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Vardhan Capital & Finance Ltd.

BSE: 542931 Sector: Financials
NSE: N.A. ISIN Code: INE128G01018
BSE 05:30 | 01 Jan Vardhan Capital & Finance Ltd
NSE 05:30 | 01 Jan Vardhan Capital & Finance Ltd

Vardhan Capital & Finance Ltd. (VARDHANCAPITAL) - Director Report

Company director report

Dear Members

The Board of Directors hereby presents the report of the business and operations ofyour Company along with the audited financial statements for the financial year endedMarch 31 2021. In line with the requirements of the Companies Act 2013 and the rulesframed thereunder this report covers the financial results and other developments duringthe Financial Year 1st April 2020 to 31st March 2021.

1. Summary of operations/results

The financial results of the Company for the year ended March 31 2021 as compared tothat of previous year are summarized as under:

(Amount in Lakhs)
Particulars For the year ended March 31 2021 For the year ended March 31 2020
Total Income 824.12 731.12
(less) Expenses 778.04 674.06
Profit/(Loss) Before Income Tax 46.08 57.06
(less) Taxes 12.61 15.30
Net Profit/(Loss) after Tax 33.47 41.76

2. Company's Affairs

During the Financial Year ended March 31 2021 the company has earned a net profit ofRs. 33.47 Lacs as compared to net Profit of Rs. 41.76 Lacs earned during the previousfinancial year ended March 31 2020.

3. Transfer to general reserves

The Company has not transferred any amount to general reserves during the financialyear ended March 31 2021.

4. Transfer of Unclaimed/Unpaid Amount

The Company doesn't have any unclaimed/unpaid amount to be transferred in accordance ofthe provisions of Section 125(2) of the Companies Act 2013.

5. Dividend

The Board has not recommended any dividend for the year under review.

6. Change in the Nature of Business and Financial Position

There are no changes in the nature of business during the Financial Year 2020-21 andtill the date of issue of this report.

7. Material Changes and Commitments

There are no material Changes and Commitments affecting the Financial Position of theCompany from 01st April 2021 till the date of issue of this report.

8. Deposits

The Company has not accepted any deposits during the financial year as defined Section73 of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014hence there is no default of re-payment and any unpaid/unclaimed deposits as on March31 2021. Details of Inter Corporate borrowings are elaborated in note no. 7 of theattached financials.

9. RBI Prudential Norms

The Company is classified as Loan Company by RBI.

The Company continues to comply with all the applicable regulation prescribed by theReserve Bank of India ("RBI") from time to time.

10. Share Capital

There were no changes in the Share Capital of the Company during the financial yearended March 31 2021.

A) Issue of Equity Shares with Differential Rights:

The Company has not issued any equity shares with differential rights during thefinancial year ended March 31 2021.

B) Issue of Sweat Equity Shares: The Company has not issued any Sweat EquityShares during the financial year ended March 31 2021.

C) Issue of Employee Stock Options: The Company has not issued any EmployeeStock Options during the financial year ended March 31 2021.

11. Subsidiary Associate and Joint Ventures Companies

The Company does not have any subsidiary as per Clause 2(87) or associate as per Clause2(6) of the Companies Act 2013. The Company has not entered into any Joint Venture duringthe Financial Year ended March 2021.

12. Maintenance of Cost Records

Maintenance of cost records as specified by the Central Government under sub-section(1) of section 148 of the Companies Act 2013 is not applicable to the Company.

13. Board of Directors and Key Managerial Personnel

The Composition of Board of the Company as on March 31 2021 is as follows:

Sr. No. Name of Director DIN/PAN Category
1. Akash Vardhan 03043186 Managing Director
2. Rajesh Vardhan 00199986 Non-Executive Director
3. Ramesh Vardhan 00207488 Non-Executive Director
4. Prashansa Bora 0 8419397 Non-Executive Independent Director
5. Sonam Vardhan ACHPH7859M Chief Financial Officer
6. Anmol Jain AXXPJ4634M Company Secretary

There has been following changes in the Directors and KMP during the year under review:

> Appointments/Re-appointments

i. Mr. Akash Vardhan (DIN: 03043186) retired by rotation at the 26th AnnualGeneral Meeting of the Company and was re-appointed u/s 152 of the Act.

ii. Mr. Shailesh Jogani (DIN: 06644699) was appointed as an Additional director of theCompany u/s 161 of Companies Act 2013 to hold office upto the ensuing 27thAGM in the capacity of Non- Executive Independent Director of the Company. The Board ofDirectors recommend to the shareholders to appoint him as Director for a term of 5 yearscommencing from the original appointment date.

> Resignations

Arvind Kothari has resigned from the position of Director with effect from 15thJune 2021.

> Retirement by rotation

Pursuant to provisions of Companies Act 2013 Mr. Ramesh Vardhan (DIN: 00207488)retires by rotation at the ensuing 27th Annual General Meeting of the Companyand being eligible seeks re-appointment.

14. Board Meetings and Attendance of Directors

During the Financial Year 2020-21 the Board of Directors duly met 5 times on thefollowing dates:

31st July 2020 15th September 2020 12th November2020 25th November 2020 and 12th February 2021.

The maximum interval between two meetings did not exceed 120 days as prescribed in theCompanies Act 2013 except in 1 instance during the strict lockdown situation in the citywhere the registered office is situated. On account of various relaxations provided by theGovernment and Ministry of Corporate Affairs the Company was allowed to hold BoardMeetings with a gap of 180 days.

The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.

15. Declaration by Independent Directors

The Company has received necessary declaration from each independent directors underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosures Requirements) Regulations 2015.

In the opinion of the Board the Independent Directors appointed during the yearpossess appropriate balance of skills experience and knowledge that enable the Board todischarge its functions and duties effectively.

The Board shall comment on proficiency once the independent directors appear for theonline proficiency selfassessment test as applicable.

16. Familiarization programme for independent directors

All new independent directors appointed on the Board attend a familiarizationprogramme. After appointment a formal letter is issued to the independent directorsoutlining his/her roles functions duties and responsibilities.

17. Performance Evaluation of the Board/ Committees and Independent Directors

The Board of Directors have evaluated the overall performance of the Board as a wholeand also of each director individually including the Independent Director and found thesame to be satisfactory.

The performance evaluation of the Independent Directors was completed. The performanceevaluation of the Chairman and Non-Independent Directors was carried out by theIndependent Directors. The Board of Directors expressed their satisfaction with theevaluation process.

The performance of the committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as composition of Committeeseffectiveness of committee meetings etc.

18. Independent Directors Meeting

During the year under review the Independent Directors met once inter alia todiscuss:

1. Evaluation of performance of Non-Independent Directors and the Board of Directors asa whole taking into account the views of Executive and Non-Executive Directors.

2. Performance evaluation of the Chairman of the Company taking into account the viewsof Executive and Non-Executive Directors and independent directors was done by the entireboard excluding the independent director being evaluated.

3. Evaluation of the quality content and timelines of flow of information between theManagement and the board that is necessary for the Board to effectively and reasonablyperform its duties

19. Committees of the Board

Currently the Board has five committees:

1. Audit Committee

2. the Nomination and Remuneration Committee

3. the Stakeholders' Relationship Committee

4. the Risk Management Committee

5. Asset Liability Management Committee.

The details of the committees of Board are as follows:

Audit Committee

The Audit Committee of Directors is constituted as per the provisions of Section 177 ofthe Companies Act 2013. The Composition of Audit Committee along with dates of meetingand directors attendance is as follows.

Name of the Member Designation
Mr. Shailesh Jogani * Chairman
Ms. Prashansa Bora Member
Mr. Rajesh Vardhan Member

*The Audit committee was re-constituted effective 15th June 2021consequent to resignation of Mr. Arvind Kohtari; Mr. Shailesh Jogani (chairman) wasinducted in place of Mr. Arvind Kothari.

Audit Committee duly met 4 times during the F.Y 2020-21 on the following dates:

31st July 2020 15th September 2020 12th November2020 and 12th February 2021

Nomination & Remuneration Committee

The Nomination & Remuneration Committee of Directors is constituted in accordancewith the requirements of Section 178 of the Companies Act 2013. The Composition ofNomination and Remuneration Committee is as follows. The Company's policy on Directors'appointment and remuneration including all other matters shall be available at theregistered office of the Company for inspection.

Name of the Director Designation
Mr. Shailesh Jogani * Chairman
Mr. Rajesh Vardhan Member
Ms. Prashansa Bora * Member

*The nomination and remuneration committee was re-constituted effective 15thJune 2021 consequent to resignation of Mr. Arvind Kohtari; Mr. Shailesh Jogani(chairman) was inducted in place of Mr. Arvind Kothari.

The nomination and remuneration policy as required under Section 178 (3) of the Companyis available on our website

Nomination & Remuneration Committee duly met thrice during the F.Y 2020-21 on thefollowing dates:

31st July 2021 25th November 2020 and 12th February2021

Stakeholders Relationship Committee

Pursuant to Section 178 of the Companies Act 2013 the Board of Directors hasconstituted the Stakeholders Relationship Committee. The Composition of StakeholdersRelationship Committee is as follows:

Name of the Member Designation
Mr. Shailesh Jogani * Chairman
Ms. Rajesh Vardhan Member
Mr. Ramesh Vardhan Member

*The Stakeholders Relationship committee was re-constituted effective 15thJune 2021 consequent to resignation of Mr. Arvind Kohtari; Mr. Shailesh Jogani(chairman) was inducted in place of Mr. Arvind Kothari.

Stakeholders Relationship Committee met once during the F.Y 2020-21 on 25thNovember 2020.

Asset Liability Management Committee (ALCO)

The Board of Directors has constituted the ALCO Committee as required under RBI's NBFCregulations. Composition of the same is as follows:

Name of the Member

Mr. Rajesh Vardhan

Mr. Shailesh Jogani *

Mr. Ramesh Vardhan

*The ALCO committee was re-constituted effective from 15th June 2021Mr. Arvind Kohtari; Mr. Shailesh Jogani (chairman) was inducted in place of Mr. ArvindKothari.

Risk Management Committee

The Board of Directors has constituted the Risk Management Committee as required underRBI's NBFC regulations. Composition of the same is as follows:

Name of the Member

Mr. Rajesh Vardhan

Mr. Ramesh Vardhan

20. Particulars of transaction between the Company and the Non-Executive Directors

During the year under review the Company has not entered into any Transaction with itsNon-Executive Director.

21. Management Discussion and Analysis

The Management Discussion and Analysis report forms integral part of this AnnualReport.

22. Conservation of Energy and Technology Absorption

The information relating to conservation of energy and technology absorption by theCompany is annexed to the report as "Annexure A"

23. Foreign Exchange Earnings and Outgo

There was no earning in Foreign Exchange nor was there any outflow during the yearunder review

24. Extract of Annual Return

Annual return for the financial year 2020-21 once filed shall be available on the onthe website of the Company

25. Corporate Governance

Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 provide threshold for applicability of corporate governance rules. Your company doesnot exceed such threshold. Hence provision of corporate governance is not applicable onyour company.

26. Vigil Mechanism for Directors and Employees

The Company has a Vigil Mechanism policy to report genuine concerns or grievances asper the provisions of section 177 of the Companies Act 2013 and regulation 22 of SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015.

27. Internal Financial Control and their Adequacy

The Company has internal financial control and risk mitigation system which isconstantly assessed and strengthened. The Audit committee actively reviews the adequacyand effectiveness of the Internal Financial control and suggests the improvements for thesame.

28. Risk Management Policy

The Board of Directors in consultation with the Audit Committee have framed a policyfor management and mitigation of risk faced by the Company in its day to day operationsfurther the Board of Directors and the Senior Management of the Company have beenentrusted with the responsibility of identification development and implementation of thesame across the organization.

29. Corporate Social Responsibility

The provisions of Section 135 with regards to Corporate Social Responsibility are notapplicable to the Company.

30. Auditors' Report

The Statements made by the Auditors in their report are self-explanatory and doesn'trequire any comments by the Board of Directors.

31. Fraud Reported by Auditors

During the year under review there have been no instances of fraud which required theStatutory Auditors to report to the Audit Committee and/or Board or Central Governmentunder Section 143(12) of Act and Rules framed thereunder.

32. Statutory Auditors

In accordance with the provisions of Section 139 of the Companies Act 2013 read withCompanies (Audit and Auditors) Rules 2014 M/s. Amar Bafna & Associates CharteredAccountants statutory auditors were appointed for 5 years from the conclusion of 23rdAGM till the conclusion of the 28th AGM to be held for the year 2022.

M/s. Amar Bafna & Associates Chartered Accountants shall continue as StatutoryAuditors for the remaining period of the term till the AGM to be held for the year 2022.

As per the communication received vide letter dated 21st October 2020 fromthe office of the Auditors of the Company the Statutory Auditors M/s Amar Bafna &Associates (FRN: 114854W) have merged with M/s. JMT & Associates (FRN: 104167W) andconsequently name of the auditor's firm has been changed to JMT & AssociatesChartered Accountants (FRN: 104167W) with effect from 21.10.2020

33. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rules madethere under the Company has appointed M/s. Priti J Sheth & AssociatesPracticing Company Secretaries to undertake the Secretarial Audit of the Company for thefinancial year ended March 31 2021.

The Secretarial Audit Report is included as "Annexure B" and forms anintegral part of this report.

34. Directors Comment on qualification or observation

With regards to the remarks by the Secretarial Auditor of the Company the managementwould state as under:

1. Due to low business operations the Company has not appointed an internal auditor;however considering the business environment the management is in the process to appointone.

2. Proof of online dispatch of notices to the shareholders have been misplaced andhence could not be presented during the process of secretarial Audit.

Other remarks mentioned in Statutory Audit Report and Secretarial Audit Report areself-explanatory and do not require any further clarifications.

35. Particulars of Employees

The Company wishes to place on record its appreciation to the contribution made by theemployees to the operations of the company during the period.

During the year under review there were no employees who were in receipt of theremuneration beyond the limits prescribed under Rule 5 (2) of Companies (Appointment andRemuneration) Rules 2014 and therefore no disclosures need to be made under the saidsection.

Further the details of the top 10 employees in terms of remuneration drawn pursuant toRule 5(2) of Companies (Appointment and Remuneration) Rules 2014 shall be available atthe registered office of the Company during the business hours and the details of ratiosof the remuneration of each Director to the median remuneration to the employees of theCompany for the year under review are enclosed as "Annexure C" to theBoard's Report.

36. Related Party Transactions

The details of Related Party Transactions entered into by the Company are annexedhereto in "Annexure D " in form AOC-2.

Further the disclosure of Related Party Transactions in compliance with AccountingStandards form a part of Note No. 25 of the financial statements.

37. Particulars of Loans Guarantees and Investments

The Company being a Non-Banking Financial Company its Main Business is of giving loansand making investments. The details of loans given and investments made are provided inNotes to financial statements.

38. Listing of Shares

Formerly the Company's Shares were listed on Ahmedabad Stock Exchange Limited PuneStock Exchange Limited Jaipur Stock Exchange Limited and Vadodara Stock Exchange Limited.These stock exchanges were granted exit by SEBI and de-recognized as Stock Exchange.

In the interest of the shareholders the Board of Directors decided to list the Sharesof the Company on Bombay Stock Exchange Limited. Accordingly shares were listed on BSELimited through 'Direct Listing' route on 11th February 2020.

39. Significant and Material Orders passed by the Regulators or Courts or Tribunal

There are no significant material orders passed by the Courts/Tribunals.

The Bombay Stock Exchange Limited granted approval for listing of Company's Shares on11th February 2020.

40. Directors' Responsibility Statement

In terms of Section 134(5) of the Companies Act 2013 in relation to financialstatements for the year ended 31st March 2021 the Board of Directors statethat:

• In the preparation of the Annual Accounts the applicable accounting standardshad been followed;

• The Directors had selected such Accounting Policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;

• The Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

• The Directors had prepared the Annual Accounts on a going concern basis;

• The Directors had laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and were operating effectively;

• The directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

41. Disclosure under sexual harassment of women at workplace

In order to prevent sexual harassment of women at work place your Company has adopteda Policy for prevention of Sexual Harassment of Women at Workplace. During the year underreview the Company has not received any complaints in this regard.

Further the provisions relating to constitution of Internal Complaints Committee underthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 are not applicable.

42. Acknowledgments

The Directors wish to place on record their appreciation of the contribution made bythe executives and employees at all levels for their outstanding professionalisminitiatives and commitment to organizations growth and success and helping theorganization in its continuous drive towards progress.

Your Directors also appreciate with gratitude the continuous support of clientsbankers institutions the Shareholders and well-wishers.

By Order of the Board

Sd/- Sd/-
Date: 23rd August 2021 Akash Vardhan Rajesh Vardhan
Place: Mumbai Managing Director Director
DIN: 03043186 DIN: 00199986