (except receipt of sing fees as Directors) with the Company for the year under review.
• Stock option details, if any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable – Not Applicable during the year under review.

• AUDITORS AND AUDITORS REPORTS
• Statutory Auditor

In terms of Section 139 of the Act, the members of the company at 27th AGM appointed M/s A. Mohan & Co., Chartered Accountants (FRN. 017403N) as statutory auditors of the company for a period of five years commencing from the financial year 2022-23 until the financial year 2026-27. The statutory auditors have confirmed they are not disqualified from continuing as auditors of the Company.

The report of the auditors is self-explanatory and there are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their audit report on the financial statement for the year ended 31st March, 2025.

• Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and rules made there under, the Board has appointed M/s P.K. Mishra & Associates, Practising Company Secretary, to conduct Secretarial Audit of company for the financial year 2024-25.

The Secretarial Audit Report for the financial year ended March 31, 2025, is annexed to this report as Annexure III. The Secretarial Audit Report is self-explanatory and there are no qualifications, reservations or adverse remarks made by the Secretarial Auditor.

• REPORTING OF FRAUDS

During the year under review, the Statutory Auditor or Secretarial Auditor have not reported any instances of fraud in the Company committed by officers or employees of the Company under Section 143(12) of the Companies Act, 2013.

• SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES COMPANIES

The Company does not have any subsidiary Company or Associate Company. The Company has not entered into any joint venture during the year under review.

• RELATED PARTY TRANSACTIONS

During the year under review, all contracts/arrangements/transactions entered into by the Company with related parties were in ordinary course of business and on an arms length basis. There was no material related party transactions by the Company during the year under review. Attention of the members is drawn to Note No. 30 to the Financial Statements which sets out related party disclosure.

• CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In view of the nature of the activities carried out by the Company, disclosure in terms of Section 134

(3) (m) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 pertaining to the Conservation of Energy and Technology Absorption is not applicable to the Company. There was no foreign exchange inflow or outflow during the year under review.

• BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report as required by Regulation 34(2) of the SEBI Listing Regulations, 2015, is applicable to the Top 1000 companies based on the market capitalisation of the company. Therefore, the requirement of preparing Business Responsibility Report is not applicable to the company.

• ANNUAL RETURN

In pursuance to the provisions of Section 92, read with Section 134 of the Companies Act, 2013 the copy of Annual Return is available on the website of the Company at https://www.smartfinsec.com/annual-return .

• CORPORATE SOCIAL RESPONSIBILTY

During the financial year under review, your Company has not met criteria laid down under the provisions of Section 135(1) of the Companies Act, 2013 read with companies (Corporate Social Responsibility Policy) Rules, 2014 and accordingly the provisions Corporate Social Responsibility are not applicable to the Company.

• COST AUDIT

The provisions of Section 148 read with the Companies (Cost records and Audit) Rules, 2014, pertaining to maintaining of Cost records and cost audit, is not applicable to the Company.

• MANAGEMENT DISCUSSION AND ANALYSIS.

The Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34 of SEBI Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed as "Annexure IV" to this Report.

• CORPORATE GOVERNANCE

Pursuant to Regulation 15(2) of the SEBI (LODR) Regulations, 2015, corporate governance provisions as specified in Regulation 17 to 27 and clauses (b) to (i) and (t) of Regulation 46(2) and Para C, D and E of Schedule V, are not applicable to the Company as, the paid- up capital of the Company is less than 10 Crores and Net worth is less than 25 Crores,

As such the Company is not required to mandatorily append to this report the Corporate Governance Report.

• PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS.

The Company being a Non-Banking Financial Company, pursuant to Section 186(11) of the Act, the provisions pertaining to loans made, guarantees given, security provided or investment made are not applicable to the Company. However, the brief particulars can be found in the notes to the Financial Statement.

Further, during the year under review, the company has given/issued Corporate Guarantee. The details of the guarantee are furnished below:

Sr. No.	Particulars	Name of the Company to which Guarantee issued	Rs. In Lakhs
1.	Guarantee Given	Smart Equity Brokers Private Limited	3000

• DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

There are no significant material orders passed by the regulators or courts or tribunals which would impact the going concern status and companys operations in future.

• COMPLIANCE WITH RBI GUIDELINES

Your Company continues to carry on the business of Non-Banking Financial Company without accepting Deposit. Since the company is Non-systematically important Non deposit taking NBFC, the Company has complied with the applicable regulations of RBI as on March 31, 2025.

• MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY.

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

• PARTICULARS OF EMPLOYEES

The information required under section 197(12) of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is mentioned in Annexure – II.

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

Your Company has zero tolerance towards sexual harassment at workplace and has adopted a policy on prevention, prohibition & redressal of sexual harassment at work place in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has also constituted an Internal Committee under the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013. During the period, the details of complaints received / resolved or pending are as under:

Number of complaints pending as on 1st April, 2024 -Nil Number of complaints received during the year – Nil Number of complaints disposed off during the year – Nil Number of cases pending for more than ninety days– Nil

• COMPLIANCE WITH THE MATERNITY BENEFIT ACT, 1961

During the year under review, the Maternity Benefit Act, 1961 was not applicable to the Company, as the Company had only 5 employees on its payroll, which is below the minimum requirement of 10 employees required for the applicability of the. However, the company is committed to supporting the health, well-being, and rights of our women employees during maternity.

• DISCLOSURE OF CERTAIN TYPES OF AGREEMENTS BINDING LISTED ENTITIES

Pursuant to Regulation 30A of the Listing Regulations, the Company has entered into an agreement under Regulation 30A. The same has been provided at the following link:

• IBC CODE & ONE TIME SETTLEMENT

During the year under review, there were no applications made or proceedings pending in the name of the Company under Insolvency and Bankruptcy Code, 2016. There has not been any instance of one time settlement of the company with any bank or financial institution.

• APPRECIATION

We are grateful to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, BSE Limited, Ministry of Finance, Ministry of Corporate Affairs, Registrar of Companies, other government and regulatory authorities, lenders, financial institutions and the Companys bankers for their valuable guidance and support and wish to express our sincere appreciation for their continued co-operation and assistance. We look forward to their continued support in future.

We wish to thank our bankers, investors, customers, Shareholders, Stakeholders and all other business associates for their support and trust reposed in us.

Your Directors express their profound feeling of appreciation for every one of the employees whose responsibility, co-activity, dynamic interest, commitment and polished skill has made the organizations growth possible.

Finally, the Directors thank you for your continued trust and support.