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Directors Report of V-Mart Retail Ltd.

Mar 31, 2022

Your Company''s Directors are pleased to present the 20^th 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:

â¢ Established a marketing property i.e. âfashion ka pyar, har tyoharâ as the sole communication icon to bind all our festival- related communication.

â¢ Launched Digital Video film- âBreak Free Live freeâ, to celebrate the unlocked period enabling people to come

out, wear fashion and celebrate it. This was clubbed with Summer, Holi and Eid festivals.

â¢ Initiated upgradation of the communication standards, moved up from Limbo photoshoot style to proper outdoor shoot for AW â21 & 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 âHappiness 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 âonline for offline'' proposition that is crafted to:

â¢ Create digital user journeys that deliver convenience and discoverability of digital presence and payments to the existing offline customers.

â¢ Drive volumes of digital orders from all digital channels, including marketplaces, directly to physical stores and win customers by achieving SLAs.

â¢ 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.

â¢ 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:

â¢ Consumer insights led category strategy

â¢ Pre-season planning

â¢ Strategic sourcing of apparel and input material nomination

â¢ In-season planning & execution

â¢ Process design & capability augmentation

DIVIDENDS

In terms of Dividend Distribution policy, your Directors in its meeting held on Wednesday, the 25^th 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.

â¢ V-Mart Certified as India''s Best Workplace in Retail, 2022 - by Great Place to Work supported by RAI

â¢ 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	INE665J01013
BSE	534976

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 DIRECTORâS 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 (âSEBI Listing Regulationsâ).

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:

â¢ Details of its business

â¢ Composition of various Committees

PRACTISING COMPANY SECRETARYâS 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 (âthe 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 (âthe 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:
Scheme	Grants	Vesting	Timeline
V-Mart ESOP Scheme 2012	During the financial year 2021-	30% of the total grant	After 12 months from the date of grant
	22 - 1 grant has been made	30% of the total grant	After 24 months from the date of grant
	comprising a total of 705 options	40% of the total grant	After 36 months from the date of grant
V-Mart ESOP Scheme 2020	During the financial year 2021-	10% of the total grant	After 12 months from the date of grant
	22 - 2 grants have been made	20% of the total grant	After 24 months from the date of grant
	comprising a total of 20,780	30% of the total grant	After 36 months from the date of grant
	options	40% of the total grant	After 48 months from the date of grant

Details of equity shares allotted under ESOP Scheme 2012 during the year are 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	âBlack 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 BOARDâS 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:

â¢ 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.

â¢ 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.

â¢ 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.

â¢ 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.

â¢ 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.

â¢ 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.

â¢ 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.

â¢ 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.

â¢ Further, installed 150 additional motion sensors to control lights in storage area, racks and washroom, saving 7 KW of energy daily.

â¢ Replacing the old machinery and devices with highly energy efficient 5 star rated devices.

â¢ 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:

â¢ 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

â¢ Implementation of a Transporter Management system for outbound process;

â¢ INFOR WMS a scalable, Tier-1 advanced warehouse management system for inventory, labor management and 3PL invoicing implemented for Bangalore warehouse of the Company;

â¢ Implemented Warehouse Control System (WCS) for segregation for stores returns (with logic SKU, Article, option and Multi season wise);

â¢ Rule Engine Upgraded and implementation for Inventory Replenishment at stores.

Cyber Security:

â¢ 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 :

â¢ Integrating Increff WMS which provides a single view of inventory across all marketplaces and a seamless order inventory for online orders;

â¢ Integration with marketplaces such as Amazon, Myntra and brand.com;

â¢ Implemented Omuni for south stores for Online sales;

â¢ Development of an In-house Product Information Management Tool.

Financial, Operations and Analytics:

â¢ Payment processing automated via Host to Host integration with bank for faster payment processing & reduced human intervention;

â¢ Centralized barcode re-printing tool for stores;

â¢ Upgradation of Tableau Dashboard for business KPIs;

â¢ In-house development and maintenance of coupon engine;

â¢ 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.

FOREIGN EXCHANGE EARNINGS AND OUTGO
Sr.	Particulars	Foreign Exchange	Foreign Exchange
no		Earning	Outgo
		(Amount in '')	(Amount in '')
	Nil	Nil	Nil

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 âZero Toleranceâ 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 (âthe listing regulationsâ), 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:

â¢ Mr. Murli Ramachandran (Chairperson),

â¢ Mr. Aakash Moondhra (Member),

â¢ Ms. Sonal Mattoo (Member) and

â¢ 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 16^th Annual General Meeting held on June 29, 2018 until the conclusion of 21^st 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)

DIRECTORâS 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.

Mar 31, 2018

Dear Members,

The Companyâs Directors are pleased to present the 16^th Annual Report of the Company, along with Audited Accounts, for the financial year ended 31^st 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 31^st March 2018	For the year ended 31^st 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 31^st 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)â	717.60
Total	9,140.70

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

(Rs. in Lacs)

Particulars	Utilisation planned as per prospectus	Utilisation of IPO proceeds as on 30^th September, 2015	Adjustments (utilisation of surplus towards other objects)	Balance amount to be utilised as on 31^st 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 countryâs 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 sectorâs 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 countryâs 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 Companyâs 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 âV-Martâ 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:

âV-Mart was recognised by Bloomberg as the âWorldâs best performing department store chain this yearâ in April 2018.â âV-Mart was recognised by progressive Grocer as the âValue retailer of choiceâ in 2018â

âChairman & Managing director of the Company, Mr. Laiit Agarwal, conferred as the âRetail Leader of the Year 2018â by Franchise Indiaâ

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 24^th May, 2018, recommended a final dividend of RS.2/- per share (@ 20 %) excluding the dividend distribution tax, for the financial year ended 31^st 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 31^st 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 (âSEBI Listing Regulationsâ).

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 stakeholderâs and as provided by the Guidance Note on Board Evaluation issued by SEBI on 5^th 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. 5^th May, 2017 and in his place Mr. Anand Agarwal has been appointed as the new CFO of the Company w.e.f. 5^th 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 DIRECTORâS 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 Directorâs 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 Companyâs 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

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 auditorsâ 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 SECRETARYâS 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 Secretaryâs 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 2^nd July 2012 and 10^th July 2012 respectively (âthe V-Mart ESOP Scheme 2012â), 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 18^th 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 31^st 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 31^st March, 2018.

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

Particulars	Details
Date of Shareholders Approval	10^th July, 2012 & 18^th 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 âBlack Scholes modelâ.

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
20^th July, 2012	150	1,53,252	1,53,252	-	1,23,264	29,988	-
5^th January, 2015	450	22,350	22,350	-	11,220	3,650	7,480
28^th December, 2015	573	13,645	4,094	5,458	4,094	-	9,552
30^th January, 2017	470	76,225	20,503	55,722	-	11,733	64,492
12^th July, 2017	900	6,395	-	6,395	-	-	6,395
09^th 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 armâs 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 31^ST MARCH, 2018 TILL THE DATE OF BOARDâS 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 âZero Toleranceâ 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 Companyâs 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 Companyâs 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 Companyâs 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.

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 18^th 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 (16^th) (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 21^st 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 31^st March 2018. The Notes on Financial Statements referred to in the Auditorsâ 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 Boardâs 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 Companyâs 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 Companyâs operations in future during the year under review.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

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

(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 (âthe listing regulationsâ), 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 Boardâs Report and is also available on the Companyâs website.

SECRETARIAL STANDARDS

DIRECTORâS 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.

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: 24^th May, 2018 DIN: 00900900

Mar 31, 2017

Dear Members,

The Companyâs Directors are pleased to present the 15th Annual Report of the Company, along with Audited Accounts, for the financial year ended 31st March, 2017.

FINANCIAL RESULTS

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

(Rs. in Lacs)

Particulars	For the year ended 31.3.2017	For the year ended 31.3.2016
Revenue	100481.54	81042.54
Profits/(Loss) before Depreciation & Tax	8214.76	6132.64
Less: Depreciation	2202.02	1901.44
Less: Tax Expense	2060.04	1467.95
Prior period items-(income)/expenses	-	19.46
Net profit for the period	3952.70	2763.25
Less: Utilized for Dividend Issue	-	226.42
Balance carried forward to Balance Sheet	3952.70	2536.83

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 utilization of proceeds raised through the IPO by the Company as on 31st March, 2017 as referred above are as follows:

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

Particulars	(Rs. in lac)
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 utilization of the afore-mentioned means of finance as on 31st March 2017 is as under:

(Rs. in Lacs)

Particulars	Utilization planned as per prospectus	Utilization of IPO proceeds as on 30th September, 2015	Adjustments (utilization of surplus towards other objects)	Balance amount to be utilized as on 31st March, 2017
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 industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. It accounts for over 10 per cent of the countryâs Gross Domestic Product (GDP) and around 8 percent of the employment. India is the worldâs fifth-largest global destination in the retail space.

As per recent studies, the Indiaâs retail market is expected to nearly double to US$ 1 trillion by 2020 from US$ 600 billion in 2015, driven by income growth, urbanization and attitudinal shifts. While the overall retail market is expected to grow at 12 per cent per annum, modern trade may expand twice as fast at 20 per cent per annum and traditional trade at 10 per cent.

Resonating the trend, the Net Sales of the Company increased by 23.82 % to RS.1000.62 crores in FINANCIAL YEAR 2016-17 from RS.808.16 crores in F.Y. 15-16. The Company has posted Operating Profits (EBITDA) of RS.85.67 crores in F.Y. 16-17. The Company posted Profit after Tax (PAT) of RS.39.52 crores in the current financial year as against a PAT of RS.27.63 crores in the previous financial year; an increase of 11.89%.

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 âV-Martâ brand in the north and eastern part of India.

During the year, the Company opened 20 (Twenty) new stores under the brand V-Mart which were spread over an area of 1.80 lacs sq. ft. The Company closed two stores during the year.

During the year under review, the Company continued to focus on enhancing the capability of the organization 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 award and recognitions: âIndiaâs No. 1 Brand Awards 2016 in Indiaâs Best Retail Fashion Store Chain category.

OPERATING RESULTS AND BUSINESS

Your Company completes its fifteenth 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.

DIVIDENDS

The Board in its meeting held on 3rd May, 2017, recommended a dividend of RS.1.25/- per share (@12.50%) excluding the dividend distribution tax, for the financial year ended 31st March, 2017 on equity shares of the Company. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting.

RESERVES

The Company during the year transferred RS.39.53 crores to the general reserves. Post transfer, the general reserves stood at RS.252.27 crores for financial year 2016-17.

MANAGEMENT DISCUSSION AND ANALYSIS

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 2017-18.

EXTRACT OF ANNUAL RETURN

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 five times (5) during the financial year 16-17, 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 and the Nomination & Remuneration committee reviewed the performance of the individual Directors on the basis of the criteria and framework adopted by the Board.

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 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. Deepak Sharma*, Chief Financial Officer and Ms. Megha Tandon, Company Secretary.

Further, during the year, Mr. Sudhir Kumar, Company Secretary of the Company resigned from the Company w.e.f. 13th January, 2017. The Company has appreciated his efforts in delivering valuable contribution towards the Company and appointed Ms. Megha Tandon, as Company Secretary of the Company w.e.f. 30th January, 2017.

*Further to inform that Mr. Deepak Sharma has resigned from the position of CFO of the Company w.e.f. 6th 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

POLICY ON DIRECTORâS 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 appointment of Directors and remuneration paid during the financial year 2016-17 is 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

The details of familiarization 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. Lalit 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 auditorsâ 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 SECRETARYâS 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 Secretaryâs 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 2 July 2012 and 10 July 2012 respectively (âthe V-Mart ESOP Scheme 2012â), consequent to which 300,000 equity shares of RS.10 each will be granted upon exercise of 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 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 March 31,2017 -	30% of the Total Grant	After 12 months from the date of grant
4 grants have been made comprising	30% of the Total Grant	After 24 months from the date of grant
total 265,472 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	05th August 2016	1464

Pursuant to the above allotment of shares, the paid up capital of the Company stands increased to RS.180,681,600/- as on 31st March, 2017.

The information required to be disclosed under SEBI (Share Based Employee Benefits) Regulations, 2014 as on 31st March, 2017 are as follows:

Particulars	Details
Date of Shareholders Approval	10th July, 2012
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	51341
Number of options granted during the year	76225
Number of options forfeited / lapsed during the year	3650
Number of options vested during the year	10153
Number of options exercised during the year	1464
Number of shares arising as a result of exercise of options	1464
Money realized by exercise of options (INR)	RS.219600
Number of options outstanding at the end of the year	122452
Number of options exercisable at the end of the year	29196
Pricing Formula	The Nomination & Remuneration Committee has been authorized to determine the exercise price of ESOPs.

Person-wise details of options granted during the Financial Year 2016-17:

Particulars	Details
i) Senior managerial personnel/key managerial personnel	Mr. Deepak Sharma, Mr. Venugopal, Mr. Rajan Sharma Mr. Ramesh K Agarwal Mr. M Srnivasan Mrs. Anjali Goel Mr. Snehal Shah Mr. Dinesh Srivastava
No of options granted and its exercise price	Mr. Rajan Sharma - 8540
	Mr. Deepak Sharma - 7230
	Mr. Snehal Shah - 5430
	Mr. Venugopal - 2940
	Mr. Ramesh K Agarwal - 2050
	Mrs. Anjali Goel - 1930
	Mr. M Srnivasan - 1470
	Mr. Dinesh Srivastava - 2340
ii) Any other employee who received a grant in any	Nil
one year of options amounting to 5% or more options
granted during the year
iii) Identified employees who are granted options	Nil
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.

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.7.02 lacs /-Impact on EPS: RS.0.06
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)	H (31.69) lacs
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 âBlack Scholes modelâ.
	Particulars	ESOPs Grant I	ESOPs Grant II	ESOPs Grant III	ESOPs Grant IV
	Price per option (In H)	150	450	573	470
	Risk free return (In%)	8.42	8.32	8.16	7.93
	Expected Life (In years)	4	4	4	4
	Expected Volatility	25%	41%	38.74%	30.13%
	Dividend Yield	0.27%	0.20%	0.20%	0.24%
	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

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	-	1,09,382	29,988	13,882
5th January, 2015	450	22,350	13,410	8,940	-	3,650	18,700
28th December, 2015	573	13,645	4,094	9,551	-	-	13,645
30th January, 2017	470	76225	-	-	-	-	76,225
Total		265472	1,70,756	18,491	1,09,382	33,638	1,22,452

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	51,341	150-573	393	NIL
Granted during the year	76,225	470	470	4
Forfeited/ Cancelled during the year	3,650	450	450	4
Expired during the year	NIL	NIL	NIL	NIL
Exercised during the year	1,464	150	150	NIL
Outstanding at the end of the year	1,22,452	150-573	442	NIL
Exercisable at the end of the year	29,196	150-573	440	NIL

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on armâs 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 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 F.Y.2016-17, 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.

The Company has not given any loan or guarantees covered under the provisions of Section 186 of the Companies Act, 2013.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY BETWEEN 31ST MARCH, 2017 AND THE DATE OF BOARDâS REPORT

SUBSIDIARY COMPANIES, JOINT VENTURES & ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint Venture and Associate Company.

REGISTERED OFFICE

Registered Office 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 crores or more, or turnover of rupees one thousand crores or more or a net profit of rupees five crores 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 our Company was requires to spend RS.88.92 lac on CSR activities during the year.

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

JUSTIFICATION FOR NOT SPENDING THE PRESCRIBED AMOUNT ON CSR ACTIVITIES

In order to spend the average of 2% of Average Net profits of preceding three financial years, the CSR committee had number of meetings to meet these criteria so that our society will get maximum benefit out of it. Many suggestions were discussed and implemented and many more proposals are on the table to discuss and will be implemented soon. Our objective is to reach large number of people and to provide a much needed support to the needy section of our society particularly in the area of education, women empowerment. Capacity building of disabled persons, enhance vocational skills, enhance heritage, to improve livelihood of rural families.

For this reason, during the year, the Companyâs spend on the CSR activities has been less than the limits prescribed under Companies Act, 2013. The CSR activities are scalable which coupled with new initiatives that may be considered in future, moving forward the Company will endeavor to spend on CSR activities in accordance with the prescribed limits.

Hence, all efforts are being made to ensure that the entire amount which is required to be spent under CSR is spent for such activities.

CONSERVATION OF ENERGY

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 âZero Toleranceâ 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 Companyâs 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 Companyâs Code of Conduct or ethics policy and provide adequate safeguards against victimization of the person availing this mechanism. This Policy has been appropriately communicated within the organization 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 Companyâs 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

HUMAN RESOURCE MANAGEMENT

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 lakhs 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 23rd September, 2014, M/s Walker Chandiok & Co. LLP, Chartered Accountants, were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of first proviso to Section 139 of the Companies Act, 2013 the appointment of the auditors shall be placed for appointment at fifteenth (15th) ensuing AGM, accordingly the appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants, Chartered Accountants, as Statutory Auditors of the Company, shall be placed for re-appointment by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Sections 141 of the Companies Act, 2013.

AUDITORS REPORT

There was no observation or qualification in the Auditors Report for the financial year ended 31st March 2017. The Notes on Financial Statements referred to in the Auditorsâ report are self-explanatory and therefore do not require any further comments.

SECRETARIAL AUDITOR & REPORT

M/s. VKC & Associate Company Secretaries, a partnership firm was appointed as Secretarial Auditors to conduct the Secretarial Audit of the Company for the FY 2016-17, 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 Boardâs Report.

Further, we wish to inform you that during the year the Company has appointed M/s. V.K. Chaudhary & Co as Secretarial Auditor of the Company, but due to internal restructuring of M/s. V.K. Chaudhary & Co, all the business and assignment of M/s. V.K. Chaudhary & Co carried out by M/s VKC & Associates (Company Secretaries) a partnership firm registered with the ICSI with effect from 1st April 2017. Consequent to this, M/s V.K. Chaudhary & Co had tendered their resignation as the Secretarial Auditor and in their place M/s VKC & Associates has been appointed to undertake the Secretarial Audit of the Company for the FY 2016-17.

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

INTERNAL FINANCIAL CONTROL

SIGNIFICANT AND MATERIAL ORDERS

There was no such order passed by the regulators or courts or tribunals impacting the going concern status and Companyâs operations in future during the year under review.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

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: 03

(b) Number of complaints disposed off during the year: 03

(d) Number of workshops on awareness program against sexual harassment carried out: 01

(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, except for certain cases of misappropriation of Inventory at certain stores by employees of the Company, identified by the management as stated. In Note 48 to the financial statements, impact of which is not ascertainable separately, and is included in âStocks written off âdisclosed under âPurchase of stock-in-tradeâ under Note 26 to the financial statements. Further, out of such write offs, an amount of RS.17.33 lacs (approx.) has been specifically identified pertaining to misappropriation of inventory by certain employees of the Company at certain stores, who have since left the Company and the management has initiated necessary legal action against such erstwhile employees.

INVESTORS EDUCATION & PROTECTION FUND (IEPF)

DIRECTORâS 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.

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 Directors take this opportunity to express their sincere appreciation for the excellent support and co-ordination extend by the shareholders, customers, suppliers, bankers and other business associates. Your Directors gratefully acknowledges ongoing co-operation and support provided by Central Government and State Government and all regulatory authorities. Your Directors also place on records their appreciation for the contribution made by employees at all levels.

By the order of Board

For and on behalf of Board of Directors

Lalit Agarwal

Place: Gurugram Chairman & Managing Director

Date: 3rd May, 2017 DIN: 00900900

Mar 31, 2016

We are pleased to present the 14th annual report of the Company for the year ended 31st March, 2016.

FINANCIAL RESULTS

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

(Hin lacs)

Particulars	For the year ended 31st March, 2016	For the year ended 31st March, 2015
Revenue	81042.54	72,239.84
Profits/(Loss) before Depreciation & Tax	6132.64	5989.56
Less: Depreciation	1901.44	456.54
Less: Provision for Tax	1467.95	1796.31
Prior period items-(income)/expenses	19.46	(7.38)
Net profit for the period	2763.25	3,736.71
Less: Utilized for Dividend Issue	226.42	270.24
Balance carried forward to Balance sheet	2536.83	3466.47

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 utilization of proceeds raised through the IPO by the Company as on 31st March, 2016 as referred above are as follows:

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

Particulars	(H 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 utilization of the afore-mentioned means of finance as on 31st March, 2016 is as under: ,

(Rs,in lacs)

Particulars	utilization planned as per prospectus	utilization of IPO proceeds as on 31st March, 2016	Adjustments (utilization of surplus towards other objects)	Balance amount to be utilized as on 31st March, 2016
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

* Surplus available after actual expenses incurred will be utilized towards other objects of the issue.

Performance REVIEW

The Retail Sector has been at the helm of India''s growth story. The sector has evolved dramatically from traditional village fairs, street hawkers to resplendent malls and plush outlets, growing from strength to strength.

According to a recent study, by 2018, the Indian retail sector is likely to grow at a CAGR of 13 per cent to reach US$ 950 billion. The reports added overall retail market is expected to grow at 12 per cent per annum, modern trade would expand twice as fast at 20 per cent per annum and traditional trade at 10 per cent. The sector is experiencing exponential growth, with retail development taking place not just in major cities and metros, but also in Tier-II and Tier-III cities.

Considering the case, the Net Sales of the Company increased by 12% to Rs. 808.16 crores in FY 2015-16 from Rs. 718.98 crores in FY 2014-15. The Company has posted Operating Profits (EBITDA) of Rs. 61.96 crores in FY 2015-16. The Company posted Profit after Tax (PAT) of Rs. 27.63 crores in the current financial year as against the Profit after Tax of Rs. 37.37 crores in the previous financial year.

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 "V-Mart" brand in the Retail Industry.

During the year, the Company opened 17 (Seventeen) new stores under the brand V-Mart with spread over an area of 1.48 lacs sq. ft. The Company closed two stores during the year.

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

AWARDS & ACHIEVEMENTS

Your Company is delighted to receive the below stated recognitions and awards during the year:

1) "One of the Fastest Growing Companies by Outlook Business Magazine during the year 2016"

2) "India''s No. 1 Brand Awards 2016 under Best Retail Format Store Chain Category by IBC InfoMedia,a Division of International Brand Consulting Corporation, New Jersey, USA"

OPERATING RESULTS AND BUSINESS

Your Company completes its fourteenth 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.

DIVIDEND

The Board in its meeting held on 27th May, 2016, recommended a final dividend of Rs 0.10/- per equity share (@1%) excluding the dividend distribution tax, which is to be paid out of the profits of the Company for the financial year ended 31st March, 2016 on equity shares of the Company, subject to approval of shareholders at the ensuing Annual General Meeting.

The Board in its meeting held on 17th March, 2016 has also declared an interim dividend of Rs. 1.15/- per equity share (@11.50%) excluding the dividend distribution tax, which has been paid out of the profits of the Company for the financial year ended 31st March, 2016. The Interim Dividend was paid to the shareholders of the Company as per the record date of 29th March, 2016.

RESERVES

The Company during the year transferred Rs. 25 crores to the general reserves. Post transfer, the general reserves of the Company stood at Rs. 212.65/- crores for FY. 2015-16.

MANAGEMENT DISCUSSION AND ANALYSIS

LISTING

The equity shares of your Company continues 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 2016-17.

EXTRACT OF ANNUAL RETURN

CORPORATE GOVERNANCE

Pursuant to the provisions of the SEBI (Listing Obligations and Disclosure 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 five times during the FY 2015-16, 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 time 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 Securities and Exchange Board of India (Listing Obligations and Disclosure 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 responsibilities, decision-making, roles & responsibilities including monitoring, benchmarking, feedback, relationship with the stakeholder''s.

In a separate meeting of the Independent Directors, performance of the Non-Independent Directors, the Board as a whole and the Chairman were evaluated.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors consists of five members, of which three are Independent Directors. The Board also comprises of One Women Director.

In pursuance of section 149 of the Companies Act, 2013 Mr. Murli Ramachandran and Ms. Sonal Mattoo, were appointed as the Independent Directors of the Company for a term of 5 years at the Annual General Meeting of the Company held on 29th September, 2015.

Further, during the year, Mr. Hemant Agarwal, Non-Executive Director of the Company resigned from the office of director w.e.f. 17th March, 2016. The Board appreciated his efforts in delivering excellent and valuable contribution towards the Company.

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. Deepak Sharma, Chief Financial Officer and Mr. Sudhir Kumar, Company Secretary.

Further, there has been no change in the key managerial personnel during the period under review.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary disclosures from each of its 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 directors 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 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 includes the criteria for determining the qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of Section 178 which is hereby appended as Annexure-B to this report.

The appointments of the Directors and remuneration paid during the financial year 2015-16 is as per the provisions of the Companies Act, 2013 and as per the terms laid down in 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 the inductees about the Company''s strategy, operations, product and market, finance, risk management.

The details of familiarization programme have been provided under the 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 (DIN 02249947), Director of the Company is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for re-appointment.

The necessary resolution for obtaining approval of the Members has been incorporated in the notice of the ensuing Annual General Meeting. The Company has received requisite disclosures and undertakings from the Directors in compliance with the provisions of the Companies Ac, 2013.

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 has been provided under the Corporate Governance report section which is forming part to this Report.

DISCLOSURE REQUIREMENTS

As per SEBI Listing Regulations, corporate governance report with practicing Company Secretary certificate thereon and management discussion and analysis are attached, which form part of this report.

The Company have also complied with disclosing the required

â¢ Details of its business

â¢ Composition of various committees

PRACTISING COMPANY SECRETARY''S CERTIFICATE ON CORPORATE GOVERNANCE

As required under Schedule V Clause E to the Listing Regulations and read with the 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 which is commonly referred to as ''the V-Mart ESOP Scheme 2012'', pursuant to which 300,000 equity shares of ''10 each will be granted upon exercise of 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 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,	30% of the Total	After 12 months
2016 - 3 grants	Grant	from the date of
have been made		grant
comprising total	30% of the Total	After 24 months
1,89,247 options	Grant	from the date of
		grant
	40% of the Total	After 36 months
	Grant	from the date of
		grant

sr. No.	Date of allotment	No. of shares allotted
1	4th May, 2015	14,237
2	3rd August, 2015	24,687
3	9th February, 2016	12,083

Pursuant to the above allotment of shares, the paid up share capital of the Company stands increased to Rs. 18,06,66,960 as on 31st March, 2016.

The information required to be disclosed under SEBI (Share Based Employee Benefits) Regulations, 2014 as on 31st March, 2016 are as follows:

Particulars	Details
Date of Shareholders Approval	10th July, 2012
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	90,477
Number of options granted during the year	13,645
Number of options forfeited / lapsed during the year	1,774
Number of options vested during the year	68,006
Number of options exercised during the year	51,007
Number of shares arising as a result of exercise of options	51,007
Money realized by exercise of options (INR)	76,51,050
Number of options outstanding at the end of the year	51,341
Number of options exercisable at the end of the year	22,051
Pricing Formula	The Nomination & Remuneration Committee has been authorized to determine the exercise price of ESOPs.
Person-wise details of options granted during the FY 2015-16:
i) Senior Managerial Personnel/Key Managerial Personnel	Mr. M. Srinivasan Vice-President- SCM & Planning
No of options granted and its exercise price	8860 Options exercisable at a Price of Rs. 573/- per option
ii) Any other employee who received a grant in any one year of options amounting to 5% or more options granted during the year	Nil
iii) 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	15.31
Lock-in	Nil
Impact on profits and EPS of the last three years	Impact on profit: Rs. 30,98,600/- Impact on EPS: 0.17
Impact of the difference on the profits of the Company and on the EPS	Impact on profit: Rs. 30,98,600/- Impact on EPS: 0.17

Particulars	Details
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)	There is no difference between employee compensation cost using intrinsic value of stock options and fair value of stock 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'', Details are as follows:
	Particulars	esop Grant i	esop Grant ii	esop Grant iii
	Price per option (In Rs.)	150	450	573
	Risk free return (In%)	8.42	8.32	8.16
	Expected Life (In years)	4	4	4
	Expected Volatility	25%	41%	38.74%
	Dividend Yield	0.27%	0.20%	0.20%
	Closing market price of share on date of option grant	210 (IPO)	539.30	615.40 (NSE) 614.00 (BSE)

EMPLOYEE STOCK OPTIONS 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	-	1,07,918	29,988	15,346
5th January, 2015	450	22,350	6,705	15,645	-	-	22,350
28th December, 2015	573	13,645	-	13,645	-	-	13,645
Total		1,89,247	1,59,957	29,290	1,07,918	29,988	51,341

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	90,477	150-450	224.11	Nil
Granted during the year	13,645	573	573	4
Forfeited/ Cancelled during the year	1,774	150	150	4
Expired during the year	Nil	Nil	Nil	Nil
Exercised during the year	51,007	150	150	Nil
Outstanding at the end of the year	51,341	150-573	150	Nil
Exercisable at the end of the year	22,350	150-450	241.22	Nil

related party transactions

All related party transactions that were entered into during the 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 which may have 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 FY2015-16, your Company has not accepted any deposits from the public 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.

The Company has not given any loan or guarantees covered under the provisions of Section 186 of the Companies Act, 2013.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY BETWEEN 31ST MARCH, 2016 AND THE DATE OF BOARD''S REPORT

There have been no such material changes and commitments which can affect the financial position of the Company which have occurred between the end of the financial and the date of this report.

SUBSIDIARY COMPANIES, JOINT VENTURES & ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint Venture and Associate Company.

REGISTERED OFFICE

During the year, the Company has shifted its Registered Office pursuant to the provision of Section 12 of the Companies Act, 2013 within the state of Delhi itself.

The Company has shifted its Registered Office at 610-611, Guru Ram Dass Nagar, Main Market, Opp. SBI Bank, Laxmi Nagar, New Delhi - 110092 w.e.f. 7th May, 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 and Ms. Sonal Mattoo (Members). The Committee is inter-alia 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 crores or more, or turnover of rupees one thousand crores or more or a net profit of rupees five crores 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.7,903,840/- on the CSR activities during the year.

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

JUSTIFICATION FOR NOT SPENDING THE PRESCRIBED AMOUNT ON CSR ACTIVITIES

In order to reach out a large number of people and to provide a much needed support to the poor/needy people particularly in the areas focused towards Capacity building of the differently abled person, Education, Women empowerment, the company has been actively engaged in carrying out a detailed survey/ analysis so that the needy people could be identified and the relevant steps may be initiated to give relief/support to them.

Further, the amount as was required to be spend on the CSR activities (detailed out in the annexure) could not be spent out entirely as, some of the activities in the areas of Capacity building of the differently abled person, Education, Women empowerment, employment enhancing vocational skills are on-going and multi-year projects.

Hence, all efforts are being made to ensure that the entire amount which is required to be spent under CSR is actually spent for such activities.

CONSERVATION OF ENERGY

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 the 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 a report concern about any unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy and provide adequate safeguards against victimization of the person availing this mechanism. This Policy has been appropriately communicated within the organization 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

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate the dealing in its securities by the Directors and the designated employees of the Company. The Code requires preclearance 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 Members and the designated employees have confirmed compliance with the code.

RISK MANAGEMENT

HUMAN RESOURCE MANAGEMENT

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. 60 Lakhs or more, or employed for the part of the year and in receipt of Rs. 5 lakhs or more a month under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, except Mr. Lalit Agarwal, Chairman & Managing Director of the Company.

AUDITORS

At the Annual General Meeting held on 23rd September, 2014, M/s Walker Chandiok & Co. LLP, Chartered Accountants, were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of first proviso to Section 139 of the Companies Act, 2013 the appointment of the auditors shall be placed for ratification at every AGM, accordingly the appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company, shall be placed for ratification by the shareholders in the ensuing Annual General Meeting. In this regard, the Company has received a certificate from the auditors to the effect that the ratification of their appointment, if made, would be in accordance with the provisions of Sections 141 of the Companies Act, 2013.

AUDITORS REPORT

There are no observation or qualifications in the Auditors Report for the financial year ended 31st March, 2016. The Notes on Financial Statements referred to in the Auditors'' report are self-explanatory and therefore do not require any further comments.

SECRETARIAL AUDITORS & REPORT

M/s. V K Chaudhary & Co., Company Secretaries, was appointed as the Secretarial Auditors to conduct the Secretarial Audit of the Company for the Financial Year 2015-16, 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 this 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. These controls have been designed to provide reasonable assurance with regard to 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.

SIGNIFICANT AND MATERIAL ORDERS

There was no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a Sexual Harassment Policy in compliance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committees (ICC) have been set up to redress complaints regarding sexual harassment,

The disclosure 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: 3

(b) Number of complaints disposed off during the year: 3

(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

The statutory Auditors of the Company has reported the following incident of fraud to the Audit Committee of the Company during the period under review:

sr. No.	Brief Facts	Action Taken	Nature of Fraud	Amount involved in the Fraud
1	Mr. Manmohan Singh, was designated as Retail Coordinator (RC) - UP1. He was responsible for approval of expenses under his region. Retail Coordinator (RC) - UP1 was found involved in some unethical/fraud related activities.	The RC has been terminated from the services of the Company & the money has been recovered from him.	Financial Fraud	Approx Rs. 75,000/-

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.

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 Directors take this opportunity to express their sincere appreciation for the excellent support and co-ordination extended by the shareholders, customers, suppliers, bankers and other business associates. Your Directors gratefully acknowledge the ongoing co-operation and support provided by the Central Government and State Government and all regulatory authorities. Your Directors also place on record their appreciation for the contribution made by employees at all levels.

By the order of Board For and on behalf of Board of Directors

Lalit Agarwal

Place: Gurgaon Chairman & Managing Director

Date: 27th May, 2016 DIN: 00900900

Mar 31, 2015

We are pleased to present the 13th annual report of the Company for the year ended 31st March, 2015.

FINANCIAL RESULTS

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

(Rs. in lacs)

For the year ended For the year ended

Revenue 72,239.84 57,567.30

Profits/(Loss) before Depreciation & Tax 6,171.31 4,871.72

Less: Depreciation 456.54 1,089.44

Less: Provision for Tax 1,858.09 1,266.56

Profits/(Loss) before Appropriation 3,736.71 2,515.72 Prior period items

Profit before Appropriation 3,736.71 2,515.72

Less: Utilized for Dividend Issue 270.23 265.44

Balance carried forward to Balance Sheet 3,649.45 2,250.28

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 initial public offer of the Company was subscribed 1.19 times. While the Qualified Institutional Buyer''s portion in the offer was subscribed 1.52 times, the Non-Institutional Investors and Retail Investors segments were subscribed 1.39 and 0.79 times, respectively, your Directors wish to express their sincere appreciation for your support in this regard.

The means of finance for the objects of IPO and status of utilization of proceeds raised through the IPO by the Company as on 31st March, 2015 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 utilization of the aforementioned means of finance as on 31st March, 2015 is as under:

(Rs.in lacs)

Utilization Particulars planned as Utilization of IPO Adjustments Balance amount to be per prospectus proceeds as on (utilization of surplus utilized as on 31st March, 2015 towards other objects) 31st March, 2015

To open new stores 6,970.40 (6,585.81) 6.60 391.19

Expansion of 438.70 (287.26) - 151.44 distribution centre

Working capital 1,000.00 (1,000.00) - -

Share issue expenses 731.60 (725.00) (6.60)* -

Total 9,140.70 (8,598.07) - 542.63

* Surplus available after actual expenses incurred will be utilized towards other objects of the issue.

Interim utilization of balance IPO proceeds up to 31st March, 2015 is as under:

Particulars (Rs. in lacs)

Balance unutilized amount assuming 542.63 utilization is out of IPO proceeds:

Amount temporary kept in mutual funds: Mutual funds 542.63

PERFORMANCE REVIEW

The Indian retail industry is one of the fastest growing markets in the world due to sound fundamentals such as stable economic growth, favourable demographic profile and rising per capita income. Retail industry in India is expected to grow to US$ 950 billion by 2018, registering a compound annual growth rate (CAGR) of 8.9 percent during 2000-2018. The online retail market is expected to grow from US$ 3.1 billion to US$ 22 billion (from 10 percent to more than 15 percent of the organized retail market) during FY13-FY18.

During the year, the Net Sales of the Company increased by 25% to Rs.718.98 crores in FY14-15 from Rs.574.95 crores in FY13-14. The Operating Profits (EBITDA) has been increased by 25% to H66.02 crores in FY14-15 from H52.96 crores in FY13- 14. The Company posted Profit after Tax (PAT) of H37.37 crores in the current FY14-15 as against the Profit after Tax of H25.16 crores in the previous financial year.

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 endeavour to establish its growth pattern in the Retail Industry with a chain of stores under the "V-Mart" brand in the Retail Industry.

During the year, the Company opened 19 (Nineteen) new stores under the brand V-Mart with spread over an area of 1.71 lacs sq. ft.

During the year, the Company has also completed the transition to a new warehouse and corporate office keeping into account the existing and future growth.

The year under review has been one where the focus of the Company has been on enhancing the capability of the organization and towards the achievement of this goal the Company has been taking a number of initiatives around the three pillars of People, Process and Technology.

AWARDS & ACHIEVEMENTS

During the year, following awards/recognitions were received by the Company:

"Most Admired Retailer of the Year 2014" for the category of concept store

OPERATING RESULTS AND BUSINESS

Your Company completes its thirteenth 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 give good results based on which your Company has posted healthy results.

DIVIDENDS

The Board in its meeting held on 4th May, 2015, recommended dividend of H1.50/- per share (@15%) excluding the dividend distribution tax, which is to be paid out of the profit of the Company for the financial year ended 31st March, 2015 on equity shares of the Company, subject to approval of shareholders at the ensuing Annual General Meeting.

RESERVES

We have transferred Rs.9.74/- crores to our general reserves and our general reserves stood at Rs.186.92/- crores which makes the Company even more financial stronger.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as required under Clause 49 of the Listing Agreement has been dealt with extensively as 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 2015-16.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extracts of Annual Return in prescribed format are appended as Annexure Â A to this Report.

CORPORATE GOVERNANCE

It describes our shared long-term values, principles and goals. It reflects our corporate culture and identity. It guides us in our daily work and shows how we want to address opportunities and risks today and in the future. It defines the way in which we assume our corporate responsibilities.

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section titled Report on Corporate Governance has been included in this Report.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the FY14-15, the details of which are given in Corporate Governance report that forms part of this Annual report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 & Listing Agreement.

BOARD EVALUATION

The Clause 49 of the Listing Agreement states that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal evaluation needs to be made by the board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by its Board of Directors, excluding the director being evaluated.

The Board has carried out the annual evaluation of its own performance and that of its Directors individually. The evaluation criteria as laid down by the Nomination & Remuneration Committee includes various aspects of functionality of Board such as compositions, process & procedures including adequate & timely information, attendance, delegation of responsibilities, decision-making, roles & responsibilities including monitoring, benchmarking, feedback, stakeholders relationship and committees.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary disclosures from each of its 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 Clause 49 of the Listing Agreement.

The details of the familiarization programme for the Independent Directors have been uploaded on the website of the Company and may be accessed through the link: http://www.vmart.co.in/ corporate.html.

POLICY ON DIRECTOR''S APPOINTMENT AND REMUNERATION

The current policy aims to have a mix of independent and executive directors on Board and separate 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. All the appointment and remuneration paid during the FY14-15 is as per the provisions of the Companies Act, 2013 and as per the terms laid down in policy of Nomination and Remuneration policy of the Company.

TRAINING OF INDEPENDENT DIRECTORS

Every new Independent Director of the Board attends an induction program. Every HOD, KMP, Senior-Executives makes presentation to inductees about the Company''s strategy, operations, product and market, finance, risk management.

Further, at the time of the appointment of Independent Directors, the Company issues a formal letter of appointment outlining his/her role, functions, duties and responsibilities as a director.

NEW TO THE BOARD

On recommendations of the Nomination and Remuneration Committee, the Board appointed Mr. Murli Ramachandran and Ms. Sonal Mattoo as Additional Directors in the capacity of Independent Directors effective from 22nd January, 2015, subject to the approval of shareholders at the ensuing Annual General Meeting.

On recommendations of the Nomination and Remuneration Committee, the Board appointed Mr. Hemant Agarwal as an Additional Director, in the capacity of Non-Executive Director, effective from 22nd January, 2015, subject to the approval/ ratification of shareholders at the ensuing Annual General Meeting.

Mr. Hemant Agarwal has been stepped down from the position of Whole-time Director of the Company and was appointed as Additional Director in the capacity of Non-Executive Director of the Company w.e.f. 22nd January, 2015.

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 (DIN 02249947), Director is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for re-appointment.

The necessary resolution for obtaining approval of Members has been incorporated in the notice of the ensuing Annual General Meeting. The requisite disclosures regarding appointment/ re- appointment of Directors have been made in the explanatory statement to the notice of the ensuing Annual General Meeting.

The Company has received requisite disclosures and undertakings from all the Directors in compliance with the provisions of the Companies Act.

RESIGNATIONS

During FY14-15, Mr. Krishan Kumar Gupta and Mr. Kamal Kumar Gupta have resigned as Independent Directors w.e.f. 22nd January, 2015. The Board appreciated their efforts in delivering excellence and invaluable contribution for the Company.

COMMITTEES OF THE BOARD

A detailed note on the Board and its Committees is provided under the Corporate Governance report section in this Annual Report.

Currently, there are four committees: Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee.

PRACTISING COMPANY SECRETARY''S CERTIFICATE ON CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement, the Practising Company Secretary 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 details of shares allotted under ESOP and ESOPs granted /exercised during the year are as follows:

Details of equity shares allotted under ESOP:

Sr. No Date of Allotment No. of shares allotted

1 29th September, 2014 41,308

2 5th January, 2015 15,603

3 4th May, 2015 14,237

Pursuant to the above allotment of shares, the paid up capital of the Company stands increased to Rs.18,02,99,260 as on 4th May, 2015.

The Information required to be disclosed under SEBI (Share Based Employee Benefits) Regulations, 2014 as on 31st March, 2015 are as follows:

Particulars Details

Options granted 175602

Pricing Formula The Nomination & Remuneration Committee has been authorized to determine the exercise price of ESOPs.

Total Options vested 91950

Options exercised 56911

Total Number of Equity Shares arising as a result of 56911 exercise the options

Options forfeited/lapsed Nil

Variation of terms of options Nil

Money realized by exercise of options 85,36,650

Total number of ESOPs in force 96341

Person-wise details of options granted during the Financial Year 2014-15:

i) Senior managerial personnel/key managerial Mr. Venugopal Konchada - 12700 personnel Ms. Anjali Goel- 3000

Mr. Vineet Kailash Khanna - 2150

Mr. Ramesh Kumar Agarwal - 3000

Mr. Sudhir Kumar - 1500

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

iii) Identified employees who are granted options Nil 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.

Fully-diluted EPS pursuant to issue of shares on exercise 20.78 of options in accordance with relevant Accounting Standards

Lock-in None

Particulars Details

Impact on profits and EPS of the last three years Impact on profit: (1669827)

Impact on EPS: (.09)

Impact of the difference on the profits of the Company Impact on profit: (1669827) and on the EPS Impact on EPS: (.09)

Difference, if any, between employee compensation There is no difference between employee compensation cost using cost (calculated according using the intrinsic value of intrinsic value of stock options and fair value of stock options. 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 price exceeds market price : Not applicable exercise price either equals or exceeds or is less than Exercise price equals market price : Not applicable the market price of the stock Exercise price is less than market price: 150

Weighted average fair values of options whose exercise Exercise price exceeds market price : Not applicable price either equals or exceeds or is less than the market Exercise price equals market price : Not applicable price of the stock Exercise price is less than market price : 150

Method and significant assumptions used to estimate There is no impact on profit and loss since the ESOPs have been granted the fair value of options granted during the year on fair market value. The fair market value has been calculated on the basis of the Black Scholes model''.

Particulars 45,975 45,975 61,302 ESOPs ESOPs ESOPs

Price per option (in Rs.) 150.00 150.00 150.00

Risk free return (in %) 8.30 8.30 8.30

Average weighted cost of 10.80 10.80 10.80 capital (in %)

Average rate of return on the 7.25 7.25 7.25 stock market (in %)

Terminal growth (in %) 10.00 10.00 10.00

Average cost of equity based 13.55 13.55 13.55 on CAPM (in %)

Beta 1.26 1.26 1.26

Price of underlying shares at 150.00 150.00 150.00 the time of the options grant

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 which may have 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 FY14-15, 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. The Company has not given any loan or guarantees covered under the provisions of Section 186 of the Companies Act, 2013.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY BETWEEN 31ST MARCH, 2015 AND THE DATE OF BOARD''S REPORT.

There are 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.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Our Company has constituted a Corporate Social Responsibility Committee of the Board and of which Mr. Lalit Agarwal is the Chairman, and Mr. Madan Gopal Agarwal, Mr. Aakash Moondhra and Ms. Sonal Mattoo are the 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, our Company requires to spend H53,72,487 on CSR activities during the year.

The annual report on CSR Activities is appended in Annexure-C to this Board Report.

JUSTIFICATION FOR NOT SPENDING THE PRESCRIBED AMOUNT ON CSR ACTIVITIES

As per the requirements of Section 135 of Companies Act, 2013, V- Mart has contributed an amount of Rs.21,00,000/- (Rupees Twenty One Lac Only) for the benefit of the Society out of Rs.53,72,487/- (Rupees Fifty Three Lac Seventy Two Thousand Four Hundred And Eighty Seven Only) which is required to be spent as per the provisions.

The Shortfall of Rs.32,72,487/- (Thirty Two Lac Seventy Two Thousand Four Hundred and Eighty Seven Only) is due to unavailability of adequate proposals. The Company is evaluating various proposals to spend the required amount and serve the society at its best.

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.

TECHNOLOGY ABSORPTION

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

FOREIGN EXCHANGE EARNINGS AND OUTGO

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 laid down by the Board is known as "Code of Business Conduct" which forms an Appendix to the Code. 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 victimization of the person availing this mechanism. This Policy has been appropriately communicated within the organization 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.

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 of 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 H60 Lac or more, or employed for the part of the year and in receipt of Rs.5 lac or more a month under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, except Mr. Lalit Agarwal, Chairman & Managing Director of the Company.

AUDITORS

At the Annual General Meeting held on 23rd September, 2014, M/s Walker Chandiok & Co. LLP, Chartered Accountants, were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of first proviso to Section 139 of the Companies Act, 2013 the appointment of the auditors shall be placed for ratification at every AGM, accordingly the appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Sections 141 of the Companies Act, 2013.

SECRETARIAL AUDITOR

VKC & CO., Practicing Company Secretaries, was appointed as Secretarial Auditors to conduct the Secretarial Audit of the Company for the FY14-15, as required under Section 204 of the Companies Act, 2013 and rules there under. The Secretarial Audit report forms part as Annexure-E to the Board''s report.

AUDITORS REPORT

There was no observation or qualification in the Auditors Report for the financial year ended 31st March, 2015, it is self explanatory in nature.

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.

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

The disclosures 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 in the year: NIL

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

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

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

(e) Nature of action taken by the employer or district officer: NIL

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 Directors take this opportunity to express their sincere appreciation for the excellent support and co-ordination extend by the shareholders, customers, suppliers, bankers and other business associates. Your Directors gratefully acknowledges ongoing co-operation and support provided by Central Government and State Government and all regulatory authorities. Your Directors also place on records their appreciation for the contribution made by employees at all levels.

By the order of Board

For and on behalf of Board of Directors

Place: Gurgaon Lalit Agarwal

Date: 30th July, 2015 Chairman & Managing Director

DIN: 00900900

Mar 31, 2014

Dear members

The Directors have great pleasure in the presenting the 12th Annual Report of the Company together with the audited accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS

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

Particulars For the year ended For the year ended 31.3.2014 31.3.2013

Revenue 57,567.30 38,364.87

Profits/(Loss) before 4,871.72 3,422.59 Depreciation & Tax

Less: Depreciation 1,089.44 761.85

Less: Provision for Tax 1,266.56 860.31

Profits/(Loss) before 2,515.72 1,800.43 Appropriation

Prior period items Nil (63.60)

Profit before Appropriation 2,515.72 1,800.43

Less: Utilised for 265.44 154.78 Dividend Issue

Balance carried 2,250.28 1,645.66 forward to Balance Sheet

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 initial public offer of the Company was subscribed 1.19 times. While the qualified institutional buyers portion in the offer was subscribed 1.52 times, the non-institutional investors and retail investors segments were subscribed 1.39 and 0.79 times, respectively, your Directors wish to express their sincere appreciation for your support in this regard.

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, 2014 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) 5,798.10

Proceeds from Pre-IPO placement (B) 2,625.00

Internal accruals (C)" 717.60

9,140.70

The utilisation of the aforementioned means of finance as on 31st March 2014 is as under:

Particulars Utilisation Utilisation of Adjustments Balance amount planned as IPO proceeds (utilisation to be utilised per prospectus as on 31 of surplus as on 31 March March 2014 (D) towards 2014 other objects)

To open new stores 6,970.40 4,052.41 6.60 2,924.59

Expansion of 438.70 130.19 - 308.51 distribution center

Working capital 1,000.00 1,000.00 - Nil Share issue expenses 731.60 725.00 (6.60)* Nil

9,140.70 5,907.60 - 3,233.10

* Surplus available after actual expenses incurred will be utilised towards other objects of the issue.

Interim utilisation of balance IPO proceeds up to 31st March 2014 is as under:

Particulars (Rs. in lacs)

Balance unutilised amount 3,233.10 assuming utilisation is out of IPO proceeds: (E=A B C-D)

Amount temporary kept in mutual 3,233.10 funds:

PERFORMANCE REVIEW

The Indian retail sector accounts for over 20% of the country''s gross domestic product (GDP) and contributes 8% to total employment. The current estimated value of the Indian retail sector IS about 500 billion USD. The penetration level of modern retail (currently 5%) will increase around six-fold from the current 27 billion USD to 220 billion USD in 2020. The Indian retail sector is expected to grow at a CAGR of 15 to 20%.Your Company continues with its existing approach to endeavor to establish its growth pattern in the retail industry with a chain of stores under the "V-Mart" brand in the Retail Industry.

During the year the Net Sales of the Company increased by 50% from Rs.383.46 crores in F.Y. 2012-13 to Rs.574.95 crores in F.Y. 2013-14. The Operating Profits (EBITDA) has been increased by 36% from Rs.39.97 crores in F.Y.2012-13 to Rs.54.49 crores in F.Y. 2013-14. The Company posted Profit after Tax (PAT) of Rs.25.15 crores in the current financial year 2013-14 as against the Profit after Tax of Rs.18.00 crores in the previous financial year.

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 has continued with its approach to expand its business taking the advantage of its Brand value it has created in the market.

During the year, the Company opened 23 new stores under the brand V-Mart with spread over an area of 712,256 sq ft.

With a view to improve operational efficiencies and to minimise the transportation and other costs, the Company is in process to shift/relocating all its warehouses from Delhi to one consolidated warehouse at Bilaspur, Haryana.

During the year 3 stores were closed due to lower footfall, poor sales and nonprofit making.

The Company has during the year implemented a space policy at the stores with an objective of allocating space to the line of biz which has the higher propensity to generate better returns on the space allocated. The initial results are very encouraging and the Company is in the process of further streamlining the same.

Factors like negotiating rentals, store opening and rationalisation, working capital management, regionalisation, cost optimisation and manpower planning are some of the key issues for the Company in the current context of re establishment.

AWARDS & ACHIEVEMENTS

During the year no awards/recognitions were received by the Company.

OPERATING RESULTS AND BUSINESS:

Your Company completes its twelth year in the field of fashion retailing.

Sustained focus on retail operational efficiency coupled with a diversified cost effective geographic footprint has contributed to a satisfactory business performance.

Revenue growth can be attributed to the encouraging performance of stores located in strategic catchments spread across northern, western and eastern parts of India. The Company has executed strategic measures like store expansion in prospective catchments, inventory rationalisation, focus on garnering higher top lines and control of operational costs.

DIVIDEND

Your Directors recommend for your consideration a dividend of 10% (Rs.1.79 crores) (i.e. Re. 1 per equity share), excluding the Dividend Distribution Tax, be paid out of the profits of the Company for the year 2013-14 on the Equity Shares, subject to approval by the members at the Annual General Meeting.

FINANCE

Your Company continues with various initiatives for bringing down the cost of borrowings which includes a judicious mix of short-term working capital borrowing, long term loans for expansion at competitive terms, so as to have funds at competitive cost.

PUBLIC DEPOSITS

Your Company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 and the rules framed there under, during the period.

INDUSTRIAL RELATIONS

The Company has developed a climate of cooperation, & confidence for its employees.

Our relation with employees is based on mutual trust & respect and we continue to maintain the same spirit at all times.

PARTICULARS OF EMPLOYEES

There was no employee of the Company during the period, whose particulars are required to be given in the Director''s Report under section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

Employee stock option scheme

Your Company has implemented an Employee Stock Option Scheme, which was approved by the Board of Directors and the shareholders vide resolution dated 2 July, 2012 and 10, July 2012 respectively (the V-Mart ESOP Scheme 2012), consequent to which 300,000 Equity Shares of ''10 each will be granted upon exercise of as stock options (ESOPs) to eligible employees.

The options will vest over a period of 12 months to 36 months of continued employment from the grant date.

On 20th July 2012, the Company has granted 153,252 ESOPs at an exercise price, as determined by the Remuneration Committee, of ''150.00 per option with graded vesting (i.e. 45.975 options vesting after 12 months from the date of grant, 45.975 options vesting after 24 months from the date of grant and 61,302 options vesting after 36 months from the date of grant). The vesting of options is subject to the continued employment of the grantee over the vesting period. The options granted can be exercised after vesting at any time before the expiry of eight years from the grant date.

The particulars of Employees Stock Option Plan (ESOP) Schemes, as required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended, are appended herewith and forms part of this 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 2014-15.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as required under Clause 49 of the Listing Agreement has been dealt with extensively as part of this Annual Report.

AUDITORS

M/s Walker, Chandiok & Co., Chartered Accountants, Statutory Auditors of the Company hold office till the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Company has received a letter from the Statutory Auditors to the effect that their re-appointment, if made at the ensuing Annual General Meeting, would be within the limits prescribed under Section 141 of the Companies Act, 2013.

The observations of the Auditors in the Auditor''s Report are explained, whenever necessary, in appropriate note to accounts.

DIRECTORS

The Board of Directors of the Company is duly constituted.

In terms of the provisions of Section 152 of the Companies Act, 2013 and Articles of Associations of the Company, Mr. Hemant Agarwal (DIN 02242019), Director is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.

The necessary resolution for obtaining approval of Members have been incorporated in the notice of the ensuing Annual General Meeting. The requisite disclosures regarding appointment/ re-appointment of Directors have been made in the explanatory statement to the notice of the ensuing Annual General Meeting.

The Company has received requisite disclosures and undertakings from all the Directors in compliance with the provisions of the Companies Act.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956 the Directors of yours Company hereby state and confirm that:-

1. In the preparation of the Annual Accounts for the year, applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

2. They 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 as at the end of the financial year ended March 31st, 2014 and of the profit of the Company for that period;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. They have prepared the Annual Accounts for the year ended March, 31st, 2014 on a going concern basis.

COMPLIANCE WITH CODE OF CONDUCT

The Company has evolved and adopted a code of conduct for its Board of Directors and its management personnel based on the principles of good corporate governance and best management practices. The declaration of compliance with the Code of Conduct has been received from them. The Code is available on the website of the Company.

REPORT ON CORPORATE GOVERNANCE

The Company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges are complied with. A separate section on Corporate Governance and Auditors Certificate is annexed hereto and forms part of this Report.

CONSEVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In view of the nature of activities which are being carried on by the Company, the particulars prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosures of Particular''s in the report of Board of Directors) rules, 1988 regarding conservation of Energy & Technology Absorption are not applicable to the company.

The details of foreign exchange earnings and outgo during the year under review are as follows:

Current Year (Rs.)

(a) Earnings Nil

(b) Outgoing 9,14,967

ACKNOWLEDGEMENT

Yours Directors take this opportunity to express their sincere appreciation for the excellent support and co-operation extend by the shareholders, customers, suppliers, bankers and other business associates. Your Directors gratefully acknowledge ongoing cooperation and support provided by Central and State Government and all regulatory authorities. Your Directors also place on record their appreciation of the contribution made by employees at all levels.

Place: New Delhi By the Order of Board Date: 01-05-2014 For on behalf of Board of Directors

CHAIRMAN

Mar 31, 2013

The Directors have great pleasure in the presenting the 11th Annual Report of the Company together with the audited accounts for the year ended 31st March, 2013.

FINANCIAL HIGHLIGHTS

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

( Rs. in million)

Year ended Year ended March 31, 2013 March 31,2012

Revenue 3,836.49 2,819.54

Profits/(Loss) before Depreciation & Tax 342.25 215.70

Less: Depreciation 76.18 58.30

Less: Provision for Tax 86.03 52.84

Profit before Appropriation 180.04 104.56

Less: Utilised for Dividend Issue 15.47 3.42

Balance carried forward to Balance Sheet 164.57 101.14

V-MART IPO

Your Company has concluded a public issue of 57, 46,000 Equity Shares of face value of Rs.10 each for cash at a price of Rs.210 per Equity Share (including a share premium of Rs.200 per Equity Share) aggregating to Rs.120,666 million comprising of a fresh issue of 4,011,000 Equity Shares by our Company aggregating to Rs.84,231 million and an offer for sale of 1,735,000 Equity Shares aggregating to Rs.36,435 million.

The Company has also made a pre-IPO placement of 1,250,000 Equity Shares of the face value of Rs.10 each at a price of Rs.210 per Equity Shares to pre-IPO investors.

The funds raised through the IPO will be utilised to finance V-Mart''s plans to open 60 new stores, for the expansion of distribution centeres, for working capital requirements, for general corporate purposes and to meet the issue expenses.

The initial public offer of V-Mart Retail Ltd has been subscribed 1.19 times. While the qualified institutional buyer''s portion in the offer was subscribed 1.52 times, the non-institutional investors and retail investors segments were subscribed 1.39 and 0.79 times, respectively.

Pursuant to Clause 5A of the Listing Agreement the Company has opened separate suspense accounts for share issued in dematerialised and physical forms which have remained unclaimed.

PERFORMANCE REVIEW

The Indian retail industry has experienced significant growth over the last decade with a noticeable shift towards organised retailing formats. The industry is moving towards a modern concept of retailing. India''s retail market is expected to grow at 7 per cent over the next 10 years, reaching a size of US$ 850 billion by 2020. Traditional retail is expected to grow at 5 per cent and reach a size of US$ 650 billion (about 76 per cent), while organised retail is expected to grow at 25 per cent and reach a size of US$ 200 billion by 2020. By working under the brand name of V-Mart Retail we feel that a significant business opportunities lie ahead for the retailers. The overall retail market continues to grow and consumer aspiration for a better service environment still remains intact. Your Company continues to endeavour to reinstate its growth pattern in the retail industry with a chain of stores under the V-Mart brand in the retail industry.

OPERATIONS REVIEW

During the year, the Company was involved in the process to overhauling its business taking the advantage of its brand value it has created in the market thus far.

During the year, Company opened 16 new stores under the brand V-Mart with spread over an area of 122,928 sq.ft.

The Company has also opened a warehouse at Mundka-2, Head Office during FY 2012-13.

The store at Karnal was closed due to an absence of footfall, poor sales and lack of financial viability.

Factors like new store openings, monitoring the financial viability of stores, financial management, HR management and manpower planning are some of the key issues for the Company in the current context.

AWARDS AND ACHIEVEMENTS

We have been chosen as an ÂIndian Power Brand 2012 Â 13'' by Planman Media. We were placed as a finalist in the ÂMost Admired Retailer of the Year: Discount Retail category'' at the Images Retail Awards 2011.

OPERATING RESULTS AND BUSINESS:

Your Company completes its eleventh year in the field of fashion retailing.

Sustained focus on understanding customer preferences, fashion merchandise, operational efficiency coupled with a strong orientation mediated towards sales and cost control has helped eke out a satisfactory business performance.

Revenue growth can be attributed to the encouraging performance of stores located in strategic catchments spread across northern, western and eastern parts of India. The Company has executed strategic measures like store expansion in prospective catchment areas, inventory rationalisation, focus on garnering higher toplines and better control of operational costs.

DIVIDEND

The Directors recommend for your consideration a dividend of Rs.1,79,58,738 (Rs. one crore seventy nine lakh fifty eight thousand seven hundred and thirty eight only) (i.e. Rs. 1 per share), excluding the Dividend Distribution Tax, be paid out of the profits of the Company for the year 2012-13 on the Equity Shares to those shareholders whose name appear in the Register of Members of the Company on September 25, 2013, subject to approval by the members at the Annual General Meeting.

FINANCE

Your Company continues to implement various initiatives for bringing down the cost of borrowings which includes a judicious mix of short-term working capital borrowing, long- term loans for expansion at competitive terms, so as to have funds available at competitive costs.

PUBLIC DEPOSITS

Your Company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 and the rules framed there under, during the period.

INDUSTRIAL RELATIONS

The Company has developed a climate of cooperation, and confidence for its employees.

Our relation with employees is based on mutual trust and respect and we continue to maintain the same spirit at all times.

PARTICULARS OF EMPLOYEES

There was no employee of the Company during the period, whose particulars are required to be given in the Director''s Report under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.

EMPLOYEE STOCk OPTION SCHEME

Your Company has implemented an Employee Stock Option Scheme, which was approved by the Board of Directors and the shareholders vide resolution dated 2 July 2012 and 10 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. The options will vest over a period of 12 months to 36 months of continued employment from the grant date.

On 20 July 2012, the Company has granted 153,252 ESOPs at an exercise price, as determined by the Remuneration Committee, of Rs.150.00 per option with graded vesting (i.e. 45,975 options vesting after 12 months from the date of grant, 45,975 options vesting after 24 months from the date of grant and 61,302 options vesting after 36 months from the date of grant). The vesting of options is subject to the continued employment of the grantee over the vesting period. The options granted can be exercised after vesting at any time before the expiry of eight years from the grant date.

The particulars of Employees Stock Option Plan (ESOP) Schemes, as required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended, are appended herewith and forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis as required under Clause 49 of the Listing Agreement has been dealt with extensively as part of this Annual Report.

AUDITORS

M/s Walker, Chandiok & Co., Chartered Accountants, Chartered Accountants, Statutory Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. They have expressed their willingness to act as Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956. The Board recommends their appointment.

AUDITOR''S QUALIFICATION

The observations made in the Auditor''s Report are self- explanatory and therefore do not call any further comments under Section 217(3) of the Companies Act, 1956.

Your Directors request you to appoint Auditors for the current year as set out in the accompanying notice of the Annual General Meeting.

DIRECTORS

The Board of Directors of the Company is duly constituted.

At the ensuing annual general meeting Sh. Aakash Moondhra, will retire by rotation and, being eligible, offer themselves for reappointment in terms of provisions of Articles of Association of the Company.

The brief resume/details relating to Directors who are to be appointed/reappointed are furnished in the explanatory statement to the notice of the ensuing Annual General Meeting.

The Company has received requisite disclosures and undertakings from all the Directors in compliance with the provisions of the Companies Act, 1956.

DIRECTORS'' RESPONSIBILITY STATEMENT Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956 the Directors of yours Company hereby state and confirm that:- 1. In the preparation of the Annual Accounts for the year, applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

2. They 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 as at the end of the financial year ended March 31st, 2013 and of the profit of the Company for that period;

3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. They have prepared the Annual Accounts for the year ended March, 31st, 2013 on a going concern basis.

COMPLIANCE WITH THE CODE OF CONDUCT The Company had evolved and adopted a Code of Conduct for its Board of Directors and its management personnel based on the principles of good corporate governance and best management practices. The declaration of compliance with the Code of Conduct has been received from them. The Code is available on the website of the Company.

REPORT ON CORPORATE GOVERNANCE The Company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges are complied with. A separate section on Corporate Governance and Auditors Certificate is annexed hereto and forms part of this Report.

CONSEVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO In view of the nature of activities which are being carried on by the Company, the particulars prescribed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosures of Particular''s in the report of Board of Directors) Rules, 1988 regarding conservation of Energy & Technology Absorption are not applicable to the Company.

The details of foreign exchange earnings and outgo during the year under review are as follows:

Current Year (Rs.)

(a) Earnings Nil

(b) Outgoing 1,764,932

IMPORTANT INTIMATION TO THE MEMBERS As you may be aware, the Ministry of Corporate Affairs, Government of India (''MCA'') as recently introduced ''Green Initiative in Corporate Governance'' by allowing paperless compliance by companies i.e. service of notice/documents including Annual Report can be sent by e-mail to its members. Keeping in view the underlying spirit and pursuant to the said initiative of MCA, we request to the members who have not registered their e-mail addresses, so far, to register their e-mail addresses, in respect of electronic holdings with the depository through their respective Depository Participants. Members'' holding shares in physical form are also requested to register their e-mail addresses with Company''s Registrar & Share Transfer Agent viz. Karvy Computershare Private Limited.

ACkNOWLEDGEMENT

Yours Directors take this opportunity to express their sincere appreciation for the support and cooperation provided by the shareholders, customers, suppliers, bankers and other business associates. Your Directors gratefully acknowledge the ongoing cooperation and support provided by Central and State Governments and all regulatory authorities. Your Directors also place on record their appreciation of the contribution made by employees across all levels.

By the Order of Board

For on behalf of Board of Directors

Place : New Delhi

Date : 16th May, 2013 CHAIRMAN

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