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Avenue Supermarts Ltd.

BSE: 540376 Sector: Others
NSE: DMART ISIN Code: INE192R01011
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OPEN 3549.00
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VOLUME 30177
52-Week high 5899.90
52-Week low 2995.20
P/E 145.00
Mkt Cap.(Rs cr) 234,353
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Sell Price 0.00
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OPEN 3549.00
CLOSE 3660.70
VOLUME 30177
52-Week high 5899.90
52-Week low 2995.20
P/E 145.00
Mkt Cap.(Rs cr) 234,353
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Avenue Supermarts Ltd. (DMART) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the Twenty First Annual Report of AvenueSupermarts Limited ("the Company") together with the audited financialstatements of the Company for the financial year ended 31st March 2021.

FINANCIAL PERFORMANCE

The Company’s financial performance during the year ended 31st March2021 compared to the previous financial year is summarized below: (Rs. in crore)

Particulars

Standalone

Consolidated

FY 2020-21 FY 2019-20 FY 2020-21 FY 2019-20
Income from operations 23787.20 24675.01 24143.06 24870.20
Other Income 208.90 63.33 196.21 59.99
Total Income 23996.10 24738.34 24339.27 24930.19
Expenses 22451.31 22955.45 22855.82 23185.42
Profit before tax 1544.79 1782.89 1483.45 1744.77
Less: Tax Expense 379.48 433.00 384.02 443.79
Profit after Tax 1165.31 1349.89 1099.43 1300.98
Other comprehensive Income (net of taxes) (1.44) (3.79) (1.90) (4.08)
Total Comprehensive income for the year 1163.87 1346.10 1097.53 1296.90

The financial statements for the year ended 31st March 2021 have beenprepared as per the Indian Accounting Standards (Ind AS).

BUSINESS AND OPERATIONS

During the year under review your Company expanded operations by adding 22 new storesdespite restrictions imposed due to outbreak of COVID-19 pandemic. The Company converted 2stores into fulfillment centers for its Subsidiary company Avenue E-commerce Limited. TheCompany has presence across 11 states and 1 union territory with a total of 234 stores asof 31st March 2021. We remain focussed on our strategy of offering ourcustomers good quality products at great value based on the Everyday Low Cost/EverydayLow Price (EDLC/ EDLP) principle.

On standalone basis the total income for FY 2021 was Rs.23996.10 Crore which is 3%lower than the previous year’s income of Rs.24738.34 Crore. Our total income onconsolidated basis for FY 2021 was Rs.24339.27 Crore as against Rs.24930.19 Crore duringFY 2020.

On standalone basis the net profit after tax (PAT) for FY 2021 stood at Rs.1165.31Crore as against previous year’s net profit of Rs.1349.89 Crore thereby recording ade-growth of 13.67%.

Our net profit after tax (PAT) on consolidated basis for FY 2021 amounted for Rs.1099.43 Crore as compared to Rs.1300.98 Crore in the previous year.

There was no change in nature of business of the Company during the year under review.

CREDIT RATING

Your Company has been rated by CRISIL Limited ("CRISIL") vide its letterdated 09th November 2020 for its debt instruments/ bank facilities as follows:

Instruments Rating
1 Bank Loan Facilities of Rs.585 Crores CRISIL AA+/Stable
2 Commercial Paper of Rs.200 Crores CRISIL A1+

The above ratings indicate high degree of safety regarding timely servicing offinancial obligations. The rated instrument carries lowest credit risk. With the aboverating affirmations the Company continues to enjoy high credit quality rating for itslong-term bank facilities and commercial paper programme.

UTILIZATION OF QUALIFIED INSTITUTIONAL PLACEMENT (QIP) PROCEEDS

The proceeds of funds raised under Qualified Institutional Placement of the Company areutilized as per Objects of the Issue. The disclosure in compliance with the Regulation 32(7A) of the Listing Regulations is as under:

Particulars Actual utilization of QIP proceeds upto 31st March 2021 Actual utilization of QIP proceeds upto 31st March 2020
(Rs. in crore) Rs. ( in crore)
1. Capex payment 783.00 -
2. Repayment of Non-convertible Debentures 300.00 300.00
3. Repayment of WCDL/ Commercial Paper 250.00 250.00
4. Repayment of Term Loan 158.00 158.00
5. WC/ General Corporate expenses (Excluding QIP expenses) 302.00 302.00
Total 1793.00 1010.00

Out of the total fund raised by the Company under Qualified Institutional Placement anamount of Rs. 2285 Crore is unutilized as on 31st March 2021.

CHANGES IN SHARE CAPITAL

During FY 2020-21 there was no change in the authorised and paid-up share capital ofthe Company. The paid-up Equity Share Capital as on 31st March 2021 amountedto Rs. 647.77 Crores.

The Company has neither issued any shares with differential rights as to dividendvoting or otherwise nor issued any sweat equity shares during the year under review.

DIVIDEND

With a view to conserve resources for expansion of business your Directors havethought it prudent not to recommend any dividend for the financial year under review.

DIVIDEND DISTRIBUTION POLICY

The Company has in place a Dividend Distribution Policy in accordance with Regulation43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 andthe same is available on the Company’s website at http://www.dmartindia.com/investor-relationship. The said Policy is disclosed under Annexure-I to thisReport.

TRANSFER TO RESERVES

The Company has not transferred any amount of profit to the reserves during thefinancial year under review.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with the applicable provisions of the Companies Act 2013 including therelevant Indian Accounting Standards (Ind AS) as issued by the Institute of CharteredAccountants of India and notified under Section 133 of the Companies Act 2013 thisAnnual Report includes Consolidated Financial Statements for the financial year 2020-21.

REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

The Company has 5 subsidiaries as on 31st March 2021. The details of whichare appended hereunder:

ALIGN RETAIL TRADES PRIVATE LIMITED (ARTPL)

ARTPL a wholly-owned subsidiary Company incorporated on 22nd September2006 is engaged in the business of packing and selling of grocery products spices dryfruits etc. Its revenue from operations for FY 2021 stood at Rs. 1296.15 Crore againstRs.1177.62 Crore in the previous year and the Company posted net profit after tax ofRs.15.80 Crore for FY 2021 against Rs. 24.81 Crore for FY 2020.

AVENUE FOOD PLAZA PRIVATE LIMITED (AFPPL):

AFPPL is a wholly-owned subsidiary Company incorporated on 08th June 2004.It is engaged in the business of operating food stalls at DMart stores. The revenue fromoperations of the Company for FY 2021 stood at Rs.14.91 Crore as against Rs.32.41 Crorefor FY 2020. The Company reported loss after tax of Rs. 1.90 Crore against net profitafter tax Rs. 6.29 Crore for previous year.

AVENUE E-COMMERCE LIMITED (AEL)

AEL a subsidiary Company incorporated on 11th November 2014 is engaged inthe business of online grocery retail under the brand name "DMart Ready". AELallows its customers to order a broad range of grocery and household products through itsmobile app and through the website www.dmart.in. Customers can either self-pick up theironline orders from any designated Dmart Ready Pickup points or get them delivered at theirdoor step.

AEL has been operating its business in Mumbai through its fulfillment centers and anetwork of Pick-up points located across the Mumbai Metropolitan region. During theFinancial Year 2020-21 AEL expanded its coverage by opening additional fulfillmentcenters and Pick-up points in MMR and in four new cities viz. Pune Hyderabad Bangaloreand Ahmedabad.

AEL’s revenue from operations for FY 2021 stood at Rs.791.29 Crore vis--vis Rs.354.03 Crore in the FY 2020.The Company registered a loss of Rs. 80.62 Crore in FY 2021against the loss of Rs.79.71 Crore in FY 2020.

NAHAR SETH & JOGANI DEVELOPERS PRIVATE LIMITED (NSJDPL):

NSJDPL subsidiary Company was incorporated on 21st February 2014 withmain object of amongst others development of land and construction. Revenue fromoperations of the Company for FY 2021 and FY 2020 was Rs. 0.75 Crore and the Companyearned net profit after tax of Rs. 0.53 Crore for FY 2021 against Rs.0.54 Crore for FY2020.

REFLECT WHOLESALE AND RETAIL PRIVATE LIMITED (RWRPL)

RWRPL a wholly-owned subsidiary Company was incorporated on 28th May 2018to carry on the business of wholesale and retail of goods and products. It is yet tocommence its operations.

The Company does not have any Joint Venture or Associate Company within the meaning ofSection 2(6) of the Companies Act 2013. No material change has taken place in the natureof business of the subsidiaries.

Pursuant to the first proviso to Section 129(3) of the Companies Act 2013 read withRule 5 and 8 of the Companies (Accounts) Rules 2014 the salient features of thefinancial statements and performance of each subsidiary in Form AOC-1 is disclosed under Annexure-IIand forms part of this Report.

Pursuant to the provisions of Section 136 of the Companies Act 2013 the financialstatements of the Company consolidated financial statements and audited financialstatements in respect of subsidiaries are available on the website of the Company underweb link http://www.dmartindia.com/investor-relationship. The same shall also be sent toMembers electronically who request for the same by sending email to Company atinvestorrelations@ dmartindia.com from their registered e-mail address.

The Company has formulated a Policy for determining material subsidiaries. The saidpolicy is available on the website of the Company athttps://www.dmartindia.com/investor-relationship.

RELATED PARTY TRANSACTIONS

In compliance with the requirements of SEBI Listing Regulations the Company has inplace a Policy on Related Party Transactions which is available on the website of theCompany https://www. dmartindia.com/investor-relationship.

All the related party transactions are placed before the Audit Committee for the reviewand approval. Prior Omnibus approval is obtained before the commencement of the newfinancial year for the transactions which are repetitive in nature and also for thetransactions which are not foreseen (subject to financial limit). A statement of allrelated party transactions is presented before the Audit Committee on a quarterly basisspecifying the nature value and terms & conditions of the transactions. Alltransactions entered with related parties were in compliance with the applicableprovisions of the Companies Act 2013 read with the relevant rules made there under andthe Listing Regulations.

All related party transactions entered into by the Company during the financial yearunder review were generally in the ordinary course of business and always on arm’slength basis. All transactions entered with related parties were in compliance with theapplicable provisions of the Companies Act 2013 read with the relevant rules madethereunder and the Listing Regulations.

During the year 2020-21 your Company did not enter into any material related partytransactions. Accordingly disclosure with respect to the same in the Form AOC-2 in termsof Section 134 of the Companies Act 2013 is not applicable.

The transactions entered by the Company during the financial year under review were inconformity with the Company’s Policy on Related Party Transactions.

PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES

Particulars of loans given investments made guarantees given and securities providedduring the year under review and as covered under the provisions of Section 186 of theCompanies Act 2013 have been disclosed in the notes to the standalone financialstatements forming part of the Annual Report.

MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company comprises of seven Directors of which three areExecutive Directors one Non-executive Woman Director and three Independent Directors(including Woman Independent Director).The constitution of the Board of Directors of theCompany is in accordance with Section 149 of the Companies Act 2013 and Regulation 17 ofthe Listing Regulations as amended from time to time.

Re-appointments:

As per Section 149 of the Companies Act 2013 and on recommendations of the Nomination& Remuneration Committee Mr. Chandrashekhar Bhave (DIN: 00059856) was re-appointed asan Independent Director of the Company for a term of five years commencing from 17thMay 2021 which was approved by the members of the Company at their 20thAnnual General Meeting held on 1st September 2020.

Mr. Ignatius Navil Noronha (01787989) was re-appointed as a Managing Director of theCompany designated as "Chief Executive Officer" for a period of five yearscommencing from 1st February 2021 by the members of the Company in 20thAnnual General Meeting held on 1st September 2020.

Mr. Elvin Machado (DIN:07206710) was re-appointed as a Whole-time Director of theCompany for a term of three years commencing from 10th June 2021 by themembers of the Company at their 20th Annual General Meeting held on 1stSeptember 2020.

Directors retiring by rotation

Pursuant to the provisions of Section 152 of the Companies Act 2013 read with therelevant rules made thereunder one-third of the Directors are liable to retire byrotation every year and if eligible offer themselves for re-appointment at the AGM.

Consequently Mr. Elvin Machado (DIN: 07206710) Director being longest in the officeis liable to retire by rotation at the ensuing Annual General Meeting of the Company andhe being eligible has offered himself for re-appointment. The Board of Directors on therecommendations of the Nomination & Remuneration Committee has recommended hisre-appointment and the matter is being placed for seeking approval of members at theensuing Annual General Meeting of the Company.

Pursuant to Regulation 36 of the Listing Regulations read with Secretarial Standard-2on General Meetings brief details of Mr. Elvin Machado are provided as an Annexure tothe Notice of the Annual General Meeting.

Key Managerial Personnel

During the year under review there was no change in Key Managerial Personnel of theCompany as prescribed under section 203 of the Companies Act 2013.

Declarations by Independent Directors

In accordance with Section 149 (7) of the Companies Act 2013 and Regulation 16(1) (b)of the Listing Regulations as amended each Independent Director of the Company hasprovided a written declaration confirming that he/she meets the criteria of independenceas stipulated under Section 149(6) of the Companies Act 2013 and Regulation 16(1) (b) ofthe Listing Regulations.

In the opinion of the Board Independent Directors fulfill the conditions specified inCompanies Act 2013 read with the Schedules and Rules issued there under as well asListing Regulations and are independent from Management.

All the Independent Directors of the Company have enrolled their names in the onlinedatabase of Independent Directors maintained with Indian Institute of Corporate Affairs interms of Section 150 of the Companies Act 2013 read with Rule 6 of the Companies(Appointment & Qualification of Directors) Rules 2014.

Familiarization Programmes

The Company has conducted familiarization programmes for the Independent Directors ofthe Company covering the matters as specified in Regulation 25(7) of the ListingRegulations. The details of the training and familiarization program conducted by theCompany are hosted on the Company’s website under the web linkhttp://www.dmartindia.com/investor-relationship.

DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES

Board Meetings

The Board of Directors met five (5) times during the financial year under review. Thedetails of the Board meetings and attendance of each Director thereat are provided in theCorporate Governance Report forming part of the Annual Report.

Audit Committee

The Company’s Audit Committee composition is in line with the requirements ofSection 177 of the Companies Act 2013 and Regulation 18 of the Listing Regulations.

The composition of the Audit Committee is as under:

Name Category Designation
1. Mr. Chandrashekhar Bhave Non-Executive and Independent Director Chairman
2. Mr. Ramesh Damani Non-Executive and Independent Director Member
3. Ms. Kalpana Unadkat Non-Executive and Independent Director Member
4. Mrs. Manjri Chandak* Non-Executive Director Member

*Mr. Ramakant Baheti ceased to be a member of Audit Committee & Mrs. Manjri Chandakwas appointed as Audit Committee member w.e.f. 17th October 2020.

The Members of the Audit Committee are financially literate and have requisiteaccounting and financial management expertise. The terms of reference of the AuditCommittee and the particulars of meetings held and attendance thereat are mentioned in theCorporate Governance Report forming part of the Annual Report. During the year underreview all the recommendations made by the Audit Committee were accepted by the Board.

Nomination and Remuneration Committee

The composition of the Nomination and Remuneration Committee is in conformity with theprovisions of the Section 178 of the Companies Act 2013 and Regulation 19 of the ListingRegulations.

The composition of the Nomination and Remuneration Committee is as under:

Name Category Designation
1. Mr. Chandrashekhar Bhave Non-Executive and Independent Director Chairman
2. Mr. Ramesh Damani Non-Executive and Independent Director Member
3. Mrs. Manjri Chandak Non-Executive Director Member

The terms of reference of the Nomination and Remuneration Committee and the particularsof meetings held and attendance thereat are mentioned in the Corporate Governance Reportforming part of the Annual Report.

The Company has formulated Nomination and Remuneration Policy which sets standards fornomination remuneration and evaluation of the Directors Key Managerial Personnel SeniorManagement Personnel and other employees of the Company.

The Nomination and Remuneration Policy of the Company is hosted on the Company’swebsite under the web link http://www. dmartindia.com/investor-relationship.

The Nomination and Remuneration Policy of the Company is disclosed under Annexure-IIIand forms part of this report.

Stakeholders Relationship Committee

Pursuant to Section 178 of the Companies Act 2013 and Regulation 20 of the ListingRegulations the Stakeholders’ Relationship Committee was constituted by the Board ofDirectors.

The composition of the Stakeholders Relationship Committee is as under:

Name Category Designation
1. Mrs. Manjri Chandak Non-Executive Director Chairperson
2. Mr. Ramesh Damani Non-Executive and Independent Director Member
3. Mr. Ramakant Baheti Executive Director Member

The brief terms of reference of the Stakeholders’ Relationship Committee and theparticulars of meetings held and attendance thereat are mentioned in the CorporateGovernance Report forming part of the Annual Report.

Corporate Social Responsibility Committee

In accordance with the provisions of Section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2014 as amended from time totime the Board of Directors of the Company has constituted Corporate SocialResponsibility (CSR) Committee. The Committee is entrusted with followingresponsibilities:

To formulate CSR Policy which shall indicate the activities to be undertaken by theCompany as specified in Schedule VII of the Act and recommend same to the Board;

To recommend the amount of expenditure to be incurred on CSR activities;

To recommend annual action plan to Board of Directors of the Company in pursuance tothe CSR policy and any modification as may be required;

To implement and monitor the CSR activities of the Company which shall be incompliance with CSR objectives and Policy of the Company;

To provide a report on CSR activities to the Board of the Company periodically;

To undertake impact assessment if required through an independent agency as per therequirements of Companies Act 2013 and CSR rules made thereunder;

To monitor and review the CSR Policy of the Company from time to time; and

To ensure the compliance of Section 135 read with Schedule VII of Companies Act 2013and Companies (Corporate Social Responsibility Policy) Rules 2014 and subsequentamendments thereto.

The brief outline of the Company’s CSR initiatives undertaken during the yearunder review is furnished in Annexure–IV in the format as prescribed in theCompanies (Corporate Social Responsibility Policy) Rules 2014 as amended from time totime. The Company’s CSR Policy is placed on the website of the Companywww.dmartindia.com.

The composition of the CSR Committee is as under:

Name Category Designation
1. Mr. Chandrashekhar Bhave Non-Executive and Independent Director Chairman
2. Mr. Ramesh Damani Non-Executive and Independent Director Member
3. Mrs. Manjri Chandak Non-Executive Director Member
4. Mr. Ramakant Baheti Executive Director Member

The brief terms of reference particulars of meetings held and attendance thereat arementioned in the Corporate Governance Report forming part of the Annual Report.

Risk Management Committee

Pursuant to Regulation 21 of the Listing Regulations the Board has constituted RiskManagement Committee to frame implement and monitor risk management plan of the Company.The Board has adopted the Risk Management Policy and guidelines to mitigate foreseeablerisks avoid events situations or circumstances which may lead to negative consequenceson the Company’s businesses. The major risks identified are systematically approachedthrough mitigating actions on continual basis. Risk evaluation is an ongoing andcontinuous process within the Company and it is regularly updated to the Board of theCompany.

The Risk Management Committee has been entrusted with the responsibility to assist theBoard in overseeing and approving the Company’s enterprise wide risk managementframework. A detailed analysis of the business risks and opportunities is given underManagement Discussion and Analysis Report.

The composition of the Risk Management Committee is as under:

Name Category Designation
1. Mr. Ignatius Navil Noronha Executive Director Chairman
2. Mr. Ramakant Baheti Executive Director Member
3. Mrs. Manjri Chandak Non-Executive Director Member
4. Mr. Ashutosh Dhar VP – Loss Prevention & Risk Management Member
5. Mr. Vikram Bhatia Sr. VP – Information Technology Member

Director’s Responsibility Statement

In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended 31st March 2021; theBoard of Directors hereby confirms that:

a. in the preparation of annual accounts the applicable accounting standards had beenfollowed along with proper explanation relating to material departures;

b. such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31st March2021 and of the profit of the Company for that year;

c. proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;

d. the annual accounts of the Company have been prepared on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively and f. propersystems have been devised to ensure compliance with the provisions of all applicable lawsand that such systems were adequate and operating effectively.

Vigil Mechanism

Pursuant to the provisions of Section 177(9) of the Companies Act 2013 read with Rule7 of the Companies (Meetings of Board and its Powers) Rules 2014 and in accordance withRegulation 22 of the Listing Regulations the Company had adopted ‘Vigil MechanismPolicy’ for Directors and Employees of the Company to report concerns about unethicalbehavior. The policy provides a mechanism which ensures adequate safeguards to Employeesand Directors from any victimization on raising concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports and so on. The employees of the Company have the right/option to report theirconcern/grievance to the Chairman of the Audit Committee.

The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations. The Vigil Mechanism Policy is hosted on the Company’swebsite www. dmartindia.com.

Annual Evaluation of Directors Committees and Board

Pursuant to the provisions of the Companies Act 2013 and as per the ListingRegulations the Board of Directors has carried out annual performance evaluation of itsown performance the directors individually as well as the working of its Committees.

The performance of the Board as a whole and of its Committees was evaluated by theBoard through structured questionnaire which covered various aspects such as thecomposition and quality meetings and procedures contribution to Board processeseffectiveness of the functions allocated relationship with management professionaldevelopment adequacy appropriateness and timeliness of information etc.

Taking into consideration the responses received from the Individual Directors to thequestionnaire performance of the Board and its Committees was evaluated. The Directorsexpressed their satisfaction with the evaluation process.

In terms of requirements of Schedule IV of the Companies Act 2013 a separate meetingof Independent Directors of the Company was held on Saturday 09th January2021 to review:

The performance of non-independent directors and the Board as a whole and itsCommittees thereof;

The performance of the Chairperson of the company taking into account the views ofexecutive directors and non-executive directors;

To assess the quality quantity and timeliness of the flow of information between theManagement and the Board.

Performance evaluation of Independent Directors was done by the entire Board excludingthe Independent Director being evaluated.

PARTICULARS OF EMPLOYEES

The disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed to this Report as

Annexure–V.

In terms of Section 136 (1) of the Act details of employee remuneration as requiredunder provisions of Section 197 of the Companies Act 2013 and rule 5(2) and rule 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 areavailable for inspection and any member interested in obtaining a copy of the same maywrite to Company at investorrelations@dmartindia.com from their registered e-mail address.

Employee Stock Options

The Members of the ESOP Committee vide circular resolution dated 14th March2017 approved grant of 13973325 options under the ESOP Scheme 2016 to 4747 eligibleemployees of the Company irrespective of their grade pursuant to the eligibilitycriteria stipulated under the ESOP Scheme 2016.

The Employee Stock Option Scheme 2016 is being administered and monitored by the ESOPCommittee of the Company. The scheme is in compliance with the SEBI (Share Based EmployeeBenefits) Regulations 2014.

During the year under review no options were vested and exercised under the ESOPScheme 2016.

In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations2014 the details of the Stock Options granted under the aforesaid ESOP Scheme areuploaded on the website of the Company www.dmartindia.com.

A certificate from S R B C & Co. LLP Statutory Auditors of the Company has beenobtained by the Company with respect to implementation of Employee Stock Option Scheme2016 and the same shall be available for inspection by Members who request for the same bysending e-mail to Company at investorrelations@ dmartindia.com from their registerede-mail address.

Internal Financial Control Systems and their adequacy

The details of the internal financial control systems and their adequacy are includedin Management Discussions and Analysis Report which forms part of the Annual Report.

AUDITORS AND REPORTS

The matters related to Auditors and their Reports are as under:

Statutory Auditors

S R B C & Co. LLP Chartered Accountants (Firm Registration No.: 324982E/E300003)were appointed as Statutory Auditors of your Company at the 17th Annual GeneralMeeting held on 6th September 2017 for a term of five consecutive years fromthe conclusion of that Annual General Meeting until the conclusion of 22ndAnnual General Meeting subject to ratification of their appointment by members at everyAnnual General Meeting of the Company. The requirement for annual ratification ofAuditors’ appointment at the AGM has been omitted pursuant to the Companies(Amendment) Act 2017 notified on 7th May 2018. Accordingly no resolution isbeing proposed for ratification of appointment of Statutory Auditors at this AGM. TheStatutory Auditors have given a confirmation to the effect that they are eligible tocontinue with their appointment and that they have not been disqualified in any mannerfrom continuing as Statutory Auditors.

Observations of Statutory Auditors on Accounts for the year ended 31stMarch 2021

The Auditors Report for the financial year ended 31st March 2021 does notcontain any qualification adverse remark or reservation and therefore do not call forany further explanation or comments from the Board under Section 134(3) of the CompaniesAct 2013.

The Auditors have not reported any matter to the Company required to be disclosed underSection 143(12) of the Companies Act 2013.

Secretarial Audit Report for the year ended 31st March 2021

The Secretarial Audit Report pursuant to the provisions of Section 204 read withSection 134(3) of the Companies Act 2013 was obtained from M/s. Rathi and AssociatesPracticing Company Secretaries in Form MR-3 for the financial year 2020-21. TheSecretarial Audit Report does not contain any qualifications reservations or adverseremarks.

The said Report is disclosed under Annexure–VI and forms part to thisreport.

Internal Audit and Control

The Company has robust internal audit system for assessment of audit findings and itsmitigation. The Internal Audit function covers all the stores inventory audit stocktakes audit for project related accounts corporate accounts etc.

Mr. Rajan Arora was appointed as an Internal Auditor of the Company by the Board at itsmeeting held on 23rd May 2020 and the Internal Auditor directly reports to theAudit Committee for functional matters. The Audit Committee reviews internal audit reportand controls at its quarterly meetings. Company’s internal controls are commensuratewith the size and operations of the business. Continuous internal monitoring mechanismensures timely identification and redressal of issues.

OTHER DISCLOSURES:

Other disclosures as per the provisions of Section 134 of the Companies Act 2013 readwith Companies (Accounts) Rules 2014 are furnished as under:

Annual Return

In terms of Section 92(3) of the Companies Act 2013 and Rule 12 of the Companies(Management and Administration) Rules 2014 the Annual Return of the Company is availableon the Company’s website at http://www.dmartindia.com/investor-relationship.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as required to be furnished as per the provisions of Section 134(3) ofthe Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 withrespect to conservation of energy technology absorption foreign exchange earnings andoutgo are disclosed under Annexure–VII which forms part of this Report.

Report on Corporate Governance and Management Discussion and Analysis

A separate report on Corporate Governance is provided together with the Certificatefrom the Practicing Company Secretaries confirming compliance of conditions of CorporateGovernance as stipulated under the Listing Regulations. Pursuant to the provisions ofRegulation 34 read with Schedule V of the Listing Regulations a report on ManagementDiscussion & Analysis is attached separately which forms part of this Annual Report.

Business Responsibility Report

The Company’s sustainability initiatives as provided in the BusinessResponsibility Report are in line with the key principles enunciated in "NationalVoluntary Guidelines on Social Environmental and Economic Responsibilities ofBusiness" framed by the Ministry of Corporate Affairs. Pursuant to the provisions ofRegulation 34 of the Listing Regulations the said report is attached separately whichforms part of this Annual Report.

Secretarial Standards Compliance

During the year under review the Company has complied with all the applicableSecretarial Standards issued by The Institute of Company Secretaries of India and approvedby the Central Government pursuant to Section 118 of the Companies Act 2013.

Disclosures as per the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at work place in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the rules thereunder for prevention and redressalof complaints of sexual harassment at workplace. The Company has complied with provisionsrelating to the constitution of Internal Complaints Committee under the Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

The details of complaints reported under Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 during FY 2020-21 are as follows:

No. of Complaints received during the year 1
Complaints disposed off 0
No. of complaints pending as on 31.03.2021 1

Update on Covid-19

During the last quarter of FY 2019-20 COVID-19 spread globally and in India. This hadan impact on the business operations of the Company. Some normalcy was restored asinfections reduced and therefore lockdown restrictions were lifted in the country duringthe second half of the year.

However towards the end of FY 2020-21 a much stronger second wave of the pandemicwith significantly higher infections has been witnessed across the country. Theenforcements from authorities at local levels this time are much stricter. Enforcementsvary from complete or partial lockdown in several cities and towns to restricted hours ofoperations to store closures on certain days of the week. Several of our stores have alsobeen restricted to sell non-essential products on certain days of the week or forcontinuous periods. As the country continues to grapple with this situation we frequentlyexpect such restrictions throughout the country during the year.

The complete extent to which COVID-19 further impacts our business will depend onfuture developments which are highly uncertain and cannot be predicted. At the same timeour business continues to rapidly adopt new guidelines announced by the CentralGovernment State Governments and the local authorities that enables shopping withadequate social distancing and other safety measures.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions for the same during the year under review:

1. Deposits covered under Chapter V of the Companies Act 2013;

2. Material changes and/ or commitments that could affect the Company’s financialposition which have occurred between the end of the financial year of the Company and thedate of this report;

3. Significant or material orders passed by the Regulators or Courts or Tribunalsimpacting the going concern status and Company’s operations in future;

4. Non-exercising of voting rights in respect of shares purchased directly by employeesunder a scheme pursuant to Section 67(3) of the Companies Act 2013 read with Rule 16(4)of Companies (Share Capital and Debentures) Rules 2014;

5. Receipt of any remuneration or commission from any of its subsidiary companies bythe Managing Director or the Whole-Time Directors of the Company;

6. Revision of the financial statements pertaining to previous financial periods duringthe financial year under review;

7. Maintenance of cost records as per sub-section (1) of Section 148 of the CompaniesAct 2013;

8. Frauds reported as per Section 143(12) of the Companies Act 2013;

9. The details of application made or any proceeding pending under the Insolvency andBankruptcy Code 2016 (31 of 2016) during the year alongwith their status as at the end ofthe financial year and

10. The details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or FinancialInstitutions along with the reasons thereof.

ACKNOWLEDGEMENTS AND APPRECIATION

Your Board takes this opportunity to thank Company’s employees at all levels fortheir hard work and commitment. Your Board also places on record its sincere appreciationfor the continued support received from the customers members suppliers bankersfinancial institutions and all other business partners/associates.

For and on behalf of the Board of Directors of
Avenue Supermarts Limited
Ignatius Navil Noronha Ramakant Baheti
Managing Director & CEO Whole-time Director & Group CFO
DIN: 01787989 DIN: 00246480

Place: Mumbai

Date: 08th May 2021

Registered Office:

Anjaneya CHS Limited Orchard Avenue

Opp. Hiranandani Foundation School

Powai Mumbai – 400 076

CIN: L51900MH2000PLC126473

Tel No.: 022-40496500

Fax No.: 022-40496503

EmailId:investorrelations@dmartindia.com

Website: www.dmartindia.com

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