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V-Mart Retail Ltd.

BSE: 534976 | NSE: VMART |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE665J01013 | SECTOR: Retail

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30-Day
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  • Offer Price (Qty.)

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013

Director’s Report

Dear Members,

The Company’s Directors are pleased to present the 16th Annual Report of the Company, along with Audited Accounts, for the financial year ended 31st March, 2018.

FINANCIAL RESULTS

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

(Rs. in Lacs)

Particulars

For the year ended 31st March 2018

For the year ended 31st March 2017

Revenue from operations other Income

122,651.30

1,00,586.63

Profit/(Loss) before Depreciation & Tax

13,539.79

8,537.55

Less: Depreciation

2,293.12

1,855.32

Less: Tax Expense

3476.26

2,291.80

Prior period items-(income)/expenses

-

-

Net profit for the period

7,770.41

4,390.43

Less: Utilised for Dividend Issue

272.27

21.76

Balance carried forward to Balance Sheet

7,498.14

4,368.67

V-MART IPO

Your Company has successfully concluded the pubic issue of equity shares during the year 2012-13 aggregating to RS.36,435 million.

The means of finance for the objects of IPO and status of utilisation of proceeds raised through the IPO by the Company as on 31st March, 2018 as referred above are as follows:

Means of finance for the objects of IPO are as under:

Particulars

(Rs. in Lacs)

Proceeds from the fresh issue (A)

57,98.10

Proceeds from Pre-IPO placement (B)

26,25.00

Internal accruals (C)”

717.60

Total

9,140.70

The utilisation of the afore-mentioned means of finance as on 31st March 2018 is as under:

(Rs. in Lacs)

Particulars

Utilisation planned as per prospectus

Utilisation of IPO proceeds as on 30th September, 2015

Adjustments (utilisation of surplus towards other objects)

Balance amount to be utilised as on 31st March, 2018

To open new stores

6970.40

(7044.67)

74.27

-

Expansion of distribution centre

438.70

(371.03)

(67.67)

-

Working capital

1000.00

(1,000.00)

-

-

Share issue expenses

731.60

(725.00)

(6.60)

-

Total

9140.70

(9140.70)

-

Nil

PERFORMANCE REVIEW

The Indian retail sector in India accounts for >10% of the country’s GDP and employs ~8% of the workforce. Growing at a rate of 12% annually, the sector size is estimated at US$672 billion. The country is the fifth-largest retail destination, enjoying a share of 55% of the total global retail market during FY 2016-17.

The sector’s growth is being fuelled by an increasing consumer base, rising incomes, growing aspirations, favourable demographics, easy credit availability and technological advancements coupled with the advent of social media. The e-commerce industry is expected to be the number one sector boosting retail industry growth in India.

The country’s retail development has been rapid not just in the metros, but also in the Tier-II and Tier-III cities. The purchasing power of Indian consumer is growing in categories like apparels, cosmetics, shoes, watches, beverages, food and even jewellery The size, scope and complexity of the Indian retail industry have undergone substantial change over the past two decades, despite retailers largely operating in spaces <500 square feet in size. Indian retail is predominantly unorganised and fragmented with thousands of local brands controlled by local distributors. This structure makes it easier to let vendors list on a platform, rather than build inventory from the ground up.

Resonating the trend, the Net Sales of the Company increased by 22 % to RS.122097.32 Lac in financial year 2017-18 from RS.100062.83 Lac in financial year 2016-17. The Company has posted Operating Profits (EBITDA) of RS.13692.68 Lac in financial year 2017-18. The Company posted Profit after Tax (PAT) of RS.7770.41 Lac in the current financial year as against a PAT of RS.4390.43 Lac in the previous financial year; an increase of 77%.

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 this Annual Report.

OPERATIONS REVIEW

During the year, the Company continued with its existing approach to endeavor to establish its growth pattern in the Retail Industry with a chain of stores under the brand “V-Mart” in the north and eastern parts of India.

During the year, the Company opened 31 (Thirty One) new stores under the brand V-Mart which were spread over an area of 2.4 Lac sq. ft. The Company closed 1 (one) store during the year.

During the year under review, the Company continued to focus on enhancing the capability of the organisation and towards the achievement of this goal, the Company has been taking a number of initiatives.

AWARDS & ACHIEVEMENTS

During the year under review your Company received the following awards and recognitions:

“V-Mart was recognised by Bloomberg as the “World’s best performing department store chain this year” in April 2018.” “V-Mart was recognised by progressive Grocer as the “Value retailer of choice” in 2018”

“Chairman & Managing director of the Company, Mr. Laiit Agarwal, conferred as the ‘Retail Leader of the Year 2018’ by Franchise India”

OPERATING RESULTS AND BUSINESS

Your Company completes its sixteenth year in the field of fashion retailing. The existing business model of the Company with a focus on the consumption story based on the growing aspiration for fashion in the Tier-II and Tier-III cities continues to provide better outcome/results. And ventured into Tier-IV towns for the first time.

DIVIDENDS

The Board in its meeting held on 24th May, 2018, recommended a final dividend of RS.2/- per share (@ 20 %) excluding the dividend distribution tax, for the financial year ended 31st March, 2018 on equity shares of the Company The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting.

The proposed dividend is in line with the policy of the Company has been provided in the report of Corporate governance forming part of this Annual Report.

RESERVES

The Company during the year transferred RS.7,737.44 Lac to the general reserves. Post transfer, the general reserves stood at RS.23550.50 Lac for financial year ended on 31st March 2018

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 this Annual Report.

LISTING

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

The Company has paid the requisite listing fee to the Stock Exchanges for the financial year 2018-19.

EXTRACT 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 extracts of Annual Return in prescribed form MGT - 9 is appended as Annexure -A to this Report.

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

The Board met four times (4) during the financial year 201718, the details of which are given in Corporate Governance report that forms 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

The Board has carried out an annual evaluation of its own performance, Board Committees and the Directors individually pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 (“SEBI Listing Regulations’).

The Board and the Nomination & Remuneration committee reviewed the performance of the individual Directors on the basis of the criteria and framework adopted by the Board.

The evaluation criteria included various aspects such as, functionality of Board, compositions, process & procedures including adequate & timely information, attendance, delegation of responsibility, decision making, roles & responsibility including monitoring, benchmarking, feedback relationship with the stakeholder’s and as provided by the Guidance Note on Board Evaluation issued by SEBI on 5th January, 2017.

In a separate meeting of the Independent Directors, performance of the Non-Independent Directors, the Board as a whole and the chairman were also evaluated, basis a set out criterion.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors consists of five members, of which three are Independent Directors. The Board also comprise of one Independent Woman Director.

In pursuance of section 203 of the Companies Act, 2013, the key managerial personnel of the Company are - Mr. Lalit Agarwal, Chairman & Managing Director, Mr. Anand Agarwal, Chief Financial Officer and Ms. Megha Tandon, Company Secretary.

During year under review Mr. Deepak Sharma has resigned from the position of CFO of the Company w.e.f. 5th May, 2017 and in his place Mr. Anand Agarwal has been appointed as the new CFO of the Company w.e.f. 5th June, 2017. The Company has also appreciated the efforts made by Mr. Deepak Sharma in delivering valuable contribution towards the growth of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary disclosures from each of its three Independent Directors under Section 149(7) of the Companies Act, 2013 that he/she meets 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 the sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.

POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION

The current policy 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-B to this report.

The appointment of Directors and remuneration paid during the financial year 2017-18 was as per the provisions of the Companies Act, 2013 and as per the terms laid down in policy of Nomination & Remuneration policy of the Company.

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.

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 four Board committees namely: Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee.

A detailed note on the Board and its Committees is provided under the Corporate Governance report section which is forming part to 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 form part of this report.

The Company has also complied with disclosing the required details on the website of the Company on www.vmart.co.in which are as follows:

- Details of its business

- Composition of various Committees

PRACTISING COMPANY SECRETARY’S CERTIFICATE ON CORPORATE GOVERNANCE

As required under Schedule V, Clause E read with Regulation 34(3) and 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 ESOP Scheme, 2012 as per the applicable SEBI regulations and approved by the members at Annual General Meeting.

The Company has implemented an Employee Stock Option Scheme, which was approved by the Board of Directors and the shareholders vide resolution dated 2nd July 2012 and 10th July 2012 respectively (‘the V-Mart ESOP Scheme 2012’), consequent to which 300,000 equity shares of RS.10 each will be granted upon exercise of as stock options (ESOPs) to eligible employees. Subsequently the share holders in its meeting held on 18th September 2017 has approved the amendment in the said employee stock option scheme by increasing total number of stock option from 3 lac to 6 lac 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. The grant details under the scheme during the year are as follows:

Grants

Vesting

Time line

As on 31st March, 2018 -

30% of the Total Grant

After 12 months from the date of grant

2 grants have been made comprising

30% of the Total Grant

After 24 months from the date of grant

total 15695 options

40% of the Total Grant

After 36 months from the date of grant

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

Sr. No.

Date of Allotment

No. of shares allotted

1

03.05.2017

29195

Pursuant to the above allotment of shares, the paid up capital of the Company stands increased to RS.180,973,550/- as on 31st March, 2018.

The information required to be disclosed under SEBI (Share Based Employee Benefits) Regulations, 2014 as on 31st March, 2018 are as follows:

Particulars

Details

Date of Shareholders Approval

10th July, 2012 & 18th September, 2017

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

1,21,572

Number of options granted during the year

15,695

Number of options forfeited / lapsed during the year

10,853

Number of options vested during the year

28,556

Number of options exercised during the year

29,195

Number of shares arising as a result of exercise of options

29,195

Money realised by exercise of options (INR)

94,76,589

Number of options outstanding at the end of the year

97,219

Number of options exercisable at the end of the year

28,556

Pricing Formula

The Nomination & Remuneration Committee has been authorised to determine the exercise price of ESOPs.

Person-wise details of options granted during the Financial Year 2017-18:

Particulars Details

) Senior managerial personnel/key managerial personnel

Mr. Anand Agarwal Mr. Venugopal

No of options granted and its exercise price

Mr. Anand Agarwal: 11735 Mr. Venugopal: 3960

i) Any other employee who received a grant in any one year of options amounting to 5% or more options granted during the year

Nil

ii) Identified employees who are granted options during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant.

Nil

Fully-diluted EPS pursuant to issue of shares on exercise of options in accordance with relevant Accounting Standards

Lock-in

Nil

Impact of the difference on the profits of the Company and on the EPS

Impact on profit: RS.118.67 Lac Impact on EPS: H0.15

Difference, if any, between employee compensation cost (calculated according using the intrinsic value of stock options) and the employee compensation cost (calculated on the basis of fair value of stock options)

RS.34.43 Lacs (Market Value - exercise price as on date of grant of options)

Weighted average exercise price of options whose exercise price either equals or exceeds or is less than the market price of the stock

Exercise price exceeds market price : Not applicable Exercise price equals market price : Not applicable Exercise price is less than market price: 150

Weighted average fair values of options whose exercise price either equals or exceeds or is less than the market price of the stock

Exercise price exceeds market price : Not applicable Exercise price equals market price : Not applicable Exercise price is less than market price : 150

Method and significant assumptions used to estimate the fair value of options granted during the year

The fair market value has been calculated on the basis of the ‘Black Scholes model’.

Particulars

ESOPs Grant I

ESOPs Grant II

ESOPs Grant III

ESOPs Grant IV

ESOPs Grant V

ESOPs Grant VI

Price per option (In Rs.)

150

450

573

470

900

1260

Risk free return (In%)

8.42

8.32

8.16

7.93

7.80

7.64

Expected Life (In years)

4

4

4

4

4

4

Expected Volatility

25%

41%

38.74%

30.13%

42.48%

50.76%

Dividend Yield

0.27%

0.20%

0.20%

0.24%

0.18%

0.10%

Closing market price of share on date of option grant

210 (IPO)

539.30

615.40 (NSE) (BSE) 614.00

511.30 (NSE) (BSE) 510.00

1214.85 (NSE) (BSE) 1220.45

1413.80 (NSE) (BSE) 1419.8

EMPLOYEE STOCK OPTION DETAILS

Grant Date

Exercise price

Options granted

Options vested and exercisable

Options unvested

Options exercised

Options cancelled

Options outstanding

20th July, 2012

150

1,53,252

1,53,252

-

1,23,264

29,988

-

5th January, 2015

450

22,350

22,350

-

11,220

3,650

7,480

28th December, 2015

573

13,645

4,094

5,458

4,094

-

9,552

30th January, 2017

470

76,225

20,503

55,722

-

11,733

64,492

12th July, 2017

900

6,395

-

6,395

-

-

6,395

09th November, 2017

1260

9,300

-

9,300

--

-

9,300

Total

2,81,167

2,00,199

76,875

1,38,578

45,371

97,219

MOVEMENT OF STOCK OPTIONS DURING THE YEAR:

Total for all grants

No. of options

Range of exercise prices (K)

Weighted average exercise price (K)

Weighted average remaining contractual life (Years)

Outstanding at the beginning of the year

1,21,572

150-573

442

NIL

Granted during the year

15,695

900-1260

1,113.32

4

Forfeited/ Cancelled during the year

10,853

470

470

4

Expired during the year

NIL

NIL

NIL

NIL

Exercised during the year

29,195

150-573

324.60

NIL

Outstanding at the end of the year

97,219

450-1260

635.08

NIL

Exercisable at the end of the year

28,556

450-573

479.53

NIL

New Options added to the pool of existing shares

3,00,000

-

-

NIL

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 Managerial Personnel or other designated persons which fall under scope of Section 188 (1) of the Companies Act, 2013 and have no potential conflict with interest of the Company at large. The Company has formulated a policy on Related Party Transaction which is available on the website of the Company at the link http:// www.vmart.co.in/corporate.html. The details of related party transactions entered during the year are provided in the accompanying financial statements.

DEPOSITS

During the financial year 2017-18, your Company has not accepted any deposits within the meaning of Section 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 and other applicable laws 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, gurantees and investments covered under section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF The Company AFTER 31ST MARCH, 2018 TILL 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 and Associate Company.

REGISTERED OFFICE

Registered Office of the Company is situated at 610-611, Guru Ram Dass Nagar, Main Market, Opp. SBI Bank, Laxmi Nagar, New Delhi - 110092 w.e.f. May 7, 2015.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has constituted a Corporate Social Responsibility Committee of the Board comprising of four members, namely Mr. Lalit Agarwal (Chairman), Mr. Madan Gopal Agarwal, Mr. Aakash Moondhra, Ms. Sonal Mattoo (Members). 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 our website.

As per the Companies Act, 2013, every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any 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, in pursuance of its Corporate Social Responsibility Policy. Accordingly, your Company was required to spend RS.107.83 Lacs on CSR activities during the year.

During the year under review, your company has spent RS.11755 Lacs towards corporate social responsibility.

The annual report on CSR Activities is appended as Annexure-C 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 programmes, training/ awareness of the employees, layout of machines and prompt upkeep is a continuous exercise.

TECHNOLOGY ABSORPTION

The Company is taking care of latest development and advancements in technology and all steps are being taken to adopt the same.

CODE OF CONDUCT

The Board of Directors has 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 / behaviors of any form and the Board has laid down the directives to counter such acts. The Code has 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 behavior, 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 mechanism whereby whistle blower may send protected disclosures directly to the Chairman of Audit Committee or Vigilance Officer. The Policy is available on the website of the Company i.e. www.vmart.co.in.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate dealing in securities by the Directors and designated employees of the Company 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 employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

All Board Directors and the designated employees have confirmed compliance with the code.

RISK MANAGEMENT

Your Company is working in an open environment and hence faces various types of risk. Company has analyzed all the possible types of risk and has taken steps to cover as much as possible if the tools of risk management are reasonably priced and available. Company has a clear policy and management to cover the various risks.

HUMAN RESOURCE MANAGEMENT

We are focused to attract and retain talented skills and make them motivated through various skill-development programmes. We provide quality workplace to our employees and provide platform to develop and to grow.

The statement containing the names and other particulars of employees in accordance with section 197 (12) of the Companies Act, 2013, read with rules 5(1) & 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure-D to the Board Report.

No employee of the Company employed throughout the financial year was in receipt of remuneration of RS.1.02 Cr or more,or employed for the part of the year and in receipt of RS.8.5 Lac or more a month under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

AUDITORS

At the Annual General Meeting held on 18th September, 2017, M/s Walker Chandiok & Co. LLP, Chartered Accountants (FRN-00176N/N500013), were appointed as statutory auditors of the Company to hold office till the conclusion of the ensuring Annual General Meeting. M/s Walker Chandiok & Co. LLP, Chartered Accountants has completed their 10 years as statutory auditors of the Company, it is therefore necessary to rotate the statutory auditors by appointing new statutory auditors in place of existing auditors as per provisions of Companies Act, 2013. In terms of first proviso to Section 139 of the Companies Act, 2013 the appointment of the auditors shall be placed for appointment at sixteenth (16th) (ensuing) AGM, accordingly the appointment of M/s S.R. Batliboi & Co. LLP (ICAI Firm Registration Number: 301003E/E300005), Chartered Accountants, as Statutory Auditors of the Company, shall be placed for appointment by the shareholders to hold the office from the conclusion of ensuing Annual General Meeting until the conclusion of 21st Annual General Meeting and to fix their remuneration. In this regard, the Company has received a certificate from the auditors to the effect that if they are appointed, it would be in accordance with the provisions of Sections 141 of the Company Act, 2013.

AUDITORS REPORT

There was no observation or qualification in the Auditors Report for the financial year ended 31st March 2018. The Notes on Financial Statements referred to in the Auditors’ report are self-explanatory 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 financial year 2017-18, 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-E to the Board’s Report.

The Secretarial Audit Report does not contain any observation or adverse remark.

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, the 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 Company has successfully laid down the framework and ensured its effectiveness. V-Mart has a well-defined delegation of power with authority limits for approving revenue as well as expenditure. V-Mart has also well-defined processes for formulating and reviewing long term and business plans. V-Mart will continue its efforts to align its processes and controls with global best practices.

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 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: 6

(b) Number of complaints disposed off during the year: 6

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

(d) Number of workshops on awareness program against sexual harassment carried out: 1

(e) Nature of action taken by the employer or district officer: Appropriate Action taken by the Company.

INCIDENT OF FRAUD

No significant 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 dividend 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.vmart.co.in

BUSINESS RESPONSIBILITY REPORT

As stipulated in term of the provisions of Regulation 34 of SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 the Business Responsibility 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.

DIVIDEND DISTRIBUTION POLICY

As per Reg 43A of the SEBI (Listing obligations and Disclosures Requirements) Regulations 2015 (‘the listing regulations’), the top 500 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 enclosed as Annexure to the Board’s Report and is also available on the Company’s website.

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.

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 had 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 had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Director wish to express their gratitude and appreciation to all customers, employees, business associates, suppliers, bankers, financials, institutes, state and central goverment for their continue support and contribution in the growth of the Company.

By order of the Board

For and on behalf of Board of Directors

Lalit Agarwal

Place: Gurugram Chairman & Managing Director

Date: 24th May, 2018 DIN: 00900900

Director’s Report