Dear Members,
Your Company's Directors are pleased to present the 21st Annual Report of the Company,
along with Audited Accounts, for the financial year ended March 31, 2023.
FINANCIAL RESULTS
The operating results of the Company for the year under review are as follows:
(f in lakhs)
Particulars |
For the year ended March 31, 2023 |
For the year ended March 31, 2022 |
Total Income |
2,47,981 |
1,68,013 |
Profits/(Loss) before Depreciation & Tax |
16,697 |
14,109 |
Less: Depreciation |
17,998 |
13,070 |
Loss/Profit before tax |
(1,301) |
1,040 |
Less: Tax Expense |
(516) |
(124) |
Net Loss/Profit for the period |
(785) |
1,164 |
Less: Utilised for Dividend Issue |
148 |
0 |
Other comprehensive income |
65 |
(187) |
Balance carried forward to Balance Sheet |
(868) |
977 |
PERFORMANCE REVIEW
The Net Sales of the Company increased by 48% to Rs. 2,46,484 lakhs in the financial
year 2022-23 as against Rs. 1,66,618 lakhs in F.Y. 2021-22. The Company has posted
Operating Profits (EBITDA) for FY 2022-23 of f 26,891 lakhs (FY 202122 of f 20,433 lakhs)
and PAT/Loss for FY 2022-23 of f (785) lakhs (FY 2021-22 of f 1,164 lakhs).
A detailed analysis of the Company's operations in terms of performance in markets,
business outlook, risks and concerns forms part of the Management Discussion and Analysis
Report, a separate section forming part of the Annual Report.
OPERATIONS REVIEW
Focusing on expansion opportunities with a long-term view, the Company opened 59 new
stores during the year, the total store count was increased to 423 and thereby growing the
total retail area by 14% y-o-y to 37 lakhs sq. ft. During the year under review 16 stores
were closed.
Throughout the year, the Company focused on expanding our presence nationwide, with a
particular emphasis on the southern regions through our Unlimited brand. Out of the total
59 new stores opened, 12 stores were established in the southern region under the brand
name of Unlimited. Simultaneously, we took the decision to close 16 underperforming
stores, which include 3 Unlimited stores.
Notably, the Unlimited Fashion Stores of the company has undergone a remarkable
turnaround, displaying positive growth and strong performance. This success can be
attributed to the effective implementation of various strategies. The Company
has worked on enhancing its product assortment, optimizing store layouts, and improving
supply chain management. Additionally, recognizing the opportunities brought about by
digital transformation, the Company has expanded our online presence, which has played a
significant role in revitalizing our business.
In a ground-breaking strategic move aimed at expanding the Company's market presence
and market share, the Company successfully acquired LimeRoad, a highly popular e-commerce
platform in India specializing in fashion and lifestyle products. The acquisition took
place on October 17, 2022, by entering into a Business Transfer Agreement (BTA) with A.M.
Marketplaces Private Limited (LimeRoad) and certain other parties, as a going concern, on
a slump sale basis, for a lump sum consideration.
This acquisition represents the beginning of a new chapter for the Company, where the
Company reiterates its commitment to fostering prosperity and enhancing the lives of
fashion-conscious individuals. It also serves to strengthen and extend its presence in
tier II, tier III, and tier IV cities.
Through this strategic integration, the Company is combining V-Mart's expertise with
LimeRoad's digital strengths. The Company's shared vision is deeply rooted in the core
principles of making affordable and fashionable apparel accessible to every corner of
India.
A major portion of investment made by the Company in the financial year was allocated
towards the establishment of a new warehouse, which has been recently inaugurated. In line
with the Company's commitment to environmental responsibility, the Company has adopted a
green building design for the warehouse.
It is noteworthy that the Company's state-of-the-art facility has aimed to adopt the
standards of the IGBC Gold Certification, reflecting its dedication to energy efficiency,
eco-friendliness, and waste reduction. The warehouse incorporates innovative features and
initiatives aimed at minimizing its environmental impact. The warehouse shall be fully
automated, utilizes natural light, and runs on a solar power plant. The Company also
prioritized green construction and implemented environmentally friendly materials.
DIVIDEND
In view of accumulated losses in financial year 2022-23, your directors have not
recommended payment of any dividend for the year under review.
RESERVES
During the year under review, the Company has transferred Rs. (64.25) Lakhs to
reserves. Post transfer, the reserves stood at Rs. 82,922.60 Lakhs as on March 31, 2023.
CREDIT RATING
Investment Information and Credit Rating Agency of India Limited (ICRA) has maintained
the long- term rating of [ICRA] AA- (pronounced ICRA double A minus) and also maintained
the short-term rating of [ICRA] A1+ (pronounced ICRA A one plus) assigned to the overall
Rs. 195 crores Line of Credit of your Company.
The credit rating of the Company as on March 31, 2023 is as under:
Facilities |
Previous Rating |
Existing Rating |
Long term bank limits |
[ICRA] AA- (ICRA double A minus) (with stable outlook) |
[ICRA] AA- (ICRA double A minus) (with positive 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
During the FY 2022-23 your Company has been recognised and honoured with a number of
prestigious awards and accolades, acknowledging our achievements across various segments
in the retail industry and governance. These achievements stand as a testament to the
unwavering dedication and relentless commitment we invest in our work consistently, year
after year.
Won the prestigious Golden Peacock Award for Excellence in Corporate Governance,
2022 by the Institute of Directors
Won the Certificate of Appreciation at the 22nd Institute of Company Secretaries
of India ("ICSI") National Awards for Excellence in Corporate Governance by ICSI
Won the Commitment to Being a Great Place to Work by Great Place to Work
Won the IMAGES Most Admired Retailer of the Year for New Market Penetration at
IRA 2022
LISTING
The Equity Shares of your Company continue to be listed at BSE Ltd. (BSE) and the
National Stock Exchange of India Ltd. (NSE). The listing fees for fiscal 2023 have been
paid for all of the above stock exchanges where the equity shares of the Company are
listed.
Exchange |
Scrip Code |
ISIN |
NSE |
VMART |
|
BSE |
534976 |
INE665J01013 |
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 the Annual
Return in prescribed form MGT-7 to be placed on the Company's website at the link www.vmart.co.in
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 forms a part
of this report.
NUMBER OF MEETINGS OF THE BOARD
Six (6) 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 Committee in the manner prescribed in the provisions of the Companies Act,
2013 and as per the Corporate Governance requirements prescribed by the Securities and
Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations,
2015 ("SEBI Listing Regulations"). The evaluation parameters and the process
have been explained in the Corporate Governance Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors consists of six members, of which four are Independent Directors
including one woman Independent Director.
In pursuance of section 203 of the Companies Act, 2013, the key managerial personnel of
the Company are as follows:
Mr. Lalit Agarwal, Managing Director, Mr. Madan Gopal Agarwal, Whole-time Director, Mr.
Anand Agarwal, Chief Financial Officer and Ms. Megha Tandon, Company Secretary.
The shareholders at the 20th AGM held on August 30, 2022 reappointed Mr.
Lalit Agarwal as the Managing Director and Mr. Madan Gopal Agarwal as the Whole-time
Director for a period of 5 years w.e.f. from May 31, 2022.
In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Lalit
Agarwal (DIN: 00900900) 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 re-appointment and the matter is being placed for the approval of members
at the ensuing Annual General Meeting of the Company.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary disclosures from each of its four Independent
Directors under Section 149(7) of the Companies Act, 2013 that they meet all the criteria
laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI
(Listing Obligation and Disclosures Requirement) Regulations, 2015 and there has been no
change in the circumstances which may affect their status as Independent Director during
the year. During the year, the Non-Executive Directors of the Company had no pecuniary
relationship or transactions with the Company, other than payments towards the sitting
fees and reimbursement of expenses incurred by them for the purpose of attending meetings
of the Company.
POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The Company has a Nomination & Remuneration Policy to ensure a competent Board. The
Committee identifies competency gaps, evaluates candidates, and recommends suitable
members. It also fills Board vacancies as needed. The selected candidates are invited to
join the Board and approved by Shareholders.
The Company has also constituted a Nomination & Remuneration Committee which help
determine the selection criteria for board members through the following roles and
responsibilities among others:
(a) The Committee shall identify persons who are qualified to become directors and who
may be appointed in senior management in accordance with the criteria laid down, recommend
to the Board their appointment and removal.
(b) The Committee shall be responsible to determine whether to extend or continue the
term of appointment of the independent director, on the basis of the report of performance
evaluation of independent directors.
(c) Recommend to the Board a policy, relating to the remuneration for directors, key
managerial personnel and other employees including ESOP, pension rights and any other
compensation payment.
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
According to the Regulation 25(7) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 the listed entity shall familiarise the independent
directors through various programmes about the listed entity, including the following:
a. nature of the industry in which the listed entity operates;
b. business model of the listed entity;
c. roles, rights, responsibilities of independent directors; and
d. any other relevant information.
The details of the 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, 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
A detailed note on the Board and its Committees is provided under the Corporate
Governance Report 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 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
PRACTISING COMPANY SECRETARY'S CERTIFICATE ON CORPORATE GOVERNANCE
As required under Schedule V, Clause E read with Regulation 34(3) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Practicing Company
Secretary's certificate on Corporate Governance is enclosed as Annexure I to the Corporate
Governance 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 the Annual General Meeting of the Company. A certificate from the
Secretarial
Auditors 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, 2012, which was approved
by the Board of Directors and the shareholders vide resolution dated 2nd
July, 2012 and 10th July, 2012 respectively (the V-Mart ESOP Scheme
2012'), consequent to which 300,000 equity shares of Rs. 10 each 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
10th August, 2020 and 30th September, 2020 respectively (the
V-Mart ESOP Scheme 2020'), consequent to which 200,000 equity shares of Rs. 10 each were
to be granted upon exercise as stock options (ESOPs) to eligible employees. Subsequently,
the shareholders in its meeting held on August 30, 2022 approved an amendment in the said
ESOP scheme by increasing the total number of stock options from 200,000 to 500,000
options. The exercise price per option in performance based ESOP scheme, 2020 shall be
based on the closing price of the day prior to the date of grant on the recognised stock
exchange and shall be decided by the nomination and remuneration committee, subject to
compliance with the provisions of the SEBI (Share based employee benefits and sweat equity
regulations) 2021. The Nomination and Remuneration committee may provide a maximum
discount of upto 50% on the above price.
The grant details under both the scheme(s) during the year are as follows:
Scheme |
Grants |
Vesting |
Timeline |
V-Mart ESOP Scheme 2012 |
During the financial year 2022-23 - No grant has been made |
30% of the total grant |
After 12 months from the date of grant |
30% of the total grant |
After 24 months from the date of grant |
40% of the total grant |
After 36 months from the date of grant |
|
During the financial year 2022-23 - 2 grants have been made comprising a
total of 2,58,463 options |
10% of the total grant |
After 12 months from the date of grant |
V-Mart ESOP Scheme 2020 |
20% of the total grant |
After 24 months from the date of grant |
30% of the total grant |
After 36 months from the date of grant |
40% of the total grant |
After 48 months from the date of grant |
Details of equity shares allotted during the year are as follows:
Sr. No. |
Date of Allotment |
No. of shares Allotted (ESOP Scheme 2012) |
No. of shares Allotted (ESOP Scheme 2020) |
1 |
May, 2022 |
6144 |
- |
2 |
June, 2022 |
2000 |
8573 |
3 |
August, 2022 |
- |
2220 |
4 |
November, 2022 |
4000 |
72 |
|
Total |
12144 |
10865 |
The information required to be disclosed under SEBI (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021 as on March 31, 2023 are as follows:
Particulars |
Details |
Date of Shareholders Approval |
ESOP Scheme 2012: July 10, 2012 and amended on September 18, 2017 ESOP Scheme 2020:
September 30, 2020 and amended on August 30, 2022 |
Total number of options approved |
ESOP Scheme 2012: 6,00,000 ESOP Scheme 2020: 5,00,000 |
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: 41,953 ESOP Scheme 2020: 1,80,085 |
Number of options granted during the year |
ESOP Scheme 2012: Nil ESOP Scheme 2020: 2,58,463 |
Number of options forfeited / lapsed during the year |
ESOP Scheme 2012: Nil ESOP Scheme 2020: 34,841 |
Number of options vested during the year |
ESOP Scheme 2012: Nil ESOP Scheme 2020: Nil |
Number of options exercised during the year |
ESOP Scheme 2012: 12,144 ESOP Scheme 2020: 10,865 |
Number of shares arising as a result of exercise of Options |
ESOP Scheme 2012: Nil ESOP Scheme 2020: Nil |
Money realized by exercise of options (Rs.in Lakhs) |
ESOP Scheme 2012: 215.74 ESOP Scheme 2020: 136.11 |
Number of options outstanding at the end of the year |
ESOP Scheme 2012: 29,809 ESOP Scheme 2020: 3,92,808 |
Number of options exercisable at the end of the year |
ESOP Scheme 2012: 18,988 ESOP Scheme 2020: 6,449 |
Pricing Formula |
The Nomination & Remuneration Committee is authorized to determine the exercise
price of ESOPs, with defined limitations, |
Person-wise details of options granted during the Financial Year 2022-23: |
Senior managerial personnel/key managerial personnel |
A. ESOP Scheme 2012 |
B. ESOP Scheme 2020 |
A. Details of options granted (ESOP Scheme 2012) |
Name of SMP/ KMP |
Nil |
Particulars |
Details |
Number of shares |
Nil |
Exercise Price Per share |
Nil |
B. Details of options granted (ESOP Scheme 2020) |
|
Name of SMP/ KMP |
Suchi Mukherjee |
Number of shares |
1,96,298 |
Exercise Price Per share |
1,415 |
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 |
-3.97 |
Lock-in |
NIL |
Impact of the difference on the profits of the Company and on the EPS |
Impact of the difference on Profits: Rs. 454.31 Impact of the difference
on EPS: Nil |
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) |
52.39 lakhs |
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: As mentioned in Below table |
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: As mentioned in below table |
Method and significant assumptions used to estimate the fair value of
options granted during the year |
The fair market value has been calculated on the basis of the Black
Scholes model'. |
how expected volatility was determined, including an explanation of the
extent to which expected volatility was based on historical volatility |
The volatility has been calculated based on one year average of standard
deviation of the daily changing share price of V-Mart Retail Ltd. / Company. |
whether and how any other features of the options granted were
incorporated into the measurement of fair value, such as a market condition |
The fair value is calculated using Black Scholes Option pricing model |
Particulars |
ESOPs Grant IV |
ESOPs Grant V |
ESOPs Grant VI |
ESOPs Grant VII |
ESOPs Grant VIII |
ESOPs Grant IX |
ESOPs Grant X |
ESOPs Grant XI |
ESOPs Grant XII |
ESOPs Grant XIII |
(i) ESOPs (ii) ESOPs Grant XIV Grant XIV |
ESOPs Grant XV |
ESOPs Grant XVI ( |
(i) ESOPs (ii) ESOPs GrantXVII Grant XVII |
ESOP Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
Scheme |
2012 |
2012 |
2012 |
2012 |
2012 |
2012 |
2012 |
2012 |
2012 |
2020 |
2020 |
2012 |
2012 |
2020 |
2020 |
2020 |
Price per option (In Rs.) |
470 |
900 |
1260 |
2047 |
2044 |
2286 |
2347 |
1683 |
1769 |
1244 |
1400 |
2520 |
1842 |
1,487 |
1,415 |
1,415 |
Risk free return (ln%) |
7.93 |
7.80 |
7.64 |
7.45 |
7.42 |
7.37 |
7.33 |
7.26 |
6.93 |
6.93 |
6.41 |
6.41 |
6.71 |
6.38 |
6.44 |
6.44 |
Expected Life (In years) |
4 |
4 |
4 |
3 |
3 |
3 |
3 |
3 |
3 |
4 |
4 |
3 |
4 |
4 |
4 |
4 |
Expected Volatility |
30.13% |
42.48% |
50.76% |
40.30% |
41.49% |
22.23% |
22.90% |
23.61% |
25.68% |
24.32% |
20.07% |
20.07% |
16.30% |
18.07% |
15.67% |
15.67% |
Dividend Yield |
0.24% |
0.18% |
0.10% |
0.10% |
0.10% |
0.10% |
0.10% |
0.10% |
0.10% |
0.10% |
0.10% |
0.10% |
0.00% |
0.10% |
0.10% |
0.10% |
Closing market price of share as on date of option grant |
522.35 |
1243.90 |
1412.60 |
2 274.05 |
2270.95 |
2540.25 |
2,594.85 |
1,871.00 |
1966.80 |
2487.55 |
2799.85 |
2799.85 |
3683.15 |
2974.35 |
2829.65 |
2829.65 |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(NSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
(BSE) |
510 |
1220.45 |
1419.8 |
2327.20 |
2367.05 |
2781.05 |
2544.20 |
1911.40 |
1980.95 |
2501.75 |
2701.60 |
2701.60 |
3694.15 |
2979.85 |
2827.15 |
2827.15 |
Weighted average exercise price (In Rs.) |
470 |
900 |
1,260 |
2,047 |
2,044 |
2,286 |
2,347 |
1,683 |
1,769 |
1,244 |
1400 |
2520 |
1842 |
1487 |
1415 |
1415 |
Weighted average fair value of stock option (In Rs.) |
211 |
673 |
727 |
902 |
913 |
792 |
807 |
591 |
443 |
1,473 |
1726 |
771 |
2177 |
1738 |
1725 |
1725 |
EMPLOYEE STOCK OPTION DETAILS:
Grant No. |
Grant Date |
ESOP Scheme |
Exercise Price |
Options Granted |
Options vested and exercisable |
Options Unvested |
Options Exercised |
Options Forfeited |
Options out-standing |
1 |
July 20, 2012 |
Scheme 2012 |
150 |
1,53,252 |
1,53,252 |
- |
1,23,264 |
29,988 |
- |
2 |
January 5, 2015 |
Scheme 2012 |
450 |
22,350 |
22,350 |
- |
18,700 |
3,650 |
- |
3 |
December 28, 2015 |
Scheme 2012 |
573 |
13,645 |
13,645 |
- |
13,645 |
- |
- |
4 |
January 30, 2017 |
Scheme 2012 |
470 |
76,225 |
76,225 |
0 |
58,812 |
17,413 |
0 |
5 |
July 12, 2017 |
Scheme 2012 |
900 |
6,395 |
6,395 |
0 |
6,395 |
0 |
0 |
6 |
November 9, 2017 |
Scheme 2012 |
1,260 |
9,300 |
9,300 |
0 |
6,528 |
2,772 |
0 |
7 |
May 24, 2018 |
Scheme 2012 |
2,047 |
18,527 |
18,527 |
0 |
4,781 |
13,746 |
0 |
8 |
July 23, 2018 |
Scheme 2012 |
2,044 |
40,764 |
40,764 |
0 |
27,868 |
3,210 |
9,686 |
9 |
November 2, 2018 |
Scheme 2012 |
2,286 |
3,426 |
3,426 |
0 |
0 |
3,426 |
0 |
10 |
May 10, 2019 |
Scheme 2012 |
2,347 |
8,228 |
4,937 |
0 |
0 |
5,369 |
2,859 |
11 |
August 2, 2019 |
Scheme 2012 |
1,683 |
6,025 |
3,614 |
0 |
100 |
3,597 |
2,328 |
12 |
November 10, 2020 |
Scheme 2012 |
1,769 |
27,051 |
8,115 |
0 |
12,115 |
0 |
14,936 |
13 |
December 24, 2020 |
Scheme 2020 |
1,244 |
1,85,950 |
0 |
0 |
10,255 |
55,015 |
1,20,680 |
14 |
May 28, 2021 |
Scheme 2012 |
2,520 |
705 |
0 |
0 |
0 |
705 |
0 |
14 |
May 28, 2021 |
Scheme 2020 |
1,400 |
7,617 |
0 |
0 |
610 |
0 |
7,007 |
15 |
February 10, 2022 |
Scheme 2020 |
1,842 |
13,163 |
0 |
0 |
0 |
3,997 |
9,166 |
16 |
August 5, 2022 |
Scheme 2020 |
1,487 |
20,767 |
0 |
0 |
0 |
0 |
20,767 |
17 |
November 11, 2022 |
Scheme 2020 |
1,415 |
2,37,696 |
0 |
0 |
0 |
2,508 |
2,35,188 |
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 (Rs) |
Outstanding at the beginning of the year |
222,004 |
1,032.60 |
Granted during the year |
258,463 |
1,420.79 |
Forfeited/ Cancelled during the year |
(34,841) |
1,297.04 |
Expired during the year |
0 |
0 |
Exercised during the year |
(23,009) |
1,529.17 |
Outstanding at the end of the year |
422,617 |
1,413.43 |
Exercisable at the end of the year |
25,437 |
1,820.20 |
|
As at March 31, 2023 |
Weighted average remaining contractual life (in years) |
7.35 |
AUTHORISED SHARE CAPITAL |
The Authorized Share Capital of your Company as on March 31, 2023 stood at Rs.
25,00,00,000 (Rupees Twenty-Five crores only) I divided into 2,50,00,000 (Two Crores and
Fifty Lakhs only) equity shares of Rs. 10/- (Rupees Ten only) each.
RELATED PARTY TRANSACTIONS I
All related party transactions that were entered into during the financial year were on
an arm's length basis and were in the ordinary I 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://
vmart.co.in/wp-content/uploads/2023/07/Related-Partv-Transaction-Policv.pdf. The
details of related party transactions entered l during the year are provided in the
accompanying financial statements. The particulars of the contract or arrangement with
related f parties referred in section 188(1) of the Companies Act, 2013 in the prescribed
form AOC-2, is annexed as Annexure-Eto this report. 5
DEPOSITS l
During the FY 2022-23, your Company has not accepted any deposits from the public, and
as such no amount of principal or interest = was outstanding as on the date of the Balance
Sheet.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT,
2013.
Loans, Guarantees & Investments 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, 2023 AND THE DATE OF BOARD'S REPORT
There have been no such material changes and commitments affecting the 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
comprising of four members, namely
Ms. Sonal Mattoo (Chairperson),
Mr. Lalit Agarwal (Member)
Mr. Madan Gopal Agarwal, (Member) and
Mr. Aakash Moondhra, (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 a net worth of rupees five hundred
crores or more, or a turnover of rupees one thousand crores or more or a net profit of
rupees five crores or more during the 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 Rs. 46.44 lakhs on CSR activities
during the year.
During the year under review, your Company has spent an amount Rs. 61.14 lakhs towards
the Corporate Social Responsibility projects. The company has spent all its statutorily
mandated 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, the 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 continued its efforts and taken many energy saving initiatives such as:
Multiple energy conservation practices have been put in place like employees
switching off all power points during lunch breaks, adding reminder messages near switches
and doors to promote electricity conservation, all Air Conditioners (AC's) at its office
have temperature sensors to ensure periodic compressor cuts, and installation of motion
sensor-enabled lighting systems enabled at the warehouse of the Company.
Recycling metal and wood scrap to create tables and racks for operational
purposes
Prioritizing the use of recycled materials, reusing carbon boxes, minimizing
plastic and paper consumption, and implementing efficient scrap management practices.
The water filtration systems produce 3,000 litres of waste water on weekdays,
reducing reliance on water supply resources.
The use of automated sensors in water tanks and coolers to prevent water wastage
from overflow.
Groundwater recharging through rainwater capture
The waste water from the RO system is utilized for cleaning and gardening
purposes and regular maintenance of the RO system is conducted to minimize effluent
generation.
Installed motion sensors to control lights in the storage area, racks and
washroom to save energy on a daily basis.
Replacing the old machinery and devices with highly energy efficient 5 star
rated devices.
Replacing higher wattage lights with lower wattage LED lights while maintaining
LUX level of 350 in the warehouse of the Company, thereby saving 2 KW of energy daily.
The Company also implemented a cable tray design to minimize unnecessary
consumption in electrical devices and utilized a digital control panel to oversee energy
meters and mitigate any potential energy losses.
Further, obtained fresh electrical equipment (alternating current/diesel
generator) in accordance with the most recent environmentally-friendly regulations, such
as the "CBCB4" standard.
TECHNOLOGY ABSORPTION
With its sights firmly focused on accelerating long-term growth and sustained value
creation for all stakeholders, your Company is steadily making its organisational
structure, processes and capabilities more robust and future-ready.
Your Company is enriching its already existing organisation wide data analytics
architecture, to feed decision-enabling insights directly to store managers, regional
heads and zonal heads. Technology adoption and up gradation across its planning, supply
chain and logistics infrastructure.
During the year under review, several technological changes have been implemented at
the company's Head-office, warehouse, as well as at the stores which includes:
Supply Chain:
Improving Vendor data interface by the up gradation of Vendor Portal and Vendor
Data Management System with the new features such as further improved quality check;
Advanced Shipment Notice (ASN) and Logistics Support
Implementation of a Transporter Management system for outbound process;
Building a centralized state of the art warehouse for meeting the future omni
channel scale.
Upgraded Warehouse Control System (WCS) for segregation for stores returns (with
logic SKU, Article, option and Multi season wise);
The Rule Engine has been enhanced and implemented to facilitate Inventory
Replenishment in stores.
Cyber Security:
The initial phase of Cyber Security implementation has been introduced, incorporating
the following features:
System, user and application authentications for security purposes;
Single sign-on (SSO) is an authentication mechanism that allows users to
securely authenticate across multiple applications and websites using a single set of
credentials.
Omni Channel:
We have expanded our presence by partnering with marketplaces like Amazon,
Myntra, and vmartretail.com. Additionally we have introduced our products this year on
LimeRoad.com.
Our custom Customer Data Platform (CDP) enhances interaction with loyal
customers, allowing us to send personalized messages and exclusive promotions, resulting
in increased sales.
We've introduced a new feature - customers can now interact with us through our
official Whatsapp handle. They can easily find personalized coupons, eliminating previous
challenges. This innovation aims to streamline the process, reduce queues, and provide a
smoother shopping experience.
VMart's data science and engineering team collaborated with external consultants
to automate and implement merchandise planning processes, particularly in the area of
demand forecasting. Through our joint efforts, we have achieved a remarkable milestone in
more accurately predicting monthly demand for every season, achieving an impressive
accuracy rate of ~71% across over 250 departments.
To ensure that our stores offer the most suitable merchandise selection, we have
implemented a recalibration process during the year. By considering regional preferences,
competition analysis, and customer surveys, we aim to curate products that align with the
specific needs and preferences of each location.Through this, we have successfully
delivered recommended merchandise mixes based on these factors. During the early pilot
phases, we recorded growth in our monthly rate of sale across various divisions, with
improvements reaching up to 3%.
We have witnessed a remarkable increase in our daily listings; it has increased
from ~50 options per day to 500 options per day. This substantial increase in listings has
allowed us to expand our product offerings and cater to a broader range of customer
preferences.
To ensure a strong omnichannel culture and adherence to service level agreements
(SLAs) across our expansive network of over 400+ stores throughout India, we have taken
deliberate measures to align and communicate
the pace of growth and incentives to our stores.Through carefully crafting sales
incentives and multiple rounds of culture building store staff trainings,we have
successfully fostered the growth of our endless aisle orders. In just 9 months since
implementation,we have witnessed a remarkable increase from 200 orders per month to over
12,000 orders per month.
Accurate inventory management and intelligent order routing allow us to
efficiently fulfil online orders from our stores. We prioritize inventory analysis,
automation, and leverage our Order Management Systems (OMS) to ensure timely delivery and
maximize customer satisfaction.
Financial, Operations and Analytics:
Efficiency has been enhanced through the implementation of workflow-based
systems in various areas such as store selection, project management, and compliance
management.
The Tableau dashboard for tracking key business performance indicators (KPIs)
has been upgraded.
Further leveraging of analytic based personalized customer discount through
coupon engine
Launching of a Campaign Manager Tool to automate and schedule rule-based
personalized communication marketing campaigns to target customers across event- specific
segments, and cohorts.
FOREIGN EXCHANGE EARNINGS AND OUTGO
|
|
|
|
Sr. No |
Particulars |
Foreign Exchange Earning (Amount in Rs.) |
Foreign Exchange Outgo (Amount in Rs.) |
|
|
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 "Zero Tolerance" against bribery,
corruption, and unethical dealings/behaviours of any form and the Board has laid down
directives to counter such acts. The Code has also been posted on the Company's website www.
vmart.co.in (http://vmart.co.in/corporate-governance/)
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company believes in the conduct of the affairs of its various constituents fairly
and transparently by committing the highest standards of professionalism, honesty,
integrity and ethical behaviour. In line with this commitment, This Vigil Mechanism/
Whistle Blower Policy ("the Policy") has been formulated to provide a mechanism
for all stakeholders, including Directors, Employees, Customers, Vendors, Associates and
Suppliers of the Company to raise concerns about suspected frauds, any violations of
legal/regulatory requirements or code of conduct/ policy of the Company, incorrect or
misrepresentation of any financial statements and reports, etc.
This Policy is to encourage V-Mart's stakeholders who have concerns about suspected
misconduct to come forward and report any actual or potential unethical practices in
violation of the code of conduct or the applicable laws, without fear of retaliation,
punishment or unfair treatment.
The policy provides a mechanism whereby whistle-blowers 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.vmart.co.in (https://vmart.
co.in/corporate-governance/)
CODE ON PROHIBITION OF INSIDER TRADING
The Securities and Exchange Board of India (SEBI) has in exercise of powers conferred
under the 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
Insiders, 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 Company and
during the period when the Trading Window is closed. The Board is responsible for the
implementation of the Code.
The Code, inter alia, lays down the procedures to be followed by DPs while trading/
dealing in Company securities and while sharing Unpublished Price Sensitive Information
(UPSI). The Code includes the obligations and responsibilities of DPs, and the obligation
to maintain a structured digital database, a mechanism for the prohibition of insider
trading and handling of UPSI.
All Directors and the designated person have confirmed compliance with the code.
Structured Digital Database (SDD) Module - Tracking of UPSI
The Structured Digital Database (SDD) Module has been implemented by the Company to
track the transfer of Unpublished Price Sensitive Information (UPSI), in accordance with
SEBI Regulations. All designated persons are required to update the data related to the
UPSI that they are sharing.
If any person contravenes the same, he/she shall be penalized by SEBI as per the
Regulations and shall also be subject to disciplinary action by the Company, which may
include wage freeze, suspension, etc.
The details in this respect are available in the Ethics Framework available on the
website of the Company: www.vmart.co.in.
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 comprising of three members, namely:
Mr. Murli Ramachandran (Chairperson),
Mr. Aakash Moondhra (Member),
Mr. Govind Shridhar Shrikhande (Member).
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 forms part of this report.
HUMAN RESOURCE MANAGEMENT
During the FY 2022-23 the Company continued to invest in the growth, progression,
welfare and well-being of the employees. The Company endeavours to achieve a harmonious
equilibrium between personal advancement and professional enrichment and progression by
furnishing a secure, facilitative, and prolific work milieu.
The Company has prioritized workforce planning and analytics to identify skills gaps,
predict talent needs, and implement strategies for attracting and retaining
high-performing employees. Employee well-being, both physical and mental, has been
prioritized through resources and support for stress management, work-life balance, and
mental health.
In terms of training and development, various programs have been implemented to support
employees at all levels. Retail excellence training focuses on customer service and sales
techniques, management development programs target middle- level managers for skills
development, and leadership training programs provide support to senior leaders through
coaching and education. Technical training programs are also offered to enhance expertise
in specific areas such as merchandising and supply chain 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-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 Rs 1.02 crores or more, or employed for the part of the
year and in receipt of Rs 8.5 lakhs or more a 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 an 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 & REPORT
Pursuant to the provisions of Section 139 of the Companies Act, 2013, S.R. Batliboi
& Co. LLP, Chartered Accountants, (Firm Registration No. 301003E/E300005) were
appointed as Statutory Auditors of the Company for a term of five consecutive years, to
hold office from the conclusion of the 16th Annual General Meeting held on June
29, 2018 until the conclusion of 21st Annual General Meeting of the Company to be held in
the calendar year 2023, subject to annual ratification by members at every Annual General
Meeting, on such remuneration as may be decided. However, vide notification dated
May 7, 2018 issued by the Ministry of Corporate Affairs, the requirement of annual
ratification has been omitted.
The Audit Committee and the Board at their meeting held on May 16, 2023 approved the
re-appointment of M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, (Firm
Registration No. 301003E/E300005) as the statutory auditors for a second term of five (5)
years i.e. from the conclusion of the 21st AGM held for the financial year 2022-23 till
the conclusion of 26th AGM held for the financial year 2027-28. The necessary
resolution(s) seeking the approval of the shareholders for their appointment as statutory
auditors is included in the notice of the 21st AGM along with other necessary disclosures
required under the Act and the Regulations.
Further, the Auditors' Report "with an unmodified opinion", given by the
Statutory Auditors on the financial statements of the Company for financial year 2022-23,
forms part of this Annual Report. There was no observation or qualification in the
Auditor's Report. The Notes on Financial Statements referred to in the Auditors' report
are self-explanatory and therefore do not require any further comments.
SECRETARIAL AUDITOR & REPORT
M/s. VKC & Associates, Company Secretaries, a partnership firm was appointed as
Secretarial Auditors to conduct the Secretarial Audit of the Company for the FY 2022-23,
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 regarding internal financial control and its
adequacy are included in the Management Discussion and Analysis, which forms 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 the 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 Women 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: 5 (five)
b) Number of complaints disposed-off during the year: 5 (five)
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)
POSH Course is a default, mandatory course that every new employee has to undertake in
the organization. We have also assigned the POSH training course to all employees in
December 2022, covering 8,000+ V-Mart employees. This type of training focuses on
educating employees on proper workplace behaviour, how to handle uncomfortable situations,
and what to do if they experience or witness sexual harassment in the workplace.
e) Nature of action taken by the employer or district officer: A detailed investigation
was carried out by the Company and the appropriate action was taken to resolve the matter.
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, all shares in respect of which dividend has not been paid or claimed for seven
consecutive years or more are required to be transferred by the company in the name of
Investor Education and Protection Fund.
Further details of unpaid or unclaimed dividends and shares are provided on our website
at www.vmart.co.in.
BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT
As stipulated in terms of the provisions of Regulation 34 of SEBI (Listing Obligation
& Disclosure Requirements) Regulations, 2015 the Business Responsibility &
Sustainability Report describing the initiatives undertaken by the Company from
environmental, social and governance perspective is presented in a separate section
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 to the business
activity carried out by the Company.
DIVIDEND DISTRIBUTION POLICY
Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosures
Requirements) Regulations 2015 ("the listing regulations"), the top 1000 listed
companies shall formulate a dividend distribution policy. Accordingly, the policy was
adopted to set out the parameters that will be taken into consideration by the Board of
the Company in determining the distribution of dividends to its shareholders and/or
retaining profits earned by the Company. The policy is available on the Company's website
at the link: https://vmart.co.in/wp-content/uploads/2023/07/
Dividend-Distribtion-Policv-1.pdf.
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.
DIRECTORS 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 coordination extended by the employees, shareholders, customers,
suppliers, bankers, and all other business associates.
Your Directors gratefully acknowledge the ongoing cooperation and support provided by
Central Government, State Governments, and all regulatory authorities.
Your Directors also appreciate and value the contribution made by every member of the
V-Mart family.
By the Order of the Board and On behalf of the Board
service contracts, policy for and scope of pension arrangements, etc. for Executives
and reviewing it on a periodic basis;
4.2.2 Formulate the criteria for determining qualifications, positive attributes and
independence of a director and recommend to the Board a policy relating to the
remuneration for the Director.
4.2.3 Identifying persons who are qualified to become directors and who may be
appointed as Executives in accordance with the criteria laid down in this policy,
recommend to the Board their appointment and removal and carry out their evaluation.
4.2.4 Formulating terms for cessation of employment and ensure that any payments made
are fair to the individual and the company, that failure is not rewarded and that the duty
to mitigate loss is fully recognized;
4.3 The Committee shall:
4.3.1 review the ongoing appropriateness and relevance of the remuneration policy;
4.3.2 ensure that all provisions regarding disclosure of remuneration, including
pensions; are fulfilled;
4.3.3 obtain reliable, up-to-date information about remuneration in other companies;
4.3.4 ensure that no director or Executive is involved in any decisions as to their own
remuneration.
4.4 Without prejudice to the generality of the terms of reference to the Nomination and
Remuneration Committee set out above, the Committee shall:
4.4.1 Operate the Company's share option schemes (if
any) or other incentives schemes (if any) as they apply to. It shall recommend to the
Board the total aggregate amount of any grants to employees (with the specific grants to
individuals to be at the discretion of the Board) and make amendments to the terms of such
schemes (subject to the provisions of the schemes relating to amendment);
4.4.2 liaise with the trustee / custodian of any employee share scheme which is created
by the Company for the benefit of employees or Directors and Director should possess the
highest personal and professional ethics, integrity;
4.4.3 review the terms of executive Directors' service contracts from time to time; and
4.4.4 perform such other acts, things and take such other decisions as provided and
authorized by the Board of Directors of the Company to the Committee in terms of the
provisions of Companies Act, 2013 and other applicable laws.
5. PROCEDURE FOR SELECTION AND APPOINTMENT
OF THE BOARD MEMBERS
5.1 Board membership criteria
The Committee, along with the Board, reviews on an annual basis, appropriate skills,
characteristics and experience required of the Board as a whole and its individual
members. The objective is to have a Board with diverse background and experience in
business, government, academics, technology and in areas that are relevant for the
Company's global operations.
In evaluating the suitability of individual Board members, the Committee takes into
account many factors, including general understanding of the Company's business dynamics,
global business and social perspective, educational and professional background and
personal achievements.
In addition, Directors must be willing to devote sufficient time and energy in carrying
out their duties and responsibilities effectively. They must have the aptitude to
critically evaluate management's working as part of a team in an environment of
collegiality and trust.
The Committee evaluates each individual with the objective of having a group that best
enables the success of the Company's business.
5.2 Selection of Board Members/ extending invitation to a potential director to join
the Board
One of the roles of the Committee is to periodically identify competency gaps in the
Board, evaluate potential candidates as per the criteria laid above, ascertain their
availability and make suitable recommendations to the Board. The objective is to ensure
that the Company's Board is appropriate at all points of time to be able to take decisions
commensurate with the size and scale of operations of the Company. The Committee also
identifies suitable candidates in the event of a vacancy being created on the Board on
account of retirement, resignation or demise of an existing Board member. Based on the
recommendations of the Committee, the Board evaluates the candidate(s) and decides on the
selection of the appropriate member.
The Board then makes an invitation (verbal / written) to the new member to join the
Board as a Director. On acceptance of the same, the new Director is appointed by the
Board.
6. BOARD DIVERSITY
6.1 The Company acknowledges the importance of diversity in its broadest sense in the
Boardroom
as a driver of Board effectiveness. Diversity encompasses diversity of perspective,
experience, education, background, ethnicity and personal attributes. The Company
recognizes that gender diversity is a significant aspect of diversity and acknowledges the
role that directors with the right skills and experience can play in contributing to
diversity of perspective in the Boardroom.
6.2 The Committee shall review and evaluate Board composition to ensure that the Board
and its Committees have the appropriate mix of skills, experience, independence and
knowledge to ensure their continued effectiveness. In doing so, it will take into account
diversity, including diversity of gender, amongst other relevant factors.
6.3 The Committee shall monitor and periodically review the Board Diversity and
recommend to the Board so as to improve one or more aspects of its diversity and measure
progress accordingly.
7. PROCEDURE FOR SELECTION AND APPOINTMENT
OF EXECUTIVES OTHER THAN BOARD MEMBERS
7.1 The Committee shall actively liaise with the relevant departments of the Company to
study the requirement for management personnel, and produce a written document thereon;
7.2 The Committee may conduct a wide-ranging search for candidates for the positions of
Employees within the Company, within enterprises controlled by the Company or within
enterprises in which the Company holds equity, if any, and on the human resources market;
7.3 The professional, academic qualifications,
professional titles, detailed work experience and all concurrently held positions of
the initial candidates shall be compiled as a written document;
7.4 A meeting of the Committee shall be convened, and the qualifications of the initial
candidates shall be examined on the basis of the conditions for appointment of the
Employees;
7.5 Before the selection of Employee, the recommendations and relevant information on
the relevant candidate(s) shall be submitted to the Board of Directors;
7.6 The Committee shall carry out other follow-up tasks based on the decisions of and
feedback from the Board of Directors.
8. COMPENSATION STRUCTURE
(a) Remuneration to Non-Executive Directors:
The Non-executive Directors of the company are paid
remuneration by way of sitting fees only for attending the meetings of the Board and
its Committee Meetings. The sitting fees paid to the Non-executive Directors for attending
meetings of Board of Directors is Rs. 1,00,000/- and Rs. 75,000/- for meeting of Audit and
Nomination and Remuneration Committee per meeting per member. Beside the sitting fees they
are also entitled to reimbursement of expenses. The Nonexecutive Directors of the Company
may also be paid other remuneration or commission, subject to requirements of applicable
laws and payment matrix as approved by the Board/Nomination and Remuneration Committee of
the Company.
The sitting fees of the Non-executive Directors for attending meetings of Board of
Directors and the Committees of Board of Directors may be modified or implemented from
time to time only with the approval of the Board in due compliance of the provisions of
Companies Act, 2013.
(b) Remuneration to Executive Directors, Key Managerial Personnel(s) (KMPs) &
Senior Management Personnel (s) (SMPs):
The Company has a credible and transparent framework in determining and accounting for
the remuneration of the Managing Director / Whole Time Directors (MD/WTDs), Key Managerial
Personnel(s) (KMPs) and Senior Management Personnel(s) (SMPs). Their remuneration shall be
governed by the external competitive environment, track record, potential, individual
performance and performance of the company as well as industry standards. The remuneration
determined for MD/WTDs, KMPs and SMPs are subjected to the approval of the Board of
Directors in due compliance of the provisions of Companies Act, 2013. The remuneration for
the KMP and the SMP at the time of the appointment has to be approved by the Board but any
subsequent increments shall be approved by the Managing Director of the Company as per the
HR policy of the Company.
The Executive Directors of the Company are also entitled for commission on the profits
of the Company as approved by the Board of Directors and Shareholders of the Company in
Annual General Meeting.
9. ROLE OF INDEPENDENT DIRECTORS
9.1 The Committee shall, in consultation with the Independent Directors of the Company,
prepare and submit this policy to the Board for its approval.
9.2 The Independent Directors shall have power and authority to determine appropriate
levels of remuneration of executive directors and
Employees and have a prime role in appointing and where necessary recommends removal of
executive directors and Employees.
9.3 The Independent Directors shall submit its recommendations/ proposals/decisions to
the Committee which the Committee shall consult and take to the Board of Directors.
10. APPROVAL AND PUBLICATION
10.1 This remuneration policy as framed by the Committee shall be recommended to the
Board of Directors for its approval.
10.2 This policy shall be hosted on the Company's website.
10.3 The policy shall form part of the Director's report to be issued by the Board of
Directors in terms of Companies Act, 2013.
11. SUPPLEMENTARY PROVISIONS
11.1 This Policy shall formally be implemented from the date on which they are adopted
pursuant to a resolution of the Board of Directors.
11.2 Any matters not provided for in this Policy shall be handled in accordance with
relevant State laws and regulations and the Company's Articles of Association. If this
Policy conflict with any laws or regulations subsequently promulgated by the state or with
the Company's Articles of Association as amended pursuant to lawful procedure, the
relevant state laws and regulations and the Company's Articles of Association shall
prevail, and this Policy shall be amended in a timely manner and submitted to the Board of
Directors for review and adoption.
11.3 The right to interpret this Policy vests in the Board of Directors of the Company.
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