For the year ended March 31 2018
Your Directors present herewith 21st Annual Report on the business and operations ofthe Company together with the Audited Financial Statements for the year ended March 312018.
1. FINANCIAL PERFORMANCE
(Rs. in lacs)
|Particulars ||Year ended March 31 2018 ||Year ended March 31 2017 |
|RETAIL TURNOVER || || |
|Own merchandise Gross of tax ||387316.73 ||367500.86 |
|Concessionaire/consignment merchandise Gross of tax ||26259.14 ||32595.04 |
|Other Retail operating income ||5055.59 ||5619.72 |
| ||418631.46 ||405715.62 |
|Less: Value Added Tax ||41985.29 ||19073.24 |
|Less: Cost of concessionaire/consignment merchandise ||17497.26 ||21838.13 |
| ||359148.91 ||364804.25 |
|Other Income ||1602.03 ||2956.98 |
|Total Income ||360750.94 ||367761.23 |
|Profit before Depreciation & Tax ||19149.51 ||16364.13 |
|Less: Depreciation ||11192.54 ||11552.61 |
|Profit before Tax ||7956.97 ||4811.52 |
|Exceptional Items ||5040.96 ||4780.00 |
|Profit before Tax ||2916.01 ||31.52 |
|Less: Provision for Tax ||1755.63 ||2025.37 |
|(Loss)/Profit for the year (A) ||1160.38 ||(1993.85) |
|Other comprehensive (income)/loss (B) ||(706.08) ||26.24 |
|Total comprehensive income/(loss) for the year (A)+(B) ||1866.46 ||(1967.61) |
2. OVERVIEW OF COMPANY'S PERFORMANCE
During the year under review your Company has opened 4 department stores i.e. onestore each at New Delhi Mumbai Thane Hyderabad and Chennai taking its chain ofstores to 83 stores (including 6 airport stores) with 13 HomeStop stores under itsoperations. Under "Beauty format" the Company added 4 Clinique 4 Bobbi Brownand 2 Smash Box stores.
The Gross Retail Turnover of the Company is Rs. 418631.46 lacs (previous year Rs.405715.62 lacs) registering a growth of 3.18% y-o-y basis. The retail turnover net oftaxes and cost of concessionaire/ consignment merchandise stood at Rs. 359148.91 lacswith a like-to-like growth at 2.10% p.a. EBITDA stood at Rs. 22765.63 lacs a growth of2.50% with a Profit before exceptional items at Rs. 7956.97 lacs a growth of 65.37% overthe previous year.
The year under review has been a hallmark year for the Company. With the aim tosharpen focus on core department store business and omni-channel strategy the Companyexited non-core businesses i.e. Hypercity Timezone and Duty-free airport retail. Thedetails of these disinvestment are provided in Subsidiaries Associates and JointVenture' section of this report. The Company raised Rs. 17925.70 lacs by offering 5% ofits share capital to Amazon.com NV Investment Holdings LLC Foreign Portfolio Investor ona private placement basis.
These measures have significantly changed the balance sheet of your Company and willdeliver greater shareholder value. At the beginning of the year the Company had a debt ofRs. 57590.17 lacs at standalone level and Rs. 88510.57 lacs at consolidated level whichis reduced to Rs. 8737.89 lacs at standalone level and Rs. 12534.88 lacs at consolidatedlevel. In fact net debt at standalone level is Rs. 6734.34 lacs as Rs. 2003.55 lacscontinues to be invested in Debt mutual funds3 Liquid Growth Schemes. The Companyhas been successful to reduce the debt-equity ratio from 0.76 to 0.09 and expects to bedebt free within a couple of quarters to come.
Further analysis of operating performance is carried under Management Discussion andAnalysis which forms part of this Annual report.
Loyalty Programme continues to grow strong with more than 53 lacs members contributingto 75% of its sales.
Our intent to bring the romance back to retail through stronger assortment experiencesand customer service coupled with re-engineered strategy on Private Brands will continuein the years to come.
In terms of Dividend Distribution policy your Directors have recommended a Dividend ofRs. 0.75 (15%) per equity share of Rs. 5 each (previous year Rs. 0.75 (15%) per equityshare of Rs. 5 each) subject to approval of the members at the ensuing Annual GeneralMeeting. Together with the Dividend Distribution Tax the total outflow on account ofdividend will be appx. Rs. 795.34 lacs.
Pursuant to Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 specified companies are required to formulate a DividendDistribution Policy. The Board has approved and adopted a Dividend Distribution Policywhich is annexed as Annexure I and the same is available on the Company's websiteat the link https://corporate.shoppersstop.com/uploaded_ files/191b878-8de7.pdf.
There is no amount proposed to be transferred to General Reserves during the year underreview.
5. CREDIT RATING
During the year under review the following credit ratings were assigned to theCompany:
1. India Ratings & Research Pvt. Ltd.:
IND A1 for Commercial Paper Programme of Rs. 5000 lacs.
IND A1 for Short-Term Debt Programme/ Commercial Paper of Rs. 10000 lacs.
2. Credit Analysis & Research Ltd.:
CARE AA-; (Double A Minus; Outlook: Stable) for the long-term bank facilitiesamounting to Rs. 74267 lacs and CARE A1 + (A One plus) for the short-term bank facilitiesamounting to Rs. 2150 lacs.
CARE A1+; (A One plus) for Commercial Paper Issue amounting to Rs. 10000 lacs.
CARE AA-; (Double A Minus; Outlook: Stable) for Non-Convertible Debenture issueamounting to Rs. 10000 lacs.
3. CRISIL Limited:
CRISIL A1+ rating for Commercial Paper of Rs. 10000 lacs.
6. SUBSIDIARIES ASSOCIATES AND JOINT VENTURE
As on March 31 2018 your Company has five subsidiary companies details whereof areas under:
Crossword Bookstores Ltd. (Crossword):
Crossword the wholly owned subsidiary with its wide portfolio of books toysstationery and gifting. Crossword has chain strength of 87 stores across the country witha revenue of Rs. 10666 lacs vis--vis (previous year Rs. 11181 lacs).
Crossword posted a net loss of Rs. 503 lacs for the year under review against a netloss of Rs. 422 lacs in the previous year.
The other four wholly owned subsidiaries of the Company viz. Upasna Trading Ltd.;Shopper's Stop Services (India) Ltd.; Shoppers' Stop.com (India) Ltd.; and GatewayMultichannel Retail (India) Ltd.; have no operations during the year under review.
During the year under review the following companies ceased to be subsidiary jointventure entity associate Company:
Hypercity Retail (India) Ltd. (Hypercity): In terms of the Share Purchase Agreementexecuted with Future Retail Limited and approval accorded by the members through postalballot on November 13 2017 the Company disposed of 77158778 equity shares of Rs. 10/-each constituting 51.09% of the share capital of Hypercity; its material subsidiary toFuture Retail Limited on November 30 2017. Accordingly Hypercity ceases to be subsidiaryof the Company.
In turn the Company was allotted 4756823 equity shares of Rs. 2/- each at an issueprice of Rs. 537/- per equity share by Future Retail Limited and received cashconsideration in terms of the aforesaid Share Purchase Agreement. These equity shares arelocked in upto December 28 2018.
An amount of Rs. 4886.75 lacs is provided towards loss on sale of investment duringthe year under review.
Nuance Group (India) Pvt. Ltd. (NGIPL): The Nuance Group AG Switzerland and theCompany had formed a Joint Venture called NGIPL to operate the duty free stores atinternational airports in India. During the year under review the Company has disposedoff its 40% shareholding in NGIPL to The Nuance Group AG Switzerland at a considerationof Rs. 600 lacs on October 6 2017. With the disposal of this shareholding theShareholders Agreement executed with them stands terminated and accordingly NGIPL ceasesto be an associate company. The Company has accounted an impairment of Rs. 3561 lacs inpreceding years and impairment reversal of Rs. 20 lacs for year under review.
Further the Company also disposed of 500 equity shares of Rs. 10 each of Nuance GroupFashion & Luxury Duty Free Pvt. Ltd.; at its face value.
Timezone Entertainment Pvt. Ltd. (TEPL): TEPL is engaged in the business ofoperating Family Entertainment Centres (FEC) under the "Timezone" brand. Duringthe year under review the Company has disposed of its 48.42% shareholding in TEPL toTimezone West Asia Pte. Ltd. at a consideration of Rs. 2270 lacs on February 15 2018.With the disposal of this shareholding the joint venture agreement executed in thisregard stands terminated and accordingly TEPL ceases to be an associate company of theCompany. An amount of Rs. 174.21 lacs is recognised as impairment loss during the yearunder review.
Except for the above no Company has become or ceased to be subsidiary joint ventureentity or associate company.
In accordance with the provisions contained in Section 136 of the Companies Act 2013the Annual Report of the Company containing therein its Standalone and the ConsolidatedFinancial Statements are available on the Company's website www.shoppersstop.com. Furtherthe Financial Statements of each of the aforesaid subsidiary companies are available onthe Company's website and shall also be available for inspection during business hours atthe Registered Office of the Company. Any member who is interested in obtaining a copy ofthe Financial Statements may write to the Company Secretary at the Registered Office ofthe Company.
7. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of Section 129(3) of the Companies Act 2013 andRegulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 (Listing Regulations) the Consolidated Financial Statements forms part of this AnnualReport and shall also be laid before the ensuing Annual General Meeting of the Company.The Consolidated Financial Statements have been prepared in accordance with the IndianAccounting Standards (IND AS) under Section 133 of the Companies Act 2013.
A Report on the performance and financial position of these subsidiaries included inthe Consolidated Financial Statement and their contribution to the overall performance ofthe Company is provided in Form AOC-1 and forms part of this Annual Report.
8. EMPLOYEES STOCK OPTION SCHEME
The Nomination Remuneration & Corporate Governance Committee of the Companyinter-alia administers and monitors the Employee Stock Option Scheme. During theyear under review the Company has allotted 60020 equity shares of Rs. 5/- each onexercise of vested options by certain employees of the Company and its subsidiaries.
During the year under review the Company has not granted any Employee Stock Options.
In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations2014 the details of the Stock Options granted under the ESOP Scheme is annexed herewithas Annexure II. Further certificate from S R B C & CO LLP StatutoryAuditors of the Company with respect to implementation of Employee Stock Option Schemewould be placed at the ensuing Annual General Meeting for inspection by the Members and acopy will also be available for inspection at the Registered Office of the Company.
9. PREFERENTIAL ALLOTMENT OF EQUITY SHARES
The Company has allotted 4395925 equity shares of Rs. 5/- each at a price of Rs.407.78/- per equity share aggregating to Rs. 17925.70 lacs to Amazon.com NV InvestmentHoldings LLC Foreign Portfolio Investor on private placement basis on January 12 2018.Pursuant to SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 asamended these equity shares are locked-in upto January 19 2019.
10. HUMAN RESOURCES
The Company continues to build organisational capability by empowering its employeesacross all levels. High Potentials Associates were identified through a very transparentassessment mechanism and they underwent a robust Programme with various bespokeinitiatives and live projects to make them future ready. To build a service orientedworkforce highly customised training sessions like hosting skills cashiering excellencePersonal Shopper@ home are being conducted thus giving the customers a delightfulexperience and help customer transformation through fashion in line with the Company'svision statement. The Company strongly stands against sexual harassment cases and thrustsa lot on various training initiatives pertaining to Prevention of Sexual Harassment(PoSH). Maximising reach and minimising efforts and time is now being made possiblethrough infusion of technology in training initiatives because of which number of traininghours have seen a positive traction. The Company has also managed to establish its imageas a Retail tech organisation by participating in National level Coding contest. It alsofocusses on the overall development of the Customer Care Associates (CCAs) and accordinglyhuman resource initiatives are being implemented. As on date of the Balance Sheet theCompany had a total of 7480 CCAs.
11. CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the provisions of Section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2014 your Company as part ofCSR initiatives has undertaken projects/ Programmes in accordance with CSR Policy. The CSRPolicy may be accessed on the Company's website at the link:https://corporate.shoppersstop. com/uploaded_files/6a821c5-ec98.pdf. The report on CSR isannexed herewith as Annexure III.
The Corporate Social Responsibility Committee comprises of three Directors i.e. Ms.Ameera Shah as the Chairperson Mr. Ravi Raheja and Mr. Rajiv Suri as the members.
12. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr. NeelC. Raheja (DIN: 00029010) is liable to retire by rotation at the ensuing Annual GeneralMeeting and being eligible has offered himself for re-appointment. The Board of Directorsrecommends his re-appointment and the matter is being placed for the approval of membersat the ensuing Annual General Meeting of the Company.
Mr. Chandru L. Raheja (DIN: 00027979) Non-Executive Promoter Chairman of the Companyresigned as a Director and Chairman of the Company with effect from June 8 2018 onaccount of his age seniority and increasing personal engagements after having served asChairman for more than two decades. Your directors would like to place on record theirsincere gratitude for the enormous contribution made by Mr. Raheja as the Chairman of theCompany since its inception. The Company and the Board benefitted immensely from Mr.Raheja's vast experience knowledge and insights.
The Board of Directors in appreciation of Mr. B. S. Nagesh's (DIN: 00027595) farsightedvision wisdom and guidance which have been invaluable to the Company's growth haselevated him from his present position of Vice Chairman to the Chairman of the Board ofDirectors and the Company with effect from June 8 2018. As the members are aware priorto his role as Non-Executive Vice Chairman of the Company effective August 18 2009 Mr.Nagesh was a Managing Director of the Company. During his then administrative &managerial position with a successful association of more than 12 years he had played akey role in the phenomenal growth and success of the Company. Your directors would like toplace on record their sincere appreciation towards the contribution made by Mr. B. S.Nagesh and welcomes him as the Chairman of the Company.
Mr. Govind Shrikhande Managing Director of the Company resigned as Managing Directoreffective from close of business hours of June 30 2018. He has stepped down to pursueother interest his personal commitments and other engagements. The Board of Directorsplace on record their deep appreciation for the contributions made by Mr. Shrikhandeduring his association of more than 17 years during which the Company has grown from 7stores in the year 2001 to 97 stores (including 13 HomeStop stores) till date.
During the year under review Mr. Rajiv Suri (DIN: 08124971) was appointed as ChiefExecutive Officer one of the Key Managerial Personnel of the Company under Section 203of the Companies Act 2013 & Rules thereunder effective January 9 2018. Further theBoard of Directors at its meeting held on June 8 2018 on the recommendation of theNomination Remuneration & Corporate Governance Committee appointed Mr. Rajiv Suri asan Additional Director and Managing Director designated as "Managing Director &Chief Executive Officer" of the Company for a period of 3 (three) years commencingfrom June 8 2018 subject to the approval of the members of the Company and otherregulatory approvals as may be applicable. The Board of Directors recommends hisappointment and the matter is being placed for the approval of members at the ensuingAnnual General Meeting of the Company.
Mr. Gareth Thomas (DIN: 07010320) Independent Director of the Company stepped down fromthe said position with effect from October 26 2017 on account of his personalengagements and new commitments. Ms. Abanti Sankaranarayanan (DIN: 01788443) has tenderedher resignation as Independent Director of the Company with effect from June 8 2018 dueto commitments at her work place. The Board places on record its appreciation forcontribution made by both of them during their tenure as Independent Directors of theCompany.
The Board of Directors at its meeting held on June 8 2018 on the recommendation ofthe Nomination Remuneration & Corporate Governance Committee appointed Ms. AmeeraShah (DIN: 00208095) as an Additional Director to hold office as Independent Director ofthe Company for a term of 5 (five) years commencing from June 8 2018 to June 7 2023subject to approval of members of the Company. The Company has received declaration fromMs. Ameera Shah confirming that she meets with the criteria of Independence as prescribedunder Section 149(6) of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The Board of Directors recommends herappointment and the matter is being placed for the approval of members at the ensuingAnnual General Meeting of the Company.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of Independence as prescribed under Section149(6) of the Companies Act 2013 and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
Key Managerial Personnel
During the year under review Mr. Salil Nair Chief Executive Officer of the Companyand Mr. Sanjay Chakravarti Chief Financial Officer of the Company had resigned from theservices of the Company with effect from May 31 2017 and December 22 2017 respectively.The Board of Directors places on record the contribution made by both of them duringtheir long association with the Company.
The Board of Directors effective June 8 2018 has appointed Mr. KarunakaranMohanasundaram as Chief Financial Officer (CFO) one of the Key Managerial Personnel ofthe Company under Section 203 of the Companies Act 2013 & Rules thereunder.Consequently Mr. Vijay Jain stepped down from the position of "Interim ChiefFinancial Officer" w.e.f. June 8 2018 and accordingly ceased to be one of the KeyManagerial Personnel of the Company. Mr. Vijay Jain was appointed by the Board ofDirectors as Interim Chief Financial Officer designated as Deputy Chief Financial Officerof the Company and one of the Key Managerial Personnel of the Company effective April 272018 till the time the Company identifies and appoints a suitable candidate for the postof CFO.
13. ANNUAL EVALUATION OF DIRECTORS COMMITTEES AND BOARD
In compliance with the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the performance evaluation of the Board itsspecified Committees and individual directors was carried out during the year underreview. More details on the same are provided in Corporate Governance Report. TheDirectors expressed their satisfaction with the evaluation process.
14. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Familiarisation Programme for Independent Directors which also extends to otherNon-Executive Directors aims to familiarise them with the Company nature of the retailindustry business model processes & policies etc. and also seeks to update them onthe roles responsibilities rights and duties under the Companies Act 2013 and otherstatutes. More details on the same are provided in Corporate Governance Report.
The details of the programme has been posted on the Company's website at web link:https://corporate. shoppersstop.com/Investors/Training.aspx
15. REMUNERATION POLICY
The Board of Directors on the recommendation of the Nomination Remuneration &Corporate Governance Committee has framed a policy for selection and appointment ofDirectors Senior Management and their remuneration. The said policy is annexed herewithas Annexure IV.
16. DISCLOSURES UNDER THE COMPANIES ACT 2013
Extract of Annual Return: The details forming part of extract of the annualreturn in Form MGT 9 is annexed herewith as Annexure V.
Meetings of the Board of Directors: The Board of Directors met 7 (seven) timesin the year under review. The details about the board meetings and the attendance of thedirectors are provided in Corporate Governance Report.
Change in Share Capital: During the year under review the Company allotted60020 equity shares of Rs. 5/- each on exercise of vested Employee Stock Options underthe ESOP Scheme. Further the Company on January 12 2018 has allotted 4395925 equityshares of Rs. 5/- each to Amazon.com NV Investment Holdings LLC Foreign PortfolioInvestor on private placement basis. These equity shares ranks pari passu in allrespect. Consequent to the above allotments of equity shares the paid-up share capitalstands increased to Rs. 439803445 divided into 87960689 equity shares of Rs. 5/- each.
Audit Committee: The Audit Committee comprises of four Non-Executive Directorsi.e. Mr. Deepak Ghaisas as the Chairman Mr. Ravi C. Raheja
Prof. Nitin Sanghavi and Mr. Manish Chokhani as the members. The Board of Directorshas accepted all the recommendations made by Audit Committee from time to time.
Related Party Transactions: Your Company has formulated a policy on RelatedParty Transactions including policy for determining material subsidiaries and onmateriality of related party transactions which are available on the Company's website andis accessible at the link: https://corporate.shoppersstop.com/uploaded_files/70ad1c1-7375.pdf. As on date there is no material subsidiary of theCompany. All contracts arrangements/transactions entered into during the year underreview by the Company with Related Parties were in ordinary course of business and on anarm's length basis.
During the year under review the Company had not entered into any contract/arrangement/ transaction with related parties which could be considered material inaccordance with the policy of the Company on materiality of related party transactions.Accordingly particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 along with the justification for entering intosuch contract or arrangement in Form AOC-2 does not form part of the report. However theDirectors draw attention of the members to note no. 38 of the Standalone FinancialStatement which sets out related party disclosures.
Omnibus approval is obtained for the transactions which are foreseen and repetitive innature with Related Parties. A statement of all such related party transactions ispresented before the Audit Committee on a quarterly basis for its review specifying thenature and value of these transactions.
Particulars of loans guarantees or investments: The details of loansguarantees and investments covered under the provisions of Section 186 of the CompaniesAct 2013 are provided in note nos. 4 5 and 29 (II) b of the Standalone FinancialStatement respectively.
Other Disclosures: The Board of Directors state that no disclosure and/or reportingand/or details is required in respect of the following items as there were no transactionson these items during the year under review:
Deposits covered under Section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014.
Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme save and except ESOP referred to in this report.
Issue of equity shares with differential rights as to dividend voting orotherwise.
Managing Director of the Company has not received any remuneration or commissionfrom any of the Company's subsidiaries.
No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
There was no revision in the financial statements.
There was no change in the nature of the business.
The Company has adopted a policy for prevention of sexual harassment at work placewhich inter-alia provides for protection against sexual harassment of women atworkplace and for prevention and redressal of such complaints. During the year underreview there were 9 complaints received and the same have been disposed of. The Companyhas an Internal Complaints Committee (ICC) which is responsible for redressal of thesecomplaints and follows the guidelines as stipulated in the policy. There are trainingbeing conducted for sensitising all the CCAs on PoSH.
17. RISK MANAGEMENT
Your Company has established a robust Risk Management system to identify & assessthe key risks and ensure smooth and efficient operations of the business. The Company hasreviewed the major risks which affects it from both the external and the internalenvironment perspective and appropriate actions have been initiated to mitigate partiallymitigate transfer or accept the risk (if need be) and monitor the risks on a regularbasis.
18. INTERNAL FINANCIAL CONTROL
The Company has laid down internal financial control's through a combination of entitylevel controls process level controls and IT general controls inter-alia toensure orderly and efficient conduct of business including adherence to the Company'spolicies and procedures accuracy and completeness of accounting records and timelypreparation and reporting of reliable financial statements/information safeguarding ofassets prevention and detection of frauds and errors.
The evaluation of these internal financial controls were done through the internalaudit process established within the Company and also through appointing professionalfirm to carry out such tests by way of systematic internal audit programme. Based on thereview of the reported evaluations the directors confirm that for the preparation offinancial Statement for the year ended March 31 2018 the applicable Accounting Standardshave been followed and the internal financial controls related to financial Statement aregenerally found to be adequate and were operating effectively and that no materialweaknesses were noticed.
19. WHISTLE BLOWER / VIGIL MECHANISM
The Company has established a Vigil Mechanism and adopted a whistle blower policy forits directors and employees to report concerns about unethical behaviour actual orsuspected fraud or violation of the Company's code of conduct or ethics policy. Themechanism provides adequate safeguards against victimisation of persons who use thismechanism. The brief details about this mechanism has also been posted on the website ofthe Company.
20. CORPORATE GOVERNANCE
The Company has complied with the requirements of corporate governance as stipulatedunder the Listing Regulations and accordingly the Report on Corporate Governance formspart of this Annual Report. The requisite certificate from S R B C & CO LLP theStatutory Auditors of the Company regarding the compliance with the conditions ofCorporate Governance as stipulated in Regulation 34 of Listing Regulations is annexed tothis Annual Report.
21. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis for the year under review as stipulated in terms ofRegulation 34 of the Listing Regulations is presented in a separate section forming partof this Annual Report.
22. BUSINESS RESPONSIBILITY REPORT
Business Responsibility Report for the year under review as stipulated in terms ofRegulation 34 of the Listing Regulations is presented in a separate section forming partof this Annual Report.
23. CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING
The Board of Directors has adopted the Code of Internal Procedures and Conduct forregulating monitoring and reporting trading by designated persons in accordance with theSEBI (Prohibition of Insider Trading) Regulations 2015. The said code lays downguidelines and procedures to be followed and disclosures to be made while dealing withthe securities of the Company. The Code of fair disclosure of unpublished price sensitiveinformation is available on website and is accessible at the linkhttp://corporate.shoppersstop.com/uploaded_ files/3cd8391-7d65.pdf
S R B C & CO LLP (Registration No. 324982E/E300003) Chartered Accountants wereappointed as Statutory Auditors of the Company by the Members at the 20th Annual GeneralMeeting (AGM) held on July 28 2017 to hold office from the conclusion of the 20th AGMuntil the conclusion of the 25th AGM of the Company in accordance with provisions of theCompanies Act 2013 and will continue to be Statutory Auditors of the Company till theirterm expires.
The Auditors' Report to the members for the year under review does not contain anyqualification reservation adverse remark or disclaimer. The Auditors has not reportedany matter to the Company required to be disclosed under Section 143(12) of the CompaniesAct 2013.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial personnel) Rules 2014 the Companyhad appointed Kaushal Dalal & Associates Practicing Company Secretaries to undertakethe Secretarial Audit of the Company for the year under review. The Secretarial AuditReport issued by them is annexed herewith as Annexure VI. The said report does notcontain any qualification reservation adverse remark or disclaimer.
25. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated is annexed herewith as Annexure VII. The foreignexchange earnings was Rs. 7978.85 lacs and outgo was Rs. 1528.42 lacs.
26. TRANSFER OF EQUITY SHARES TO IEPF
During the year under review 734 Equity shares of 11 Shareholders of the Company havebeen transferred/ credited to the Demat account of Investor Education and Protection FundAuthority (IEPF Authority) in accordance with Section 124(6) of the Companies Act 2013read with Investor Education and Protection Fund Authority (Accounting Audit Transferand Refund) Rules 2016 as amended whose dividend has not been encashed on such sharessince last seven consecutive years. The details thereof are available under InvestorSection' on the Website of the Company viz. www.shoppersstop.com. Any person whose sharesand/or unclaimed dividend has been transferred to the IEPF Authority may claim the sharesand/or apply for refund in respect of unclaimed dividend as the case may be under theprovisions of the Companies Act 2013 and rules made thereunder.
27. DEMAT SUSPENSE ACCOUNT FOR UNCLAIMED SHARES
As on date there are 13 shareholders holding 700 equity shares of Rs. 5/- each (postsub-division) allotted in Initial Public Offering of 2005 lying in the escrow account dueto non-availability of their correct particulars. Despite various reminders to them byKarvy Computershare Private Limited Registrar and Share Transfer Agent of the Company noresponse has been received. As a result the said unclaimed shares have been credited toShoppers Stop Ltd. Unclaimed Shares Demat Suspense Account'. Suchshareholders may approach the Company with their correct particulars and proof of theiridentity for crediting requisite shares from Demat Suspense Account to their individualDemat Account. During the year under review no shares were transferred from the suspenseaccount to any of the aforesaid shareholders.
28. PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended a statement showing the names and other particulars ofthe employees drawing remuneration in excess of the limits set out in the said rules formspart of this report.
Further the disclosures pertaining to remuneration and other details as required underSection 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of thisReport.
Having regard to the provisions of the second proviso to Section 136(1) of the Act theAnnual Report excluding the aforesaid information is being sent to the members of theCompany. The said information is available for inspection at the registered office of theCompany during business hours on working days upto the date of ensuing Annual GeneralMeeting. Any member interested in obtaining such information may write to the CompanySecretary and the same will be furnished on request. The Annual Report including theaforesaid information is also available on the Company's website.
29. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134 of the Companies Act 2013 it is herebyconfirmed that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
b) appropriate accounting policies have been selected and applied them consistently andjudgements and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as on March 31 2018 and of theprofit of the Company for the year under review;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) the proper internal financial controls has been laid down and that the internalfinancial controls were adequate and were operating effectively; and
f) the systems to ensure compliance with the provisions of all applicable laws are inplace and were adequate and operating effectively.
30. SECRETARIAL STANDARDS
During the year under review the Company has complied with Secretarial Standards onmeetings of the Board of Directors and on General Meetings issued by the Institute ofCompany Secretaries of India in terms of Section 118(10) of the Companies Act 2013.
31. AWARDS AND ACCOLADES
During the year under review your Company received many awards and felicitationsconferred by reputable organisations some of them are:
a) Times Ascent Dream Company to work for in Retail & were also ranked 17thamongst "Times Ascent Dream Companies to work for" across all industries andsectors in India.
b) "Great Place to Work" & also recognised as one of the Top 10 BestWorkplaces in Retail by Great Place to Work Institute 2018.
c) Economic Times Excellence3 in Supply Chain3 & Logistics Award.
d) ELSC Industry Excellence in Supply Chain Retail.
e) BT-CSR Excellence award for Energy Conservation from Bureaucracy Today.
f)Winner in the following categories at Kamikaze Customer Loyalty Awards - 2018'
Best Loyalty Programme in Retail Sector: Large/Multi - Brand Format
Best Customer Experience in Retail Sector: Large/Multi - Brand Format
Best Use of Innovation in Loyalty Marketing.
Best Use of Customer and Data Analytics in Loyalty Programme
Best Use of Direct Marketing in a Loyalty Programme
32. MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments which could affect the Company'sfinancial position which have occurred between March 31 2018 and the date of this Report.
Your Directors would like to place on record its sincere appreciation for the supportand contribution made by customers business partners suppliers shareholders and allCustomer Care Associates across the Country as well as various government departmentsbanks and financial institutions for the conduct of operations of the Company.
| ||For and on behalf of the Board of Directors |
| ||B. S. Nagesh |
|June 8 2018 ||Chairman |
CERTIFICATE OF COMPLIANCE WITH THE CODE OF CONDUCT FOR THE FINANCIAL YEAR 2017318
We hereby declare that the Company has adopted a Code of Conduct for the Board ofDirectors and Senior Management of the Company and they have affirmed compliance with thesaid Code of Conduct.
| || ||For Shoppers Stop Limited |
| ||Govind Shrikhande ||Rajiv Suri |
|April 27 2018 ||Customer Care Associate & Managing Director ||Customer Care Associate & Chief Executive Officer |