VLS Finance Ltd Directors Report

Your directors are pleased to present the 39th Annual Report of the Company together with the Audited Annual Financial Statements for the year ended 31st March 2026.

1. Summary of Standalone Financial Results ( Rs.in Lakhs)

Particulars	For the year ended 31st March 2026	For the year ended 31st March 2025*
Total Income	4,321.76	10,362.32
Less: Total Expenditure	2,013.00	4259.08
Less: Finance Cost	16.23	16.71
Gross Profit/(loss)	2,292.53	6086.53
Less: Depreciation	351.84	443.96
Profit/(loss) before tax	1,940.69	5642.57
Less: Current Tax	(148.54)	(1257.00)
Add: Deferred Tax	189.88	147.19
Net Profit/(loss) after tax	1,982.03	4,532.76
Paid up Equity Share Capital (excluding calls in arrears)	3,150.09	3,413.25
Reserves excluding revaluation reserve	1,69,528.23	1,90,562.49
Earnings per share (Rs.)	5.93	13.19

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

2. Management Discussion and Analysis

Industry Structure and Development

The Indian stock market witnessed phases of volatility due to global economic uncertainties and geopolitical developments. Factors such as evolving interest rate trends, inflationary pressures, and fluctuating foreign investment flows influenced market movements.

On the domestic front, the Indian economy continued to show strength supported by stable macroeconomic fundamentals and consistent investor participation. Increased involvement of retail investors and steady inflows from domestic institutions provided support to the markets.

The global economy is again disrupted, this time with the outbreak of war in the Middle East. Rising commodity prices, firmer inflation expectations and tighter financial conditions are testing the recent resilience. Global inflation is expected to tick up in 2026 and may decline in 2027. Pressures are concentrated in emerging markets and developing economies, especially commodity importers with preexisting vulnerabilities. A prolonged conflict, deeper geopolitical fragmentation, disappointment over AI-driven productivity or renewed trade tensions could weaken growth and unsettle markets. High public debt and lack of policy buffers could add to vulnerability.

Future Outlook, Risks and Concerns

The ongoing global tensions interalia due to war between Iran on one side and USA and Israel on other side had significantly impacted global stock markets in adverse manner. For initial three quarters of financial year under review, the Indian stock market had despite volatility performed in positive manner. However, in fourth quarter, the downtrend in market had an adverse effect on the whole years performance. The Directors are, however, hopeful that the global situation will improve in near future and the normalcy will be restored in the stock market.

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 the 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 grasping the available opportunities. The uncertain state of the global economy continues to remain a cause of concern.

Adequacy of Internal Financial Control Systems

The management in consultation with the Internal Auditors monitors on an ongoing basis and evaluates 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 a total income of Rs. 4321.76 lakhs as against Rs. 10,362.32 lakhs in the previous year. The other income included in the aforesaid total income is Rs. 810.87 lakhs for the year under review as against Rs. 723.82 lakhs in the previous year. The Company has earned a net profit before tax of Rs. 1940.69 lakhs for the year under review as compared to the profit of Rs. 5,642.57 lakhs in the previous year. The other comprehensive income for the period stood at Rs. (12,769.30) Lakhs as compared to the corresponding other comprehensive income of Rs. (7,060.48) 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 to Note no. 49 of Standalone Financial Results for Key ratios and related information thereon.

Segment wise Performance

Ind-AS 108 on Operating Segments has been complied with. Please refer to Note no. 54 of the Standalone Financial Statements. Hence a separate disclosure has not been made here.

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 2025-26 subject to approval of members. The dividend, if approved, will be paid to the registered members as on the Record date for the purpose of ensuing Annual General Meeting (AGM). No amount was proposed to be transferred to the reserve during the year under review.

Further as per SEBI directive, members holding shares in physical form, who have not updated all of the following information viz. PAN, Choice of Nomination, Contact Details, phone/mobile number, email address, postal address, bank account details and specimen signature (KYC details) on their respective folios in the records of Company, the dividend, if any in respect of such folios shall be withheld and be paid only through electronic mode upon furnishing all the aforesaid information in entirety. Hence, members holding shares in physical form who have not updated all of the abovementioned information are requested to provide/update all your KYC details mentioned above in prescribed KYC Forms i.e. ISR-1, ISR-2, SH-13 or ISR-3 to the RTA viz. RCMC Share Registry Private Limited, B-25/1, First Floor, Okhla Industrial Area-Phase II, New Delhi-110 020 or to the Company at its registered office address at the earliest. Format of KYC Forms are available at website of the Company at https://www.vlsfinance.com/kcyc/

4. Buy-back

During the year under review, the Board of Directors of the Company at its meeting held on 22 November, 2025, approved the buyback of upto 26,31,578 (Twenty Six Lakhs Thirty One Thousand Five Hundred Seventy Eight only) fully paid up equity shares of Rs. 10/- each, through Tender Offer route using the Stock Exchange Mechanism in terms of proviso to clause (b) of sub section 2 of section 68 of the Companies Act, 2013 read with SEBI (Buy Back of Securities) Regulations, 2018 (buyback regulations) at a buy back price of Rs. 380/- (Rupees Three Hundred Eighty only) per fully paid-up Equity Share payable in cash for an amount not exceeding Rs. 99,99,99,640/- (Rupees Ninety Nine Crores Ninety Nine Lakhs Ninety Nine Thousand Six Hundred Forty Only), excluding Transaction Costs, representing 5.84% and 5.52% of the aggregate of the total paid-up equity share capital and free reserves of the Company based on latest audited standalone and consolidated results, respectively as on March 31, 2025. As the size of the Buyback was less than 10% of the paid-up capital and free reserves of the Company, members approval was not required.

The buyback was offered to all eligible equity shareholders of the Company on a proportionate basis as per applicable regulations on record date i.e. 12th December, 2025. The buyback of equity shares through the Tender Offer route commenced on 18th December, 2025 and concluded on 24th December, 2025. The Promoter and members constituents of the Promoter Group did not participate in the Buyback except VLS Capital Limited (a member of the Promoter Group) who opted for limited participation in buyback by offering 100 equity shares in buyback. Further, requisite compliances under applicable regulations have been made in respect of aforesaid buyback including for extinguishment of said shares so bought back.

During the entire buyback, the Company had bought back 26,31,578 equity shares at a price of Rs. 380/- per equity share which were extinguished on 13th January, 2026 in accordance with the buyback regulations. A total sum of Rs. 99,99,99,640/- (Rupees Ninety Nine Crores Ninety Nine Lakhs Ninety Nine Thousand Six Hundred Forty Only) (excluding transaction costs) was utilised for the said buyback. Post buyback the paid up share capital of the Company comprised of 3,13,78,663 equity shares of Rs. 10/- each amounting to Rs. 31,50,08,880/- (including an amount of Rs. 12,22,250/- received earlier on 4,67,500 forfeited equity shares).

Further details in this regard may be accessed from the website of the Company i.e. www.vlsfinance.com or Stock Exchanges website viz. www.bseindia.com or www.nseindia.com .

5. Directors/ Key Managerial Personnel (KMP)

During the year under review and till the date of this report, following changes took place in the composition of the Board of Directors/ Key Managerial Personnel of your Company:

Shri Gaurav Goel (DIN: 00076111)- Non-Executive, Non-Independent Director resigned from the Board w.e.f. 21/11/2025 in connection with his proposed redesignation as a Non-Executive, Independent Director.

Shri Gaurav Goel (DIN: 00076111)- was appointed as Non-Executive, Independent Director of the Company w.e.f. 22/11/2025 for first term of five years subject to requisite approvals.

Shri Gaurav Goel (DIN: 00076111)- Non-Executive, Independent Director resigned w.e.f. 19/01/2026 from the Board due to certain preoccupation and other personal commitments. The Board places on record its sincere appreciation for the invaluable contribution made by Shri Gaurav Goel during his tenure with the Company.

Shri S. K. Agarwal- Managing Director (DIN: 00106763) was reappointed by the Board in its meeting held on 27/05/2025 for a further period of 3 years w.e.f. 21/08/2025 to 20/08/2028 which was approved by the members of the Company in the 38th Annual General Meeting held on 27/09/2025.

Shri K. K. Soni- Director- Finance & CFO (DIN: 00106037) was reappointed by the Board in its meeting held on 27/05/2025 for a further period of 3 years w.e.f. 01/08/2025 to 31/07/2028 which was approved by the members of the Company in the 38th Annual General Meeting held on 27/09/2025.

The opinion of the Board on expertise and other attributes of all 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 Keshav Tandan (DIN: 10450801) will be retiring by rotation at the ensuing AGM of your Company and being eligible, has offered himself for re-appointment. Concurring to the recommendation of the Nomination and Remuneration Committee of the Company, your directors recommend his re-appointment.

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 31st, 2026:

1. Shri S. K. Agarwal- Managing Director

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

3. Shri Keshav Tandan- Executive Director

4. Shri H. Consul- Company Secretary

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 31/03/2026, 1 (one) meeting of Independent Directors was held on 31/03/2026 as detailed hereunder:

S. No.	Name of the Director	Whether Chairman / Member	Whether attended meeting held on 31/03/2026
1	Shri Adesh Kumar Jain	Chairman	Yes
2	Shri Anoop Mishra	Member	Yes
3	Shri D. K. Mehrotra	Member	No
4	Shri Najeeb Hamid Jung	Member	Yes
5	Mrs. Neeraj Vinay Bansal	Member	Yes

In the meeting of Independent Directors, held on 31/03/2026 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, through Shri Ashutosh Aggarwal, Practicing Company Secretary (COP: 7467 and Peer Review Certificate No. 7666 / 2026) confirming that as on 31/03/2026, none of the Directors of the Company has 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:

1. that in the preparation of the annual accounts for the financial year ended 31st March, 2026, the applicable accounting standards have been followed along with proper explanations relating to material departures;

2. 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;

3. 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;

4. that they have prepared the Annual Accounts for the financial year ended 31st March, 2026 on a going concern basis;

5. 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

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

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;

4. that they have prepared the Annual Accounts for the financial year ended 31st March, 2026 on a going concern basis;

5. 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

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

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 26/05/2026. 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 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 26/05/2026 on the parameters including attendance, contribution and independent judgment by individual directors. Since all Directors have rich experience of the corporate environment, 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. 3,00,82,562/- for spending in the F.Y. 2025-2026. The utilization statement is appended below:

2025-26 3,00,82,562/- 15,00,000/- Friends of Tribals Society Plot No.8,1st Floor, Local Shopping Complex, Okhla Industrial Area, Phase-II, New Delhi-110020 Project Ekal Vidyalaya for 50 centres providing elementary education to under privileged children in remote areas in District Alwar in the state of Rajasthan 2,70,82,562 15,00,000/- Bharat Lok Shiksha Parishad NS-15/H-5 Between ED & FD Block), Pitampura, Delhi-110034 Project Ekal Vidyalaya for 50 centres providing elementary education to under privileged children in remote areas in the state of Himachal Pradesh 2,55,82,562 15,00,000/- Bharat Lok Shiksha Parishad NS-15/H-5 Between ED & FD Block), Pitampura, Delhi-110034 Project Ekal Vidyalaya for 50 centres providing elementary education to under privileged children in remote areas in the state of Uttar Pradesh 2,48,97,182/- 6,85,380/- IMPACT M-2/3, GF, DLF Phase II, Gurgaon-122002 Assistance for five learning centers located providing elementary education to under privileged children in the rural areas of Hardwar, Bundi and Kanpur Dehat. 25,00,000/- Aanchal Nyas NH-9, Dhabarsi Road, Jindal Nagar, Ghaziabad Assistance for installation of a solar power system, Hostel furniture and Bus for school in village Dhabarsi, District Ghaziabad, Uttar Pradesh. 10,00,000/- My Home India 2,13,97,182/- 6/801, Mayur Vihar Phase I Extension, New Delhi-110096 Project Sapno se Apno Tak for reuniting children with their families. 15,00,000/- All India Deaf & Dumb Society Plot No.4&7, Institutional Area, Vikas Marg Ext, Karkardooma, Delhi-110092 Assistance for new building to provide education up to 12th grade to specially abled children. 99,75,000/- Sri Sathya Sai Health and Education Trust 99,22,182/- 132 Infantry Road, Bangalore, Karnataka-560001 Cardiac treatment including surgeries of the children inter-alia with congenital heart disease at Sai Sanjeevani hospital in Chhattisgarh, Haryana, Maharashtra & Telangana. 99,22,182/- Transfer to PM National Relief Fund as permissible under schedule VII of the Companies Act, 2013. # approved as an Ongoing Project. During F.Y. 2025-26, an amount of Rs. 5 Lakhs were disbursed to the entity. The balance amount of Rs. 10 Lakhs allocated was deposited in VLS Finance Limited- Unspent Corporate Social Responsibility Account (UCSR 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. For the financial year 2025-26, from the entire corpus allocated to PM National Relief Fund) during the entire financial year for CSR initiative by the Company, Rs. 2,90,82,562/- had been and an amount of Rs. 10,00,000/- had been deposited in spent in various projects (including Rs. 99,22,182/- contributed VLS Finance Limited- 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. No unspent amount has been left in the corpus for the financial year 2025-26 requiring transfer to Fund in terms of second proviso to subsection 5 of Section 135 of the Companies Act, 2013.

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, 2025 is available on the website of the Company at www.vlsinance.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.vlsinance.com under the head Investor Relations.

B. Related Party Transaction

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

VLS Finance Limited 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.vlsinance.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 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 provides 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 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 covering all women employees, including permanent, contractual, temporary employees and trainees. The detailed policy is available on the Companys website at www.vlsinance.com under the head Investor Relations.

The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee under the aforesaid Act, headed by the Woman Director on the Board. Following are the complaints received during the year under review:

(a) Number of complaints of sexual harassment received: Nil (b) Number of complaints disposed of: Nil (c) Number of cases pending for more than ninety days: Nil

F. Nomination and Remuneration Policy

The detailed policy may be accessed at www.vlsinance.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 of 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 adhering to the highest standards of ethical, moral and legal conduct of business operations. The 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.vsfinance.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 as Statutory Auditors 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 confirmation that they are eligible to continue with their appointment and have not been disqualified in any manner for continuing as Statutory Auditors. The appointment of Statutory Auditors is not required to be ratified every year as per extant regulations.

Cost Auditor

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

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. A. Aggarwal and Associates (CoP No. 7467) had been appointed as Secretarial Auditors of the Company for a term of five consecutive financial years i.e., 2025-26 to 2029-30 subject to applicable regulations. The members in the 38th AGM of the Company had authorized the Board to fix the remuneration of the Secretarial Auditors.

17. Independent Auditors Report

The Statutory Auditors Report issued by M/s. Agiwal & Associates for the year under review does not contain any qualification, reservations, adverse remarks or disclaimer. The Notes to Accounts referred to in the Auditors Report are self-explanatory, therefore, do not call for any further clarifications under Section 134(3)(f) of the Act. Further, pursuant to the provisions of Section 143(12) of the Act, the Statutory Auditors of the Company have not reported any instances of fraud committed in the Company by its officers or employees.

18. Secretarial Audit Report

The Secretarial Audit Report for the year 2025-26 submitted by Secretarial Auditors 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 remarks or observation by the Secretarial Auditors.

19. Statutory Information.

The Company has paid the annual listing fees for the year 2026-27 to BSE Limited and The National Stock Exchange of India Limited and the custodian fees to National Securities Depository Limited and Central Securities Depository Limited The Board in its meeting held on 25/10/2018 had approved the proposal for voluntary delisting from the Calcutta Stock Exchange Limited (CSE). When the Company approached CSE, thereafter, to complete formalities of delisting, it was learnt that CSE had suspended the scrip of the 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 Limited, The National Stock Exchange of India Limited, Mumbai and The Calcutta Stock Exchange Limited, 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.

There was no one time settlement with Bank/ Financial Institutions during the year under review. Further, no event has taken place that give rise to reporting of details w.r.t. difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions.

During the year under review, the Company did not absorb any new technology nor did it carry out any R&D related activity for this purpose except mandated as member of Stock Exchange. 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 is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India under Section 118(10) of the Companies Act, 2013.

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 the Boards Report has been made in terms of Section 131 of the Companies Act, 2013, during the year under review.

Disclosure relating to the 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.

During the year under review, Managing Director, Director-Finance & CFO and Executive Director of your company were not in receipt of any remuneration or commission from any subsidiary company in terms of Section 197(14) of the Companies Act, 2013. The re-appointment of Managing Director and Director-Finance & CFO for three years was made by passing Special Resolution. There have been no significant and material orders passed by regulatory authorities / court that would impact on the going concern status of the Company and its future operations. Further, there were no material changes or commitments affecting the 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. Your Company is in compliance with the provisions of the Maternity Benefit Act, 1961 and the rules made thereunder, as applicable.

20. Fixed Deposits

The Company has not held 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 36 (Thirty Six) 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 the 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. Limited. 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 hconsult@vlsfinance.com.

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 hconsult@vlsfinance.com.

23. Subsidiary/Associate Companies

Statement pursuant to Section 129(3) of the Companies Act, 2013 in Form AOC-1 for the financial year ended 31/03/2026 in respect of the subsidiary / associate companies, is enclosed with Annual Accounts of the Company. Please refer to Note no. 51 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 31/03/2026 of the subsidiaries VLS Securities Limited (100%) VLS Sunnivesh Limited (formerly known as VLS Real Estate Limited) (100%) and VLS Asset Management Limited (99.15%). The financial results of VLS Capital Limited for the same period have been consolidated under equity method of accounting as an associate of VLS Securities Limited 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 Limited (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. Transfer of Unclaimed Dividend and Unclaimed shares to Investor Education and Protection Fund (IEPF)

The details relating to unclaimed dividend and unclaimed shares forms part of the Report on Corporate Governance enclosed as Annexure-I to this report.

26. Acknowledgements

The Directors thank the Companys business associates, Bankers, the Securities & Exchange Board of India, 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.

For and on behalf of the Board of Directors

Place: New Delhi Suresh Kumar Agarwal Kishan Kumar Soni Date: 26/05/2026 Managing Director Director- Finance & CFO DIN: 00106763 DIN: 00106037