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Directors Report of VLS Finance Ltd.

Mar 31, 2016

DIRECTORS’ REPORT TO THE MEMBERS

The Directors are pleased to present the 29th Annual Report of the Company together with the audited statement of accounts for the year ended 31st March, 2016.

1. Financial Results (Rs. in Lakhs)

For the year ended

31st March, 2016

For the year ended 31st March, 2015*

Gross Receipts

191701.79

462349.03

Profit before Interest & Depreciation

1036.82

799.38

Less: Interest & Finance Charges

195.80

23.04

Profit before Depreciation

841.02

776.33

Less: Depreciation

44.96

47.64

Profit before Tax

796.06

728.69

Less: Provision for Taxation/(Credits)

94.08

(80.68)

Profit after Tax

701.98

648.01

Surplus brought forward from

4444.25

2495.28

previous year

Less: Adjustment on account of

0.00

1.16

transitional Provision effect

for depreciation

Add: Transfer from Statutory Reserve

0.00

1302.13

(Under RBI Act, 1934)

Available for Appropriation

5146.23

4444.25

Appropriations:

To General Reserve

0.00

0.00

Surplus c/f

5143.23

4444.25

* (Figures have been regrouped/recast to conform to current year’s methodology)

2. Management Discussion and Analysis Financial Review

During the year under review, profit before tax was Rs.796.06 Lakhs as compared to Rs. 728.69 Lakhs for the previous year and profit after tax was also higher at Rs. 701.98 Lakhs as compared to Rs. 648.01 Lakhs during the previous year.

Industry Structure and Development

The world economy showed a weakening trend, with weak aggregate demand, falling commodity prices and increasing volatility in the financial markets. Most emerging economies have been showing slower economic growth. India has fortunately been able to buck this trend, thanks largely to the country’s domestic demand and comparatively limited reliance on the external sector for growth. The world economy’s revised growth rate was at 2.4% as compared to 3.6% in the previous year and is projected to grow by 2.9% in 2016.

The Asian region is expected to grow at a steady 5.4 percent in 2015-16 and will continue to remain the global growth leader. Asia’s growth should benefit from relatively strong labour markets and growth in disposable income along with the ongoing recovery in major developed economies. Low inflation, increased public investment, revival of private investment and increased consumption (both urban and rural) were the major factors influencing India’s GDP growth which was at 7.4%. The continuing tightening measures by the Reserve Bank of India to combat inflation, led to higher cost of funds which adversely affected India’s industrial growth. The value of the rupee stabilized vis-a-vis other international currencies during the later half of the fiscal year as a result of various measures taken by the Government and Reserve Bank of India.

Outlook, Risks and Concerns

Your Company has been making use of available opportunities in the capital and the commodities markets for its operations, keeping in view its business objectives. The Company received registration as stock broker in October, 2014. After complying with the requisite formalities of the stock exchange viz. BSE Ltd, the Company commenced operations as stock broker in December, 2015.

The underlying strength of Indian consumption and demand, continues to remain robust. The country’s equity markets remain a favourite of global investors. The performance of your Company is closely linked to those of the stock and commodities markets and more particularly to stock markets. The growth tendencies for 2016-17 are expected to be mostly reflective of the developments in these areas. Your Company is cautiously optimistic in the current scenario and will focus on a well-adjusted portfolio mix, resourceful cost management and risk containment measures in order to sustain profitability.

The Company is exposed to normal industry risks such as credit, interest rate, economic, currency, political, market and operational risks. Our approach to risk management is based on our extensive experience and well placed risk management framework. The Company views risk management as integral to its business for creating and maintaining best practices in business operations and administration.

Opportunities and Threats

Positive strides have been made since the new government has taken over. The Company is looking forward to grasp the available opportunities. The Company will also focus on permitted avenues as a member of the Stock Exchange including corporate advisory and other related services. The uncertain state of the global economy however remains a cause of concern.

Adequacy of Internal Financial Control Systems

The Internal Auditor monitors 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. Significant 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 is perused by the Management, the Audit Committee as well as the Board for proper implementation. The Company’s internal financial controls have been found to be adequate and effective.

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 is below the norms prescribed in AS-17, hence separate disclosure has not been made.

Cautionary Statement

The statements in the above analysis, describing the Company’s projections, 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 Company’s operations include changes in government regulations, tax regimes, economic developments within the country and abroad, and other related factors.

3. Dividend

As a measure to conserve resources, no dividend is recommended.

4. Reserve

No amount was proposed to be transferred to the reserve during the year under review.

5. Directors/ Key Managerial Personnel (KMP)

The following changes have occurred from 01/04/2015 till the date of this report in the composition of the Board of Directors/ Key Managerial Personnel of your Company:

Directors:

Due to untimely demise of Shri Somesh Mehrotra on 22/08/2015, he ceased to be the Director from that date and Shri M.P. Mehrotra was appointed as Non-Executive/Non-Independent Director on 12.09.2015 to fill the casual vacancy so caused. Shri. B.M. Oza ceased to be Director w.e.f. 30/06/2016 due to his demise.

Shri R. Bandyopadhyay and Shri D.K. Mehrotra have been appointed as Additional Directors in the category of Independent Director w.e.f. 28.05.2016 besides Shri Vikas Mehrotra who was also appointed an Additional Director on 28.05.2016 in the category of Non-Independent Director. Shri Vikas Mehrotra is son of Shri M.P. Mehrotra- Promoter and Director of the Company and is related to him as such.

In accordance with the provisions of Article 89 of the Articles of Association of the Company, Shri K. K. Soni- Director-Finance & CFO will retire by rotation at the ensuing Annual General Meeting of your Company and being eligible, offers himself for re-election.

The tenure of Shri S.K. Agarwal-Managing Director is ending on 20th August, 2016 and his reappointment, subject to members approval, has been made in the Board meeting held on 28/05/2016. His tenure as a Managing Director will be effective from 21/08/2016 for a period of 3 years.

As already reported, Dr. (Mrs.) Sushma Mehrotra ceased to be Director on 09/04/2015 due to her demise. Dr. (Mrs.) Neeraj Arora was appointed as Additional Director w.e.f. 30/05/15 and her appointment as Director liable to retire by rotation was approved by members in 28th Annual General Meeting held on 24/09/15.

Key Managerial Personnel (KMP):

Shri K. K. Soni- Director-Finance & CFO was reappointed as such in the extraordinary general meeting held on 19th December, 2015. There has been no other change in the Key Managerial Personnel of your Company during the year under review.

i. Independent Directors

The Independent Directors of your company have complied with the relevant provisions of the law relating to their declaration served to the Company and they continue to comply with the provisions of the applicable laws & listing regulations.

’. Annual Return extract (MGT-9)

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as annexure A.

. Contracts with Related Party

The disclosure in prescribed form AOC-2 is enclosed as annexure B.

i. Directors’ Responsibility Statement

Pursuant to the provisions of Section 134(3) of the Companies Act, 2013, the Directors hereby confirm:

a. that in the preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

b. 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;

c. 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; and

d. that they have prepared the Annual Accounts for the financial year ended 31st March, 2016 on a ‘going concern’ basis.

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

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

10. Evaluation of Board/Committees/Individual Directors

The Board carried out the annual performance evaluation of its own performance, its Committees and Directors. The exercise was led by the independent directors and the Chairman. The evaluation process focused on various aspects of the Board and Committees functioning such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual directors on parameters such as attendance, contribution and independent judgment. The Directors expressed their satisfaction with the evaluation process. The aim was to assess the effectiveness of the Board’s/Committees’ processes, and to identify any actions required to improve effectiveness. The review thus focused on the following associated areas; structure, leadership, strategy, risks, decision making and development.

The evaluation process comprised the following:

- Review of Board, Committees and management information and other relevant documentation

- Meetings with key individuals within the organization.

- Discussions with all directors on the Board, Committee members focusing on aspects of the Board’s 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. Most directors have rich experience of corporate environment and so they are accustomed to having their performance regularly evaluated.

11. Proper systems to ensure compliances were adequate and effective The professional conduct sets expectations that all employees shall comply with all laws and regulations governing company’s conduct. Information is reported upwards internally within the organization to senior management and as 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. Number of meetings

During the financial year ended on 31st March, 2016, the Board met 5 times, on 28/05/2015, 11/08/2015, 12/09/2015, 06/11/2015 and 09/02/2016.

13. Corporate Social Responsibility (CSR)

With the enactment of the Companies Act, 2013 (‘Act’) the Company is covered under the threshold prescribed under the Act for CSR.

In the previous year it was reported that the Company had to expend a sum of Rs. 4,98,534/- being 2% of the average profits of the previous three years on its CSR initiatives. However, based on the clarification by the Ministry of Corporate Affairs on the computation of the profits under section 135 of the Companies Act, 2013, a recalculated figure of Rs. 6,47,440/- was derived to be spent on its CSR activities which is higher than the earlier reported figure for the year 2013-2014. The amount to be spent on CSR initiatives for the year 2014-2015 amounted Rs. 8,46,347/-. Out of the total amount of Rs. 14,93,787/- to be spent on CSR in the year 2015-2016, the Company had placed Rs. 6,48,000/- in the ‘Prime Minister’s National Relief Fund’ as recommended by the CSR committee in its meeting held on 21st March, 2016. The unspent amount for CSR as on 31/03/2016 was Rs. 8,45,787/-. Further, Rs. 100,000/- was approved by the CSR Committee by circulation on 06/06/2016 to be expended by way of contribution made by the Company to Jan Akanksha Pratishthan’s (a non-government organization) ‘Flying Feet’ initiative. The cumulative unspent brought forward amount for CSR activities thus stood at Rs.7,45,787/- . The allocation for the year 2015-16 towards CSR expenditure amounts to Rs. 7,98,376/-. Accordingly, the total unspent amount under CSR as on date of this report is Rs. 15,44,163/-. This amount will be spent as per the further recommendations of the CSR Committee. Given below is the summary of the amount expended on CSR:

Statement of CSR allocation and expenditure

(in Rs.)

Financial

Year

Allocated

Amount

Amount

Spent

Amount Unspent (cumulative)

2013-2014

6,47,440

Not applicable

6,47,440

2014-2015

8,46,347

0

14,93,787

2015-2016

7,98,376

6,48,000

16,44,163

2016-2017

*

1,00,000

15,44,163

*will be computed after closure of current financial year.

The report of CSR Committee in terms of section 135 of the Companies Act, 2013 is enclosed as Annexure -C to this report.

14. Policies

Your Company has formulated following polices to better perform its functions and deliver results.

A. Corporate Social Responsibility Policy

Primer

VLS Finance Limited (VLSF) is committed to undertake CSR activities in accordance with the provisions of Section 135 of the Companies Act, 2013 and related Rules, as amended.

VLSF believes that development has to be all-encompassing and every community has to be responsible for the development of an impartial and benevolent society. VLSF commits itself to add to the society in ways possible for the organization.

Intention & Purpose

- Strategy is to develop a long-term vision for VLSF CSR goals.

- Outline of activities to be embarked upon, in line with the CSR policy and Schedule VII of the Companies Act, 2013, as amended.

- VLSF shall promote projects that are sustainable and create a long term value for the society;

- Have specific and measurable goals in alliance with VLSF beliefs;

- To establish a mechanism for the implementation and monitoring of the CSR activities.

Committee Composition

The CSR Committee of the Board shall be composed of at least three (3) Directors. The CSR Committee shall include one (1) independent director effectively within the time period prescribed under law. Members of the CSR Committee may be replaced by any other member of the Board.

Committee Meetings

The CSR Committee shall meet as often as its members deem necessary to perform its duties responsibly.

Duties & Responsibilities of CSR Committee

i) Formulate and recommend to the Board the CSR activities/ programs to be undertaken by VLSF. The CSR Committee shall be guided by the list of activities specified in Schedule VII to the Companies Act, 2013.

ii) Recommend the CSR expenditure to be incurred on the CSR activities.

iii) Institute a transparent mechanism for implementation of the CSR projects and effective monitoring tools of such projects.

iv) Preparation of annualized reports of the CSR activities undertaken and submission of the same to the Board.

Responsibilities of the Board

i) Approve the CSR Policy and expenditure on CSR initiatives after taking into consideration the recommendations made by the CSR committee.

ii) Ensure the CSR spending in every financial year is in accordance with statutory provisions as applicable from time to time.

iii) Ensure that the CSR activities included in the policy are undertaken by the Company and are in conformity to the activities as outlined in Schedule VII of the Companies Act.

iv) Ensure disclosure of the contents of the CSR Policy and CSR Committee in its report to the members and put the policy on the Company’s website.

CSR Expenditure

i) CSR expenditure shall mean all expenditure incurred in respect of specific projects/programs relating to activities as approved by the Board on the recommendation of its CSR committee including contribution to corpus relating to CSR activities and it shall not include expenditure on an item not in conformity with the CSR policy and Schedule VII of the Companies Act, 2013.

ii) The surplus arising out of the CSR activities or projects shall not form part of the business profit of the Company.

CSR Activities - Projects

i) The Company may undertake one or more CSR activities in line with Schedule VII of the Companies Act, 2013.

ii) The Company shall give preference to the local area(s) around which it operates while considering the CSR activities to be undertaken. However, it may be guided by the requirements of the specific CSR activity in other locations within India.

Implementing CSR Activities

i) The Company shall undertake the CSR activities directly and also through various implementing agencies within the group or outside such as, non-profit organizations, etc. Such outside implementing agencies shall have an established track record as prescribed under the relevant law.

ii) The initiatives so undertaken may be communicated to the employees through specific awareness campaigns, so as to enable maximum participation.

iii) The Company may collaborate with other companies for undertaking CSR projects or programs provided separate reporting mechanisms are in place and are in accordance with Companies Act, 2013 and rules there under, as amended.

Assessment

The CSR committee shall be apprised on the implementation of the CSR activities and the progress shall be monitored on regular basis.

The Company shall through its internal controls, monitoring and evaluation systems, implement, assess, document and report the impact of its CSR activities.

General

Any term or aspect not specifically defined or set out in this policy shall be construed to mean what is laid down in respect thereof under the Act or CSR Rules.

Amendments

This Policy may be reviewed and amended from time to time.

B. Related Party Transaction

The detailed policy may be accessed at www.vlsfinance.com 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 Clause 49 of the Listing Agreement.

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.vlsfinance.com

VLS Finance Ltd. recognizes 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.vlsfinance.com

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 the 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 provided 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 Company’s businesses.

E. Anti-sexual harassment mechanism

The detailed mechanism may be accessed at www.vlsfinance.com

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. All women employees interalia (permanent, contractual, temporary, trainees) are covered under this policy.

The Internal Complaints Committee is headed by the woman Director on the Board. There were no complaints received from any employee or otherwise during the year under review and no complaints were pending as on 31/03/2016.

F. Nomination and Remuneration Policy Title:

This Policy shall be called ‘VLSF Nomination and Remuneration Policy.’

Objective:

The provisions in the Companies Act, 2013 and corresponding provisions in the revamped Regulation 27(2) of the SEBl (Listing Obligations & Disclosure Requirements) Regulations, 2015 have ushered Indian corporate system in to a new era of Corporate Governance placing onerous governance responsibilities on the shoulders of the Board of Directors and Key Managerial Personnel of the Companies.

Section 178 of the Companies Act, 2013 and clause 49 of the Listing Agreement provide the necessary legal impetus for companies to have a policy and criteria for various matters like the remuneration of directors, key managerial persons and other employees, training of Independent Directors and performance evaluation of directors.

Considering this it is necessary to ensure quality of persons on the Board of Directors of the Company as well as in the Key Managerial personnel, as these are the persons who are entrusted with the responsibility of policy formulation for, direction to and execution of the business and operations of the Company. Definitions:

Board means the Board of Directors of VLS FINANCE LIMITED. Company means VLS Finance LIMITED.

Committee means Nomination and Remuneration Committee of Board of Directors.

Director means a person who has been appointed as such on the Board of the Company and includes Executive as well as Non-Executive Directors.

Executive Director means a Director who is in the whole time employment of the Company and includes a Managing Director as well as a Whole time Director and Manager, if member of the Board.

Government includes Central Government as well as any of the State Governments, any statutory authority, tribunal, board or a governmental or semi-governmental authority or any authority or agency recognized by the Government.

HR Department means the Human Resource Department of the Company.

HR Policy means the Policy of the Company defining the criteria and process for the recruitment, training, appraisal etc. and dealing with other matters concerning the employees of the Company.

Key Managerial Person means a person appointed as such by the Board under Section 203 of the Companies Act, 2013.

Nomination & Remuneration Committee means the Committee of the Board constituted as such under the provisions of Section 178 of the Companies Act, 2013.

Non-Executive Director means a Director who is not in the whole time employment of the Company and includes an Independent Director, Promoter Director and Nominee Director.

Policy means this policy, as amended from time to time.

Contents of the Policy:

This Policy contains following:

a) Process for the selection and appointment of Directors and Key Managerial Personnel;

b) Criteria for determining remuneration of the Directors, Key Managerial Personnel and other employees of the Company;

c) Training of Independent Directors.

(I) Selection of Directors and Key Managerial Personnel

In case of Executive Directors and Key Managerial Personnel, the selection can be made in either of the ways given below:

a) by way of recruitment from outside;

b) from within the Company hierarchy; or

c) Upon recommendation by the Chairman or other Director.

The appointment may be made either to fill up a vacancy caused by retirement, resignation, death or removal of an existing Executive Director or it may be a fresh appointment. In case of Non-Executive Directors the selection can be made in either of the ways given below:

a) by way of selection from the data bank of Independent Directors maintained by the Government.

b) Upon recommendation by Chairman or other Director. The appointment may be made either to fill up a vacancy caused by resignation, death or removal of an existing Non-Executive Director or it may be appointment as an additional director or an alternate director.

(II) Qualifications, Experience and Positive Attributes of Directors

a) While appointing a Director, it shall always be ensured that the candidate possesses appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations or other disciplines related to the company’s business.

b) In case of appointment as an Executive Director, the candidate must have the relevant technical or professional qualifications and experience as are considered necessary based on the job description of the position. In case no specific qualification or experience is prescribed or thought necessary for the position then, while recommending the appointment, the HR Department shall provide the job description to the Committee and justify that the qualifications, experience and expertise of the recommended candidate are satisfactory for the relevant appointment. In such circumstances, the Committee may, if considered necessary, call for an expert opinion on the appropriateness of the qualifications and experience of the candidate for the position of the Executive Director.

c) In case of appointment as a Non-Executive Director, the candidate must be a graduate or possess diploma or a professional qualification in the field of his practice / profession / service and shall have not less than five years of working experience in such field as a professional in practice, advisor, consultant or as an employee, provided that the Board may waive the requirements of qualification and /or experience under this paragraph for a deserving candidate.

d) The Board, while making the appointment of a Director, shall also try to assess from the information available and from the interaction with the candidate that he is a fair achiever in his chosen field and that he is a person with integrity, diligence and open mind.

(III) Process for Appointment of Directors and Key Managerial Personnel

(A) Process for the appointment of Executive Directors and Key Managerial Personnel:

a) A proposal for the appointment of an Executive Director / Key Managerial Personnel with such details as may be prescribed shall be submitted for the consideration of the Committee. The proposal with recommendation of committee will be placed before the Board.

b) The Board shall, based on the information available in the proposal and recommendation of committee deliberate upon the necessity for appointment, expertise, skill and knowledge of the candidate and reasonableness of the remuneration.

c) The Board may call and seek the help of any other Company Official including the recommender or a Key Managerial Personnel while finalizing the appointment. The recommender shall not take part in the discussion or voting on the appointment of a Key Managerial Personnel.

(B) Process for the appointment of Non- Executive

Directors:

a) A proposal for the appointment of a Non-Executive Director with such details as may be prescribed shall be submitted for the consideration of the committee. The proposal with recommendation of committee will be placed before the Board.

b) The Board, based on the information available in the proposal, shall deliberate upon the necessity for appointment, integrity, qualifications, expertise, skill and knowledge of the candidate.

(IV) Remuneration of Directors, Key Managerial Personnel and other Employees

a) While determining the remuneration of Executive Directors and Key Managerial Personnel, the Board shall consider following factors:

i) Criteria / norms for determining the remuneration of such employees prescribed in applicable statutory provisions and Company’s internal criteria for remuneration.

ii) Existing remuneration drawn.

iii Industry standards, if the data in this regard is available.

iv) The job description.

v) Qualifications and experience levels of the candidate,

vi) Remuneration drawn by the outgoing employee, in case the appointment is to fill a vacancy on the death, resignation, removal etc. of an existing employee.

vii) The remuneration drawn by other employees in the grade with matching qualifications and seniority, if applicable.

b) The determination of remuneration for other employees shall be governed by the HR Policy.

c) The proposal for the appointment of an Executive Director / Key Managerial Personnel shall provide necessary information in this regard including recommendation of Committee to the Board in arriving at the conclusion as to whether or not the remuneration offered to the candidate is appropriate, reasonable and balanced as to the fixed and variable portions (including the commission).

d) The remuneration payable to the Executive Directors, including the Commission and value of the perquisites, shall not exceed the permissible limits as are mentioned within the provisions of the Companies Act, 2013.

e) The Executive Directors shall not be eligible to receive sitting fees for attending the meetings of the Board or committees thereof.

f) The Non-Executive Directors shall not be eligible to receive any remuneration / salary from the Company. However, the Non-Executive Directors shall be paid sitting fees for attending the meeting of the Board or committees thereof and commission, as may be decided by the Board / shareholders from time to time.

The Non-Executive Directors shall also be eligible to receive reimbursement of reasonable out-of-pocket expenses incurred by them for attending the meetings of the Board, committees or shareholders, including travelling and lodging & boarding expenses or such other expense incurred by them regarding the affairs of the Company on an actual basis.

g) The amount of sitting fee and commission payable to Non-Executive Directors shall not exceed the limits prescribed therefore under the provisions of the Companies Act, 2013.

Explanation: For the purposes of this Policy, Remuneration shall mean the Cost to the Company and shall include the salary, allowances, perquisites, performance incentive and any other facility provided or payment made to the employee.

(V) Training of Independent Directors

The Company shall arrange to provide training to Independent Directors to familiarize them with the Company, their roles, rights and responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc.

The training may be provided in any of the ways given below:

a) By providing reading material to the Independent Director(s) giving all relevant information about the Company, industry and the role of Independent Directors.

b) An induction program devised for the Independent Director(s) wherein structured training is provided to the Independent Director(s) either exclusively or with other officials of the Company who are due for such induction / training.

c) Such other manner as may be prescribed by applicable law or decided by the Board.

Interpretation:

a) Any words used in this policy but not defined herein shall have the same meaning ascribed to it in the Companies Act, 2013 or Rules made there under, SEBI Act or Rules and Regulations made there under, Listing Agreement, Accounting Standards or any other relevant legislation / law applicable to the Company.

b) The reference to the male gender in the Policy shall be deemed to include a reference to female gender.

c) In case of any dispute or difference upon the meaning / interpretation of any word or provision in this Policy, the same shall be referred to the Committee and the decision of the Committee in such a case shall be final. In interpreting such term / provision, the Committee may seek the help of any of the officers of the Company or an outside expert as it deems fit.

Amendments:

The Board of Directors shall have the power to amend any of the provisions of this Policy, substitute any of the provisions with a new provisions or replace this Policy entirely with a new Policy.

G. Vigil Mechanism /Whistle Blower

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. 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.

The detailed policy may be accessed at www.vlsfinance.com.

15. Corporate Governance and Compliance Certificate

We have reported in annexure D to this report, the extent of compliance of Corporate Governance practices in accordance with Regulation 27 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

16. Auditors

The Statutory Auditors, M/s. Agiwal & Associates, Chartered Accountants (FRN: 000181N), will retire at the forthcoming annual general meeting. The Company has received a certificate from the Auditors that they are qualified under Section 139 of the Companies Act, 2013 (‘Act’) to act as the Auditors of the Company, if appointed. Concurring to the recommendation of the Audit Committee, the Board of Directors recommends their appointment. The Board may also be authorized to fix their remuneration. In terms of Section 139(2) read with rule 6 of Companies (Audit and Auditors) Rules, 2014. The present auditor can be appointed for one more term i.e. for the financial year 2016-17 before being subjected to compulsory rotation of auditors as per the extant provisions of the Act. The Board in its meeting held on 28/05/2016 has appointed Ms. Pooja Gandhi -Practicing Company Secretary as secretarial auditor for the year 2016-17. The provisions relating to Cost Records and Audit are not applicable to your company.

17. Auditors’ Report

The observations made by the Auditors, with reference to notes on accounts for the year under report, have been adequately dealt with in the relevant Notes forming part of Financial Statements and need no further comments from Directors.

18. Secretarial Audit Report

According to the provision of Section 204 of the Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report submitted by Company Secretary in Practice is enclosed as a part of this report as annexure E.

19. Statutory Information

During the year under review, the Company did not absorb any new technology or carry out any R&D related activity for this purpose. 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 F to this report.

- The shares of the Company are presently listed at BSE Ltd., The National Stock Exchange of India Ltd., Mumbai and The Calcutta Stock Exchange Ltd., Kolkata.

- The Company has paid the annual listing fees for the year 20162017 to all the aforesaid Stock Exchanges.

- Upon closure of Madras Stock Exchange (MSE) vide SEBI order dated 14/05/2015 the listing of shares of Company stood terminated from said exchange.

- Your company’s principle business is acquisition of securities; hence Section 186 of the Act is not applicable.

- 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 boards report has been made in terms of Section 131 of the Companies Act, 2013, during the year under review.

- No Independent Director was reappointed through special resolution during the year under review.

- Disclosure relating to ratio of the remuneration of each director to the median employee’s remuneration in terms of Section 197(12) of the Companies Act, 2013 is enclosed as annexure G to this report.

- The managing director and whole time director (Director-Finance & CFO) of your company are not in receipt of any remuneration or commission from any of subsidiary company in terms of Section 197(14) of the Companies Act, 2013.

- There were no orders passed by the regulators against the Company.

- Senior Management have made all the disclosures to the Board relating to all material financial and commercial transactions, if any.

20. Fixed Deposits

The Company has not accepted 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 30. 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 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 proposes to send future correspondence and documents like the notice calling the general meeting, audited financial statements, directors’ report, and auditors’ reports etc. in the electronic form, to the email addresses provided by the Members and made available to us by the Depositories. Members who hold shares in the physical form are requested to register their e-mail addresses and intimate any changes in their e-mail id, with the 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-mail addresses with the Depository through their concerned Depository Participants. However, in case you desire to receive Company’s communication and documents in physical form, you are requested to intimate us through email at hconsul@vlsfinance.com. You may kindly note that as a member of the Company, you will be 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.

23. Subsidiary Companies

Statement pursuant to Section 129(3) of the Companies Act, 2013 for the financial year ended 31/3/2016 in respect of the Subsidiary Companies, is enclosed with Annual Accounts of the Company.

After coming into effect of the Companies Act, 2013, the definition of “associate” covers a Company or Companies in which the Company holds not less than 20% of the Total Share Capital of that company or those companies irrespective of whether they are in the same group or not except when held in fiduciary capacity. Hence, Sunair Hotels Ltd. and BMS IT Institute Private Ltd which are presently not in the same group, have been considered as associates. Even though the Company is in litigation with these companies, in the opinion of the Company, there is no adverse impact of such litigation on investments/advances made by it in these associates.

Separate section on performance and financial position of subsidiary and associate companies have been provided as note no. 23 sub-note 17(a) and 17(b) of Notes forming part of consolidated financial statement in the Annual Report for 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. Acknowledgements

Your Directors wish to place on record their sincere appreciation and gratitude to the Company’s business associates, customers, Bankers, the Securities & Exchange Board of India, Stock Exchanges and in particular BSE Ltd. for their continued support and assistance and also to the esteemed shareholders of the Company, for their valuable support and patronage.

For and on behalf of the Board of Directors

Place : New Delhi S.K. Agarwal K.K. Soni

Date : 29/07/2016 Managing Director Director-Finance & CFO

DIN: 00106763 DIN: 00106037


Mar 31, 2014

THE MEMBERS

The Directors are pleased to present the Twenty Seventh Annual Report of the Company together with the audited statement of accounts for the year ended 31st March, 2014.

1. Financial Results (Rs. in Lakhs)

For the year ended For the year ended 31st March, 2014 31st March,2013*

Gross Receipts 381636.53 232213.50

Profit before Interest & Depreciation 459.53 435.47

Less: Interest & Finance Charges 1.97 15.55

Profit before Depreciation 457.56 420.32

Less: Depreciation 41.98 48.73

Profit before Tax 415.58 371.59

Less: Provision for Taxation/ (Credits) 67.37 187.00

Profit after Tax 348.21 184.59

Surplus brought forward from previous year 2260.37 2127.45

Previous year adjustments/other adjustment@ (113.30) (14.75)

Available for Appropriation 2495.28 2297.29

Appropriations:

To General Reserve 0.00 0.00

To Statutory Reserve (under RBI Act, 1934) 0.00 36.92

Total Appropriations 0.00 36.92

Surplus c/f 2495.28 2260.37

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

@Tranferred to Capital Redemption Reserve A/c.

3. Dividend

With a view to conserve resources, no dividend is recommended.

4. Directors

In accordance with the provisions of Article 89 of the Articles of Association of the Company, Shri Somesh Mehrotra- Director will retire by rotation at the ensuing Annual General Meeting of your Company and being eligible, offers himself for re-election. To enable the Company to obtain his continued valuable direction, guidance and assistance in conduct of the affairs of your Company, it is recommended that his reappointment be approved. The Board had re-appointed Shri S. K. Agarwal as Managing Director of the Company for 3 years w.e.f. 21/08/2013 and members'' approval was obtained in Annual General Meeting held on 25/09/2013. Further, the Board in its meeting dated 14/11/2013 had revised the remuneration of Shri S. K. Agarwal - Managing Director w.e.f. 01/04/2013 and appointed Shri K. K. Soni, CFO of the Company as Director of the Company also by redesignating him as Director- Finance & CFO and revised his remuneration w.e.f. 01/04/2013, the approvals of which from members were obtained in Extra-ordinary General Meeting held on 21/12/2013.

Your Board at its meeting held on 11th August, 2014 has recommended the appointment of Shri Ajit Kumar, Shri B. M. Oza, Shri M.G. Diwan, Dr. S. Ramesh, Shri A. K. Puri, Shri B. B. Tandon and Shri Gian Vijeshwar as Independent Directors in terms of Sections 149, 152 read with Schedule IV & other applicable provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, with effect from the date of the ensuing Annual General Meeting of your Company.

Your Board at the said meeting, on the recommendation of the Nomination and Remuneration Committee, also recommended, for the approval of the Members for the change of terms of appointment of Shri S. K. Agarwal-Managing Director and Shri K. K. Soni - Director- Finance & CFO of the Company by making them liable to retire by rotation, with effect from the date of the ensuing Annual General Meeting of your Company. The remuneration of the Managing Director and the Director-Finance & CFO is also sought to be revised from the dates

indicated in respective resolutions therefor in the notice convening the ensuing Annual General Meeting. The re-appointment of Independent Directors and change in category of Executive Directors has been made in order to comply with provisions of the Companies Act, 2013 which are required to be approved by the members.

Appropriate resolutions seeking your approval to the aforesaid appointments are appearing in the Notice convening the 27th Annual General Meeting of the Company. Shri Ajit Kumar, Shri B. M. Oza, Shri M.G. Diwan, Dr. S. Ramesh, Shri A. K. Puri, Shri B. B. Tandon and Shri Gian Vijeshwar by virtue of being Independent Directors of your Company in terms of the provisions of the Companies Act, 2013, will not be liable to retire by rotation for the residual period of their respective terms of appointment approved by the Members of the Company.

5. Directors'' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm:

a. that in the preparation of the Annual Accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

b. 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;

c. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. that they have prepared the Annual Accounts for the financial year ended 31st March, 2014 on a ''going concern'' basis.

6. Corporate Governance and Compliance Certificate

We have reported in Annexure-1 to this report, the extent of compliance of Corporate Governance practices in accordance with Clause 49 of Listing Agreement.

7. Auditors

The Auditors, M/s. Agiwal & Associates, Chartered Accountants, will retire at the forthcoming Annual General Meeting. The Company has received a certificate from the Auditors that they are qualified under section 139 of the Companies Act, 2013 to act as the Auditors of the Company, if appointed. Concurring to the recommendation of the Audit Committee, the Board of Directors recommends their appointment. The Board may also be authorised to fix their remuneration. In terms of section 139 (2) read with Rule 6 of Companies (Audit and Auditors) Rules, 2014, the present auditors can be appointed for three consecutive terms of one year each starting from present proposal before being subjected to compulsory rotation of Auditors.

8. Auditors'' Report

The observations made by the Auditors with reference to notes on accounts for the year under report have been adequately dealt with, in the relevant Notes forming part of Financial Statements and need no further comments from Directors.

9. Statutory Information

Not being a manufacturing Company, your Company is advised that Form A prescribed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to Conservation of Energy and Technology Absorption, is not applicable to it. It is informed that during the year under review, the Company did not absorb any new technology or carried out any R&D related activity for this purpose. However, use of energy efficient devices, wherever possible, in conducting business of Company is part of administration policies. During the year under review the Company had decided to buyback its own shares under authority of Board''s power to buyback the same and the entire process was completed on 11/02/2014. The Company had bought back 11,32,983 equity shares in terms of the offer to buyback made by it. Accordingly, the capital of the Company had been reduced by Rs.1,13,29,830/- as detailed in the enclosed balance sheet in Notes No. 2 i.e. Share Capital of the Company.

Details of foreign exchange earnings and outgo are given below:

Foreign Exchange earnings : Nil

Foreign Exchange outgo : Rs. 1,75,216/-

The shares of the Company are presently listed at BSE Ltd. (formerly, The Bombay Stock Exchange, Mumbai), The National Stock Exchange of India Ltd., Mumbai, The Calcutta Stock Exchange Ltd., Kolkata and The Madras Stock Exchange Ltd., Chennai.

The Company has paid the Annual Listing fees for the year 2014-2015 to all the aforesaid Stock Exchanges.

10. Fixed Deposits

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

11. Human Resource

Employee relations continued to be cordial during the year. The number of employees stood at 22. The Directors place on record their appreciation of the devoted service of the employees at all levels. In terms of the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, there was no employee during the year drawing remuneration more than the stipulated amount in the said rules.

12. Green Initiative in Corporate Governance

As a continuing endeavor towards the Go Green initiative, the Company proposes to send future correspondences and documents like the notice calling the general meeting, audited financial statements, directors'' report, auditors'' reports etc. in the electronic form, to the email addresses provided by the Members and made available to us by the Depositories. Members who hold shares in the physical form are requested to register their e-mail addresses and intimate any changes in their e-mail id, with the 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-mail addresses with the Depository through their concerned Depository Participants. However, in case you desire to receive Company''s communication and documents in physical form, you are requested to intimate us through email at hconsul@vlsfinance.com. You may kindly note that as a Member of the Company, you will be 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.

Members are advised to convert their shares from Physical form to Dematerialized form. Dematerialization of shares provides several benefits to the shareholders. The transaction of shares can be carried out quickly and in an easy way. Holding securities in Demat form helps the investors to get immediate transfer of securities. No stamp duty is payable on transfer of shares held in Demat form and the brokerage involved is also generally lower. The incidence of non-delivery or bad delivery and the risks associated such as forged transfers that occurs for the shares when held in physical format is totally avoided.

Further, the sale and purchase of Company''s shares is possible if the shares are held in dematerialized form only. Hence members holding in physical form can not sell the shares through stock exchange unless the physical shares are converted in dematerialized form.

13. Subsidiary Companies

Statement pursuant to Section 212(1) (e) read with sub-section (3) of the said section of the Companies Act, 1956 for the financial year ended 31/3/2014 in respect of the Subsidiary Companies, is enclosed with Annual Accounts of the Company.

14. Consolidated Financial Statements

In compliance of Clause 41 of the Listing agreement, the Consolidated Financial Statements in accordance with the prescribed Accounting Standards are annexed to the Audited Annual Accounts for the year under review.

15. Acknowledgements

Your Directors wish to place on record their sincere appreciation and gratitude to the Company''s business associates, customers, Bankers, and the Reserve Bank of India for their continued support and assistance and also to the esteemed shareholders of the Company, for their valuable support and patronage.

For and on behalf of the Board

Place : New Delhi

Date : 11/8/ 2014 K. K. Soni S. K. Agarwal

Director-Finance & CFO Managing Director


Mar 31, 2013

TO THE MEMBERS

The Directors are pleased to present the Twenty Sixth Annual Report of the Company together with the audited statement of accounts for the year ended 31st March, 2013.

1. Financial Results

(Rs. in Lakhs)

For the year ended For the year ended 31s March. 2013 31st March, 2012*

Gross Receipts 232213.50 213661.45

Profit before Interest & Depreciation 435.47 422.21

Less: Interest & Finance Charges 15.55 66.53

Profit before depreciation 420.32 355.68

Less: Depreciation 48.73 171.69

Profit before Tax 371.59 183.99

Less: Provision for Taxation/(credits) 187.00 (31.01)

Profit after Tax 184.59 215.00

Surplus brought forward from previous year 2127.45 1953.25

Previous year adjustments/other adjustment (14.75) 2.20

Available for Appropriation 2297.29 2170.45

Appropriations:

To General Reserve 0.00 0.00

To Statutory Reserve (under RBI Act, 1934) 36.92 43.00

Total Appropriations 36.92 43.00

Surplus c/f 2260.37 2127.45

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

2. Dividend

With a view to conserve resources, no dividend is recommended.

4. Directors

Shri Ajit Kumar, Shri B. M. Oza and Dr. S. Ramesh - Directors would retire by rotation at the forthcoming Annual General Meeting and all, being eligible, offer themselves for reappointment. To enable the Company to obtain their continued valuable direction, guidance and assistance in conduct of the affairs of your Company, it is recommended that their reappointment be approved. The Board has re-appointed Shri S. K Agarwal as Managing Director of the Company for next 3 years w.e.f. 21/08/2013 subject to members'' approval.

5. Directors'' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm:

a. that in the preparation of the Annual Accounts for the financial year ended 31st March, 2013, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

b. 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;

c. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. that they have prepared the Annual Accounts for the financial year ended 31st March, 2013 on a ''going concern'' basis.

6. Corporate Governance and Compliance Certificate

We have reported in Annexure-1 to this report, the extent of compliance of Corporate Governance practices in accordance with Clause 49 of Listing Agreement.

7. Auditors

The Auditors, M/s. Agiwal & Associates, Chartered Accountants, will retire at the forthcoming Annual General Meeting. The Company has received a certificate from the Auditors that they are qualified under section 224 (1B) of the Companies Act, 1956 to act as the Auditors of the Company, if appointed. Concurring to the recommendation of the Audit Committee, the Board of Directors recommends their appointment. The Board may also be authorised to fix their remuneration.

8. Auditors'' Report

The observations made by the Auditors with reference to notes on accounts for the year under report have been adequately dealt with, in the relevant Notes forming part of Financial Statements and need no further comments from Directors.

9. Statutory Information

Not being a manufacturing Company, your Company is advised that Form A prescribed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to Conservation of Energy and Technology Absorption, is not applicable to it. It is informed that during the year under review, the Company did not absorb any new technology or carried out any R&D related activity for this purpose. However, use of energy efficient devices, wherever possible, in conducting business of Company is part of administration policies. There was no proposal during the year under review for buy back of shares by the Company. Details of foreign exchange earnings and outgo are given below:

Foreign Exchange earnings : Nil

Foreign Exchange outgo : Rs. 41,588/-

The shares of the Company are presently listed at BSE Ltd. (formerly, The Bombay Stock Exchange, Mumbai), The National Stock Exchange of India Ltd. Mumbai, The Calcutta Stock Exchange Ltd., Kolkata and The Madras Stock Exchange Ltd., Chennai.

The Company has paid the Annual Listing fees for the year 2013-2014 to all the aforesaid Stock Exchanges.

10. Fixed Deposits

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

11. Human Resource

Employee relations continued to be cordial during the year. The number of employees stood at 19. The Directors place on record their appreciation of the devoted service of the employees at all levels. In terms of the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, there was no employee during the year drawing remuneration more than the stipulated amount in the said rules.

12. Subsidiary Companies

Statement pursuant to Section 212(1) (e) read with sub-section (3) of the said section of the Companies Act, 1956 for the financial year ended 31/3/2013 in respect of the Subsidiary Companies, is enclosed with Annual Accounts of the Company.

13.Consolidated Financial Statements

In compliance of Clause 41 of the Listing agreement, the Consolidated Financial Statements in accordance with the prescribed Accounting Standards are annexed to the Audited Annual Accounts for the year under review.

14. Acknowledgements

Your Directors wish to place on record their sincere appreciation and gratitude to the Company''s business associates, customers, Bankers, and the Reserve Bank of India for their continued support and assistance and also to the esteemed shareholders of the Company, for their valuable support and patronage.

For and on behalf of the Board

Place : New Delhi M. P. Mehrotra S. K. Agarwal

Date : 22/7/2013 Director Managing Director


Mar 31, 2012

The Directors are pleased to present the Twenty Fifth Annual Report of the Company together with the audited statement of accounts for the year ended 31st March, 2012.

1. Financial Results (Rs. in Lakhs)

For the year For the year ended ended 31st March, 31st March, 2012 2011*

Gross Receipts 2136614 60100.22

Profit before Interest & Depreciation 422.21 830.90

Less: Interest & Finance Charges 66.53 59.00

Profit before depreciation 355.68 771.90

Less: Depreciation 171.69 45.91

Profit before Tax 183.99 725.99

Less: Provision for Taxation/(credits) (31.01) 222.73

Profit after Tax 215.00 503.26

Surplus brought forward from previous year 1953.25 1547.50

Previous year adjustments/ other adjustment 2.20 3.14

Available for Appropriation 2170.45 2053.90

Appropriations:

To General Reserve 0.00 0.00

To Statutory Reserve (under RBI Act, 1934) 43.00 100.65

Total Appropriations 43.00 100.65

Surplus c/f 2127.45 1953.25

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

3. Dividend

With a view to conserve resources, no dividend is recommended.

4. Directors

Shri M. P. Mehrotra, Shri A.K. Puri and Shri M.G. Diwan - Directors would retire by rotation at the forthcoming Annual General Meeting and all, being eligible, offer themselves for reappointment. To enable the Company to obtain their continued valuable direction, guidance and assistance in conduct of the affairs of your Company, it is recommended that their reappointment be approved.

5. Directors' Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm:

a. that in the preparation of the annual accounts for the financial year ended 31st March, 2012, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

b. 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;

c. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. that they have prepared the annual accounts for the financial year ended 31st March, 2012 on a ‘going concern' basis.

6. Corporate Governance and Compliance Certificate

We have reported in Annexure-1 to this report, the extent of compliance of Corporate Governance practices in accordance with clause 49 of listing agreement.

7. Auditors

The Auditors, M/s. Agiwal & Associates, Chartered Accountants, will retire at the forthcoming Annual General Meeting. The Company has received a certificate from the Auditors that they are qualified under section 224 (1B) of the Companies Act, 1956 to act as the Auditors of the Company, if appointed. Concurring to the recommendation of the Audit Committee, the Board of Directors recommends their appointment. The Board may also be authorised to fix their remuneration.

8. Auditors' Report

The observations made by the Auditors with reference to notes on accounts for the year under report have been adequately dealt with, in the relevant Notes forming part of financial statements and need no further comments from Directors.

9. Statutory Information

Not being a manufacturing Company, your Company is advised that Form A prescribed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to Conservation of Energy and Technology Absorption, is not applicable to it. It is informed that during the year under review, the Company did not absorb any new technology or carried out any R&D related activity for this purpose. However, use of energy efficient devices, wherever possible, in conducting business of Company is part of administration policies. Details of foreign exchange earnings and outgo are given below:

Foreign Exchange earnings : Nil

Foreign Exchange outgo : Rs. 5,57,986/-

The shares of the Company are presently listed at BSE Ltd. (formerly, The Stock Exchange, Mumbai), The National Stock Exchange of India Ltd., Mumbai, The Calcutta Stock Exchange Ltd., Kolkata and The Madras Stock Exchange Ltd., Chennai.

The Company has paid the Annual Listing fees for the year 2012-2013 to all the aforesaid Stock Exchanges.

10. Fixed Deposits

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

11.Human Resource

Employee relations continued to be cordial during the year. The number of employees stood at 20. The Directors place on record their appreciation for the devoted service of the employees at all levels. In terms of the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, there was no employee during the year drawing remuneration more than the stipulated amount in the said rules.

12. Subsidiary Companies

Statement pursuant to Section 212(1) (e) read with sub-section (3) of the said section of the Companies Act, 1956 for the financial year ended 31/3/2012 in respect of the subsidiary companies, is enclosed with Annual Accounts of the Company.

13.Consolidated Financial Statements

In compliance of Clause 41 of the Listing agreement, the Consolidated Financial statements in accordance with the prescribed accounting standards, are annexed to the Audited Annual Accounts for the year under review.

14. Group

The SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 2011 had been promulgated w.e.f. 23/9/2011 repealing SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997. The new regulations do not prescribe disclosure requirement of ‘group' in Annual Report of target Company as stipulated in earlier regulations, hence dispensed with in this report.

15. Acknowledgements

Your Directors wish to place on record their sincere appreciation and gratitude to the Company's business associates, customers, Bankers, and the Reserve Bank of India for their continued support and assistance and also to the esteemed shareholders of the Company, for their valuable support and patronage.

For and on behalf of the Board



Place : New Delhi M. P. MEHROTRA S. K. AGARWAL

Date : 6/8/2012 Director Managing Director


Mar 31, 2010

The Directors are pleased to present the Twenty Third Annual Report of the Company together with the audited statement of accounts for the year ended 31st March, 2010.

1. Financial Results (Rs. in Lakhs)

For the year ended For the year ended

31st March 2010 31st March 2009

Gross Receipts 104937.78 63977.88

Profit before Interest &

Depreciation 727.81 1010.61

Less: Interest & Finance Charges 4.92 0.07

Profit before depreciation 723.89 1010.54

Less: Depreciation 48.91 50.54

Profit before Tax 674.98 960.00

Less: Provision for Taxation 194.56 -14.74

Profit after Tax 480.32 974.74

Surplus b/fd. From previous year 1131.33 351.46

Previous year adjustments/other

adjustment 31.91 0.08

Available for Appropriation 1643.56 1326.28

Appropriations:

To General Reserve 0.00 0.00

To Statutory Reserve

(under RBI Act, 1934) 96.06 194.95

Total Appropriations 96.06 194.95 Surplus c/f 1547.50 1131.33

3. Dividend

With a view to conserve resources, no dividend is recommended.

4. Directors

Shri Ajit Kumar, Shri B. M. Oza and Dr. S. Ramesh - Directors would retire by rotation at the forthcoming Annual General Meeting and all, being eligible, offer themselves for reappointment. The Board has re-appointed Shri S. K Agarwal as Managing Director of the Company for next 3 years w.e.f. 21/08/2010 subject to members’ approval. To enable the Company to obtain their continued valuable direction, guidance and assistance in conduct of the affairs of your Company, it is recommended that their reappointment be approved.

5. Directors Responsibility Statement

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm:

a. that in the preparation of the annual accounts for the financial year ended 31st March, 2010, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

b. 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;

c. that they have taken proper and sufficient care for the maintenance of proper accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. that they have prepared the annual accounts for the financial year ended 31st March, 2010 on a ‘going concern basis.

6. Corporate Governance and Compliance Certificate

The Corporate Governance philosophy of your Company is to comply with not only the statutory requirements, but also voluntarily formulate and adhere to a set of strong Corporate Governance practices. We at VLS, believe that sound Corporate Governance is critical to enhance and retain investors’ trust. The responsibility for this lies with the Board of Directors and the Management of the Company. The driving forces of Corporate Governance at VLS are its core values, which are : belief in people, entrepreneurship, innovation and pursuit of excellence. The Companys goal is to find creative and productive ways of keeping its stakeholders, such as investors, customers and associates informed, while fulfilling the role of a responsible corporate, committed to best practices. The Board and the Company Management strive hard to serve the interests of all stakeholders including shareholders, Government and the society at large in the best possible manner.

7. Auditors

The Auditors, M/s. Agiwal & Associates, Chartered Accountants, will retire at the forthcoming Annual General Meeting. The Company has received a certificate from the Auditors that they are qualified under section 224 (1B) of the Companies Act, 1956 to act as the Auditors of the Company, if appointed. Concurring to the recommendation of the Audit Committee, the Board of Directors recommends their appointment. The Board may also be authorised to fix their remuneration.

8. Auditors Report

The observations made by the Auditors with reference to notes on accounts for the year under report have been adequately dealt with, in the relevant Notes on Accounts and need no further comments from Directors.

9. Statutory Information

Not being a manufacturing Company, your Company is advised that Form A prescribed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to Conservation of Energy and Technology Absorption, is not applicable to it. It is informed that during the year under review, the Company did not absorb any new technology or carried out any R&D related activity. Details of foreign exchange earnings and outgo are given below:

Foreign Exchange earnings : Nil

Foreign Exchange outgo : Rs.6,17,574/-

The shares of the Company are presently listed at The Bombay Stock Exchange Ltd. Mumbai., The National Stock Exchange of India Ltd. Mumbai, The Calcutta Stock Exchange Association Ltd., Kolkata and The Madras Stock Exchange Ltd., Chennai.

The Company has paid the Annual Listing fees for the year 2010-2011 to all the aforesaid Stock Exchanges. The delisting confirmation is yet to be received from The Calcutta Stock Exchange Association Ltd. and The Madras Stock Exchange Limited.

10. Fixed Deposits

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

11. Human Resource

The Company has a team of able and experienced professionals. The management recognizes the intellectual capital as its most valuable asset and constantly strives to strategically align personal goals and organizational growth. It encourages open channels of communication, blending the individuals vision with that of the organization and building a shared understanding of how each team member can contribute to the Companys success. It aims to build a strong corporate culture on core values such as safety, integrity, innovation and teamwork, thus creating a vision-guided, values-driven organization that focuses on employee fulfillment and leadership development. Employee relations continued to be cordial during the year. The number of employees stood at 20. The Directors place on record their appreciation of the devoted service of the employees at all levels. In terms of the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, there was no employee during the year drawing remuneration more than the stipulated amount in the said rules.

12. Subsidiary Companies

Statements pursuant to Section 212(1) (e) & (f), read with sub-section (3) and sub section (5) of the said section of the Companies Act, 1956 for the relevant financial year, in respect of the subsidiary companies, are enclosed with Annual Accounts of the Company.

13. Consolidated Financial Statements

In compliance of Clause 41 of the Listing agreement, the Consolidated Financial statements in accordance with the prescribed accounting standards, are annexed to the Audited Annual Accounts for the year under review.

14. Group

Group for inter se transfer of shares under Clause 3 (e) of Securities & Exchange Board of India ( Substantial Acquisition of Shares & Takeovers) Regulations, 1997:

a. Shri M. P. Mehrotra

b. M. P. Mehrotra (HUF)

c. Dr. (Mrs.) Sushma Mehrotra

d. Shri Somesh Mehrotra

e. Ms. Divya Mehrotra

f . Mrs. Sadhana Mehrotra

g. Ms. Daya Mehrotra

h. Shri Ramji Mehrotra

i. Mrs. Sushma Mehrotra

j. VLS Capital Ltd.

k. Gaurav Overseas Exports Pvt. Ltd.

l. Needle Eye Plastic Industries Pvt. Ltd.

m. Pragati Moulders Ltd.

n. South Asian Enterprises Ltd.

15. Acknowledgements

Your Directors wish to place on record their sincere appreciation and gratitude to the Company’s business associates, customers, Bankers, and the Reserve Bank of India for their continued support and assistance and also to the esteemed shareholders of the Company, for their valuable support and patronage.

For and on behalf of the Board

Place : New Delhi S. K. AGARWAL M. P. MEHROTRA

Date : 27/07/ 2010 Managing Director Director

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