FINANCIAL PERFORMANCE OVERVIEW

In the Financial Year 2025-26, the Company's revenue from
operations demonstrated a growth of approximately 16%,
reaching Rs. 3,78,936 Lakhs, compared to Rs. 3,25,386 Lakhs
in the previous financial year 2024-25. The Company reported
an Operating Profit (EBITDA) of Rs. 51,346 Lakhs for FY 2025¬
26, as against Rs. 37,711 Lakhs in FY 2024-25. The Company
recorded a PAT of Rs. 12,400 Lakhs, as against Rs. 4,577
Lakhs in FY 2024-25.

A comprehensive overview of the Company's operational
performance, including insights into market dynamics, business
outlook, and related risks and concerns, is provided in the
Management Discussion and Analysis Report.

OPERATIONAL PERFORMANCE OVERVIEW

During the financial year under review, the Company continued
to strengthen its position as one of Bharat's leading value
fashion retailers through disciplined expansion, enhanced
merchandise relevance, improved operational efficiencies, and
accelerated digital transformation. The Company's integrated
retail ecosystem, spanning physical stores, digital channels and
omnichannel capabilities, enabled it to serve customers more
effectively while driving profitable growth.

During FY 2025-26, the Company achieved a significant
milestone of operating 577 stores across 28 states, reinforcing

its presence in Tier II, III and IV markets and strengthening
accessibility for customers across Bharat. The Company
reported revenue from operations of Rs. 3,78,936 lakhs,
registering a growth of approximately 16% over the previous
year, while EBITDA increased by 36% year-on-year, reflecting the
benefits of improved merchandise productivity, supply chain
efficiencies and disciplined cost management.

The Company remained focused on enhancing customer value
through superior assortment planning, faster speed-to-market
and improved product quality. Private labels continued to
remain a key strategic lever, contributing approximately 70% of
revenues, enabling greater control over product differentiation,
margins and customer relevance.

To improve responsiveness and merchandise agility, the Company
further strengthened its Product Lifecycle Management (PLM)
framework and Design-to-Display processes, creating a connected
workflow across design, sourcing, merchandising and allocation
functions. These initiatives helped reduce the order-to-shelf cycle
from approximately 80 days to 70-75 days, improving speed-to-
market and enhancing the Company's ability to respond to evolving
consumer preferences.

As part of its omnichannel strategy, the Company further
integrated its physical and digital channels to deliver a
seamless shopping experience. The 1-Click Omni capability
enabled customers to access a wider assortment beyond

store inventory and contributed nearly 30% of platform orders,
helping improve fulfilment efficiency and conversion rates.
Powered by LimeRoad's omnichannel ecosystem, customers
could seamlessly discover, transact and fulfil purchases
across channels.

The Company also strengthened customer engagement
through advanced CRM capabilities and AI-enabled
marketing interventions. A unified customer data platform
enabled personalised campaigns and targeted customer
journeys, resulting in 4.7% incremental revenue through
CRM-led initiatives, while gamification campaigns achieved
approximately 12% in-store conversion.

Technology continued to be a critical enabler of operational
excellence. During the year, the Company strengthened its
digital capabilities through the development of a unified Digital
Spine, integrating product, inventory, store and customer data
into a single operating intelligence platform. This architecture
enabled near real-time visibility, predictive decision-making
and enhanced planning capabilities across the value chain.
Advanced analytics and machine learning models supported
forecasting, replenishment, inventory allocation and assortment
planning, contributing to 84% season sell-through and forecast
accuracy of 66-67%.

Supported by disciplined execution, technology-led decision
making, a robust supply chain, and a customer-centric
operating model, the Company remains well positioned to
capture the long-term growth opportunity arising from the
increasing formalisation of retail and the rising aspirations of
Bharat consumers.

CONFIRMATION

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

CHANGES IN THE NATURE OF BUSINESS

During the year under review, the Company did not undergo any
change in the nature of its business.

DIVIDEND

In terms of Dividend Distribution policy, your Directors at
thier meeting held on Thursday, the 7^th day of May, 2026,
recommended a dividend of Rs. 1 per share @10%, for
the financial year ended March 31, 2026. The proposal is
subject to the approval of shareholders at the ensuing Annual
General Meeting.

GENERAL RESERVES

During the year under review, the Company transferred Rs. 8,126
Lakhs to general reserves. Subsequently, total reserves stood
at Rs. 87,164 Lakhs as on March 31, 2026.

CREDIT RATING

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

The credit rating of the Company as on March 31,
2026 is as under:

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Schedule V read with Regulation 34(2)(e) of SEBI
Listing Regulations, the Management Discussion and Analysis
Report for the Financial Year under review, is presented in a
separate section, forming part of the Annual Report.

AWARDS AND ACCOLADES

During the financial year 2025-26, the Company's pursuit of
excellence across financial reporting, customer centricity, and
retail innovation was recognized through several prestigious
industry honors. These accolades underscore our commitment
to transparency, brand resonance, and operational leadership
in the retail sector.

Corporate Governance & Reporting

• ICAI Awards for Excellence in Financial Reporting, 2025

• Ranked 19th in LACP Vision 2024-25 Award in the
Integrated Report Competition for the following categories:

- Platinum Award for the Annual Report, and

- Gold Award for the Integrated Report.

Retail Excellence & Customer Experience

• Best use of Personalization to Elevate the Customer
Journey (Retail) by Excellence Awards, 2025

• Value Retailer of the Year 2025 by IReC Awards

• Images Most Admired Retailer of the Year: Visual
Merchandising by Images Retail awards, 2025

Marketing & Brand Innovation

• Influencer Marketing: Festive Marketing Campaign by
Trendies Awards, 2025

• Dun & Bradstreet
LISTING

The Equity Shares of the Company continue to be listed on BSE
Ltd. (BSE) and the National Stock Exchange of India Ltd. (NSE).
The Company has paid the annual listing fees for the Financial
Year 2025-26 to both the exchanges. The relevant details of the
stock exchanges are as follows:

WEBLINK OF ANNUAL RETURN

Pursuant to Section 92(3) and 134(3)(a) of the Companies
Act, 2013 read with Rule 12 of the Companies (Management
and Administration) Rules, 2014, the Annual Return for the
Financial Year ended March 31, 2026, in Form MGT-7 will be
made available on the Company's website athttps://vmart.
co.in/other-disclosures.

CORPORATE GOVERNANCE

In accordance with Regulation 34(3) of SEBI Listing Regulations,
this report is accompanied by a comprehensive Report
on Corporate Governance, which forms an integral part of
the Annual report.

NUMBER OF BOARD MEETINGS

During the Financial Year under review, the Board met five
(5) times. The meeting details are provided in the Corporate
Governance Report that forms part of the Annual Report. The
gap between two consecutive Board Meetings did not exceed
120 (One Hundred and Twenty) days as stipulated under Section
173 of the Act, Regulation 17 of the SEBI Listing Regulations
and Para 2.1 of Secretarial Standard - 1.

DIRECTORS AND KEY MANAGERIAL PERSONNEL
Board of Directors

As on March 31, 2026, the Board of Directors consists of 6 (six)
members, of which three (3) are Independent Directors including
one (1) Independent Woman Director. The composition of the
Board of Directors is provided below:

During the year under review, there were no changes to the
Board of Directors of the Company.

Key Managerial Personnel

In pursuance of Section 203 of the Companies Act, 2013, the
Key Managerial Personnel of the Company as on March 31,
2026 are as follows:

During the year under review, there were no changes in the Key
Managerial Personnel (“KMP”) of the Company.

BOARD EVALUATION

To ensure the efficient functioning of the Board and its
Committees while ensuring compliance with statutory
requirements, the Board conducted an annual evaluation of
its own performance, its Committees and individual Directors.
This assessment followed the framework designed by the
Nomination & Remuneration Committee in compliance with the
Companies Act, 2013, and SEBI Listing Regulations.

The results were presented to the Board and its Committees
for review. Furthermore, an external agency was engaged to
provide a validation certificate. The evaluation parameters
and methodology along with validation certificate forms part of
Corporate Governance Report.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company maintains a comprehensive Familiarization
Programme designed to provide Independent Directors with
deep insights into business model, strategy, risk management
framework, and regulatory environment. Through structured
training sessions, regular corporate updates, and direct interaction
with Senior Management, Directors gain a thorough understanding
of the Company's operations and market positioning. Detailed
information regarding the induction and familiarization program is
included in the Corporate Governance Report and is accessible
on the Company's website athttps://vmart.co.in/wp-content/
uploads/V-Mart-Familiarization-Programme 2025-26.pdf.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has, inter alia, received the following declarations
from all the Independent Directors confirming that:

a. they meet the criteria of independence as prescribed
under the Section 149(6) of the Companies Act, 2013
read with Schedule IV and Rules made thereunder, and
Regulation 16 of the Listing Regulations. There has been
no change in the circumstances affecting their status as
Independent Directors of the Company;

b. they have complied with the Code for Independent
Directors prescribed under Schedule IV to the Act; and

Further, they have confirmed that they have registered
themselves with the Independent Director's Databank
maintained by the Indian Institute of Corporate Affairs (IICA).

The Board of Directors of the Company has taken on
record the declaration and confirmation submitted by the
Independent Directors after undertaking due assessment of
the veracity of the same.

None of the Directors of the Company are disqualified from
being appointed as Directors as specified under Section
164(1) and 164(2) of the Act read with Rule 14(1) of the
Companies (Appointment and Qualifications of Directors)
Rules, 2014 (including any statutory modification(s) and/or re¬
enactments) thereof for the time being in force) or are debarred
or disqualified by the Securities and Exchange Board of India
(“SEBI”), Ministry of Corporate Affairs (“MCA”) or any other such
statutory authority.

All members of the Board and Senior Management have
affirmed compliance with the Code of Conduct for Board and
Senior Management for the financial year 2025-26.

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, commission and
reimbursement of expenses incurred by them for the purpose of
attending meetings of the Company.

In the opinion of the Board, all the Independent Directors
possess strong sense of integrity and have requisite experience,
skills, qualification, expertise and proficiency. For further
details, please refer to the Corporate Governance Report that
forms part of this Annual report.

POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION

The Company's Nomination & Remuneration Policy serves as the
framework for Board composition and executive compensation.
The Nomination & Remuneration Committee is responsible
for identifying vacancies, evaluating potential candidates, and
recommending appointments to the Board and Shareholders.

Furthermore, the responsibilities of Nomination & Remuneration
Committee include, but are not limited to:

1. Talent Identification: Proactively identifying and vetting
individuals qualified to serve as Directors or Senior
Management Personnel.

2. Tenure Management: Determining the tenure of
Independent Directors, including decisions regarding the
continuation or extension of their terms based on rigorous
performance evaluations.

3. Comprehensive Compensation: Formulating a holistic
remuneration policy for Directors, Senior executives, and
employees, encompassing ESOPs, pensions, and other
compensatory benefits.

The complete policy, encompassing the criteria for
independence and positive attributes required under Section
178(3), is available on the website of the Company athttps://
vmart.co.in/wp-content/uploads/NRC-Policy-2.pdf.

SHARE CAPITAL

a. Buy-Back of Securities: During the year under review,
the Company has not undertaken any buy-back of
its securities.

b. Issue of Sweat Equity: The Company has not issued any
sweat equity shares during the year under review.

c. Issue of Bonus Shares: During the year under review,
the Board of Directors, at its meeting held on May 02,
2025, recommended the issuance of Bonus Shares in
the ratio of 3:1. This recommendation was subsequently
approved by the Shareholders of the Company on
June 12, 2025, through a Postal Ballot. Further, the
Nomination & Remuneration Committee, in its meeting
held on June 24, 2025, also approved the allotment to the
eligible shareholders.

Pursuant to this Bonus Issue, the Company allotted
5,95,30,353 (Five Crores Ninety-Five Lakhs Thirty
Thousand Three Hundred and Fifty-Three) fully paid-up
Equity Shares of Rs. 10/- each to eligible shareholder
whose names appeared in the Register of Members as on

the Record Date, i.e., June 23, 2025. The bonus shares
were allotted in the ratio of 3:1, representing 3 (three) new
fully paid-up equity shares of Rs. 10/- each for every 1
(one) existing fully paid-up equity share held.

This issuance was executed by capitalizing a sum not
exceeding Rs. 59,53,03,530/- (Rupees Fifty Nine Crores
Fifty Three Lakhs Three Thousand and Five Hundred
Thirty) from the Securities Premium account of the
Company, as per the audited accounts for the financial
year ended March 31, 2025. These bonus shares rank
pari-passu in all respects with the existing equity shares
of the Company.

d. Employees Stock Option / Restricted Stock Units: The

details relating to the ESOP are available on the Company's
website and can be accessed athttps://vmart.co.in/
corporate-governance. A certificate from the Secretarial
Auditors confirming that the ESOP schemes have been
implemented in accordance with the SEBI (Share Based
Employee Benefits and Sweat Equity) Regulations, 2021
is available for inspection.

Pursuant to the issue of bonus shares during the year,
the Company obtained in-principle approvals from BSE
Limited and National Stock Exchange of India Limited for
the adjusted ESOP pool under the ESOP Schemes approved
by the shareholders. Accordingly BSE Limited and National
Stock Exchange of India Limited, granted in-principle
approval for the issuance and allotment of 647,403 equity
shares of Rs 10 each under V-Mart ESOP Scheme 2012
and 1,330,209 equity shares of Rs. 10 each under V-Mart
ESOP Scheme 2020, pursuant to the adjustment arising
from the bonus issue.

AUTHORISED SHARE CAPITAL

During the year under review, the Board of Directors, at
its meeting held on May 02, 2025, recommended an
increase in the Authorised Share Capital of the Company
from Rs. 25,00,00,000/- (Rupees Twenty-Five crores) to Rs.

95.00. 00.000 (Rupees Ninety-Five crores only), divided into

9.50.00. 000 (Nine Crores and Fifty Lakhs only) equity shares of
Rs. 10/- (Rupees Ten only) each. The said increase was approved
by the shareholders through a Postal Ballot on June 12, 2025.

Accordingly, The Authorized Share Capital of the Company as
on March 31, 2026 stood at Rs. 95,00,00,000 (Rupees Ninety-
Five crores only) divided into 9,50,00,000 (Nine Crores and Fifty
Lakhs only) equity shares of Rs. 10/- (Rupees Ten only) each.

RELATED PARTY TRANSACTIONS

• Review

During the year under review, all transactions with
related parties were reviewed and approved by the Audit
Committee and were in accordance with the Related Party
Policy of the Company. All Related party transactions
undertaken during the financial year were conducted at
arm's length and in the ordinary course of business. Prior
omnibus approval of the Audit Committee was obtained
for the transactions which are of a foreseen and repetitive
nature. There were no materially significant related party
transactions with Promoters, Key Management Personnel,
or other designated persons that could potentially conflict
with the interests of the Company as a whole.

• Policy

The Company has established a policy on Related Party
Transactions, which is available on its website athttps://
vmart.co.in/wp-content/uploads/Final-RPT-Policy-2.pdf.

• Statutory Disclosures

The details of related party transactions entered during
the year in terms of Ind AS - 24 forms part of 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,
prescribed under the provisions of Section 134(3)(h) of
the Act and Rule 8(2) of the Companies (Accounts) Rules,
2014, is annexed as Annexure A to this report.

DEPOSITS FROM PUBLIC

During the year under review, the Company has not accepted
any deposits from the public falling under Section 73 and 76
of the Act read with the Companies (Acceptance of Deposits)
Rules, 2014, and no amount of principal or interest was
outstanding as on the date of the Balance Sheet.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Loans, Guarantees or Investments covered under the
provisions of Section 186 of the Companies Act, 2013, if any,
forms 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, 2026 AND THE DATE OF BOARD’S REPORT

There were no material changes and commitments affecting
the financial position of the Company which occurred between
the end of the financial year to which the financial statements
relate to and the date of this 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 continues to be situated
at 610-611, Guru Ram Dass Nagar, Main Market, Opp. SBI
Bank, Laxmi Nagar, New Delhi - 110092.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In alignment with the provisions of Section 135 of the
Companies Act, 2013, read with the Companies (Corporate
Social Responsibility Policy) Rules, 2014, the Company remains
steadfast in its commitment to social upliftment and ethical
corporate citizenship.

• CSR Committee

The Board has constituted a CSR Committee to oversee
the formulation, implementation, and monitoring of
the Company's CSR Policy. As of March 31, 2026, the
Committee comprises the following members:

CSR Policy

The CSR Policy adopted by the Board is available on the
Company's website and can be accessed athttps://vmart.
co.in/wp-content/uploads/CSR-Policv.pdf.

CSR Expenditure & Voluntary Contribution

In accordance with Section 135(5) of the Companies Act,
2013, and its subsequent rules, the Company is mandated
to allocate a minimum of 2% of its average net profits
from the past three financial years towards Corporate
Social Responsibility (CSR) initiatives, as calculated under
Section 198 of the Companies Act, 2013.

For the financial year 2025-26, the Company was not
statutory mandated to earmark funds toward CSR
activities as per the stipulated criteria.

Nevertheless, the Company has voluntarily contributed
Rs. 16 lakhs to CSR projects, surpassing its statutory
obligation. This voluntary spend reflects our ingrained
philosophy of giving back to society, regardless of
regulatory mandates.

• Annual Report on CSR

The brief outline of the CSR Policy and the initiatives
undertaken during the year, in the format prescribed under
the Companies (CSR Policy) Rules, 2014, is annexed as
"Annexure B" to this Report.

CONSERVATION OF ENERGY

Although our company does not consume energy at an industrial
scale, sustainability remains a top priority. Our 700 KWP rooftop
solar power plant at our Palwal warehouse now generates over
2,700 GJ of renewable energy annually, significantly reducing
dependence on conventional energy sources. This facility has
been built to incorporate green HVAC systems, LED lighting,
motion sensors, and smart energy monitoring dashboards.

Across our store network, we have continued expanding 100%
LED lighting, temperature-regulated air conditioning, heat
control films, and optimised electrical designs to improve energy
efficiency. On water conservation, our sewage treatment plant
at Palwal recycles approximately 40,000 KL of water annually
for landscaping, while RO wastewater recovery systems across
stores reduce wastage. We achieved approximately 90% carton
reuse across our supply chain, eliminated 100% plastic shrink
wrap, removed 1.4 Crore polybags, and enabled production of
over 27 Lakh garments using recycled fabrics. Further details
are available in the Natural Capital section of this Annual Report.

TECHNOLOGY ABSORPTION

Technology continued to be a key enabler of operational
excellence and customer-centric growth during the year. The
Company strengthened its digital capabilities through the
development of a unified Digital Spine, integrating product,
inventory, vendor, store, and customer data to enable faster
decision-making and greater operational visibility across
the value chain.

The Company further enhanced its Product Lifecycle
Management platform and implemented a Vendor Management
System to improve collaboration, sourcing efficiency, product
development, and supply chain responsiveness. Advanced
analytics and automation were increasingly leveraged for
demand forecasting, inventory allocation, replenishment
planning, and merchandise management, helping improve
inventory productivity and speed-to-market.

The Company also continued to strengthen its omnichannel
capabilities through seamless integration of stores and digital
platforms, while expanding the use of customer analytics and
business intelligence tools to drive personalized engagement
and data-driven decision-making.

These initiatives have enhanced operational agility, improved
planning accuracy, and strengthened the Company's ability to
serve evolving customer needs efficiently and at scale.

FOREIGN EXCHANGE EARNINGS AND OUTGO

CODE OF CONDUCT FOR DIRECTORS AND SENIOR
MANAGEMENT PERSONNEL

The Board of Directors have established a Code of Conduct
applicable to its members and Senior Management
Personnel. This Code serves as a foundational framework
for ethical business practices, equitable treatment, and the
prohibition of actions such as bribery, corruption, and anti¬
competitive behaviour.

All Board members and Senior Management Personnel
have confirmed their compliance with the Code of Conduct
for the Financial Year 2025-26. A declaration affirming this
adherence, signed by Mr. Lalit Agarwal, Managing Director, is
included in the Corporate Governance Report forming part of
this Annual Report.

The Code of Conduct is available on the website of the Company
athttps://vmart.co.in/wp-content/uploads/V-Mart Code-of-
Conduct-for-Directors-SMPs Mav-2024.pdf

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company remains committed to the highest standards of
ethical behavior and has adopted a robust vigil mechanism
through Whistle Blower Policy in compliance with the provisions
of Section 177(10) of the Act and Regulation 22 of the Listing
Regulations to provide a safe platform to report illegal or
unethical activities.

This mechanism empowers Directors, employees, and all
stakeholders to report concerns regarding fraud, violations of
legal or regulatory obligations, breaches of the Company's code
of conduct/policies, or incorrect or misrepresentation of any
financial statements and reports, or any activity detrimental
to the Company's interests, ensuring complete protection
against victimization.

During the year under review, the Company affirms that no
personnel has been denied access to the Audit Committee.

The Policy is available on the website of the Company athttps//
vmart co in/wp-oontent/uploads/Whistle-Rlower-Policy-1 pdf

CODE ON PROHIBITION OF INSIDER TRADING

In accordance with SEBI Prohibition of Insider Trading
Regulations, the Company has implemented a Code of
Conduct for Insider Trading and a Code of Fair Disclosure to
regulate and report trading by Designated Persons. These
frameworks ensure the ethical management of Unpublished
Price Sensitive Information (UPSI) and strictly prohibit insider
trading activities. To support these measures, the Company
maintains a Structured Digital Database (SDD) and conducts
regular awareness initiatives, such as informative mailers, Flash
cards, short awareness videos and quizzes, to keep employees
updated on their compliance obligations.

The Audit Committee evaluated the adequacy and effectiveness
of the internal control systems related to insider trading. The
Committee reviews the instances of non-compliance, if any,
and recommends necessary actions to the Board in line with
the Company's penalty framework. Regulatory breaches, if any,
are promptly reported to the Stock Exchanges, and applicable
penalties are deposited by the Designated Persons into SEBI's
Investor Protection and Education Fund.

All Directors and Designated Persons have confirmed their
compliance with the Code for the financial year 2025-26.

The Code of Conduct for Insider Trading and Code of Fair Disclosure
is available on the Company's website athttps://vmart.co.in/
wp-content/uploads/Insider-Trading-Code-of-Conduct-1.pdf
andhttps://vmart.co.in/wp-content/uploads/2022/09/CODE.
pdf respectively.

COMPLIANCE MANAGEMENT

A comprehensive Compliance Certificate, accompanied by
detailed annexures, is presented to the Board on a quarterly
basis. The report offers a holistic assessment of the Company's
compliance landscape, identifies any deviations from applicable
requirements, and outlines the corrective and preventive
actions (CAPA) implemented to reinforce compliance controls,
enhance accountability, and proactively mitigate future risks.

RISK MANAGEMENT

The Company has established an integrated enterprise risk
management framework aligned with globally recognised
standards and requirements of the Companies Act and SERI
regulations. This framework enables proactive identification,
assessment, and mitigation of key risks across strategic,
operational, financial, compliance, and reputational
dimensions, thereby ensuring resilience and alignment with
long-term objectives.

Risk management is embedded across the organisation through
a structured top-down and bottom-up approach, supported
by active Board oversight. In compliance with Regulation
21 of the SEBI Listing Regulations, the Board has adopted a
Risk Management Policy and constituted a Risk Management
Committee. The Committee assists the Board in its oversight of
risk identification, impact assessment, and the implementation
of effective mitigation plans.

The Company is increasingly leveraging Artificial Intelligence
(AI) and advanced analytics to strengthen risk identification,
predictive monitoring, and real-time decision-making. In
addition, the Company is integrating ESG considerations into
its risk philosophy. This strengthens resilience, enhances
stakeholder trust, and supports responsible long-term
value creation.

A detailed analysis of business risks and opportunities is
included in the Management Discussion and Analysis Report.

HUMAN RESOURCE MANAGEMENT

The Company believes that its people are central to delivering
superior customer experiences and sustaining long-term
growth. During FY 2025-26, the Company continued to
strengthen its human capital through focused investments
in capability building, leadership development, and employee
engagement. Several learning initiatives were undertaken
during the year, including structured induction programmes
for frontline employees, customer service excellence training,
store leadership development programmes, and functional
upskilling initiatives aimed at enhancing merchandising, supply
chain, digital, and analytics capabilities.

Recognising the increasing role of technology in retail operations,
the Company also conducted targeted training programmes to
improve digital adoption across stores and support functions,
enabling employees to effectively leverage new systems and
data-driven decision-making tools. In addition, emerging
leaders were identified through structured talent development
interventions to build a strong internal leadership pipeline and
support the Company's expanding store network.

The Company remains committed to fostering an inclusive,
safe, and performance-oriented workplace that encourages
collaboration, innovation, and continuous learning. Employee
engagement and recognition programmes were conducted
throughout the year to strengthen organisational culture and
reinforce shared values. As on March 31, 2026, the Company
employed over 13,000 employees across its operations.
Industrial relations remained cordial throughout the year,
and the Company did not experience any material industrial
disputes affecting its operations.

In accordance with Section 197(12) of the Companies Act, 2013,
read with Rules 5(1) and 5(2) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, the
requisite statement of employee particulars is appended as
Annexure C to this Report. This includes details of employees
who received remuneration exceeding Rs 1.02 Crores per annum
(if employed throughout the year) or Rs 8.5 Lakhs per month (if
employed for part of the year).

For further insights, please refer to the Human Capital section
of the Annual Report.

INTEGRATED REPORT

The Company is committed to transparency and comprehensive
reporting, as demonstrated by our voluntary Integrated Report.
This report provides a holistic overview of our performance,
integrating both financial and non-financial information to
provide stakeholders with a deeper understanding of the
Company's strategic perspective and value creation process.

Our reporting framework offers an in-depth look at our core
business activities, governance structure, and strategic
objectives. It specifically highlights our ability to generate long¬
term value across the Six Capitals namely Financial capital,
Manufactured capital, Intellectual capital, Human capital, Social
& Relationship capital, and Natural capital. This comprehensive
approach ensures that all dimensions of value creation are
captured, reflecting our unwavering dedication to sustainable
development and meaningful stakeholder engagement.

AUDITORS & AUDIT REPORT
Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies
Act, 2013 read with rules made thereunder, M/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 five consecutive years, to hold
office from the conclusion of the 21^st Annual General Meeting
held on September 15, 2023 until the conclusion of 26^th
Annual General Meeting of the Company to be held for the
financial year 2027-28.

The Auditors have confirmed their eligibility and independence
in accordance with the Companies Act and the Code of Ethics
issued by the Institute of Chartered Accountants of India (ICAI).
They have further affirmed that they are not disqualified from
continuing their tenure.

The Statutory Auditors' Report for the financial year 2025-26
is presented with an "unmodified opinion" and forms part of
this Annual Report. There are no qualifications, observations,
or adverse remarks in the Auditors' Report. The Notes to the
Financial Statements referred to therein are self-explanatory

and, accordingly, do not require further clarification or comment
from the Board.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act,
2013 read with Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, and Regulation 24A of SEBI
Listing Regulations, M/s. Agarwal S. & Associates, Company
Secretaries (Firm Registration Number: P2003DE049100)
were appointed as the Secretarial Auditors of the Company for
a term of five consecutive years from the Financial Year 2025¬
26 until the conclusion of 28^th Annual General Meeting of the
Company which will be held for the financial year 2029-30.

The Secretarial Audit Report in Form MR-3, issued under
the Act and Regulation 24A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, is enclosed as
Annexure D to this Report. The Secretarial Audit Report contains
the following observation :

“During the period under review the Company has complied
with the provisions of the Act, Rules, Regulations, Guidelines,
Standards etc. mentioned above subject to non-compliance
under Regulation 29(1)(f) of Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements)
Regulation, 2015 (SEBI LODR 2015). Company is required to
give prior intimation of at least two working days in advance,
excluding the date of the intimation and date of the meeting
to stock exchange about the meeting of the board of directors
which was held for issue of Bonus Shares. The meeting of
the board of directors which was held on 02.05.2025. It was
initially intimated to the stock exchanges on April 23, 2025,
subsequently an updated intimation was filed on April 29,
2025, to include an additional agenda for the proposal of
a bonus issue. Due to the trading holiday on May 01, 2025
(Maharashtra Day) the updated intimation fell short by one
working day. Consequently, The National Stock Exchange of
India Limited (NSE) and BSE Limited (BSE) each has levied fine
of Rs. 11,800/- (inclusive of GST @18%) for non-compliance of
Regulation 29(1)(f) of SEBI LODR 2015, which has been paid.”

The Board wishes to state that the delay in compliance with
Regulation 29 was inadvertent and unintentional due to the
trading holiday on account of Maharashtra Day (May 01, 2025),
the "two working days" notice period fell short by one day, as
this is a regional holiday celebrated primarily in Maharashtra.

The Company has taken immediate corrective measures
to ensure that such non-compliance does not recur in the
future. The Management has committed to strengthening its
compliance calendar to account for trading holidays in the future.

Further the Annual Secretarial Compliance Report for the
financial year 2025-26 confirming compliance with all applicable
SEBI Regulations, Circulars, Guidelines, and Secretarial

Standards was received in accordance with Regulation 24A
of the Listing Regulations. This report is available on the
Company's website athttps://vmart.co.in/other-disclosures.

Internal Auditors

As part of our commitment to maintaining the highest
standards of internal control and governance, the Company
has engaged M/s. KPMG Assurance & Consulting Services LLP,
a firm established under the Limited Liability Partnership Act,
2008, to carry out our internal audit and review our internal
control environment.

KPMG, a globally recognized leader in Audit, Tax, and Advisory
services, conducts comprehensive quarterly audits across
our diverse business operations. On a quarterly basis, the
Internal Auditor presents a detailed status report to the Audit
Committee, encompassing key findings, risk assessments, and
the remedial action plans agreed upon with Management.

This robust internal audit framework ensures continuous
oversight and reflects our unwavering dedication to transparency,
operational excellence, and corporate governance.

Reporting of Frauds by Auditors

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

INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

The Company has instituted a comprehensive internal financial
control framework that is commensurate with the scale, size,
and complexity of its operations. These controls are designed
to provide reasonable assurance regarding the reliability
of financial and operational information, compliance with
applicable laws and internal policies, safeguarding of assets,
prevention and detection of frauds and errors, and the accuracy
and completeness of accounting records.

The Board periodically reviews the Company's internal policies,
processes, and internal financial control systems to ensure
their continued effectiveness. Accordingly, the Directors'
Responsibility Statement includes a confirmation on the adequacy
of internal financial controls. The effectiveness of these controls
is evaluated through management reviews, self-assessments,
ongoing monitoring by functional heads, and testing conducted
as part of internal and statutory audits. Further, an independent
assessment of the Internal Controls over Financial Reporting
(ICoFR) has been carried out by the Statutory Auditors, M/s. S.R.
Batliboi & Co. LLP, Chartered Accountants.

SIGNIFICANT AND MATERIAL ORDERS

During the year under review, there were no significant and
material orders passed by the Regulators/ Courts/ Tribunals
which would impact the going concern status of the Company
and its future operations.

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
Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013. The Internal Committee (IC) has been set up to
redress complaints regarding sexual harassment, if any.

The Composition of the IC Committee as on March 31,
2026 is as follows:

The disclosures for the period under review as per the Anti¬
Sexual Harassment Policy of the Company and applicable Act
thereof are as follows:

a) Number of complaints of sexual harassment received
during the year: 4

b) Number of complaints disposed-off during the year: 4

c) Number of cases pending for more than ninety days: 0

d) Number of workshops on awareness program against
sexual harassment carried out: 2

e) Nature of action taken by the employer or district officer: A
detailed investigation was carried out by the Company and
the appropriate action was taken to resolve the matter.

The Policy for prevention of sexual harassment is announced to
all the staff and is available on the Company's website athttps://
vmart.co.in/wp-content/uploads/Annexure-A-POSH-Policv.pdf.

COMPLIANCE UNDER THE MATERNITY BENEFIT ACT, 1961
Your Company remains in full compliance with all statutory
provisions of the Maternity Benefit Act, 1961, ensuring a
supportive environment and all prescribed benefits for its
women employees.

INCIDENT OF FRAUD

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

INVESTORS EDUCATION & PROTECTION FUND (IEPF)

Pursuant to Sections 124 and 125 of the Companies Act,
2013 read with IEPF Authority (Accounting, Audit, Transfer &
Refund) Rules, 2016 (“IEPF Rules”), all unpaid or unclaimed
dividends are required to be transferred by the Company to
the IEPF established by Central Government after completion
of seven years.

Further, all shares in respect of which dividend has not been
paid or claimed for seven consecutive years or more are
required to be transferred by the Company in the name of IEPF.

Further, shareholders may verify the details of such
transfers on the Company's website athttps://vmart.co.in/
shareholding-information.

ENVIRONMENT SOCIAL GOVERNANCE (ESG)

The Company remains committed to integrating Environmental,
Social and Governance (ESG) principles into its business
strategy and operations to create sustainable long-term
value for all stakeholders. During FY 2025-26, the Company
continued to strengthen its ESG framework through initiatives
focused on responsible sourcing, energy efficiency, waste
reduction, resource conservation, employee well-being,
diversity and inclusion, community development, and robust
corporate governance practices. Sustainability considerations
are increasingly being embedded across business
processes to support responsible growth and enhance
organisational resilience.

The Board and its Committees provide oversight on ESG-
related matters, ensuring alignment with the Company's long¬
term objectives and stakeholder expectations. The Company
continued to undertake various environmental and social
initiatives, including renewable energy adoption, responsible
packaging practices, employee development programmes,
and community engagement activities. The Company remains
committed to advancing its ESG agenda and fostering a culture
of responsible business conduct while contributing positively to
society and the environment.

For more details refer to ESG Page forming part of the
Annual Report.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

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

COST RECORDS AND COST AUDIT

Pursuant to the provisions of Section 148(1) of the Companies
Act, 2013, the maintenance of cost records and the
requirement for a cost audit are not applicable to the business
activities carried out by the Company during the financial
year under review.

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 Company has adopted a formal policy that
outlines the key financial parameters and internal/external
factors to be considered by the Board of Directors when
determining the distribution of dividends to shareholders or the
retention of profits.

The policy is available on the Company's website at the link:
http://vmart.co.in/wp-content/uploads/2023/07/Dividend-
Distribtion-Policv-1.pdf.

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

During the year under review, no application has been
made or any proceeding is pending under Insolvency and
bankruptcy Code, 2016.

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

During the year under review, there were no instances of one¬
time settlements or bank term loans; Accordingly, the disclosure
of differences between valuation at the time of settlement
versus loan inception is not applicable.

SECRETARIAL STANDARDS

During the year under review, the Company has complied with
all applicable Secretarial Standards issued by the Institute
of Company Secretaries of India (ICSI) as prescribed under
Section 118(10) of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) and Section 134(5) of the
Companies Act, 2013, with respect to Directors' Responsibility
Statement, it is confirmed that:

a) In the preparation of the annual accounts for the Financial
Year ended on March 31, 2026, the applicable accounting
standards have been followed and there are no material
departures from the same;

b) The Directors have selected such accounting policies
and applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give
a true and fair view of the state of affairs of the company
at the end of the financial year ended on March 31, 2026
and of the profit or loss of the company for that period;

c) The Directors have taken proper and sufficient care for
the maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding
the assets of the Company and for preventing and
detecting fraud and other irregularities;

d) The annual accounts have been prepared on a
going concern basis;

e) The Directors have laid down Internal Financial Controls
to be followed by the Company and that such internal
financial controls are adequate and operating effectively;

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

The aforesaid statement has also been reviewed and confirmed
by the Audit Committee of the Board of Directors of the Company.

ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation
for the continued trust, support, and cooperation extended by the
Company's employees, shareholders, customers, suppliers, bankers,
business partners, and other stakeholders, whose contribution has
been invaluable to the Company's growth and success.

The Board also gratefully acknowledges the guidance and
support received from the Central and State Governments,
regulatory authorities, and other statutory bodies.

Your Directors further commend the dedication, commitment,
and efforts of all employees across the organisation. Their
unwavering focus, professionalism, and contribution continue
to be instrumental in advancing the Company's objectives and
sustaining its long-term growth.