Your directors are pleased to present the Fortieth Annual Report of your Company together with the audited financial statements for the financial year ended March 31,2023.

1. SUMMARY OF FINANCIAL RESULTS

The performance of the Company for the Finacial year ended March 31,2023 is summarized below:

The Gross turnover of the Company for the year was '2,92,924.29 lakhs. Out of the same, revenue depicted above as that of the Continuing Operations, i.e. '2,66,286.66 lakhs relates to Goods Transportation and corresponding revenues for the two discontinued business, i.e. Wind Power Undertaking and Bus Operations Undertaking was '797.37 lakhs and '25,840.26 lakhs respectively. Further details are given below.

2. OPERATING HIGHLIGHTS / STATE OF COMPANY’S AFFAIRS

During the year, the Company hived off two business divisions with an intention to solely focus on its Goods Transportation business, being its core competency.

The Company has, during the year, executed a Business Transfer Agreement for the sale / transfer of its Wind Power Business as a going concern on a slump sale basis for an aggregate sale consideration amounting to '5,285 lakhs. The profit before tax amounting to ' 1,034 lakhs on this sale (net of expenses incurred amounting to '6 lakhs), has been accounted as an Exceptional Item in the Financial Results. The said division ceased to be a part of the Company w.e.f. August 2022.

The Company executed a Business Transfer Agreement with a promoter group company for the sale / transfer of its Bus Operations Business as a going concern on a slump sale basis for an aggregate sale consideration amounting to '23,000 lakhs. The profit before tax amounting to ' 17,687 lakhs on sale / transfer (net of expenses incurred amounting to '13 lakhs), has been accounted as an Exceptional Item in the Financial Results. The said division ceased to be a part of the Company w.e.f. January 2023.

The Goods Transportation Business, which is the continuing operational division, achieved a gross revenue of '2,66,286.66 lakhs as against '2,18,037.10 lakhs for the earlier fiscal depicting a growth of 22.13% driven by robust volume growth. Such growth was possible owing to rapid branch expansion as also the ongoing shift of customers from the unorganized operators to entities like us. The Net profit after tax from continuing operations was ' 16,613.75 lakhs as against the corresponding figure of ' 15,615.22 for the previous year. The net profit after tax from discontinued operations for the year was ' 15,706.31 lakhs. The total profit after tax was ' 32,320.06 lakhs.

The Company's Goods Transport Division achieved a turnover of '2,60,877.18 lakhs registering a growth rate of 22.79 % as compared to the previous year.

3. SHARE CAPITAL

The paid up Equity Share Capital as at March 31,2023 stood at ' 8,834.35 lakhs. There was no change to the paid up share capital during the fiscal. The company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31,2023, none of the Directors of the company held instruments convertible into equity shares of the Company.

The company had initiated a buy-back of 8,75,000 equity shares during the last quarter of the fiscal and the same was concluded during FY 2023-24. A detailed note on Buy back has been summarized in point no 4 below.

4. BUY BACK OF SHARES

The Board of Directors of the Company at its meeting held on January 30, 2023 approved the proposal of Buyback of up to 8,75,000 (Eight Lakh Seventy Five Thousand Only) Equity Shares, (representing 0.99 % of the total number of Equity Shares in the existing total paid-up equity capital of the Company as on the date of the Board Meeting), from the shareholders/ beneficial owners of Equity Shares of the Company as on the Record Date being Friday, February 10, 2023 on a proportionate basis, through the “tender offer” process as prescribed under the SEBI Buyback Regulations, at a price of '700/- (Indian Rupees Seven Hundred Only) per Equity Share, payable in cash, for an aggregate maximum amount of '61,25,00,000/-(Rupees Sixty One Crores and Twenty Five Lakhs Indian Rupees), excluding transaction costs. The Buyback Size represented 9.44% of the aggregate of the Company's fully paid-up equity capital and free reserves as per the then last audited financial statements of the Company, as on March 31,2022.

The Buyback Size was within the statutory limit of 10% of the aggregate of the paid-up capital and free reserves of the Company as on March 31,2022 as per Section 68(2) of the Companies Act 2013 and Regulation 5(i)(b) of the SEBI Buyback Regulations. The maximum number of Equity Shares bought back represented 0.99 % of the total number of Equity Shares in the existing total paid-up equity capital of the Company, which is within the permissible limit of 25% of the total paid-up equity capital of the Company in that financial year.

The Board at the said meeting constituted a Buyback committee to execute necessary documentation, papers, announcements and to do other related things which were necessary to give effect to the said buyback of equity shares. The Committee comprised of 5 members viz., Dr. Vijay Sankeshwar, Chairman, Mr. L R Bhat, Dr, Anand Pandurangi, Mr. Gurudas Narekuli and Dr. Raghottam Akamanchi.

Upon closure, the Company has extinguished the shares in accordance with the extant provisions of the applicable Securities Exchange Board of India (Buy Back of Securities) Regulations, 2018, as amended, (“SEBI Buy Back Regulations”) and Companies Act, 2013. The Company completed the Buyback of 8,75,000 equity shares of the Company during the month of April 2023 and as such no related accounting entries are effected during FY 2022-23.

5. CHANGE IN THE NATURE OF BUSINESS

Your Company continues to be one of the leading Logistics service providers in the country. The service offerings of the Company during the year in the Logistics space were Goods Transport, Bus Operations, Transportation of Passengers by Air and Wind Power Generation Business. There is no change in nature of business of the Company except as stated hereunder-

Wind Power: During the year, the Company entered into a Business Transfer Agreement (”BTA”) with Nirani Energy Private Limited for the sale of its Wind Power Generation Business on a going concern basis, by way of Slump Sale for a consideration of '52.85 Lakhs. The said transaction was concluded during the fiscal and with effect from August 2022 the said division, including its underlying cash flows, vested with the purchaser.

Bus Operations: The Bus Operations Business Undertaking was a significant part of the Company's business operations till the Financial Year 2019-20. However, the impact of the COVID-19 pandemic and subsequent lockdowns and local travel restrictions have adversely affected the operations of the Bus Operations Business Undertaking. The existing fleet of vehicles was predominantly aged and would require replacement in the near short term resulting in significant capex outgo/ commitments from the Company. Such capex would be in the nature of replacement capex and would not necessarily yield incremental revenues. Given the nature of the business operations, it is imperative that the bus fleet is in accordance with the customer needs, demands and also better than that of the competitors across the routes in which we operate. At the time of its evaluation, i.e. as of 31.08.2022, out of the total fleet of 277 owned buses, a total of 179 buses were over 9 years old.

Going ahead, the Management wishes to position VRL Logistics Limited as an entity focusing solely on its core competency, which is Goods Transportation. The Company had explored options to sell off the Bus Operations Business Undertaking to an independent third party. However no satisfactory response could be seen with regard to this transaction. The Company also tried to dispose off the buses individually however there were no suitable buyers for the same. Promoters, having started this undertaking, have stepped in and proposed to take over the operations on a going concern basis and accordingly, after obtaining the due shareholder approvals in respect thereof, the said transaction was concluded. The said undertaking was

sold on slump sale basis for a lump sum consideration of '23,000 Lakhs determined on the basis of independent valuation report. The company had engaged the services of M/s Grant Thornton Bharat LLP to arrive at an independent valuation of the said division.

During the FY2022-23, the approval of the shareholders was obtained by way of postal ballot for Transfer of the Bus Operations Business Undertaking of the Company to Vijayanand Travels Private Limited, on slump sale basis.

6. CAPITAL EXPENDITURE:

During the Financial year 2022-23, the company has incurred a capital expenditure of ' 41,398.42 Lakhs. Out of the same, an amount of '37,862.94 Lakhs was invested on purchase of new fleet i.e., Goods Transport Vehicles. The balance capex of ' 3,535.48 Lakhs was spent on machineries, land & building, furniture and fixtures, plant & equipment, office equipment and leasehold improvements etc.

7. LEASES

The adoption of the accounting standard Ind-AS 116- Leases, which has become effective from April 1,2019, has resulted in the Company recognizing a right-of-use (ROU) of assets and related lease liability in connection with all former operating leases except for those identified as low-value or having a remaining lease term of less than 12 months from the date of initial application.

This year, the addition to ROU assets was to the tune of ' 13,287.99 Lakhs attributable entirely to Buildings owing to rapid branch expansion. Also the addition to Lease Liabilities, including both current and Non-current was to the tune of ' 14,750.38 Lakhs.

The impact of adopting IndAS 116 on the financial statements for the year ended March 31,2023 is as follows:

• In compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), the Dividend policy of the Company is available on the Company's website at http:// vrlgroup.in/vrljnvestor_desk.aspx?display=policies. A copy of the same is annexed to this Report as Annexure A.

9. TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS AND SHARES TO IEPF:

The Ministry of Corporate Affairs under Section 124 and 125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”), requires dividends that are not encashed/ claimed by the shareholders for a period of seven consecutive years, to be transferred to the Investor Education and Protection Fund (IEPF).

During the year the company has transferred the IPO Share Application money which was unclaimed for a period of seven years amounting to ' 14,65,750 to the Investor Education and Protection Fund Authority in accordance with the provisions of the Act.

Dividend, pertaining to FY 2015-16 unclaimed for a period of seven years amounting to ' 1,83,920/- has been transferred to the Investor Education and Protection Fund Authority in accordance with the provisions of the Act.

Pursuant to the provisions of the Companies Act 2013, read with the Investor Education and Protection Fund Authority Rules, underlying shares on which dividends have not been claimed for 7 consecutive years have been transferred to the IEPF Authority. In compliance with the above, the Company has transferred 1012 equity shares in favour of IEPF Authority.

The details of the consolidated unclaimed/ unpaid dividend as required by the Act read with IEPF Rules for all the unclaimed/ unpaid dividend accounts outstanding (drawn up to the Thirty Ninth Annual General Meeting held on August 10, 2022) have been uploaded on the Company's website and can be accessed at http://vrlgroup.in/investor_download/Unclaimed_ Dividend_2020.pdf?a=1

The Members of the Company, who have not yet encashed their dividend warrant(s) or those who have not claimed their dividend amounts as also members whose shares have been transferred to IEPF, may write to the Company/ Company's Registrar and Share Transfer Agent, Kfin Technologies Limited.

10. TRANSFER TO RESERVES:

The Company has transferred an amount of ' 3,232.01 lakhs to the General Reserve out of current year's profits in line with its practice of earlier years.

11. SUBSIDIARY COMPANIES:

The Company does not have any subsidiary.

12. FIXED DEPOSITS

The Company has not accepted any deposits during the year within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under.

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. Details of investments made by the company are given in the notes to the financial statements.

14. CREDIT RATING

During the year, ICRA Limited has upgraded its existing long term rating from [ICRA] A (Stable) to [ICRA] A (Positive) (pronounced as ICRA A Plus Positive). The outlook on the long term rating is upgraded from Stable to Positive, indicative of low credit risk.

15. MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 (2) of SEBI Listing Regulations read with Schedule V thereto, is presented in a separate section forming part of this Annual Report.

16. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

The Securities Exchange Board of India vide notification has mandated top 1,000 listed companies based on market capitalization to include a report on business responsibility & sustainability. Your Company stands at 445th position as on March 31,2023. The said report is in compliance with the SEBI Listing Regulations and forms a part of this Annual Report.

17. CORPORATE GOVERNANCE

The Company is committed to maintain the steady standards of corporate governance and adhere to the corporate governance requirements set out under extant law. The Report on corporate governance as stipulated under Regulation 34 of the SEBI Listing Regulations read with Schedule V thereto forms part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Regulations, as also the related certificate from CEO/CFO are attached to the Report on Corporate Governance.

The auditors' certificate does not contain any qualification, reservation or adverse remarks.

18. BOARD COMPOSITION AND INDEPENDENCE

The composition of the Board is in conformity with Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI Listing Regulations, which stipulates that the Board should have optimum combination of Executive and Non-executive Directors with at least one Independent Woman Director and at least 50% of the Board should consist of Independent directors, as the Chairman of our Board is an Executive Director.

As on March 31,2023, the Board comprised of twelve Directors. Out of these, two are Managing Directors who are also the Promoters of the Company and two are Whole Time Executive Directors, the other eight being Non-Executive Directors.

Of the eight Non-Executive Directors, six are Independent Directors. These include two Independent Woman Directors. All the Directors possess the requisite qualifications, expertise and experience in general corporate management, finance, banking, laws and other allied fields enabling them to contribute effectively in their capacity as Directors of the Company.

None of the Directors of the Company are related to each other except Dr. Vijay Sankeshwar, Chairman & Managing Director (CMD) and Dr. Anand Sankeshwar, Managing Director (MD).

All Independent Directors have given due declarations that they meet the criteria of independence as laid down under section 149 (6) and (7) of the Companies Act, 2013 and under extant provisions of the SEBI Listing Regulations.

19. NUMBER OF MEETINGS OF THE BOARD

During the year, six Board Meetings were held, details of which are provided in the Corporate Governance Report. The intervening gap between the Meetings was in compliance with the requirements of the Companies Act, 2013 and SEBI Listing Regulations.

Details of attendance of meetings of the Board, its Committees and the Annual General Meeting are included in the Report on Corporate Governance, which forms part of this Annual Report.

20. COMMITTEES OF THE BOARD

The Board has the following committees:

a. Audit Committee

b. Nomination and Remuneration Committee

c. Corporate Social Responsibility Committee (CSR)

d. Stakeholders Relationship Committee

e. Risk Management Committee

f. Administration Committee

g. Finance Committee

h. Buy Back Committee

Details such as terms of reference, powers, functions, meetings, membership of committee, attendance of directors etc. are dealt with in Corporate Governance Report forming part of this Annual report.

Board has accepted all recommendations made by the Audit Committee during the year.

21. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

a) Inductions

There was no induction of any new Director/KMP during the year under consideration.

Based on the recommendation of the Nomination & Remuneration Committee, the board proposes the induction of CA Shantilal Jain as an independent director on the Board of Directors. A resolution to that effect is proposed for the approval of the members at the ensuing Annual General Meeting of the company. The Board recommends his appointment.

b) Retirement/Re-appointment

Mr. L R Bhat, Whole-time Director and Dr. Ashok Shettar, Non-Executive Director of the Company, retire by rotation at this AGM and being eligible, offer themselves for reappointment. The Board recommends their re-appointment.

c) Resignation

During the year under review, no directors resigned from the Company.

d) Key Managerial Personnel

Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company are Dr. Vijay Sankeshwar, Chairman & Managing Director, Dr. Anand Sankeshwar, Managing Director, Mr. K N Umesh, Whole time Director, Mr. L R Bhat, Whole time Director, Mr. Sunil Nalavadi, Chief Financial Officer and Mr. Aniruddha Phadnavis Company Secretary & Compliance Officer. There was no change in Key Managerial Personnel of the Company during the year.

The remuneration and other details of these Key Managerial Personnel for FY 2022-2023 are provided in the Annual Return (MGT 7) which is available on the website of the Company and can be accessed at https://www.vrlgroup.in/ .

22. STATUTORY DISCLOSURES

None of the Directors of your Company are disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Companies Act, 2013 and SEBI Listing Regulations. A Certificate to that effect as mandated under Schedule V of the SEBI (LODR) Regulations, 2015 has been obtained from a Company Secretary in practice.

23. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, the annual performance of the Board, its Committees, Chairperson and Individual Directors including Independent Directors was evaluated as per the criteria laid down by the Nomination and Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report which forms part of this Annual Report.

24. BOARD DIVERSITY

A diverse Board enables efficient functioning through differences in perspective and skill and also fosters differentiated thought processes at the back of varied industrial and management expertise, gender and knowledge. The Board recognizes the importance of a diverse composition and has adopted a Board Diversity policy which sets out the approach to diversity.

The said policy can be accessed through the following link : https://www.vrlgroup.in

25. DIRECTOR'S RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

i) In the preparation of the annual accounts, the applicable accounting standards (IndAS) have been followed along with proper explanation relating to material departures. The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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.

iii) 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.

iv) The directors have prepared the annual accounts on a going concern basis.

v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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

vii) Based on the framework of internal financial controls established and maintained by the Company, work performed by the internal, statutory auditors, reviews performed by the management and the relevant Board Committees, the Board, in concurrence with the Audit Committee, is of the opinion that the Company's internal financial controls were adequate, operational and effective as on March 31,2023.

26. 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.

During the financial year, the company transferred its Bus Operations Business Undertaking to Vijayanand Travels Private Limited (a company owned and controlled by the promoter(s) of the Company), as a going concern, on slump sale basis for a lump sum consideration of ' 23,000 Lakhs determined on the basis of independent valuation report obtained from M/s Grant Thornton Bharat LLP The said transaction was carried out with prior approval of Audit Committee and Board of Directors and was also approved by the shareholders through postal ballot. The said related party transaction was carried out at the Arms Length Price and is with compliance of Section 188 of the Companies Act 2013 and Regulation 23 of SEBI (LODR) Regulations 2015. Necessary disclosures related to the said transaction have been made to the stock exchanges where the company are listed.

Except for the above said transaction there were no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons.

All Related Party Transactions are placed before the Audit Committee as also to the Board for prior approval. Omnibus approval was obtained for transactions which are repetitive in nature. A statement containing details of all transactions entered into pursuant to omnibus approval are placed before the Audit Committee and the Board for review and approval on a quarterly basis.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors of the Company can be viewed on the website of the Company through the following link.

http://vrlgroup.in/investor_download/RPT%20Policy.pdf

Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 forms a part of this report and is covered in Annexure H.

27. NOMINATION AND REMUNERATION POLICY

In adherence to Section 178(1) of the Companies Act, 2013, the Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes and other matters provided under sub section (1) (3) of section 178 of the Companies Act 2013. The Remuneration Policy is annexed to this report as Annexure B. The said policy alternatively can also be accessed on the website of the Company at the following link:

http://vrlgroup.in/investor_download/Nomination_Remuneration%20Policy.pdf

28. CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and specified 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 / behavior in any form and the Board has laid down certain directives to counter such acts. Such code of conduct has also been placed on the Company's website. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance on the expected behavior from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. Pursuant to SEBI (LODR) Regulations, 2015, a confirmation from the Managing Director regarding compliance with the Code by all the Directors and senior management of the Company is given as a part of the Annual Report.

29. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Vigil Mechanism Policy in line with the provisions of Section 177(9) and Section 177(10) of the Companies Act, 2013 to deal with instances of fraud and mismanagement, if any. Staying true to our core values being committed to high standards of Corporate Governance and stakeholder responsibility, the said policy ensures that strict confidentiality is maintained in respect of whistle blowers whilst dealing with concerns and also specified that no discrimination will be meted out to any person for a genuinely raised concern and also provides a direct access to the Chairman of the Audit Committee. During the year under review none of the personnel have been denied access to the Chairman of Audit Committee.

The Vigil Mechanism policy is available on the website of the Company and can be accessed at the following link.

http://vrlgroup.in/investor_download/vigil_Mechanism.pdf.

30. PREVENTION OF INSIDER TRADING

In terms of the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended (PIT Regulations), the Company has adopted a Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders with a view to regulate trading in securities by the Directors and certain 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 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.

The said code is available on the website of the Company and can be accessed at the following link. http://vrlgroup.in/vrl_investor_desk.aspx?display=policies

31. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Board of the Company had laid down policies, guidelines, procedures and structure to enable implementation of appropriate internal financial controls across the Company. These control processes enable and ensure the orderly and efficient conduct of Company's business, including safeguarding of assets, prevention and detection of frauds and errors, the accuracy and

completeness of the Accounting records and timely preparation & disclosure of financial statements. These controls also identify the risks and provides for means to minimize / mitigate the risks affecting the business of the Company as a whole. Auditors, as required under the Companies Act 2013, have also reported the existence and operations of these controls in an effective manner.

The Company's internal audit department enables the Management to mitigate the risks and prevent non-compliance with laws which would affect the financial position of the Company. The scope and authority of the Internal Audit function is well defined and to maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board as well as directly to the Chairman & Managing Director. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the internal audit report from time to time, the management undertakes corrective actions in the relevant areas and thereby strengthens the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee.

32. BUSINESS RISK MANAGEMENT

Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has in place a risk management architecture that provides a holistic approach to the best of its capabilities. The Company identifies, assesses and mitigates risks that could materially impact its performance in achieving the stated objectives.

The Risk Management Committee and Audit Committee, on a regular basis, reviews the Company's portfolio of risks and examines it under the light of the Company's Risk Appetite.

The material risks affecting Company are identified along with related mitigation measures and elaborated in the Risk Management Policy of the Company which has also been hosted on the website of the Company and can be accessed at the following link.

http://vrlgroup.in/investor_download/Risk%20Management%20Policy.pdf

33. SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

The Company's Equity Shares are listed on the BSE Ltd and National Stock Exchange of India Limited and the Company has paid the applicable Annual listing fees to these stock exchanges. The Company has also formulated the following Policies as required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015:

‘Policy for Preservation of Documents' under Regulation 9 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The said policy can be accessed at the following link: http://vrlgroup.in/vrl_investor_desk.aspx?display=policies

‘Policy on Criteria for determining Materiality of Events/Information' under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

The said policy can be accessed through the following link: http://vrlgroup.in/vrl_investor_desk.aspx?display=policies

34. AUDITORS and AUDIT REPORTS

a) Statutory Auditors and Audit Report:

In accordance with Section 139 of the Companies Act, 2013 and Rules made thereunder, Members at the 37^th Annual General Meeting of the Company had approved the appointment of Statutory Auditors, M/S. Kalyaniwalla & Mistry LLR Chartered Accountants, Mumbai (Firm Registration No. 104607W / W100166) for a period of 5 years from the date of the said Annual General Meeting.

There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report for the financial year ended March 31, 2023. Pursuant to provisions of section 143 (12) of the Companies Act 2013, the Statutory Auditors have not reported any incident of fraud to the Audit Committee during the year under review.

b) Cost Auditors & Cost Audit Report

Section 148 (1) of the Companies Act 2013 read with Rules made thereunder mandates every Company belonging to category prescribed in the Rules to undertake a Cost Audit. In compliance with said provision, Company had appointed M/s S.K. Tikare & Co., Cost Accountants, Belagavi, to audit the cost records for FY 2022-23 pertaining to its Wind Rower division. The Cost Auditor has submitted the Cost Audit report for FY 2022-23 and the same is annexed as Annexure C herewith.

There are no qualifications, reservations or adverse remarks made by the Cost Auditors in their report for the financial year ended March 31,2023.

Upon the hiving off the Company's Wind Power Division during the year, the requirement of maintenance of cost records does not arise from the succeeding fiscal. However, the company has written to the concerned office in the Ministry of Corporate Affairs for suitable exemption from maintenance of cost records and cost audit.

c) Secretarial Auditor & Secretarial Audit Report

Pursuant to provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Mr. R Parthasarathy, Company Secretary in practice to undertake the Secretarial Audit of the Company for FY 2022-23. The Secretarial Audit report in Form MR-3 is annexed herewith as Annexure D.

Pursuant to the recommendation of the Audit Committee, the Board of Directors have re-appointed Mr. R Parthasarathy, Company Secretary to conduct the Secretarial Audit for FY 2023-24 at its meeting held on May 20, 2023 as also to issue the applicable Secretarial Compliance Report to be submitted to the Stock Exchanges.

With reference to the observation made by the Secretarial Auditor in his report relating to delay of Nine days (from August 1, 2022 to August 09, 2022) in obtaining consent of Members by passing Special Resolution, for continuation of Dr. Prabhakar Kore as an Independent Director, having attained the age of 75 years, it is submitted as under-

As indicated in the report of the Secretarial Auditor, the board took cognizance of the nine days' delay in getting the special resolution passed for continuation of Dr. Prabhakar Kore as an Independent Director, having attained the age of 75 years at its meeting held on January 30, 2023. The board also took note of the penalty of '21,240/-, inclusive of GST paid to each of the stock exchanges and also advised the Management to take care of non-recurrence of such delays and ensure proper compliance henceforth. The outcome of the said meeting was filed with the stock exchanges.

35. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As required under the provisions of the section 135 of the Companies Act 2013, the Board has constituted the Corporate Social Responsibility Committee which monitors and oversees various CSR initiatives and activities of the Company. The CSR Committee comprises of five directors out of which two are Independent Directors. The CSR Committee met three times during the year. Further details such as composition, terms, functions, meetings and attendance of directors of the said committee are provided in the Corporate Governance report forming part of this Annual Report.

The Company has undertaken and contributed to various projects identified by the other Trusts/Educational Institutions for CSR related activities as approved by the CSR Committee during the year mainly towards Education, Healthcare, Disaster Management (Flood relief Activities) and Sports, etc.

A detailed Annual Report as required to be given under Section 135 of the Companies Act, 2013 and Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 containing details of CSR activities & contents of CSR policy is annexed as Annexure E.

CSR policy of the Company is available on the Company's website and can be accessed through the following link http:// vrlgroup.in/investor_download/CSR%20POUCYpdf

36. ANNUAL RETURN:

A copy of the Annual Return of the Company containing the particulars prescribed u/s 92 of the Companies Act, 2013, in Form MGT-7, as of the end of the financial year i.e. March 31, 2023 is uploaded on the website of the Company in the Investor Relations Section under the tab ‘Annual Return' and can be accessed at https://www.vrlgroup.in/vrl_investors_desk. aspx?display=annual_return

37. DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and expenditure are annexed hereto as Annexure G and forms part of this Report.

38. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 (12) read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, forms part of this report and annexed herewith as Annexure G.

A statement containing top ten employees in terms of remuneration and the names of every employee who was in employment of the Company throughout the year and was in receipt of the specified remuneration is also included therein.

39. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

40. MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments that occurred subsequent to the end of the financial year till the date of this report, which affects the financial position of the Company.

41. INDUSTRIAL RELATIONS

During the year under review, your Company experienced cordial relationship with workers and employees at all levels, throughout the year.

42. SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting going concern status and company's operations for a foreseeable future.

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

The Company has in place a Policy for Prevention Prohibition and Punishment of Sexual Harassment of Women at Work place in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

44. ACKNOWLEDGMENTS AND APPRECIATION

The Directors take this opportunity to thank the Company's customers, shareholders, Investors, suppliers, bankers, financial institutions and Central & State Governments for their consistent support and cooperation extended to the Company. The Directors also wish to place on record their appreciation towards employees at all levels for their hard work, dedication and commitment.

For and on behalf of the BoardDr. Vijay Sankeshwar Chairman & Managing Director

DIN:00217714

Place: Hubballi Date: May 20, 2023