Dharani Finance Ltd Directors Report

Dear Members,

Your directors present herein the 36th Annual Report of the Company along with the audited financial statements for the financial year ended 31st March 2026.

FINANCIAL SUMMARY

The Financial performance of the Company for the financial year ended 31st March 2026 is summarized as follows:

Rs. in Lakhs

Particulars	2025-26	2024-25
Income through Travel Operations, Finance Services and others	139.81	142.43
Expenditure (Employee & Administrative Expenses)	44.01	42.48
Profit / (Loss) before depreciation & Interest	95.80	99.95
Depreciation	8.90	9.92
Finance Cost & Net Loss on Fair value charges	5.83	5.49
Profit/ (Loss) after depreciation & Interest	81.07	84.54
Provision for Income Tax Current	19.28	17.85
Deferred	6.33	(17.10)
Profit/(Loss) after Tax	55.46	83.79
Surplus brought forward	-	-
Profit available for appropriation	55.46	83.79
APPROPRIATIONS	-	-
Transfer to Statutory Reserves	11.09	16.76
Proposed Dividend	-	-
Net Surplus carried over	44.37	67.03

PERFORMANCE

OUTLOOK

The Company is presently engaged in NBFC activities within a limited areas in the state of Tamil Nadu. The Company is planning to expand its operations in and around parts of State of Tamil Nadu and is taking active steps to upscale its business in the coming years.

During the year under review your company has established a liaison office in the form of travel desk at Hotel Le Meridien, Neelambur, Coimbatore - 641 048 to facilitate and coordinate vehicle registration and other related administrative matters in connection with its lease finance operations. This office does not undertake any financing activities.

In view of the Net Owned Funds (NOF) requirements prescribed under applicable regulatory provisions, the Company is considering the infusion of additional capital to strengthen its capital base and ensure continued compliance with statutory requirements.

RESERVES

Your Board Directors has not recommended transferring any amount to General Reserve Account during the year. However your company has transferred Rs.11.09 Lakhs to the statutory reserve as per the RBI guidelines.

CHANGE IN THE NATURE OF BUSINESS

During the year under review, the Company has continued to operate as a Non-Deposit Accepting, Base layer Non-Banking Financial Company (NBFC) and has not considered any change in its existing nature of business model.

DIVIDEND & DIVIDEND DISTRIBUTION POLICY

During the year under review to conserve the cash flow, your Board of Directors has not recommended any dividend. The Board has decided to retain all earnings for the current period and such retained earnings will be used to fund future investments and support the companys continued growth. Pursuant to Regulation 43A of LODR Regulation 2015, the regulations related to Dividend Distribution Policy are not applicable to the Company.

SHARE CAPITAL

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, 2026 continues to remain at Rs.4,99,44,000/-. 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.

ANNUAL RETURN

The details forming part of the annual return in the prescribed Form MGT-7 as per Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available at the website www.dharanifinance.com.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

During the year under review, your companys board of directors comprised of six (6) directors, consisting of two independent directors, a women director, two non-executive directors and a Managing Director as tabled below:

DIN	Name	Designation
00081002	Dr. Palani G Periasamy	Director
00064517	Mrs. Visalakshi Periasamy	Director
10693633	Mr. R. Murugavel	Managing Director
09048245	Mr. P G Muthusamy, IRS (R)	Director
10461017	Mr. P R Shampath, IAS (R)	Director
00277906	Mr. K. Kandasamy (till 16.05.2026)	Director

During the year under review, there was no changes in the composition of Board of directors of the Company. However, Mr. Kolandagounder Kandasamy, Director has vacated from his office as per Section 167(1)(b) with effect from 16th May 2026.

In pursuance of Section 152 of the Companies Act, 2013 and the rules framed there under Mrs. Visalakshi Periasamy, Non-Executive Director (DIN 00064517), of the Company is liable to retire by rotation, at the 36th Annual General Meeting and being eligible offers herself for reappointment.

The resolution seeking members approval for the re-appointment of Mrs. Visalakshi Periasamy as a Director of the Company is included in the Notice convening the 36th Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations. In the opinion of the Board, the Independent Directors possess the requisite expertise and experience, and they fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.

The Board of Directors has carried out an annual evaluation of its own performance, working of its Committees and Individual Directors of the Company pursuant to the provisions of the Companies Act, 2013 read with the Rules framed thereunder and SEBI (LODR) Regulations. The performance was evaluated by the Board after seeking input from all the Directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc

Pursuant to the provisions of Schedule IV of the Companies Act, 2013, the Independent Directors of the Company had a separate meeting during the financial year without the attendance of non-independent Director at its meeting held on 11th Feb 2026, the performance of the Non-Independent Directors, the Board as a whole was evaluated, taking into account the views of Directors.

With regard to Key Managerial Personnel, During the year under review, there was no change in the office of Key Managerial Personnel, the following persons continue to be in their designation as follows:

- Mr. R. Murugavel, Managing Director;

- Mr. N. Sivabalan, Chief Financial Officer;

- Ms. Saloni Jain, Company Secretary & Compliance Officer.

MEETINGS OF THE BOARD

During the financial year ended 31 March 2026, four (4) meetings of the Board of Directors were held on 28 May 2025, 11 August 2025, 12 November 2025, and 11 February 2026. The details of attendance at these meetings are provided in the table below:

Name of Directors	No of meeting entitled to attend	No of meeting attended
Dr. Palani G Periasamy	4	4
Mrs. Visalakshi Periasamy	4	3
Mr. P. G Muthusamy, IRS (R)	4	4
Mr. P. R Shampath, IAS (R)	4	4
Mr. R. Murugavel	4	4
Mr. K. Kandasamy	4	0

AUDIT COMMITTEE

Your Company has an Audit Committee pursuant to the requirements of the Act read with Rules framed thereunder and SEBI (LODR) Regulations, 2015. During FY 2025-26, the recommendations of Audit Committee were duly accepted by the Board.

During the year under review, the Audit Committee met four (4) times, on 28 May 2025, 11 August 2025, 12 November 2025, and 11 February 2026. The composition of the Committee and the attendance of its members at the meetings are provided in the table below:

Name of Directors	Designation	No of meeting entitled to attend	No of meeting attended
Mr. P. G Muthusamy, IRS (R)	Chairman	4	4
Mr. P. R Shampath, IAS (R)	Member	4	4
Mr. R. Murugavel	Member	4	4

NOMINATION AND REMUNERATION COMMITTEE

The Company has in place a Nomination and Remuneration Committee in terms of the requirements of the Companies Act, 2013 read with the rules made there under and SEBI (LODR) Regulations. The Board has accepted the recommendations of the Nomination and Remuneration Committee and there were no incidences of deviation from such recommendations during the financial year under review.

During the year under review, the Nomination and Remuneration Committee met only once on 28 May 2025 and the details of the directors comprising the committee, meetings held, and attendance of each Director are as tabled below:

Name of Directors	Designation	No of meeting entitled to attend	No of meeting attended
Mr. P. G. Muthusamy, IRS (R)	Chairman	1	1
Mr. P. R Shampath, IAS (R)	Member	1	1
Mr. Visalakshi Periasamy	Member	1	1

STAKEHOLDER RELATIONSHIP COMMITTEE

The Company has in place a Stakeholders Relationship Committee in terms of the requirements of the Companies Act, 2013 read with the rules made there under.

During the year under review, the Stakeholder Relationship Committee met only once on 28 May 2025 and the details of the directors comprising the committee, meetings held, and attendance of each Director are as tabled below:

Name of Directors	Designation	No of meeting entitled to attend	No of meeting attended
Mr. P. R Shampath IAS (R)	Chairman	1	1
Mr. R. Murugavel	Member	1	1
Mr. N. Sivabalan	Member	4	4

CREDIT COMMITTEE MEETING

The Company has formulated a comprehensive credit policy to identify and support customers and corporate entities requiring financial assistance for the enhancement and growth of their businesses.

In this regard, a Board-level Committee was constituted on 28 May 2025 to review and sanction credit facilities across various lines of business, in accordance with the delegation matrix approved by the Board.

The detailed terms of reference of the Committee are available on the Companys website: www.dharanifinance.com.

During the year under review, the Credit Committee met 4 (four) times on 02 June 2025, 11 August 2025, 12 November 2025 and 11 February 2026 and the details of the committee, meetings held, and attendance are as tabled below:

Name of Directors	Designation	No of meeting entitled to attend	No of meeting attended
Mr. P.R Shampath, IAS (R)	Chairman	4	4
Mr. R. Murugavel	Member	4	4
Mr. N. Sivabalan	Member	4	4

RISK MANAGEMENT COMMITTEE

The Board of Directors has constituted a Risk Management Committee, comprising a majority of the Directors, in accordance with the applicable provisions of the Reserve Bank of India (RBI) regulations.

During the Financial year the committee met only once on 11 Feb 2026.

The composition of the Committee and the attendance of its members at the meetings are as follows:

Name of Directors	Designation	No of meeting entitled to attend	No of meeting attended
Mr. P. R Shampath, IAS (R)	Chairman	1	1
Mr. P. G Muthusamy, IRS (R)	Member	1	1
Mr. R. Murugavel	Member	1	1

The Committee is entrusted with the responsibility of evaluating the overall risk profile of the Company, including, but not limited to, liquidity risk, and of reporting its observations and recommendations to the Board of Directors. It ensures the establishment and maintenance of a robust risk management framework, whereby all material risks are identified, assessed, monitored, and mitigated in alignment with the Companys strategic objectives.

INDEPENDENT DIRECTORS MEETING

Pursuant to the Companies Act 2013, the independent directors must hold at least one meeting in a financial year without attendance of non-independent directors and members of the Management. Accordingly, independent directors of the Company met on 11th Feb 2026 and:

- noted the report of performance evaluation from the Chairman of the Board for the year 2025-26;

- reviewed the performance of non-independent directors and the Board as a whole;

- reviewed the performance of the Chairman of the Board, taking into account the views of executive and non-executive directors; and

- assessed the quality, quantity, and timeliness of flow of information between the Companys Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

COMPLIANCE WITH CODE OF CONDUCT

All Board members and employees have affirmed compliance with the Companys Code of Conduct for Financial year 2025-26.

POLICY ON APPOINTMENT OF DIRECTORS AND REMUNERATION

The Companys policy on Directors, Senior Management appointment and remuneration and other matters provided in Section 178 (3) of the Companies Act, 2013.

Its core objective is to ensure that the remuneration structure is reasonable, competitive, and aligned with the companys performance. It aims to attract, retain, and motivate highly competent individuals while striking a balance between short-term and long-term goals to drive sustainable growth. The policy is available for reference on the companys official website at the following link: www.dharanifinance.com

CORPORATE SOCIAL RESPONSIBILITY

Your Company does not fall in the threshold limit specified under Section 135 of the Companies Act and hence not mandated to formulate a Corporate Social Responsibility Policy or spend the prescribed amounts.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the section 134 (5) of the Companies Act, 2013, your directors, to the best of the knowledge and ability, confirms as follows:

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 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.

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.

WHISTLE-BLOWER POLICY/VIGIL MECHANISM

In accordance with Section 177 of the Companies Act, 2013 Company has formulated a Vigil Mechanism and has a whistle blower policy in place to address genuine concerns or grievances, if any, of the directors, customers and employees. The whistle blower policy is available on the website of the Company at www.dharanifinance.com.

STATUTORY AUDIT & MANAGEMENT EXPLANATION

Your Company has appointed M/s. Srivatsan & Associates, Chartered Accountants (FRN: 014921S) as Statutory Auditors for the Company in the 32nd Annual General Meeting held on 29th December 2022 to hold the office till the conclusion of the 37th Annual General Meeting (Till FY 2026-27).

The Independent Auditors Report(s) to the Members of the Company in respect of the Financial Statements for the Financial Year ended 31st March 2026 forms part of this Annual Report and auditor has provided qualified opinion with regard to the financial statements for the year ended 31st March 2026 and the same is as follows:

Qualification	Management Explanation
a. Recovery of amount due from major customer aggregating to Rs. 272 Lakhs, which is considered doubtful due to uncertainty in the receipt of funds.	The Management is of the opinion that based on the discussion with the customer that the full repayment of the outstanding receivable is expected to be received.
b. Had the company considered making provision for the outstanding balance referred to in (a) above, the net owned funds of the Company as at March 31, 2026 will be lower than the limits prescribed under section 45-IA of the Reserve Bank of India Act, 1934 for a Non-Banking Financial Services Company (NBFC). Thus, the Companys ability to continue as an NBFC and as a going concern may depend on infusion of further capital to meet the minimum net owned funds criteria as per RBI norms within the prescribed time limit and on identification of alternative business plans

DETAILS OF FRAUD

The Statutory Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013. There have been no instances of fraud reported by the Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Company or to the Central Government during FY 2025-26.

SECRETARIAL AUDIT

Your Company has appointed M/s. Damodaran & Associates, LLP, Company secretaries (FRN: L2019TN006000) as Secretarial Auditors of the Company in the 35th Annual General meeting held on 24th Sep 2025 for the term of 5 years from FY 2025-26 to 2029-30.

The secretarial audit report forms part of this annual report as Annexure 1 and contains no qualification, reservation or adverse remark or disclaimer in the Audit Report.

INTERNAL AUDIT

Pursuant to Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 and all other applicable provisions (including any amendment thereof) if any of the Companies Act, 2013, M/s. R Balachandran & Co., Chartered Accountants, (FRN 000323S), Chennai was appointed as the Internal Auditors of the company for the Financial Year 2025-26.

However, Pursuant to the recommendation of the Audit committee, your Board of directors had approved to reappoint M/s. R Balachandran & Co., Chartered Accountants, (FRN 000323S) Chennai as the internal auditors for the financial year 2026-27.

COST AUDIT

During the year under review, your Company does not fall under the category of Section 148 of Companies Act, 2013.

LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Pursuant to Section 186(11) (a) of the Act read with Rule 11(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, the loan made, guarantee given or security provided in the ordinary course of business by an NBFC registered with the RBI are exempt from the applicability of the provisions of Section 186 of the Act. However, for the details of loans, guarantees, investments made by the Company are given in notes to the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has in place a policy on related party transactions as approved by the Board and the same is available on the website of the Company. All transactions with related parties that were entered into during the financial year were in the ordinary course of business and were on an arms length basis. There were no significant transactions with promoters, Directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

There were no contracts or arrangements entered into with related parties during the year to be disclosed under sections 188(1) and 134(h) of the Act in form AOC-2. An omnibus approval of the Audit Committee was obtained for the transactions of the Company proposed to be entered into with related parties at the beginning of the financial year. The transactions entered into pursuant to the approval so granted were placed before the audit committee for its review on a quarterly basis.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, the Company has been in compliance with the applicable Secretarial Standards i.e., SS-1 and SS-2, issued by the Institute of Company Secretaries of India, with respect to Meetings of Board and its Committees and General Meetings respectively.

MATERIAL CHANGES AND COMMITMENTS

There was 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

FOREIGN EXCHANGE EARNINGS AND OUT-GO, CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION

A. Foreign Exchange Earnings & Out-Go

During the year, the Company did not have any foreign exchange earnings and outgo.

B. Conservation of energy

As a Non-Banking Financial Company (NBFC), the Company does not engage in energy-intensive manufacturing activities. However, the Company remains conscious and prudent in its energy consumption and integrates sustainability considerations into its day-to-day operations.

With regard to Rule 8 of the Companies (Accounts) Rules, 2014, the details are as follows:

- Steps taken or impact on conservation of energy: The Company continuously adopts and promotes energy-efficient practices across its offices and operational facilities, including the use of energy-saving equipment, optimization of lighting and air-conditioning systems, and regular monitoring of energy usage to identify opportunities for improvement.

- Steps taken by the Company for utilizing alternate sources of energy: Nil

- Capital investment on energy conservation equipment: Nil

C. Technology Absorption

As a Non-Banking Financial Company (NBFC), the Company uses basic technology required for its operations, such as accounting systems, record management, and communication tools. These systems are maintained and updated as needed to ensure smooth functioning. The Company adopts simple digital processes wherever feasible to improve efficiency and continues to use technology in line with its operational requirements.

SUBSIDIARIES / ASSOCIATES / JOINT VENTURES

During the year under review, your Company has no Subsidiary / Associate / Joint Venture.

PARTICULARS OF EMPLOYEES REMUNERATION

The ratio of remuneration of each Director to the median of employees remuneration as per Section 197(12) of the Companies Act, 2013 and information relating to employees to be disclosed under Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed to and forms part of this report as Annexure 2.

RISK MANAGEMENT POLICY

Pursuant to Section 134(3)(n) of the Companies Act, 2013, the Company has developed a comprehensive Risk Management Policy and constituted a Risk Management Committee, as detailed earlier in the report, as risk management forms an integral part of our business strategy. As a lending institution, the Company is exposed to various risks inherent in its operations. The objective of our risk management processes is to identify, measure, monitor, and mitigate these risks, in accordance with policies and procedures and strictly following the directions issued by the Reserve Bank of India (RBI).

The Companys Risk Management Committee of the Board of Directors, constituted in accordance with the Companies Act and applicable RBI regulations, has overall responsibility for overseeing the implementation of the Risk Management Policy. The Committee meets once every six months to review the overall risk position and evaluate the effectiveness of risk management practices.

During each meeting, the Committee reviews reports detailing major developments in various risk areas over the reporting period, along with the measures in place to manage them. Recommendations and directions from the Committee for strengthening risk management practices are implemented across the Company in both letter and spirit. The primary responsibility for managing day-to-day risks rests with the heads of the respective business units.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

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 & 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 with corrective actions thereon are presented to the Audit Committee of the Board.

DEPOSITS

Your Company being a Non-Deposit Taking NBFC, has not accepted any deposits from the public during the year under review.

CORPORATE GOVERNANCE

Pursuant to the regulation 15(2) SEBI (LODR) regulations, 2015, Your Company does not come under the ambit of the said provisions.

DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

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. No complaints were received during the year 2025-26.

The details as per Rule 8 Companies (Accounts) Rules, 2014 is as follows:

number of complaints of sexual harassment received in the year	Nil
number of complaints disposed-off during the year	Nil
number of cases pending for more than ninety days	Nil

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis for the year under review as stipulated under Regulation 34(2) of the SEBI (LODR) Regulations, highlighting the business details, is attached and forms part of this report as Annexure 3.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

DEMATERIALISATION OF SHARES

As on March 31, 2026, 81.60% of the Companys paid-up Equity Share Capital exists in dematerialized form, with the remaining 18.40% in physical form. Your Company has updated the relevant forms in the website of the company regarding the procedure to convert their physical shares into dematerialized form. The shareholders can access those form to convert their physical holdings into dematerialised form.

The Companys Registrar and Share transfer Agent is M/s. Cameo Corporate Services Limited, Subramanian Building, No 1, Club House Road, Chennai, Tamil Nadu, 600002.

UNCLAIMED DIVIDEND

In accordance with Sections 124 and 125 of the Companies Act, 2013, read with the Investor Education and Protection Fund (Accounting, Audit, Transfer, and Refund) Rules, 2016, any dividends that remain unclaimed or unpaid for a period of seven years are required to be transferred to the Investor Education and Protection Fund ("IEPF").

During the Financial Year 2025-26, the Company has not transferred any amounts to the IEPF. Shareholders whose dividends are eventually transferred to the IEPF may claim the same by applying to the IEPF Authority in the prescribed form, as detailed on the Companys website at www.dharanifinance.com. Once the dividend is transferred to the IEPF, no claim shall lie against the Company in respect of such dividend.

GENERAL

Your directors state that no disclosure or reporting is required of the following matter as there were no transactions on these matters during the year under review:

- Issue of equity shares with differential rights.

- Issue of shares to employees of the Company under any scheme.

- There are no proceedings pending under the Insolvency and Bankruptcy code, 2016.

- There was no instance of one-time settlement with any Banks or financial institution.

- The provision of Maternity Benefit act 1961 is not applicable to the company for the financial year ended 31st March 2026.

ACKNOWLEDGEMENT

The Board of Directors sincerely appreciates the hard work and dedication of all the employees and executives of the Company. Their efforts have played an important role in the Companys growth and success.

The Board also takes this opportunity to thank the Companys customers, shareholders, and other stakeholders for their continued support and trust. Their confidence in the Company means a lot.

For and on behalf of the Board of Directors

Dr Palani G Periasamy

Chairman

DIN: 00081002

Date: 16 May 2026

Place: Chennai