Your Companys Directors are pleased to present the 19th Annual Reportof the Company along with Audited Accounts for the financial st March 2021.
The operating results of the Company for the year under review are as follows:
(` in lakhs)
|Particulars ||For the year ended 31st March 2021 ||For the year ended 31st March 2020 |
|Total Revenue ||109650 ||166650 |
|Profits/(Loss)before Depreciation & Tax ||9331 ||16345 |
|Less: Depreciation ||10297 ||9392 |
|Loss/Profit before tax ||(966) ||6953 |
|Less: Tax Expense ||(346) ||2018 |
|Net Loss/Profit for the period ||(620) ||4935 |
|Less: Share issue expenses (QIP) ||463 ||- |
|Less: Utilised for Dividend Issue including DDT ||0 ||372 |
|Other comprehensive income ||(31) ||(1) |
|Balance carried forward to Balance Sheet ||(1114) ||4561 |
The Net Sales of the Company decreased by 35.37% to ` 107394 lakhs in financialyear 2020-21 from` 166159 lakhs in F.Y. 2019-20. The Company has posted Operating Profits(EBITDA) of ` 13121 lakhs in FY 2020-21. The Company posted Profit after Tax (PAT)/ NetLoss of ` (620) lakhs in the current financial year as against a PAT of ` 4935 lakhs andEBITDA statement of ` 21376 lakhs in the previous financial year.
A detailed analysis of Companys operations in terms of performance in marketsbusiness outlook risksandconcerns from the leanest-forms part of the ManagementDiscussion and Analysis a separate section of the Annual Report.
During the year under review your Company maintained its stable performance in managingthe cash flow by having a lean inventory delivering greater value to customers andsustaining the entire stakeholder ecosystem. The Companys agility and reactiveresponse to situations enabled it to emerge stronger and more resilient. Despite achallenging operating outlook your Company remains committed and focused on its long-termstrategic intent to create sustained value for all stakeholders while being resilient andagile in adapting business execution to the changing environment.
Focusing on expansion opportunities with a long-term view your Company opened 20 newstores during the year taking the total store count to 279 and thereby growing the totalretail area by 4.21% y-o-y to 22.99 lakhs sq. ft. The majority of these stores werelaunched in Uttar Pradesh and Bihar the Companys two largest markets whileRajasthan Assam Madhya Pradesh and Jharkhand accounted for the rest. During the yearunder review 7 stores were closed.
The Companys product assortment underscores its continued commitment to identifyand bring latest and differentiated fashion to its customers at highly affordable pricepoints.
The Company offered home delivery to the customers to ease sales amidst the pandemic.The Company remains committed to focus on the journey of its omni-channel presence whichhas emerged as the most critical model for retail businesses amongst COVID-19 pandemic.The Company had launched its online platform through its website www.vmartretail.com andapps on both Google Play Store and Apple App Store. As on 31st March 2021 theCompany witnessed 1.3 mn+ app downloads. The Company has also taken proactive steps toensure the safety of our customers and employees hygiene and social distancing SOPsformulated and implemented at stores and workplaces early implementation of company-widework-from-home measures and person level daily roll call and healthmonitoring of its 7000+ employees.
FY21 Performance Highlights
? The Company managed to maintain a robust cash position utilizing less than 20% ofits approved working capital limits. Following its ethos of prudence and agility theCompany proactively implemented efficient inventory management measures. Through a deftmechanism of inter-store transfer significantly controlled inventory purchases agilestore-level replenishment and a responsive supply chain strategy the Company achieved itsleanest-ever inventory in Q2 FY 2020-21 and maintained it well into the second half of theyear as well. Benefitting inventory levels the Company procured and stocked its storeswith fresh merchandize. Despite a very healthy inventory situation the Companyconservatively continues to carry provision against any unforeseen disruption due toCOVID-19. The Company raised fresh capital of 375 Crores through QIP to further strengthenthe cash reserves and enable fast tracking planned expansion projects. These includesetting up a new warehousing facility expanding stores refurbishment of stores and alsofast tracking the technology investments particularly around online/omni channel.
? Innovative marketing campaigns and promotional offers resonated well with customersdriving footfalls and sales during festive and marriage-related shopping as well asgiving an impetus to winter merchandise sales. Marking an auspicious beginning of festiveshopping the Gold Coin offer gained good traction. All these steps aided higher footfallsand conversions resulting into a higher sell-through rate for both existing and freshmerchandise.
? As the year progressed there was gradual and steady improvement in businessoperations. The Company witnessed Total revenue recovery of 66%. Despite lower operatingdays reduced topline and marginalised savings due to largely fixed cost structuresEBITDA recovery remainedhighat61%.Reflecting the Covid-19 impacted performance and theadded impact of IndAS 116 induced lease rent accounting the Company reported itsfirst-ever yearly loss at 6 Crores. Same Store Sales Growth (SSSG) for the full year camein at (39.9%) which was (2.3%) last year while sales per sq. feet on effective days(SPSF per month) stood at 530 recovering 70% from last year. Footfalls recovered 52%with transaction size and average selling price (ASP) witnessing an increase of 14% and1% y-o-y respectively. The recovery in revenue well supported by an effective costreduction mechanism and proactive inventory management measures has significantlycushioned the pandemics impact on the ability. Revenue contribution continued profitCompanys to be dominated by fashion which captured 78.8% of the total revenue piewith the remaining 21.2% coming from non-apparel and FMCG products.
? At a time when resources are even more scarce agility will be crucial not only inproviding adequate and right merchandize in every store but also in ensuring betterutilization of resources to create customer delight.
? The Company is in the process of augmenting the Online platform by creative andcompelling products and shopping experience with an aim of giving a tremendous boost tooverall sales in the longer term. The Company is working on augmenting the website andmobile app interface for a better customer experience.
Considering the current pandemic situation and financial position of the Companyincluding liquidity constraints and cash flow position no dividend was declared for theF.Y. 2020-21.
The Company during the year has transferred ` 36474.42 Lakhs to reserves. Posttransfer the reserves stood at ` 80552.06 Lakhs as on 31st March 2021.
Investment Information and Credit Rating Agency of India Limited (ICRA) has reaffirmedthe long- term rating of [ICRA] AA- (pronounced ICRA double A minus) assigned for ` 185crores Line of Credit of your Company and also reaffirmed the short-term rating of[ICRA]A1+ (pronounced ICRA A one plus) assigned to ` 10 crores Line of Credit of yourCompany.
The credit rating of the Company is as under as on date:
|Facilities Rating Existing Reaffirmed |
|Long term ||[ICRA] AA- (ICRA ||[ICRA] AA- (ICRA double |
|bank limits ||double A minus) (with stable outlook) ||A minus) (with stable outlook |
|Short term ||ICRA A1 + ||ICRA A1 + |
|bank limit ||(ICRA A one plus ||(ICRA A one plus) |
MANAGEMENT DiSCUSSiON AND ANALYSiS
The Management Discussion and Analysis for the period under review as required underSchedule V read with Regulation 34(2) (e) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 has been dealt with extensively in a separate sectionforming part of the Annual Report.
AwARDS AND ACCOLADES
The performance of your Company has been widely recognised and honored through severalawards and accolades. In particular we have been appreciated for our best practices andbusiness excellence and have been honored for being an award-winning workplace.
? Indias Retail Champions supported by RAI - Winner of Apparel and Lifestyle-2021- Presented by Bhartiya Mall of Bengaluru
? V-Mart Certified as a Great Place to Work by the Great Place to Work(GPTW) Institute India
? Ranked 16th on the Fortune 2021 Midsize Marvel List India notching rapidgains from 148th rank in 2020. Further V-Mart is ranked 1st in theRetail-Trade category
? Won the prestigious World CSR Congress Leadership Award for Community Development inFY2021
The equity shares of your Company continue to be listed at BSE Ltd. (BSE) and theNational Stock Exchange of India Ltd. (NSE).
|Exchange ||Scrip Code ||S i iN |
|NSE ||vMART ||i NE665J01013 |
|BSE ||534976 || |
The listing fees for fiscal 2021 have been paid for all of the above stock exchangeswhere the equity shares of the Company are listed.
wEBLiNk OF ANNUAL RETURN
Pursuant to the provisions of Section 92(3) of the Companies Act 2013 read with Rule12 of the Companies (Management and Administration) Rules 2014 the copy of Annual Returnin prescribed form MGT 7 will be placed on the Companys website at the linkwww.vmart.co.in upon filing the same with ROC.
Pursuant to the provisions of the SEBI (Listing Obligations and DisclosuresRequirements) Regulations 2015 the detailed Report on Corporate Governance is appendedas Annexure to this Report.
NUMBER OF MEETiNGS OF THE BOARD
Six times (6) Board meetings were held during the year under review the details ofwhich are given in the Corporate Governance report forming part of this report. Theintervening gap between any two meetings was within the period prescribed by the CompaniesAct 2013 & SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.
The Board of Directors have carried out an annual evaluation its own performance BoardCommittees and individual Directors in the manner prescribed in the provisions of theCompanies Act 2013 and as per the Corporate Governance requirements prescribed by theSecurities and Exchange Board of India (Listing Obligations and Disclosures Requirements)Regulations 2015 ("SEBI Listing Regulations").
The Board and the Nomination & Remuneration committee reviewed the performance ofthe Board Committees and individual Directors on the basis of the criteria and frameworkadopted by the Board. The evaluation criteria included various aspects such asfunctionality of Board compositions process & procedures including adequate &timely information attendance delegation of responsibility decision making roles &responsibility including monitoring benchmarking feedback relationship with thestakeholders and as provided by the Guidance Note on Board Evaluation issued by SEBIon 5th January 2017. In a separate meeting of the Independent Directorsperformance of the Non Independent Directors the Board as a whole and the chairman werealso evaluated based on a set out criterion.
DiRECTORS AND kEY MANAGERiAL PERSONNEL
The Board of Directors consists of six members of which four are IndependentDirectors. The Board also comprises one-Woman Independent Director.
In pursuance of section 203 of the Companies Act 2013 the key managerial personnel ofthe Company are Mr. Lalit M Agarwal Chairman & Managing Director Mr. Anand AgarwalChief Financial Officerand Ms. Megha Tandon Company Secretary.
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr. LalitM Agarwal (DIN: 00900900) is liable to retire by rotation at the ensuing Annual GeneralMeeting and being eligible has offered himself for re-appointment. The Board of Directorsrecommends his re-appointment and the matter is being placed for the approval of membersat the ensuing Annual General Meeting of the Company.
During the year under review Mr. Murli Ramachandran (DIN: 00264018) & Ms. SonalMattoo (DIN: 00106795) Independent Directors were re-appointed on the Board asIndependent Directors of the Company at the Eighteenth Annual General Meeting (AGM) heldon 30th September 2020 for a period of five years w.e.f. 28thSeptember 2020.
DECLARATiON BY iNDEPENDENT DiRECTORS
The Company has received necessary disclosures from each of its four IndependentDirectors under Section 149(7) of the Companies Act 2013 that he/she meets all thecriteria laid down in Section 149(6) of the Companies Act 2013 and Regulation 16 of theSEBI (Listing Obligation and Disclosures Requirement) Regulations 2015 and there has beenno change in the circumstances which may affect their status as Independent Directorduring the year. During the year the Non-Executive Directors of the Company had nopecuniary relationship or transactions with the Company other than payments towards thesitting fees and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Company.
POLiCY ON DiRECTORS APPOiNTMENT AND REMUNERATiON
The policy of the company aims to have a mix of Independent and Executive Directors onits Board and to separate out its functions of governance and management.
The policy of the Company on Directors appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a Directorand other matters provided under sub-section (3) of Section 178 is appended as Annexure-Ato this report.
TRAiNiNG OF iNDEPENDENT DiRECTORS
Every new Independent Director of the Board attends an induction program. EverySenior-Management Personnel makes a presentation to inductees about the Companysstrategy operations product and market finance risk management etc.
The details of familiarisation programme have been provided under Corporate GovernanceReport forming part of this Report.
RETiREMENT BY ROTATiON
In terms of the provisions of Section 152 of the Companies Act 2013 and Articles ofAssociations of the Company Mr. Lalit M Agarwal Director is liable to retire byrotation at the forthcoming Annual General Meeting and being eligible offers himself forre-appointment.
COMMiTTEES OF THE BOARD
At present there are seven Board committees namely: Audit Committee Nomination andRemuneration Committee Stakeholders Relationship Committee Corporate SocialResponsibility Committee Risk Management Committee Investment and Warehouse Committee.
A detailed note on the Board and its Committees is provided under the CorporateGovernance report section which is forming part of this Annual Report.
As per SEBI Listing Regulations Corporate Governance Report with auditorscertificate thereon and Management Discussion and Analysis are attached which form partof this report. The Company has also complied with disclosing the required details on thewebsite of the company on www. vmart.co.in which are as follows:
? Details of its business
? Composition of various Committees
PRACTiSiNG COMPANY SECRETARYS CERTiFiCATE ON CORPORATE GOvERNANCE
As required under Schedule V Clause E read with Regulation 34(3) and of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the PracticingCompany Secretarys certificate on Corporate Governance is enclosed as Annexure tothe Board Report.
a) Buy Back of Securities: The Company has not bought back any of its securities duringthe year under review.
b) Issue of Sweat Equity: The Company has not issued any sweat equity shares during theyear under review.
c) Issue of Bonus Shares: The Company has not issued any bonus shares during the yearunder review.
d) Employees Stock Option / Restricted stock units: The Company has adopted the ESOPScheme 2012 and the ESOP Scheme 2020 as per the applicable SEBI regulations and approvedby the members at Annual General Meeting of the Company.
e) A certificate payment regulations has been obtained and shall be available forinspection at the Annual General Meeting of the Company.
The Company has implemented an Employee Stock Option Scheme which was approved by theBoard of Directors and the shareholders vide resolution dated 2nd July 2012and 10th July 2012 respectively (the V-Mart ESOP Scheme 2012)consequent to which 300000 equity shares of ` 10 each were to be granted upon exercise asstock options (ESOPs) to eligible employees. Subsequently the shareholders in its meetingheld on 18th September 2017 approved an amendment in the said ESOP scheme byincreasing the total number of stock options from 300000 to 600000 options. The exerciseprice of these options will be determined by the Nomination & Remuneration Committeeand the options will vest over a period of 12 months to 36 months of continued employmentfrom the grant date.
Further the Company has also implemented an Employee Stock Option Scheme 2020 whichwas approved by the Board of Directors and the shareholders vide resolution dated 10thAugust 2020 and 30th September 2020 respectively (the V-Mart ESOPScheme 2020) consequent to which 200000 equity shares of ` 10 each were to begranted upon exercise as stock options (ESOPs) to eligible employees. The exercise priceof these options will be determined by the Nomination & Remuneration Committee and theoptions will vest over a period from 12 to 48 months subject to achievement of performancematrix by the company as well as the eligible employees during from the Statutory Auditorunder share based the 48 months from the date of grant.
The grant details under the both the scheme(s) during the year are as follows:
|Scheme ||Grants ||Vesting ||Timeline |
|V-Mart ESOP Scheme 2012 ||During the financial year 2020-21 ||30% of the total grant ||After 12 months from the date of grant |
| ||1 grant have been made comprising total 27051 options ||30% of the total grant ||After 24 months from the date of grant |
| || ||40% of the total grant ||After 36 months from the date of grant |
|V-Mart ESOP Scheme 2020 ||During the financial year 2020-21 ||10% of the total grant ||After 12 months from the date of grant |
| ||1 grant have been made comprising total 185950 options ||20% of the total grant ||After 24 months from the date of grant |
| || ||30% of the total grant ||After 36 months from the date of grant |
| || ||40% of the total grant ||After 48 months from the date of grant |
Details of equity shares allotted under ESOP Scheme 2012 during the year are asfollows:
|Date of Allotment ||No. of shares Allotted |
|1 29th May 2020 ||10435 |
|2 10th August 2020 ||2979 |
|3 5th September 2020 ||4688 |
|4 10th November 2020 ||1945 |
|Total ||20047 |
The information required to be disclosed under SEBI (Share Based Employee Benefits)Regulations 2014 as on 31st March 2021 are as follows:
|Particulars ||Details |
|Date of Shareholders Approval ||ESOP Scheme 2012: 10th July 2012 |
| ||ESOP Scheme 2020: 30th September 2020 |
|Maximum Terms of options granted ||Options to be exercised within 8 years of vesting |
|Options granted Options to be exercised within 8 years of vesting Sources of Shares ||Primary Issuance |
|Variation of terms of options ||NIL |
|Number of options outstanding at the beginning of the year ||ESOP Scheme 2012: 103777 |
|Number of options granted during the year ||ESOP Scheme 2012: 27051 |
| ||ESOP Scheme 2020: 185950 |
|Number of options forfeited / lapsed during the year ||ESOP Scheme 2012: 23129 |
| ||ESOP Scheme 2020: 4800 |
|Number of options vested during the year ||ESOP Scheme 2012: 61518 |
| ||ESOP Scheme 2020: NIL |
|Number of options exercised during the year ||ESOP Scheme 2012: 20047 |
| ||ESOP Scheme 2020: NIL |
|Number of shares arising as a result of exercise of Options ||ESOP Scheme 2012: 20047 |
|Money realized by exercise of options (` in Lakhs) ||ESOP Scheme 2012: 94.22 |
|Number of options outstanding at the end of the year ||ESOP Scheme 2012: 87652 |
| ||ESOP Scheme 2020: 181150 |
|Number of options exercisable at the end of the year ||ESOP Scheme 2012: 39013 |
| ||ESOP Scheme 2020: NIL |
|Pricing Formula ||The Nomination & Remuneration Committee is authorized to determine the exercise price of ESOPs. |
Person-wise details of options granted during the Financial Year 2020-2021:
|i) Senior managerial personnel/key managerial personnel ||ESOP Scheme 2012: Vineet Jain |
| ||ESOP Scheme 2020: |
| ||A. Vineet Jain |
| ||B. Anand Agarwal |
| ||C. Anjali Goel |
| ||D. Rajan Sharma |
| ||E. Snehal Shah |
| ||F. M. Srinivasan |
| ||G. Ranjan Kumar |
| ||H. Dinesh Srivastava |
| ||I. Syed Ali Athar |
| ||J. Ramesh Agarwal |
| ||K. Megha Tandon |
ii) A. No of options granted and its exercise price
|(ESOP Scheme 2012) || |
|Name ||Vineet Jain |
|Number of shares ||27051 |
|Exercise Price Per share ||1769 |
|Particulars ||Details || || |
|B. No of options granted and its exercise price (ESOP Scheme 2020) ||Name ||No. of Shares ||Exercise Price per share |
| ||Anand Agarwal ||15901 ||1244 |
| ||Anjali Goel ||4756 ||1244 |
| ||Dinesh Srivastava ||2052 ||1244 |
| ||Megha Tandon ||593 ||1244 |
| ||M. Srinivasan ||8820 ||1244 |
| ||Rajan Sharma ||13650 ||1244 |
| ||Ramesh Kumar Agarwal ||5487 ||1244 |
| ||Ranjan Kumar ||3050 ||1244 |
| ||Snehal Shah ||9993 ||1244 |
| ||Syed Ali Athar ||3213 ||1244 |
| ||Vineet Jain ||18838 ||1244 |
|iii) Any other employee who received a grant in any one year of options amounting to 5% or more options granted during the year ||Nil |
|iv) identified employees who are granted options during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. ||Nil |
|Fully-diluted EPS pursuant to issue of shares on exercise of options in accordance with relevant Accounting Standards ||(3.37) |
|Lock-in ||NIL |
|Impact of the difference on the profits of the Company and on the EPS ||Impact on profit:` 149.47 lakhs impact on EPS: 0.60 |
|Difference if any between employee compensation cost (calculated according using the intrinsic value of stock options) and the employee compensation cost (calculated on the basis of fair value of stock options) ||1.53 lakhs |
|Weighted average exercise price of options whose exercise price ||Exercise price exceeds market price: Not applicable |
|either equals or exceeds or is less than the market price of the stock ||Exercise price equals market price: Not applicable |
| ||Exercise price is less than market price: As mentioned in Below table |
|Weighted average fair values of options whose exercise price either equals or exceeds or is less than the market price of the stock ||Exercise price exceeds market price: Not applicable |
| ||Exercise price equals market price: Not applicable |
| ||Exercise price is less than market price: As mentioned in below table |
|Method and significant assumptions used to estimate the fair value of options granted during the year ||The fair market value has been calculated on the basis of the Black Scholes model. |
|Particulars ||ESOPs ||ESOPs ||ESOPs ||ESOPs ||ESOPs ||ESOPs ||ESOPs ||ESOPs ||ESOPs ||ESOPs ||ESOPs ||ESOPs ||ESOPs |
| ||Grant I ||Grant II ||Grant III ||Grant IV ||Grant V ||Grant VI ||Grant VII ||Grant VIII ||Grant IX ||Grant X ||Grant XI ||Grant XII ||Grant XIII |
|ESOP Scheme ||Scheme ||Scheme ||Scheme ||Scheme ||Scheme ||Scheme ||Scheme ||Scheme ||Scheme ||Scheme ||Scheme ||Scheme ||Scheme |
| ||2012 ||2012 ||2012 ||2012 ||2012 ||2012 ||2012 ||2012 ||2012 ||2012 ||2012 ||2012 ||2020 |
|Price per option (In `) ||150 ||450 ||573 ||470 ||900 ||1260 ||2047 ||2044 ||2286 ||2347 ||1683 ||1769 ||1244 |
|Risk free return (In%) ||8.42 ||8.32 ||8.16 ||7.93 ||7.80 ||7.64 ||7.45 ||7.42 ||7.37 ||7.33 ||7.26 ||6.93 ||6.93 |
|Expected Life (In years) ||4 ||4 ||4 ||4 ||4 ||4 ||3 ||3 ||3 ||3 ||3 ||3 ||4 |
|Expected Volatility ||25% ||41% ||38.74% ||30.13% ||42.48% ||50.76% ||40.30% ||41.49% ||22.23% ||22.90% ||23.61% ||25.68% ||24.32% |
|Dividend Yield ||0.27% ||0.20% ||0.20% ||0.24% ||0.18% ||0.10% ||0.10% ||0.10% ||0.10% ||0.10% ||0.10% ||0.10% ||0.10% |
|Closing market price ||210 ||551.90 ||615.40 ||511.30 ||1214.85 ||1413.80 ||2330.25 ||2356.75 ||2779.70 ||2595.50 ||1893.30 ||1986.05 ||2500.95 |
| ||(IPO) ||(NSE) ||(NSE) ||(NSE) ||(NSE) ||(NSE) ||(NSE) ||(NSE) ||(NSE) ||(NSE) ||(NSE) ||(NSE) ||(NSE) |
| || ||(BSE) ||(BSE) ||(BSE) ||(BSE) ||(BSE) ||(BSE) ||(BSE) ||(BSE) ||(BSE) ||(BSE) ||(BSE) ||(BSE) |
| || ||551.95 ||614 ||510 ||1220.45 ||1419.8 ||2327.20 ||2367.05 ||2781.05 ||2544.20 ||1911.40 ||1980.95 ||2501.75 |
|Weighted average exercise price (In `) ||150 ||450 ||573 ||470 ||900 ||1260 ||2047 ||2044 ||2286 ||2347 ||1683 ||1769 ||1244 |
|Weighted average fair value of stock option (In `) ||51 ||263 ||248 ||211 ||673 ||727 ||902 ||913 ||792 ||807 ||591 ||443 ||1473 |
EMPLOYEE STOCk OPTiON DETAiLS:
|Grant Date ||ESOP Scheme ||Exercise Price ||Options Granted ||Options vested and exercisable ||Options Unvested ||Options Exercised ||Options Forfeited ||Options outstanding |
|20th July 2012 ||Scheme 2012 ||150 ||153252 ||153252 ||- ||123264 ||29988 ||- |
|5th January 2015 ||Scheme 2012 ||450 ||22350 ||22350 ||- ||18700 ||3650 ||- |
|28th December 2015 ||Scheme 2012 ||573 ||13645 ||13645 ||- ||13645 ||- ||- |
|30th January 2017 ||Scheme 2012 ||470 ||76225 ||76225 ||- ||54548 ||17413 ||4264 |
|12th July 2017 ||Scheme 2012 ||900 ||6395 ||6395 ||- ||3806 ||- ||2589 |
|09th November 2017 ||Scheme 2012 ||1260 ||9300 ||9300 ||- ||2790 ||2772 ||3738 |
|24th May 2018 ||Scheme 2012 ||2047 ||18527 ||11116 ||7411 ||- ||11658 ||6869 |
|23rd July 2018 ||Scheme 2012 ||2044 ||40764 ||24460 ||16304 ||- ||2910 ||37854 |
|2nd November 2018 ||Scheme 2012 ||2286 ||3426 ||2056 ||1370 ||- ||3426 ||- |
|10th May 2019 ||Scheme 2012 ||2347 ||8228 ||2468 ||5760 ||- ||5369 ||2859 |
|2nd August 2019 ||Scheme 2012 ||1683 ||6025 ||1807 ||4218 ||- ||3597 ||2428 |
|10th November 2020 ||Scheme 2012 ||1769 ||27051 ||- ||27051 ||- ||0 ||27051 |
|24th December 2020 ||Scheme 2020 ||1244 ||185950 ||- ||185950 ||- ||4800 ||181150 |
MOvEMENT OF STOCk OPTiONS DURiNG THE YEAR OF ESOP SCHEME 2012 AND 2020:
|Total for all grants ||No. of Options ||Weighted average exercise price (K) |
|Outstanding at the beginning of the year ||103777 ||1642.59 |
|Granted during the year ||213001 ||1310.67 |
|Forfeited/ Cancelled during the year ||27929 ||1976.73 |
|Expired during the year ||- ||- |
|Exercised during the year ||20047 ||470.00 |
|Outstanding at the end of the year ||268802 ||1430.84 |
|Exercisable at the end of the year ||39013 ||1721.16 |
Weighted average remaining contractual life (in years)
| ||As at 31st March 2021 |
|Weighted average remaining contractual life (in years) ||7.15 |
The Shareholders of the Company in their 18th Annual General Meetinghave authorized to create issue offer and allot as may be decided by the Board in termsof the applicable regulations and as permitted under the applicable law in one or moretranches with or without green shoe option for an aggregate amount of up to ` 500 Crore(Rupees Five Hundred Crore Only) to such investors whether Indian or foreign that may bepermitted to invest in such issuance of Securities including eligible qualifiedinstitutional buyers (the "QIBs") asdefinedin the Securities and Exchange Boardof India (Issue of Capital and Disclosure Requirements) Regulations 2018 by way of apublic ement provided in this annual issue preferential allotment private placementincluding a qualified institutions placement (the "QIP") in accordance with theprovisions of Chapter VI of the Securities and Exchange Board of India (Issue of Capitaland Disclosure Requirements) Regulations 2018. disturbance and Pursuant to aboveapproval the Company through its Investment Committee has issued and listed 1530612equity shares of ` 10 each at price of ` 2450 per equity share aggregating to `3749999400 on 03.02.2021 to 30 qualified institutional buyers (the "QIBs")under the applicable provision of the Securities and Exchange Board of India (Issue ofCapital and Disclosure Requirements) Regulations 2018.
CHANGE iN AUTHORiSED SHARE CAPiTAL
The Authorized Share Capital of your Company was increased from ` 200000000 (RupeesTwenty Crores only) to ` 250000000 (Rupees Twenty-Five crores only) during the yearunder review.
Consequent to the above the Authorized Share Capital of your Company as on 31stMarch 2021 stood at ` 250000000 (Rupees Twenty-Five crores only) divided into25000000 (Two Crores and Fifty Lakhs only) equity shares of ` 10/- (Rupees Ten only).
RELATED PARTY TRANSACTiONS
All related party transactions that were entered into during the financial year were onarms length basis and were in the ordinary course of the business. There were nomaterially Companysignificant with the Promoters Key Management Personnel or otherdesignated 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 thewebsite of the Company at the link https://www.vmart.co.in/investor/5/corporate-governance. The details of related party transactions entered during the yearare provided in the accompanying financial statements. The particulars of the contract orarrangement with related parties referred in section 188(1) of the Companies Act 2013 inthe prescribed form AOC-2 is annexed as Annexure - E to this report.
During the FY 2020-21 your Company has not accepted any deposits from the public andas such no amount of principal or interest was outstanding as on date of the BalanceSheet.
PARTICULARS OF LOANS GUARANTEES OR i N vESTMENTS UNDER SECTiON 186 OF THE COMPANiES
Loan guarantees & investment covered under the provisions of Section 186 of theCompanies Act 2013 if any form part of the notestothefinancial
MATERiAL CHANGES AND COMMiTMENTS AFFECTiNG FiNANCiAL POSiTiON OF THE COMPANY BETwEEN
31 ST MARCH 2021 AND THE DATE OF BOARDS REPORT
The outbreak of coronavirus (COVID-19) pandemic globally and in India has causedsignificant of economic activity. Operations and revenue of the Company have beenadversely impacted in Q1 of FY 2021-22 as most of the stores were closed and the remainingstores being partially operational.
SUBSIDIARY COMPANIES JOINT VENTURES & ASSOCIATE
The Company does not have any Subsidiary Joint Venture or Associate Company.
The Registered Office of the company is situated at 610-611 Guru Ram Dass Nagar MainMarket Opp. SBI Bank Laxmi Nagar New Delhi 110092.
CORPORATE SOCiAL RESPONSiBiLiTY (CSR)
Your Company has constituted a Corporate Social Responsibility Committee of the Boardcomprising of five members namely Mr. Lalit M Agarwal (Chairman) Mr. Madan GopalAgarwal (Member) Mr. Aakash Moondhra (Member) Ms. Sonal Mattoo (Member) and Mr. GovindShridhar Shrikhande (Member). The Committee is responsible for formulating and monitoringthe CSR policy of the Company. Details about the CSR policy of the Company and initiativestaken by the Company on CSR during the year are available on the company's website.
As per the Companies Act 2013 every company having net worth of rupees five hundredcrores or more or turnover of rupees one thousand crores or more or a net profit ofrupees five crores or more during immediately preceding financial year shall spend inevery financial year at least two percent of the average net profits of the company madeduring the three immediately preceding financial has not completed the period of threefinancial years since its incorporation during such immediately preceding financial yearsin pursuance of its Corporate Social Responsibility Policy. Accordingly our Company wasrequired to spend ` 188.75 lakhs on CSR activities during the year.
During the year under review your Company has spent an amount ` 330.73 lakhs towardsthe Corporate Social Responsibility.
The company has spent all its CSR obligations during the period under review.
The annual report on CSR Activities is appended as Annexure-B to this Board Report.
CONSERvATiON OF ENERGY
The operational activity of the Company does not involve large energy consumption. Inany case conservation of energy is considered to be a priority and therefore ensuringminimum consumption by way of better energy conservation programs training/ awareness ofthe employees layout of machines and prompt upkeep is a continuous exercise.
The Company has continue its efforts and taken many energy saving initiatives such as:
? Implementation of setting up of store wise monthly diesel limit in petro card linkedwith stores DG run hour resulting in good control in fuel consumption.
? Tallying up of physical diesel received at store vis-a-vis the payment from PetroCard from HO resulting in the misuses of Petro Card under control.
? Adherence to Modified being given to low footfall extended non-peak hours for theentire day (only 30% to 50% power to be used depending on the footfall at the storeswithout compromising on customers comfort).
? Consumption of bare minimum electricity in the FMCG section of the stores operatingfor Kirana Home Delivery only.
? Optimum use of air conditioner (AC) at the stores in order to reduce the electricityconsumption
? With the aim to minimise fuel consumption there has been a reduction in the monthlypetro card limits with emphasis being placed on No Air Conditioning during the initial onehour of power cuts and thereafter only 30% operation of ACs.
? Emphasis being made on daily monitoring of PF reading and implementation of RevisedDiesel Consumption monitoring SOPs.
? Encouraging Digital and Automation Initiatives including process automation to reduceuse of paper.
? Installation of glass doors walls and windows at the stores to use daylight andreduce electricity consumption.
? Installation of sensor based lighting arrangement at our MSA storage area which hasenabled us to save 45% of electricity consumption for said area.
? Deployment of sensor based water reservoirs at the warehouse which has enabled us tosave 25% of our water usage being approx. 1000 liters of water wastage/day has been saved.
? Replacement of single use plastic carry bags with paper or other recyclable materialbags at the stores.
The Company is in process of evaluating the usage of solar panel at the stores;feasibility study to implement the same is in process.
With its sights firmly focused on accelerating long-term growth and sustained valuecreation for all stakeholders your Company is steadily making its organisationalstructure processes and capabilities more robust and future-ready.
Your Company is enriching its already existing organisation wide data analyticsarchitecture to feed decision-enabling insights directly to store managers regionalheads and zonal heads. Technology adoption and up gradation across its planning supplychain and logistics infrastructure.
During the year under review several LightSOPwhereinconsiderationis technologicalchanges have been implemented at the companys Head-office warehouse as well as atthe stores which includes:
Supply Chain Augmentation:
? Improving Vendor data interface by the introduction of Vendor Portal and Vendor DataManagement which inter alia includes the Indent system to generate auto PO.
? Introduction of Next Generation Rule Engine enhancements for increasing thesell-through margin and decreasing the DOI through better allocation.
? Implementation of proprietary customer data platform to process customer transactiondata since APR 2013
? Curation of customer data capturing granular purchase behavior including recencyfrequency & monetary
? Plan manage & launch customer engagement campaigns for segments built onmultiple dimensions
? Tie up with online marketplaces for online sales growth
? Integration with Banks and financial institutions for UPI helping in financialtransactions automation
? Implemented customer engagement platform to achieve higher value through the customerlifecycle
Risk & Governance:
? Introduction of Site Master data Management system through which better informationon store demographics can be gathered
? Increased Focus on Sales Forecasting Automation
? Automation of process to help increase the productivity of the employee and optimizeload
? Digitization of Risk management systems to optimize compliance and regulatory risks.
? Introduction of HCI (Hyperconverged Infra Virtualisation Proxmox) that will help toscale up the growth of business and support data-driven approach
FOREiGN EXCHANGE EARNiNGS AND OUTGO
|Particulars ||Foreign Exchange Earning ||Foreign Exchange Outgo |
| ||(Amount in `) ||(Amount in `) |
|NIL ||NIL ||NIL |
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe Company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings / behaviours of any form and the Board has laid downdirectives to counter such acts. The Code has also been posted on the Companyswebsite.
viGiL MECHANiSM / wHiSTLE BLOwER POLiCY
The Company has a Whistle Blower Policy/ Vigil Mechanism to deal with instances offraud and mismanagement if any. The purpose of this mechanism is to provide a frameworkto report concern about unethical behaviour actual or suspected fraud or violation of theCompanys Code of Conduct or ethics policy and provide adequate safeguards againstvictimisation of the person availing this mechanism. This Policy has been appropriatelycommunicated within the organisation and is effectively operational. The policy provides amechanism whereby whistle blower may send protected disclosures directly to the Chairmanof the Audit Committee or Vigilance Officer.
The Policy is available on the website of the Company i.e. www.vmart.co.in.
PREvENTiON OF iNSiDER TRADiNG
The Securities and Exchange Board of India (SEBI) has in exercise of powers conferredunder Securities and Exchange Board of India Act 1992 has made the Securities andExchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations 2018 toamend the Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015
In view of the above the code of conduct to regulate monitor & report trading byinsider has been approved by the Board of Directors at their duly convened meeting.
The Code requires pre-clearance for dealing in the Companys shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated persons whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.
All Board Directors and the designated person have confirmed compliance with the code.
Enterprise risk management (ERM) is a key area of operation for every responsibleorganisation. In recent years volatile external factors have increased the significanceof ERM for organisation. Your Company is working in an open environment and hence facesvarious types of risk. Your Company has constituted a Risk Management Committee of theBoard comprising of four members namely Mr. Aakash Moondhra (Chairman) Mr. MurliRamachandran (Member) Ms. Sonal Mattoo (Member) and Mr. Govind Shridhar Shrikhande(Member). The Committee is responsible for monitoring and reviewing the risk managementplan & policy and ensuring its effectiveness.
The details in respect of risk management are included in the Management Discussion andAnalysis which is a part of this report.
HUMAN RESOURCE MANAGEMENT
The focus for the year was on Capability Building Employee Engagement and Key TalentManagement. We are focused to attract and retain talented skills and make them motivatedthrough various skill-development programmes. We provide a quality workplace to ouremployees and provide a platform to develop and to grow.
The statement containing the names and other particulars of employees in accordancewith section 197(12) of the Companies Act 2013 read with rules 5(1) & 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isappended as Annexure-C to the Board Report.
The details of the employees of the Company employed throughout the financial year wasin receipt of a remuneration of ` 1.02 crores or more or employed for the part of theyear and in receipt of ` 8.5 lakhs or more a month under Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are mentioned inAnnexure C to this report.
NTEGRATED REPORT i
Your Company has voluntarily provided Integrated Report which encompasses bothfinancial and non-financial information to enable the Members to take well informeddecisions and have a better understanding of the Companys long term perspective.
The Report also touches upon aspects such as organisations strategy governanceframework performance and prospects of value creation based on the six forms of capitalviz. financial capital manufactured capital intellectual capital human capital socialand relationship capital and natural capital.
Pursuant to the provisions of Section 139 of the Companies Act 2013 S.R. Batliboi& Co. LLP Chartered Accountants (Firm Registration No. 301003E/E300005) wereappointed as Statutory Auditors of the Company for a term of five consecutive years tohold office from the conclusion of the 16th Annual General Meeting held on 29thJune 2018 until the conclusion of 21st Annual General Meeting of the Companyto be held in the calendar year 2023 subject to annual ratification by members at everyAnnual General Meeting on such remuneration as may be decided. However Vide notificationdated 7th May 2018 issued by Ministry of Corporate Affairs the requirement ofannual ratification has been omitted.
There was no observation or qualification in the Auditors Report for the financialyearended 31 st March 2021. The Notes on Financial Statements referred to in theAuditors report are self-explanatory and therefore do not require any furthercomments.
SECRETARIAL AUDITOR & REPORT
M/s. VKC & Associate Company Secretaries a partnership firm was appointed asSecretarial Auditors to conduct the Secretarial Audit of the Company for the FY 2020-21pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. TheSecretarial Audit report in form MR- 3 is enclosed herewith as Annexure-D to theBoards Report.
The observation made by the Secretarial Auditor is self-explanatory in nature andrequires no further clarification.
i NTERNAL F iNANCiAL CONTROL
The Board has adopted adequate policies and procedures for ensuring orderly andefficient conduct of its business including adherence to the Companys policiessafeguarding of its assets prevention and detection of frauds and errors the accuracyand completeness of the accounting records and the timely preparation of reliablefinancial in respect of internal financial included in the Management Discussion andAnalysis which is a part of this report.
SiGNiFiCANT AND MATERiAL ORDERS
There was no such order passed by the regulators or courts or tribunals impacting thegoing concern status and Companys operations in future during the year under review.
DiSCLOSURE UNDER SEXUAL HARASSMENT OF wOMEN
AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
Your Company laid down an Anti-Sexual Harassment Policy in compliance with therequirements of the Sexual Harassment of Woman at Workplace (Prevention Prohibition andRedressal) Act 2013. The Internal Complaints Committee (ICC) has been set up to redresscomplaints regarding sexual harassment if any.
The disclosures for the period under review as per the Anti Sexual Harassment Policy ofthe Company and applicable Act thereof are as follows:
a) Number of complaints of sexual harassment received during the year: NIL b) Number ofcomplaints disposed-off during the year: NIL c) Number of cases pending for more thanninety days: NIL d) Number of workshops on awareness program against sexual harassmentcarried out: 1 (one) e) Nature of action taken by the employer or district officer:Detailed Investigation and Appropriate resolution of the matter
i NC iDENT OF FRAUD
No material fraud by the Company or on the Company by its officers or employees hasbeen noticed or period covered by our audit.
INVESTORS EDUCATION & PROTECTION FUND (IEPF)
Pursuant to the applicable provisions of the Companies Act 2013 read with IEPFAuthority (Accounting Audit Transfer & Refund) Rules 2016 all unpaid or unclaimeddividends are required to be transferred by the Company to the IEPF established by CentralGovernment after completion of seven years. Further details of unpaid or unclaimeddividend are provided on our website at www.vmart.co.in.
BUSiNESS RESPONSiBiLiTY REPORT
As stipulated in terms of the provisions of Regulation 34 of SEBI (Listing Obligation& Disclosure Requirements) Regulations 2015 the Business Responsibility Reportdescribing the initiatives undertaken by the Company from environmental social andgovernance perspective is presented in a separate section forming part of this AnnualReport.
COST RECORDS AND COST AUDiT
Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of section 148(1) of the Companies Act 2013 are not applicable for thebusiness activity carried out by the Company.
DiviDEND DiSTRiBUTiON POLiCY
Pursuant to Regulation 43A of the SEBI (Listing obligations and DisclosuresRequirements) Regulations 2015 ("the listing regulations") the top 1000 listedcompanies shall formulate a dividend distribution policy. Accordingly the policy wasadopted to set out the parameters that will be taken into consideration by the Board ofthe Company in determining the distribution of dividend to its shareholders and/orretaining profits earned by the Company. The policy is available on the Companyswebsite at the link www.vmart.co.in.
During the year under review your Company has complied with all applicable secretarialstandards issued by The Institute of Company Secretaries of India and approved by theCentral 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 stateand confirm that:
a) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit or loss of the company for that period.
c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities.
d) The Directors have prepared the annual accounts on a going concern basis.
e) The Directors have laid down Internal Financial Controls to be followed by theCompany and that such internal financial controls are adequate and operating effectively.
f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Your Directors take this opportunity to express their sincere appreciation for theexcellent support and co-ordination extended by the employees shareholders customerssuppliers bankers and all other business associates.
Your Directors gratefully acknowledges on going cooperation and support provided byCentral Government and State Government and all regulatory authorities.
Your Directors regret the loss of life due to COVID-19 pandemic and are deeply gratefuland have immense respect for every person who risked their life and safety to fight thispandemic.
Your Directors appreciate and value the contribution made by every member of the V-Martfamily.
| ||By the Order of the Board and |
| ||On behalf of the Board |
| ||Lalit M Agarwal |
|Place: Gurugram ||DIN: 00900900 |
|Date: 28th May 2021 ||Chairman & Managing Director |