vertoz advertising ltd share price Directors report

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Consolidated Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] (as amended from time to time). The Financial Statements have been prepared on the accrual and going concern basis. The Financial Statements have been prepared on a historical cost basis, except for financial assets and liabilities that is measured at fair value as stated in subsequent policies.

1.2 FINANCIAL SUMMARY AND/OR HIGHLIGHTS:

The Companys standalone and consolidated performance during the year ended March 31, 2023, as compared to the previous financial year, is summarized below:

( in Lakhs)

1.3 OPERATIONS AND AFFAIRS OF THE COMPANY:

On standalone basis, during the year ended March 31, 2023, your Company registered its total income of 5457.50 Lakhs as compared to 2094.28 Lakhs in the previous financial year 2021-22 with a growth of 33.63%. The Net Profit after tax amounted to 366.57 Lakhs in the current year as compared to Net Profit after tax of 370.33 Lakhs in the previous year. The Comprehensive Income amounted to 571.93 Lakhs in the current year as compared to Comprehensive Income of 356.72 Lakhs in the previous year.

On consolidated basis, during the year ended March 31, 2023, your Company registered its total income of 8376.19 Lakhs for the current year as compared to 4260.99 Lakhs in the previous financial year 2021-22 with a growth of 41.15%. The Net Profit after tax amounted to 1103.68 Lakhs in the current year as compared to Net Profit after tax of 610.35 Lakhs in the previous year resulting in growth of 4.93%. The Comprehensive Income amounted to 1309.04 Lakhs in the current year as compared to Comprehensive Income of 596.74 Lakhs in the previous year.

1.4 TRANSFER TO RESERVES:

The Company has Standalone closing balance of 4754.98/- as Reserves and Surplus.

The Standalone Closing Balance of Reserve and Surplus is bifurcated as follows:

( in Lakhs)

1.5 FINAL DIVIDEND:

The Directors wish to invest the profits back into the Company for further growth and expansion, and therefore did not recommend any dividend for the Financial Year ended 31^st March 2023.

1.6 MAJOR EVENTS OCCURRED DURING THE YEAR:

A. INCORPORATION OF WHOLLY OWNED SUBSIDIARY VIZ. VERTOZ FZ-LLC:

The Company incorporated its Wholly Owned Subsidiary viz., Vertoz FZ-LLC and its License was issued on 5^th August 2022. Vertoz FZ-LLC is having its office at FDRK3599 Compass Building, Al Shohada Road, AL Hamra Industrial Zone-FZ, Ras Al Khaimah, United Arab Emirates. Its object is to carry on the business of Digital Advertising, Domain Selling, Cloud Hosting and providing IT & IT-Enabled Services in Domestic and International Market.

B. INCORPORATION OF STEP-DOWN SUBSIDIARY VIZ. OR SOLUTIONS FZ-LLC:

OR Solutions FZ-LLC, is the Wholly-Owned Company of Vertoz FZ-LLC and its License was issued on 19^th August 2022, which means it is Step-Down Subsidiary of Vertoz Advertising Limited. OR Solutions FZ-LLC is having its office at FDRK3594, Compass Building, Al Shohada Road, AL Hamra Industrial Zone-FZ, Ras Al Khaimah, United Arab Emirates. Its object is to carry on the business of Digital Advertising, Domain Selling, Cloud Hosting and providing IT & IT-Enabled Services in Domestic and International Market.

C. INCORPORATION OF WHOLLY OWNED SUBSIDIARY VIZ. INCREMENTX PRIVATE LIMITED:

On 29^th August 2022, the Company incorporated its Wholly Owned Subsidiary viz., IncrementX Private Limited to carry on the business of Digital Advertising and Monetization, Internet-based Advertising, Digital Marketing, Advertising Consulting and act as a service agent or an intermediary between the Digital Marketers / Advertisers and the Digital Publishers and help them to increase (Increment) the revenue and as needed expand the same business across the globe by setting up business units or appointing partners.

D. SCHEME OF ARRANGEMENT:

The Board of Directors of the Company at its Meeting held on 14^th February 2022 proposed the Acquisition through Merger of the Companies having business activities in the field of Digital Advertising, Digital Technology, Information Technology (IT) & IT Enabled Services (ITeS), Artificial Intelligence (AI) Platforms and any other allied activities, in India and out of India, through Direct and/or Indirect mode including Promoters and Promoter Group Entities, on a Share Swap Basis, subject to the approval of the Members in the ensuing Extra-Ordinary General Meeting and subject to the necessary applicable Regulatory Approvals. But the same was withdrawn due to some reasons.

Then again, the Board of Directors at its Meeting dated 24^th June 2022, had considered and approved the Acquisition through Merger of the Companies having business activities in the field of Digital Advertising, Digital Technology, Information Technology (IT) & IT Enabled Services (ITeS), Artificial Intelligence (AI) Platforms and any other allied activities, in India and out of India, through Direct and/or Indirect mode including Promoters and Promoters

Group Entities, on a Share Swap Basis, subject to the approval of the Members and subject to the necessary applicable Regulatory Approvals.

After the Board Approval, the Company had done the required filings and disclosures with the National Stock Exchange of India Limited (NSE) for getting the No Observation Certificate (NOC). NSE has raised several Requirement Letters, to which the Company had replied and finally on 11^th January 2023 the NSE has issued the No Observation Letter (NOC). Post getting the NOC, the Company had filed the application with the National Company Law Tribunal (NCLT) and had received the Pronouncement Order dated 10^th Day of August, 2023 and 18^th Day of August, 2023 passed in Company Scheme Application C.A.(CAA) No. 169/MB/2023 and CA-352/2023 in C.A.(CAA)/169(MB)/2023 under subsection (1) of section 230 of the Act.

Thereupon, a National Company Law Tribunal Meeting of the Equity Shareholders (“Meeting) will be convened on Friday, 29^th Day of September, 2023 at 01:30 P.M. through Video Conferencing (“VC”)/ Other Audio Visual Means (“OVAM”) in compliance with the applicable provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations), other applicable SEBI Circulars and Secretarial Standard (‘SS-2) on General Meetings to consider the Scheme of Merger by Absorption of Paynx Technologies Private Limited (“The First Transferor Company”) and Qualispace Web Services Private Limited (“The Second Transferor Company”) with Vertoz Advertising Limited (“The Transferee Company”).

E. ISSUE OF EQUITY SHARE WARRANTS ON PREFERENTIAL BASIS:

The Board of Directors at its Meeting held on 5^th September 2022 proposed to issue Equity Share Warrants on Preferential Basis in accordance with Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (‘SEBI ICDR Regulations) and the provisions of the Companies Act, 2013 and Rules made thereunder, subject to Statutory Approvals and Approval of Shareholders of the Company.

The Members approval for the same was received on 30^th September 2022 but the Board of Directors at its Meeting held on 16^th October 2022, gave an update that due to unavoidable and unpredictable circumstances, the Company could not complete the process of Allotment of the aforesaid Share Warrants and hence, the issue stands cancelled.

Again, the Board of Directors at its Meeting held on 14^th November 2022 proposed to issue Equity Share Warrants on Preferential Basis in accordance with Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (‘SEBI ICDR Regulations) and the provisions of the Companies Act, 2013 and Rules made thereunder, subject to Statutory Approvals and Approval of Shareholders of the Company. Post which the Members approval was received on 14^th December 2022.

Further, the Board of Directors at its Meeting held on 29^th December 2022, considered and approved allotment of 65,85,000 fully convertible Equity Share Warrants having face value of Rs. 10/- each at a premium of Rs. 112.93/- issued on Preferential basis in accordance with Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (SEBI ICDR Regulations) and the provisions of the Companies Act, 2013 and rules made there under.

F. CORPORATE ACTION:

G. CHANGE IN NATURE OF BUSINESS:

During the FY 2022-2023 under review, the Board of Directors, though exploring addition to existing business and commercial activities, could not be materialized. Therefore, there is no change in the nature of business and commercial activities of the Company.

H. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION

OF THE COMPANY HAVING OCCURRED SINCE THE END OF THE YEAR AND TILL THE DATE OF THE REPORT:

There were few material changes that happened since the end of the year and till the date of the Report. The same are as follows:

On 25^th April 2023, the Company incorporated the Wholly Owned Subsidiary Company at Hong Kong to carry on the business of Digital Advertising, Domain selling, Cloud Hosting and providing IT & IT-Enabled Services in domestic and international market.

On 9^th May 2023, the Company acquired 1.82% of Cheerio Technologies Private Limited, Cost of Acquisition being Rs. 15,00,000.25/- (245 Equity Shares at Rs. 6,122.45/- each). Cheerio Technologies Private Limited is a Service Marketing Automation Company that helps business low on tech and marketing bandwidth automate their campaigns and get upto 56% increment in revenue through better retention. The investment in Cheerio, will get Vertoz rights to potential future profits and benefits of a Start-up Company.

On 27^th July 2023, Mr. Akshay Sonar Parolkar, Chief Financial Officer of the Company, gave his resignation from the post of Chief Financial Officer of the Company due to career advancement opportunities. His resignation was accepted, and he will be relieved from his responsibilities from the closure of business hours on 15^th September 2023.

There was no other material reason for his resignation other than the one mentioned above.

The Company is in the process of identifying a suitable candidate for filling the position of the Chief Financial Officer of the Company.

On 8^th August 2023, the Board of Directors approved and allotted 18,00,000 Equity Shares pursuant to conversion of Equity Share Warrants into Equity Shares to 3 allottees. The process of Listing Approval and Trading Approval with NSE is still under process.

On 8^th August 2023, the Company acquired 51.00% of Silvertech Web Solutions Private Limited, Cost of Acquisition being Rs. 51,000/- (5100 Equity Shares at Rs. 10.00/- each). Silvertech Web Solutions Private Limited is engaged in the business of providing Advertising and Digital Marketing Services. The investment in Silvertech is strategic in nature and it will benefit the Company in terms of operational and business growth, as well as potential future earnings.

The Board of Directors at their Meeting dated 4^th September 2023 has approved the draft ESOP 2023 Scheme based on the approval of the Scheme received from the Nomination and Remuneration Committee at its Meeting held on 4^th September 2023 and thereby accorded to the introduction and implementation of ‘Vertoz Advertising Limited Employee Stock Option Plan 2023 (“ESOP 2023”/ “Plan”), contemplating to create, grant, issue and allot from time to time, in one or more tranches, not exceeding 10,00,000 (Ten Lakhs only) Employee Stock Options to or for the benefit of such persons as may be determined in the Scheme.

1.7 DETAILS OF REVISION OF FINANCIAL STATEMENTS OR THE REPORT

There was no occasion whereby the Company has either revised or required to revise the Financial Statement or the Boards Report of the Company for any period prior to the FY 2022-2023. As such, no specific details are required to be given or provided.

The detailed discussion on the overview of the industry is covered under Management Discussion and Analysis section which forms part of this Report.

2.2 ECONOMIC OUTLOOK

The detailed discussion on the Global Economic outlook is covered under Management Discussion and Analysis section which forms part of this Report.

The existing Capital Structure of the Company is as follows:

(*On 11^th June 2022, by passing Ordinary Resolution via Postal Ballot, the Authorized Share Capital of the Company increased from 35 Crores to 50 Crores.) (*On 8th August 2023, the Board of Directors of the Company approved the allotment of 18,00,000 Equity Shares of Rs. 10/- each upon Conversion of Equity Share Warrants resulting into increase in Issued, Subscribed and Paid-up Share capital from 119700000 to 137700000.)

Further, the Company has neither issued any Convertible or Non-Convertible Securities, Debentures, Bonds, Shares with differential voting rights as to dividend, voting or otherwise, nor issued or granted any ESOP, Stock Option, Sweat Equity during the FY 2022-2023 except as mentioned above about the issuance and allotment of 65,85,000 Equity Share Warrants on 29^th December 2022.

In terms of the provisions of Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, your Company was not required to transfer any amount to the Investor Education & Protection Fund (IEPF) during the financial year 2022-2023.

During the Financial Year, your Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 (“the Act”) read with the Companies (Acceptance of Deposit) Rules, 2014 during the financial year under review. Hence, the requirement for furnishing of details relating to deposits covered under Chapter V of the Act or the details of deposits which are not in compliance with the Chapter V of the Act is not applicable.

During the financial year under review, all transactions/contracts/arrangements entered into by the Company with related party (ies) as defined under the provisions of Section 2(76) of the Companies Act, 2013, were in ordinary course of business and on an arms length basis. Further, none of these contracts / arrangements / transactions with related parties could be considered material in nature as per the thresholds given in Rule 15(3) of the Companies (Meetings of Board and its Powers) Rules, 2014 and hence no disclosure is required to be given in this regard.

Accordingly, the disclosure of Related Party Transactions at arms length price for the FY 2022-2023 as required under section 134(3) (h) of the Companies Act, 2013 in Form AOC-2 is given in

“Annexure 3”.

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 in respect of conservation of energy have not been furnished considering the nature of activities undertaken by the company during the year under review.

B. Research and Development and Technology Absorption:

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 in respect of research and development and technology absorption have not been furnished considering the nature of activities undertaken by the company during the year under review.

C. Foreign Exchange Earnings and Outgo:

The details of Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows.

During the FY 2022-2023 under review, the Company has neither granted loan/s (secured or unsecured), provided guarantees or securities in connection with any loan/s availed by others nor made any investments pursuant to the provisions of Section 185 and 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014(as amended). As such, no specific details are required to be given or provided.

The brief details of legal structure of the Company and its Subsidiary and Step-down Subsidiary as follows:

VERTOZ INC (US):

This Subsidiary deals with Online Advertising Solutions and media inventory buying and selling across the world. This is fully operational profit-making unit situated at California, USA having its operational branches at New York and New Jersey, USA and five (5) step-down subsidiaries holding

100% stake in it located at USA in the name of Adnet Holdings Inc, PubNX Inc, Zkraft Inc, AdZurite Inc and AdMozart Inc. The consolidated operation activities brief as follows:

VERTOZ LTD (UK):

This Subsidiary deals with Online Advertising Solutions and media inventory buying and selling across the world. This is fully operational profit-making unit situated at London, UK having its one operational step-down subsidiary holding 100% stake in it located at UAE in the name of Vertoz Advertising FZ-LLC which is also operational in nature. The consolidated operation activities brief as follows:

ADZURITE SOLUTIONS PRIVATE LIMITED:

This Subsidiary is a Performance Marketing Company backed with technology which proffers Services and advertising needs. Its advanced solutions and premium Partners aid Advertisers earn better ROIs.

OWN WEB SOLUTION PRIVATE LIMITED:

This Subsidiary is a Company engaged in Web Hosting, Designing & Content writing, Domain Name Registration & Renewal, Software Development and/or to provide Software as a Service, Dedicated Server and/or Server Co-location, Business Process Outsourcing, Research and Development, Server Management & Maintenance, Web Services & Consultancy, Payment Gateway Services, Email Hosting, Providing Internet Service, Data Center Services and all other web hosting related businesses in Domestic and International Market.

INCREMENTX PRIVATE LIMITED

This Subsidiary is incorporated in India to carry on the business of Digital Advertising and Monetization, Internet-based Advertising, Digital Marketing, Advertising Consulting and act as a service agent or an intermediary between the Digital Marketers/ Advertisers and the Digital Publishers and help them to increase (increment) the revenue and as needed expand the same business across the globe by setting up business units or appointing partners.

VERTOZ FZ-LLC

This Subsidiary is a Company incorporated in UAE with the Government of Ras Al Khaimah, UAE and it got the license on 5^th August 2022. It is incorporated to carry out the business of Digital Advertising, Domain selling, Cloud Hosting and providing IT & IT enabled services in Domestic and International Market.

During the year under review, the Board of Directors have reviewed the affairs of the Subsidiaries. Pursuant to the provisions of sub section (3) of section 129 of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, the salient features of the Financial Statement of each of our Subsidiaries are set out in the prescribed format AOC-1 which forms part of the Financial Statements section of this Annual Report attached as “Annexure 2”.

Pursuant to the requirements of Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the details of Loans/Advances made to and investments made in the subsidiary have been furnished in Notes forming part of the Accounts.

10. ANNUAL RETURN:

As required under section 134(3)(a) of the Act, the annual return in accordance with section 92(3) in Form No. MGT-7 for the financial year 2022-23, is available on the Companys website https://www.vertoz.com/ir/financials/

11. NUMBER OF MEETINGS OF BOARD:

The Board met 7 (seven) times during the Financial Year ended 31^st March 2023 on 6^th May 2022, 30^th May 2022, 24^th June 2022, 10^th August 2022, 5^th September 2022, 16^th October 2022, 14^th November 2022, 24^th November 2022, 29^th December 2022 and 9^th February 2023. The necessary quorum was present at all the Meetings. The intervening gap between any two Meetings was not more than one hundred and twenty days as prescribed by the Act.

For details of Meeting, please refer Corporate Governance Report, forming part of this Annual Report.

12. COMMITTEES OF THE BOARD

As on 31^st March 2023, the Board of Directors has constituted the Audit Committee, the Stakeholders Relationship Committee and the Nomination & Remuneration Committee.

The details on the composition of the Board and its committees are provided in the Corporate Governance Report.

13. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to Financial Statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Statutory Auditors of the Company for inefficiency or inadequacy of such controls.

The internal audit is carried out by in house Internal Audit Department, for the Financial Year 2022-2023. The periodical Audit Reports, including significant audit observations and corrective actions there-on, are presented to the Chairman of the Audit Committee for deliberation, discussion and implementation.

14. MATTERS RELATING TO BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL OF THE

COMPANY:

a) DETAILS OF BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The Board of Directors is duly constituted and consists of the following 06 (six) Directors as on the close of the financial year:

[*Mr. Akshay Sonar Parolkar resigned from the position of Chief Financial Officer of the Company w.e.f. 27^th July 2023 and will be relieved from his office w.e.f. 15^th September 2023]

b) CHANGES IN COMPOSITION OF BOARD OF DIRECTORS:

There was no change in the composition of the Board of Directors.

c) RETIREMENT BY ROTATION:

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Ashish Shah (DIN: 0092787), is due to retire by rotation at the 12^th Annual General Meeting.

d) ANNUAL EVAULATION OF BOARD OF DIRECTORS AND ITS COMMITTEES:

Pursuant to the applicable provisions of the Companies Act, 2013, and SEBI (LODR) Regulations, 2015, the Board has carried out Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its all Committees. The Boards functioning was evaluated on various aspects, including inter-alia the Structure of the Board, Meetings of the Board, Functions of the Board, Degree of fulfilment of key responsibilities, Establishment and delineation of responsibilities to various Committees, Effectiveness of Board processes, information and functioning. The Committees of the Board were assessed on the degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of meetings. The Directors were evaluated on aspects such as attendance, contribution at Board/Committee Meetings and guidance/support to the Management outside Board/Committee Meetings. The performance assessment of Non-Independent Directors, Board as a whole and the Chairman were evaluated in a separate Meeting of Independent Directors. The same was also discussed in the NRC and the Board. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

e) DECLARATION BY INDEPENDENT DIRECTORS:

During the Financial Year under review, declarations were received from all Independent Directors of the Company that they satisfy the “criteria of Independence” as defined under Regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with the provisions of Section 149(6) of the Companies Act, 2013, the Schedules and Rules framed there under.

Based on the declaration received from all the Independent Directors and also in the opinion of the Board, all independent Directors possess integrity, expertise, experience & proficiency and are independent of the Management.

During the year under review, none of the Independent Directors of the Company has had any pecuniary relationship or transactions with the Company, other than sitting fees or commission.

f) POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The policy of the Company on Directors appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a Director and other matters, as mandated under Section 178 (3)of the Act, is available on the Companys website: https://vertoz.com/ir/policies/.

The details with respect to training and familiarization programs can be accessed at https://www.vertoz.com/ir/management-and-committee/.

15. COMPLIANCE WITH SECRETARIAL STANDARDS:

The Board of Directors confirms that the Company, has duly complied and is complying, with the applicable Secretarial Standard/s, namely Secretarial Standard 1 (‘SS-1) on Meetings of the Board of Directors and Secretarial Standard - 2 (‘SS-2) on General Meetings, during the FY 2022-2023.

16. CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND

BANKRUPTCY CODE, 2016 (IBC):

During the FY 2022-2023 under review, no such event occurred by which Corporate Insolvency Resolution Process can be initiated under the Insolvency and Bankruptcy Code, 2016 (IBC). As such, no specific details are required to be given or provided.

17. FAILURE TO IMPLEMENT ANY CORPORATE ACTION:

During the FY 2022-2023 under review, there were no failure to implement any corporate action.

18. VIGIL MECHANISM / WHISTLE BLOWER:

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Board of Directors of the Company has, framed “Vigil Mechanism Policy” for Directors and Employees of the Company to provide a mechanism which ensures adequate safeguards to Employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, etc.

The employees of the Company have the right/option to report their concern/grievance to the Chairman of the Board of Directors. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations.

19. RISK MANAGEMENT:

All material risks faced by the Company are identified and assessed. For each of the risks identified, corresponding controls are assessed, and policies and procedures are put in place for monitoring, mitigating and reporting risk on a periodic basis.

20. AUDITORS:

a) APPOINTMENT:

M/s. Mittal & Associates, Chartered Accountants (FRN: 106456W), were appointed as Statutory Auditors of the Company at the Seventh Annual General Meeting (AGM) held on 28^th August, 2018 to hold office for a period of 5 (five) years from the conclusion of the Seventh AGM until the conclusion of the Twelfth AGM of the Company. The Board has proposed to re-appoint them as the Statutory Auditors for a second term for consecutive 5 (five) years starting from the conclusion of the 12^th AGM until 17^th AGM.

The Statutory Auditors have given confirmation to the effect that they are eligible for their reappointment and that they have not been disqualified in any manner from continuing as Statutory Auditors. The remuneration payable to the Statutory Auditors shall be determined by the Board of Directors based on the recommendation of the Audit Committee. b) AUDITORS REPORT:

There are no qualifications or adverse remarks in the Auditors Report which require any clarification/ explanation. The Notes on financial statements are self-explanatory and needs no further explanation. The Auditors have given clean unmodified opinion in their report for the financial year 2022-2023.

c) REPORTING OF FRAUDS BY STATUTORY AUDITORS UNDER SECTION 143 (12):

There were no instances of fraud reported reporting of frauds by Statutory Auditors of the Company under Section 143 (12) of the Act read with Companies (Accounts) Rules, 2014.

d) MAINTENANCE OF COST RECORDS:

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Company is not required to maintain Cost Records under said Rules.

e) SECRETARIAL AUDIT FOR THE YEAR ENDED 31^ST MARCH 2023:

Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from Practicing Company Secretary. M/s. U. Hedge & Associates, Practicing Company Secretaries had been appointed to issue Secretarial Audit Report for the Financial Year 2022-2023.

Secretarial Audit Report issued by M/s. U. Hedge & Associates, Practicing Company Secretaries in Form MR-3 for the Financial Year 2022-2023 forms part to this report as an “Annexure 4”. The said report does not contain the following observation or qualification.

21. CORPORATE GOVERNANCE:

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), a separate section on “Corporate Governance” with a detailed Report on Corporate Governance forms part of this Annual Report.

22. CORPORATE SOCIAL RESPONSIBILITY:

Your Company does not meet the limits fixed under Section 135(1) of the Companies Act, 2013 with respect to Corporate Social Responsibility, therefore the same is not applicable.

23. PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in Securities by the Directors and designated employees of the Company. The said code of conduct is in line with SEBI (Prohibition of Insider Trading) Regulations, 2015. The Code requires pre-clearance for dealing in the Companys Shares and prohibits the purchase or sale of Company Shares by the Directors and the Designated Employees while in possession of Unpublished Price Sensitive Information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All the Directors and the Designated employees have complied with the Code.

24. INFORMATION ABOUT MANAGEMENT DISCUSSION AND ANALYSIS REPORT & AOC-1:

Pursuant to Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis report is annexed hereto and marked as “Annexure - 1” and AOC-1 is attached as “Annexure - 2”.

25. MEANS OF COMMUNICATION:

The Company has designated compliance@vertoz.com as an email id for the purpose of registering complaints by investors and displayed the same on the website of the Company.

26. OTHER DICLOSURES:

a) DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:

No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Companys operations in future.

b) DISCLOSURE OF INTIMATION FOR CONDUCTING GOODS AND SERVICE TAX AUDIT:

During this year the Company have filed all the GST Returns as per GST Norms. There are no GST dues pending with the Company as on 31^st March 2023.

c) DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 134 (5) of the Companies Act, 2013, in relation to the Audited Financial Statements of the Company for the year ended 31^st March 2023, the Board of Directors hereby confirms that: a) in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures; b) such Accounting Policies have been selected and applied consistently and the Directors 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 as at 31^stMarch 2021 and of the profit/loss of the Company for that year; c) proper and sufficient care was taken 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 Annual Accounts of the Company have been prepared on a going concern basis; e) 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) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of Internal Financial Controls and Compliance Systems established and maintained by the Company, the work performed by the Internal, Statutory and Secretarial Auditors and External Consultants, including the Audit of Internal Financial Controls over Financial Reporting by the Statutory Auditors and the reviews performed by management and the relevant Board Committees, including Audit Committee, the Board is of the opinion that the Companys Internal Financial Controls were adequate and effective during the Financial year 2022-2023.

d) SUSPENSION OF TRADING:

There was no occasion wherein the Equity Shares of the Company have been suspended for trading during the FY 2022-2023.

e) BUSINESS RESPONSIBILITY REPORT:

The SEBI Listing Regulations mandate the inclusion of the BRR as part of the Annual report for the top 1000 listed entities based on market capitalization. As the Company does not fall under the criteria specified, the BRR is not applicable to the Company.

f) DEMATERIALISATION OF SHARES:

The Companys shares are held with both the Depositories i.e., National Securities Depository Limited (‘NSDL) and Central Depository Services (India) Limited (‘CDSL). 1,19,69,998 of the Companys Shares are held in electronic/ demat form as on March 31, 2023.

As on March 31, 2023, the number of Shares held in dematerialized and physical mode are as under:

g) PAYMENT OF LISTING AND DEPOSITORIES FEES:

The Company has duly paid the requisite Annual Listing Fees for the FY 2022-2023, to the National Stock Exchange of India Limited (NSE).

The Company has also duly paid the requisite annual custodian/depository fee and other fees for the FY 2022-2023, to the National Securities Depository Limited (NSDL) and Central Depository Service (India) Limited (CDSL).

h) POLICY ON SEXUAL HARASSMENT AT WORKPLACE:

Your Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The Company has in place an appropriate Policy on Prevention of Sexual Harassment at Workplace in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, to prevent sexual harassment of its employees.

Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The Company did not receive any complaint during the financial year 2022-23.

27. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES

AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

The disclosures as per Rule 5 of Companies (Appointment & Remuneration) Rules, 2014 have been marked as “Annexure 5”.

28. APPRECIATION:

Your Directors wish to convey their gratitude and appreciation to all the employees of the Company posted at all its locations for their tremendous personal efforts as well as collective dedication and contribution to the Companys performance.

Your Directors would also like to thank the employees, shareholders, customers, dealers, suppliers, bankers, Government and all other business associates, consultants and all the stakeholders for their continued support extended to the Company and the Management.

For & on behalf of Vertoz Advertising Limited and its Board of Directors

Harshad Shah Place: Mumbai

Chairman & Non-Executive Director

Date: 4^th September 2023

DIN: 07849186