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V-Mart Retail Ltd.

BSE: 534976 Sector: Others
NSE: VMART ISIN Code: INE665J01013
BSE 00:00 | 23 Jun 2849.25 30.95
(1.10%)
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2846.80

HIGH

2929.25

LOW

2841.35

NSE 00:00 | 23 Jun 2850.30 28.65
(1.02%)
OPEN

2835.80

HIGH

2929.95

LOW

2835.80

OPEN 2846.80
PREVIOUS CLOSE 2818.30
VOLUME 891
52-Week high 3129.40
52-Week low 1677.95
P/E
Mkt Cap.(Rs cr) 5,616
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2846.80
CLOSE 2818.30
VOLUME 891
52-Week high 3129.40
52-Week low 1677.95
P/E
Mkt Cap.(Rs cr) 5,616
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

V-Mart Retail Ltd. (VMART) - Director Report

Company director report

Dear Members

Your Company's Directors are pleased to present the 18thAnnual Report of the Company along with Audited Accounts for the financial year endedMarch 31 2020.

FINANCIAL RESULTS

The operating results of the Company for the year under review are asfollows:

Particulars For the year ended March 31 2020 For the year ended March 31 2019
Revenue 166650 143 967
Profits/(Loss) before Depreciation & Tax 16345 13724
Less: Depreciation 9392 2763
Profit before exceptional item & tax 6953 10961
Exceptional Items - 980
Less: Tax Expense 2018 3818
Prior period items-(income)/expenses - -
Net profit for the period 4935 6163
Less: Utilised for Dividend Issue including DDT 372 437
Other comprehensive income -1 -36
Balance carried forward to Balance Sheet 4561 5690

PERFORMANCE REVIEW

The Net Sales of the Company increased by 16% to Rs 166159 lakhs infinancial year 2019-20 from Rs 143217 lakhs in F.Y. 18-19. The Company has postedOperating Profits (EBITDA) of Rs 21376 lakhs in FY 19-20. The Company posted Profit afterTax (PAT) of Rs 4935 lakhs in the current financial year as against a PAT of Rs 6163lakhs and EBITDA of Rs 13293 lakhs in the previous financial year.

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

OPERATIONS REVIEW

During the year under review your Company maintained its stableperformance sustaining it well into Q4 until the business disruption caused by theCovid-19 pandemic. With the late onset of winters and an early Holi the last quarter hadwitnessed revenue growth of 29% LTL growth of 8% and EBITDA growth of 60% until March 15when store closures started due to the pandemic. Despite a challenging operating outlookin the near term your Company is committed to and focused on its long-term strategicintent to create sustained value for all stakeholders while being resilient and agile inadapting business execution to the changing environment.

Marking a new milestone in its retail footprint expansion your Companyopened 55 new stores in F.Y. 2019-20 its highest-ever tally in a single year taking thetotal store count to 266. This surpassed yet another highest-ever achievement of 44 storesadded last year growing the total retail area by 23% y-o-y to 22 lakh sq. ft. at the endof F.Y. 2019-20. While the new store additions focused on penetrating deeper and wider inexisting clusters the Company also ventured into two new states Arunachal Pradesh andNagaland both in the North East. During the year under review 3 stores were closed.

With the zonal structure that was introduced in quarter one of F.Y.2019-20 your Company has embarked on large-scale coordinated initiatives at the storelevel to enhance inventory efficiency improving people and space productivity and visualmerchandising and display standards.

The Company's product assortment underscores its continued commitmentto identify and bring latest and differentiated fashion to its customers at highlyaffordable price points.

In the last month of F.Y. 2019-20 the COVID-19 pandemic developedrapidly into a global crisis forcing governments to enforce lock-downs of all economicactivity. For the Company the focus immediately shifted to ensuring the health andwell-being of all employees' customers and all stakeholders. The Company has also takenproactive steps to ensure the safety of our customers and employees — hygiene andsocial distancing SOPs formulated and implemented at stores and workplaces earlyimplementation of company-wide work- from-home measures and person level daily ‘rollcall' and health monitoring of its 7500+ employees. Starting from March 22 and untilearly May stores remained closed for operations. During this time the centralisedwarehouse in Haryana maintained a minimal level of operations during the lockdown tosupport the very few functional stores selling essentials and the Company's CSRactivities. The company's front-line store teams distributed food supplies to thousands ofstranded migrants slum dwellers and other needy segments daily.

FY20 Performance Highlights

Keeping product at the core of its value proposition the Company isfocusing on faster mind-to-market and more trendy collections e.g. its range of casual andstreet wear denim jackets sweat shirts hoodies and ladies dresses to meet the fashionaspirations of youth and young families. Also with a steady growth in its private labelcontribution which now nears 70% the Company is undertaking product and vendordevelopment programs to enhance product quality design and fashion quotient across itsmen's women's and kids wear portfolios

Acknowledging that its customers are becoming more aspirational andfashion-aware the Company has introduced an Integrated Go-To-Market (IGTM) mechanismthrough better synchronisation and more real-time collaboration between buyingmerchandising planning and supply chain and visual merchandising functions. This hasenabled the Company to improve key internal metrics pertaining to on-time productavailability better sell through faster replenishment more attractive VM and productdisplay and an overall enhanced customer experience

On the people front the retail zonal structure that was introduced inQ1 to enhance inventory efficiency and people and space productivity has startedyielding results. Further a more robust goal-setting and performance management frameworkintroduced last year is driving the alignment between individual efforts andorganisational objectives. In Dec 2019 the Company achieved the Great Place to Work(GPtW) certification which is indicative of its thriving work culture and high employeetrust

The Company launched its omni channel platform in Oct 2019 and hassubsequently expanded it across its store network. In the wake of Covid-19 the Company isaiming to leverage the accelerated digital adoption by scaling up its Omni channeloperations and also expanding its digital footprints across e-commerce marketplaceplatforms

DIVIDENDS

The Board on the recommendations of the Audit Committee and consideringthe current pandemic situation and financial position of the Company including liquidityconstraints and cash flow position decided not to declare any dividend for the F.Y.2019-20.

RESERVES

The Company during the year transferred Rs 4963.60 lakhs to thereserves. Post transfer the reserves stood at Rs 44077.64 lakhs for financial year2019-20.

CREDIT RATING

Investment Information and Credit Rating Agency of India Limited (ICRA)has reaffirmed the long- term rating of [ICRA] AA- (pronounced ICRA double A minus)assigned earlier to the Rs 110 crores Line of Credit of your Company and also reaffirmedthe short-term rating of [ICRA]A1+ (pronounced ICRA A one plus) assigned earlier to the Rs15 crores Line of Credit of your Company.

Additionally ICRA has assigned a long-term rating of [ICRA]AA-(pronounced ICRA double A minus) to the additional limit of Rs 25 crores. The outlook onthe longterm rating is 'Stable'.

The credit rating of the Company is as under as on date:

Facilities Existing Rating Reaffirmed Rating
Long term bank limits [ICRA] AA- (ICRA double A minus) (with stable outlook) [ICRA] AA- (ICRA double A minus) (with stable outlook)
Short term bank limit ICRA A1 + (ICRA A one plus) ICRA A1 + (ICRA A one plus)

MANAGEMENT DISCUSSION AND ANALYSIS

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

AWARDS AND ACCOLADES

The performance of your Company has been widely recognised and honoredthrough several awards and accolades. In particular we have been appreciated for our bestpractices and business excellence and have been honored for being an award-winningworkplace.

Most Admired Affordable Retailer in Visual Merchandising Concept atIFA- Images Fashion Awards

V-Mart Certified as a ‘Great Place to Work' by the Great Place toWork (GPTW) Institute India

Award from RSLDC (Rajasthan government) for Best Project ImplementationAgency in the Skill Development Programme

LISTING

The equity shares of your Company continue to be listed at BSE Ltd.(BSE) and the National Stock Exchange of India Ltd. (NSE)

Exchange Scrip Code ISIN
NSE VMART

— INE665J01013

BSE 534976

The listing fees for fiscal 2020 have been paid for all of the abovestock exchanges where the equity shares of the Company are listed.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92(3) of the Companies Act 2013read with Rule 12 of the Companies (Management and Administration) Rules 2014 theextracts of Annual Return in prescribed form MGT - 9 is appended as Annexure-A to thisReport.

CORPORATE GOVERNANCE

Pursuant to the provisions of the SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 the detailed Report on Corporate Governanceis appended as Annexure to this Report.

NUMBER OF MEETINGS OF THE BOARD

Four times (4) Board meetings were held during the year under reviewthe details of which are given in Corporate Governance report forming part of this report.The intervening gap between any two meetings was within the period prescribed by theCompanies Act 2013 & SEBI (Listing Obligations and Disclosures Requirements)Regulations 2015.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation its ownperformance Board Committees and individual Directors in the manner prescribed in theprovisions of the Companies Act 2013 and as per the Corporate Governance requirementsprescribed by the Securities and Exchange Board of India (Listing Obligations andDisclosures Requirements) Regulations 2015 ("SEBI Listing Regulations").

The Board and the Nomination & Remuneration committee reviewed theperformance of the Board Committees and individual Directors on the basis of the criteriaand framework adopted by the Board. The evaluation criteria included various aspects suchas functionality of Board compositions process & procedures including adequate& timely information attendance delegation of responsibility decision making roles& responsibility including monitoring benchmarking feedback relationship with thestakeholder's and as provided by the Guidance Note on Board Evaluation issued by SEBI onJanuary 5 2017. In a separate meeting of the Independent Directors performance of theNonIndependent Directors the Board as a whole and the chairman were also evaluated basisa set out criterion.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors consists of six members of which four areIndependent Directors. The Board also comprise of one-Woman Independent Director

In pursuance of section 203 of the Companies Act 2013 the keymanagerial personnel of the Company are - Mr. Lalit Agarwal Chairman & ManagingDirector Mr. Anand Agarwal Chief Financial Officer and Ms. Megha Tandon CompanySecretary.

In accordance with the provisions of Section 152 of the Companies Act2013 Mr. Madan Gopal Agarwal (DIN: 02249947) is liable to retire by rotation at theensuing Annual General Meeting and being eligible has offered himself for re-appointment.The Board of Directors recommends his reappointment and the matter is being placed for theapproval of members at the ensuing Annual General Meeting of the Company.

During the year under review Mr. Govind Shridhar Shrikhande (DIN:00029419) was appointed on the Board as an Independent Director of the Company at theSeventeenth Annual General Meeting (AGM) held on August 2 2019 for a period of five yearsw.e.f. November 2 2018.

Mr. Murli Ramachandran (DIN 00264018) & Ms. Sonal Mattoo (DIN00106795) Independent Directors whose current period of offices are expiring on September28

2020 and who have submitted a declaration confirming the criteria ofIndependence under Section 149 of the Companies Act 2013 read with the Listingregulations as amended from time to time and who are eligible for reappointment for asecond term under the provisions of the Companies Act 2013 Rules made thereunder and theListing Regulations. The Board of Directors recommends their re-appointment for a for asecond term of of 5 years and the matter is being placed for the approval of members atthe ensuing Annual General Meeting of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary disclosures from each of its fourIndependent Directors under Section 149(7) of the Companies Act 2013 that he/she meetsall the criteria laid down in Section 149(6) of the Companies Act 2013 and Regulation 16of the SEBI (Listing Obligation and Disclosures Requirement) Regulations 2015 and therehas been no change in the circumstances which may affect their status as IndependentDirector during 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 commission and reimbursement of expenses incurred by them for the purpose ofattending meetings of the Company.

POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION

The policy of the company aims to have a mix of Independent andExecutive Directors on its Board and to separate out its functions of governance andmanagement.

The policy of the Company on Director's appointment and remunerationincluding criteria for determining qualifications positive attributes independence of aDirector and other matters provided under sub-section (3) of Section 178 is appended asAnnexure-B to this report.

The appointment of Directors and remuneration paid during the financialyear 2019-20 is as per the provisions of the Companies Act 2013 and as per the terms laiddown in the Nomination & Remuneration policy of the Company.

TRAINING OF INDEPENDENT DIRECTORS

Every new Independent Director of the Board attends an inductionprogram. Every Senior-Management Personnel makes a presentation to inductees about theCompany's strategy operations product and market finance risk management etc.

The details of familiarisation programme have been provided underCorporate Governance Report forming part of this Report.

RETIREMENT BY ROTATION

In terms of the provisions of Section 152 of the Companies Act 2013and Articles of Associations of the Company Mr. Madan Gopal Agarwal Director is liableto retire by rotation at the forthcoming Annual General Meeting and being eligible offershimself for re-appointment.

COMMITTEES OF THE BOARD

At present there are five Board committees namely: Audit CommitteeNomination and Remuneration Committee Stakeholders Relationship Committee CorporateSocial Responsibility Committee and Risk Management Committee.

A detailed note on the Board and its Committees is provided under theCorporate Governance report section which is forming part to this Annual Report.

DISCLOSURE REQUIREMENTS

As per SEBI Listing Regulations Corporate Governance Report withauditors' certificate thereon and Management Discussion and Analysis are attached whichform part of this report. The Company has also complied with disclosing the requireddetails on the website of the company on www. vmart.co.in which are as follows:

Details of its business

Composition of various Committees

PRACTISING COMPANY SECRETARY'S CERTIFICATE ON CORPORATE GOVERNANCE

As required under Schedule V Clause E read with Regulation 34(3) andof the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 thePracticing Company Secretary's certificate on Corporate Governance is enclosed as Annexureto the Board Report.

SHARE CAPITAL

a) Buy Back of Securities: The Company has not bought back any of itssecurities during the year under review.

b) I ssue of Sweat Equity: The Company has not issued any sweat equityshares during the year under review.

c) I ssue of Bonus Shares: The Company has not issued any bonus sharesduring the year under review.

d) Employees Stock Option / Restricted stock units: The Company hasadopted ESOP Scheme 2012 as per the applicable SEBI regulations and approved by themembers at Annual General Meeting.

e) A certificate from the Statutory Auditor under share based paymentregulations has been obtained and shall be available for inspection at the Annual GeneralMeeting of the Company.

The Company has implemented an Employee Stock Option Scheme which wasapproved by the Board of Directors and the shareholders vide resolution dated July 2 2012and July 10 2012 respectively (‘the V-Mart ESOP Scheme 2012') consequent to which300000 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 onSeptember 18 2017 approved an amendment in the said ESOP scheme by increasing the totalnumber of stock option from 300000 to 600000 options. The exercise price of theseoptions will be determined by the Nomination & Remuneration Committee and the optionswill vest over a period of 12 months to 36 months of continued employment from the grantdate. The grant details under the scheme during the year are as follows:

Grants Vesting Time Line
During the financial year 2019-20 - 2 grants have been made comprising total 14253 options 30% of the Total Grant After 12 months from the date of grant
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

Details of equity shares allotted under ESOP during the year are asfollows:

Sr. No Date of Allotment No. of shares Allotted
1 May 20 2019 23414
2 August 2 2019 189
3 November 1 2019 1888
Total 25491

Pursuant to the above allotment of shares the paid-up capital of theCompany stands increased to Rs 181554 840 as on March 31 2020.

The information required to be disclosed under SEBI (Share BasedEmployee Benefits) Regulations 2014 as on March 31 2020 are as follows:

Particulars Details
Date of Shareholders Approval July 10 2012
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 123106
Number of options granted during the year 14253
Number of options forfeited / lapsed during the year 8091
Number of options vested during the year 43773
Number of options exercised during the year 25491
Number of shares arising as a result of exercise of Options 25491
Money realised by exercise of options (Rs in lakhs) 133.55
Number of options outstanding at the end of the year 103777
Number of options exercisable at the end of the year 44689
Pricing Formula The Nomination & Remuneration Committee is authorised to determine the exercise price of ESOPs.
Person-wise details of options granted during the Financial Year 2019-2020:
i. Senior managerial personnel/key managerial personnel Mr. Sandeep Kant Mittal
ii. No of options granted and its exercise price
Name Mr. Sandeep Kant Mittal
Number of shares 5369
Exercise Price Per share 2347
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 27
Lock-in NIL
Impact of the difference on the profits of the Company and on the EPS Impact on profit ; Rs 271.26 lakhs impact on EPS: 0.1
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) 15.04 lakhs
Weighted average exercise price of options whose exercise Exercise price exceeds market price: Not applicable
price either equals or exceeds or is less than the market Exercise price equals market price: Not applicable
price of the stock Exercise price is less than market price: As mentioned in Below table
Weighted average fair values of options whose exercise price Exercise price exceeds market price: Not applicable
either equals or exceeds or is less than the market price of Exercise price equals market price: Not applicable
the stock 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
Grant I Grant II Grant III Grant IV Grant V Grant VI Grant VII Grant VIII Grant IX Grant X Grant XI
Price per option (In Rs) 150 450 573 470 900 1260 2047 2044 2286 2347 1683
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
Expected Life (In years) 4 4 4 4 4 4 3 3 3 3 3
Expected Volatility 25% 41% 38.74% 30.13% 42.48% RIGHT>50.76% 40.30% 41.49% 22.23% 22.90 23.61
Dividend Yield 0.27% 0.20% 0.20% 0.24% 0.18% 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
of share as on date (IPO) (NSE) (NSE) (NSE) (NSE) (NSE) (NSE) (NSE) (NSE) (NSE) (NSE)
of option grant (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
Weighted average exercise price (In Rs) 150 450 573 470 900 1260 2047 2044 2286 2595 1871
Weighted average fair value of stock option (In Rs) 50.9 263 248 211 673 727 902 913 792 2347 1683

EMPLOYEE STOCK OPTION DETAILS:

Grant Date Exercise Price Options Granted Options vested and exercisable Options Unvested Options Exercised Options Forfeited Options outstanding
July 20 2012 150 153252 153252 - 123264 29988 -
January 5 2015 450 22350 22350 - 18700 3650 -
December 28 2015 573 13645 13645 - 13645 - -
January 30 2017 470 76225 58812 - 34501 17413 24311
July 12 2017 900 6395 3837 2558 3806 - 2589
November 9 2017 1260 9300 4392 2136 2790 2772 3738
May 24 2018 2047 18527 5558 12969 - - 18527
July 23 2018 2044 40764 12160 28370 - 234 40530
November 2 2018 2286 3426 1028 2398 - - 3426
May 10 2019 2347 8228 - 8228 - - 8228
August 2 2019 1683 6025 - 2428 - 3597 2428

MOVEMENT OF STOCK OPTIONS DURING THE YEAR:

Total for all grants No. of Options Weighted average exercise price (K)
Outstanding at the beginning of the year 123106 1320.27
Granted during the year 14253 2066.32
Forfeited/ Cancelled during the year 8091 1009.23
Expired during the year - -
Exercised during the year 25491 523.91
Outstanding at the end of the year 103777 1642.59
Exercisable at the end of the year 44689 1164.78

Weighted average remaining contractual life (in years)

As at March 31 2020
Weighted average remaining contractual life (in years) 5.99

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during thefinancial year were on arm's length basis and were in the ordinary course of the business.There were no materially significant related party transactions made by the Company withthe Promoters Key Management Personnel or other designated persons and have no potentialconflict with interest of the Company at large.

The Company has formulated a policy on Related Party Transaction whichis available on the website of the Company at the link http://www.vmart.co.in/corporate.html. The details of related party transactions entered during the year are provided inthe accompanying financial statements.

The particular of contract or arrangement with related parties referredin section 188(1) of the Companies Act 2013 in the prescribed form AOC-2 is annexed asAnnexure - G to this report.

DEPOSITS

During the FY 2019-20 your Company has not accepted any deposits frompublic and as such no amount of principal or interest was outstanding as on date of theBalance Sheet.

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

Loan guarantees & investment covered under the provisions ofSection 186 of the Companies Act 2013 if any form part of the notes to the financialstatement provided in this annual report

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THECOMPANY BETWEEN MARCH 31 2020 AND THE DATE OF BOARD'S REPORT

There have been no such material changes and commitments affectingfinancial position of the Company which have occurred between the end of the financialyear 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 AssociateCompany.

REGISTERED OFFICE

Registered Office of the company is situated at 610-611 Guru Ram DassNagar Main Market Opp. SBI Bank Laxmi Nagar New Delhi - 110092.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has constituted a Corporate Social ResponsibilityCommittee of the Board comprising of five members namely Mr. Lalit Agarwal (Chairman)Mr. Madan Gopal Agarwal (Member) Mr. Aakash Moondhra (Member) Ms. Sonal Mattoo (Member)and Mr. Govind Shridhar Shrikhande (Member). The Committee is responsible for formulatingand monitoring the CSR policy of the Company. Details about the CSR policy of the Companyand initiatives taken by the Company on CSR during the year are available on the company'swebsite.

As per the Companies Act 2013 every company having net worth ofrupees five hundred crores or more or turnover of rupees one thousand crores or more or anet profit of rupees five crores or more during immediately preceding financial year shallspend in every financial year at least two percent of the average net profits of thecompany made during the three immediately preceding financial year or where the companyhas not completed the period of three financial years since its incorporation during suchimmediately preceding financial years in pursuance of its Corporate Social ResponsibilityPolicy. Accordingly our Company was required to spend Rs 186.28 lakhs on CSR activitiesduring the year.

During the year under review your Company has spent amount Rs 108.77lakhs towards Corporate Social Responsibility.

The annual report on CSR Activities is appended as Annexure-C to thisBoard Report.

Justification for not spending the prescribed amount on CSR activities:

Our CSR vision is to enhance the quality of life indicators of thelocal communities where we conduct our business. This is by way of various initiativese.g. in education sports coaching skill development and capacity building socialinfrastructure upkeep and maintenance (school parks etc.) and livelihood programs.

In order to spend the average of 2% of Average Net profits of precedingthree financial years the CSR Steering Committee (CSR STECO) had regular review meetingsduring the year. Many potential funding avenues and initiatives were discussed andimplemented while several more proposals are continually evaluated. The Company hasdesigned and put in place a rigorous project evaluation process including onsiteassessment through its store teams to validate the authenticity and genuineness ofpotential CSR funding initiatives being considered. Much needed due diligence is involvedin this process to ensure funds reach the real

beneficiaries and impact local communities. Only projects that passthrough this due diligence process are considered by the CSR STECO for potential fundingdiscussions. The Company couldn't spend the prescribed full CSR amount under CompaniesAct 2013 as it did not have an adequate number of initiatives that could qualify throughthe due diligence process.

We are committed to spending the mandated CSR funds in line with ourvision and objectives and the project pipeline is being streamlined accordingly. We arecommitted to fulfill our CSR spending commitments on projects that are in the impact areasrelated to our CSR vision.

CONSERVATION OF ENERGY

The operational activity of the Company does not involve large energyconsumption. In any case conservation of energy is considered to be a priority andtherefore ensuring minimum consumption by way of better energy conservation programstraining/ awareness of the employees layout of machines and prompt upkeep is a continuousexercise.

The Company has taken many energy initiatives such as:

Installation of LED lights and power saving equipment's at all storesto conserve electricity usage

Optimum use of air conditioner (AC) at the stores in order to reducethe electricity consumption

Automation of processes to reduce use of paper

Installation of glass doors walls and windows at the stores to usedaylight and reduce electricity consumption

Plantation of trees for combating air pollution at warehouse

Elimination of the use of single use plastic carry bags at the stores

The Company is in process of evaluating the usage of solar penal at thestores; feasibility study to implement the same is in process

TECHNOLOGY ABSORPTION

With its sights firmly focused on accelerating long-term growth andsustained value creation for all stakeholders your Company is steadily making itsorganisational structure processes and capabilities more robust and future-ready.

Your Company is enriching its already existing organisationwide dataanalytics architecture to feed decision-enabling insights directly to store managersregional heads and zonal heads. Technology adoption and up gradation across its planningsupply chain and logistics infrastructure.

During the year under review several technological changes have beenimplemented at the company's Head-office warehouse as well as at the stores whichincludes:

Installation of new business intelligence tool

Setting up an organisation-wide data analytics platform

Adding a new data center

Digitalisation of product catalogue

Up gradation of network backbone

Investment for launching omni enable retail

Up gradation in replenishment software and rule engine.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Sr. Particulars No Foreign Exchange Earning (Amount in Rs) Foreign Exchange outgo (Amount in Rs)
NIL NIL NIL

CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which isapplicable to the Members of the Board and all employees in the course of day to daybusiness operations of the Company. The Company believes in "Zero Tolerance"against bribery corruption and unethical dealings / behaviours of any form and the Boardhas laid down directives to counter such acts. The Code has also been posted on theCompany's website.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy/ Vigil Mechanism to deal withinstances of fraud and mismanagement if any. The purpose of this mechanism is to providea framework to report concern about unethical behaviour actual or suspected fraud orviolation of the Company's Code of Conduct or ethics policy and provide adequatesafeguards against victimisation of the person availing this mechanism. This Policy hasbeen appropriately communicated within the organisation and is effectively operational.The policy provides mechanism whereby whistle blower may send protected disclosuresdirectly to the Chairman of Audit Committee or Vigilance Officer. The Policy is availableon 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 ofpowers conferred under Securities and Exchange Board of India Act 1992 has made theSecurities and Exchange Board of India (Prohibition of Insider Trading) (Amendment)Regulations 2018 to amend 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 by insider has been approved by the Board of Directors at their dulyconvened meeting.

The Code requires pre-clearance for dealing in the Company's shares andprohibits the purchase or sale of Company shares by the Directors and the designatedpersons while in possession of unpublished price sensitive information in relation to theCompany and during the period when the Trading Window is closed. The Board is responsiblefor implementation of the Code.

All Board Directors and the designated person have confirmed compliancewith the code.

RISK MANAGEMENT

Enterprise risk management (ERM) is a key area of operation for everyresponsible organisation. In recent years volatile external factors have increased thesignificance of ERM for organisation. Your Company is working in an open environment andhence faces various types of risk. Your Company has constituted a Risk ManagementCommittee of the Board comprising of four members namely Mr. Aakash Moondhra (Chairman)Mr. Murli Ramachandran (Member) Ms. Sonal Mattoo (Member) and Mr. Govind ShridharShrikhande (Member). The Committee is responsible for monitoring and reviewing the riskmanagement plan & policy and ensuring its effectiveness.

The details in respect of risk management are included in theManagement Discussion and Analysis which is a part of this report.

HUMAN RESOURCE MANAGEMENT

The focus for the year was on Capability Building Employee Engagementand Key Talent Management. We are focused to attract and retain talented skills and makethem motivated through various skill-development programmes. We provide quality workplaceto our employees and provide platform to develop and to grow.

The statement containing the names and other particulars of employeesin 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 2014is appended as Annexure-D to the Board Report.

The details of the employees of the Company employed throughout thefinancial 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 monthunder Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are mentioned in Annexure D to this report.

INTEGRATED REPORT

Your Company has voluntarily provided Integrated Report whichencompasses both financial and non-financial information to enable the Members to takewell informed decisions and have a better understanding of the Company's long termperspective.

The Report also touches upon aspects such as organisation's strategygovernance framework performance and prospects of value creation based on the six formsof capital viz. financial capital manufactured capital intellectual capital humancapital social and relationship capital and natural capital.

STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act 2013M/s S.R. Batliboi & Co. LLP Chartered Accountants (Firm Registration No.301003E/E300005) were appointed as Statutory Auditors of the Company for a term of fiveconsecutive years to hold office from the conclusion of the 16th AnnualGeneral Meeting held on June 29 2018 until the conclusion of 21st AnnualGeneral Meeting of the Company to be held in the calendar year 2023 subject to annualratification by members at every Annual General Meeting on such remuneration as may bedecided. However Vide notification dated May 7 2018 issued by Ministry of CorporateAffairs the requirement of annual ratification has been omitted.

AUDITORS REPORT

There was no observation or qualification in the Auditors Report forthe financial year ended March 31 2020. The Notes on Financial Statements referred to inthe Auditors' report are self-explanatory and therefore do not require any furthercomments.

SECRETARIAL AUDITOR & REPORT

M/s. VKC & Associate Company Secretaries a partnership firm wasappointed as Secretarial Auditors to conduct the Secretarial Audit of the Company for theFY 2019-20 pursuant to the provisions of Section 204 of the Companies Act 2013 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. TheSecretarial Audit report in form MR- 3 is enclosed herewith as Annexure-E to the Board'sReport.

The Secretarial Audit Report does not contain any observation oradverse remark.

INTERNAL FINANCIAL CONTROL

The Board has adopted adequate policies and procedures for ensuringorderly and efficient conduct of its business including adherence to the Company'spolicies safeguarding of its assets prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures. The details in respect of internal financial control andtheir adequacy are included in the Management Discussion and Analysis which is a part ofthis report.

SIGNIFICANT AND MATERIAL ORDERS

There was no such order passed by the regulators or courts or tribunalsimpacting the going concern status and Company's operations in future during the yearunder review

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

Your Company laid down an Anti-Sexual Harassment Policy in compliancewith the requirements of the Sexual Harassment of Woman at Workplace (PreventionProhibition and Redressal) Act 2013. The Internal Complaints Committee (ICC) has been setup to redress complaints regarding sexual harassment if any.

The disclosures for the period under review as per the AntiSexualHarassment Policy of the Company and applicable Act thereof are as follows:

a) Number of complaints of sexual harassment received during the year:1 (one)

b) Number of complaints disposed-off during the year: 1 (one)

c) Number of cases pending for more than ninety 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:Appropriate Action taken by the Company.

INCIDENT OF FRAUD

No fraud by the Company or on the Company by its officers or employeeshas been noticed or reported during the period covered by our audit

INVESTORS EDUCATION & PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the companies Act 2013 readwith IEPF Authority (Accounting Audit Transfer & Refund) Rules 2016 all unpaid orunclaimed dividend are required to be transferred by the Company to the IEPF establishedby Central Government after completion of seven years. Further details of unpaid orunclaimed dividend are provided on our website at www.vmart.co.in.

BUSINESS RESPONSIBILITY REPORT

As stipulated in term of the provisions of Regulation 34 of SEBI(Listing Obligation & Disclosure Requirements) Regulations 2015 the BusinessResponsibility Report describing the initiatives undertaken by the Company fromenvironmental social and governance perspective is presented in a separate sectionforming part of this Annual Report.

COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribedunder the provisions of section 148(1) of the Companies Act 2013 are not applicable forthe business activity carried out by the Company

DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of the SEBI (Listing obligations andDisclosures Requirements) Regulations 2015 ("the listing regulations") the top500 listed companies shall formulate a dividend distribution policy. Accordingly thepolicy was adopted to set out the parameters that will be taken into consideration by theBoard of the Company in determining the distribution of dividend to its shareholdersand/or retaining profits earned by the Company. The policy is enclosed as Annexure-F tothe Board's Report and is also available on the Company's website at the link http://www.vmart.co.in//

SECRETARIAL STANDARDS

During the year under review your Company has complied with allapplicable secretarial standards issued by The Institute of Company Secretaries of Indiaand approved by the Central Government pursuant to Section 118 (10) of the Companies Act2013.

DIRECTOR'S RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directorshereby state and confirm that:

a) In the preparation of the annual accounts the applicable accountingstandards have been followed.

b) The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit or loss of the company for that period.

c) The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities.

d) The Directors have prepared the annual accounts on a going concernbasis.

e) The Directors have laid down Internal Financial Controls to befollowed by the Company and that such internal financial controls are adequate andoperating effectively.

f) The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.

ACKNOWLEDGEMENT

Your Directors take this opportunity to express their sincereappreciation for the excellent support and co-ordination extended by the employeesshareholders customers suppliers bankers and all other business associates.

Your Directors gratefully acknowledges ongoing cooperation and supportprovided by Central Government and State Government and all regulatory authorities.

Your Directors regret the loss of life due to COVID-19 pandemic and aredeeply grateful and have immense respect for every person who risked their life and safetyto fight this pandemic.

Your Directors appreciate and value the contribution made by everymember of the V-Mart family.

By the Order of the Board and
On behalf of the Board
Lalit Agarwal
Place: Gurugram DIN: 00900900
Date: May 29 2020 Chairman & Managing Director