SCRIPT

Introduction

[All board members and the Chairperson are seated around a large table in a conference room.]

Managing Director: Good evening, everyone. Welcome to the 28th Board Meeting of Eon Luxe
being conducted today in furtherance of the Notice dated 13 April 2024. I am Anjana Palamand,
and I will be the chairperson for today’s meeting.

At the outset, I would like to welcome Mr. Arora, our nominee director, through video
conferencing. As Ms. Madhumohan had briefed us before, a company is allowed to have its
directors participate through video conferencing in conformity with Section 173(2) of the Act
and Rule 3 of the Companies - Meetings of Board Rules, 2014. This meeting is going to be
recorded, and I request everyone to raise their hand if they are not able to hear him. All other
rules are similar to what we have been following in our hybrid work model.

Before we commence, we need to check the quorum for this meeting. Ms. Madhumohan, can
you please assist me with the same?

Company Secretary: Sure, as per Section 174(1) of the Companies Act, 2013, the meeting of
the Board of Directors should be attended by at least 1/3rd of the total number of directors of
Eon Luxe which is 3. Now since the quorum is met, I will circulate the quorum sheet and I
request everyone to sign it along with today’s date under your signature. And in the best interest
of time, let us continue our discussion as well.

Managing Director: Thank you. And, Ms. Madhumohan, can we please get an update on the
status of the actionables from the last meeting dated 12 February 2024?
Company Secretary: Of course! Ensuring compliance under Section 118 of the Companies
Act and the Secretarial Standard on Meetings of the Board of Directors, 2015, I have
thoroughly maintained the minutes of our previous meeting, which can be found at Annexure 9
of the compilation. The two actionables from the previous meeting pertained to updating the
website and establishing a menstrual leave policy.

Chief Technical Officer: Yes! Our website has been recently updated to highlight our renewed
dedication to sustainability, and we have also added our PoSH policy. Please refer to Annexure
14.

[Shows the website, everyone nods.]

Human Resources Director: Concerning the menstrual leave policy, we have passed an order
allowing every menstruating person to take 24 leaves annually for their menstrual well-being. I
have annexed the same under Annexure 14.

Managing Director: Thank you, Ms. Rebello and Mr. Apte. It is a matter of pride that we are
one of the few companies in India to enact a menstrual policy.

Today, we have a few matters to discuss on the broad agendas of expanding our ESG policy and
incorporating AI at Eon Luxe. The relevant documents have been provided beforehand for your
perusal.

Proceeding with the 1st agenda for today which is - Introducing clothing take-back programs
in line with our ESG Goals.

All in favour of discussing the same?

[All nod in agreement and raise .]

Agenda 1

Managing Director: Recently, we have conducted a survey with our members, where they
expressed their willingness to support our take-back model as a part of our ESG commitments.
Relevant results of this survey is attached in Annexure 15.

None of our efforts would have been remotely successful without the involvement of our CIO,
Ms. Nerlikar. I request you to tell us a little about what ESG is, and its purpose.

Chief Innovation Officer: Yes, I have been working extensively on it, and I have summarized
the same in Annexure 16. Take-back programmes, based on the concept of circular fashion,
encourage sustainable clothing consumption by allowing customers to return unwanted products
to the company in exchange for incentives such as discounts or store credit.
These pre-owned garments go through a number of operations to extend their lives and reduce
environmental effects, including refurbishment, recycling, and repurposing.

Managing Director: That sounds like a great way to give back to our community. However,
what is the legality surrounding this? Do we have liability regarding the same, Mr. Srivastava?

Legal Counsel: The legal landscape surrounding clothing recycling and extended producer
responsibility (EPR) has evolved significantly. The EPR concept holds manufacturers, importers,
and retailers responsible for the entire life cycle of their products. In India, ESG regulations are
not consolidated into one legislation and are at a nascent stage. The SEBI’s Business
Responsibility and Sustainability Reporting (BRSR) Guidelines apply only to the top 1000
listed entities (by market capitalization). Anticipating the future of growing regulations in this
arena, it is advised that we must be ready to adopt the requirements to adjust our ESG strategies
and compliance practices proactively.
Independent Director: Keeping in mind the focus on profitability, sustainability must be viewed
with reference to predictable resource utilization mechanisms and de-risking by targeting
environmentally conscious consumers. From my perspective, the onus of ensuring traceability
and control over clothes is another important aspect as transparency affects consumer choice.
Performance targets should respect the waste hierarchy, prioritizing prevention and reuse, while
closed-loop recycling should be favored over downcycling.

Nominee Director: Well, while I appreciate Ms. Nerlikar’s initiative and Mr. Mohan’s opinion
on prioritisation, I am doubtful of its financial feasibility. The company’s financials are not in a
great position, and as a representative of Standard Chartered Bank, I do not think this is a good
idea, where we need to consider other business models to cover all our financial bases.

[Everyone looking at each other, some nodding in agreement with Mr. Arora.]

Chief Financial Officer: I’m afraid I do agree with Mr. Arora insofar as our financials have not
been desirable in the past three quarters. We have to take into consideration the fact that this
initiative will incur considerable upfront costs as well as additional operational expenses.
Offering discounts for returned garments will further decrease revenue, a prospect that we just
cannot consider at the moment.

Chief Executive Officer: I agree. I understand that Ms. Nerlikar has been working on this
initiative with her team, but with no clarity on the programme design, I am just not convinced.
The programme seems financially viable to me only if it reduces our reliance on virgin materials
in our manufacturing process to a considerable extent. Do we have something on that end, Ms.
Nair?

Chief Financial Officer: My team and I have prepared a Cost-Benefit Analysis on Take-Back
Programmes, with case studies, which can be found at Annexure 18. While there are some
success stories, there are just as many failures, and without clarity on the proposed project
design, I believe our finances are insufficient to allow such a programme.
Chief Innovation Officer: While I understand your apprehension, in the bigger picture we are
laying the groundwork for long-term success by implementing this program. We can mitigate
these issues by carefully designing the program and studying the successful programs of other
companies. We can establish ourselves as front runners in responsible business practices by
strategically planning and implementing this take-back program.

Chief Technical Officer: I appreciate the concept of take-back programs. I propose that we
implement it through a digital platform seamlessly integrated into our existing infrastructure,
such as our website. Customers will have the convenience of initiating returns online, choosing
between pick-up and drop-off options. They will receive automatic notifications about their
incentives, which they can use towards future purchases. Additionally, we’ll regularly update
everyone on our sustainability progress to keep them engaged.

Company Secretary: I am drawn to this programme because of how it lines up with our CSR!
Also, the National Voluntary Guidelines on Social, Environmental, and Economic
Responsibilities of Business provide guidance to companies like us on integrating a sustainable
CSR into their business operations and this programme is a great start.

Chief Financial Officer: What I fail to understand is, why are we bothering to comply with
mandates that do not even concern us? CSR is not something that should be on our radar right
now, when neither do we have the money for it, nor is it something we are legally obligated to
do.

Chief Executive Officer: Exactly, what should be on our radar is product liability. Without
adequate product research, we might also be opening ourselves up to liability in the event that
our refurbished products do not meet the standards that our customers expect of us. We're on the
hook. Lawsuits, regulatory fines, the whole nightmare. Look, I'm all for sustainability, but we
can't get so green that we paint ourselves into a legal corner. We cannot rush into a project like
this.
Human Resources Director: I agree, plus we must consider the potential strain on HR.
Increased workload and complexity could lead to burnout and decreased morale for staff
managing returns and refurbishment. Additionally, take-backs will require special training, lack
of which could cause frustration and confusion among the employees and hinder productivity.
So, I believe we must take proactive measures to ensure the well-being of our employees.

Chief Executive Officer: Exactly! Mr. Apte makes a valid point. The operational complexities
of this project are just going to burden us further if we do not plan this out. Setting up a
take-back program requires a robust infrastructure for collection, sorting, and potentially
refurbishment or recycling. This can be complex to manage, leading to logistical issues.

Company Secretary: I hear your concerns, Mr. Apte and Ms. Singh. To address these, we’ll
prioritize employee well-being by providing comprehensive support, and resources for adapting
to new processes. For example, a German chemical distribution company called Brenntag uses a
platform called Emplus to ensure employee well-being, transparency, and increased
communication among them. We could use a similar platform like Emplus for the same as well!

Independent Director: I have to agree with Ms. Madhumohan on this. I gained some experience
in this field as the innovation officer of EcoChic a few years ago. EcoChic’s “Revive &
Reward” is a similar take-back program launched in 2021. Customers return pre-loved garments
to stores or via mail for store credits which garnered positive media attention, enhancing brand
reputation as a sustainability leader. As part of the internal audit and risk management
committee, I suggest the optimization of logistics and inventory management to reduce the cost
of initiative whilst having targeted advertising campaigns to ensure profitability.

Managing Director: Wow, that is promising! I am interested in how this programme secures us
financially, engages our customers more and paves way for environment-friendly fashion.

In order to move forward with this, I request the marketing and sales; operations and logistics
and the customer care teams to prepare proposals outlining their role, challenges and operating
procedure. I am hoping this can be done before 1 July 2024. Then after, Ms. Nair and Mr. Arora
can review them and guide us on how we can implement this programme. I also request our
technical team to look into how artificial intelligence can help us in maximising the benefits
from this programme.

Which reminds me, shall we move into the agenda? And before that, can we vote on this
proposed plan of action? Just to reiterate, according to Section 107 of the Act, all of those in
favour of this resolution may show their assent by raising their hands.

[Those in favour vote by raising their hands]

Seeing as this resolution has passed, we can move on to the next agenda. Our second agenda is
on the incorporation of artificial intelligence at Eon Luxe.

Agenda 2

Nominee Director: At the outset, I would like to stress on how demotivating Eon Luxe’s
financials look. Your turnover has not been more than 13%. Please take a look at Annexure 19. I
am concerned about the sustainability of your business and brand. With all due respect Ms. Nair,
how is it financially feasible to explore options like take back programmes and artificial
intelligence when you are barely breaking even?

Chief Financial Officer: Thank you for voicing your concerns, Mr. Arora. I agree that our
company's financial performance over the past year has been below par. Which is what brings us
to the present agenda. By analyzing demand, competition, and customer behavior, AI can
dynamically optimize prices for maximum profit and market share. Ms. Rebello's team and mine
have been working extensively on this initiative.

Chief Technical Officer: Thank you, Ms. Nair. I'd like to present our proposed AI pricing
optimization framework, which comprises three key components: First, we'll gather and study
data from various sources like past sales and market trends. Next, we'll train machine learning
models to understand how customers respond to price changes and find the most effective
pricing strategies. Finally, our system will automatically adjust prices based on what the models
learn.

Managing Director: This will help us make more profits and stay competitive in today's rapidly
changing market. Ms. Singh, what do you think?

Chief Executive Officer: I'm all for innovation, and AI has massive potential. But major
reliance on it relinquishes control. To preserve our brand's human touch and creativity, a hybrid
approach is ideal. This leverages AI's power for data and efficiency while keeping humans at the
core. It fosters innovation while safeguarding our brand identity.

Human Resources Director: I agree with a hybrid approach. I have looked into it and
summarized my findings in Annexure 20. Yes, tech should be our priority to stay competitive,
but we must think about our employees too! We have to focus on helping everyone develop new
skills and potentially move into different roles within the company (maybe the operators of such
AI systems). Minimizing layoffs and a smooth transition to this hybrid must be our priority!
Plus, when it comes to consumer needs AI lacks that human versatility.

Chief Financial Officer: I do understand your concerns Mr. Apte, but our proposal is not to
completely replace our existing pricing mechanism with AI but rather to supplement it with
real-time data that would allow us to optimize our pricing strategies. Instead of relying on
statistics from the past, we would be able to anticipate customer demand by harnessing data
gathered in real-time.

Company secretary: However, the compliance aspect of this may be an issue. We are dealing
with sensitive data and there may even be privacy concerns relating to it. The Digital Personal
Data Protection Act of 2023 (DPDP Act) would make it hard for this concept to be
implemented due its compliance checklist and stringent laws. For example, under Section 8(5) of
the Act, failure to take reasonable security safeguards to prevent personal data breaches would
result in a fine of up to ₹250 crores! That may be a lot for us to handle at the moment.
Chief Executive Officer: I agree. AI for pricing is a strategic move, but the execution is key.
Let's make sure we do it right. Collecting massive customer data for it requires robust data
security to avoid breaches and maintain trust. I would suggest we explore ways to utilize AI for
dynamic pricing while maintaining stability and customer trust.

Legal counsel: Regulations of AI are still at a nascent stage but we are expecting greater
legislation in this regard. In fact, there was a case where Air Canada’s AI chatbot promised a
discount that wasn't available, and they tried to escape by saying that it was the chatbot’s
liability. But, the court rejected this argument and instructed it to pay the damages.

Managing Director: Yes, I remember the Air Canada case. I think this can be detrimental to our
business, even if the court may give us a clean chit.

Company Secretary - Also, I’ve done a patentability assessment of the AI as per the current
scenario and you can view the same at Annexure 23. I believe that if we patent our AI system, it
would be a great IP asset for our company.

Legal Counsel: We just need to ensure that our AI system has no algorithmic bias, which lands
us in legal trouble. Apart from that, I think patenting is a great idea.

Chief Technical Officer: Given the ambiguity surrounding the legal status of AI, we can
potentially use this uncertainty to our advantage when implementing pricing strategies. By
presenting AI as a neutral tool without legal obligations, we might avoid potential regulatory
obstacles. We could leverage these legal gray areas around AI as a way for our company to shine
in the market while staying on the right side of the law.

Legal counsel: I completely disagree, Ms. Rebello. Exploiting AI's legal ambiguity for pricing
strategies could lead us to potential legal liabilities, including regulatory fines, lawsuits, and
damage to our company's reputation. I have added an AI compliance report too, in Annexure 21.
Please refer to it, to see the nuances we must care about before deciding in a haphazard manner.
Managing Director: While I agree about these soft benefits, what is the cost-benefit delta of
using AI? I understand that it will be fairly expensive to use these tools, but how much will it
help us, Ms. Nair?

Chief Financial Officer: Our research shows that it would be extremely beneficial. If you could
please refer to Annexure 22, our Feasibility Report shows that this will help us maximize
profitability and capture market opportunities in real-time. Further, it would provide valuable
insights into customer preferences and market trends, enhancing resource allocation. Ultimately,
it would enable us to generate sustainable financial growth, something we desperately need,
while maintaining a competitive edge in the market.

Chief Executive Officer: Additionally, I would like to add that I understand the concerns about
the upfront costs. But based on our discussion till now, I believe that AI-driven pricing can be a
significant financial advantage. By optimizing prices based on real-time data, we can capture
new revenue opportunities and improve margins. Earlier, we relied on historical data, which can
miss the mark. AI can give us a sharper edge in a competitive market. Ms. Nerlikar, can you
elaborate on the potential return on investment (ROI) we can expect?

Chief Innovation Officer: Certainly! Using AI-driven pricing strategies will help us promote
innovation and adapting to changing trends will make us stand out as leaders in our industry.
Companies leveraging AI for pricing have been experiencing a significant increase of 10- 20% in
their revenue, alongside a substantial improvement in profit margins, often reaching 15-25%
over time. Additionally, AI allows us to predict market trends, spot new opportunities, and
customize pricing for individual customers.

Independent Director: I suggest the strategic integration of AI into Eon Luxe’s pricing plans by
ensuring the acquisition of superior data at the data collection stage, and having clear data
governance and cybersecurity protection mechanisms. Concerns about algorithmic bias and
transparency in AI systems must be addressed. We need to appoint a Chief Data Officer and
regularly check the performance monitoring of these systems.
Chief Executive Officer: That's exactly the kind of innovation we need at Eon Luxe. Capturing
a larger market share and fostering customer loyalty through competitive pricing can
significantly improve our financial health!

Nominee Director: I reiterate my concerns regarding the legal and financial risks involved,
which may turn out to be more non-sustainable than beneficial. I am not convinced.

Managing Director: I hear your concerns, Mr. Arora. However, I do think that we have ample
case studies to show that AI can definitely benefit us in the long run. How about we circle back
to this agenda once all of us engage in more stakeholder dialogues to understand the nuances
better? Hence, we will not vote on the agenda.

Chief Executive Officer: So, from today’s meeting, we have mainly two things to work on -
concerned departments preparing ESG proposals and AI cost-benefit analysis reports. We shall
review the former on 1 July 2024 and the latter on 20 August 2024.

[All vote in favour.]

Managing Director: Are any additional or ancillary agendas to be discussed?

[No agendas raised.]

Since there are no more agendas, we will conclude the Board meeting.

I take this opportunity to thank all the members of the board for having been present here and for
giving your valuable opinions. I believe that our discussion today brought forward a few
concerns and opportunities that should be looked into in the near future.

[Looks towards Company Secretary.]

I request Ms. Madhumohan to kindly provide us with a copy of the minutes of today’s meeting.
Thank you again everyone, for your invaluable input and participation.

[Everyone says thank you, shakes hands and leaves the room in a busy chatter].