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VLS Finance Ltd.

BSE: 511333 Sector: Financials
NSE: VLSFINANCE ISIN Code: INE709A01018
BSE 00:00 | 24 Jun 141.30 2.45
(1.76%)
OPEN

146.60

HIGH

146.60

LOW

141.25

NSE 00:00 | 24 Jun 141.85 2.25
(1.61%)
OPEN

148.00

HIGH

148.00

LOW

141.05

OPEN 146.60
PREVIOUS CLOSE 138.85
VOLUME 155
52-Week high 264.85
52-Week low 129.40
P/E 2.15
Mkt Cap.(Rs cr) 546
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 146.60
CLOSE 138.85
VOLUME 155
52-Week high 264.85
52-Week low 129.40
P/E 2.15
Mkt Cap.(Rs cr) 546
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

VLS Finance Ltd. (VLSFINANCE) - Director Report

Company director report

Your directors are pleased to present the 34th Annual Reportof the Company together with the Audited Annual Accounts for the year ended 31stMarch 2021.

1. Financial Results

(Rs. in Lakhs)

Particulars For the year ended 31st March 2021 For the year ended 31st March 2020
Total Income 21562.91 2773.37
Less: Total Expenditure 1302.87 3879.22
Less: Finance Cost 1.63 6.56
Gross Profit/(loss) 20258.41 (1112.41)
Less: Depreciation 76.17 115.60
Profit/ (loss) before tax 20182.24 (1228.01)
Less: Current Tax (614.00) 0
Less/Add: Tax adjustment for earlier year (6.45) (9.20)
Add: Deferred Tax 2020.39 4485.97
Net Profit/ (loss) after tax 21582.18 3248.76
Paid up Equity Share Capital (excluding calls in arrears) 3878.42 3878.42
Reserves excluding revaluation reserve 131356.11 85311.03
Earnings per share (Rs.) 55.82 8.40

* (Figures have been regrouped / recast to conform to current year'sfigures)

2. Management Discussion and Analysis Industry Structure andDevelopment

The trend in Indian Stock Market had largely been upbeat during theyear under review inspite of continuing COVID- 19 pandemic. The COVID-19 outbreak whichengulfed India resulted in nationwide lockdown starting 25th March 2020.However a gradual and calibrated easing of lockdown measures started from June 2020.During this unprecedented time the Company has successfully managed to have operationscarried out with limited staff coming to office and with part of its employees workingfrom home.

During the restrictions imposed due to subsequent wave of pandemic theoperations of Company continued with the same pace. It is expected that measures taken byGovernment will show results in due course of time for bringing back the economy on trackwhich will further strengthen the stock market.

Health Safety and Pandemic Risk

In addition to serious implications for people's health and thehealthcare services coronavirus (COVID-19) is having a significant impact on theworld-wide economy including India in terms of business growth and business models. Thedisruption has pushed the various sectors to adopt digital model for sustenance andgrowth. The Company and its subsidiaries have been proactive enough to adopt the digitalmode since the Covid-19 outbreak ensuring employees best health safety measures anduninterrupted service to the stakeholders. In keeping with its employee-safety firstapproach the Company quickly instituted measures to be in contact with all employees andassured of their well-being. The Company's focus on liquidity supported by a strongbalance sheet and acceleration in cost optimization initiatives would help in navigatingany near-term challenge. However the performance of the Company and its subsidiaries maybe impacted in future because of the lasting effect of this disruption on the economy incase the stock market does not farewell due to this pandemic.

Outlook Risks and Concerns

The country's equity markets remains promising for both global anddomestic investors. The underlying strength of Indian consumption and demand continues toremain healthy. The performance of your Company is closely linked to those of the stockmarkets. Your Company has been making use of available opportunities in the capitalmarkets keeping in view its business objectives.

The Company is exposed to normal industry risks such as creditinterest rate economic currency political market and operational risks. The Companyviews risk management as integral to its business for creating and maintaining bestpractices in business operations and administration.

Opportunities and Threats

The continuing emphasis on ‘Make in India' by government isexpected to infuse further capital investment in the country and thus more opportunity forfinancial sector. The Company is looking forward to grasp the available opportunities. TheCompany will also focus on permitted avenues as a member of the Stock Exchange. Theuncertain state of the global economy however remains a cause of concern.

Adequacy of Internal Financial Control Systems

The management in consultation with Internal Auditors monitor andevaluate the efficacy and adequacy of internal financial control systems in the Companyits compliance with operating systems accounting procedures and policies at all levels ofthe Company and its subsidiaries. The audit observations and the corrective actionsthereon are presented to the Audit Committee of the Board. The control framework isestablished and maintained by the Company. The observations by the internal and statutoryauditors are perused by the Management the Audit Committee as well as the Board forproper implementation. The Company's internal financial controls have been found to beadequate and effective.

Financial Review

During the year under review your Company generated total income ofRs. 21562.91 lakhs as against Rs. 2773.37 lakhs in the previous year. The other incomestood at Rs. 2.17 lakhs for the year under review as against Rs. 9.24 lakhs in theprevious year. The Company has earned a net profit after tax of Rs. 21582.18 lakhs for theyear under review compared to the profit of Rs. 3248.76 lakhs in previous year. The othercomprehensive income for the period stood at Rs. 25042.83 lakhs as compared to thecorresponding other comprehensive income figure of Rs. 15437.22 lakhs for the previousyear.

Further the Financial Statements of the Company have been prepared inaccordance with the Indian Accounting Standards (‘IND AS') as per the Companies(Indian Accounting Standards) Rules 2015 as amended and notified under Section 133 of theCompanies Act 2013 ("the Act") read with relevant Rules issued thereunder andin conformity with the accounting principles generally accepted in India.

Key Ratios

Summary of applicable key ratios on standalone basis for FY 20-21vis-a-vis FY 19-20

Particulars FY 2021 FY 2022
1 Return on equity (PAT/Equity) 16% 3.60%
2 Return on assets (PAT/Total Assets) 13.2% 2.90%
3 Net profit margins(PAT/ Turnover)* 3.72% 0.97%
4 Earning before interest tax depreciation and amortization (EBITDA/ Turnover)* 3.49% -0.33%

* Turnover comprises of Total Income (net of Trading inshares/Securities as per P & L Account and sale of Shares/ Securities/Mutual Fundsetc. as specified in Note No. 24 of Annual Financial Statements for the year 2020-21.

The above changes in ratios are on account of stock market conditions.

Segment wise Performance

Accounting Standard (AS-17) relating to "Segment Reporting"has been complied with. The gross operating income and profit from the other segment isbelow the norms prescribed in AS-17 hence separate disclosure has not been made.

Cautionary Statement

The statements in the above analysis describing the Company'sestimates expectations or predictions may be ‘forward looking statements' within themeaning of applicable securities laws and regulations. The actual results may differ fromthose expressed or implied. Important factors that could make a difference to theCompany's operations include changes in government regulations tax regimes economicdevelopments within the country and abroad and other related factors.

3. Dividend & Reserve

The Board has recommended 15% dividend on equity shares

i.e. @Rs.1.50 per equity share for the year 2020-21 subject to approvalof members. The dividend if approved will be paid to the registered members as on thedate of book closure of Annual General Meeting scheduled to be held on 30/09/2021(‘AGM'). No amount was proposed to be transferred to the reserve during the yearunder review.

4. Directors/ Key Managerial Personnel (KMP)

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

Directorate:

In accordance with the provisions of Article 89 of the Articles ofAssociation of the Company Shri Kishan Kumar Soni- Director Finance & CFO (DIN:00106037) and Mr. Vikas Mehrotra - Non Executive Director (DIN: 06476150) will be retiringby rotation at the ensuing AGM of your Company and being eligible have offered themselvesfor re-appointment. Concurring to recommendation of Nomination and Remuneration Committeeof the Company your Directors recommend their re-appointment as set out in the Noticeconvening the ensuing AGM.

Shri R. Bandyopadhyay - Independent Director (DIN:01122778) resignedw.e.f. 29/04/2020 from the Board due to personal reasons and had confirmed that there wasno other reason for his resignation. The Board places on record its appreciation forvaluable contribution made by Shri R. Bandyopadhyay during his tenure as Director of theCompany.

Shri Deepak Kumar Chatterjee (DIN: 03379600) aged about 68 years whofulfills the criteria given under Section 149 (6) of the Act for an Independent Directorof the Company had been appointed as an Additional Director in the category ofIndependent Director by the Board in its meeting held on 12/02/2021 for the first term offive consecutive years commencing from 12/02/2021 till 11/02/2026 subject to approval ofmembers. Concurring to recommendation of Nomination and Remuneration Committee of theCompany your Directors recommend his appointment as Independent Director for his firstterm of five years as set out in the Notice convening the ensuing AGM.

Further the first term of Shri Dinesh Kumar Mehrotra (DIN: 00142711)as Independent Director had ended on 27/05/2021. The Board had reappointed him for his 2ndterm of five years w.e.f. 29/06/2021 as Additional Director in the category of IndependentDirector concurring to recommendation of Nomination and Remuneration Committee of theCompany. Your Directors recommend reappointment of Shri Dinesh Kumar Mehrotra asIndependent Director who in the opinion of the Board fulfils the criteria given undersection 149(1) of the Act for an Independent Director for his second term for a period offive consecutive years as set out in the Notice convening the ensuing AGM The opinion ofthe Board on expertise and other attributes of Directors including Independent Directorshas been charted in the Report on Corporate Governance enclosed as Annexure -I tothis report.

The revision in remuneration of Shri M. P Mehrotra- Executive Vice -Chairman Shri S. K. Agarwal - Managing Director and Shri Kishan Kumar Soni- DirectorFinance & CFO is also proposed as set out in the Notice convening the ensuing AGMbesides approval for continuation of employment of Managing Director upon attaining age of70 (Seventy) years.

Key Managerial Personnel (KMP):

Pursuant to the provisions of sub-section (51) of Section 2 and Section203 of the Act read with the Rules framed thereunder the following persons were KeyManagerial Personnel of the Company as on March 312021:

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

2. Shri S. K. Agarwal- Managing Director

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

4. Shri H. Consul- Company Secretary

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

5. Independent Directors

The Independent Directors of your Company have complied with therelevant provisions of the law relating to their appointment and they continue to complywith 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 Actand Regulation 16 of the Listing Regulations the Company has received declarations fromall the Independent Directors of the Company that they continue to meet with the criteriaof independence as provided in the Act and the Listing Regulations. Further all theNon-Executive Directors of the Company had no pecuniary relationship or transactions withthe Company other than sitting fees and reimbursement of expenses if any incurred bythem for the purpose of attending meetings of the Company.

During the year ended 31/03/2021 1 (one) meeting of IndependentDirectors was held on 30/03/2021 as detailed hereunder:

Name of the Director Whether Chairman / Member No. of Meeting(s) attended during F.Y. 2020-2021 and dates
1 Shri Ajit Kumar Chairman 1 30/03/2021
2 Shri D.K. Mehrotra Member 1 30/03/2021
3 Dr. R. L. Bishnoi Member 1 30/03/2021
4 Shri D. K. Chatterjee Member 1 30/03/2021

In the meeting of Independent Directors held on 30/03/2021 pursuant toSchedule IV of the Act and the Listing Regulations the Independent Directors reviewed theperformance of the Chairman and Non-Independent Directors of the Company. The Directorsalso discussed the quality quantity and timeliness of flow of information between theCompany management and the Board which is necessary for the Board to effectively andreasonably perform their duties. Their conclusion on all the issues discussed wassatisfactory.

6. Number of Board and Committee Meetings

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

7. Corporate Governance and Compliance Certificate

We have reported in Annexure -I to this report the extent ofcompliance of Corporate Governance practices in accordance with Regulation 34(3) of theSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.

The requisite certificate from A Aggarwal and Associates- CompanySecretaries signed by Shri Ashutosh Aggarwal Practicing Company Secretary (COP:7467)confirming that none of the directors on the Board of the Company have been debarred ordisqualified 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 ofaforesaid report.

8. Directors' Responsibility Statement

Pursuant to the provisions of Section 134(3) of the Companies Act2013 the Directors hereby confirm:

a. that in the preparation of the annual accounts for the financialyear ended 31st March 2021 the applicable accounting standards have beenfollowed along with proper explanation relating to material departures;

b. that they have 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 of the Company for that period;

c. that they have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d. that they have prepared the Annual Accounts for the financial yearended 31st March 2021 on a ‘going concern' basis;

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

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

9. Evaluation of Board/Committees/Individual Directors

\The Board carried out the annual performance evaluation of its ownperformance and its Committees in its meeting held on 29/06/2021. The said exercise wasled by the independent directors who are also constituents of Nomination and RemunerationCommittee. The evaluation process focused on different aspects of the Board and Committeesfunctioning such as composition of the Board and Committees experience and competenceperformance of specific duties and obligations governance issues etc. The aim was toassess the effectiveness of the Board's/Committees' processes and to identify any actionsrequired to improve effectiveness. The review thus focused on the following associatedareas 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 otherrelevant documentation

• Discussions with all directors on the Board Committee membersfocusing on aspects of the Board's and Committees' composition; strategy risk andcontrols; decision-making roles and performance of the Chairman independent directorsexecutive directors and other non-executive directors.

Given the experience and qualifications of the Board members it wasnot considered necessary to engage external persons to facilitate the evaluation process.

As per the provisions of Section 178(2) of Companies Act 2013 theBoard of Directors also carried out annual evaluation of each Director's performance inits meeting held on 29/06/2021 on the parameters including attendance contribution andindependent judgment by individual directors. Since all Directors have rich experience ofcorporate environment so they are accustomed to having their performance regularlyevaluated.

10. Proper systems to ensure that compliances were adequate andeffective

The professional conduct sets expectations that all employees shallcomply with all laws and regulations governing Company's conduct. Information is reportedupwards internally within the organization to senior management and if appropriate alsoshared with the Board of Directors and/or the external auditors. Information is reportedexternally in public filings if it meets the criteria for requiring public disclosure.

11. Corporate Social Responsibility (CSR)

The Company is covered under the threshold prescribed under the Act forCSR. During the year under review the Company sanctioned Rs. 5.25 Lacs to IIMPACT aGurgaon based nonprofit organisation inter-alia engaged in activities relating topromotion of primary education of girls to support its centers in rural areas of KanpurDehat Uttar Pradesh. The Company has supported these centers in past three years as well.Further Rs. 3176629/- (Rupees Thirty One Lacs Seventy Six Thousand Six Hundred TwentyNine only) was released in favour of Smt. Sunderdevi Memorial Charitable Trust to beutilised for setting up a VEDIC SCHOOL at Dist. Karnal in the state of Haryana. The amountof Rs. 5.00 Lacs sanctioned earlier to Rahab for their project was not disbursed pendingcompletion of documentation. The amount sanctioned to RAHAB was cancelled during the yearsince documentation was not completed by them inspite of reminders.

The recent amendment in CSR Rules effective from 22/01 /2021 issued byMinistry of Corporate Affairs mandates under Rule 10 thereof that the amount whichremains unspent till the 31st March of every financial year must be transferred todesignated fund by the Government (‘fund') within 6 months from the end of financialyear and the Company would no longer be able to use or disburse under the CSR activitiesor carry over to next year or spend in future the allocated amount for CSR which remainedunspent on 31st March of every financial year.

For the financial year 2020-21 the entire amount available on CSRinitiative by the Company has been spent. There being no unspent amount left in CSR corpusfor the year 2020-21 no amount would be required to be transferred to the fund undersecond proviso to sub-section 5 of section 135 of the Companies Act 2013 read with Rule 10of Companies (Corporate Social Responsibility policy) Rules 2014.

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

12. Annual Return Extract (MGT-9)

The reporting of extract of Annual Return in Form no. MGT-9 had beendone away with pursuant to amendment in section 92(3) of the Companies Act 2013 read withRule 12 of Companies (Management and Administration) Rules 2014 w.e.f. 28/08/2020. Hencethe reporting of extract of Annual Return has not been made in this report. The AnnualReturn is now required to be placed on the website of the Company if any in terms ofsection 92(3) read with section 134(3)(a) of the Act and link thereof is required to begiven in the Board's Report. The Annual Return for the Financial Year 2019-20 isavailable on web link viz.: https://www.vlsfinance.com/category/annual-return/

13. Policies

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

A. Corporate Social Responsibility Policy

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

B. Related Party Transaction

The detailed policy may be accessed at www.vlsfinance.com under thehead ‘Investor Relations'.

The Board of Directors (the "Board") of VLS Finance Limited(the "Company") has adopted this Policy. The said Policy includes themateriality threshold and the manner of dealing with Related Party Transactions("Policy") in compliance with the requirements of Section 188 of the CompaniesAct 2013 and conforms to the requirements of regulation 23 of the Listing Regulations.

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

This Policy is intended to ensure due and timely identificationapproval disclosure and reporting of transactions between the Company and any of itsRelated Parties in compliance with the applicable laws and regulations as may be amendedfrom time to time.

C. Board diversity

The detailed policy may be accessed at www.vlsfinance.com under thehead ‘Investor Relations'.

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

D. Risk Management

The detailed policy may be accessed at www.vlsfinance.com under thehead ‘Investor Relations'.

The Company has formed Risk Management Policy to ensure appropriaterisk management within its systems and culture. The Company operates in a competitiveenvironment and is generally exposed to various risks at different times such astechnological risks business risks operational risks financial risks etc. The Board ofDirectors and the Audit Committee of the Company shall periodically review the RiskManagement Policy of the Company so that the Management controls the risk through properlydefined network.

The Company has a system based approach to business risk managementbacked by strong internal control systems. A strong independent Internal Audit Function atthe corporate level carries out risk focused audits across all businesses enablingidentification of areas where risk managements processes may need to be improved. TheBoard reviews internal audit findings and provided strategic guidance on internalcontrols monitors the internal control environment within the Company and ensures thatInternal Audit recommendations are effectively implemented.

The combination of policies and procedures adequately addresses thevarious risks associated with your Company's businesses.

E. Anti-sexual harassment mechanism

The detailed mechanism may be accessed at www.vlsfinance.com under thehead ‘Investor Relations'.

The Company has in place an Anti-Sexual Harassment Policy in line withthe requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. All women employees inter-alia permanentcontractual temporary trainees are covered under this policy.

The Internal Complaints Committee is headed by the woman Director onthe Board. There were no complaints received from any employee or otherwise during theyear under review and no complaints were pending as on 31/03/2021.

F. Nomination and Remuneration Policy

The detailed policy may be accessed at www.vlsfinance.com under thehead ‘Investor Relations'.

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

G. Vigil Mechanism /Whistle Blower

The Company is committed to adhere to the highest standards of ethicalmoral and legal conduct of business operations. Vigil (whistleblower) mechanism provides achannel to the employees and directors to report to the management concerns aboutunethical behaviour actual or suspected fraud or violation of the code of conduct orpolicy. The mechanism provides for adequate safeguards against victimization of directorsand employees who avail of the mechanism and also provide for direct access to theChairman of the Audit Committee in exceptional cases. It is hereby affirmed that no personwas denied access to the Audit Committee. The detailed mechanism may be accessed atwww.vlsfinance.com under the head ‘Investor Relations'.

14. Contracts with Related Party

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

15. Auditors Statutory Auditors

In terms of Section 139 read with Companies (Audit and Auditors) Rules2014 M/s. M. L. Puri & Co. - Chartered Accountants (FRN: 002312N) had been appointedfor a period of 5 years i.e. from the conclusion of 30th Annual General Meetingtill the conclusion of 35th Annual General Meeting of the Company subject toapplicable regulations. The members in the 31st AGM of the Company hadauthorised for the Board to fix the remuneration of the Auditors for the remaining tenure.The Statutory Auditors have consented to continue as Statutory Auditors and have given aconfirmation that they are eligible to continue with their appointment and have not beendisqualified in any manner for continuing as Statutory Auditors.

Cost Auditor

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

16. Auditors' Report

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

17. Secretarial Audit Report

The Secretarial Audit Report for the year 2020-21 submitted bySecretarial Auditor in terms of Section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isenclosed as Annexure-IV. The said report does not contain any adverse remark orobservation by the Secretarial Auditor.

18. Statutory Information.

• The Board in its meeting held on 25/10/2018 had approved theproposal for voluntary delisting from the Calcutta Stock Exchange Ltd. (‘CSE'). Whenthe Company approached CSE thereafter for completing formalities of delisting it waslearnt that CSE had suspended the scrip of your Company alleging non-payment of listingfee for the year 2014-15 and other non- compliances. Since the Company had paid the saidlisting fee in time and also made other compliances the same were promptly informed to CSEin response to their communications. However the Exchange had been inordinately delayingthe process and delisting approval has not yet been granted. Regarding listing fee for theyear 2021-22 the stand taken by the Company is that the same is not payable since theCompany had approached Exchange for delisting of scrip well in time and cannot be madeliable for payment of the fee when the delay is on part of Exchange.

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

• Your Company's dispute with BMS IT Institute Pvt. Ltd. had cometo an end in terms of order dated 05/04/2020 of Hon'ble Supreme Court of India andremaining amount due as per settlement in terms of aforesaid order had been received inthe year 2020-21.

• During the year under review the Company did not absorb any newtechnology or carry out any R&D related activity for this purpose. However use ofenergy efficient devices wherever possible in conducting business of Company is part ofits administration policies. The detailed disclosure is enclosed as Annexure-V tothis report.

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

• The Company has paid the annual listing fees for the year2021-22 to BSE Ltd. and The National Stock Exchange of India Ltd.

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

• Your Company has not issued equity shares with differentialvoting rights sweat equity or ESOP in terms of Section 43 and Section 62 of the CompaniesAct 2013 during the year under review.

• No revision of financial statements or Board's Report has beenmade in terms of Section 131 of the Companies Act 2013 during the year under review.Further there was no one time settlement with Bank/ Financial Institutions during theyear under review.

• Disclosure relating to ratio of the remuneration of eachdirector to the median employee's remuneration in terms of Section 197(12) of theCompanies Act 2013 is enclosed as Annexure -VI to this report.

• Executive Vice-Chairman Managing Director and Director- Finance& CFO of your company are not in receipt of any remuneration or commission from any ofsubsidiary company in terms of Section 197(14) of the Companies Act 2013. No IndependentDirector was appointed by special resolution during the year under review.

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

19. Fixed Deposits

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

20. Human Resources

Employee relations continued to be cordial during the year. The numberof employees stood at 32 (Thirty two) at the end of the year under review. The Directorsplace 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 theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 there was noemployee during the year drawing remuneration more than the stipulated amount in the saidrules. Your Company has not approved any scheme relating to provision of money to be heldin a trust for the benefit of the employees in terms of Section 67(3)(b) of the CompaniesAct 2013 during the year under review.

21. Green initiative in Corporate Governance

As a continuing endeavor towards the Go Green Initiative the Companyhas been sending documents like the notice calling the general meeting audited financialstatements directors' report auditors' report etc. in electronic form to the emailaddresses provided by the members directly or made available to us by the depositoriesbesides regular correspondence. The electronic mode is both economical and speediercompared to physical documents. Members who hold shares in physical form are thereforerequested to register their e-mail addresses and intimate any change in e-mail id withthe Company or with the Registrar & Share Transfer Agents RCMC Share Registry Pvt.Ltd. In respect of electronic holdings members are requested to register their e-mailaddresses with the depository through their concerned depository participants. You maykindly note that even after registration of e-mail ID you are entitled to be furnishedfree of cost a printed copy of the annual report of the Company upon receipt of arequisition from you at any time. In case you desire to receive Company's communicationand documents in physical form you are requested to intimate us through email athconsul@vlsfinance.com.

22. Subsidiary/Associate Companies

Statement pursuant to Section 129(3) of the Companies Act 2013 for thefinancial year ended 31/03/2021 in respect of the subsidiary/associate companies isenclosed with Annual Accounts of the Company.

The consolidated financial results include the audited financialresults for the year ended on 31/03/2021 of the subsidiaries VLS Securities Limited(99.67%) and VLS Asset Management Limited (99.15%). The financial results of VLS CapitalLtd. for the same period have been consolidated as an associate under equity method ofaccounting. The financial results of other companies included in consolidated results inprevious years namely BMS IT Institute Private Limited (BMS) and Sunair Hotels Ltd.(Sunair) are not included in these consolidated financial statements as the company hasalready disposed off its investments in equity of BMS during the year 2019-20 as per thesettlement reached in terms of the order passed by the Hon'ble Supreme Court of India. Asregards Sunair it does not fall under the definition of an associate as per Ind AS-28 dueto absence of significant influence on account of ongoing disputes between the Company andSunair hence excluded from consolidation of financial results of the year under review.

During the year a wholly owned subsidiary by the name VLS Real EstateLtd. was incorporated on 03/02/2021 by the Company for undertaking business in real estatesector. The first financial year of said subsidiary being upto 31/03/2022 the auditedfinancial statements as on 31/03/2021 had not been prepared for the purpose ofconsolidation of financial results however the relevant financial figures of saidsubsidiary had been considered in consolidated financial statement for the year underreview.

Separate section on performance and financial position of subsidiarycompanies and associate company have been provided as Note no. 40 of Notes forming part ofconsolidated financial statement in the Annual Report for the year under review.

23. Consolidated Financial Statements

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

24. Acknowledgements

The Directors thank the Company's business associates customersBankers the Securities & Exchange Board of India and Stock Exchanges employeescustomers vendors investors and academic partners for their continuous support. TheDirectors also thank the Government of India and Governments of various states in India.

For and on behalf of the Board

Place: New Delhi S.K. Agarwal K. K. Soni
Date : 29/06/2021 (Managing Director) Director Finance & CFO
DIN:00106763 DIN: 00106037

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