2. STATE OF COMPANY’S AFFAIRS: The Company is engaged in the business of buying, selling, advertising, promoting maternity, baby and kids products on a wholesale basis through various channels and providing facilitation services in education, training and other related activities. The Company is also a single brand retailer and operates stores under the brand name Babyhug. The revenue from operations of the Company has increased from Rs. 13,092.85/- millions in the year ended March 31, 2021 to Rs. 17,523.86/- millions in the year ended March 31, 2022 on a standalone basis and Rs. 16,028.54/- millions in the year ended March 31, 2021 to Rs. 24,012.88/- millions in the year ended March 31, 2022 on a consolidated basis. The Company had a net profit of Rs. 187.76/- millions in the year ended March 31, 2022 as against net profit of Rs. 2,838.67/- millions in the year ended March 31, 2021 on a standalone basis and a net loss of Rs. 786.85/- millions in the year ended March 31, 2022 as against net profit of Rs. 2,159.42/- millions in the year ended March 31, 2021 on a consolidated basis.

Since the Company is mainly engaged in wholesale business, the Company does not consume a substantial amount of energy. However, the Company has strived to imbibe energy conservation principles and initiatives across all its facilities. a. The steps taken or impact on conservation of energy: Key Initiatives across taken are highlighted below: Lighting – The Company has continued usage of the electric manual switches that were installed in each work station at the registered office which has led to considerable saving of energy levels and the electricity costs. The Company has also installed new-age energy efficient LED fittings and motion sensors in its various warehouses across India which has helped us to reduce the energy consumption. The Company is also discussing with various landlords of its warehouses to set up solar energy as a green source of energy.

The Company does not have any formal Research and Development Department. However, efforts are always made for the improvements in its process controls, control over the time and materials wastages. Expenditures on such activities cannot be identified separately. i. the efforts made towards technology absorption: The Company has not absorbed any technology from any source. ii. the benefits derived like product improvement, cost reduction, product development or import substitution: N.A. iii. in case of imported technology (imported during the last three years reckoned from the beginning of the financial year): N.A. (a) the details of technology imported: N.A. (b) the year of import: N.A. (c) whether the technology been fully absorbed: N.A. (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof: N.A. iv. the expenditure incurred on Research and Development: N.A

During the year, foreign exchange outgo was Rs. 1,70,30,65,439.76/- and foreign exchange earnings were Rs. 30,72,36,311.08/-.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the statutory auditors and external consultant(s) and the reviews performed by Management, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2021- 2022. Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that: (i) in the preparation of the annual accounts for the year ended March 31, 2022, the applicable accounting standards have been followed and there was no material departure from the same; (ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2022 and of the profit and loss for the period April 1, 2021 to March 31, 2022; (iii) they 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) they have prepared the annual accounts on a going concern basis; (v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year; and (vi) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.