Smart Finsec Ltd Directors Report

To,

The Members,

Smart Finsec Limited

Your Directors are pleased to presents the 31st Annual Report along with the Audited Financial Statement of the company for the year ended March 31, 2026 (FY 2025-26).

1. FINANCIAL PERFORMANCE

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

(Rs. In Lakhs)

Particulars	F.Y. ended 31.03.2026	F.Y. ended 31.03.2025
Revenue from Operation	196.73	236.77
Others	Nil	Nil
Total Income	196.73	236.77
Total Expenditure	63.25	86.70
Profit before Tax	133.47	150.08
Tax Expenses (including Current tax, Deferred Tax & provisions of earlier years)	35.80	32.69
Profit after Tax	97.67	117.39

2. REVIEW OF OPERATIONS AND STATE OF THE COMPANYS AFFAIRS

The performance of the Company during the year under review, as compared with the previous financial year, is summarized below:

The Companys total income stood at 196.73 lakh during FY 2025-26 as against 236.77 lakh during FY 2024-25, representing a decrease of approximately 16.91%. The decrease in total income was primarily attributable to lower income from F&O/Jobbing activities and lower income from sale of share.

The Companys profit before tax stood at 133.47 lakh during FY 2025-26 as compared to 150.08 lakh during FY 2024-25. After considering tax expenses, including current tax, deferred tax and provisions relating to earlier years, the profit after tax stood at 97.67 lakh, as against 117.39 lakh in the previous year.

Despite the decline in overall income and profitability during the year, the Company continued to maintain a profitable operation. The management remains focused on careful deployment of resources, and improving operational efficiency. The Board continues to remain optimistic about the Companys future prospects and is committed to taking appropriate measures to enhance the Companys performance and create sustainable value.

3. TRANSFER TO RESERVE

The Company transferred a sum of 26.69 Lakhs to the statutory reserve as required under the Reserve Bank of India Act, 1934.

4. DIVIDEND

The Board of Directors do not recommend any dividend for the financial year ended on 31st March, 2026 in order to conserve resources for the development of business of the company.

5. 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, 2026 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.

6. CHANGE IN THE NATURE OF BUSINESS

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

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

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

8. DEPOSIT

Your company is a Non-Deposit Taking-Non-Systematically Important NBFC. The company has not held or accepted any deposits during the year under review.

9. 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.

10. 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.

11. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

As on March 31, 2026, the Board comprises of 5 Directors, viz 2 (two) Non-Executive Directors, 2 (two) Independent Directors, and (1) Managing Director.

Change in the Board and Key Managerial Personnel

During the year of this report, following changes took place in the Directorships:

Mr. Arun Khera was appointed as the Managing Director of the Company for a term of five years, commencing from August 29, 2025, up to August 28, 2030 (both days inclusive). The said appointment was approved by the shareholders of the Company in 18th Annual General Meeting ("AGM") held on August 25, 2025.

Mr. Rajinder Kumar Arora (DIN: 10797869), ceased to be Whole Director of the Company, with effect from the close of business hours on October 07, 2025, upon completion of his term. Further, he resigned as a Director (Executive) of the Company with effect from November 14, 2025.

Ms. Shashi Sharma resigned from the position of Chief Financial Officer (CFO) with effect from the close of business hours on 30th June, 2025 and the Board of Directors at the Board Meeting held on 30th June, 2023 appointed Mr. Jayant Kumar as a Chief Financial Officer with effect from 1st July 2025.

Re-appointment of Director retiring by rotation

Ms. Vimmi Sachdev (DIN: 01712051), whose office is liable to retire at the ensuing AGM, being eligible seeks re-appointment, in terms of the provisions of Section 152(6) of the Companies Act. The resolution for the said re-appointment forms part of the Notice of ensuing AGM. The Board of Directors of your Company has recommended her re-appointment.

12. 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, 2026, 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 required under Section 149 of the Companies Act, 2013.

There has been no change in the circumstances affecting their status as Independent Directors of the Company and in the opinion of the Board, the Independent Directors fulfil the conditions specified in the Act and the rules made thereunder for appointment as Independent Directors including integrity, expertise, experience and proficiency and confirm that they are independent of the management. Further, in terms of Section 150 read with Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.

Meeting of Independent Director

The Independent Directors met once during the year as on 16th January, 2026 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 MD 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.

13. MEETINGS OF BOARD OF DIRECTORS

Eight (8) meetings of the Board were held during FY 2025-2026 on following dates: May 26, 2025, June 30, 2025, August 12, 2025, August 28, 2025, November 13, 2025, December 10, 2025, January 16, 2026, and February 06, 2026. 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.

Attendance of Directors at the Board Meetings held during the financial year 2025-26:

Name of the Member	Category	No. of meetings held	No. of meetings attended
Mr. Arun Khera	Managing Director	8	7
Mr. Rajinder Kumar Arora	Whole Time Director (resigned)	8	5
Mr. Vishesh Chaturvedi	Independent Director	8	8
Ms. Parul Pathak	Independent Director	8	8

14. 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 26, 2025, June 30, 2025, August 12, 2025, November 13, 2025, January 16, 2026 and February 06, 2026.

Composition and Attendance of Members at the meetings of the Audit Committee held during the financial year 2025-26:

Name of the Member	Category	No. of meetings held	No. of meetings attended
Mr. Vishesh Chaturvedi	Chairman, Independent Director	5	5
Ms. Parul Pathak	Member, Independent Director	5	5
Mr. Sachit Khera	Member, Non-Executive Director	5	4

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

Nomination and Remuneration Committee

The Company has constituted Nomination & Remuneration Committee as per requirement of Section 178 of the Companies Act 2013 and 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 June 30, 2025, and August 28, 2025.

Composition and Attendance of Members at the meetings of the Nomination & Remuneration Committee held during the financial year 2025-26:

Name of the Member	Category	No. of meetings held	No. of meetings attended
Mr. Vishesh Chaturvedi	Chairman, Independent Director	2	2
Ms. Parul Pathak	Member, Independent Director	2	2
Ms. Vimmi Sachdev	Member, Non-Executive Director	2	2

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 twice on December 10, 2025 and 16 January, 2026.

Composition and Attendance of Members at the meetings of the Stakeholders Relationship Committee held during the financial year 2025-26:

Name of the Member	Category	No. of meetings held	No. of meetings attended
Ms. Parul Pathak	Chairman, Non-Executive Director	2	2
Mr. Vishesh Chaturvedi	Member, Independent Director	2	2
Mr. Sachit Khera	Member, Non-Executive Director	2	2

15. 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.

16. 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 option to report their concerns 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, 2026.

17. DIRECTOR RESPONSIBILITY 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:

i. that in preparation of the annual financial statements for the year ended March 31, 2026, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. 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, 2026;

iii. 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;

iv. that the annual accounts have been prepared on a going concern basis;

v. 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

vi. that systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

18. AUDITORS AND AUDITORS REPORTS

A. 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, 2026. Audit report for FY 2025-26 is annexed as Annexure VI.

B. 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 2025-26.

The Secretarial Audit Report for the financial year ended March 31, 2026, 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.

19. 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.

20. 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.

21. 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.

22. 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.

(A) Conservation of energy

a) The steps taken or impact on conservation of energy: Energy conservation is given due consideration at all levels, with emphasis on efficient energy use through regular monitoring and adoption of improved operational practices
b) The steps taken by the company for utilizing alternate: None
c) The capital investment on energy conservation equipments: NIL

(B) Technology absorption, adaptation and innovation

a) The efforts made towards technology absorption: The Company has not absorbed any technology from any source.
b) The benefits derived like product improvement, cost reduction, product development or import substitution: Not Applicable
c) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): Not Applicable
(i) the details of technology imported; (ii) the year of import;

(iii) whether the technology been fully absorbed; (iv) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof;

(C) Foreign exchange earnings and outgo

Foreign Exchange earned in terms of actual inflows during the year: NIL
Foreign Exchange outgo during the year in terms of actual outflows: NIL

23. 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.

24. 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.smartfinssec.com/annual-return.

25. CORPORATE SOCIAL RESPONSIBILITY

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.

26. 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.

27. INTERNAL FINANCIAL CONTROLS

The Company has sound Internal Financial Controls commensurate with the nature and size of its business operations and operating effectively. The Company has processes in place to monitor controls, identify gaps, and implement appropriate controls where such gaps may materially impact its operations.

28. RISK MANAGEMENT

The Board of Directors have adopted a risk management policy for the Company which provides for identification of key risks impacting the business objectives of the Company and attempts to ensure timely evaluation, reporting and monitoring risks across all functions and operations.

29. 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.

30. 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.

31. 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

32. SIGNIFICANT 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.

33. COMPLIANCE WITH RBI GUIDELINES

Your Company continues to carry on the business of Non-Banking Financial Company without accepting Deposit. The Company has generally complied with the applicable regulations, guidelines, etc. of RBI as prescribed from time to time.

34. 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.

35. 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, 2025 - 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

36. 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.

37. 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 disclosed on the website of the company.

38. 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.

39. 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.

By Order of the board

For Smart Finsce Limited

Sd/-

Arun Khera

Managing Director

DIN: 00355694

Sd/-

Sachit Khera

Director

DIN: 03536957

Place: New Delhi

Date: August 25, 2026