delhivery ltd share price Directors report


Dear Members,

The Board of Directors ("the Board") have pleasure in presenting the 12th Annual Report of Delhivery Limited (formerly known as Delhivery Private Limited) (hereinafter referred as "Company"/"Delhivery") along with the Audited Financial Statements for the financial year ("FY") ended March 31, 2023 (hereinafter referred as "FY23" or "during the year").

Financial Performance

Key highlights of the financial results of your Company for the FY23 are as under:

Amount (Rs. in Million)

Particulars

Standalone – FY ended

Consolidated – FY ended

March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Revenue from Operations 66,586.61 59,109.96 72,253.01 68,822.86
Other Income 3,311 .74 1,698.59 3,049.48 1,561.41
Total Income 69,898.35 60,808.55 75,302.49 70,384.27
Less: Total expenses 77,908.26 69,421.85 85,968.83 80,645.30
Loss before exceptional items, share of net profit/(loss) of (8,009.91) (8,613.30) (10,666.34) (10,261.03)
associate and tax
Less: Exceptional Items 113.11 21.87 - -
Loss before tax and share of profit/(loss) of associate (8,123.02) (8,635.17) (10,666.34) (10,261.03)
Less: Tax Expense - - (452.81) (183.30)
Loss after tax before share of profit/(loss) of associate (8,123.02) (8,635.17) (10,213.53) (10,077.73)
Add: Share of profit/(loss) of associate (net) - - 135.74 (32.27)
Loss for the year (8,123.02) (8,635.17) (10,077.79) (10,110.00)
Other Comprehensive (loss)/Income (8.87) 9.64 12.30 14.37
Total Comprehensive Loss for the year (8,131.89) (8,625.53) (10,065.49) (10,095.63)

The Standalone and Consolidated Financial Statements of your Company for FY23 are prepared in compliance with the applicable provisions of the Companies Act, 2013 (‘the Act), Indian Accounting Standards (‘Ind AS) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended [‘SEBI Listing Regulations].

a The revenue from operations on standalone basis for FY23 stood at RS.6,586.61 million as against RS.9,109.96 million for FY22, registering a growth of 12.65%. Whereas the loss for FY23 stood at Rs.,123.02 million as against Rs.,635.17 million for FY22, a reduction by 5.93%.

a The revenue from operations on consolidated basis for FY23 stood at RS.2,253.01 million as against RS.8,822.86 million for FY22, registering a growth of 4.98%. Whereas the loss for FY23 stood at RS.0,077.79 million as against Rs. 10,110.00 million for FY22, a reduction by 0.32%.

a The increase in revenue from operations is on account of:

Increase in revenue from our Express Parcel, Supply Chain Services and Truckload services.

Spoton Logistics Private Limited ("Spoton"), a wholly-owned subsidiary of Delhivery, contributed to the revenues for the full year in FY23 as compared to approximately 7 months in FY22.

a The increase in expenses is on account of:

increase in freight, handling and servicing cost, employee benefit expenses and other expenses attributable to the increase in revenues.

increase in depreciation and amortisation expenses majorly due to depreciation and amortisation of assets acquired during integration of Spoton with Delhivery.

State of Affairs of the Company/ Business

Operations

Your Companys mission is to enable customers to operate flexible, reliable and resilient supply chains at the lowest costs. As of March 31, 2023, we provided supply chain solutions to a diverse base of over 27,000 active customers such as e-commerce marketplaces, direct-to-consumer e-tailers and enterprises and SMEs across several verticals such as FMCG, consumer durables, consumer electronics, lifestyle, retail, automotive and manufacturing.

This is achieved through high-quality logistics infrastructure and network engineering, a vast network of domestic and global partners and significant investments in automation, all of which are orchestrated by our self-developed logistics operating system that drive network synergies within and across our services and enhance our value proposition to customeRs.

The key differentiators of business of your Company are:

a Integrated solutions: Your Company provides a full range of logistics services, including express parcel delivery, heavy goods delivery, Part Truck Load ("PTL") freight, Truck Load ("TL") freight, warehousing, supply chain solutions, cross-border express and freight services and supply chain software, along with value added services such as e- commerce return services, payment collection and processing, installation and assembly services and fraud detection.

a Proprietary logistics operating system: In-house logistics technology stack is built by your Company to meet the dynamic needs of modern supply chains. Your Company has over 80 applications through which your Company provides various services, orchestrated by the platform to govern transaction flows from end to end. The platform of your Company is designed as a set of foundational layers, libraries and APIs that form the building blocks for logistics applications and provides a configurable framework and tools to enable both internal and external developers to build custom applications.

a Data Intelligence: Your Company collects, structures, stores and processes vast amounts of transaction and environmental data to guide real-time operational decision making. We used machine learning extensively to build various capabilities, including intelligent geo-location, network design, route optimisation, load aggregation, ETA prediction, product identification and fraud detection, which enabled us to execute operations in an efficient and precise manner.

a Automation: Your Company operated 24 fully and semiautomated sortation centres and 94 gateways across India (including those operated by Spoton) as of March 31, 2023. We have a Rated Automated Sort Capacity of 5.4 million shipments per day as of March 31, 2023. We have automated material handling systems at gateways in Tauru (Haryana), Bhiwandi (Maharashtra) and Bengaluru (Karnataka). Your Company is expanding the gateway infrastructure in Bhiwandi and Bengaluru to

700,000 sq.ft. and 1,000,000 sq.ft. respectively, which will enable your Company to service the increasing demand for its services. This automation, combined with system directed floor operations, path expectation algorithms and machine-vision guided truck loading systems, together enable the facility staff to be more productive and reduce errors in their operations.

a Unified Infrastructure and Network: Your Company operates a pan-India network and provides services in

18,540 postal index number ("PIN") codes, as of March 31, 2023. Logistics platform, data intelligence and automation of your Company enable the network to be seamlessly interoperable and allows to share infrastructure and operational capacity across business lines and set new service standards, such as providing e-commerce-like turnaround times to traditional part-truckload shippers on several lanes.

a Asset-light operations: Your Company follows an asset light model. The approach is to invest in critical service elements and IP-sensitive areas of the network, while delivering services through a large number of network partneRs. Network partners with warehousing, freight

(truckload or air) or first/last-mile capacity can sign up and find customers via the partner applications. The systems of your Company function as managed marketplaces that match partner capacity with its internal and third-party client demand based on partners service quality ratings and pricing. This approach has enabled your Company to quickly expand to geographically dispersed locations, optimise loads, improve the cost structure and maintain flexibility in handling seasonal variations and changes in client requirements while incurring minimal fixed costs and capital expenditures.

a Entrepreneurial team: The experienced team of your Company has driven service excellence and industry first innovations that have enabled your Company to gain market leadership in a short span of time. The team comes from diverse backgrounds in engineering, technology, operations, R&D and design from across industries such as technology, e-commerce, manufacturing, telecommunications, management consulting, financial services and the armed forces, among otheRs.

Acquisitions and Investments

In line with the strategy to build scale and new capabilities both organically and inorganically, your Company completed important acquisitions in FY23 as detailed below:

Algorhythm Tech Private Limited ("Algorhythm Tech")

Your Company acquired Algorhythm Tech in India by acquiring 100% of its share capital for RS.49.06 million during January, 2023. Algorhythm Tech is a supply chain software company that offers comprehensive, end-to-end supply chain planning & execution solutions for industry sectors like FMCG, pharma, steel, auto, telecom etc. through their proprietary, AI-enabled and cloud-ready rhythm 3.0 platform.

The platform consists of a dozen products designed to deal with various problems in manufacturing, supply chain, and sales & distribution processes.

Further, your Company has made following strategic investments during FY23.

Boxseat Ventures Private Limited ("Boxseat Ventures")

Investment of 4.97% in the equity share capital of Boxseat

Ventures in India for a consideration of RS.97.90 million during October, 2022. Boxseat Ventures is engaged in the business of acquiring cash flow positive eCommerce merchants selling on marketplaces like Amazon and Flipkart.

Further, post the closing of FY23 and till the date of this report, your Company also strategically invested in:

Vinculum Solutions Private Limited ("Vinculum")

Investment of 10.94% in the equity share capital of Vinculum in India for a consideration of Rs. 250 million during FY24. Vinculum is one of the early software companies from India, enabling brands to tap into the opportunity presented by eCommerce and Omni Channel. In response to the industry and consumer shifts post the pandemic Vinculum has scaled up into a leading SaaS Omni Channel software company working with over 400 brands across Grocery &

FMCG, Healthcare, Beauty, Cosmetics, Fashion, and Jewelry in India, South East Asia, and the Middle East markets.

Transfer to Reserves and Dividend

As your Company does not have Profits for the FY23 hence no amount is available for transfer to reserves. Accordingly, the Board does not recommend any dividend for the FY23. In terms of Regulation 43A of the SEBI Listing Regulations, the dividend distribution policy is available on the companys website at https://www.delhivery.com/company/investor-relations.

Initial Public Offer ("IPO") of Equity Shares

Your Company floated Initial Public Offer ("IPO") of its

Equity Shares during FY23. The IPO was completed, and your Company got listed at the National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE") (collectively referred to as "Stock Exchanges") on May 24, 2022. Despite extremely challenging times stemming from geo-political tensions, supply chain constraints, rising interest rates and volatile market conditions, your Company completed its IPO successfully with participation of several leading domestic and global investoRs. The Board is gratified and humbled by the faith shown in the Company by its MembeRs. The total size of the IPO was Rs.52,350.00 million comprising of 107,497,225 equity shares including fresh issue of 82,137,328 equity shares aggregating to Rs.40,000.00 million and offer for sale of 25,359,897 equity shares aggregating to Rs.12,350.00 million by selling shareholdeRs. The IPO opened on May 11, 2022 and closed on May 13, 2022 and the Equity shares were allotted / allocated at a price of Rs.487/- per Equity Share (including a share premium of Rs.486/- per Equity Share) on May 20, 2022. A discount of Rs. 25/- was offered to eligible employees. Your Company has appointed Axis Bank Ltd. as the Monitoring Agency in terms of Regulation 41(2) of the SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2018, as amended, to monitor the utilisation of IPO proceeds and has obtained a monitoring report, for every quarter and submitted the same with Stock Exchanges as required under SEBI Listing Regulations. The proceeds realised by the

Company from the IPO are being utilised as per objects of the offer disclosed in the Prospectus of the Company.

Out of the Net proceeds of fresh issue of RS.8,703.00 million (net of provisional IPO expense in relation to fresh issue amounting to Rs.,297.00 million) your Company has utilised the funds as detailed herein below:

Amount (Rs. in Million)

Sl. No. Objects of fund raising Amount of funds Allocated Funds utilised as on March 31, 2023 Funds utilised as on June 30, 2023
1. Organic Growth Initiatives Building scale in existing business lines and developing new adjacent business lines 1,600.00 1,247.82 1547.77
Expanding network infrastructure of your Company 13,600.00 4,205.691 5,949.962
Upgrading and improving proprietary logistics operating system of your Company 4,800.00 2,454.86 3,092.93
2. Funding inorganic growth through acquisition and other strategic Initiatives 10,000.00 161.25 411.25
3. General Corporate purposes 8,703.00 5,125.24 5,125.24
Total 38,703.00 13,194.86 16,127.15

1 Lease payment also includes payment towards security deposit of Rs. 274.45 million from the date of IPO till the quarter ended March 31, 2023. 2 Lease payment also includes payment towards security deposit of Rs. 329.54 million from the date of IPO till the quarter ended June 30, 2023.

Funds unutilised as on March 31, 2023 is RS.5,508.14/- and as on June 30, 2023 is RS.2,575.85 million. There has been no deviation in the utilisation of the IPO proceeds of the Company. The Monitoring Agency Report is available at the Companys website at https://www.delhivery.com/company/investor-relations.

Change in the nature of Business

There has been no change in the nature of business of your Company during the year.

Material Changes and Commitment affecting Financial Position of the Company

There were no material changes between the end of the financial year of your company and the date of this report, affecting the Financial Position of your Company other than issuance of fresh shares as detailed in this report.

Share Capital
A. A uthorised Share Capital
There has been no change in the Authorised/Nominal Share Capital of the Company during FY23. The said Share as on March 31, 2023 was Rs.,342,535,980 divided into:
a 873,502,280 Equity Shares of Rs. 1 each,
a 300,000 Preference Shares of RS.0 each and
a 4,660,337 Preference Shares of Rs. 100 each
B. Changes in Issued, Subscribed and Paid-up Share Capital
D uring the FY23, the changes in Issued, Subscribed and Paid-up Share Capital of your Company was as follows:
Particulars No. of shares Amount (in Rs. )
Issued, Subscribed and Paid up Share Capital at the beginning of the financial year 2022-23 642,106,100 642,106,100
Shares issued/allotted during the financial year 2022-23 86,609,049 86,609,049
Issued, Subscribed and Paid-up Share Capital at the end of the financial year 2022-23 728,715,149 728,715,149

D etails of shares issued/allotted during the financial year 2022-23 are as follows:

SI. No. Date of allotment Mode of issue/allotment No. of shares allotted Face Value per equity share (in Rs. ) Nature of consideration
1. April 19, 2022 Employee Stock Options Exercised 259,727 1 Cash
2. May 20, 2022 Fresh issue of shares pursuant to Initial Public Offer 82,137,328 1 Cash
3. August 08, 2022 Employee Stock Options Exercised 210,250 1 Cash
4. September 02, 2022 Employee Stock Options Exercised 1,032,950 1 Cash
5. October 10, 2022 Employee Stock Options Exercised 604,362 1 Cash
6. November 05, 2022 Employee Stock Options Exercised 533,922 1 Cash
7. December 06, 2022 Employee Stock Options Exercised 1,255,568 1 Cash
8. January 06, 2023 Employee Stock Options Exercised 170,676 1 Cash
9. February 06, 2023 Employee Stock Options Exercised 134,563 1 Cash
10. March 05, 2023 Employee Stock Options Exercised 269,703 1 Cash

A fter the closure of the reporting period, your Company has allotted Equity Shares as per following details:

SI. No. Date of allotment Mode of issue/allotment No. shares allotted Face Value per equity share (in Rs. ) Nature of consideration
1. April 06, 2023 Employee Stock Options Exercised 158,855 1 Cash
2. May 06, 2023 Employee Stock Options Exercised 385,739 1 Cash
3. June 08, 2023 Employee Stock Options Exercised 1,941,454 1 Cash
4. July 10, 2023 Employee Stock Options Exercised 1,728,427 1 Cash
5. August 08, 2023 Employee Stock Options Exercised 197,846 1 Cash

A s on the date of this report, your Companys paid-up share capital amounts Rs. 733,127,470/- to

Alteration of Memorandum of Association (MOA) & Articles of Association (AOA)

MOA

During the year, there was no alteration in your Memorandum of Association (MOA) of the Company.

AOA

With effect from the date of listing of Equity Shares of your Company at Stock Exchanges i.e. May 24, 2022,

Part A of the AOA continues to be effective and Part B has become ineffective. The Articles of Association (AOA) of your Company were further amended by special resolution passed on July 10, 2022 through the Postal Ballot.

Employees Stock Option Plans ("ESOPs")

Your Company has four ESOPs, namely, Delhivery Employees Stock Option Plan, 2012 ("ESOP I 2012"), Delhivery Employees Stock Option Plan II, 2020 ("ESOP II 2020"), Delhivery Employees Stock Option Plan III, 2020 ("ESOP III 2020") and Delhivery Employees Stock Option Plan IV, 2021 ("ESOP IV 2021", and collectively, the "ESOPs").

These Plans are in compliance with the Securities and

Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (hereinafter referred to as "SEBI SBEB & SE Regulations") and have also been ratified by the Members of the Company on July 10, 2022 through postal ballot.

The Secretarial Auditors of your Company have provided a certificate stating that the aforesaid ESOP Plans have been implemented in accordance with SEBI SBEB & SE Regulations and are in accordance with the approval of shareholders of the Company, from time to time. The said certificate will be placed before the members at the AGM. The disclosures as required under Regulation 14 of SEBI SBEB & SE Regulations, are available on the website of the Company at https://www.delhivery.com/company/investor-relations.

Credit Rating

Not applicable

Investor Grievances

Your Company has a Stakeholders Relationship Committee of the Board to examine and redress investors complaints.

The status of complaints is presented before the Committee on a periodic basis.

During the year under review, the status of Investor

Grievances is as under:

Pending at the beginning of the financial year Nil
Received during the financial year 5
Disposed off during the financial year 5
Pending at the end of the financial year Nil
Complaints not resolved to the satisfaction of investor Nil

Directors and Key Managerial Personnel

Your Company has an appropriate mix of directors on its Board of Directors (‘Board). As on March 31, 2023, the Board consisted of three (3) Executive Directors, five (5) Non-Executive Independent Directors including one (1) Woman Independent Director and two (2) Non-Executive Directors in compliance with the applicable provisions of the Act and the SEBI Listing Regulations. Your Directors are eminent individuals of diverse backgrounds with skills, experience and expertise in various areas, the complete list of which has been provided in the Corporate Governance Report forming part of this report.

The year under review saw the following changes to the Board composition / Change in terms of Appointment of the

Board members:

Appointment

a The Members at its AGM held on September 29, 2022 have approved the appointment of Ms. Aruna Sundararajan (DIN: 03523267) as a Non-Executive Independent Director for a period of 5 years, w.e.f. July 08, 2022, not liable to retire by rotation.

Change(s) in terms of Appointment

a The Members at its AGM held on September 29, 2022 have approved the changed terms of appointment of Mr. Sahil Barua, Managing Director and Chief Executive Officer of the Company, from being "not liable to retire by rotation" to

"liable to retire by rotation" w.e.f. July 09, 2022.

a The Members at its AGM held on September 29, 2022 have approved the changed terms of appointment of

Mr. Sandeep Kumar Barasia, Executive Director and Chief

Business Officer of the Company, from being "not liable to retire by rotation" to "liable to retire by rotation" w.e.f. July 08, 2022.

a Consequent upon listing of shares of the Company, Mr. Suvir Suren Sujan (DIN: 01173669), Non-Executive Nominee director representing M/s Nexus Ventures III Ltd. and Nexus Opportunity Fund Ltd., Equity Investors of the Company has ceased to be a nominee of M/s Nexus Ventures III Ltd. and Nexus Opportunity Fund Ltd., and continues as a Non-Executive Director w.e.f. May 24, 2022.

a Consequent upon listing of shares of the Company, Mr. Donald Francis Colleran (DIN: 09431299) was appointed as Non-Executive Nominee Director to represent M/s FedEx Express Transportation and Supply Chain Services (India) Private Limited ("FedEx"), Equity

Investor of the Company, has ceased to be a nominee of

FedEx and continues as a Non-Executive Director w.e.f. May 24, 2022.

Cessation(s) / Resignation(s)

a Ms. Kalpana Jaisingh Morparia (DIN: 00046081) resigned from the Board w.e.f. February 11, 2023, due to preoccupation.

a Mr. Munish Ravinder Varma (DIN: 02442753), Non-Executive Nominee Director representing M/s SVF Doorbell (Cayman) Ltd, an Equity Investor of the Company, resigned from the Board w.e.f. June 29, 2022 due to personal reasons.

a Mr. Agus Tandiono (DIN: 08577542), Non-Executive Nominee Director representing M/s Canada Pension Plan Investment Board, an Equity Investor of the Company, resigned from the Board w.e.f. April 08, 2022 due to personal reasons and preoccupation.

The Board places on record its appreciation for Ms. Kalpana Jaisingh Morparia, Mr. Munish Ravinder Varma and Mr. Agus

Tandiono, Directors who have ceased as Directors, for their invaluable contribution and guidance during their tenure. Post the completion of FY23, based on the recommendation of the Nomination and Remuneration Committee of the Company, the Board of Directors in its meeting held on August 04, 2023 have approved the appointment of Mr. Anindya Ghose (DIN: 10243913) as an Additional Director under the category of Independent Director of the Company for a term of five years with effect from August 04, 2023, subject to the approval of members in the ensuing 12th AGM. The Board recommends his appointment as Non-Executive Independent Director at the ensuing AGM. The details as required under the SEBI Listing Regulations are contained in the Notice convening the ensuing AGM of your Company.

Further, Mr. Suvir Suren Sujan, Non-Executive Director, ceased to be associated with your Company w.e.f. August 24, 2023, pursuant to his resignation on account of preoccupation and other commitments.

The Non-Executive Directors of the Company had no pecuniary relationship or transactions during the year with your Company, other than sitting fees, remuneration and reimbursement of expenses, if any, as detailed in Corporate Governance Report forming part of this report.

Key Managerial Personnel

During FY23, there was no change in Key Managerial Personnel (‘KMP) of your Company.

Directors and the KMP as on March 31, 2023 are as under:

S. No. Name of Director and KMP Designation
1 Mr. Deepak Kapoor Chairperson and Non-Executive Independent Director
2 Mr. Srivatsan Rajan Non-Executive Independent Director
3 Mr. Romesh Sobti Non-Executive Independent Director
4 Mr. Saugata Gupta Non-Executive Independent Director
5 Ms. Aruna Sundararajan Non-Executive Independent Director
6 Mr. Sahil Barua Managing Director and Chief Executive Officer
7 Mr. Sandeep Kumar Barasia Executive Director and Chief Business Officer
8 Mr. Kapil Bharati Executive Director and Chief Technology Officer
9 Mr. Suvir Suren Sujan1 Non-Executive Director
10 Mr. Donald Francis Colleran Non-Executive Director
11 Mr. Amit Agarwal Chief Financial Officer
12 Mr. Sunil Kumar Bansal2 Company Secretary and Compliance Officer

1 M r. Suvir Suren Sujan, Non-Executive Director, ceased to be associated with your Company w.e.f. August 24, 2023, pursuant to his resignation on account of pre-occupation and other commitments.

2 M r. Sunil Kumar Bansal, Company Secretary and Compliance Officer, ceased to be associated with your Company w.e.f. May 31, 2023, pursuant to his resignation.

It may be noted that Mr. Vivek Kumar who was already associated with the Company as Director- Corporate Affairs and Deputy Company Secretary, was appointed as the Company Secretary and Compliance Officer of the Company w.e.f. June 01, 2023.

In addition to the aforesaid Directors and KMP, your Company, as on March 31, 2023, had following Senior Management Personnel (‘SMP) who were also designated as KMP, along with other SMP:

S. No. Name KMP and/or SMP Designation
1. Mr. Suraj Saharan KMP and SMP Head of New Ventures
2. Mr. Ajith Pai KMP and SMP Chief Operating Officer
Mangalore
3. Ms. Pooja Gupta KMP and SMP Chief People Officer
4. Mr. Abhik Mitra* KMP and SMP Managing Director and CEO of Spoton. Also designated as Chief Customer Experience Officer of Delhivery w.e.f. May 14, 2022
5. Mr. Uday Sharma SMP Head of Business Development

*Mr. Abhik Mitra ceased to be associated with Delhivery and Spoton w.e.f. April 24, 2023, pursuant to his resignation.

Directors retiring by Rotation:

All the Directors (other than the Independent Directors), on the Board of your Company are liable to retire by rotation. In terms of the provisions of Section 152(6) of the Act and the Rules made thereunder, Mr. Kapil Bharati, Executive Director & Chief Technology Officer, and Mr. Donald Francis Colleran, Non-Executive Director, are scheduled for retirement by rotation at the ensuing AGM. Mr. Kapil Bharati, being eligible, has offered himself for re-appointment. Based on the recommendations of the NRC, the Board recommends re-appointment of Mr. Kapil Bharati at the ensuing AGM. However, Mr. Donald Francis Colleran has expressed his unwillingness to be re-appointed due to his present & upcoming commitments elsewhere. Accordingly, the Board does not recommend the re-appointment of Mr. Colleran, and has recommended not to fill-up the vacancy resulting from his cessation as a Director at the upcoming AGM. The details of above Directors, as required under the SEBI Listing Regulations are contained in the Notice convening the ensuing AGM of your Company.

Independent Directors Declaration

Your Company has received necessary declarations from each Independent Director under the provisions of Section

149 of the Act and Regulation 16 of SEBI Listing Regulations that they meet the criteria of independence laid down under the said Section and Regulation.

In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of your Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors)

Rules, 2014, as amended, Independent Directors of your

Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of

Corporate AffaiRs.

Familiarisation Programme for Directors

Disclosure pertaining to familiarisation programmes for Directors is provided in the Corporate Governance Report forming part of this Report.

Board and Committee Meetings

During the year under review, Nine (9) Board Meetings were held to consider and approve various matteRs. The details of the meetings and the attendance of the Directors are provided in the Corporate Governance Report forming part of this report.

The Board constituted Committees as on March 31, 2023 are: a) Audit Committee; b) Nomination and Remuneration Committee; c) CSR & Sustainability Committee 1; d) Stakeholders Relationship Committee; e) Risk Management Committee; f) IPO Committee2; g) Merger and Amalgamation

("M&A") Committee3.

The details with respect to the composition, terms of reference, number of meetings held, and business transacted by the aforesaid Committees, are given in the Corporate

Governance Report forming part of this Report.

Policy on Directors Appointment, Remuneration and other matters

The Policy of your Company on appointment and remuneration including criteria for determining the qualification, positive attributes, independence and other matters of Directors, KMP and SMP as per applicable provisions under Sec 178 of the Act read with SEBI Listing

Regulations has been formulated by the NRC and approved by the Board. The said Policy is uploaded on the website of your Company at https://www.delhivery.com/company/investor-relations and is followed for respective appointment(s). The Salient Features of the Policy on Nomination, Remuneration & Evaluation are as follows:

1. Objective: The policy should clearly state its objective, which is to ensure a transparent and fair process for the selection, appointment, and remuneration of directors,

KMP and SMP.

2. Nomination Process: The policy outlines the process for identifying and selecting suitable candidates for various positions within your company, including directors, KMP and SMP. It may include factors such as qualifications, experience, independence, diversity, and skills required for the specific role.

3. Board Evaluation: The policy includes provisions for conducting regular evaluations of the performance of the board, individual directors, and board committees.

The evaluation process helps in identifying areas for improvement and ensuring the effectiveness of the board.

4. Remuneration Framework: The policy defines the principles and guidelines for determining the remuneration of directors, KMP and SMP. It may consider factors such as industry benchmarks, company performance, individual performance, and responsibilities.

Board Evaluation

The NRC has formulated a Policy and criteria for evaluation of the Board, its Committees and Individual Directors, which has been adopted by the Board. Their performance of the

Board and its Committees were evaluated after seeking inputs from all the Directors on the basis of criteria such as the composition and meetings, role & responsibilities and overall effectiveness of the Board & Committees. Evaluation of the performance of all Individual Directors (including Independent Directors and Chairperson) was also done this year. The details of the Board Evaluation process are mentioned in the Corporate Governance Report forming part of this Report.

Pursuant to Schedule IV of the Act read with Regulation 25 of SEBI Listing Regulations, the Independent Directors met on May 04, 2022 and March 29, 2023 without the presence of Non-Independent DirectoRs. Further, details regarding this are mentioned in the Corporate Governance Report forming part of this Report.

Directors Responsibility Statement

In terms of the Section 134(5) of the Act, the Directors have relied on the Independent Auditors report, representation by the management team and to the best of their knowledge and belief, state that: (a) in preparation of the annual accounts for the FY23, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at

March 31, 2023 and loss of your Company for the period ended on that date;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they had prepared annual accounts on a going concern basis;

(e) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Internal Controls and their Adequacy

Your Company has internal control systems in place commensurate with the size scale and complexity of its operations. The internal controls have been designed further to the interest of all its stakeholders by providing an environment which is facilitative to conduct its operations and take care of, inter alia, financial and operational risk with emphasis on integrity and ethics as part of work culture.

Your Company has laid down a set of standards, policies and processes to implement internal financial control across the organisation and same are adequate and operating effectively. Your Company has an adequate Internal Financial

Control System over financial reporting ensuring that all transactions are authorised, recorded, and reported correctly in a timely manner to provide reliable financial information and to comply with applicable accounting standards which commensurate with the size and volume of business of your

Company. Details of the internal financial controls of the

Company are mentioned in the Management Discussion and

Analysis Report ("MD&A Report") forming part of this report.

The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control systems in your Company and its compliance with accounting procedures, financial reporting and policies. The reports of Internal Audit are reviewed and discussed by the Audit Committee in detail and the process owners take corrective actions in their respective areas and thereby strengthen the controls. A summary of the suggested corrective actions is placed before the Board by the Management and the Chairperson of the Audit Committee briefs the Board on recommendations of the

Audit Committee for its discussion and suggestions thereon.

Subsidiary, Associate & Joint Venture Companies

Subsidiary Companies:

Your Company has the following wholly-owned subsidiaries

(including four (4) wholly-owned step-down subsidiaries) as on March 31, 2023. The details are as follows:

1. Delhivery Freight Services Private Limited, India

("DFSPL")

2. Orion Supply Chain Private Limited, India ("OSCPL")

3. Delhivery Cross Border Services Private Limited, India

(formerly known as Skynet Logistics Private Limited)

4. Delhivery Corp Limited, United Kingdom

5. Delhivery HK Pte. Limited, Hong Kong

6. Delhivery USA, LLC, USA ("Delhivery USA")

7. Delhivery Singapore Pte. Ltd., Singapore ("Delhivery

Singapore")

8. Delhivery Robotics LLC, USA, ("Delhivery Robotics")

(Subsidiary of Delhivery Singapore)

9. Spoton Logistics Private Limited, India ("Spoton") 10. Spoton Supply Chain Solutions Private Limited, India

(Subsidiary of Spoton)

The following companies have become wholly-owned

Subsidiaries/ step down subsidiaries of your Company during the FY23.

11. A lgorhythm Tech Private Limited ("Algo") 12. Delhivery Bangladesh Logistics Pvt. Ltd. ("DBLPL")

(Subsidiary of Delhivery Singapore)

13. Delhivery Logistics (Shenzhen) Company Limited

("DLSCL") (Subsidiary of Delhivery Singapore)1

Your Board reviewed the affairs of subsidiaries and there has been no material change in the nature of the business of such subsidiaries. Further, no Company ceased to be a subsidiary of the Company during FY23.

Associate Companies:

During the year under review, no company became or ceased to be the associate of the Company. As on March 31, 2023, your Company has one associate company i.e. Falcon

Autotech Private Limited ("Falcon") wherein the Company holds 34.55% of equity shares.

Joint Venture Companies:

During the year under review, no company became or ceased to be a joint venture of the Company. Furthermore, your

Company did not have any joint ventures as defined under the provisions of the Act during the year.

In accordance with the provisions of Section 129 of the

Act, your Company has prepared Consolidated Financial Statements of the Company and all its subsidiaries and associates which form part of this Report. Further, the report on the performance and financial position of each subsidiary and associate, as applicable, and salient features of their Financial Statements in the prescribed Form AOC-1 is annexed to this Report as Annexure 1. Further, contribution of subsidiaries and associates to the overall performance of your Company have been disclosed in Note 41 of the Consolidated Financial Statements.

In accordance with the provisions of Section 136 of the Act and the amendments thereto, read with the SEBI Listing

Regulations, the audited financial statements, including the consolidated financial statements and related information of your Company and financial statements of the subsidiary companies are available on the website of your Company at https://www.delhivery.com/company/investor-relations for inspection by the MembeRs.

Pursuant to the provisions of Regulation 16(c) of SEBI Listing

Regulations, the Board has approved and adopted a Policy for determining Material Subsidiary. During the period under review, Spoton was a material subsidiary of your Company.

Policy on Material Subsidiary is uploaded on the website of your Company at https://www.delhivery.com/company/ investor-relations.

Deposits

During FY23, your Company has not accepted any deposits from the public in terms of the provisions of Section 73 of the Act. Further, no amount on account of principal or interest on deposits from the public was outstanding as on

March 31, 2023.

Particulars of Loans, Guarantees or Investments

Your Company has not given any guarantee and/or provided any security to any body corporate, whether directly or indirectly, within the meaning of Section 186 of the Act. The details of loans and investments covered under Section

186 of the Act have been disclosed in note no. 35 to the standalone financial statements forming part of this Report.

Related Party Transactions

Your Company has formulated a Policy on Related Party Transactions in accordance with the provisions of Sections

177 and 188 of the Act and Rules made thereunder read with Regulation 23 of SEBI Listing Regulations, and the same is available on the website of your Company at https:// www.delhivery.com/company/investor-relations. The

Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between your Company and its related parties.

All Related Party contracts or arrangements or transactions entered during the year were on arms length basis and in the ordinary course of business and in compliance with the applicable provisions of the Act/ SEBI Listing Regulations. None of the contract or arrangement or transaction with any of the Related Parties was in conflict with the interest of your Company.

Since all the transactions with related parties during the year were on arms length basis and in the ordinary course of business, hence, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to your Company for FY23.

Details of related party transactions entered into by your

Company, in terms of Ind AS-24 have been disclosed in the Note 35 of the standalone and Note 34 of the consolidated financial statements, respectively, forming part of this report.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

Details of the energy conservation, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) read with Rule 8 of the Companies (Account) Rules, 2014 are annexed to this Report as

Annexure 2.

Vigil Mechanism / Whistle-Blower Policy

Pursuant to the provisions of Section 177 of the Act and Regulation 22 of SEBI Listing Regulations, your Company has established a Vigil Mechanism / Whistle-Blower Policy for Directors, employees, vendors, customers and other stakeholders of your Company and its subsidiaries to raise and report concerns regarding any unethical conduct, irregularity, misconduct, actual or suspected fraud or any other violation of the Policy within your Company. The vigil mechanism provides for adequate safeguards against victimisation of persons who use such mechanisms and make provision for direct access to the chairperson of the

Audit Committee in appropriate or exceptional cases. The said Policy is available on the website of your Company at https://www.delhivery.com/company/investor-relations. Further, all the Whistle-Blower Complaints alongwith their status update are periodically placed before the Audit

Committee for their review and discussion. The same are also placed before the Board for their perusal and necessary action.

Auditors & Auditors Report:

Statutory Auditors

The Members at the AGM held on September 30, 2019, approved the appointment of M/s. S. R. Batliboi & Associates LLP (Firm Registration No. 101049W/E300004), Chartered

Accountants, as the statutory auditors of your Company for a period of four years commencing from the conclusion of the

08th AGM held on September 30, 2019, until the conclusion of 12th AGM of your Company to be held in the year 2023.

The report of the Statutory Auditors forms part of the Annual

Report for FY23. The said report does not contain any qualification, reservation, adverse remark or disclaimer.

Your Company, based on the recommendation of the Audit Committee and the Board of Directors vide their resolutions dated August 03, 2023 and August 04, 2023, respectively, proposes and recommends to the members of the

Company for appointment of M/s. Deloitte Haskins & Sells LLP (Firm Registration No.117366W/W-100018), Chartered

Accountants, as the new statutory auditors of your Company for the term of five (5) consecutive years from the conclusion of the ensuing 12th AGM till the conclusion of 17th AGM of the Company to be held in the calendar year 2028.

Secretarial Auditors

The Board appointed M/s. VAPN & Associates, (Registration No. P2015DE045500) Practicing Company Secretaries, as the Secretarial Auditor to conduct Secretarial Audit of your

Company and its material subsidiary i.e. Spoton for FY23 as per the provisions of Section 204 of the Act. The Secretarial Audit Report for the FY23 is annexed to this Report as Annexure-3 and Annexure-4. The said reports does not contain any qualification, reservation, adverse remark or disclaimer.

Further, the Board has appointed M/s. VAPN & Associates as the Secretarial Auditor of the Company & Spoton for FY24.

Internal Auditors

Pursuant to the provisions of Section 138 of the Act and the Companies (Accounts) Rules, 2014, M/s

PricewaterhouseCoopers Services LLP, were appointed as Internal Auditors by the Board to conduct internal audit of your

Company for FY23. The scope and authority of internal audit is defined by the Audit Committee which is reviewed each year in consultation with statutory auditors and approved by the Audit Committee. Their report on findings is submitted to the Audit Committee on a periodic basis and corrective actions are taken by the respective functional teams as per suggestions of the Internal Auditor and Audit Committee. Further, the Board has appointed Mr. Jitender Khatri,

Chartered Accountant, an employee of the Company as the

Internal Auditor of your Company for FY24. Mr. Khatri reports to the Chairperson of the Audit Committee.

Disclosure regarding Frauds

During the year, there were no frauds reported by the Auditors to the Audit Committee, the Board or to the Central

Government under Section 143(12) of the Act.

Cost Records and Audit

Maintenance of cost records as specified by Central

Government u/s 148(1) of the Act is not applicable to your Company.

Annual Return

The Annual Return in Form MGT - 7 for the FY23 pursuant to Section 92(3) read with Section 134(3)(a) of the Act and Rules made thereunder, is available on website of your Company at https://www.delhivery.com/company/investor-relations.

Disclosure as per the Sexual Harassment of

Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has zero tolerance towards sexual harassment at the workplace. Your Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. Your Company has complied with the provisions relating to the constitution of the Internal Committee as per the requirement of the said act.

The details of sexual harassment complaints that were filed, disposed of and pending during the financial year are provided in the Business Responsibility and Sustainability

Report of this integrated Annual Report.

Downstream Investment

Your Company is in compliance with applicable laws regarding downstream investment as per Foreign Exchange Management (Non-debt Instruments) Rules, 2019, issued by Reserve Bank of India ("RBI") and has obtained requisite certificate from the statutory auditors in this regard.

CSR & Sustainability Committee

The nomenclature of Corporate Social Responsibility Committee with changed to "CSR & Sustainability

Committee" w.e.f. May 30, 2022.

Your Company has adopted a CSR Policy and has undertaken CSR activities on a voluntary basis towards a sustainable community development and such CSR activities are aligned to the requirements of Section 135 of the Act. The CSR policy, the Composition of the Committee, terms of reference of the CSR & Sustainability Committee and the projects undertaken is available on the website of your Company at https://www.delhivery.com/company/investor-relations. The Annual Report on CSR activities, in terms of Section 135 of the Act and the Rules framed thereunder, is annexed to this Report as Annexure 5. Further, details regarding this are mentioned in the Corporate Governance Report forming part of this Report.

Risk Management

Risk Management is an integral part of the strategy and planning process of your Company. The Board has formed a Risk Management Committee to frame, implement and monitor the Risk Management policy/ framework of your

Company. The Committee is responsible for monitoring and reviewing the risk management framework and ensuring its effectiveness. Your Company has a risk management policy and framework in place to identify, assess and mitigate risks appropriately. The Policy is available on the website of your Company at https://www.delhivery.com/company/ investor-relations. The approach to risk management is designed to provide reasonable assurance that the assets are safeguarded, the risks facing the business are being assessed and mitigated and all information that may be required to be disclosed is reported to senior management, the Audit Committee, the Risk Management Committee and the Board.

The Audit Committee has additional oversight in the areas of financial risks and controls, the major risks identified by the business and functions are systematically addressed on a continuous basis. The details of the Risk Management

Committee and its functions are furnished in the Corporate

Governance Report forming of this Report. More details on risk management are furnished in the MD&A report forming part of this Report. There are no risks which in the opinion of the Board threaten the existence of your Company.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are attached as Annexure 6 forming part of this Report.

In terms of Section 197(12) of the Act, read with Rule 5(2) and

5(3) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of limits set out in said rules forms part of this Report. Considering the provisions of Section 136 of the Act, the Annual Report, excluding the aforesaid information, is being sent to the Members of the Company and others entitled thereto. The said information is available for inspection at the registered office of your Company or through electronic mode during business hours on working days up to the date of the forthcoming AGM, by MembeRs.

Any Member interested in obtaining a copy thereof may send an e-mail to corporateaffairs@delhivery.com.

Human Resources and Employee Relations /

Development

Your company has always believed that employees are its greatest strength and are key to the companys sustained growth & success. A multitude of initiatives were undertaken through the year to ensure that the work environment fosters high performance, inclusivity, respect, empathy, and employees are provided with opportunities for their development.

The Delhivery Skills Development Program was started in

FY23 with an aim of providing career opportunities to young job-seekeRs. After a detailed assessment and 4-weeks of rigorous classroom and practical trainings across Delhivery facilities, offers for full-time permanent employment were rolled out to the successful candidates.

Your company continued to conduct regular town halls and all-hands meetings to ensure transparent communication and encourage a steady stream of two-way communication between the employees and the leadership. The annual engagement survey provided an opportunity to understand the pulse of the organisation and several initiatives were undertaken to address employee feedback across various dimensions. An org-wide Rewards and Recognition program was launched to foster a culture of appreciation. Several wellness initiatives were undertaken to enhance the overall well-being of employees which included establishment of fully-equipped gym facilities at corporate offices and sessions aimed at improving mental wellness. Internal Job

Postings were encouraged, thereby providing an opportunity for employees to move across roles and functions.

Your company remains deeply committed to helping employees develop the knowledge, skills and abilities needed for continued growth and success in their roles.

Based on operational challenges and business goals, Delhivery Academy conducted different types of sessions for the workforce which included induction, refresher and upskilling training. In FY23, team members participated in skilling programs and were subsequently absorbed into permanent positions within the company.

Your company has zero tolerance towards any unfair, unethical or discriminatory practices at the workplace and this reflects in all Company policies. Employees are continuously made aware and trained on policies such as the

Prevention of Sexual Harassment (PoSH) at the workplace, the Companys Code of Conduct and the Whistle-Blower Policy. Health, Safety and Environmental Awareness also continues to be a key focus area.

More details about these initiatives can be found in the Our

People section of this Annual Report.

Management Discussion and Analysis Report

("MD&A Report")

The MD&A Report for FY23, as stipulated under Regulation 34 of the SEBI Listing Regulations, is annexed separately forming part of this Report.

Integrated Report and Business Responsibility and Sustainability Report ("BRSR Report")

In accordance with Regulation 34(2)(f) of the SEBI Listing Regulations, the Securities and Exchange Board of India (SEBI), in May 2021, introduced new sustainability related reporting requirements to be reported in the specific format of Business Responsibility and Sustainability Report (BRSR). BRSR is a notable departure from the existing Business

Responsibility Report and a significant step towards giving a platform to the companies to report the initiatives taken by them in areas of Environment, Social and Governance. Further, SEBI has mandated top 1,000 listed companies, based on market capitalisation, to transition to BRSR from

FY2022-23 onwards. Accordingly, we are glad to present our inaugural BRSR for FY2022-23 separately forming part of this Report.

Corporate Governance

Your Company has complied with the applicable corporate governance requirements under the Act and SEBI Listing Regulations. A separate section on corporate governance, along with a certificate from the practicing company secretary confirming Corporate Governance compliances is annexed forming part of this Report.

Prevention of Insider Trading

Your Company has adopted a Code of Conduct for Prevention of Insider Trading, in accordance with the requirements of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time. The said Code is available on the website of your Company at https://www.delhivery.com/company/investor-relations.

Further, the violations against the Code are reported to the Audit Committee from time to time and details of the same are placed before the Audit Committee on a periodic basis for their perusal and necessary action.

Other Disclosures

In terms of the applicable provisions of the Act and SEBI

Listing Regulations, your Company provides following additional disclosures as on March 31, 2023:

a No equity shares with differential rights as to dividend, voting or otherwise have been issued.

a No Sweat equity shares have been issued.

a No Buyback of shares have been undertaken.

a None of your Directors has received any remuneration or commission from any subsidiary of your Company.

a Requirement of one time settlement with Banks or Financial Institutions was not applicable.

a No amount or Shares were required to be transferred to the Investor Education and Protection Fund.

a Your Company has complied with the provisions of the applicable secretarial standards issued by The Institute of

Company Secretaries of India.

a The 99.99% share capital of your Company has been dematerialised.

a No application was required to be made by or against your Company and no proceeding is pending under the

Insolvency and Bankruptcy Code, 2016.

a No significant and material order was passed by the regulators or courts or tribunals impacting the going concern status and your Companys future operations.

Cautionary Statement

Statements in this Report and the Management Discussion

& Analysis Report describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed in the statements.

Acknowledgement

The success of your Company is directly linked to hard work and commitment of the employees who worked round-the clock to ensure the business continuity and exceptional service quality offerings for the CustomeRs.

The Board wishes to place on record its sincere appreciation to all employees for their hard work, dedication, commitment and efforts put in by them for achieving encouraging results under difficult conditions during this unprecedented year. The Board also wishes to express its sincere appreciation and thanks to all customers, suppliers, banks, financial institutions, solicitors, advisors, Government of India, concerned State Governments and other regulatory & statutory authorities for their consistent support and cooperation extended to your Company during the year.

The Board is deeply grateful to the Members of the Company for entrusting their confidence and faith.

For and on behalf of the Board of Directors

Delhivery Limited

(formerly known as Delhivery Private Limited)

Sahil Barua Deepak Kapoor
Managing Director Chairperson & Non-Executive
and Chief Executive Officer Independent Director
DIN: 05131571 DIN: 00162957
Place: Goa Place: Delhi
Date: August 24, 2023