undefined share price Directors report


Your directors are pleased to present the 36th Annual Report of the Company together with the Audited Annual Accounts for the year ended 31st March, 2023.

1. Financial Results

(Rs. in Lakhs)

Particulars

For the year ended 31st March, 2023 For the year ended 31st March, 2022

Total Income

7,725.11 28,628.73

Less: Total Expenditure

1,933.94 1,814.68

Less: Finance Cost

7.20 2.22

Gross Profit/(loss)

5,783.97 26,811.83

Less: Depreciation

425.82 146.69

Profit/ (loss) before tax

5,358.15 26,665.14

Less: Current Tax

(568.00) (2,937.00)

Less/Add: Tax adjustment for earlier year

60.09 _

Add: Deferred Tax

393.76 1,710.80

Net Profit/ (loss) after tax

5,244.00 25,438.94

Paid up Equity Share Capital (excluding calls in arrears)

3,535.00 3,878.42

Reserves excluding revaluation reserve

1,45,797.78 1,67,097.53

Earnings per share (Rs.)

13.57 65.80

* (Figures have been regrouped / recast to conform to current years figures)

2. Management Discussion and Analysis Industry Structure and Development

The registered office of the Company was changed to 1st Floor, 90, Okhla Industrial Estate, Phase-III, New Delhi- 110020 w.e.f. 01/06/2022. The same was changed to Ground Floor, 90, Okhla Industrial Estate, Phase - III, New Delhi - 110020 effective from 10/11/2022. The related compliances were done in time under prescribed procedure.

The trend in the Indian Stock Market had largely been upbeat during the year under review except towards end of 4th quarter. Much of the effect of the COVID-19 pandemic waned during the year resulting in near normal operations. Globally also the effect of COVID-19 has waned. However, the global economy continued to face challenges with fear of recession looming large in several countries. The continuing war between Ukraine and Russia with visible unrest in some parts of the world continues to be a cause of concern. The Central Banks had effected several rate hikes in the wake of continuing inflation.

Health Safety and Pandemic Risk The Company and its subsidiaries have been proactive enough to adopt the digital mode since the Covid-19 outbreak ensuring best health safety measures for employees and uninterrupted service to the stakeholders in the Post COVID-19 era. The Companys focus on liquidity, near zero debt supported by a strong balance sheet and acceleration in cost optimization initiatives, would help in navigating any near-term challenge.

Outlook, Risks and Concerns

The underlying strength of Indian demand and consumption, continues to remain healthy. The performance of your Company is closely linked to those of the stock markets. The Company is exposed to normal industry risks such as credit, interest rate, economic, currency, political, market and operational risks. The Company views risk management

as integral to its business for creating and maintaining best practices in business operations and administration.

Opportunities and Threats

The continuing emphasis on ‘Make in India, Production Linked Incentive in various sectors, emphasis on building up infrastructure by the government is expected to infuse further capital investment in the country and thus more opportunities for the financial sector. The Company is looking forward to grasp the available opportunities. The Company will also focus on permitted avenues as a member of the Stock Exchange. The uncertain state of the global economy however continues to remain a cause of concern. Adequacy of Internal Financial Control Systems The management in consultation with Internal Auditors monitor and evaluate the efficacy and adequacy of internal financial control systems in the Company, its compliance with operating systems, accounting procedures and policies at all levels of the Company and its subsidiaries. The audit observations and the corrective actions thereon are presented to the Audit Committee of the Board. The control framework is established and maintained by the Company. The observations by the internal and statutory auditors are perused by the Management, the Audit Committee as well as the Board for proper implementation. The Companys internal financial controls have been found to be adequate and effective.

Financial Review

During the year under review, your Company generated total income of Rs. 7,725.11 lakhs as against Rs. 28,628.73 lakhs in the previous year. The other income included in the aforesaid total income was Rs. 153.77 lakhs for the year under review as against Rs. 73.35 lakhs in the previous year. The Company has earned a net profit before tax of Rs. 5,358.15 lakhs for the year under review as compared to the profit of Rs. 26,665.14 lakhs in previous year. The other comprehensive income for the period stood at (Rs.20108.07 lakhs) as compared to the corresponding other comprehensive income figure of Rs. 10,882.43 lakhs for the previous year.

Further, the Financial Statements of the Company have been prepared in accordance with the Indian Accounting Standards (‘IND AS) as per the Companies (Indian Accounting Standards) Rules 2015 as amended and notified under Section 133 of the Companies Act, 2013 (“the Act”), read with relevant Rules issued thereunder and in conformity with the accounting principles generally accepted in India. Key Ratios

Please refer Note no. 50 of Standalone Financial Statements for Key ratios and related information thereon.

Segment wise Performance

Ind-AS 108 on Operating Segments has been complied with. Please refer Note no. 55 of Standalone Financial Statements. Hence separate disclosure has not been made.

Cautionary Statement

The statements in the above analysis, describing the Companys estimates, expectations or predictions may be ‘forward looking statements within the meaning of applicable securities laws and regulations. The actual results may differ from those expressed or implied. Important factors that could make a difference to the Companys operations

include changes in government regulations, tax regimes, economic developments within the country and abroad, and other related factors.

3. Dividend & Reserve

The Board has recommended a dividend of 15% i.e. Rs.1.50 per equity share of Rs. 10/- each for the year 2022-23 subject to approval of members. The dividend, if approved, will be paid to the registered members as on the cutoff date for the purpose of Annual General Meeting (‘AGM) scheduled to be held on 29/09/2023. No amount was proposed to be transferred to the reserve during the year under review.

4. Buy-back

During the year under review, the Board of Directors of the Company at its meeting held on 5th January, 2023, approved the buyback of upto 35,00,000 (Thirty Five Lacs) fully paid- up equity shares of Rs. 10/- each, from the open market through the stock exchange route at a price of upto Rs. 200/- per Equity Share (“Maximum Buyback Price”) excluding brokerage costs, Securities and Exchange Board of India turnover charges, taxes, advisory fees, brokerage, relevant stamp duty, GST, public announcement, publication charges, SEBI & Stock exchanges fees etc. (collectively referred to as “Transaction Costs”) for an aggregate amount not exceeding Rs.70,00,00,000/- (Rupees Seventy Crores only) (maximum buyback size, excluding transaction costs). The buyback was offered to all eligible equity shareholders of the Company (other than the Promoters / Promoter Group of the Company). The buyback of equity shares through the stock exchange commenced on 16th January, 2023 and would be closed on 29th May, 2023 (closing date of buyback).

The Company had bought back 34,34,235 equity shares during the financial year ended 31/03/2023 at an average price of Rs. 180.51 per equity share which were extinguished as per the buyback regulations. Accordingly, the share capital of the Company has been reduced by Rs.3,43,42,350/- as detailed in the enclosed balance sheet in Note No. 20s footnote.

Further, from the commencement of buy-back upto the date of this report the Company had bought back 38,66,025 (Thirty eight lakhs sixty six thousand and twenty five) Equity Shares at an average price of Rs 179.22 (Rupees One Hundred Seventy Nine Twenty Two Paisa Only) per equity share and had deployed Rs. 69,28,58,736.35 (Rupees Sixty Nine Crores Twenty Eight Lacs Fifty Eight Thousand Seven Hundred Thirty Six and Paise Thirty Five only) (excluding Transaction Costs), which represents 98.98% of the Maximum Buyback Size of Rs.70 Crores (i.e. the maximum total amount which could be utilized in the Buyback).

Since the equity shares were bought back at an average price of Rs. 179.22 which was below the maximum buyback price of Rs. 200/-, therefore, the actual number of equity shares bought back has exceeded the indicative maximum number of equity shares that could have been bought back which was subject to maximum buyback size of Rs. 70 crores but was less than 38,66,200 equity shares being 10% of equity share capital prior to commencement of buyback.

5. Directors/ Key Managerial Personnel (KMP)

During the year under review and till the date of this report there had been no changes in the composition of the Board of Directors/ Key Managerial Personnel of your Company except as stated below:

Directorate:

Shri Vikas Mehrotra (DIN: 06476150) was appointed as Managing Director - International Operation w.e.f.

12/01/2022 pursuant to the approval of the Board and the members in their meetings held on 13/11/2021 and 30/12/2021 respectively and the subsequent approval of the Central Government via order dated 31/05/2022 read with corrigendum dated 29/06/2022.

Dr. Rajeev Lochan Bishnoi-Independent Director

(DIN: 00130335) resigned w.e.f. the closing business hours of 01/03/2023 from the Board citing his expanding role and responsibilities on being appointed on the Audit Advisory Board of Comptroller and Auditor General of India and other commitments. Besides this, he has confirmed that there are no other reasons. The Board places on record its appreciation for the invaluable guidance and contribution made by Dr. Bishnoi during his tenure as Independent Director of the Company.

Shri Deepak Kumar Chatterjee-Independent Director

(DIN: 03379600) resigned w.e.f. 04/05/2023 from the Board due to personal reasons. Besides this, no other reason has been stated for resignation by him. The Board places on record its appreciation for the invaluable guidance and contribution made by Shri Chatterjee during his tenure as Independent Director of the Company.

Dr. (Mrs.) Neeraj Arora-Non Executive Director

(DIN: 07191167) resigned w.e.f. 10/05/2023 from the Board due to personal reasons including her health. Besides this, no other reason has been stated for resignation by her. The Board places on record its appreciation for the invaluable guidance and contribution made by Dr. Arora during her tenure as Non-Executive Director of the Company.

Further, Shri M. P Mehrotra (DIN: 00016768) Executive Vice-Chairman in the capacity of Whole Time Director, whose tenure would end on 31st July, 2023, was reappointed by the Board in its meeting held on 27/05/2023 for a further period of 3 years w.e.f. 01/08/2023 to 31/07/2026, concurring to the recommendation of Nomination and Remuneration Committee of the Company subject to approval of Members in the ensuing Annual General Meeting. Your Directors recommend his re-appointment as Executive Vice-Chairman for a period of three years as set out in the Notice convening the ensuing AGM.

Shri S. K. Agarwal- Managing Director (DIN: 00106763) was reappointed by the Board in its meeting held on 28/05/2022 for a further period of 3 years w.e.f. 21/08/2022 to 20/08/2025 which was approved by the members of the Company in the 35th Annual General Meeting held on 30/09/2022.

Shri K. K. Soni- Director- Finance & CFO (DIN: 00106037) was reappointed by the Board in its meeting held on 28/05/2022 for a further period of 3 years w.e.f. 01/08/2022 to 31/07/2025 which was approved by the members of the Company in the 35th Annual General Meeting held on 30/09/2022.

The opinion of the Board on expertise and other attributes of Directors including Independent Directors has been charted in the Report on Corporate Governance enclosed as Annexure-I to this report.

Directors retiring by rotation:

In accordance with the provisions of Article 89 of the Articles of Association of the Company, Shri Suresh Kumar Agarwal (DIN: 00106763) and Ms. Divya Mehrotra (DIN: 0006494) will be retiring by rotation at the ensuing AGM of your Company and being eligible, have offered themselves for re-appointment. Concurring to recommendation of Nomination and Remuneration Committee of the Company,

your directors recommend their re-appointment as set out in the Notice convening the ensuing AGM.

Key Managerial Personnel (KMP):

Pursuant to the provisions of sub-section (51) of Section 2 and Section 203 of the Act read with the Rules framed thereunder, the following persons were Key Managerial Personnel of the Company as on March 31,2023:

1. Shri M. P. Mehrotra- Executive Vice-Chairman

2. Shri S. K. Agarwal- Managing Director

3. Shri Vikas Mehrotra- Managing Director - International Operations

4. Shri K. K. Soni- Director- Finance & Chief Financial Officer

5. Shri H. Consul- Company Secretary

There is no change in the Key Managerial Personnel of the Company during the year under review.

6. Independent Directors

The Independent Directors of your Company have complied with the relevant provisions of the law relating to their appointment and they continue to comply with the provisions of the Companies Act, 2013 and the listing regulations.

In terms of the provisions of sub-section (6) of Section 149 of the Act and Regulation 16 of the Listing Regulations, the Company has received declarations from all the Independent Directors of the Company that they continue to meet with the criteria of independence as provided in the Act and the Listing Regulations. Further, all the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, and reimbursement of expenses, if any, incurred by them for the purpose of attending meetings of the Company.

During the year ended 31/03/2023, 1 (one) meeting of Independent Directors was held on 31/03/2023 as detailed hereunder:

S. Name of the No. Director

Whether Chairman / Member

No. of Meeting(s) attended during F.Y. 2022-2023 and date(s)

1 Shri D. K. Chatterjee

Chairman 1 31/03/2023

2 Shri Ajit Kumar

Member 1 31/03/2023

3 Shri D.K. Mehrotra

Member 1 31/03/2023

In the meeting of Independent Directors, held on 31/03/2023 pursuant to Schedule IV of the Act and the Listing Regulations, the Independent Directors reviewed the performance of the Chairman and Non-Independent Directors of the Company. The Directors also discussed the quality, quantity and timeliness of flow of information between the Company management and the Board, which is necessary for the Board to effectively and reasonably perform their duties. Their conclusion on all the issues discussed was satisfactory.

7. Number of Board and Committee Meetings

Relevant details have been provided in the Report on Corporate Governance enclosed as Annexure-I of this Annual Report.

8. Corporate Governance and Compliance Certificate

We have reported in Annexure -I to this report, the extent of compliance of Corporate Governance practices in accordance with Regulation 34(3) of the SEBI (Listing

Obligations & Disclosure Requirements) Regulations, 2015.

The requisite certificate from A. Aggarwal and Associates- Company Secretaries signed by Shri Ashutosh Aggarwal, Practicing Company Secretary (COP: 7467 and Peer Review Certificate No. 1097 / 2021) confirming that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Director of Company by the SEBI / Ministry of Corporate Affairs or any such statutory authority is appended at the end of aforesaid report.

9. Directors Responsibility Statement

Pursuant to the provisions of Section 134(3) of the Companies Act, 2013, the Directors hereby confirm:

a. that in the preparation of the annual accounts for the financial year ended 31 st March, 2023, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

b. that they 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 period;

c. that they 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. that they have prepared the Annual Accounts for the financial year ended 31st March, 2023 on a ‘going concern basis;

e. that they have laid down Internal Financial controls to be followed by the Company and that such Internal Financial Controls are adequate and effective and

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

10. Evaluation of Board/Committees/Individual Directors

The Board carried out the annual performance evaluation of its own performance and its Committees in its meeting held on 27/05/2023. The said exercise was led by the independent directors who are also constituents of Nomination and Remuneration Committee. The evaluation process focused on different aspects of the Board and Committees functioning such as composition of the Board and Committees, experience and competence, performance of specific duties and obligations, governance issues etc. The aim was to assess the effectiveness of the Boards/Committees processes, and to identify any actions required to improve effectiveness. The review thus focused on the following associated areas viz. structure, leadership, strategy, risks, decision making and development.

The evaluation process inter-alia comprised the following:

• Review of Board, Committees and management information and other relevant documentation.

• Discussions with all directors on the Board, Committee members focusing on aspects of the Boards and Committees composition; strategy, risk and controls; decision-making, roles and performance

5 ::

of the Chairman, independent directors, executive directors and other non-executive directors.

Given the experience and qualifications of the Board members, it was not considered necessary to engage external persons to facilitate the evaluation process.

As per the provisions of Section 178(2) of Companies Act, 2013, the Board of Directors also carried out annual evaluation of each Directors performance in its meeting held on 27/05/2023 on the parameters including attendance, contribution and independent judgment by individual directors. Since all Directors have rich experience of corporate environment, so they are accustomed to having their performance regularly evaluated.

11. Proper systems to ensure that compliances were adequate and effective

The professional conduct sets expectations that all employees shall comply with all laws and regulations governing Companys conduct. Information is reported upwards internally within the organization to senior management and if appropriate, also shared with the Board of Directors and/or the external auditors. Information is reported externally in public filings, if it meets the criteria for requiring public disclosure.

12. Corporate Social Responsibility (CSR)

The Company is covered under the threshold prescribed under the Act for CSR. During the year under review, the Company had allocated total amount of Rs. 2,90,98,638.00 for spending in the F. Y. 2022-2023 after adjusting excess amount of Rs.13,330/- spent in previous year. The utilization statement is appended below:

Financial

Year

Allocated

Amount

Amount spent

Recipient entity and project

Amount Unspent (cumulative) as on March 31, 2023
(in Rs.) (in Rs.) (in Rs.)

2022-23

2,91,11,967.18 Opening Balance (excess spent) -13,330.00
Amount available for disbursal 2,90,98,637.18

6,85,380.00

IIMPACT, Gurgaon (Assistance for five learning centers located in the rural areas of Kanpur Dehat Dist.

(UP.).

2,84,13,257.18

11,00,000.00

Bharat Lok Shiksha Parishad NS-15/ H 5 (Between ED & FD Block), Pitampura, Delhi-110034 (Project Ekal Vidyalaya for 50 centres)

2,73,13,257.18
49,40,000.00 Sri Sathya Sai Health & Education Trust (for treatment of 38 children with congenital heart disease in Sai Sanjeevani Hospital at Palwal, Haryana and other centers). 2,23,73,257.18
32,50,000.00 Sri Sathya Sai Health & Education Trust (for treatment of 38 children with congenital heart disease in Sai Sanjeevani Hospital at Palwal, Haryana and other centers). 1,91,23,257.18
7,85,100.00 Pratibha Parishkar Sansthanam, Mathura (U.P.) (Purchasing of Ambulance). 1,83,38,157.18
-4,052.50 Refunded by Pratibha Parishkar Sansthanam, Mathura (U.P.) 1,83,42,209.68
11,00,000.00* Sri Sankat Mochan Dham Trust, Kanpur (Construction work of Computer Centre and Science Lab in Smt. Kasturi Devi Parashar Inter College in village Salai, District Kasganj (U P). (approved as an Ongoing project) 1,72,42,209.68
52,79,730.00* Pushp Niketan School Samiti, Dhampur, (U.P.). (for complete renovation of badminton court). (approved as an Ongoing project) 1,19,62,479.68
1,15,72,000.00* Research project by National Institute of Computer Education Society, Meerut (U.P.) (approved as an Ongoing project) 3,90,479.68
3,90,480.00 Transfer to PM CARES FUND permissible under schedule VII of the Companies Act, 2013 on 31/03/2023. (including a sum of Rs. 4052/- which remained untilized by Pratibha Parishkar Sansthanam) 0.00
-13,123.00 Refunded by Pratibha Parishkar Sansthanam, Mathura (U.P.) received on 31/03/2023. 13,123.00
13,123.00 s Transfer to PM CARES FUND permissible under schedule VII of the Companies Act, 2013 on 09/05/2023. 0

Balance

0

* Transferred to “VLS Finance Ltd. - Unspent Corporate Social Responsibility Account” in pursuance to Section 135(6) for the Companies Act, 2013 read with Rule 2(1) (i) the Companies (Corporate Social Responsibility Policy) Rules, 2014.

$ An amount of Rs.7,85,100.00 was allocated to the ‘Pratibha Parishkar Sansthanam, Mathura (U.P.). However, Rs.17,175.00 was unutilized and therefore, returned to the Company in two tranches. The entire amount was deposited to the PM Cares Fund as per CSR rules in two tranches. First tranch of Rs. 4,052/- was deposited on 31/03/2023 and second tranch of Rs. 13,123/- was deposited on 09/05/2023.

The recent amendment in CSR Rules effective from 22/01/2021 issued by Ministry of Corporate Affairs, mandates under Rule 10 thereof that the amount which remains unspent till the 31st March of every financial year, must be transferred to designated fund by the Government (‘fund) within 6 months from the end of financial year and the Company would no longer be able to use or disburse under the CSR activities or carry over to next year or spend in future the allocated amount for CSR which remained unspent on 31st March of every financial year. For the financial year 202223, from the entire amount available for CSR initiative by the Company, Rs. 1.07.43.305/- had been spent in various proposals and an amount of Rs. 1.79.51.730/- had been Transferred to “VLS Finance Ltd. - Unspent Corporate Social Responsibility Account” in pursuance to Section 135(6) for the Companies Act. 2013 read with Rule 2(1)(i) the Companies (Corporate Social Responsibility Policy) Rules. 2014. Further. an amount of Rs. 3.90.480/- was transferred to the PM Cares Fund. At the end of financial year, there was an unspent amount of Rs. 13,123/- left in CSR corpus for the year 2022-23 which was received on 31/03/2023 from ‘Pratibha Parishkar Sansthanam besides allocation for ongoing projects. Accordingly, the amount of Rs. 13,123/- was transferred to the PM cares fund compliance of second proviso to sub-section 5 of Section 135 of the Companies Act 2013 read with Rule 10 of Companies (Corporate Social Responsibility Policy) Rules, 2014.

The report of CSR Committee in terms of Section 135 of the Companies Act, 2013 is enclosed as Annexure -II to this report.

13. Annual Return Extract (MGT-9)

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company as on March 31, 2023 is available on the website of the Company at www.vlsfinance.com.

14. Policies

Your Company has formulated the following policies to optimize its performance and functions.

A. Corporate Social Responsibility Policy

The CSR policy can be accessed at Companys website viz. www.vlsfinance.com under the head ‘Investor Relations.

B. Related Party Transaction

The detailed policy may be accessed at www.vlsfinance.com under the head ‘Investor Relations.

The Board of Directors (the “Board”) of VLS Finance Limited (the “Company”) has adopted this Policy. The said Policy includes the materiality threshold and the manner of dealing with Related Party Transactions (“Policy”) in compliance with the requirements of

Section 188 of the Companies Act, 2013 and conforms to the requirements of Regulation 23 of the Listing Regulations.

This Policy applies to transactions between the Company and one or more of its Related Parties. It provides a framework for governance and reporting of Related Party Transactions including material transactions.

This Policy is intended to ensure due and timely identification, approval, disclosure and reporting of transactions between the Company and any of its Related Parties in compliance with the applicable laws and regulations as may be amended from time to time.

C. Board diversity

The detailed policy may be accessed at www.vlsfinance.com under the head ‘Investor Relations.

VLS Finance Ltd. recognises and embraces the benefits of having a diverse Board and sees increasing diversity at Board level as an essential element in maintaining a competitive advantage. A truly diverse Board will include and make good use of differences in the skills, regional and industry knowledge and experience, background, race, gender and other distinctions between Directors. These differences will be considered in determining the optimum composition of the Board and when possible would be balanced appropriately. All Board appointments shall be made on merit, in the context of the skills, experience, independence and knowledge which the Board as a whole requires to be effective.

D. Risk Management

The detailed policy may be accessed at www.vlsfinance.com under the head ‘Investor Relations.

The Company has formed Risk Management Policy to ensure appropriate risk management within its systems and culture. The Company operates in a competitive environment and is generally exposed to various risks at different times such as technological risks, business risks, operational risks, financial risks, etc. The Board of Directors and the Audit Committee of the Company shall periodically review the Risk Management Policy of the Company so that the Management controls the risk through properly defined network.

The Company has a system-based approach to business risk management backed by strong internal control systems. A strong independent Internal Audit Function at the corporate level carries out risk focused audits across all businesses, enabling identification of areas where risk managements processes may need to be improved. The Board reviews internal audit findings, and provided strategic guidance on internal controls, monitors the internal control environment within the Company and ensures that Internal Audit recommendations are effectively implemented.

The combination of policies and procedures adequately addresses the various risks associated with your Companys businesses.

E. Anti-sexual harassment mechanism

The detailed mechanism may be accessed at www.vlsfinance.com under the head ‘Investor Relations.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of

The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All women employees inter-alia permanent, contractual, temporary, trainees are covered under this policy.

The Internal Complaints Committee is headed by the woman Director on the Board. There were no complaints received from any employee or otherwise during the year under review and no complaints were pending as on 31/03/2023.

F. Nomination and Remuneration Policy

The detailed policy may be accessed at www.vlsfinance.com under the head ‘Investor Relations.

Pursuant to the provisions of Section 178(3) of the Companies Act, 2013 and Regulation 19 of the Listing Regulations, the Nomination and Remuneration Committee (‘NRC) has formulated a policy relating to the remuneration for the Directors, Key Managerial Personnel (KMP), Senior Management and other employees including their annual evaluation. While formulating this policy, the NRC has considered the factors laid down in Section 178(4) of the Companies Act, 2013 and the Listing Regulations, as amended.

G. Vigil Mechanism /Whistle Blower

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. Vigil (whistleblower) mechanism provides a channel to the employees and directors to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of the code of conduct or policy. The mechanism provides for adequate safeguards against victimization of directors and employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. It is hereby affirmed that no person was denied access to the Audit Committee.

The detailed mechanism may be accessed at www.vlsfinance.com under the head ‘Investor Relations.

15. Contracts with Related Party

The disclosure in prescribed form AOC-2 is enclosed as Annexure - III.

16. Auditors Statutory Auditors

In terms of Section 139 read with Companies (Audit and Auditors) Rules, 2014 M/s. Agiwal & Associates, Chartered Accountants (FRN: 000181N) had been appointed for a period of 5 years i.e. from the conclusion of 35th Annual General Meeting till the conclusion of 40th Annual General Meeting of the Company subject to applicable regulations. The members in the 35th AGM of the Company had authorised the Board to fix the remuneration of the Auditors. The Statutory Auditors have consented to continue as Statutory Auditors and have given a confirmation that they are eligible to continue with their appointment and have not been disqualified in any manner for continuing as Statutory Auditors.

Cost Auditor

The provisions relating to cost records and audit are not applicable to your Company.

Secretarial Auditors

The Board in its meeting held on 27/05/2023 had reappointed M/s. A. Aggarwal & Associates-Company Secretaries (COP: 7467) as Secretarial Auditors for the financial year 2023-24 who was also the Secretarial Auditors of the Company for the financial year 2022-23 in compliance with Section 204 of the Companies Act, 2013 read with regulation 24A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

17. Auditors Report

The observations made by the Statutory Auditors, with reference to notes on accounts for the year under report, have been adequately dealt with in the relevant Notes forming part of Financial Statements and need no further comments from Directors. Further, the Auditors have not reported any fraud in terms of Section 143(12) of the Companies Act, 2013 to the Board for the year under review.

18. Secretarial Audit Report

The Secretarial Audit Report for the year 2022-23 submitted by Secretarial Auditor in terms of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure-IV. The said report does not contain any adverse remark or observation by the Secretarial Auditor.

19. Statutory Information.

• The Company has paid the annual listing fees for the year 2023-24 to BSE Ltd. and The National Stock Exchange of India Ltd. and the custodian fees to National Securities Depository Ltd. and Central Securities Depository Ltd.

• The Board in its meeting held on 25/10/2018 had approved the proposal for voluntary delisting from the Calcutta Stock Exchange Ltd. (‘CSE). When the Company approached CSE, thereafter, for completing formalities of delisting, it was learnt that CSE had suspended the scrip of your Company alleging nonpayment of listing fee for the year 2014-15 and other non- compliances. Since the Company had paid the said listing fee in time and also made other compliances the same were promptly informed to CSE in response to their communications. However, the Exchange had been inordinately delaying the process and delisting approval has not yet been granted. Regarding listing fee for the year 2019-20 onwards, the stand taken by the Company is that the same is not payable since the Company had approached Exchange for delisting of scrip well in time and cannot be made liable for payment of the fee when the delay is on part of Exchange.

• The shares of the Company are presently listed at BSE Ltd., The National Stock Exchange of India Ltd., Mumbai and The Calcutta Stock Exchange Ltd., Kolkata (pending delisting).

• There had been no change in the nature of business and name of Company during the year under review. Further, no proceedings/ application under Insolvency and Bankruptcy Code, 2016 had been made/pending against the Company.

• During the year under review, the Company did not absorb any new technology or carry out any R&D related activity for this purpose. However, use of energy efficient devices, wherever possible, in conducting

business of Company is part of its administration policies. The detailed disclosure is enclosed as Annexure -V to this report.

• Your Companys principal business is acquisition of securities; hence Section 186 of the Act is not applicable.

• Your Company has not issued equity shares with differential voting rights, sweat equity or ESOP in terms of Section 43 and Section 62 of the Companies Act, 2013, during the year under review.

• No revision of financial statements or Boards Report has been made in terms of Section 131 of the Companies Act, 2013, during the year under review. Further, there was no one time settlement with Bank/ Financial Institutions during the year under review.

• Disclosure relating to ratio of the remuneration of each director to the median employees remuneration in terms of Section 197(12) of the Companies Act, 2013 is enclosed as Annexure -VI to this report.

• Executive Vice-Chairman, Managing Director and Director- Finance & CFO of your company are not in receipt of any remuneration or commission from any subsidiary company in terms of Section 197(14) of the Companies Act, 2013 and were appointed by passing special resolution for 3 years.

• There had been no significant and material orders passed by regulatory authorities/ court that would impact the going concern status of the Company and its future operations. Further, there were no material changes or commitments affecting financial position of the Company occurred between the year under review and date of this report.

• In the annual financial statements for the year under review, the disclosures of those items, where amount for the year under review and corresponding previous year was Nil, had been dispensed with, though required to be disclosed under applicable regulations.

20. Fixed Deposits

The Company has not accepted any fixed deposit during the year under review. The Company has no plans to accept any deposits from the public in the current year.

21. Human Resources

Employee relations continued to be cordial during the year. The number of employees stood at 34 (Thirty Four) at the end of the year under review. The Directors place on record their appreciation of the devoted service of the employees at all levels. In terms of the provisions of Section 197 of the Companies Act 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there was no employee during the year drawing remuneration more than the stipulated amount in the said rules. Your Company has not approved any scheme relating to provision of money to be held in a trust for the benefit of the employees in terms of Section 67(3)(b) of the Companies Act, 2013 during the year under review.

22. Green initiative in Corporate Governance

As a continuing endeavor towards the Go Green Initiative, the Company has been sending documents like the notice calling the general meeting, audited financial statements, directors report, auditors report etc. in electronic form, to

the email addresses provided by the members directly or made available to us by the depositories, besides regular correspondence. The electronic mode is both economical and speedier compared to physical documents. Members who hold shares in physical form are, therefore, requested to register their e-mail addresses and intimate any change in e-mail id, with the Company or with the Registrar & Share Transfer Agents, RCMC Share Registry Pvt. Ltd. In respect of electronic holdings, members are requested to register their e-mail addresses with the depository through their concerned depository participants. You may kindly note that even after registration of e-mail ID, you are entitled to be furnished, free of cost, a printed copy of the annual report of the Company, upon receipt of a requisition from you, at any time. In case you desire to receive Companys communication and documents in physical form, you are requested to intimate us through email at hconsul@vlsfinance.com.

23. Subsidiary/Associate Companies

Statement pursuant to Section 129(3) of the Companies Act, 2013 for the financial year ended 31/03/2023 in respect of the subsidiary/associate companies, is enclosed with Annual Accounts of the Company. Please refer to Note no. 53 of Notes forming part of consolidated financial statement in the Annual Report for the year under review.

The consolidated financial results include the audited financial results for the year ended on 31/03/2023 of the subsidiaries VLS Securities Limited (100%), VLS Real Estate Limited (100%) and VLS Asset Management Limited (99.15%). The financial results of VLS Capital Ltd. for the same period have been consolidated under equity method of accounting as an associate of VLS Securities Ltd. a subsidiary of the Company, since it was not consolidated by said subsidiary in view of exemption available under Section 129 read with Rule 6 of the Companies (Accounts) Rules, 2014. The financial results of Sunair Hotels Ltd. (‘Sunair) are not included in these consolidated financial statements as it does not fall under the definition of an associate as per Ind AS-28 due to absence of significant influence on account of ongoing disputes between the Company and Sunair, hence excluded from consolidation of financial results of the year under review.

24. Consolidated Financial Statements

In compliance of Section 129(3) of the Companies Act, 2013, the consolidated financial statements in accordance with the prescribed accounting standards are annexed to the audited annual accounts for the year under review.

25. Acknowledgements

The Directors thank the Companys business associates, Bankers, the Securities & Exchange Board of India and Stock Exchanges, employees, vendors, investors and academic partners for their continuous support. The Directors also thank the Government of India and Governments of various states in India.