The Directors have pleasure in presenting the 38^th Annual Report, together with the audited accounts for the year ended 31^st March 2023.

1. FINANCIAL HIGHLIGHTS

(Rs. In Lakhs)

2. OPERATIONS

a) Income: The income of the Company for the year under review was Rs.335 Lakhs as against Rs.126 Lakhs during the previous year.

b) Net Profit: The profit after tax for the year is Rs.145 Lakhs as against Rs.12 Lakhs during the previous year.

3. MANAGEMENT DISCUSSION AND ANALYSIS

a) Classification by Reserve Bank of India (RBI): The Company is registered with RBI as Non Deposit taking Non-Banking Financial Company (NBFC-ND) and holds a valid certificate of Registration.Your Company is generally complying with the directions of the Reserve Bank of India issued from time to time.

b) Business Review: The Company is currently carrying on the business of short term and long term financing to both corporate and non-corporate entities. Further the Company continues to concentrate upon recovery of overdue receivables. Even while pursuing the legal route, the company attempts negotiations with customers for early recovery of debts.

c) Future Outlook: The Company is confident of doing better business in the form of short term and long term financing (both secured and unsecured).

Report on Management Discussion and Analysis forms part of this Annual Report.

4. DIVIDEND

In order to plough back the profits, your directors do not recommend any dividend for the year.

5. TRANSFER TO RESERVES

An amount of Rs.29.04 Lakhs has been transferred to Special Reserve as per the requirement under Section 45 IC of the Reserve Bank of India Act, 1934. The company has not transferred any amount to the general reserves.

6. ANNUAL RETURN

The annual return is available for inspection of the members at the registered office of the Company and same shall also be uploaded in the website of the Company www.uflindia.com.

7. CORPORATE GOVERNANCE

Clause 15(2)(a) of SEBI (Listing Obligations and Disclosure Requirements) (LODR) Regulations 2015 prescribes that, Clause 27 (submission of Quarterly Corporate Governance Report) of LODR Regulations is not applicable for Companies having paid up equity share capital not exceeding Rs.10 Crores and Net worth not exceeding Rs.25 Crores as on the last day of the previous year. The paid up capital of the company is Rs.4.27 Crores and the net worth is less than Rs.25 Crores as at 31.03.2023. Hence, clause 27 is not applicable to the Company and the report on Corporate Governance is not provided.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The composition of the company's board is in conformity with the applicable provisions of the Companies Act, 2013 with regard to Independent Directors and women directors as on 31^st March 2023.

Ms. Rekha Jain and Ms. Bhavika M Jain, Directors, are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers themselves for re-appointment. The board recommends their re-appointment as directors of the Company.

Mr. Vikash Mahipal has resigned as Chief Executive Officer (CEO) & Chief Financial Officer (CFO) of the Company w.e.f 01.09.2022.

Mr. S Mohan Kumar have been appointed as the Chief Executive Officer (CEO) & Chief Financial Officer (CFO) of the Company w.e.f 01.09.2022.

Mr. J Akash Jain (DIN: 09688787) and Mr. Bharat Kumar Dughar (DIN: 07996160) was appointed as an Independent Directorsfor a term of five consecutive years w.e.f. 30.07.2022 and 30.09.2022 respectively.

Mr. Biswajit Chaudhury (DIN: 08611223) and Mr. Naressh Mahendra Kumar Jain (DIN: 08102162), Independent Directors of the Company resigned from the Board with effect from 30.07.2022.

Ms. Monika Kedia resigned as Company Secretary & Compliance officer of the Company w.e.f. 04.05.2022.

Mr. S Gokul Raja was appointed as Company Secretary and Compliance Officer of the Company w.e.f 01.08.2022 and resigned w.e.f. closing business hours of 03.02.2023.

Ms. Monika Kedia has been appointed as the Company Secretary & Compliance Officer of the Company with effect from 16.06.2023.

Code of Conduct

The Board members and senior management personnel have affirmed compliance with the Code for the year ended 31^stMarch 2023.The Code of Conduct for Board members and senior management of the Company has been placed on the Company's website and can be accessed at www.uflindia.com

9. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that:-

a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) The directors have selected such accounting policies and applied them consistently, and made judgments and estimates that are 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 of the Company for that year.

c) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The directors have prepared the annual accounts on a going concern basis.

e) The directors have laid down internal financial controls which are adequate and are operating effectively.

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

10. DECLARATION BY INDEPENDENT DIRECTORS

The independent directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as laid down section 149(6) of the Companies Act, 2013. In the opinion of the board, the independent directors fulfill the conditions specified in the Act and the rules made there under for appointment as independent directors and confirm that they are independent of the management.

11. SEPERATE MEETING OF INDEPENDENT DIRECTORS

As stipulated by the Code for Independent Directors under the Companies Act, 2013 a separate meeting of the Independent Directors of the Company was held to review the performance of the Board as a whole taking into account the views of the non-executive director. The independent Directors also reviewed the quality, content and timeliness of the flow of information between the Management and the Board and its committees, which is necessary to effectively and reasonable perform and discharge their duties.

12. MEETING OF BOARD OF DIRECTORS

14 Board Meetings were held during the year on 14.04.2022, 04.05.2022, 30.05.2022, 30.06.2022, 30.07.2022, 14.08.2022, 01.09.2022, 06.09.2022, 30.09.2022, 14.11.2022, 18.01.2023, 25.01.2023 03.02.2023 and 27.02.2023.

* Resigned from the Board w.e.f 30.07.2022

# Appointed as an Independent director w.e.f 30.09.2022 ^A Appointed as an Independent Director w.e.f 30.07.2022

13. COMMITTEES OF THE BOARD

The Board has three committees constituted as per the Companies Act, 2013, namely Audit Committee, Nomination and Remuneration Committee and Stakeholder's Relationship Committee.

a) Audit Committee:

The Committee as on 31^st March 2023 comprised of the following Directors as its Members:

The Committee met 4 times during the year on 30.05.2022, 14.08.2022, 14.11.2022 and 03.02.2023. The details of attendance in committee meetings are as follows:

* Resigned from the Board w.e.f. 30.07.2022 and consequently ceased as Chairman and member of the Committee.

a Appointed as Chairman w.e.f. 30.07.2022 and re-designated as member w.e.f. 30.09.2022

@ Appointed as member w.e.f. 30.07.2022 and ceased w.e.f. 30.09.2022

# Appointed as Chairman of the Committee w.e.f 30.09.2022

The terms of reference of the Audit Committee interalia include the recommendation for appointment, remuneration and terms of appointment of auditors of the company, examinations of the financial statement and the auditor'sreport thereon and other matters specified for audit committees under Section 177 of the Companies Act, 2013 and SEBI Listing Regulations, 2015.

b) Nomination and Remuneration Committee:

The Committee as on 31^st March 2023 comprised of the following Directors as its Members:

The Committee met 3 times during the year on 30.07.2022, 01.09.2022 & 06.09.2022. The details of attendance of meetings are as follows;

@ Appointed as Chairman w.e.f. 30.09.2022

# Appointed as member w.e.f. 30.07.2022 and ceased w.e.f. 30.09.2022

* Resigned from the Board w.e.f. 30.07.2022 and consequently ceased as Chairman and member of the Committee

a Appointed as Chairman w.e.f. 30.07.2022 and re-designated as member w.e.f. 30.09.2022

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, senior management and key managerial personnel and the remuneration of directors, key managerial personnel and other employees. The Nomination and Remuneration Policy is attached in Annexure I of this report.

c) Stakeholders Relationship Committee

The Committee as on 31^st March 2023 comprised of the following Directors as its Members:

The Committee met once during the year on 03.02.2023. The details of attendance of the committee meeting is as follows

14. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Board has adopted a policy on Whistle Blower Policy (vigil mechanism) in accordance with the provisions of the Companies Act, 2013, which provides a framework to report instances of unethical behavior, actual or suspected, fraudor violation of the Company's Code of Conduct. It protects every stakeholder(s), who is/are willing to raise a concern about serious irregularities within the Company and also provides direct access to the Chairman of the Audit Committee.

15. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, evaluation of all the Board members, its committees and the Board as a whole was done on an annual basis, as per the criteria for performance evaluation framework laid down by the Nomination and Remuneration Committee and approved by the Board. The Directors expressed their satisfaction with the evaluation results.

16. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

None of the employees draws remuneration of Rs. 8,50,000/- or above per month and Rs.1,02,00,000/- or above per year. Hence, details of the employees of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are not furnished.

Having regard to the provisions of Section 136(1) read with its relevant proviso of the Companies Act, 2013, the disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, forming part of the Annual Report, is available for inspection at the registered office of the company during working hours. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee and free of cost.

a) STATUTORY AUDITORS

M/s. VENKAT AND RANGAA LLP (FRN:004597s), Chartered Accountants, Chennai, were appointed, as the Statutory Auditors of the Company in the 36^th Annual General Meeting held on 30.09.2021 to hold office until the conclusion of 41^st Annual General Meeting to be held on 2026. The Company has received confirmation from them that their appointment is within the limits specified in the Act and is eligible to continue as Auditors of the Company.The observations made by the Auditors in their report are self-explanatory.

b) SECRETARIAL AUDITORS

Pursuant to Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, the Board of Directors have appointed M/s. A.K. JAIN & ASSOCIATES, Company Secretaries in Practice, Chennai as the Secretarial Auditors of the Company to conduct the Secretarial Audit for the financial year 2022-2023. The Secretarial AuditReport in Form MR - 3 is enclosed vide Annexure II and forms part of this report. The reply given by the board on remarks made by the Secretarial Auditor are as follows:

c) INTERNAL AUDITORS

The Board of Directors, as per the recommendation of Audit Committee, appointed M/s. SIDHARTH MEHTA & Co., Chartered Accountants, Chennai (FRN: 008108S) as Internal Auditor.

19. INTERNAL FINANCIAL CONTROLS

The Company has an adequate system of internal controls to ensure accuracy of accounting records, compliance with all laws & regulations and compliance with all rules, procedures & guidelines prescribed by the applicable statues.

20. RISK MANAGEMENT

As the Company is engaged in the business of lending/financing, it is exposed to the several systematic and unsystematic risks. The Board also reviews the risks and corrective actions and mitigation measures are taken as and when needed.

21. DISCLOSURE UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company believes in providing a safe and harassment freeworkplace for every individual working in the Company's premises throughvarious interventions and practices. The Company always endeavours to createand provide an environment that is free from discrimination and harassmentincluding sexual harassment.There were no complaints / cases pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

22. CHANGE IN NAME OF THE COMPANY:

There is no change in the name of the Company during the year under review.

23. SHARE CAPITAL:

(a) During the year under review, the Company has increased its authorised capital from Rs.10 Crores (divided into 50 Lakhs equity shares of Rs.10/- each and 5 Lakhs Cumulative Redeemable Preference shares of Rs.100/- each) to Rs.15 Crores (divided into 100 Lakhs equity shares of Rs.10/- each and 5 Lakhs Cumulative Redeemable Preference shares of Rs.100/- each) and accordingly altered the Memorandum and Articles of Association of the Company.

(b) The Company has on 10.04.2023 allotted 21,59,250 equity shares of Rs.10/- each at a premium of Rs.30/- per share on Preferential basis to Promoters and Non-Promoters and obtained necessary Listing and Trading approval from the Stock Exchange.

(c) The Company has on 01.09.2023 allotted 24,72,500 equity shares of Rs.10/- each at a premium of Rs.30/- per share on Preferential basis to Promoters and Non-Promoters. Necessary application will be submitted with the Stock exchange to obtain Listing and Trading approval

24. GENERAL

The company has complied with the provisions of secretarial standards issued by the Institute of Company Secretaries of India in respect of meetings of the board of directors and general meetings held during the year.

There were 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.

The Company has nothing to report/disclose in respect of the following items as detailed below:

a) The Company has no subsidiary, associate or Joint venture companies and hence reporting on the performance and financial position of them as per AOC 1 and preparation of consolidated financial statements are not applicable to the company.

b) There is no change in the nature of business of the Company during the year.

c) No company have become or ceased to be its subsidiaries, joint ventures or associates during the year under review.

d) During the year under review, the Company has not accepted any deposits from the public within the meaning of Section 73 of the Companies Act, 2013.

e) There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

f) The company has not issued sweat equity shares to the employees under any scheme during the year under review.

g) The Company has not bought back any shares, nor issued bonus shares during the year.

h) The company was not required to constitute a CSR Committee as the company has not met any of the thresholds mentioned in Section 135 of the Companies Act, 2013 during the financial year under review. Hence reporting about policy on Corporate Social responsibility and the initiatives taken are not applicable to the company.

i) The provisions of section 186 is not applicable to the company and hence reporting under section 186 on loans, guarantees and investments does not arise.

j) There were no contracts or arrangements with related parties referred to in sub-section (1) of Section 188. Hence, Form AOC-2 pursuant to the Companies (Accounts) Rules 2014 is not enclosed.

k) The Company has nothing to report on conservation of energy and technology absorption. There were no foreign exchange earnings or outgo for the company during the year.

l) Neither any application was made nor are any proceedings pending under the Insolvency and Bankruptcy Code, 2016.

m) During the Financial Year, there were no instances of one-time settlement with the Banks of Financial Institutions. Therefore, the disclosure under Rule 5 (xii) of the Companies (Accounts) Rules, 2014 is not applicable.

n) Your Company does not have any demat suspense account/unclaimed suspense account. Hence reporting under Schedule V (F) of the SEBI (LODR) Regulations, 2015 is not applicable

24. ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the continued support from all those assisting the recovery of over dues. The Directors also wish to thank the employees for their cooperation.

By Order of the Board

For AASTAMANGALAM FINANCE LIMITED