Dharani Finance Ltd

Dear Members,

The Board of Directors present herein the 34th Annual

Report of the Company together with the Audited Accounts for the year ended 31st March 2024.

The Financial results for the year ended 31st March 2024 are briefly as follows: - Rs.in Lakhs

The total revenue was Rs. 79.28 lakhs as against Rs.59.99 lakhs in the previous year. The income for this year consists mainly of interest on loans and vehicles on lease. Besides interest, the Company also received a sum of Rs. 26.10 lakhs as lease charges for the vehicles given on lease.

The loss comes to Rs. 30.40 lakhs as against the loss of Rs.12.66 lakhs in the previous year.

Further, during the year under review there were no changes in the nature of business of the company.

Your company is also exploring the possibility of increasing its resources by additional capital or borrowings though it has not been able to does during 2023-24. In addition, your Company proposes to increase its financial services activities in the coming years.

Due to absence of profits in the current year, no amount is proposed to be transferred to General Reserves account on account of loss during the year.

In view of the accumulated losses, Directors do not recommend any dividend for the Equity shareholders for the financial year 2023-24.

Pursuant to Regulation 43A of LODR Regulation 2015, the regulations related to Dividend Distribution Policy are not applicable to the Company

There is no change in the Share Capital of the Company- either the Authorized Capital or the issued Capital. The Paid up equity capital as on March 31, 2024 continues to remain at Rs.4,99,44,000.00. During the year under review, the company has not issued shares with differential voting rights nor granted stock options or sweat equity or bonus shares. The Company has not bought back any of its securities during the year under review.

The Form MGT -7 for the year 2023-24 shall be filed with Registrar of Companies within the prescribed time after the date of 34th Annual General Meeting (AGM) of your Company. This also available in web address of the Company i.e., www.dharanifinance.com .

1. Board consists of five directors including one Woman Director, as given below.

2. During the year 2023-24 FOUR Board Meetings were held on 26.05.2023, 10.08.2023, 10.11.2023 and 12.02.2024.

Attendance at these meeting is given below.

A qualified Audit Committee is in position consisting of the following directors. Mr M Ganapathy – Chairman, Dr S Muthu and Mr K Kandasamy, Managing Director.

The Audit Committee met 4 times on 26.05.2023, 10.08.2023, 10.11.2023 and 12.02.2024. There was no instance where the recommendation of the Audit Committee was not accepted by the Board.

As required by Section 178 of the Companies Act, 2013 a Nomination & Remuneration Committee has been set up. Mr M Ganapathy and Dr S Muthu and Mrs Visalakshi Periasamy are the members and Mr M Ganapathy is the Chairman. The Committee has formulated appropriate criteria for appointment of Directors and their remuneration.

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is available in Website. One Meeting was held during 2023-24. The Committee met on 26.05.2023.

The Stakeholders' Relationship Committee is in position to specifically look into shareholder's / investors complaints, on transfer of shares, non receipt of balance sheet, non- receipt of declared dividend etc., and also the action taken by the Company on those matters. The Committee met on 26.05.2023. The Members of the Stakeholders

Relations Committee are Dr S Muthu, Independent Director (Chairman) and Mr K Kandasamy, Managing Director.

From 01.04.2019 transfer of shares can be only in demat form and Shareholders have been advised.

No Management Committee meeting was conducted during this period.

The Company's policy on Directors, Senior Management appointment and remuneration and other matters provided in Section 178 (3) of the Companies Act, 2013, is available on the website of the Company at www.dharanifinance.com

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 profit or loss of the Company for the year under review.

iii) The directors have taken proper and for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The directors have 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.

vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system was adequate and operating effectively.

The new accounting standards, viz., Ind AS has become applicable to your Company with effect from the year 2019-20.

The Independent Directors have given their declarations as per Section 149 (6) to the effect that they meet the criteria of Independence.

During the year 2023-24, the company has not made investment or given any loans or provided any guarantees covered under the provisions of Section 186 of the Companies Act, 2013.

The Company does not fall under the category of Sec 148(1) of Companies Act, 2013 and hence such disclosure and maintenance of cost accounts/cost records is not applicable.

Pursuant to the provisions of Sections 139 and 141 of the Companies Act, 2013, Mr N Srivatsan, Chartered Accountants, Chennai (Registration No.014921S) were appointed as Statutory Auditors for a period of 5 years in the Annual General Meeting held on 29th December 2022 to hold office until the conclusion of the 37th Annual General Meeting of the Company.

The observations made in the Auditors' Report read together with relevant notes thereon are self-explanatory and do not call for any further comments under Section 134(3) f of the Companies Act, 2013. Statement on impact of Audit Qualification is attached in

Pursuant to the provisions of Section 204(1) of the Companies Act 2013 read along with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules 2020 and other applicable provisions, if any, of the Companies Act 2013, M/s. M Damodaran & Associates LLP, Chennai, (Mem.No.5837 and COP No.5081) were appointed as the Secretarial Auditors of the Company for the financial year 2023-24. The Secretarial Audit Report for the financial year 2023-24 of the Company is annexed as "Annexure II.

During the year under review, the provisions of Secretarial Standard 1 (Board Meetings) and 2 (General Meetings) issued by the Institute of Company Secretaries of India (ICSI) were adhered to while conducting the respective Meetings.

All related party transactions that were entered into during the financial year were in the ordinary course of business and were on arm's length basis. The statement in form AOC 2 is attached as Annexure- III. There are no materially significant related party transactions entered into by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with the interest of the Company at large.

There are no material changes and commitments, affecting . the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

A. During the year there were no Foreign Exchange Earnings & Outflow.

B. Conservation of Energy & Technology absorption. - These guidelines are not applicable to this Company.

f PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section197 (12) of Annexure - I. the Companies Act,2013, read with Rules 5(1),5(2) and 5(3), of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, the name and other particulars of employees are to be set out in the "Annexure–IV' forming part of the Annual Report.

As on 31st March 2024, the Company does not have any subsidiary or any associate Company.

The Company has developed a risk management policy. Pursuant to Section 134 (3) (n) of the Companies Act, 2013 details of the Policy are disclosed in the Company's Website. At present the Company has not identified any element of risk which may threaten the existence of the Company. In this context, report against heading ‘Material Changes of Commitments' given above may be referred to.

Mrs Visalakshi Periasamy, (DIN No.00064517) who retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.

Mr Palaniappan Rajamanickam Shampath (IAS) (R) (DIN: 10461017 was appointed by the Board as an Independent Director with effect from 9th August 2024.

Mr Perianna Gounder Muthusamy (DIN: 09048245) was appointed by the Board as an Independent Director with effect from 9th August 2024.

Mr Murugavel Ramasasmy (DIN:10693633) was appointed as Managing Director with effect from 9th August 2024.

Mr Kandasamy Kolanda Gounder (DIN: 00277906) ceased to be a Managing Director of the Company at the close of the business hours on 24.06.2024, upon completion of his term of five (5) years.

Dr Muthu Sakkarakali Gounder (DIN No.03331664), his tenure 5 years (2nd Term) an Independent Director of the Company will be closed on 24.09.2024.

Mr Ganapathy Gounder Muthusamy (DIN No.00234337) his tenure 5 years (2nd Term) an Independent Director of the Company will be closed on 24.09.2024.

There were no significant and material orders passed the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future.

During the year under review, the Statutory Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors as prescribed under Section 143(12) of the Companies Act, 2013 and rules made thereunder.

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the assignment order. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board & to the Chairman of the Board. The Internal Audit monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of internal auditor, management undertakes corrective action and thereby strengthen the controls. Significant audit observations wherever made and recommendations along August2024 with corrective actions thereon are presented to the Audit Committee of the Board.

The Company does not hold any public deposits as on 31st March 2024. Your Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. The Company has stopped collecting public deposits and had got its Licence amended by Reserve Bank of India to indicate that it is a non deposit taking NBFC. Your Company does not propose to collect public deposits in the coming year.

Your Company does not fall within the parameters as per Section 135 of the Companies Act and hence not mandated to formulate a Corporate Social Responsibility Policy or spend the prescribed amounts.

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation is carried out is based on criteria approved by the Board which is available on the Company's Website.

A competent Vigil mechanism has been established and a whistle blower policy has been designed to help Directors and Employees to report genuine concerns. The complete mechanism is given in the company's website.

CORPORATE GOVERNANCE

This requirement is not applicable to this Company at present, as per Regulation 15(2) of the SEBI (Listing Obligations and Disclosure Requirements), as its paid up capital is less than Rs. 10 crores and Net worth less than Rs.25 crores.

The above is also to be treated as Management discussion and analysis. Related Party disclosures are available in Note No.36 to the accounts.

The Company has in place an Anti Sexual harassment policy in line with the requirements of Section 4 of the Sexual harassment of Women at Work Place (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received as sexual harassment. All employees are covered under this policy. Details have been displayed prominently in the work place and also in the Company's Website. No complaints were received during the year 2023-24.

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the Company.

The Code has been posted on the Company's website: www. dharanifinance.com

The Provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid last year.

Pursuant to Section 124 & 125 of the Companies Act,2013 dividend remaining unpaid or unclaimed for a period of 7 years were transferred to the Investor Education and Protection Fund of the Central Government.

Shareholders may claim their unclaimed dividend for the years prior to and including the financial year 2011-12 and the corresponding shares, from the IEPF Authority by applying in the prescribed Form No. IEPF-5. This form can be downloaded from the website of the IEPF Authority www. iepf.gov.in.

Your Directors place on record their appreciation of the services rendered by the Staff and Executives of your Company.

Your Directors also thank the Registrar & Transfer Agent and shareholders who have continued to repose their confidence in the Company and its management.