V-Mart Retail Ltd

<dhhead>BOARD'S REPORT</dhhead>

Dear Members,

The Board of Directors of your Company are pleased to present the 22^nd Annual Report, along with Audited Financial Statements, for the financial year ended March 31, 2024.

FINANCIAL RESULTS

Your Company's financial performance for the year under review is summarised below:

(Rs. lakhs)

PERFORMANCE REVIEW

The Net Sales of the Company increased by 13% to Rs. 2,78,560 lakhs in the FY 2023-24 as against Rs. 2,46,484 lakhs in FY 2022-23. The Company has posted Operating Profits (EBITDA) for FY 2023-24 of Rs. 21,305 lakhs (FY 2022-23 of Rs. 26,891 lakhs) and PAT/(loss) for FY 2023-24 of Rs. (9,676) lakhs (FY 2022-23 of Rs. (785) lakhs).

A detailed analysis of the Company's operations in terms of performance in markets, business outlook, risks and concerns forms part of the Management Discussion and Analysis Report, a separate section forming part of the Annual Report.

CONFIRMATION

There was no revision of financial statements and Board's Report of the Company for the preceding financial years, during the year under review.

Further, it is confirmed that there is no change in the nature of business.

OPERATIONS REVIEW

During the FY 2023-24, your Company expanded its reach by opening 46 new stores across the nation. In addition to this, your Company has also worked towards enhancing its omni-channel capabilities to cater to the evolving needs of its customers. As a result, customers can now engage with your Company seamlessly across all channels.

Your Company has also successfully relocated its Warehouse and Handling System (WHS) from Bilaspur to Palwal. The decision to relocate was driven by the need to efficiently manage the growing stock volumes that are in line with the planned growth of the business. Your Company's strategic move has helped it to streamline its operations and achieve greater efficiencies.

Your Company has undertaken significant initiatives to improve both digital capabilities and operational processes, leading to enhanced customer experiences and overall business performance. Key digital and the operational initiatives undertaken by your Company includes:

• Product Strategy Evolution: Understanding the dynamic preferences of the youth demographic, your Company focused on offering fashionable designs, with improved quality that resonate with their evolving tastes.

• Store Renovations: Significant investments have been made in renovating existing stores to create an exceptional customer experience. These infrastructure enhancements not only strengthened our physical presence but also facilitated seamless digital integration.

• Store Optimization: Your Company strategically replaced underperforming stores with new, high-potential locations, resulting in a 6% improvement in overall network performance.

• Supply Chain Transformation: By adopting advanced tools and streamlining supply chain operations, your Company has achieved greater efficiency and responsiveness.

• Digital Invoices via WhatsApp: To protect environment, your Company has introduced digital invoices via WhatsApp across all V-Mart stores.

• Enhanced CRM Capabilities: Your Company has strengthened its Customer Relationship Management

(CRM) system by implementing proactive measures to better engage with customers.

• Seamless Digital Integration: Successful digital integration efforts bridged the gap between offline and online customer experiences, positioning the Company for continued growth in the market.

DIVIDEND

Due to the operational losses in the FY 2023-24, the Board of Directors has decided not to recommend any dividend payment for the year under review.

RESERVES

During the year under review, the Company has transferred Rs (10,202) Lakhs to reserves. Post transfer, the reserves stood at Rs. 72,721 Lakhs as on March 31, 2024.

CREDIT RATING

Investment Information and Credit Rating Agency of India Limited (ICRA) has maintained the long-term rating of [ICRA] AA- (pronounced ICRA double A minus) and also maintained the short-term rating of [ICRA] A1+ (pronounced ICRA A one plus) assigned to the overall Rs. 300 crores Line of Credit of your Company.

The credit rating of the Company as on March 31, 2024 is as under:

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis for the period under review as required under Schedule V read with Regulation 34(2) (e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been dealt with extensively in a separate section forming part of the Annual Report.

AWARDS AND ACCOLADES

During the FY 2023-24, your Company has earned widespread recognition, receiving numerous esteemed awards and honors that reflect our significant accomplishments in diverse areas of the retail sector. This recognition serves as a powerful affirmation of the steadfast dedication and persistent effort we pour into our endeavors, maintaining a consistent standard of excellence year upon year

• Retail ICON of the year 2023 by UBS Forum

• Value E-Retailer of the year 2023 by Star Retailer Awards

• Department Store of the year 2023 Star Retailer Awards

• Retail Brand of the Year by Great India Retail Awards

• Value Retailer of the Year 2024 by IReC Awards

LISTING

The Equity Shares of your Company are currently listed on BSE Ltd. (BSE) and the National Stock Exchange of India Ltd. (NSE), and we have ensured the listing fees for the FY 2024 are fully paid across all platforms where the equity shares of the

Company are listed.

WEBLINK OF ANNUAL RETURN

In accordance with Section 92(3) of the Companies Act, 2013, and Rule 12 of the Companies (Management and Administration) Rules, 2014, it is mandatory to display the Annual Return in the specified MGT-7 form on the Company's website. This document is to be made available at https:// vmart.co.in/other-disclosures/ following its submission to the

Registrar of Companies (ROC).

CORPORATE GOVERNANCE

In accordance with the SEBI (Securities and Exchange Board of India) (Listing Obligations and Disclosure Requirements) Regulations, 2015, this Report is accompanied by a comprehensive Report on Corporate Governance, which forms an integral part of this Report.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the FY 2023-24. The meeting details are provided in the Corporate Governance Report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and SEBI Listing Regulations

BOARD EVALUATION

To ensure the effective functioning of the Board and its

Committees, as well as compliance with statutory mandates, the annual performance evaluation of the Board, its Committees, and individual directors was conducted during the year. The outcome of the evaluation was presented to the Committee and the Board. This evaluation was performed in accordance with the criteria and framework established by the Nomination & Remuneration Committee, adhering to the stipulations set forth in the Companies Act, 2013, and aligning with the Corporate Governance standards mandated by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Further, during the year under review, the Board Evaluation was validated by an external agency and the certificate forms part of Corporate Governance Report. The parameters for evaluation and the methodology employed have been detailed in the Corporate Governance Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on March 31, 2024, the Board of Directors consists of six members, of which four are Independent Directors including one woman Independent Director.

Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company has appointed Ms. Shweta Kumar (DIN: 08596612) and Mr. Raghuvesh Sarup (DIN: 10626162) as Additional Directors in their capacity of Independent Non-Executive Director of the Company with effect from May 14, 2024 to hold office for a term of five years subject to approval of members at ensuing Annual General Meeting. The tenure of Mr. Aakash Moondhra (DIN: 02654599) as an Independent Director will end on 22^nd September 2024 upon the completion of the second term of 5 (five) consecutive years.

Considering his deep understanding of the Company's business, corporate governance expertise, values, extensive knowledge of the retail sector, and his immense contributions as a member of the Board, Committee, and Chairperson of the Company over the years, the Nomination & Remuneration Committee and Board had recommended the appointment of Mr. Moondhra as a Non-Independent Non-Executive Director for a term of 5 (five) consecutive years liable to retire by rotation from the completion of his term as Independent Director w.e.f. 23rd September, 2024, subject to the approval of the shareholders at the ensuing Annual General Meeting. In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Madan Gopal Agarwal (DIN: 02249947) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board of Directors recommends his re-appointment and the matter is being placed for the approval of members at the ensuing Annual General Meeting of the Company.

Based on performance evaluation and recommendation of the Nomination and Remuneration Committee, the Board of

Directors recommends his re-appointment as Whole Time Director of the Company, liable to retire by rotation. None of the Directors of the Company have resigned during the year under review.

KEY MANAGERIAL PERSONNEL

In pursuance of section 203 of the Companies Act, 2013, the key managerial personnel of the Company are as follows: Mr. Lalit Agarwal, Managing Director, Mr. Madan Gopal Agarwal, Whole-time Director, Mr. Anand Agarwal, Chief Financial Officer and Ms. Megha Tandon, Company Secretary.

During the year under review, there were no changes to the Key Managerial Personnel of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary disclosures from each of its four Independent Directors under Section 149(7) of the Companies Act, 2013 that they meet all the criteria laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligation and Disclosures Requirement) Regulations, 2015 and there has been no change in the circumstances which may affect their status as Independent Director during the year. During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than payments towards the sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.

POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION

The Company has a Nomination & Remuneration Policy to ensure a competent Board. The Committee identifies competency gaps, evaluates candidates, and recommends suitable members. It also fills Board vacancies as needed. The selected candidates are invited to join the Board and subject to approval of Shareholders. Additionally, a Nomination & Remuneration Committee has been established to set criteria for board member selection, which includes: (a) Identification of candidates who are qualified to become directors and senior management personnel

(b) Determining the tenure of independent directors, whether to extend or continue the term of appointment of the independent director, based on the Report of performance evaluation (c) Formulating a remuneration policy for directors, senior executives, and staff, covering ESOP, pensions, and other compensations.

The policy of the Company on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 is appended as Annexure-A to this Report.

TRAINING OF INDEPENDENT DIRECTORS

Independent directors receive training on the Company's operations and functioning at the time of their appointment and continue to stay informed about the Company's affairs. Details of the training and familiarization program are provided in the Corporate Governance Report and are also available on the

Company's website at www.vmart.co.in.

A detailed note on the Board and its Committees is provided under the Corporate Governance Report forming part of this Annual Report.

SHARE CAPITAL a. Buy Back of Securities: The Company has not bought back any of its securities during the year under review. b. Issue of Sweat Equity: The Company has not issued any sweat equity shares during the year under review. c. Issue of Bonus Shares: The Company has not issued any bonus shares during the year under review. d. Employees Stock Option / Restricted stock units: The Company has adopted the ESOP Scheme 2012 and the ESOP Scheme, 2020 as per the applicable SEBI

Regulations and approved by the members at the Annual General Meeting of the Company. A certificate from the Secretarial Auditors under share-based payment regulations has been obtained and shall be available for inspection at the Annual General Meeting of the Company.

The Company has implemented an Employee Stock Option Scheme, 2012, which was approved by the Board of Directors and the shareholders vide resolution dated 2nd July, 2012 and 10th July, 2012 respectively (‘the V-Mart ESOP Scheme 2012'), consequent to which 300,000 equity shares of Rs. 10 each were to be granted upon exercise as stock options (ESOPs) to eligible employees. Subsequently, the shareholders in its meeting held on September 18, 2017 approved an amendment in the said ESOP scheme by increasing the total number of stock options from 300,000 to 600,000 options. The exercise price of these options will be determined by the Nomination & Remuneration Committee and the options will vest over a period of 12 months to 36 months of continued employment from the grant date. Further, the Company has also implemented an Employee Stock Option Scheme 2020, which was approved by the Board of Directors and the shareholders vide resolution dated 10^th August, 2020 and 30th September, 2020 respectively (‘the V-Mart ESOP Scheme 2020'), consequent to which 200,000 equity shares of Rs. 10 each were to be granted upon exercise as stock options (ESOPs) to eligible employees. Subsequently, the shareholders in its meeting held on August 30, 2022 approved an amendment in the said ESOP scheme by increasing the total number of stock options from 200,000 to 500,000 options. The exercise price per option in performance -based ESOP scheme 2020 shall be based on the closing price of the day prior to the date of Grant on the recognized stock exchange and shall be decided by the Nomination & Remuneration Committee, subject to compliance with the provisions of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulation, 2021. The Nomination and Remuneration Committee may provide a maximum discount of up to 50% (fifty percent) on the above price.

The grant details under both the scheme(s) during the year are as follows:

Details of equity shares allotted during the year are as follows:

The information required to be disclosed under SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 as on March 31, 2024 are as follows:

EMPLOYEE STOCK OPTION DETAILS:

MOVEMENT OF STOCK OPTIONS DURING THE YEAR OF ESOP SCHEME 2012 AND ESOP SCHEME 2020

Weighted average remaining contractual life (in years)

AUTHORISED SHARE CAPITAL

The Authorized Share Capital of your Company as on March 31, 2024 stood at Rs. 25,00,00,000 (Rupees Twenty-Five Crores only) divided into 2,50,00,000 (Two Crores and Fifty Lakhs only) equity shares of Rs. 10/- (Rupees Ten only) each.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of the business. There were no materially significant with the Promoters, Key Management Personnel or other designated persons and have no potential conflict with interest of the Company at large. The Company has formulated a policy on Related Party Transaction which is available on the website of the Company at the link: http://vmart.co.in/wp-content/ uploads/2023/07/Related-Party-Transaction-Policy.pdf. The details of related party transactions entered during the year are provided in the accompanying financial statements. The particulars of the contract or arrangement with related parties referred in section 188(1) of the Companies Act, 2013 in the prescribed form AOC-2, is annexed as Annexure-B to this Report.

DEPOSITS

During the FY 2023-24, your Company has not accepted any deposits from the public, and as such no amount of principal or interest was outstanding as on the date of the Balance Sheet.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013.

Loans, Guarantees & Investments covered under the provisions of Section 186 of the Companies Act, 2013, if any, form part of the notes to the financial statement provided in this

Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY BETWEEN MARCH 31, 2024 AND THE DATE OF BOARD'S REPORT

There have been no such material changes and commitments nding alternatives to affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the Report.

SUBSIDIARY COMPANIES, JOINT VENTURES & ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint Venture or related party transactions made by the Company

Associate Company.

REGISTERED OFFICE

The Registered Office of the Company is situated at 610-611, Guru Ram Dass Nagar, Main Market, Opp. SBI Bank, Laxmi Nagar, New Delhi 110092.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility (CSR) Committee of the Board. The CSR Committee comprises four members, namely Ms. Sonal Mattoo (Chairperson), Mr. Lalit Agarwal (Member) Mr. Madan Gopal Agarwal, (Member) and Mr. Aakash Moondhra, (Member). The Committee is responsible for formulating and monitoring the CSR policy of the Company. The CSR Policy is available on Company's website at URL https://vmart.co.in/wp-content/ uploads/2022/09/CSR-Policy.pdf In accordance with Section 135(5) of the Companies Act, 2013, and its subsequent rules, the Company is mandated to allocate a minimum of 2% of its average net profits from the past three financial years towards Corporate Social Responsibility (CSR) initiatives, as calculated under Section 198 of the Act. For the FY 2023-24, the Company was not required to earmark funds for CSR activities as per the stipulated criteria.

Nevertheless, your Company has voluntarily contributed Rs. 17.80 Lakhs (Rupees Seventeen Lakhs Eighty Thousand only) to CSR projects, surpassing its statutory obligation. This exemplifies our commitment to social welfare beyond the mandatory requirements

The brief outline of the Corporate Social Responsibility ('CSR') Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year in the format prescribed in the Companies ('CSR Policy') Rules, 2014 are set out in Annexure - C of this Report.

CONSERVATION OF ENERGY

Although your Company doesn't use a lot of energy, we still prioritize conservation. We have ongoing programs to reduce energy use, train employees, and maintain our equipment efficiently. Some of our key initiatives include Project Go Green, where we are building eco-friendly warehouses, and the V-Green Project, which uses recycled plastic and sustainable cotton in our products. Project Solar involves installing solar panels at our warehouse and exploring expansion to stores and the head office. We also focus on optimizing fuel use across our operations use. Our solar panels and at the Palwal warehouse generate 68,282 kWh annually, cutting ^CO2 emissions by 36 tonnes. Additionally, we emphasize water conservation throughrainwaterharvestingatourheadoffice in Gurugram, and our warehouse established at Palwal for reducing water wastage with float valves, reusing treated wastewater for horticulture via a sewage treatment plant at our warehouse, and reusing water in 346 stores with plans to expand. Further details on these efforts are available in the Management Discussion and

Analysis Report.

TECHNOLOGY ABSORPTION

To drive long-term growth and create sustained value for all stakeholders, your Company is strengthening its organizational structure, processes, and capabilities to be more robust and future-ready. We are enhancing our data analytics architecture to provide decision-enabling insights directly to store managers, regional heads, and zonal heads. This includes upgrading technology across our planning, supply chain, and logistics infrastructure.

This year, we implemented several technological changes at our head office, warehouse, and stores. We integrated WhatsApp Business for customer queries and digital invoices, and enabled customers to search offline vouchers via WhatsApp. Our Customer Relationship Management (CRM) now allows stores to engage with customers on special occasions and issue product-specific coupons. We adopted 'Tableau' for data visualization and analysis, and use ANOVA to optimize stock allocation. These efforts enhance convenience, efficiency, and scalability Further details on these efforts are available in the Management Discussion and Analysis Report.

FOREIGN EXCHANGE EARNINGS AND OUTGO

CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNELS

The Board of Directors has approved a Code of Conduct applicable to both board members and senior management personnel. This code outlines guiding principles for ethical business conduct, equitable treatment, and avoidance of practices like bribery, corruption, and anti-competitive behavior. During the year under review, the Code of Conduct for Board and Senior Management was amended to redefine senior management and address other legal requirements.

All board members and senior management personnel have affirmed their compliance with the Code of Conduct for the FY 2023-24. Mr. Lalit Agarwal, the Managing Director, has signed a declaration confirming adherence to the Code of Conduct which is available under the Corporate Governance Report forming part of this Annual Report.

The Code is also available on the website of the Company at https://vmart.co.in/wp-content/uploads/V-Mart_Code-of-Conduct-for-Directors-SMPs_May-2024.pdf

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company is dedicated to managing its operations with fairness and transparency, upholding the utmost levels of professionalism, honesty, integrity, and ethical standards. Reflecting this dedication, the Vigil Mechanism/Whistle Blower

Policy ("the Policy") has been established. It serves as a structured process for stakeholders, encompassing Directors, Employees, Customers, Vendors, Associates, and Suppliers, to voice any suspicions of fraud, breaches of legal or regulatory obligations, or the Company's code of conduct/policies, as well as any inaccuracies or misstatements in financial documents and reports.

The objective of this policy is to enable V-Mart stakeholders to safely report any suspected wrongdoing or violations of the code of conduct or applicable laws. It guarantees protection against any form of retaliation, punishment, or discrimination. Whistle-blowers are provided with a secure channel to submit confidential reports either to the Audit Committee's Chairperson or the Vigilance Officer. This policy can be found on the company's website i.e.https://vmart.co.in/wp-content/ uploads/2023/07/Whistle-Blower-Policy.pdf

CODE ON PROHIBITION OF INSIDER TRADING

In accordance with the SEBI Insider Trading Regulations, the Company has a Code of Conduct to Regulate, Monitor and

Report trading by Designated Person ("Code of Conduct for

Insider Trading") and a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ("Code of Fair Disclosure"). Further, the Company has established systems and procedures to prohibit insider trading activity. The Code of Conduct for Insider Trading is reviewed and amended suitably from time to time, to incorporate the amendments carried out by SEBI. The Company periodically circulates the informative emails on Prevention of Insider Trading, Do's and Don'ts, etc. to the employees to familiarise them with the provisions of the Code for Prevention of Insider Trading and educate and sensitize them on various aspects of Code for Prevention of Insider Trading.

The Code, inter alia, lays down the procedures to be followed by DPs while trading/ dealing in Company securities and while sharing Unpublished Price Sensitive Information (UPSI). The

Code outlines the duties and responsibilities of Designated

Persons (DPs), including the maintenance of a Structured Digital Database (SDD). This database serves as a crucial tool for preventing insider trading and managing Unpublished Price Sensitive Information (UPSI). In compliance with SEBI regulations, the company has adopted the SDD Module to meticulously monitor the flow of UPSI. It is mandatory for all DPs to diligently record any UPSI dissemination, ensuring the integrity and confidentiality of sensitive information. This systematic approach reinforces the

Company's commitment to upholding the highest standards of information security and regulatory adherence.

During the year under review, the Audit Committee has reviewed the compliance with the provisions of the SEBI Insider Trading Regulations and has verified that the systems for internal controls are adequate and operating effectively. The Audit Committee reviews cases of non-compliances, if any, and makes necessary recommendations to the Board with respect to action taken against such defaulters in accordance with the penalty framework. The said non-compliances are promptly intimated to the Stock Exchanges in the prescribed format and penalty, if any, is being directly deposited by the Designated

Person with SEBI's Investor Protection and Education Fund.

The Code of Conduct for Insider Trading and Code of Fair

Disclosure have been uploaded on the Company's website at https://vmart.co.in/wp-content/uploads/2022/09/Insider_ Trading_Code_of_Conduct_V-Mart.pdf respectively. All Directors and the designated person have confirmed compliance with the code.

COMPLIANCE MANAGEMENT

The Company has established a dynamic and comprehensive online legal compliance management system. This system is meticulously designed to ensure adherence to all relevant laws affecting the Company's operations. It features automated notifications that prompt compliance owners to fulfill their obligations within the prescribed timelines. These owners are responsible for verifying compliance, which is then examined by approvers. A unified dashboard, showcasing compliance status, is regularly presented to the respective functional leaders and the Compliance Officer. Furthermore, a certificate of compliance of all applicable laws and regulations along with corrective and preventive action, if any, is placed before the Board of Directors on a quarterly basis.

In addition, the Company has deployed a centralized, automated system for the ongoing surveillance, management, and archival of communications from regulatory bodies. This proactive approach ensures that the Company remains vigilant and responsive to statutory requirements.

RISK MANAGEMENT

Your Company has implemented an integrated Risk Management framework that incorporates principles from COSO's Enterprise Risk Management, ISO 31000, and compliance with the requirements under the Companies Act and SEBI Regulations. This comprehensive framework is strategically designed to manage a spectrum of risks, including financial, operational, strategic, compliance, and reputational. The Company is dedicated to enhancing its Risk and Governance framework continuously to fulfil its vision of becoming a prominent value retailer in Bharat. The framework is governed by the Board of Directors, employing both top-down and bottom-up approaches for seamless integration with business operations.

Pursuant to Regulation 21 of the Listing Regulations, the Board constituted a Risk Management Committee to frame, implement and monitor risk management plans of the Company. The Board has adopted the Risk Management Policy and framework to mitigate foreseeable risks, avoid events, situations or circumstances, which may lead to negative consequences on the Company's businesses. The detailed analysis of the business risks and opportunities is given under Management Discussion and Analysis Report, which forms part of this Report.

HUMAN RESOURCE MANAGEMENT

During the FY 2023-24, the Company continued to invest in the growth, progression, welfare and well-being of its employees. Moreover our organizational culture emphasizes collaboration, effective communication, and teamwork. We actively promote diversity and inclusion by providing targeted training to address biases. Additionally, we create diverse development opportunities and encourage internal mobility. As part of our commitment to social responsibility, we engage in CSR initiatives that focus on sustainability and community involvement. Our unwavering commitment to diversity lies at the heart of our customer-centric approach. We aspire to be the employer of choice by eliminating any biases or discrimination within our organization through a comprehensive range of initiatives.

The statement containing the names and other particulars of employees in accordance with section 197 (12) of the Companies Act, 2013, read with rules 5(1) & 5(2) of the

Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014, is appended as Annexure-D to the Board Report.

The details of the employees of the Company employed throughout the financial year was in receipt of a remuneration of Rs 1.02 crores or more, or employed for the part of the year and in receipt of Rs 8.5 lakhs or more a month under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014 are mentioned in Annexure-D to this Report.

For more details refer Human Capital forming part of this

Annual Report.

INTEGRATED REPORT

Your Company is committed to transparency and comprehensive reporting, as evidenced by our voluntary Integrated Report. This Report provides a holistic view of the company's performance, combining financial and non-financial information to facilitate informed decision-making and enhance understanding of our strategic direction by the Members.

This Report provides a deep dive into the essence of our business activities, illuminating our governance framework, strategic aims, and capacity to create enduring value across the six pillars of capital:

Our methodology emphasizes our commitment to sustainable value creation and the importance we place on engaging with our stakeholders, ensuring that our operations benefit all parties involved and contribute positively to the broader ecosystem.

Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013, S.R. Batliboi & Co. LLP, Chartered Accountants, (Firm Registration No. 301003E/E300005) were appointed as Statutory Auditors of the Company for a term of five consecutive years, to hold office from the conclusion of the 21st Annual General Meeting held on September 15, 2023 until the conclusion of 26th Annual General Meeting of the Company to be held for the FY 2027-28 subject to annual ratification by members at every Annual General Meeting, on such remuneration as may be decided. However, vide notification dated May 7, 2018 issued by the Ministry of Corporate Affairs, the requirement of annual ratification has been omitted.

Further, the Auditors' Report "with an unmodified opinion", on the financial statements of the Company for FY 2023-24, forms part of this Annual Report. There was no observation or qualification in the Auditor's Report. The Notes on Financial Statements referred to in the Auditors' Report are self-explanatory and therefore do not require any further comments.

Secretarial Auditors

M/s. VKC & Associates, Company Secretaries, a partnership firm was appointed as Secretarial Auditors to conduct the Secretarial Audit of the Company for the FY 2023-24, pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014.

The Secretarial Audit Report for the FY 2023-24 under the Act read with Rules made thereunder and Regulation 24A of the Listing Regulations in form MR-3 is enclosed herewith as Annexure-E to the Board's Report.

The Secretarial Compliance Report received for the FY 2023-24, in relation to compliance of all applicable SEBI Regulations/ Circulars/Guidelines issued thereunder, Secretarial Standards, pursuant to the requirement of Regulation 24A of the Listing

Regulations, The Annual Secretarial Compliance Report is available on the Company's website at the link: https:// vmart.co.in/wp-content/uploads/V-Mart_Annual-Secretarial-Compliance-Report-FY-23-24.pdf

Internal Auditors

In our commitment to uphold the highest standards of internal audit, we have entrusted KPMG Assurance & Consulting Services LLP, a firm constituted under the Limited Liability Partnership Act, 2008, with the task of conducting our internal audits. KPMG, renowned for their expertise in Audit, Tax, and Advisory services, performs comprehensive quarterly audits of our different business operations. The observations/remarks obtained from these audits are systematically reported to the Audit Committee, ensuring continuous enhancement of our business practices.

This steadfast approach to internal auditing is a testament to our dedication to transparency and excellence in corporate governance.

Reporting of Frauds by Auditors

None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013.

INTERNAL FINANCIAL CONTROL

The Board has adopted adequate policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The details regarding internal financial control and its adequacy are included in the Management Discussion and Analysis, which forms part of this Report.

SIGNIFICANT AND MATERIAL ORDERS

There was no such order passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in the future during the year under review.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION, AND REDRESSAL) ACT, 2013

Our Company laid down an Anti-Sexual Harassment Policy in compliance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Committee (IC) has been set up to redress complaints regarding sexual harassment, if any. The disclosures for the period under review as per the Anti-Sexual Harassment Policy of the Company and applicable Act thereof are as follows: a) Number of complaints of sexual harassment received during the year: 12 b) Number of complaints disposed-off during the year: 12 c) Number of cases pending for more than ninety days: 0 d) Number of workshops on awareness program against sexual harassment carried out: POSH Course is a default, mandatory course that every new employee has to undertake in the organization. The

Company had assigned the POSH training to its employees via its in-house e-learning module - ALT Learning. This type of training focuses on educating employees on proper workplace behaviour, how to handle uncomfortable situations, and what to do if they experience or witness sexual harassment in the workplace. e) Nature of action taken by the employer or district officer: A detailed investigation was carried out by the Company and the appropriate action was taken to resolve the matter.

INCIDENT OF FRAUD

No material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our auditors

INVESTORS EDUCATION & PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer & Refund) Rules 2016 all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by Central Government after completion of seven years. Further, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more are required to be transferred by the Company in the name of

Investor Education and Protection Fund.

Further details of unpaid or unclaimed dividends and shares are provided on our website at https://vmart.co.in/shareholding-information/

ENVIRONMENT SOCIAL GOVERNANCE (ESG)

Your Company is dedicated to strong Environmental, Social, and Governance (ESG) practices to ensure long-term sustainability and value creation. We have implemented comprehensive initiatives across all areas of our operations. These include energy efficiency measures, waste management, water conservation, and social programs supporting community welfare and diversity. Additionally, we maintain stringent governance practices to ensure compliance and ethical conduct. Our commitment to these ESG efforts reflects our dedication to responsible growth and a positive impact on our stakeholders and the environment.

The environmental initiatives of the Company focus on energy efficiency, waste management, and water conservation. Solar power activation at our warehouse has led to 60-70% energy cost savings, and an electricity consumption indicator has been installed to monitor usage. We have implemented paperless billing, initiated e-waste recycling, eliminated plastic shrink wrapping, and replaced paper cups with reusable ceramic cups. Water conservation efforts include repurposing RO wastewater for various uses.

We maintain a gender ratio of 25% and aim to employ 2% differently-abled individuals. Our Community Free School initiative benefits over 750 people, providing jobs to 16 individuals in nearby villages. The Girls Ashram supports 35 beneficiaries, enhancing education for girls. The Karma Animal Foundation cares for 250 dogs, offering meals and medical aid. Our V-Care program includes sessions on mental wellness and physical fitness.

We have implemented an Integrated Compliance Tool to ensure compliance with applicable laws, with automated alerts and a central repository for notices. The Stakeholder Relationship Committee now includes sustainability responsibilities and ESG commitments, and ESG metrics are part of the KPIs for HODs and SMPs. Additionally, 10,915 employees have been trained on human rights policies, and regular workshops cover cyber security and corporate governance.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

As stipulated in terms of the provisions of Regulation 34 of SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 the Business Responsibility & Sustainability Report describing the initiatives undertaken by the Company from environmental, social and governance perspective is presented in a separate section forming part of this Annual Report.

COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of section 148(1) of the Companies Act, 2013 are not applicable to the business activity carried out by the Company.

DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 ("the listing regulations"), the top 1000 listed companies shall formulate a dividend distribution policy. Accordingly, the policy was adopted to set out the parameters that will be taken into consideration by the Board of the Company in determining the distribution of dividends to its shareholders and/or retaining profits earned by the Company. The policy is available on the Company's website at the link: http://vmart.co.in/wp-content/uploads/2023/07/ Dividend-Distribtion-Policy-1.pdf.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

No application has been made or any proceeding is pending under Insolvency and bankruptcy Code, 2016.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF VALUATION DONE DURING ONE TIME SETTLEMENT AND VALUATION DONE WHILE TAKING LOAN FROM BANKS OR FINANCIAL INSTITUTIONS

No one time settlement has been made by the Company during the year under review.

SECRETARIAL STANDARDS

During the year under review, your Company has complied with all applicable secretarial standards issued by the Institute of Company

Secretaries of India and approved by the Central Government pursuant to Section 118(10) of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Companies Act, 2013, the Directors hereby state and confirm that: a) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same. b) The Directors 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 or loss of the Company for that period. c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d) The annual accounts have been prepared on a going concern basis. e) The Directors have laid down Internal Financial Controls to be followed by the Company and that such internal financial controls are adequate and operating effectively. f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors take this opportunity to express their sincere appreciation for the excellent support and coordination extended by the employees, shareholders, customers, suppliers, bankers, and all other business associates. Your Directors gratefully acknowledge the ongoing cooperation and support provided by Central Government, State Governments, and all regulatory authorities.

Your Directors also appreciate and value the contribution made by every member of the V-Mart family.