Your Company's Directors are pleased to present the 20th Annual Report of the Company, along with Audited Accounts, for the financial year ended March 31, 2022.
FINANCIAL RESULTS
The operating results of the Company for the year under review are as follows:
|
(' in lakhs)
|
|
Particulars
|
For the year ended March 31, 2022
|
For the year ended March 31, 2021
|
|
Total Revenue
|
1,68,013
|
109,650
|
|
Profits/(Loss) before Depreciation & Tax
|
14,109
|
9,331
|
|
Less: Depreciation
|
13,070
|
10,297
|
|
Loss/Profit before tax
|
1,040
|
(966)
|
|
Less: Tax Expense
|
(124)
|
(346)
|
|
Net Loss/Profit for the period
|
1,164
|
(620)
|
|
Less: Utilised for Dividend Issue including DDT
|
0
|
0
|
|
Other comprehensive income
|
(187)
|
(31)
|
|
Balance carried forward to Balance Sheet
|
977
|
(1,114)
|
PERFORMANCE REVIEW
The Net Sales of the Company increased by 55% to ' 1,66,617 lakhs in financial year 2021-22 as against ' 1,07,546 lakhs in F.Y. 2020-21. The Company has posted Operating Profits and EBITDA for FY 2021-22 of ' 20,433 lakhs (FY 2020-21 of ' 13,121 lakhs) and PAT for FY 2021-22 of ' 1,164 lakhs (FY 2020-21 of ' (620) lakhs).
A detailed analysis of Company's operations in terms of performance in markets, business outlook, risks and concerns forms part of the Management Discussion and Analysis, a separate section of the Annual Report.
OPERATIONS REVIEW
During the year, the Company has acquired 74 stores and 1 warehouse from Arvind Lifestyle Brands Ltd, a wholly owned subsidiary of Arvind fashions for cash by way of Assets transfer Agreement (ATA). As per ATA the company has acquired the fixed assets at these stores, inventory with age less than one year, lease and other current assets of Unlimited business along with the brand Unlimited at fair value. The acquisition allowed the Company to expand its geographical footprint in South India with the acquisition of successfully running 74 store locations across 6 new states with a 7.8 lakh sq ft area.
Focusing on expansion opportunities with a long-term view, your Company opened 113 new stores during the year, including acquisition of 74 Unlimited stores in South India, the total store count was increased to 380 and thereby growing the total retail area by 43.5% y-o-y to 33 lakhs sq. ft. During the year under review 12 stores were closed.
The Company has designed its efforts to unlock the next level of efficiency across the business operations. The Company is investing significantly in ramping up its warehousing capacity and improving the technology backbone to realize higher efficiencies and continues to make process improvements across our value chain to strengthen our capabilities and capacities. The Company working toward augmenting the organisational structure by acquiring the best-in-class talent and ensuring world-class training for the people to facilitate growth.
The Company remain steadfastly focused on enhancing brand differentiation in the crowded market through a more relevant and focused product assortment and in-store experience. During FY 2021-22, the Company has launched several initiatives and programmes to enhance our brand proposition which includes:
• Established a marketing property i.e. “fashion ka pyar, har tyohar” as the sole communication icon to bind all our festival- related communication.
• Launched Digital Video film- “Break Free Live free”, to celebrate the unlocked period enabling people to come
out, wear fashion and celebrate it. This was clubbed with Summer, Holi and Eid festivals.
• Initiated upgradation of the communication standards, moved up from Limbo photoshoot style to proper outdoor shoot for AW ‘21 & SS'22 with aspirational imagery to connect with youth.
Being a responsible corporate, the Company have introduced eco-friendly V-Green range of fashion. It underscores the sustainability initiatives of the Company from the environmental perspective. The Company is making significant investments in promoting this as a key value proposition.
Amidst the rapidly changing business landscape, the Company has been prompt in responding to the importance of being a digital business. The Company strived to manage the expectations of customers as well as internal functions to ensure that investments in analytics and technology improve the current business model. With a view to provide a seamless shopping experience to customers, the Company continues to enhance its omnichannel platform. The Company remains committed to leveraging its digital marketing channels and analytics to drive business operations. In January 2022, the company has launched a shop-at-home programme titled ‘Happiness Agents' as a measure in response to the Covid pandemic. The programme is powered by the proprietary customer data platform, offering modules within the company's website and serviced by the store teams.
The Company is continuously investing in building the online channels to complement the robust physical presence, to create a unique ‘online for offline' proposition that is crafted to:
• Create digital user journeys that deliver convenience and discoverability of digital presence and payments to the existing offline customers.
• Drive volumes of digital orders from all digital channels, including marketplaces, directly to physical stores and win customers by achieving SLAs.
• Ensure that we stay persistent relevant in the online space ruled by large marketplaces built over large digital spends, and thus grow as indispensable partners to marketplaces.
• Provide seamless anywhere-anytime shopping experience to the customers.
The Company's product assortment underscores its continued commitment to identify and bring latest and differentiated fashion to its customers at highly affordable price points. To strengthen the efforts, the Company have crafted a new strategic roadmap for accelerated growth, which is aligned with the growing focus on meeting the evolving aspirations of the consumers living in Tier 2, 3 and 4 cities by mapping a well-
defined journey to build the V-Next proposition by taking us into new geographies of growth. The Company has embarked on a 15-month V-Next journey, aimed at unlocking greater efficiencies and setting ourselves up for rapid growth. This journey is structured around the following focus areas:
• Consumer insights led category strategy
• Pre-season planning
• Strategic sourcing of apparel and input material nomination
• In-season planning & execution
• Process design & capability augmentation
DIVIDENDS
In terms of Dividend Distribution policy, your Directors in its meeting held on Wednesday, the 25th day of May, 2022, recommended a dividend of ' 0.75 per share @7.5%, for the financial year ended March 31, 2022. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting.
RESERVES
During the year, there is an addition of ' 2,435 Lakhs to reserves on account of amount transferd from statement of profit & loss, of ' 1,164 Lakhs from other comprehensive income of ' (187) Lakhs and ' 1,084 Lakhs on account of employee stock option including premium on issue of ESOPs. Post transfer, the reserves stood at ' 82,987 Lakhs as on March 31, 2022.
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 ' 195 crores Line of Credit of your Company.
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 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
The performance of your Company has been widely recognised and honored through couple awards and accolades. In particular, we have been appreciated for our best practices and business excellence, and have been honored for being an award-winning workplace.
• V-Mart Certified as India's Best Workplace in Retail, 2022 - by Great Place to Work supported by RAI
• The CNBC Masters of Risk award - Retail & Consumer Sector
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
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INE665J01013
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|
BSE
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534976
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|
The listing fees for fiscal 2022 have been paid for all of the above stock exchanges where 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 Rule 12 of the Companies (Management and Administration) Rules, 2014 the copy of Annual Return in prescribed form MGT-7 to be placed on the Company's website at the link www.vmartretail.com upon filing the same with ROC.
CORPORATE GOVERNANCE
Pursuant to the provisions of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the detailed Report on Corporate Governance is appended as Annexure to this Report.
NUMBER OF MEETINGS OF THE BOARD
Five (5) Board meetings were held during the year under review, the details of which are given in the Corporate Governance report forming part of this report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 & SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.
BOARD EVALUATION
In order to ensure that the Board and board committees are functioning effectively and to comply with statutory requirements, the annual performance evaluation of the Board, board committees and individual directors was conducted during the year. The evaluation was carried out based on the criteria and framework approved by the Nomination & Remuneration
of members at the ensuing Annual General Meeting 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 policy of the Company aims to have a mix of Independent and Executive Directors on its Board and to separate out its functions of governance and management.
The policy of the Company on Director's 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
Every new Independent Director of the Board attends an induction program. Every Senior-Management Personnel makes a presentation to inductees about the Company's strategy, operations, product and market, finance, risk management etc.
The details of familiarisation programme have been provided under Corporate Governance Report forming part of this Report.
RETIREMENT BY ROTATION
In terms of the provisions of Section 152 of the Companies Act, 2013 and Articles of Associations of the Company, Mr. Madan Gopal Agarwal, Director is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.
COMMITTEES OF THE BOARD
At present, there are seven Board committees namely: Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee, Investment and Warehousing Committee.
A detailed note on the Board and its Committees is provided
Committee in the manner prescribed in the provisions of the Companies Act, 2013 and as per the Corporate Governance requirements prescribed by the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 (“SEBI Listing Regulations”).
The evaluation criteria included various aspects such as:
The Board - Structure, composition of the Board, board meeting schedule, agenda and collaterals, board meeting practices and overall effectiveness of the Board
Board committees - Composition, role and responsibilities, information flow and effectiveness of the meetings, effectiveness of committee chairpersons, etc.
Independent Directors - Independence from the Company, exercising independent judgement in decision-making, contributing strongly and objectively to the Board deliberations based on their external expertise, etc
Executive Directors - Attendance, preparedness for discussion, quality of contribution, engagement with fellow board members, KMPs and senior management, etc.
Chairperson - Leadership of the Board, promoting effective participation of all board members in the decision-making process, etc
All the directors participated in the evaluation process. The responses received from the board members were compiled by the Secretarial department of the Company and a consolidated report was submitted by the Company Secretary to the Board. The Board discussed the outcome of the same and agreed to work on the action plan.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors consists of six members, of which four are Independent Directors. The Board also comprises one woman Independent Director.
In pursuance of section 203 of the Companies Act, 2013, the key managerial personnel of the Company are:
Mr. Lalit M Agarwal, Managing Director, Mr. Madan Gopal Agarwal, Whole-time Director, Mr. Anand Agarwal, Chief Financial Officer and Ms. Megha Tandon, Company Secretary.
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 reappointment and the matter is being placed for the approval
under the Corporate Governance report section which is forming part of this Annual Report.
DISCLOSURE REQUIREMENTS
As per SEBI Listing Regulations, Corporate Governance Report with auditors' certificate thereon and Management Discussion and Analysis are attached, which forms part of this report. The Company has also complied with disclosing the required details on the website of the company on www.vmartretail.com 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) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Practicing Company Secretary's certificate on Corporate Governance is enclosed as Annexure to the Board 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 Annual General Meeting of the Company.
e) A certificate from the Secretarial Auditor 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, which was approved by the Board of Directors and the shareholders vide resolution dated July 2, 2012 and July 10, 2012 respectively (‘the V-Mart ESOP Scheme 2012'), consequent to which 300,000 equity shares of ' 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 August 10, 2020 and September 30, 2020 respectively (‘the V-Mart ESOP Scheme 2020'), consequent to which 200,000 equity shares of ' 10 each were to be granted upon exercise as stock options (ESOPs) to eligible employees. The exercise price of these options will be determined by the Nomination & Remuneration Committee and the options will vest over a period from 12 to 48 months subject to achievement of performance matrix by the company as well as the eligible employees during the 48 months from the date of grant.
|
The grant details under the both the scheme(s) during the year are as follows:
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|
Scheme
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Grants
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Vesting
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Timeline
|
|
V-Mart ESOP Scheme 2012
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During the financial year 2021-
|
30% of the total grant
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After 12 months from the date of grant
|
| |
22 - 1 grant has been made
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30% of the total grant
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After 24 months from the date of grant
|
| |
comprising a total of 705 options
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40% of the total grant
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After 36 months from the date of grant
|
|
V-Mart ESOP Scheme 2020
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During the financial year 2021-
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10% of the total grant
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After 12 months from the date of grant
|
| |
22 - 2 grants have been made
|
20% of the total grant
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After 24 months from the date of grant
|
| |
comprising a total of 20,780
|
30% of the total grant
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After 36 months from the date of grant
|
| |
options
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40% of the total grant
|
After 48 months from the date of grant
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|
Details of equity shares allotted under ESOP Scheme 2012 during the year are as follows:
|
|
Sr.
No.
|
Date of Allotment
|
No. of shares Allotted
|
|
1
|
May 28, 2021
|
4,973
|
|
2
|
August 10, 2021
|
21,673
|
|
3
|
November 8, 2021
|
7,262
|
|
4
|
February 10, 2022
|
9,403
|
| |
Total
|
43,311
|
|
The information required to be disclosed under SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 as on March 31, 2022 are as follows:
|
|
Particulars
|
Details
|
|
Date of Shareholders Approval
|
ESOP Scheme 2012: July 10, 2012 ESOP Scheme 2020: September 30, 2020
|
|
Total number of options approved
|
ESOP Scheme 2012: 6,00,000 ESOP Scheme 2020: 2,00,000
|
|
Vesting Requirements
|
ESOP Scheme 2012: Tenure Based ESOP Scheme 2020: Performance Based
|
|
Maximum Terms of 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: 88,372 ESOP Scheme 2020: 1,80,430
|
|
Number of options granted during the year
|
ESOP Scheme 2012: 705 ESOP Scheme 2020: 20,780
|
|
Number of options forfeited / lapsed during the year
|
ESOP Scheme 2012: 3,813 ESOP Scheme 2020: 21,159
|
|
Number of options vested during the year
|
ESOP Scheme 2012: 37,475 ESOP Scheme 2020: Nil
|
|
Number of options exercised during the year
|
ESOP Scheme 2012: 43,311 ESOP Scheme 2020: Nil
|
|
Number of shares arising as a result of exercise of Options
|
ESOP Scheme 2012: 43,311
|
|
Money realized by exercise of options ('in Lakhs)
|
ESOP Scheme 2012: 758.19 ESOP Scheme 2020: Nil
|
|
Number of options outstanding at the end of the year
|
ESOP Scheme 2012: 41,953 ESOP Scheme 2020: 1,80,051
|
|
Number of options exercisable at the end of the year
|
ESOP Scheme 2012: 20,902 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 2021-2022:
|
|
Senior managerial personnel/key managerial personnel
|
ESOP Scheme 2012: ESOP Scheme 2020:
|
|
Particulars
|
Details
|
|
i) A. No of options granted and its exercise price (ESOP Scheme 2012)
|
|
Name
|
Nil
|
|
Number of shares
|
Nil
|
|
Exercise Price Per share
|
Nil
|
|
B. No of options granted and its exercise price (ESOP Scheme 2020)
|
|
Name
|
Jaideep Jaiman
|
|
Number of shares
|
7,617
|
|
Exercise Price Per share
|
1,400
|
|
ii) Any other employee who received a grant in any one year
|
Nil
|
|
of options amounting to 5% or more options granted during the year
|
|
iii) Identified employees who are granted options during any
|
Nil
|
|
one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.
|
|
Fully-diluted EPS pursuant to issue of shares on exercise of
|
5.88
|
|
options in accordance with relevant Accounting Standards
|
|
Lock-in
|
NIL
|
|
Impact of the difference on the profits of the Company and on
|
Impact of the difference on Profits: 703.77 Lakhs
|
|
the EPS
|
Impact of the difference on EPS: 0.02
|
|
Difference, if any, between employee compensation cost
|
108.59 Lakhs
|
|
(calculated according using the intrinsic value of stock options) and the employee compensation cost (calculated on the basis of fair value of stock options)
|
|
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 price
|
Exercise price equals market price: Not applicable
|
|
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
|
The fair market value has been calculated on the basis of the
|
|
value of options granted during the year
|
‘Black Scholes model'.
|
|
how expected volatility was determined, including an
|
The volatility has been calculated based on one year average of
|
|
explanation of the extent to which expected volatility was
|
standard deviation of the daily changing share price of V-Mart Retail
|
|
based on historical volatility
|
Ltd./ Company.
|
|
whether and how any other features of the options granted
|
The fair value is calculated using Black Scholes Option pricing
|
|
were incorporated into the measurement of fair value, such as
|
model
|
|
a market condition
|
|
MOVEMENT OF STOCK OPTIONS DURING THE YEAR OF ESOP SCHEME 2012 AND ESOP SCHEME 2020:
|
|
Total for all grants
|
No. of Options
|
Weighted average exercise price (?)
|
|
Outstanding at the beginning of the year
|
2,68,802
|
1,430.34
|
|
Granted during the year
|
21,485
|
1652.24
|
|
Forfeited/ Cancelled during the year
|
(24,972)
|
1,400.18
|
|
Expired during the year
|
|
-
|
|
Exercised during the year
|
(43,311)
|
1,750.58
|
|
Outstanding at the end of the year
|
2,22,004
|
1,032.60
|
|
Exercisable at the end of the year
|
20,902
|
1,942.61
|
|
Weighted average remaining contractual life (in years)
|
| |
As at
March 31, 2022
|
|
Weighted average remaining contractual life (in years)
|
6.59
|
CHANGE IN AUTHORISED SHARE CAPITAL
The Authorized Share Capital of your Company as on March 31, 2022 stood at ' 25,00,00,000 (Rupees Twenty-Five crores only) divided into 2,50,00,000 (Two Crores and Fifty Lakhs only) equity shares of ' 10/- (Rupees Ten only) each.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial 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 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: https:// www.vmart.co.in/investor/5/corporate-governance. 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 - E to this report.
DEPOSITS
During the FY 2021-22, your Company has not accepted any deposits from the public and as such no amount of principal or interest was outstanding as on date of the Balance Sheet.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013.
Loan, guarantees & investment 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, 2022 AND THE DATE OF BOARD’S REPORT
There have been no such material changes and commitments affecting 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 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)
Your Company has constituted a Corporate Social Responsibility Committee of the Board. As on March 31, 2022 the CSR Committee comprising of five members, namely Mr. Lalit M Agarwal (Chairperson), Mr. Madan Gopal Agarwal, (Member) Mr. Aakash Moondhra, (Member) Ms. Sonal Mattoo (Member) and Mr. Govind Shridhar Shrikhande (Member). The Committee is responsible for formulating and monitoring the CSR policy of the Company. Details about the CSR policy of the Company and initiatives taken 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 hundred crores or more, or turnover of rupees one thousand crores or more or a net profit of rupees five crores or more during immediately preceding financial year shall spend in every financial year, at least two percent of the average net profits of the company made during the three immediately preceding financial year, or where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years in pursuance of its Corporate Social Responsibility Policy. Accordingly, the Company was required to spend ' 110.86 lakhs on CSR activities during the year.
During the year under review your Company has spent an amount ' 247.77 lakhs towards the 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. In any case, conservation of energy is considered to be a priority and therefore ensuring minimum consumption by way of better energy conservation programs, training/ awareness of the 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:
• Multiple energy conservation practices have been put in place like employees switching off all power points during lunch breaks, all Air Conditioners (AC's) in the head office having temperature sensors to ensure periodic compressor cuts, and installation of motion sensor-enabled lighting system enabled at the warehouse of the Company.
• Multiple water recycling practices have been adopted such as utilising wastewater in various day-to-day gardening and housekeeping activities, to minimise our dependence on water supply resources.
• Prevention of water wastage due to overflow during the refill process through automatic water tank sensors installed. Further, a few sensor-based water reservoirs have been deployed.
• Arranged and promoted for our teams to use scrap material in the creation of storage space, such as conveyors, storage racks and tables for the warehouse of the Company.
• Ensured more effective and safe management of the scrap, by segregating all our scrap waste and selling it to vendors who, in turn, sell it to manufacturing plants for reuse, promarily for plastic and paper waste.
• Reduction in use of materials such as pins and cardboard in packaging has been discontinued for most products. Further, efforts are being made to look for sustainable packaging options for all types of products.
• Ban on plastic bags and usage of paper bags has been encouraged at all stores. Efforts are also being made to encourage customers to bring their shopping bags or to avail cloth bags made available at a minimal price at the stores.
• Introduction of an eco-friendly V-Green range of fashion. It underscores V-Mart's sustainability initiatives by defining the sustainable fashion as high-quality, durable products, followed by a pollution-free production process that does not use hazardous chemicals.
• Further, installed 150 additional motion sensors to control lights in storage area, racks and washroom, saving 7 KW of energy daily.
• Replacing the old machinery and devices with highly energy efficient 5 star rated devices.
• Replacing of higher wattage LED lights with lower wattage LED lights while maintain LUX level of 350 in the warehouse of the Company, thereby saving 2 KW of energy daily.
TECHNOLOGY ABSORPTION
With its sights firmly focused on accelerating long-term growth and sustained value creation for all stakeholders, your Company is steadily making its organisational structure, processes and capabilities more robust and future-ready.
Your Company is enriching its already existing organisation wide data analytics architecture, to feed decision-enabling insights directly to store managers, regional heads and zonal heads. Technology adoption and up gradation across its planning, supply chain and logistics infrastructure.
During the year under review, several technological changes have been implemented at the company's Head-office, warehouse, as well as at the stores which includes:
Supply Chain:
• Improving Vendor data interface by the upgradation of Vendor Portal and Vendor Data Management System with the new features such as:
1. Improved Quality check;
2. Advanced Shipment Notice (ASN);
3. Logistics Support
• Implementation of a Transporter Management system for outbound process;
• INFOR WMS a scalable, Tier-1 advanced warehouse management system for inventory, labor management and 3PL invoicing implemented for Bangalore warehouse of the Company;
• Implemented Warehouse Control System (WCS) for segregation for stores returns (with logic SKU, Article, option and Multi season wise);
• Rule Engine Upgraded and implementation for Inventory Replenishment at stores.
Cyber Security:
• Introduced the Phase-1 Implementation for Cyber Security with the below features:
System, user and application authentications for security purposes;
Single sign-on (SSO) an authentication method that enables users to securely authenticate with multiple applications and websites by using just one set of credentials.
Omni Channel :
• Integrating Increff WMS which provides a single view of inventory across all marketplaces and a seamless order inventory for online orders;
• Integration with marketplaces such as Amazon, Myntra and brand.com;
• Implemented Omuni for south stores for Online sales;
• Development of an In-house Product Information Management Tool.
Financial, Operations and Analytics:
• Payment processing automated via Host to Host integration with bank for faster payment processing & reduced human intervention;
• Centralized barcode re-printing tool for stores;
• Upgradation of Tableau Dashboard for business KPIs;
• In-house development and maintenance of coupon engine;
• Launching of a Campaign Manager Tool to automate and schedule rule-based personalized communication marketing campaigns to target customers across event-specific segments, and cohorts.
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FOREIGN EXCHANGE EARNINGS AND OUTGO
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Sr.
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Particulars
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Foreign Exchange
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Foreign Exchange
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no
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Earning
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Outgo
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(Amount in ')
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(Amount in ')
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Nil
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Nil
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Nil
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CODE OF CONDUCT
The Board of Directors have approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the Company. The Company believes in “Zero Tolerance” against bribery, corruption and unethical dealings / behaviours of any form and the Board has laid down directives to counter such acts. The Code has also been posted on the Company's website.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy/ Vigil Mechanism to deal with instances of fraud and mismanagement, if any. The purpose of this mechanism is to provide a framework to report concern about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy and provide adequate safeguards against victimisation of the person availing this mechanism. This Policy has been appropriately communicated within the organisation and is effectively operational. The policy provides a mechanism whereby whistle blower may send protected disclosures directly to the Chairperson of the Audit Committee or Vigilance Officer. The Policy is available on the website of the Company i.e. www. vmartretail.com
PREVENTION OF INSIDER TRADING
The Securities and Exchange Board of India (SEBI) has in exercise of powers conferred under Securities and Exchange Board of India, Act, 1992 has made the Securities 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 duly convened meeting.
The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated persons while in possession of unpublished price sensitive information in relation to the
e) Nature of action taken by the employer or district officer: A detailed investigation was carried out by the Company and the appropriate action were 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 audit.
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 details of unpaid or unclaimed dividend are provided on our website at www.vmartretail.com
BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT
As stipulated in terms of the provisions of Regulation 34 of SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 the Company has voluntarily adopted the Business Responsibility and 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 for 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 dividend to its shareholders and/or retaining profits earned by the Company. The policy is available on the Company's website at the link www.vmartretail.com
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.
Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.
All Directors and the designated person have confirmed compliance with the code.
RISK MANAGEMENT
Enterprise risk management (ERM) is a key area of operation for every responsible organisation. In recent years, volatile external factors have increased the significance of ERM for organisation. Your Company is working in an open environment and hence faces various types of risk. Your Company has constituted a Risk Management Committee of the Board. The composition of the Committee as on March 31, 2022 is as follows:
• Mr. Murli Ramachandran (Chairperson),
• Mr. Aakash Moondhra (Member),
• Ms. Sonal Mattoo (Member) and
• Mr. Govind Shridhar Shrikhande (Member).
*as on March 31, 2022
The Committee is responsible for monitoring and reviewing the risk management plan & policy and ensuring its effectiveness.
The details in respect of risk management are included in the Management Discussion and Analysis, which is a part of this report.
HUMAN RESOURCE MANAGEMENT
During the FY 2021-22 the Compnay continued to invest in the growth, progression, welfare and well-being of the employees. The focus for the year was on Capability Building, Employee Engagement and Key Talent Management. We have launched several programmes for training and capability building of our employees during the year.
The Compnay has conducted assessment development for all the employees at the head officethe warehouse and the zones during the year. The exercise included talent mapping across designations, as well as identification of high potential employees below the managerial level and successors among the above manager level.
During the year the Compnay has launched Leadership. Effectiveness. Acceleration. Programme' (LEAD) for the leadership team development. As a responsible corporate, we remain focused on building and nurturing gender diversity in the organisation. Our women-centric programmes also focus on leadership training and promotions among women.
Our employee initiatives during the year focused on creating awareness, Covid Safety updates, work from home guidelines,
PMS mailers, performance management updates, Alt learning and HR- linked updates.
The Company has also launched various wellness programmes for our people, including V-Care Vaccination, Drive Thrive Wellness Series, tie-up with Practo (online booking of doctors), Yoga and Zumba classes, Physiotherapy, etc.
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-C to the Board Report.
The details of the employees of the Company employed throughout the financial year was in receipt of a remuneration of ' 1.02 crores or more, or employed for the part of the year 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 in Annexure C to this report.
INTEGRATED REPORT
Your Company has voluntarily provided Integrated Report, which encompasses both financial and non-financial information to enable the Members to take well informed decisions and have a better understanding of the Company's long term perspective.
The Report also touches upon aspects such as organisation's strategy, governance framework, performance and prospects of value creation based on the six forms of capital viz. financial capital, manufactured capital, intellectual capital, human capital, social, relationship capital and natural capital.
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 16th Annual General Meeting held on June 29, 2018 until the conclusion of 21st Annual General Meeting of the Company to be held in the calendar year 2023, 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 Ministry of Corporate Affairs, the requirement of annual ratification has been omitted.
AUDITORS REPORT
There was no observation or qualification in the Auditors Report for the financial year ended March 31, 2022. The Notes on Financial Statements referred to in the Auditors' report are selfexplanatory and therefore do not require any further comments.
SECRETARIAL AUDITOR & REPORT
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 2021-22, 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 in form MR- 3 is enclosed herewith as Annexure-D to the Board's Report.
The observation made by the Secretarial Auditor is selfexplanatory in nature and requires no further clarification.
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 in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, 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 the going concern status and Company's 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 the requirements of the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee (ICC) has been set up to redress complaints regarding sexual harassment, if any.
The disclosures for the period under review as per the AntiSexual Harassment Policy of the Company and applicable Act thereof are as follows:
a) Number of complaints of sexual harassment received during the year: 2 (two)
b) Number of complaints disposed-off during the year: 2 (two)
c) Number of cases pending for more than ninety days: NIL
d) Number of workshops on awareness program against sexual harassment carried out: 1 (one)
DIRECTOR’S 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.
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 Directors have prepared the annual accounts 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 co-ordination extended by the employees, shareholders, customers, suppliers, bankers and all other business associates.
Your Directors gratefully acknowledges on going cooperation and support provided by Central Government and State Government and all regulatory authorities.
Your Directors appreciate and value the contribution made by every member of the V-Mart family.
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