Vertoz Advertising Ltd Directors Report.

Dear Members of Vertoz Advertising Limited,

Your Directors have pleasure in presenting this 9th Annual report on the affairs of the Company together with the Audited Statement of Accounts for the year ended on 31st March 2020.

1. COMPANY SPECIFIC INFORMATION

1.1 FINANCIAL SUMMARY AND/OR HIGHLIGHTS:

( in Lakhs)

Standalone Figures Consolidated Figures
Particulars FY 2019- 2020 FY 2018- 2019 FY 2019- 2020 FY 2018- 2019
Gross Income 1659.61 2194.67 4228.10 4688.58
Profit/(Loss) Before Interest and Depreciation 412.23 479.34 794.97 1104.92
(-) Finance Charges (75.61) (34.63) (89.32) (37.68)
Gross Profit/(Loss) 336.62 444.71 705.65 1067.24
(-) Provision for Depreciation (35.17) (59.41) (167.55) (187.96)
Net Profit Before Tax 301.45 385.30 538.10 879.28
(-) Provision for Tax (69.09) (122.69) (97.4) (158.19)
(-) Deferred Tax (20.04) 12.71 (20.04) 12.71
Net Profit After Tax 212.32 275.33 420.66 733.80
Balance of Profit/(Loss) brought forward 212.32 275.33 420.66 733.80
(-) Consolidation Revaluation Gain/(Loss) 0.00 0.00 0.00 0.00
Balance available for appropriation 212.32 275.33 420.66 733.80
(-) Proposed Dividend on Equity Shares 0.00 0.00 0.00 0.00
(-) Tax on proposed Dividend 0.00 0.00 0.00 0.00
(-) Transfer to General Reserve 0.00 0.00 0.00 0.00
Surplus/(Deficit) carried to Balance Sheet 212.32 275.33 420.66 733.80

1.2 OPERATIONS AND AFFAIRS OF THE COMPANY:

The Company has reported total standalone income of 1659.61 Lakhs for the current year as compared to 2194.67 Lakhs in the previous year. The Net Profit after tax for the year under review amounted to 212.32 Lakhs in the current year as compared to Net Profit after tax of 275.33 Lakhs in the previous year.

The Company has reported total consolidated income of 4228.10 Lakhs for the current year as compared to 4,688.58 Lakhs in the previous year. The Net Profit after tax for the year under review amounted to 420.66 Lakhs in the current year as compared to Net Profit after tax of 733.80 Lakhs in the previous year.

1.3 TRANSFER TO RESERVES:

The Company has closing balance of 15,00,07,265/- as Reserves and Surplus.

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

Sr. No. Particulars As at 31st March, 2020
1. Surplus from Profit & Loss Account
Opening Balance 4,07,61,876
Add: Profit/(Loss) for the period 2,12,32,151
Less: Issue of Bonus Shares -
2. Securities Premium (n/off preliminary expenses) 8,85,96,940
Total Value in INR 15,00,07,265

1.4 FINAL DIVIDEND:

Your Directors are pleased to recommend a final dividend at the rate of 1% i.e. 0.10 per Equity Share having Face Value of 10/- aggregating to 5,22,785.20/- plus applicable Taxes thereon as the case may be. The Promoter & Promoter Group have forgone / waived their right to receive final dividend for the financial year 2019-2020 and hence the Dividend, if any, approved by the Members at the ensuing Annual General Meeting shall be only for Non-Promoter/ Open Public Shareholders upon 52,27,852 Equity Shares. "Record Date" for the same is Tuesday, 20th October, 2020.

1.5 MAJOR EVENTS OCCURRED DURING THE YEAR:

A. COVID-19 IMPACT:

The outbreak of Coronavirus (COVID-19) pandemic globally is causing a slowdown in economic activity. In many countries, businesses are being forced to cease or limit their operations for long or indefinite periods. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered disruptions to businesses worldwide, resulting in an economic slowdown and uncertainties pertaining to future operations.

During this challenging time, the Companys focus is on supporting customers, employees and the local communities in which we operate along with safeguarding the interest of all the Stakeholders.

The Company is remotely operational and has instructed its staff to Work from Home since 17th March,2020 and the Company has made all the necessary arrangementsto ensure the staff is able to deliver on projects for the Companys clients.

B. CHANGE IN NATURE OF BUSINESS:

During the FY 2019-2020 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.

C. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY HAVING OCCURRED SINCE THE END OF THE YEAR AND TILLTHE 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:

a) To provide various advantage/s like enhanced liquidity, better realization, brand image and value, etc. to all the Stakeholders including the Shareholders (Members) of the Company and prospective Investors at large your Company had passed resolution through postal ballot during the FY 2019-2020 for migration of specified securities [Equity Shares] from SME Exchange [NSE EMERGE] to the Main Board [NSE].

Accordingly, NSE has granted its approval vide its letter dated 12th May, 2020 for migration of Equity Shares of the Company and they are listed and admitted to dealings on the Exchange (Capital Market Segment) w.e.f. 14thMay, 2020.

b) On 25th June, 2020, Mr. Harshal Patel, Non-Executive Independent Director (DIN: 07842251) resigned from the Company as an Independent Director, due to personal reasons and owing to resignation all the committees were reconstituted.

c) On 30thJune 2020, Promoters of the Company, Mr. Hirenkumar Shah and Mr. Ashish Shah, sold 10,00,000 Shares each in the Open Market, thereby reducing their individual Shareholding from 34.02% to 25.67%.

d) The Board of Directors of the Company is contemplating and evaluating at its Meeting held on 29th September 2020 any and all proposals for raising of funds by way of issuance of any instrument or security, including Equity Shares, Fully or Partly Convertible Debentures, Non-Convertible Debentures, Warrants, Securities, any other Equity-based Instruments or Securities or any combination thereof, in one or more tranches including by way of Follow on Public Issue, Preferential Allotment, or a Private Placement (including one or more Qualified Institutions Placements (QIP).

1.6 DETAILS OF REVISION OF FINANCIAL STATEMENT OR THE REPORT

There is 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 2019-2020. As such, no specific details are required to be given or provided.

2. GENERAL INFORMATION:

2.1 OVERVIEW OF THE INDUSTRY

The details discussion on the overview of the industry is covered under Management Discussion and Analysis which forms part of this report.

2.2 ECONOMIC OUTLOOK

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

3. CAPITAL AND DEBT STRUCTURE:

During the year, your Company has increased Authorised Share Capital of the Company from 6,00,00,000/- (Rs. Six Crores) divided into 60,00,000 (Sixty Lakhs) Equity Shares of 10/-(Rs. Ten) each to 12,00,00,000/- (Rs. Twelve Crores) divided into 1,20,00,000 (One Crore Twenty Lakh) Equity Shares of 10 (Rs. Ten) each. Further, the Company by Capitalization of free reserves namely Securities Premium allotted 59,85,000 (Fifty-Nine Lakhs Eighty-Five Thousand) Equity Shares of face value of 10/- each, in the capital of the Company in the proportion of One (1) Bonus Equity Share of 10/- (Rs. Ten) each, for every One (1) fully paid-up Equity Share of 10/- (Rs. Ten) each, held by the Member/s of the Company. The existing capital Structure of the Company is as follows:

Particulars 31st March 2020 31st March 2019
Amount (Rupees in lakhs)
Authorised Share Capital
1,20,00,000 (60,00,000) Equity Shares of 10/- (Rupees Ten) each 1,200.00 600.00
Issued, Subscribed and Paid-up Share Capital
1,19,70,000 (59,85,000) Equity Shares of 10/- (Rupees Ten) each 1,197.00 598.50

Further, the Company has neither issued any Convertible or Non-Convertible Securities, Debentures, Bonds, Warrants, Shares with differential voting rights as to dividend, voting or otherwise, nor issued or granted ESOP, stock option, sweat equity during the FY 2019-2020.

4. UNPAID DIVIDEND & INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

During the FY 2019-2020 under review, your Company was not required to transfer any amount to the Investor Education & Protection Fund (IEPF) and does not have unclaimed dividend which remains to be transferred to Investor Education & Protection Fund (IEPF). As such, no specific details are required to be given or provided.

5. DEPOSITS:

During the FY, 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 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.

6. PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:

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, during the financial year under review 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 2019-2020 as required under section 134(3) (h) of the Companies Act, 2013 in Form AOC-2 is given in "Annexure – 4"

7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

A. Conservation of Energy:

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

Particulars FY 2019-2020
Foreign Exchange Inflow 2,70,64,634
Foreign Exchange Outflow 5,26,017

8. PARTICULARS OF INVESTMENTS, LOANS, GUARANTEES AND SECURITIES:

During the FY 2019-2020 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 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.

9. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

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 one operational branch at New York, 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:

Financial Year Total Assets Total Revenue Share of Net Profit/(Loss) Net Cash Flows
(Rs) (Rs) (Rs) (Rs)
2018-2019 31,53,12,266 30,79,76,895 66,35,577 (80,70,687)
2019-2020 56,09,21,219 25,91,36,873 54,98,709 9,01,009

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:

Financial Year Total Assets Total Revenue Share of Net Profit/(Loss) Net Cash Flows
(Rs) (Rs) (Rs) (Rs)
2018-2019 11,90,29,065 7,25,08,041 3,92,12,117 (1,07,583)
2019-2020 25,28,42,265 14,81,92,669 10,61,78,710 (7,86,787)

10. During the year under review, the Board of Directors have reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, your Company has prepared Consolidated Financial Statements of the Company and all its subsidiaries in compliance with the applicable accounting standards, which forms part of this Annual Report.

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 – 3".

11. EXTRACT OF ANNUAL RETURN:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the Financial Year ended 31st March, 2020 made under the provisions of Section 92 (3) of the Act is attached as "Annexure - 1 " which forms part of this Report.

The extract of Annual Return shall also be placed on the website of the Company at: https://www.vertoz.com

12. 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 Mr. Kashish Shah, Internal Audit Department, which was set up by the Company, for the Financial Year 2019-2020. 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.

13. MATTERS RELATING TO BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL OF THE COMPANY:

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

Sr. No. Name of Directors & Key Managerial Personnel DIN/PAN Category cum Designation Members of Audit Committee No. of Shares held as on 31st March, 2020
1 Hirenkumar Rasiklal Shah 00092739 Whole-time Director Yes 40,71,824
2 Ashish Rasiklal Shah 00092787 Whole-time Director No 40,71,824
3 Rasiklal Hathichand Shah 00091585 Non-Executive Director No 1,19,700
4 Harshad Uttamchand Shah 07849186 Chairman & Non- Executive Director No 59,852
5 Harshal Ishwar Patel* 07842251 Independent Director Chairman of Audit Committee NIL
6 Rohit Keshavlal Vaghadia# 07946771 Independent Director Yes NIL
7 Nilam Samir Doshi@ 07848294 Independent Director Yes NIL
8 Akshay Sonar Parolkar BBCPS6255B Chief Financial Officer Company No NIL
9 Zill Shah$ EZOPS6680B Secretary & Compliance Officer No NIL

[* Harshal Patel resigned from the Company w.e.f. 25th June 2020 and so he ceased to be the Independent Director of the Company and all the Committees were reconstituted.

# Rohit Keshavlal Vaghadia became the Member of the Audit Committee w.e.f. 25th June 2020

@ Nilam Samir Doshi was elected as the Chairperson of the Audit Committee w.e.f. 25th June 2020

$ Zill Shah was appointed as the Company Secretary & Compliance Officer w.e.f. 30th May 2019]

b) CHANGES IN COMPOSITION OF BOARD OF DIRECTORS:

During the year under review, there was no change in composition of Board of Directors of the Company.

But after the Financial Year 2019-2020, there were changes in the Board Composition. On 25th June 2020, Mr. Harshal Patel resigned from the Company and so he ceased to be the Independent Director of the Company and all the Committees were reconstituted with immediate effect.

c) RETIREMENT BY ROTATION:

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Harshad Uttamchand Shah (DIN: 07849186), is due to retire by rotation at the 9th Annual General Meeting and being eligible, offer himself for re-appointment. Brief profile of the proposed appointee together with other disclosures in terms of Regulation 36 (3) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 are mentioned in the Notice which is part of this Annual Report.

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

Pursuant to the provisions of the Companies Act, 2013, 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.

14. MATTERS RELATING TO MEETING OF BOARD OF DIRECTORS AND COMMITTEES OF BOARD:

a) NUMBER OF BOARD MEETINGS:

The Board of Directors met 4 (Four) times during the Financial Year ended 31st March 2020 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. The Company has complied with the applicable Secretarial Standards in respect of all the above-Board Meetings. Also, the intervening gap between any two Meetings was within the period prescribed by the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015.

Sl. No. Date of Meeting Board Strength No. of Directors Present
1 30th May, 2019 7 6
2 30th August, 2019 7 7
3 14th November, 2019 7 6
4 4th January, 2020 7 6

b) AUDIT COMMITTEE:

1. PREAMBLE:

The Audit Committee of Directors was constituted pursuant to the provisions of Section 177 of the Companies Act, 2013 ("the Act"). The Composition of the Audit Committee is in conformity with the provisions of the said section.

2. TERMS OF REFERENCE OF AUDIT COMMITTEE:

The scope and terms of reference of the Audit Committee have been framed in accordance with the Act.

3. COMPOSITION OF AUDIT COMMITTEE:

Name of Director Status in Committee Nature of Directorship
Harshal Patel Chairman Non-Executive & Independent Director
Nilam Doshi Member Non-Executive & Independent Director
Hirenkumar Shah Member Whole-time Director

[Harshal Patel resigned w.e.f. 25th June 2020, so Nilam Doshi was elected as the Chairperson of the Audit Committee and Rohit Vaghadia became the Member along with the existing Member Hirenkumar Shah]

4. ATTENDANCE RECORD:

Dates on which Meetings Attendance of Members
were held Harshal Patel Nilam Doshi Hirenkumar Shah
30th May, 2019 Present Present Present
30th August, 2019 Present Present Present
14th November, 2019 Present Present Present
4th January, 2020 Present Present Present

c) NOMINATION AND REMUNERATION COMMITTEE:

1. PREAMBLE:

The Nomination and Remuneration Committee of Directors as constituted by the Board of Directors of the Company in accordance with the requirements of Section 178 of the Act. The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees. The Policy is placed on the website of the Company at: https://www.vertoz.com.

2. TERMS OF REFERENCE OF NOMINATION & REMUNERATION COMMITTEE:

The scope and terms of reference of the Nomination & Remuneration Committee have been framed in accordance with the Act.

3. COMPOSITION OF NOMINATION & REMUNERATION COMMITTEE:

Nomination & Remuneration Committee consists of following members:

Name of Director Status in Committee Nature of Directorship
Harshal Patel Chairman Non-Executive & Independent Director
Nilam Doshi Member Non-Executive & Independent Director
Harshad Shah Member Non-Executive & Non-Independent Director

[Hirenkumar Shah ceased to be the Member of Nomination & Remuneration Committee w.e.f. 4th January 2020.

Harshal Patel resigned w.e.f. 25th June 2020, so Nilam Doshi was elected as the Chairperson of the Nomination & Remuneration Committee and Rohit Vaghadia became the Member along with the existing Member Harshad Shah]

4. ATTENDANCE RECORD:

Dates on which

Attendance of Members

Meetings were held Harshal Patel Nilam Doshi Harshad Shah Hirenkumar Shah
4th January 2020 Present Present Present Present

d) STAKEHOLDERS RELATIONSHIP COMMITTEE:

1. PREAMBLE:

Pursuant to Section 178 (5) of the Companies Act, 2013, the Board of Directors of the Company has constituted the Stakeholders Relationship Committee.

2. TERMS OF REFERENCE OF STAKEHOLDERS RELATIONSHIP COMMITTEE:

The scope and terms of reference of the Stakeholders Relationship Committee have been framed in accordance with the Act.

3. COMPOSITION OF STAKEHOLDERS RELATIONSHIP COMMITTEE:

Stakeholders Relationship Committee consists of following members:

Name of Director Status in Committee Nature of Directorship
Nilam Doshi Chairperson Non-Executive & Independent Director
Harshal Patel Member Non-Executive & Independent Director
Harshad Shah Member Non-Executive & Non-Independent Director
Hirenkumar Shah Member Whole-time Director

[Harshal Patel resigned w.e.f. 25th June 2020, so Rohit Vaghadia became the Member along with the existing Member Harshad Shah and Hirenkumar Shah]

There was one Meeting conducted during the year.

4. ATTENDANCE RECORD:

Dates on which

Attendance of Members

Meetings were held Nilam Doshi Harshal Patel Harshad Shah Hirenkumar Shah
4th January 2020 Present Present Present Present

15. COMPLIANCE WITH SECRETARIAL STANDARDS:

The Board of Directors confirms that the Company, has duly complied and is in compliance, 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 2019-2020.

16. CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC):

During the FY 2019-2020 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 2019-2020 under review, the Company has duly complied with corporate action regarding issue and allotment of 59,85,000 (Fifty-Nine Lakhs Eighty-Five Thousand only)

Bonus Equity Shares and also, there was no occasion wherein the Company failed to implement any Corporate Action. As such, no specific details are required to be given or provided.

18. VIGIL MECHANISM / WHISTLE BLOWER:

The Board of Directors of the Company has, 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, 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 28th 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 Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment 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 2019-2020.

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

There were no incidences of 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 31ST MARCH 2020:

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 2019-2020.

Secretarial Audit Report issued by M/s. U. Hedge & Associates, Practicing Company Secretaries in Form MR-3 for the Financial Year 2019-2020 forms part to this report as an "Annexure – 5". The said report does not contain the following observation or qualification.

21. CORPORATE GOVERNANCE:

During the year under review, your Companys Shares is listed on the SME Exchange, therefore Corporate Governance provisions as specified in Regulations 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, and Clause (b) to (i) of sub-regulation (2) of Regulation 46 and para C, D and E of the Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company.

Your Company migrated w.e.f. 14th May 2020, it shall comply with the requirements of Corporate Governance provisions as specified in Regulations 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, and Clause (b) to (i) of sub-regulation (2) of Regulation 46 and para C, D and E of the Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from FY 2020-21.

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 AOC-1 & MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

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 - 2" and AOC-1 is attached as "Annexure - 3".

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 noGST dues pending with the Company as on 31st March, 2020. Further the Company had completed and filed GST Audit Report for FY 2017-18 on 07.02.2020. The GST Audit for FY 2018-19 and FY 2019-20 will be processed and complied with GST norms or on before its due date.

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 31st March 2020, 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 31st March 2020 and of the profit/loss of the Company for that year;

c) proper and enough 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 2019-2020.

d) DISCLOSURE UNDER SECTION 43(A)(II) OF THE COMPANIES ACT, 2013:

The Company has not issued any Shares with differential rights and hence no information as per provisions of Section 43(a) (ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

e) DISCLOSURE UNDER SECTION 54(1)(D) OF THE COMPANIES ACT, 2013:

The Company has not issued any Sweat Equity Shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

f) DISCLOSURE UNDER SECTION 62 (1) (B) OF THE COMPANIES ACT, 2013:

The Company has not issued any Equity Shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62 (1) (b) of the Act read with Rule 12 (9) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

g) DISCLOSURE UNDER SECTION 67 (3) OF THE COMPANIES ACT, 2013:

During the year under review, there were no instances of non-exercising of voting rights in respect of Shares purchased directly by employees under a scheme pursuant to Section 67 (3) of the Act read with Rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014 is furnished.

h) SUSPENSION OF TRADING:

There was no occasion wherein the equity shares of the Company have been suspended for trading during the FY 2019-2020.

i) 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.

j) DEMATERIALISATION OF SHARES:

As on 31st March 2020, the entire 100% Issued, Subscribed and Paid-up Share Capital i.e. 1,19,70,000 Equity Shares of the Company were held in dematerialized form through depositories namely National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

k) PAYMENT OF LISTING AND DEPOSITORIES FEES:

The Company has duly paid the requisite annual listing fees for the FY 2020-21, to the National Stock Exchange of India Limited (NSE).

The Company has also duly paid the requisite annual custodian and other fees for the FY 2019-20, to the National Securities Depository Limited (NSDL) and Central Depository Service (India) Limited (CDSL).

l) 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 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.

During the year 2019-2020, pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder there were

No Complaints registered.

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 – 6".

28. APPRECIATION:

The Board wishes to place on record their appreciation for the sincere efforts of the Directors, employees and the co-operation extended by Bankers, Shareholders, Clients, Associates and Central and State Governments for their continuous support towards the conduct of the Company.

For & on behalf of Vertoz Advertising Ltd. and its Board of Directors
Harshad Shah
Place: Mumbai Chairman & Non-Executive Director
Date: 29th September 2020 DIN: 07849186