To,

The Members,

Your Directors take pleasure in presenting the 45^th Directors Report of your Company together with Audited Financial Statements and the Auditor's Report thereon for the Financial Year ended March 31, 2024.

Your Company's Standalone Financial performance during the Financial Year 2023-24 as compared to that of the previous Financial Year 2022-23 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 of 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 Shareholders in its 44th Annual General Meeting held on 14th September, 2023, had reappointed Ms. Ntasha Berry as Independent Director and Mr. Jayant Goel as Whole time director of the Company and they both will continue to hold office, subject to applicable laws, untill 23rd September, 2028.

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 under review the Board met 4 (Four) times inter alia to adopt and declare financial results to 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:

During the financial year under review, the Nomination & Remuneration Committee met 1 (one) time for recommending the re-appointment of Ms. Ntasha Berry as Independent Director and re-appointment of Mr. Jayant Goel as Whole time director of the Company.

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.

There are no material changes and commitment's 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;

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 2023-24 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. Mayuri Rupareliya, Practicing Company Secretary (C.P. No. 18634) (Peer Review No. 2017/2022), as the Secretarial Auditors to conduct Secretarial Audit of the Company for the FY 2023-24 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 any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

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.

Company has in place a Whistle Blower Policy for its directors and employees to report concerns about unethical behavior, actual or suspected fraud in accordance with Section 177(9) of the Companies Act, 2013. 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 complaint during the year 2023-24.

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.

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. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company did not receive any complain during the year 2023-24.

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.

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 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/annual- reports/

The Directors take this opportunity of thanking their shareholders, bankers, business sassociates and government authorities for their co-operation and support during the year.

We look forward to their continued support and encouragement.

FOR THE FINANCIAL YEAR ENDED 31^st MARCH, 2024 [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members,

Lerthai Finance Limited CIN L65100KA1979PLC061580 Office No. 312/313, Third Floor,

Barton Centre, Mahatma Gandhi Road,

Bangalore, Karnataka, India, 560001

I have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Lerthai Finance Limited (hereinafter called the "Company"). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing my opinion thereon.

Based on my verification of the Company's papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit and as per the explanations given to me and the representations made by the Management, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2024 generally complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made here in after:

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2024 and made available to me, according to the provisions of:

i. 1 he Companies Act, 2013 (the Act) and the Rules made thereunder;

ii. The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder;

iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

iv. Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'):-

a. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

b. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

c. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

d. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (Not applicable during the audit period);

e. The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021; (Not Applicable during the audit period);

f. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2021; (Not Applicable during the audit period);

g. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with Client;

h. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021; (Not applicable during the audit period); and

i. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; (Not applicable during the audit period).

j. Securities and Exchange Board of India (Depositories and Partidpant^^sK^\

Regulations, 2018; (Not applicable during the audit period). \t

UrA ⁶ . ?

vi. I have relied on the representation made by the Company and its officers for systems and mechanism formed by the Company for compliances under other applicable acts, laws, rules and regulations to the Company. Based on the representation made by the Company and its officers, the Company has proper system and process in place for compliance under the other applicable Laws and other incidental laws, Acts, Rules, Regulations and Guidelines.

vii. I have also examined compliance with applicable clauses of the following:

a. Secretarial Standards issued by the Institute of Company Secretaries of India;

b. Pursuant to Regulation 109 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, the Company has executed a uniform listing agreement with BSE Limited and The Calcutta Stock Exchange Limited with effect from 1st December, 2015.

I further report that:

a. the compliances by the Company of applicable financial laws like direct and indirect tax laws, have not been reviewed in this Audit since the same are subject to review by statutory financial audit.

b. During the year under review, Composition of board of directors are not in proper balance of Executive Directors, Non-Executive Directors and Independent Directors, there is only one Independent Director in Board. Due to which Formation of Audit Committee and Nomination Remuneration Committee are not in proper order. And separate meeting of Independent directors not held during the year. We had also Recommend board to appoint suitable candidate during the last year. Management of the company had informed us , that the Company is in process of identifying the independent directors to make board composition in line with the Companies Act, 2013.

c. adequate notice is given to all Directors to schedule the Board Meetiqg^^N Agenda and detailed notes on Agenda were sent at least seven days in advance, ysu

and a system exists for seeking and obtaining further information <agd g

clarifications on the Agenda items before the meeting and for meaningful participation at the meeting.

d. as per the minutes of the meetings recorded and signed by the Chairperson, the decisions of the Board were unanimous and no dissenting views of the Directors have been noticed in the Minutes.

e. there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable Laws, Rules, Regulations and Guidelines.

t. during the audit period following specific events / actions having a major bearing on the Company's affairs in pursuance of the above referred Laws, Rules, Regulations, Guidelines, Standards, etc: NA.

1 further report that during the audit period, there were no specific events / actions having a major bearing on company's affair in pursuance of the above - referred laws, rules, regulations, guidelines, standards, etc; -

'ANNEXURE A'

(To the Secretarial Audit Report for the Financial Year ended March 31, 2024)

To,

The Members,

Lerthai Finance Limited CIN L65100KA1979PLC061580

Office No. 312/313, Third Floor,

Barton Centre, Mahatma Gandhi Road,

Bangalore, Karnataka, India, 560001

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance viability of the Company nor of the efficacy or effectiveness management has conducted the affairs of the Company. fV % B ^g