To,

Dear Members,

Your Directors' are pleased to present the 42 nd Annual Report and Audited Financial Statements (Standalone & Consolidated) of ARCO LEASING LIMITED, for the financial year ended March 31, 2026.

FINANCIAL RESULTS

The Company's financial performance for the year ended 31 st March 2026 is summarized below: (Rs. In Lakhs)

PERFORMANCE OF THE COMPANY

? The Company generated revenue of Rs. 7.00 Lakhs from its operations during the year under review. Further, the Company earned other income of Rs. 1.17 Lakhs during the year. Accordingly, the total revenue of the Company for the year under review stood at Rs. 8.17 Lakhs, as compared to Rs. 1.14 Lakhs in the previous year.

? Total expenditure of the Company during the financial year 2025-26 is Rs. 64.30 Lakhs as compared to Rs.12.65 Lakhs in the previous year. It has resulted in the losses of Rs. 56.13 Lakhs to the Company during the financial year of 2025-26.

? Similarly, on Consolidated basis, total revenue of the Company for the financial year under review is enhanced to Rs. 24.77 Lakhs as compared to Rs.18.82 Lakhs of previous year. Total expenditure of the Company for F.Y. 2025-26 on consolidated basis is Rs.65.09 Lakhs which has increased as compared to Rs.13.15 Lakhs of the previous year. It has resulted in the losses of Rs.37.62 Lakhs to the Company during the financial year of 2025-26.

? There were no material changes and commitments affecting the financial position of the Company, between the end of the financial year and the date of the report.

DIVIDEND

In order to conserve resources of the Company your Board has not recommended any dividend for the year under review

TRANSFER TO RESERVES

The Directors do not propose to transfer any amount to Reserve.

MAJOR EVENTS OCCURRED DURING THE YEAR

MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL DATE OF REPORT

There are no material changes and commitments affecting the financial position of the Company which have occurred between the ends of the financial year i.e. 31st March, 2026 and as on the date of this report.

CHANGE IN NATURE OF BUSINESS:

The Company has not undergone any change in the nature of business during the year.

SHARE CAPITAL

The Authorized Share Capital of the Company is 6,00,00,000/- (Rupees Six Crores only) comprising 20,00,000 (Twenty Lakhs) Equity Shares of 10/- (Rupees Ten) each and 4,00,000 (Four Lakhs) Cumulative Redeemable Preference Shares of 100/- (Rupees One Hundred) each.

As on March 31, 2025, the Paid-up Equity Share Capital of the Company was 24,00,700/- (Rupees Twenty-Four Lakhs Seven Hundred only) divided into 2,40,070 (Two Lakh Forty Thousand and Seventy) Equity Shares of 10/- each, fully paid-up, and the Paid-up Preference Share Capital was 2,50,00,000/- (Rupees Two Crores Fifty Lakhs only).

Close to the year under review, the Company allotted 10,613,500 (One Crore Six Lakh Thirteen

Thousand Five Hundred) Equity Shares of face value of 10/- each, fully paid-up, at an issue price of 10/- per Equity Share as on August 13 th ,2026.

Pursuant to the aforesaid allotment, the Paid-up Equity Share Capital of the Company increased from 24,00,700/- to 10,85,35,700/-, comprising 1,08,53,570 (One Crore Eight Lakh Fifty-Three

Thousand Five Hundred and Seventy) Equity Shares of 10/- each, fully paid-up.

Except for the aforesaid allotment, during the year under review, the Company has not issued any shares or convertible securities, shares with differential voting rights, nor granted any stock options, sweat equity shares or warrants.

LISTING FEES

Listing and Revocation of Suspension of Trading:

The Equity Shares of the Company are listed on BSE Limited. The trading in the Equity Shares of the Company was earlier suspended by BSE Limited. During the year under review, the Company completed the necessary compliances and formalities for revocation of suspension of trading in its Equity Shares.

Accordingly, BSE Limited revoked the suspension of trading in the Equity Shares of the Company, and trading in the Equity Shares of the Company has resumed and is currently traded on BSE Limited.

DEPOSITS

The Company has not accepted any deposits from public under Chapter V of the Companies Act, 2013, during the financial year under review.

MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis as required under the Listing Regulations forms an integral part of this report and is presented separately. It gives details of the overall industry structure, economic developments, performance and state of affairs of your Company's, and their adequacy, risk management systems and other material developments during the Financial Year 2025-26.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

? BOARD OF DIRECTORS

As on March 31, 2026, the Board of Directors of the Company comprised a combination of Executive Directors and Non-Executive Independent Directors.

The Board is well diversified and includes one Woman Independent Director (Non-Executive). The composition of the Board is in compliance with the applicable provisions of Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and comprises an appropriate mix of Executive and Non-Executive Directors, including Independent Directors.

? APPOINTMENT, RE-APPOINTMENT AND RESIGNATION OF DIRECTORS

During the year under review, the following changes took place in the composition of the Board of Directors of the Company:

Changes in the Board of Directors and Key Managerial Personnel

During the financial year under review and subsequent to the close of the financial year, there were several changes in the composition of the Board of Directors and Key Managerial Personnel of the Company, as detailed below:

Cessation of Mrs. Aarushi Jain (DIN: 10936056):

Mrs. Aarushi Jain (DIN: 10936056) ceased to be an Independent Director of the Company upon completion of her term with effect from May 12, 2025. The Board took note of her cessation and placed on record its sincere appreciation for the valuable guidance, support and contribution rendered by her during her tenure as an Independent Director of the Company.

Appointment of Mrs. Khadija Taher Raniwala and Mrs. Usha Ghelani:

On August 13, 2025, Mrs. Khadija Taher Raniwala (DIN: 11237433) and Mrs. Usha Ghelani (DIN: 10414386) were appointed as Non-Executive Independent Directors of the Company. The Board is of the opinion that they possess the requisite integrity, expertise, experience and proficiency to effectively discharge their duties and responsibilities and that their appointments would strengthen and further diversify the composition of the Board.

Appointment of Mrs. Jeny Gowadia and Mr. Keyur Shah:

On March 09, 2026, Mrs. Jeny Gowadia (DIN: 03014009) and Mr. Keyur Shah (DIN: 09420459) were appointed as Non-Executive Independent Directors of the Company. The Board is of the opinion that they possess the requisite integrity, expertise, experience and proficiency to effectively discharge their duties and responsibilities and that their appointments would strengthen the overall composition of the Board.

Appointment of Mr. Akash Dubey as Managing Director and Chief Financial Officer:

On March 09, 2026, the Board approved the appointment of Mr. Akash Dubey (DIN: 08731219) as the Managing Director and Chief Financial Officer (CFO) of the Company.

Appointment of Mr. Atul Ramshankar Jaiswal and Mr. Jitesh Kothari as Additional Directors:

On July 23, 2026, the Board approved the appointment of Mr. Atul Ramshankar Jaiswal (DIN: 11615262) and Mr. Jitesh Kothari (DIN: 07522761) as Additional Directors of the Company with effect from July 23, 2026.

Appointment of Mr. Atul Ramshankar Jaiswal and Mr. Jitesh Kothari as Whole-Time Directors:

The Board approved the appointment of Mr. Atul Ramshankar Jaiswal (DIN: 11615262) and Mr. Jitesh Kothari (DIN: 07522761) as Whole-Time Directors of the Company for a period of five (5) years with effect from July 23, 2026, subject to the approval of the shareholders of the Company.

Resignation of Mr. Akash Dubey from the office of Managing Director and Chief Financial Officer: Mr. Akash Dubey (DIN: 08731219) tendered his resignation from the office of Managing Director and Chief Financial Officer (CFO) of the Company with effect from the close of business hours on August 13, 2026. The Board accepted his resignation and placed on record its sincere appreciation for the valuable services, guidance and contribution rendered by him during his tenure with the Company.

Change in Designation of Mr. Atul Ramshankar Jaiswal from Whole-Time Director to Managing Director:

The Board approved the change in designation of Mr. Atul Ramshankar Jaiswal (DIN: 11615262) from Whole-Time Director to Managing Director of the Company for a period of five (5) years with effect from August 13, 2026, subject to the approval of the shareholders of the Company.

Appointment of Mr. Anshul Sharma as Executive Director and Chief Financial Officer:

On August 13, 2026, the Board approved the appointment of Mr. Anshul Sharma (DIN: 11870835) as an Executive Director of the Company for a period of five (5) years with effect from August 13, 2026, subject to the approval of the shareholders of the Company. The Board also appointed Mr. Anshul Sharma as the Chief Financial Officer (CFO) and Key Managerial Personnel of the Company with effect from August 13, 2026, pursuant to Section 203 and other applicable provisions of the Companies Act, 2013.

Appointment of Mr. Utsav Jasapara as Additional Director (Non-Executive, Independent Director): On August 13, 2026, Mr. Utsav Jasapara (DIN: 09711346) was appointed as an Additional Director in the capacity of Non-Executive Independent Director of the Company for a first term of five (5) consecutive years, subject to the approval of the shareholders of the Company.

Resignation of Mr. Rajendra Mahavirprasad Ruia from the office of Whole-Time Director: Mr. Rajendra Mahavirprasad Ruia (DIN: 01300823) tendered his resignation from the office of Whole-Time Director of the Company with effect from the close of business hours on August 18, 2026. The Board accepted his resignation and placed on record its sincere appreciation for his valuable services, guidance and contribution during his tenure with the Company.

Resignation of Mr. Narendra Mahavirprasad Ruia from the office of Director:

Mr. Narendra Mahavirprasad Ruia (DIN: 01228312) tendered his resignation from the office of Director of the Company with effect from the close of business hours on August 18, 2026. The Board accepted his resignation and placed on record its sincere appreciation for his valuable services, guidance and contribution during his tenure with the Company.

Resignation of Independent Directors:

Pursuant to the sale of stake in the Company and the consequent change in the management and control of the Company, the following Independent Directors tendered their resignations from the Board with effect from August 31, 2026:

Mr. Srikar Gopalrao (DIN: 02116323) Independent Director;

Mrs. Usha Manish Ghelani (DIN: 10414386) Independent Director; and Mrs. Khadija Taher Raniwala (DIN: 11237433) Independent Director.

The Board accepted their resignations and placed on record its sincere appreciation for the valuable guidance, support and contribution rendered by them during their respective tenures as Independent Directors of the Company.

? APPOINTMENT AND RESIGNATION OF KEY MANAGERIAL PERSONNEL

During the year under review and subsequent to the close of the financial year, there were changes in the Key Managerial Personnel ("KMP") of the Company, as detailed below:

Resignation of Ms. Reshma Deshmukh:

Ms. Reshma Deshmukh (Membership No. A68764) tendered her resignation from the position of Company Secretary and Compliance Officer of the Company with effect from February 10, 2026, in order to pursue career opportunities outside the Company. The Board accepted her resignation and placed on record its sincere appreciation for the valuable contributions and services rendered by her during her tenure with the Company.

Appointment of Mrs. Nidhi Sheth:

The Board, at its meeting held on March 09, 2026, approved the appointment of Mrs. Nidhi Sheth as the Company Secretary and Compliance Officer of the Company with effect from March 09, 2026.

Appointment of Mr. Akash Dubey as Chief Financial Officer:

On March 09, 2026, the Board approved the appointment of Mr. Akash Dubey (DIN: 08731219) as the Chief Financial Officer (CFO) and Key Managerial Personnel of the Company.

Resignation of Mr. Narendra Mahavirprasad Ruia as Chief Financial Officer:

Mr. Narendra Mahavirprasad Ruia (DIN: 01228312), Chief Financial Officer and Key Managerial Personnel of the Company, tendered his resignation from the position of Chief Financial Officer due to other professional commitments. The Board accepted his resignation, and he was relieved from his services with effect from the close of business hours on March 27, 2026.

Appointment of Mr. Akash Dubey as Managing Director and Chief Financial Officer:

On March 09, 2026, the Board approved the appointment of Mr. Akash Dubey (DIN: 08731219) as the Managing Director and Chief Financial Officer (CFO) of the Company.

Resignation of Mr. Akash Dubey as Managing Director and Chief Financial Officer:

Mr. Akash Dubey (DIN: 08731219) tendered his resignation from the office of Managing Director and Chief Financial Officer (CFO) of the Company with effect from the close of business hours on August 13, 2026. The Board accepted his resignation and placed on record its sincere appreciation for the valuable services, guidance and contribution rendered by him during his tenure with the Company.

Appointment of Mr. Atul Ramshankar Jaiswal as Managing Director:

The Board approved the change in designation of Mr. Atul Ramshankar Jaiswal (DIN: 11615262) from Whole-Time Director to Managing Director of the Company for a period of five (5) years with effect from August 13, 2026, subject to the approval of the shareholders of the Company.

Appointment of Mr. Anshul Sharma as Chief Financial Officer:

On August 13, 2026, the Board approved the appointment of Mr. Anshul Sharma (DIN: 11870835) as an Executive Director of the Company for a period of five (5) years with effect from August 13, 2026, subject to the approval of the shareholders of the Company. The Board also appointed Mr. Anshul Sharma as the Chief Financial Officer (CFO) and Key Managerial Personnel of the Company with effect from August 13, 2026, pursuant to Section 203 and other applicable provisions of the Companies Act, 2013.

? REMUNERATION / SITTING FEES TO NON-EXECUTIVE DIRECTORS

During the year under review, the Non-Executive Directors of the Company had no transactions with the Company, including payment of sitting fees, commission or reimbursement of expenses incurred by them for attending meetings of the Board of Directors and/or Committees of the Company. Except for the changes specifically stated above, there were no other changes in the composition of the Board of Directors or Key Managerial Personnel of the Company during the year under review.

? DECLARATION BY INDEPENDENT DIRECTORS:

All Independent Directors have submitted the declaration of independence, pursuant to the provisions of Section 149(7) of the Act and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulations 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his/her ability to discharge his/ her duties with an objective independent judgment and without any external influence.

In compliance with Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors ("IDD") of the Company have registered themselves with the

Indian Institute of Corporate Affairs (IICA), Manesar, to include their names in the databank of Independent Directors. They have also confirmed that they will appear for the online proficiency test within a period of one year, wherever applicable. (if required/if any) Further, there has been no change in the circumstances affecting their status as IDDs of the Company.

? DECLARATION BY THE COMPANY:

None of the Directors of the Company are disqualified from being appointed as Directors as specified in Section 164(2) of the Act read with Rule 14 of Companies (Appointment and Qualifications of Directors) Rules, 2014.

MANAGING DIRECTOR/DIRECTOR AND CHIEF FINANCIAL OFFICER (CFO) CERTIFICATE

In terms of the SEBI LODR Regulations, the certificate, as prescribed in Part B of Schedule II of the said Regulations, has been obtained from Managing Director & Chief Financial Officer, for the Financial Year 2025-26 with regard to the Financial Statements and other matters. The said Certificate forms part of this Report.

CONSTITUTION OF COMMITTEES:

During the year under review, the composition of different Committees of your Board of Directors is given hereunder:

AUDIT COMMITTEE

Composition:

As on March 31, 2026, the Audit Committee of the Board comprised Independent Directors, with Mr. Srikar Gopalrao Kowlikar as the Chairman and Mr. Narendra Ruia, Ms. Aarushi Jain, Mrs. Khadija Taher Raniwala, Mrs. Usha Ghelani, Mrs. Jeny Gowadia, Mr. Keyur Shah and Mr. Utsav Jaspara as members.

Ms. Aarushi Jain, an Independent Director of the Company, ceased to be a member of the Board upon completion of her tenure on May 12, 2025. Subsequently, Mrs. Khadija Taher Raniwala (DIN: 11237433) and Mrs. Usha Ghelani (DIN: 10414386) were appointed as Non-Executive Independent Directors of the Company with effect from August 13, 2025.

Further, during the year under review, Mrs. Jeny Gowadia (DIN: 03014009) and Mr. Keyur Shah (DIN: 09420459) were appointed as Non-Executive Independent Directors of the Company with effect from February 02, 2026.

On August 13, 2026, Mr. Utsav Jasapara (DIN: 09711346) was appointed as an Additional Director in the capacity of Non-Executive Independent Director of the Company for a first term of five (5) consecutive years, subject to the approval of the shareholders of the Company. Accordingly, the Audit Committee was reconstituted with effect from August 13, 2026.

The members of the Audit Committee possess requisite knowledge and expertise in areas including corporate and project finance, accounts, financial management and the Companies Act, 2013.

The composition, constitution and functioning of the Audit Committee are in compliance with the applicable provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Objective:

The Audit Committee assists the Board in its responsibility for overseeing the quality and integrity of the accounting, auditing and reporting practices of the Company and compliance with the legal and regulatory requirements. The Committee oversees the accounting and financial reporting process of the Company, the audits of the Company's financial statements, the appointment, independence, performance and remuneration of the Statutory Auditors, the performance of internal auditors and the Company's risk management policies.

The Role of Audit Committee includes:

? To investigate any activity within its terms of reference ? To seek information from any employee ? To obtain outside legal or other professional advice

? To secure attendance of outsiders with relevant expertise, if it considers necessary

? Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible ? Recommending to the Board the appointment, remuneration and terms of appointment of Auditors of the Company ? Approval of payment to statutory auditors for any other services rendered by the statutory auditors ? Reviewing / Examination, with the management, the annual financial statements and auditor's report thereon before submission to the Board for approval, with particular reference to:

? Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013; ? Changes, if any, in accounting policies and practices and reasons for the same; ? Major accounting entries involving estimates based on the exercise of judgment by management; ? Significant adjustments made in the financial statements arising out of audit findings; ? Compliance with listing and other legal requirements relating to financial statements; ? Disclosure of related party transactions; ? Modified opinion in the draft audit report, if any;

? Reviewing / Examination, with the management, the quarterly financial statements before submission to the Board for approval; ? Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;

? Review and monitor the auditor's independence and performance, and effectiveness of audit process; ? Approval or any subsequent modification of transactions of the Company with related parties; ? Scrutiny of inter-corporate loans and investments; ? Valuation of undertakings or assets of the Company, wherever it is necessary;

? Evaluation of internal financial controls and risk management systems;

? Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems; ? Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit; ? Discussion with internal auditors of any significant findings and follow up there on; ? Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board; ? Discussion with statutory auditors, before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern; ? To look into the reasons for substantial defaults in the payment to the shareholders (in case of non-payment of declared dividends) and creditors; ? To review the functioning of the Whistle Blower mechanism; ? Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate; ? Carrying out other functions as may be specifically referred to the Committee by the Board of Directors ? To review the utilization of loans and/ or advances from/investment by the holding company in the subsidiary exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans / advances / investments existing ? To consider and comment on rationale, cost-benefits and impact of schemes involving merger, demerger, amalgamation etc., on the listed entity and its shareholders.

To review the following:

? Management discussion and analysis of financial condition and results of operations ? Statement of significant related party transactions (as defined by the Audit Committee), submitted by management ? Management letters / letters of internal control weaknesses issued by the statutory auditors ? Internal audit reports relating to internal control weaknesses and ? The appointment, removal and terms of remuneration of the chief internal auditors shall be subject to review by the audit committee ? Statement of Deviations; ? Quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange (s) in terms of Regulation 32 (1) of SEBI (Listing Obligations and disclosure requirements), Regulations, 2015 ? Annual Statement of funds utilized for purpose other than those stated in the offer document/ prospectus/notice in terms of regulation 32 (7) of SEBI (Listing Obligations and disclosure requirements), Regulations, 2015

Meetings:

Four meetings of Audit Committee were held during the year ended March 31, 2026:

? 12 th May, 2025 ? 13 th August, 2025 ? 25 th August, 2025 ? 13 th November, 2025 ? 02 nd February, 2026

Attendance details of the members:

*Mrs. Aarushi Jain (DIN:10936056) has stepped down from the position of Independent Director due to expiry of his term on May 12, 2025. ** On August 13, 2025, Mrs. Khadija Taher Raniwala, (DIN: 11237433) and Mrs. Usha Ghelani, (DIN:10414386) are appointed as Non-Executive Independent Director(s) of the Company. #On March 09, 2026, Mrs. Jeny Gowadia, (DIN: 03014009) and Mr. Keyur Shah, (DIN: 09420459) are appointed as Non-Executive Independent Director(s) of the Company. ^ On August 13, 2026, Mr. Utsav Jasapara (DIN: 09711346) was appointed as an Additional Director in the capacity of Non-Executive Independent Director of the Company ***On August 31,2026, Mr. Srikar Gopalrao, Mrs. Usha Manish Ghelani, and Mrs. Khadija Taher Raniwala has resigned from the Board of the Company and has ceased to become member of the committee.

Executives of accounts department, finance department, secretarial department and representatives of the Statutory Auditors attended the Audit Committee Meetings.

NOMINATION AND REMUNERATION COMMITTEE

Composition:

As on March 31, 2026, the Nomination and Remuneration Committee of the Board comprised Independent Directors, with Mr. Srikar Gopalrao Kowlikar as the Chairman and Mr. Rajendra Ruia, Ms. Aarushi Jain, Mrs. Khadija Taher Raniwala, Mrs. Usha Ghelani, Mrs. Jeny Gowadia, Mr. Keyur Shah and Mr. Utsav Jaspara as members.

Ms. Aarushi Jain, an Independent Director of the Company, ceased to be a member of the Board upon completion of her tenure on May 12, 2025. Subsequently, Mrs. Khadija Taher Raniwala

(DIN: 11237433) and Mrs. Usha Ghelani (DIN: 10414386) were appointed as Non-Executive Independent Directors of the Company with effect from August 13, 2025.

Further, during the year under review, Mrs. Jeny Gowadia (DIN: 03014009) and Mr. Keyur Shah (DIN: 09420459) were appointed as Non-Executive Independent Directors of the Company with effect from March 09, 2026.

On August 13, 2026, Mr. Utsav Jasapara (DIN: 09711346) was appointed as an Additional Director in the capacity of Non-Executive Independent Director of the Company for a first term of five (5) consecutive years, subject to the approval of the shareholders of the Company. Accordingly, the Nomination and Remuneration Committee was reconstituted with effect from August 13, 2026.

The members of the Nomination and Remuneration Committee possess requisite knowledge and expertise in areas including corporate governance, human resources, remuneration matters and the Companies Act, 2013.

The composition, constitution and functioning of the Nomination and Remuneration Committee are in compliance with the applicable provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Terms of reference of the Committee includes:

? Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the Directors, key managerial personnel and other employees; ? Identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal; ? Formulation of criteria for evaluation of Independent Directors, the Board and every

Director's performance;

? Devising a policy on Board diversity;

? Whether to extend or continue the term of appointment of the Independent Director, on the basis of the report of performance evaluation of independent Directors. ? Recommend to the board, all remuneration, in whatever form, payable to senior management.

Meetings:

The meeting of the Committee was held during the year on 13th August, 2025 , 25 th August, 2025 and 09 th March 2026

*Mrs. Aarushi Jain (DIN:10936056) has stepped down from the position of Independent Director due to expiry of his term on May 12, 2025. ** On August 13, 2025, Mrs. Khadija Taher Raniwala, (DIN: 11237433) and Mrs. Usha Ghelani, (DIN:10414386) are appointed as Non-Executive Independent Director(s) of the Company. *** On March 09, 2026, Mrs. Jeny Gowadia, (DIN: 03014009) and Mr. Keyur Shah, (DIN: 09420459) are appointed as Non-Executive Independent Director(s) of the Company. ^ On August 13, 2026, Mr. Utsav Jasapara (DIN: 09711346) was appointed as an Additional Director in the capacity of Non-Executive Independent Director of the Company. ***On August 31,2026, Mr. Srikar Gopalrao, Mrs. Usha Manish Ghelani, and Mrs. Khadija Taher Raniwala has resigned from the Board of the Company and has ceased to become member of the committee.

STAKEHOLDER RELATIONSHIP COMMITTEE:

The Stakeholders Relationship Committee is not constituted by the Company as there are less than One Thousand stakeholders of the Company and the provisions of section 178 of the Act and SEBI (Listing Obligations and Disclosure) Regulations, 2015 are not applicable to the Company.

The Company has duly appointed Share Transfer Agent (R&T Agent) for servicing the shareholders holding shares in physical or dematerialized form. All requests for dematerialization of shares are likewise processed and confirmations thereof are communicated to the investors within the prescribed time. During the year of review, no Investor complaints were received.

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS

The Board has established a comprehensive process to evaluate the performance of the Board, its committees and of individual directors. The performance evaluation matrix defining the criteria of evaluation for each of the above has been put in place. The performance evaluation of the Independent Directors was carried out by the other members of the Board (excluding the Director being evaluated).

A meeting of the Independent Directors was held on February 2, 2026 to review the performance of Non-Independent Directors and the Board as a whole. The Chairman of the Nomination & Remuneration Committee had updated the other members of the Board about the outcome of the evaluation process.

DIRECTOR'S RESPONSIBILITY STATEMENT

As required under clause (c) of sub-section (3) of Section 134 of Companies Act, 2013, Directors, to the best of their knowledge and belief, state that

(i) in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures; (ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year ended on that period; (iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) the directors had prepared the annual accounts on a going concern basis; (v) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

REPORTING OF FRAUDS

There was no instance of fraud during the year under review, which required the statutory auditors to report to the Audit Committee and/or Board under section 143(12) of the Act and rules framed thereunder.

SUBSIDUARY

Ansu Trade & Fiscals Private Limited continue to be the wholly owned subsidiary of Arco Leasing Limited.

ACCOUNTING STANDARDS

The Company has prepared the Financial Statements for the year ended 31st March, 2026 as per Section 133 of the Companies Act, 2013, read with rule 7 of Companies (Accounts) Rules, 2014.

FAMILIARIZTION/ ORIENTATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Independent Directors attend a Familiarization / Orientation Program as being inducted by the Board.

The Company had devised the detailed framework for the Familiarization Program and also approved the format of the formal letter of appointment as required to be given to the Independent Directors, outlining their role, function, duties and responsibilities.

REMUNERATION POLICY

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

Policy for Remuneration to Directors/Key Managerial Personnel

i. Remuneration to Managing Director/Whole-time Directors:

(a) The Remuneration/Commission etc. to be paid to Managing Director/Wholetime Directors, etc. shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force and the approvals obtained from the Members of the Company.

(b) The Nomination & Remuneration Committee shall make such recommendations to the Board of Directors, as it may consider appropriate with regard to remuneration to Managing Director/Whole-time Directors.

ii. Remuneration to Non-Executive/Independent Directors:

(a) The Non-Executive/Independent Directors may receive sitting fees and such other remuneration as permissible under the provisions of the Companies Act, 2013. (b) All remuneration of the Non-Executive/Independent Directors (excluding remuneration for attending meetings as prescribed under Section 197(5) of the Companies Act, 2013) shall be subject to ceiling/limits as provided under the Companies Act, 2013 and rules made there under or any other enactment for the time being in force. The amount of such remuneration shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors or shareholders, as the case may be.

(c) An Independent Director shall not be eligible to get Stock Options and shall also not be eligible to participate in any share based payment schemes of the Company.

(d) Any remuneration paid to Non-Executive/ Independent Directors for services rendered which are of professional nature shall not be considered as part of the remuneration for the purposes of clause (b) above if the following conditions are satisfied

? The Services are rendered by such Director in his capacity as the professional; and ? In the opinion of the Committee, the Director possesses the requisite qualification for the practice of that profession. iii. Remuneration to Key Managerial Personnel:

(a) The remuneration to Key Managerial Personnel shall consist of fixed pay, in compliance with the provisions of the Companies Act, 2013 and in accordance with the Company's Policy. (b) The Fixed pay shall include monthly remuneration, employer's contribution to Provident Fund, contribution to pension fund, pension schemes, etc. as decided from time to time in accordance with the Company's Policy.

Remuneration paid to Non-Executive Directors and Executive Directors:

No sitting fees were paid to non-executive non-independent Directors or independent Directors as they have waived their entitlement for the same.

Non-executive Directors of a company's Board of Directors add substantial value to the Company through their contribution to the Management of the Company. In addition, they also play an appropriate control role. Even considering the valuable role of the Independent Directors of the Company, your company is in the process to finalize the sitting fees structure and shall update the members at large subject to regulatory approval and compliance(s) if any.

NUMBER OF MEETINGS OF THE BOARD

There were 7 (Seven) meetings of the Board held during the year, specifically on May 12, 2025, August 13, 2025, August 25, 2025, November 13, 2025, February 2, 2026, March 09, 2026, and March 13, 2026 The maximum time gap between any two meetings did not exceed prescribed period of one hundred twenty days.

The particulars of directors present at Board meetings are given below

COMPLIANCE WITH SECRETARIAL STANDARD 1 AND SECRETARIAL STANDARD 2

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and such systems are adequate and operating effectively.

During the year under review, the Company was in compliance with the Secretarial Standards (SS) i.e., SS-1 and SS- 2, relating to "Meetings of the Board of Directors" and "General Meetings", respectively.

AUDIT COMMITTEE RECOMMENDATIONS

All the recommendations made by the Audit Committee were accepted by the Board.

CORPORATE GOVERNANCE

Corporate Governance stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is not applicable to the Company as Paid-Up Equity Share Capital of the Company is not exceeding Rupees Ten Crores and Net Worth of the Company is not exceeding Rupees Twenty-Five Crores, as on the last date of the previous financial year and the specific certificate to this effect has been obtained by the Company & kept on its records.

STATUTORY AUDITORS

During the year under review, M/s. M. C. Jain & Co LLP, Chartered Accountants (Firm Registration No. 304012E), resigned as the Statutory Auditors of the Company as on August 14th, 2026, resulting in a casual vacancy in the office of Statutory Auditors.

The Board of Directors, at its meeting held on August 25, 2026, approved the appointment of M/s. D M K H & CO, Chartered Accountants (Firm Registration No. 116886W) as the Statutory Auditors of the Company to fill the casual vacancy caused by the resignation of M/s. M. C. Jain & Co LLP, Chartered Accountants, and to hold office from August 25, 2026 until the conclusion of the ensuing 42nd Annual General Meeting ("AGM") of the Company.

Further, the Board of Directors, based on the recommendation of the Audit Committee, recommended to the Members of the Company for their approval, the appointment of M/s. D M K H & CO, Chartered Accountants (Firm Registration No. 116886W) as the Statutory Auditors of the Company for a term of five (5) consecutive years, to hold office from the conclusion of the ensuing 42nd AGM until the conclusion of the 47th AGM, to be held in the year 2031, subject to the approval of the Members at the ensuing AGM.

The Company has received the necessary consent and eligibility certificate from M/s. D M K H & CO confirming that their appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and the rules made thereunder.

INTERNAL AUDITOR

Internal Audit for the year ended March 31, 2026 was carried out and Internal Audit report at periodic intervals as statutorily required were placed before the Audit Committee.

COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act, are not applicable for the business activities carried out by the Company.

SECRETARIAL AUDITOR & COMPLIANCE REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made thereunder the Company has appointed Ms. Priyanka Oka, of M/s. PRIYANKA OKA & ASSOCIATES, Practicing Company Secretaries bearing CP No. 22164 as secretarial auditor for the Company. The secretarial audit report in the prescribed form i.e. MR-3 for the Financial Year ended 31st March, 2026 is annexed to the Board Report.

There were no qualifications, reservation or adverse remarks or observations made in the secretarial audit report except following

Hence, the compliance with respect to Regulation 24A, i.e., Secretarial Compliance Report is not applicable to the Company for the financial year under review.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company is an equal opportunity employer and consciously strives to build a work culture that promotes dignity of all employees. As required under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and Rules framed there under, the Company has implemented a policy on prevention, prohibition and Redressal of Sexual harassment of Women at workplace. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Accordingly, an Internal

Complaint Committee has been formed and the policy on 'Anti-Sexual Harassment' is posted on the website of the Company at www.arcoleasing.com

Matters handled by Internal Complaint Committee during the year 2025-2026, are as follows: -

Number of complaints on sexual harassment received during the year: NIL

Number of complaints disposed of during the year: N.A.

Number of cases pending for more than 90 days: N.A.

Nature of action taken by the Employer: N.A.

Number of Workshops: NIL

RISK MANAGEMENT POLICY:

Business Risk Evaluation and Management is an ongoing process within the Organization. Your Company has implemented mechanism to identify, assess, monitor and mitigate various risks and has formulated a Risk Management Policy. The Audit Committee and the Board of Directors are informed of the Risk assessment and minimization procedures.

During the year under review, no major risks were noticed, which may threaten the existence of the Company.

CORPORATE SOCIAL RESPONSIBILITY:

The Company does not meet the criteria of Section 135 of Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. But your Company has approved the CSR policy of the Company along with the amendments thereon to provide a guideline for CSR activities of the Company.

Your Company was in the process of identifying worthwhile avenues for CSR expenditure during the year and the Company continues to remain committed towards undertaking CSR activities for the welfare of the society.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

There is no information regarding loans and guarantees as required under the provisions of Section 186 of the Companies Act, 2013 as the Company has not given any loans or provided any guarantees or securities during the year under review.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH THE RELATED PARTIES:

There is no transaction with Related Party within the meaning of provisions of section 188 of the Companies Act, 2013, which requires disclosure under Section 134(3) (h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014. Related Party Disclosures under Accounting Standards mentioned in Note-21 to the Financial Statements. Hence, AOC -2 is not required to be attached to the said report.

CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and specified employees in the course of day to day business operations of the Company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behavior in any form and the Board has laid down certain directives to counter such acts. Such code of conduct has also been placed on the Company's website. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code. A declaration to this effect signed by the Whole Time Director of the Company appears elsewhere in this annual report.

Code of Conduct for Prevention of Insider Trading as per Regulation 8(2) policy is available on the website of the Company.

PARTICULARS OF EMPLOYEES

The Company does not have any employee except KMPs. Therefore, the information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is not furnished.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism Policy/ Whistle Blower Policy to deal with instances of fraud and mismanagement, if any which provides formal mechanism to the directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or Ethics Policy. Staying true to our core values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and Stakeholder Responsibility. The said Policy ensures that strict confidentiality is maintained in respect of whistle blowers whilst dealing with concerns and also specified that no discrimination will be meted out to any person for a genuinely raised concern. The Policy on Vigil Mechanism/Whistle Blower Mechanism may be accessed through website of the Company viz. www.arcoleasing.com

PERFORMANCE OF JOINT VENTURE/CONSORTIUM

There are no Companies/LLPs which are Associates/Consortium of the Company.

STATUTORY DISCLOSURES

There are no associate companies but there is subsidiary company as of March 31, 2026, hence the prescribed Form AOC-1 is required to be attached to this Report. A Cash Flow Statement for the Financial Year 2025-26 is also attached to the Balance Sheet.

Pursuant to Sections 134(3)(a) and 92(3) of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return in e-form MGT-7 may be accessed on the Company's website at the web link www.arcoleasing.com

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

The Company has not involved in any industrial or manufacturing activities, the Company has no particulars to report regarding conservation of energy and technology absorption as required under Section 134 of the Companies Act, 2013 and Rules made thereunder.

During the year under review, the Company did not have any foreign exchange earnings, or the foreign exchange outgo towards Business promotion, Advertisement expenses, Legal consultancy and Professional fees.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company has an effective internal financial control and risk-mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures which also covers adherence to the Company's Policies for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial disclosures.

The Company's internal financial control system is commensurate with its size, scale and complexities of its operations.

PREVENTION OF INSIDER TRADING

The Company has also adopted a code of conduct for prevention of insider trading. All the Directors, Senior Management employees and other employees who have access to the unpublished price sensitive information of the Company are governed by this code.

During the year under report, there has been due compliance with the said code of conduct for prevention of insider trading based on the SEBI (Prohibition of Insider Trading) Regulations 2015.

SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND OPERATIONS OF THE COMPANY

During the year under review there are no significant or material orders passed by any Regulator, Court or Tribunal against the Company, which could impact its going concern status or operations.

DETAILS OF AN APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR.

The Company has not made any application during the year or no application has been filed against the company or there are no proceedings pending against or for the Company 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.

There is no one-time settlement made during the financial year.

CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC)

No such process initiated during the period under review under the Insolvency and Bankruptcy Code, 2016 (IBC)

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, including amendment thereunder, the Business Responsibility and Sustainability Report (BRSR) for Financial Year 2025-26 is not applicable to the Company.

CAUTIONARY STATEMENT

Statements in this Directors' Report and Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be "forward- looking statements" within the meaning of applicable securities laws and regulations.

Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company's operations include changes in the government regulations, developments in the infrastructure segment, tax regimes and economic developments within India or abroad.

ACKNOWLEDGEMENT & APPRECIATION

The Board sincerely thanks the Ministry of Corporate Affairs, BSE Limited, Securities and Exchange Board of India, and various government agencies for their continued support, cooperation and advice. The Board expresses sincere thanks to all its consultants, bankers, vendors, auditors, lawyers for their continued partnership and confidence in the Company.

The Board of Directors also places on record its sincere appreciation for the commitment and hard work put in by the Management and the employees of the Company, its subsidiaries and associates and thanks them for yet an excellent year of performance.

BY AND ON BEHALF OF THE BOARD OF DIRECTORS FOR ARCO LEASING LIMITED