Lerthai Finance Ltd

The Members,

Your Directors take pleasure in presenting the 46^th Directors Report of your Company together with Audited Financial Statements and the Auditor's Report thereon for the Financial Year ended March 31, 2025.

Your Company's Standalone Financial performance during the Financial Year 2024-25 as compared to that of the previous Financial Year 2023-24 is summarized below:

After the discontinuation of business activities of inter alia production, manufacture & trade of refractories and bricks of all types and varieties, the management of your Company has been keenly looking for viable business opportunities. However, the changing business environment post COVID-19 pandemic and the prevailing geo-political situation globally have delayed the efforts of the management in terms of finding suitable business opportunities for the Company in the market. As the effects of the pandemic is subsiding and India is gearing for economic growth the promoters are optimistic about the future of your Company.

During the year under consideration, the company has earned income mainly from interest earned on fixed deposits.

Since the management is still looking for options to revive the business of the Company, there is nothing at present which can be reported under Management Discussion and Analysis Report in so far industry structure, outlook, opportunities and risk are concerned. The Directors have dealt with the other aspects relating to financial performance, internal control and accounting treatment as far as possible elsewhere in this report.

Further, the obligations relating to compliance with corporate governance provisions does not apply to the Company as per the exemption criteria given under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Company shall comply with the requirements with the said regulations within six months from the date on which it becomes applicable to it. Nevertheless, the Company follows highest governance standards in spirit and believes in philosophy of transparency and disclosure. Corporate Governance is about maximizing shareholder value legally, ethically and sustainably. Your Company's Board exercises its fiduciary responsibilities in the widest sense of the term.

To conserve the reserves of the Company for future business growth, the Board of Directors has not recommended any dividend for the year under review.

The current authorized capital of the Company is Rs.5,00,00,000/- (Rupees Five Crores Only). The paid-up share capital of the Company is Rs. 70,00,000 (Rupees Seventy Lakhs Only) consisting of 700,000 (Seven Lakhs) Equity Shares of Rs. 10 (Rupees Ten only) each. There was no change in the Share Capital of the Company during the year under review.

No amount is proposed to be transferred to any reserve.

The Company did not have any subsidiaries, joint ventures or associate companies during the year under review.

The present Board of Directors consists of the following Directors:

The Board has entrusted Audit Committee and Nomination Committee to search for the Independent Directors in terms of the statutory provisions and the process for the same is underway as the committee is screening candidates suitable for the position.

Ms. Sneha Khandelwal is the Company Secretary and Chief Financial Officer of the Company.

During the year, four board meetings were convened and held, with details provided in the Corporate Governance Report. The interval between the meetings complied with the period prescribed under the Companies Act, 2013, and Regulation 17 of the Listing Regulations. In addition, the Company has declared its financial results to the stock exchange.

The Company has received necessary declarations from Ms. Ntasha Berry, an Independent Director, under Section 149(7) of the Companies Act, 2013 that she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013.

The Board of Directors have carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act, SEBI Listing Regulations and the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

The performance of the board was evaluated by the board including the independent Director after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual Directors on the basis of criteria such as education qualification, experience of the core area in which the company operates, attendance, the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In the board meeting that followed the meeting of the independent Directors and meeting of Nomination and Remuneration Committee, the performance of the board, its committees, and individual directors was also discussed.

Performance evaluation of independent Directors was done by the entire board, excluding the independent director being evaluated.

Present composition of the Audit Committee is as under:

During the financial year, the Audit Committee met 4 (four) times.

Present composition of the Nomination & Remuneration Committee is as under: -

The Nomination & Remuneration Committee has not conducted any meetings during the year as there has been no requirement of any such meeting.

Present composition of the Stakeholders' Relationship Committee is as under:

The Stakeholders' Relationship Committee has not conducted any meetings during the year as there has been no requirement of any such meeting.

The Company has a policy, which mandates the criteria for determining qualifications, positive attributes and independence of Directors' Appointment and Remuneration while considering appointment of Director and key managerial personnel. The policy inter alia takes into account:

(i) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully; (ii) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and (iii) remuneration to Directors and key managerial personnel involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

Details of employees and Directors or Key Managerial Personnel who are in receipt of remuneration, as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is tabled below:

Further, the other members of Board are only entitled to sitting fees as approved by the Board pursuant to provisions of Section 203 of the Companies Act, 2013 and Rule 4 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 ("the Act") and, based upon representations from the Management, the Board states that:

a) in preparing the annual accounts, applicable accounting standards have been followed and there are no material departures;

b) the Directors have selected accounting policies, applied them consistently and made judgments and estimates that are reasonable and prudent 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;

c) the Directors have taken proper and sufficient care in maintaining adequate accounting records in accordance with provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts of the Company on a "going concern" basis;

e) the Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively; and

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

As per provisions of the Companies Act, 2013 M/s. B D Jokhakar & Co., Chartered Accountants have been appointed as Statutory Auditors of the Company from the conclusion of the 41^st AGM of the Company till the conclusion of the AGM to be held for FY end 31^st March 2025, on such remuneration as may be decided by the Board.

M/s. B.D. Jokhakar & Co., Chartered Accountants being the current statutory auditor have audited the financials of the Company for current FY. There are no qualifications or adverse remarks in the Statutory Auditors' Report which require any explanation from the Board of Directors.

In terms of Section 134(3)(l) of the Companies Act, 2013, except as disclosed elsewhere in this report, no material changes and commitments that could affect the Company's financial position have occurred between the end of the financial year of the Company and date of this report

In accordance with Section 138 of the Companies Act, 2013 read with Rule 13 of Chapter IX of the said Act, the Board has appointed Mrs. Snehal Shaligram, Practicing Company secretary (CP No. 10216), (Peer Review No. 5310/2023) as Internal Auditor of the Company for the Financial Year 2024-25 to conduct internal audit.

Section 204 of the Act, inter alia, requires every listed company to annex to its Board's Report, a Secretarial Audit Report, given in the prescribed form, by a Company Secretary in practice. The Board had appointed Ms. Krupa Kamleshbhai Shah, Practicing Company Secretary (C.P. No. 18634), as the Secretarial Auditors to conduct Secretarial Audit of the Company for the FY 2024-25 and their Report is annexed to this report. The management's reply on the qualification of the Secretarial Auditor, form part of Secretarial Audit Report, which is self explanatory.

During the year under review, there have been no orders passed by any of the regulators or courts or tribunals impacting the going concern status of the Company and the Company's operations in future.

During the financial year under review, there have been no transactions between the Company and related parties which requires compliances as referred to in section 188(1) of the Companies Act, 2013. Accordingly, Form AOC-2 as per the rules prescribed under Chapter IX relating to Accounts of Companies under the Companies Act, 2013 does not form part of this report.

During the financial year under review, the Company has not granted any loans or guarantees or made any investments in respect of which the provisions of section 186 of Companies Act, 2013 are applicable.

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Act read with the Companies (Acceptance of Deposit) Rules, 2014, during the year under review. Hence, the details relating to deposits as required to be furnished in compliance with Chapter V of the Act are not applicable.

Since the Company has already closed its manufacturing operations and is in the process of identifying business opportunities, the Company has no such policy in place as of now. The Board shall take steps to formulate the requisite policy as soon as it identifies business opportunity.

The Board has, pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, framed "Whistle Blower Policy and Vigil Mechanism. The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity, and ethical behavior.

The policy provides for protected disclosures, which can be made by a complainant through e-mail or a letter to the Chairperson of the audit committee. The Company did not receive any complaints during the year 2024-25.

For the year under review, the provisions of section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable to the Company.

During the year under review, the Statutory Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12)of the Companies Act, 2013.

The Company has in place an adequate internal financial control system commensurate with the size, scale, and complexity of its operations. The internal financial controls are designed to ensure the orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

The Company has in place a policy for prevention of sexual harassment in accordance with the requirements of the Sexual Harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has constituted Internal Complaints Committee as required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Status of the complaints received/ pending/ disposed off during the year:

(i) Number of complaints filed during the financial year: NIL

(ii) Number of complaints disposed of during the financial year: NIL

(iii) Number of cases pending for more than ninety day:NIL

The Company is in the process of aligning its internal HR policies and employee benefits with the requirements of the Maternity Benefit Act, 1961. As of the date of this Report, certain provisions under the Act, such as paid maternity leave, medical bonus, and nursing breaks, are not fully implemented across all locations or employee categories. The Company has taken note of the statutory requirements and is taking steps to ensure full compliance in a time-bound manner.

Particulars regarding conservation of energy and technology absorption as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014 are not applicable since the Company is not engaged in any manufacturing/power intensive activity.

Neither any application was made, nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year under review.

There was no foreign exchange inflow or Outflow during the year under review.

The Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there were no funds which were required to be transferred to the Investor Education and Protection Fund (IEPF).

The Company has in place proper systems to ensure compliance with the provisions of the applicable secretarial standards issued by The Institute of Company Secretaries of India and such systems are adequate and operating effectively.

The Annual Return as required under subsection (3) of Section 92 of the Companies Act, 2013 (hereinafter referred to as ‘the Act') is made available on the website of the Company and can be accessed through the web link http://www.lerthaifinance.com/investor- relations/annualreports/

The Board wishes to place on record its sincere appreciation for the hard work, dedication, and commitment of all employees, whose efforts have contributed to achieving encouraging results this year. The Board also extends its heartfelt gratitude to shareholders, banks, financial institutions, solicitors, advisors, and other stakeholders, as well as the Government of India, relevant State Governments, and regulatory and statutory authorities for their unwavering support and cooperation throughout the year.

We look forward to their continued support and encouragement.