VRL Logistics Ltd

Dear Members,

Your directors are pleased to present the Forty Second Annual Report of your Company together with the audited financial statements for the financial year ended 31 March, 2025.

The performance of the Company for the financial year ended 31 March 2025 is summarized below:

(in lakhs)

During the year under consideration, the Company has achieved a gross income of 3,18,640.65 lakhs as against 2,90,971.85 lakhs in the previous year representing a growth of 9.51 %. Due to increased turnover, cost reduction and realization, the Company could achieve a record profit before tax of 25,048.34 Lakhs as against

12,051.23 Lakhs in the previous year. Accordingly, PAT also increased to 18,332.79 lakhs as against the corresponding figure of 8,906.10 for the previous year. The other major reasons for the increase in profitability are the increased yield pursuant to rationalisation of fright rates resulting higher yield effected during later part of the fiscal.

For more detailed analysis on the operations and financial performance and position of the Company, please refer the Management Discussion & Analysis section of this Annual Report.

The paid-up Equity Share Capital as at March 31, 2025 remained at 8746.85 lakhs and there was no change in the same. The company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2025, none of the Directors of the company held instruments convertible into equity shares of the Company.

There was no change in nature of business of the Company. Your Company continues to be one of the leading

Surface Logistics service providers in the country. The service offerings of the Company during the year within Goods Transportation, its core business, included less than truck load and full truck load offerings.

During the Financial year 2024-25, the company has incurred a capital expenditure of 46,094.73 lakhs. Out of the same, an amount of 12,349.14 lakhs was invested on purchase of new fleet i.e., Goods Transport Vehicles and an amount of 29,780.97 lakhs was invested on purchase of premises for operations at Bengaluru, Mangaluru and Mysuru. The balance capex of 3,964.62 lakhs was spent on Plant & Equipments, furniture and fixtures, office equipment and Leasehold improvements etc. The predominant capex during the year was purchase of the existing leased transshipment hub located at Bengaluru.

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

This year, the net reduction in ROU assets was to the tune of 1,382.96 lakhs attributable entirely to Buildings owing to vacating of certain branches as also purchase of the existing transshipment hub at Bengaluru. The addition to Lease Liabilities, including both current and non-current was to the tune of 2,158.45 lakhs.

The impact of adopting IndAS 116 on the financial statements for the year ended 31 March 2025 is as follows:

(in Lakhs)

Considering the record profitearned by the Company and the liquidity position, the Board of Directors recommend a final dividend of 10/- per equity share for the financial year 2024-25. Your dividend of 5/- per equity share during the year. Thereby the aggregate dividend for the year works out to

15/- per equity share.

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/vrl_investor_desk.aspx?display=policies. A copy of the same is annexed to this Report as Annexure A.

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).

The details of the consolidated unclaimed/ unpaid dividend statements as required by the Act read with IEPF Rules for all the unclaimed/ unpaid dividend accounts have been uploaded on the Company's website and can be accessed at https://vrlgroup.in/vrl_investors_desk.aspx?display=unclaimed_dividend 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

IEPF/ Company/ Company's Registrar and Share Transfer Agent, Kfin Technologies Limited.

The Company has transferred an amount of 1829.83 lakhs to the General Reserve out of current year's profits in line with its practice of earlier years.

The Company does not have any subsidiary.

The Company has not accepted any fixed deposits during the year within the meaning of Section 73 of the

Companies Act, 2013 and the rules made thereunder.

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.

During the year, ICRA Limited has revised the Fund based Long term and Cash Credit rating of the Company to [ICRA] A+ Stable from [ICRA] A+ Positive.

As indicated by ICRA, the revision in the outlook to Stable from Positive for VRL Logistics Limited (VRL) factors in the likely moderation in VRL's debt protection metrics against ICRA's expectations, amid debt-funded capex plans in FY2025. The company's earnings profile in the quarters close rating were affected by stable freight rates and persistent inflationary scenario. While the company has recently hiked the freight rates, a sustained expansion in the operating margins remains to be seen. The Stable outlook reflects ICRA's opinion that VRL's credit profile will remain healthy and be supported by its established position in the market, and a strong customer base, which would improve its earnings and cashflows . Strengthening of its fleet, and amidastrongbusinessprofile expansion of the branch network and expected return from the same are likely to be visible in the days to come.

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.

The Securities Exchange Board of India has mandated top 1000 listed companies based on market capitalization to include a report on business responsibility & sustainability. The said report is in compliance with the SEBI

Listing Regulations and forms a part of this Annual Report.

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.

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, 2025, the Board comprised of twelve Directors. Out of these, two are Managing Directors who are also the Promoters of the Company and One Whole Time Executive Director, the other nine being Non-Executive Directors (one of whom is related to the Promoters).

Of the nine Non-Executive Directors, six are Independent Directors. These include one Independent Woman

Director. All the Directors possesstherequisitequalifications,expertise and experience in general corporate management, finance, banking, laws, operations 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), Dr. Anand Sankeshwar, Managing Director (MD) and Mr. Shiva A Sankeshwar (Non-Executive Director).

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.

During the year, fiveBoard Meetings were held, the details of which are provided in the Corporate Governance

Report which forms part of this Annual Report. The intervening gap between these Meetings was in compliance with the requirements of the Companies Act, 2013 and SEBI Listing Regulations. Details of attendance of meetings of the Board, Committees and the Annual General Meeting are also included in the Report on Corporate Governance.

The Board has the following committees: a. Audit Committee b. Nomination and Remuneration Committee c. CSR Committee d. Stakeholders Relationship Committee e. Risk Management Committee f. Administration Committee g. Finance 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.

In view of retirement of Dr. Prabhakar Kore and Mr. Gurudas Narekuli, Independent Directors of the Company whose term ended on March 31, 2024, Mr. Virupaxagouda Patil and Mr. Vinay Javali were appointed as an Independent Directors of the Company w.e.f. April 1, 2024 through Postal Ballot.

In view of further retirement of Dr. Anand Pandurangi and Mr. Shankarasa Ladwa, Independent Directors of the Company whose term ended on February 18, 2025, Dr. D. V. Guruprasad and Mr. Shankar Vasantrao Pinge were appointed as an Independent Directors of the Company w.e.f. February 19, 2025 through Postal Ballot dated December 11th 2024. b) Retirement

Mrs. Medha Pawar, Independent Director of the Company retired on December 11, 2024, Dr. Anand Pandurangi and Mr. Shankarasa Ladwa, Independent Directors of the Company retired on February 18, 2025. c) Retirement by Rotation and reappointment

Mr. Shiva A Sankeshwar and Dr. Ashok Shettar, Non- Executive Directors of the Company, retire by rotation at this AGM and being eligible, offer themselves for reappointment. The Board recommends their re-appointment. d) Resignation

None of the directors resigned during the year.

During the year under consideration, there was no change in Key Managerial Personnel of the Company.

The remuneration and other details of the Key Managerial Personnel for FY 2024-25 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/ .

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.

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.

A diverse Board enables efficient functioning through differences in perspective and skill and also 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://vrlgroup.in/vrl_investors _desk. aspx?display=policies

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, as 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 the Companies Act 2013 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 devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. vi. 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, 2025.

All related party transactions that were entered into during the financial year were on arm's length basis. There were no materially significant related party transactions made by the company with Promoters, Key Managerial

Personnel or other designated persons. 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 does not form a part of this report.

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

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 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

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.

The Company has a Vigil Mechanism Policy in line with the provisions of Section 177 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 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 has 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.

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

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 directly 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 systems in the Company, its application within 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.

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 identifiedalong 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

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 thru the following link: http://vrlgroup.in/vrl_investor_desk.aspx?display=policies

Pursuant to SEBI Circular SEBI/HO/DDHS/DDHS-POD1/P/CIR/2023/172 dt 19.10.2023, Your Company confirms that it does not fall under the "Large Corporate" Category and as such the related compliances are not applicable.

M/S. Kalyaniwalla & Mistry LLP, Chartered Accountants, Mumbai, Statutory Auditors of the Company, retire at this

AGM. In accordance with Section 139 and 142 of the Companies Act, 2013 and Rules made thereunder read with the Companies (Audit and Auditors Rules, 2014 (the Rules) and in accordance with Regulation 36(5) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and a notice having been received from a member and as recommended by the Audit Committee, the Board recommends that M/s. Walker Chandiok & Co, LLP, Chartered Accountants (Firm Registration No. 001076N /

N500013 be appointed as Statutory Auditors of the Company, in the place of retiring Auditors, AGM, for a period of 5 years, their remuneration being fixed for an initial period of two years as detailed in the AGM Notice, with an authority being proposed to the Board to revise the same in consultation with the Auditors. The new Auditors have given their consent and declaration on their eligibility for appointment as Statutory Auditors.

Thereareno qualifications, or adverse remarks made by the Statutory Auditors in their report for the financial year ended March 31, 2025. 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) 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 had appointed Mr. R Parthasarathy, Company

Secretary in practice to undertake the Secretarial Audit of the Company for FY 2024-25. The Secretarial Audit report in Form MR-3 is annexed herewith as Annexure C. There were no qualifications/adverse remarks in the

Secretarial Audit report.

As per recent amendment in the SEBI (LODR) Regulations 2015 and pursuant to the recommendation of the Audit Committee and Board of Directors, subject to the approval of the Shareholders in the ensuing Annual General Meeting, the Board of Directors recommends the appointment of Mr. R Parthasarathy, Company Secretary, as Secretarial Auditor of the Company, for a period of 5 years.

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 four 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, Sports and other worthy causes.

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 D.

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%20POLICY.pdf

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, 2025 is uploaded on the website of the

Company in the Investor Relations Section under the tab ‘Annual Return' and can be accessed at the below link https://www.vrlgroup.in/vrl_investors_desk.aspx?display=annual_return

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

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 F. 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.

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

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.

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

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.

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.

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.