Dhoot Industrial Finance Ltd Directors Report

For the Financial Year 01^st April, 2023 to 31^st March, 2024

To

The Members of DHOOT INDUSTRIAL FINANCE LIMITED

Your Directors have pleasure in presenting the 46^th Annual Report on the business and operations of the Company together with the Audited Accounts for the year ended 31^st March, 2024.

1. Financial summary/ highlights and state of Companys affairs.

During the said financial year the turnover of the Company is INR 3,257.84 Lakhs as against INR 3,528.42 Lakhs for the last year.

The Net Profit of the Company is INR 14,948.63 Lakhs as against Net Loss of INR (6,243.72) Lakhs for the last year.

2. Change in the nature of Business, if any:

The Board would like to bring to your notice that as on the financial year ending 31^st March, 2024, the Financial Assets of the Company are more than 50% of Total Assets and during the financial year the Income from Financial Assets is more than 50% of the Total Income owing to which the Company is required to register under section 45-IA of the Reserve Bank of India Act,1934. The Company has initiated the procedure of seeking registration from the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934. However, the Business of the Company continues to be the same and thus there is no change in general character or nature of business.

3. Board Meetings.

The Board of the Company consists of Directors as prescribed by the Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

The details pertaining to composition of the Board, terms of reference, etc. of the Board of Directors of your Company and the meetings of the Board held during the financial year and the attendance thereat have been mentioned in the Corporate Governance forming part of this Annual Report.

4. Audit Committee.

The Company has an Audit Committee in place, constituted as per the provisions of Section 177 of the Companies Act, 2013. The members of the Audit Committee, its terms of reference, the meetings of the Audit Committee and attendance thereat of the members of the Committee is mentioned in the Corporate Governance Report under the appropriate heading.

5. Reserves.

The Board does not propose to carry any amount to reserves for the said financial year.

6. Dividend.

The Directors are pleased to recommend a Final Dividend of INR 1.50/- per equity share of face value of INR 10/- each for the FY ended 31^st March, 2024.

The Final Dividend, subject to the approval of Members at the AGM on Friday, 27^th September, 2024, will be paid on or after 30^th September, 2024, to the Members whose names appear in the Register of Members, as on the Book Closure date. The Total Dividend for the financial year will absorb INR 94.77 Lakhs. In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the Shareholders. The Company shall, accordingly, make the payment of the Final Dividend after deduction of tax at source.

7. Particulars of loans and investment and utility purpose by the recipient under section 186.

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 4 and 5 to the standalone financial statement).

8. Particulars of contracts or arrangements with related parties under Section 188(1).

All contracts, arrangements and transactions entered by the Company with related parties during FY 2023-24 were in the ordinary course of business and on an arms length basis.

During the year, the Company did not enter into any transaction, contract or arrangement with related parties that could be considered material in accordance with the Companys policy on related party transactions. Accordingly, the disclosure of related party transactions in Form AOC-2 is not applicable.

However detailed disclosure on related party transactions as per IND AS-24 containing name of the related party and details of the transactions have been provided under financial statements.

The Company has formulated a Policy on Related Party Transactions which is also available on Companys website at www.dhootfinance.com. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

9. Details of Directors or Key Managerial Personnel who were appointed or have resigned during the year.

During the year under review, Mr. Rajgopal Ramdayal Dhoot was liable to retire by rotation and was re-appointed in the 45^th AGM.

Mr. Girish Champaklal Choksey and Mr. Rajesh Loya, Independent Directors of the Company will complete their second consecutive term as an Independent Director on 30^th September, 2024. The Board places on record their appreciation of the contribution made by them as Independent Directors of the Company during their long association with the Company.

The Board of Directors on the recommendation of Nomination and Remuneration Committee at their meeting held on 13^th August, 2024, proposes appointment of Mr. Bhairav Sheth and Mr. Vishal Jain, as Independent Directors of the Company for a period of 5 years from 01^st October, 2024 to 30^th September, 2029.

& Remuneration Committee.

The Nomination & Remuneration Committee has formulated the following policy:

a. Directors appointment and remuneration: As best suited for Companys business and in accordance with the applicable law.

b. Criteria for determining qualifications, positive attributes and independence of a Director: As per the Companies Act, 2013. c. Remuneration for key managerial personnel and other employees: At present Non–Executive and Independent Directors are not paid any remuneration except sitting fees for attending Board Meetings. The Managing Director and the Key Managerial Personnel is paid remuneration as per the terms of their appointment.

11. Statement on declaration given by Independent Director(s) under Section 149.

The Board confirms that all the Independent Directors on the Board have given a declaration of their Independence to the Board as required under Section 149(6) of the Companies Act, 2013.

12. Formal annual evaluation.

The Board of Directors has devised a policy for the performance evaluation and accordingly evaluation process was carried for the financial year for Board of Directors, Board Committees, Independent Directors and other individual Directors.

13. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo.

14. Details on deposits covered under Chapter V of the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014.

In terms of the provisions of Sections 73 and 74 of the Companies Act, 2013, read with the relevant rules, Company has not accepted any fixed deposits during the year under report. Details of loans taken, if any, are provided under Note 24 of Financial Statement.

15. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

During the year in review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

16. Other Company/ies which have become or ceased to be Companys subsidiaries, joint ventures or associate companies.

Not Applicable as the company has no subsidiaries, joint ventures or associates.

17. Performance and financial position of each of the subsidiaries, associates and joint venture Companies included in the consolidated financial statement.

The company has no subsidiary or associate company or any joint venture to be included in the consolidated financial statement of the Company.

18. Extract of annual return.

Pursuant to Section 92(3) of the Act read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2024 is available on the website of the Company at http://www.dhootfinance.com/

19. Disclosure on Remuneration.

None of the employees of the Company fall within the purview of the provisions of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 hence, no information is required to be disclosed.

20. Material changes between the period 31/03/2024 and 13/08/2024.

The Board Meeting held on 27^th May, 2024, the Board has recommended, subject to the approval of shareholders, final dividend of Rs. 1.50/- per equity share of the face value of Rs. 10/- each (i.e. 15% of the face value) for the financial year ended March 31, 2024.

Mr. Girish Champaklal Choksey and Mr. Rajesh Loya, Independent Directors of the Company will complete their second consecutive term as an Independent Director on 30^th September, 2024. The Board places on record their appreciation of the contribution made by them as Independent Directors of the Company during their long association with the Company.

The Board of Directors on the recommendation of Nomination and Remuneration Committee at their meeting held on 13^th August, 2024, proposes appointment of Mr. Bhairav Sheth and Mr. Vishal Jain, as Independent Directors of the Company for a period of 5 years from 01^st October, 2024 to 30^th September, 2029.

Further there were no material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the company to which the financial statements relate and the date of this report

21. Details in respect of adequacy of internal financial controls with reference to the financial statements.

The existing internal financial controls are adequate and commensurate with the nature, size, complexity of the Business and the Business Processes followed by the Company. The Company has a well laid down framework for ensuring adequate internal controls over financial reporting. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

22. Risk management policy.

Your company does not find a place in the list of top 500 listed entities, hence it does not have a Risk Management Committee.

23. Vigil mechanism.

The Company has established vigil mechanism for directors and employees to report genuine concerns, to provide for adequate safeguards against victimisation of employees and directors who avail of the vigil mechanism and provides for direct access to Mr. Rajesh Loya- Chairperson of the Audit Committee in exceptional cases. The details of establishment of such mechanism have been disclosed on the website of the Company.

24. Statutory Auditors.

As required under the provisions of section 139 of the Companies Act, 2013, and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of the maximum term permitted under the provisions of Companies Act, 2013. In line with the requirements of the Companies Act, 2013, Pulindra Patel and Co, Chartered Accountants (Firm Registration No. 115187W) were appointed as the Statutory Auditors of the Company from conclusion of the 44^th Annual General Meeting (AGM) held on until the conclusion of the fifth consecutive AGM of the Company to be held in the year 2027.

25. Secretarial Audit Report.

The Secretarial Audit Report as given by Ms. Isha Shah of M/s. Shah Patel & Associates – Company Secretaries (Membership No. 35253 & COP No. 15201), is enclosed herewith in Form MR-3 at Annexure II.

26. Explanation/ Comments by the Board on qualification, reservation or adverse remark or disclaimer made in Auditors Report and Secretarial Audit Report.

Remarks – We draw your Kind Attention to Note No. 31, to the standalone financial statement, The Companys Financial Assets are more than 50% of Total Assets and Income from Financial Assets are more than 50% of the total Income during the year. In view of the same, the Company is required to get it registered under section 45-IA of the Reserve Bank of India Act, 1934.

Explanation - The company is in process of getting registered under section 45-IA of the Reserve Bank of India Act, 1934.

27. Details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government.

The Auditors have not reported any fraud(s) during the period under review.

28. Disclosure about Corporate Social Responsibility.

As per the provisions of Section 135 read with the Section 198 of the Companies Act, 2013, there is CSR obligation for the year 2023-24. The statutory disclosures with respect to CSR is annexed hereto, forming part of this report.

29. Directors responsibility statement.

Your Directors confirm that: a. In the preparation of the annual accounts, the applicable accounting standards had been followed and there were no material departures; b. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for 2023-2024; c. The Directors had taken proper and sufficient care 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. d. The Directors had prepared the annual accounts on a going concern basis; and e. 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. f. 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.

30. Disclosure regarding Sexual Harassment at workplace.

The disclosures regarding Sexual Harassment at workplace form a part of Corporate Governance Report.

31. Changes in Share Capital.

There is no change in the Issued, Subscribed and Paid-Up Share Capital of the company.

32. Compliance with Secretarial Standards.

The Company has complied with the Secretarial Standards on Meetings of the Board of Directors and General Meetings issued by the Institute of Company Secretaries of India (ICSI).

33. Other Statutory Disclosures.

The other statutory disclosures pursuant to Sections 134, 135, 188, 197 and other applicable provisions of the Companies Act, 2013 read with related Rules are attached herewith.

34. Acknowledgments.

Your Directors wish to place on record its appreciation to the Staff, Executives, Companys Bankers, Auditors and Government Authorities for their co-operation, guidance and support.