To the Members
Your Board of Directors present 23rd Annual Report of Shoppers Stop Limitedon the business and operations of the Company together with the Audited FinancialStatements for the financial year ended March 31 2020 ("the year under review"or "the year" or "FY20").
This report is in accordance with the applicable provisions of the Companies Act 2013("the Act") and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 ("the Listing Regulations").
1. F inancial Performance An Overview
(Rs. in crores)
|Particulars ||Year ended March 31 2020 ||Year ended March 31 2019 |
|Retail Turnover || || |
|Own merchandise Gross of tax ||3507.79 ||3646.87 |
|Less: Goods and Service Tax ||402.69 ||406.62 |
| ||3105.10 ||3240.24 |
|Other Retail Operating Revenue ||275.88 ||241.06 |
|Revenue from Operations ||3380.98 ||3481.31 |
|Other Income ||33.49 ||17.89 |
|Total Income ||3414.47 ||3499.19 |
|Profit before Depreciation & Tax ||388.55 ||258.76 |
|Less: Depreciation ||439.21 ||135.07 |
|Profit before Tax ||(50.66) ||123.69 |
|Exceptional Items ||20.00 ||- |
|Profit before tax ||(70.66) ||123.69 |
|Less: Provision for Tax ||70.28 ||44.93 |
|Profit for the year (A) ||(140.94) ||78.76 |
|Other comprehensive loss / (income) (B) ||177.03 ||47.78 |
|Total comprehensive income/(loss) for the year (A)-(B) ||(317.97) ||30.98 |
2. Re view of Operations
D uring FY20 your Company has opened 11 Shoppers Stop' departmental storestaking its chain of stores to 89 stores with 11 HomeStop stores and 132 beauty doorsacross 44 cities in India under its operations. Your Company posted revenue fromoperations of Rs.3380.98 Crores (as per GAAP financials) a de-growth of (2.88%) over theprevious year. The EBITDA stood at Rs.582.93 Crores (as per GAAP financials) with a growthof 114.94% over the previous year.
A combination of all below items aggregating to Rs. 127.62 crores impacted theprofitability of the albeit they are non-cash and provided purely on conservative basis.Without these onetime non-cash provisions the Company's Profit before tax would have beenat Rs.56.96 crores. (Rs.123.69 crores in FY19) i. On March 30 2019 Ministry of CorporateAffairs (MCA) had notified Indian Accounting Standards
(Ind AS) 116 Leases as part of the Companies (Ind AS) Amendment Rules 2019. Ind AS116 replaces existing standard on Leases Ind AS 17 Leases with effect from AccountingPeriod beginning on or after April 1 2019. The New Standard requires Lessees to initiallyrecognize a lease liability for the obligation to make lease payments and a right of useasset for the right to use the underlying asset for the lease term. The lease liability ismeasured at the present value of the lease payments to be made over the lease term. Lesseeincreases the lease liability to reflect interest cost and reduce the same to reflectlease payments made over a period. The corresponding right of use asset is depreciated inaccordance with the depreciation requirements of Ind AS 16 Property Plant and Equipmentover a tenure of lease. We need to recognize the Interest on liability and thedepreciation on the assets. This is a significant deviation from the earlier Ind AS 17which recognized the lease expenses as an expense on accrual basis. Consequently forthis year the EBITDA had been significantly higher and it has been offset by Interest andDepreciation (Rs.379.80 crores) on the ROU Liability and Asset. The impact for the year isRs.368.73 crores. on the lease expenses which has increased the EBITDA for FY21 anddecrease the net profit by Rs.11.07 crores.
On account of Ind AS 116 the re-measurement of lease life in certain propertiesresulted in a GAAP income of Rs.15.20 crores. Consequently the cumulative net profit hasincreased by Rs.4.13 crores. The EBITDA for FY20 and FY19 is strictly not comparable tothis extent. We have onetime adjustment in the opening reserves for Rs.517.17 crores (netof deferred tax) on account of this standard as a difference between the ROU Liabilityand the Asset. While adhering to Ind AS 116 we also had to accelerate the depreciation byRs.44.44 crores on some of the assets in line with the primary lease period even thoughthe life of the assets is higher than the primary lease period.
Similarly in line with Ind AS 109 interest income accounted on present value ofdeposits of Rs.12.04 crores and depreciation on prepaid rentals amounting to Rs. 15.01crores has had a net impact of Rs.2.97 crores on the profitability (non-cash)
ii. Due to the Covid Impact we believe there are few vulnerable stores for which weare negotiating lease rentals. Purely on conservative basis we have accounted Rs.20crores as accelerated depreciation for the immovable assets in this fiscal year for thesestores on the assumption that we may have to close down during the year.
iii. The accumulated GAAP losses of our 100% subsidiary Crossword Rs.46.78 crores atMarch 31 2020 have substantially eroded its net worth. Whilst Crossword BookstoresLimited continues to take steps to revamp its operations (including store right sizingand brand positioning) the gestation period to achieve the desired level of turnaround istaking longer than previously envisaged. Based on a business valuation the Company hasrecognized impairment loss of Rs.20 crores with respect to its equity investment ofRs.35.06 crores.
iv. Effective January 1 2020 the company has reviewed the estimated economic usefullife of all components within the broad category of Leasehold improvements and Electricalequipments of its property plant and equipment based on the combination of evaluationconducted by an independent consultant and management estimate. As a result of this thecompany has decided to take a Depreciation charge for the quarter ended March 31 2020.The impact on account of this is Rs.30.60 crores.
v. Due to Covid-19 impact the Company has written off stocks of Rs. 13.74 crores. Theprovision has been higher due to lower sales in March and purely as a conservativemeasure the company has written off some of the inventory albeit this can be sold inFY21.
vi. The Company has to mark to market shares of Future Retail Limited (FRL) fromRs.211.31 crores
(net of shares sold) to Rs.36.46 crores during the year and consequently the companyhad to write down Rs.174.85 crores. The Company was allotted these equity shares by FRLsubsequent to disposal of its 51.09% stake in equity share capital of Hypercity Retail(India) Ltd.
While the year under review started on a high note with your Company being in a growthacceleration mode it however ended on a rather solemn note. Even as the Company opened11 new large format department stores the Covid-19 pandemic and the nation-wide lockdowntowards the fag end of the FY20 brought operations to a standstill. All stores weretemporarily closed and that had a significant impact on revenue. Nonetheless the Companyhas put into place certain strategic steps to ensure a bounce back from this situation.Simultaneously we will provide a safe workplace for employees and a safe and delightfulshopping experience at stores for customers. Our key investments in Digitisation andfurther strengthening our strategic pillars of First Citizen Members Personal ShoppersExclusive Brands and Beauty will help us put forth a resilient and sustainable businessmodel. Further analysis of operating performance is carried under Management Discussionand Analysis which forms part of this Annual report.
I n accordance with Regulation 43A of the Regulations the Company has adopted theDividend Distribution Policy' which sets out the parameters and circumstances thatwill be taken into account by the Board in determining the distribution of dividend to itsMembers and / or retaining profits earned by the Company from time to time. This Policyis annexed as Annexure I to this report and is also available on the Company's corporatewebsite at https://corporate. shoppersstop.com/uploaded_files/191b878-8de7.pdf.
In view of said financial position of the Company for FY20 the Board of Directors ofyour Company are unable to recommend dividend on equity shares (previous yeardivided at Rs.0.75 per equity share was declared).
T here is no amount proposed to be transferred to Reserves for the year under review.
5. S ubsidiaries Associates And Joint Venture
A s on March 31 2020 your Company has five owned subsidiaries details whereof are asunder:
Crossword Bookstores Limited (Crossword):
Crossword with its wide portfolio of books movies toys confectionary and stationeryis the definitive place and space for those who seek information knowledge or just thepleasure of reading. Crossword has chain strength of 41 stores across the country with arevenue of Rs. 81.46 crores (previous year Rs.96.98 crores). Crossword posted net loss ofRs. 12.45 crores for the year under review against a net loss of Rs. 14.45 crores in theprevious year.
Shoppers' Stop.Com (India) Limited (SSCL): SSCL was incorporated in year 2000 withan objective of advancing the online presence which became more operationalized duringthe year under review with commencing the online business activities. With its maidenonline presence SSCL posted net profit of Rs.0.29 crores for the year under reviewagainst a net loss of Rs.0.01 crores in the previous year.
The other 3 (three) wholly owned subsidiaries of the Company viz.: Upasna TradingLimited; Shopper's Stop Services (India) Limited and Gateway Multichannel Retail (India)Limited; had no operations during the year under review. The Company has no joint ventureor associate company. Further no company has become or ceased to be subsidiary jointventure or associate company of the Company during the year under review.
A separate statement containing the salient features of the Financial Statement of allabove subsidiaries is provided in prescribed Form AOC - 1 and forms part of this AnnualReport.
In accordance with the provisions of Section 136(1) of the Act the FinancialStatements of each of the aforesaid subsidiaries along with related information areavailable on the Company's corporate website at https://corporate.shoppersstop.com/ andthe same are also available for inspection by the Members. The Members desiring inspection/ interested in obtaining a copy of the Financial Statements may write at firstname.lastname@example.org or to the Company Secretary.
Your Company has adopted a policy for determining material subsidiaries which is partof the Company's Policy on Related Party Transactions. The same is available on theCompany's corporate website at https://corporate.shoppersstop.com/uploaded_files/614043c-71cd.pdf. As per this Policy as on March 31 2020 your Company does nothave any material subsidiary.
6. C onsolidated Financial Statements
I n accordance with the provisions of Section 129(3) the Act and Regulation 34 of theListing Regulations the Consolidated Financial Statements forms part of this AnnualReport. The Consolidated Financial Statements have been prepared in accordance with theIndian Accounting Standards (IND AS) and Section 133 of the Act.
7. E mployees Stock Option Scheme / Plan And Statutory Information Thereon Shoppers Stop Employee Stock Option 2008 (ESOP 2008):
The Members at 11th Annual General Meeting held on July 29 2008 hadapproved ESOP -2008 for issuance of the employee stock options ('Options'') to theeligible employees of the Company. ESOP 2008 aims to promote desired behavior amongemployees for meeting the Company's long term objectives and enable retention of employeesfor desired objectives and duration through a customized approach.
The Nomination Remuneration & Corporate Governance Committee of the Companyinter-alia administers and monitors ESOP 2008 implemented by the Company in accordancewith the Act and the SEBI (Share Based Employee Benefits) Regulations 2014 as amended("the SEBI Regulations"). During the year under review the Company has granted82915 Options under ESOP 2008 to the eligible employees of the Company.
Statutory Information On ESOP 2008:
The disclosures requirements under the Securities and Exchange Board of India (ShareBased Employee Benefits) Regulations 2014 for the aforesaid ESOP Scheme in respect ofthe year ended March 31 2020 are disclosed on the Company's website and can be accessedusing the link https://corporate.shoppersstop. com/Investors/annual-report.aspx. Furthera certificate from S R B C & CO LLP Statutory Auditors of the Company with respectto implementation of Employee Stock Option Plan in compliance with the Act the SEBIRegulations and the Members' approval is obtained and shall be available for inspectionby the Members. The Members desiring inspection may write at investor@ shoppersstop.com orto the Company Secretary.
8. H uman Resources
T he Company has been designing its Resources initiatives in line with the trendsshaping the future of work and enabling us to create the best possible environment for theworkforce. During the year under review your company built on a number of initiatives toimprove existing HR systems and processes as well as develop new tools to enhance theemployee experience. These efforts spanned around recruitment and employer brand;development; engagement; performance and recognition; leadership of and succession.
Key HR processes of recruitment has gone digital and implemented all India basedRecruitment Management System which provides a seamless experience to newly hiredemployees and at the same time develops a robust database of potential candidate forfuture requirements. As on date of the Balance Sheet the Company has a total of 7498Customer Care Associates.
As we adopt digital tools and new ways of working we also needed to ensure ouremployees are equipped with the right skills. To support this objective we have providedaccess to learning available anywhere and anytime via our innovative Learning Planetprogram. Learning Planet is a cloud based Learning
Management System implemented this year. It covers the entire range of mandatorytraining and available learning at Shoppers Stop. Furthermore reflecting our commitmentto help employees develop professionally and personally and advance their careers.
It is crucial for us to understand what motivates and engages our employees and howthey perceive their work environment. Therefore we encourage open and regular dialoguebetween managers and their team members conduct surveys and offer a framework whichensures they feel comfortable to speak up raise concerns and are empowered to initiateimprovements. As a part of which your Company conducted a 360 degree feedback survey forall its senior employees to help them develop themselves and also listen to their teams.We are pleased to inform that this has helped in creating a more trusting and open workingenvironment. Furthermore the team provided support by coaching and training seniormanagers to prepare them for the foundational changes your Company is going through.
As your Company continued to execute its strategy the HR function helped managesignificant organizational change such as the reframing of its competencies and updatedthem in line with the changing work environment at the same time simplified itscompetency framework. Keeping an eye on the future it introduced competencies such asbeing Digital Savvy and Agility. Your Company was conferred the Best HR initiative awardby TRRAIN and also honoured by RASCI for their project on RPL Recognition of PriorLearning at the Retailers Association of India - annual event.
9. C orporate Social Responsibility (CSR)
T he Company remains committed as a Corporate Citizen to integrate socialenvironmental and economic concerns in its values and operations to improve the welfareof the stakeholders and the Society as a whole.
Your Company has in place the CSR Committee ("the Committee") which performsthe functions as mandated under the Act and the Rules framed thereunder. The compositionof the Committee is detailed in the Corporate Governance Report.
Further your Board has adopted a Policy on CSR in terms of the Act and the Rulesframed thereunder and in accordance thereof your Company undertakes activities / projects/ initiatives and makes contributions from time to time. The salient features of the saidPolicy are outlined in the Corporate Governance Report and the said Policy is madeavailable on the Company's corporate website.
Pursuant to the provisions of Section 135 of the Act and Schedule VII thereto read withthe Companies (Corporate Social Responsibility Policy) Rules 2014 the prescribed CSRexpenditure for the financial year 2019-20 amounts to Rs.1.68 crores. The CSR expenditureincurred by your Company amounts to Rs. 0.85 crore.
A brief outline of the CSR Philosophy and the report on CSR activities containingtherein the reasons for unspent CSR amount for the period under review is enclosed asAnnexure II to this report.
10. B oard Of Directors & Key Managerial
i Non-Independent Directors - Director Retiring.
During the year under review the Members at 22nd AGM held on July 30 2019approved reappointment of Mr. B. S. Nagesh (DIN: 00027595) as the Director of the Companywho retired by rotation at the said AGM and being eligible had offered himself forappointment.
In accordance with the Act and the Article of Association of the Company Mr. RaviRaheja (DIN: 00028044) is liable to retire by rotation at the ensuing AGM and beingeligible has offered himself for re-appointment as the Director. Accordingly there-appointment of Mr. Ravi Raheja is being placed for the approval of the Members at theensuing AGM. A brief profile of Mr. Ravi Raheja along with other related information formspart of the Notice convening the ensuing AGM.
ii. Independent Directors
During the year under review the Members at 22nd AGM held on July 30 2019approved appointment of Mr. Robert Bready (DIN: 06842835) as an Independent Director ofthe Company. The members also approved re-appointment of Mr. Nirvik Singh (DIN: 01570572)Mr. Deepak Ghaisas (DIN: 00001811) Prof. Nitin Sanghavi (DIN: 00863107) and Mr. ManishChokhani (DIN: 00204011) as the Independent Directors of the Company for their secondterm pursuant to the provisions of the Act and the Listing Regulations.
Your Board had formed an opinion that above mentioned Independent Directors who gotappointed for their second term during the year under review are of utmost integrity andthat they possess requisite expertise and experience relevant to support and scale up thebusiness model of your Company.
The Board of Directors on June 15 2020 on the recommendation of the NominationRemuneration & Corporate Governance Committee appointed Mr. William Kim (DIN:08750326) as an Additional and Independent Director of the Company for a term of 5 (five)consecutive years effective June 15 2020 subject to approval of the Members at ensuing23rd AGM of the Company. He shall hold office as an Additional Director up tothe date of ensuing 23rd AGM. The Company has received declaration from Mr.William Kim confirming that he meets the criteria of Independence as prescribed underboth Section 149(6) of the Act and the Listing Regulations. The Board of Directorsrecommends his appointment and attention of the Members is invited to the relevant item inthe Notice convening 23rd AGM the explanatory statement and brief profileattached thereto.
In terms of recent regulatory requirement in respect of establishment of an on-linedatabase of Independent Directors by Indian Institute of Corporate Affairs everyIndependent Director shall pass an online proficiency self-assessment test conducted bysaid Institute. However immunity has been granted to an individual who has served for aperiod of at least 10 years as on the date of inclusion of his name in the databank asdirector or key managerial personnel in a listed public company or in an unlisted publiccompany having a paid-up share capital of Rs. 10 crores or more. The Independent Directorsof the Company who do not have this exemption shall ensure clearance of onlineproficiency self-assessment test within the stipulated timeframe.
. Declaration By Independent Directors
The Company has received necessary confirmations/ declarations from each IndependentDirector of the Company confirming that they meet the criteria of independence asprescribed under the Act and the Listing Regulations. Based on such confirmations/declaration in the opinion of the Board the Independent Directors of your Company fulfilthe conditions specified under the Act the Rules made thereunder and Listing Regulationsand are independent of the Management of the Company. Further the Company has receiveddeclaration from all Independent Directors confirming that they have ensured inclusion oftheir names in the Independent Directors' data bank created and maintained by IndianInstitute of Corporate Affairs within stipulated timeframe as mandated by the Companies(Appointment and Qualification of Directors) Rules 2014 as amended.
iv. Key Managerial Personnel
During the year under review there were no changes in the Key Managerial Personnel ofthe Company.
11. P erformance Evaluation
I n compliance with the relevant provisions of the Act read with the Rules madethereunder and the Listing Regulations the performance evaluation of the Board as awhole its specified statutory Committees the Chairman of the Board and the individualDirectors was carried out for the year under review. The manner in which the annualevaluation was carried out and the outcome of the evaluation are explained in theCorporate Governance Report.
12. N omination Remuneration & Corporate
Governance Committee And Company's Policy On Nomination Remuneration Board DiversityEvaluation And Succession
Y our Company has in place the Nomination Remuneration & Corporate GovernanceCommittee which performs the functions as mandated under the Act and the ListingRegulations. The composition of the Committee is detailed in the Corporate GovernanceReport.
In terms of the Act and the Listing Regulations the Board of Directors of your Companyhas framed and adopted a policy on appointment and remuneration of Directors KeyManagerial Personnel (KMP) and Senior Management Personnel (SMP) of the Company whichinter-alia includes Board Diversity process of Evaluation of Directors KMPs and SMPsof the Company criteria for determining qualifications positive attributes independenceof a Director and other related matters. The remuneration paid to Directors KMP and SMPof the Company are as per the terms laid down in this Policy. The Managing Director &CEO of your Company does not receive remuneration or commission from any of thesubsidiaries of your Company. The salient features of the said Policy are outlined in theCorporate Governance Report and the said Policy is made available on the Company'scorporate website.
13. D isclosures Under The Act
E xtract of Annual Return: The extract of Annual Return in prescribed form MGT 9pursuant to Section
92 of the Act read with the Rules framed thereunder is annexed as Annexure III to thisreport and is also available on the Company's corporate website athttps://corporate.shoppersstop.com/Investors/ annual-report.aspx.
M eetings of the Board of Directors: A calendar of Meetings is prepared andcirculated in advance to the Directors. The Board of Directors of your
Company met 4 (four) times during the year under review. The intervening gap betweenthe Meetings was within the period prescribed under the Act and the Listing Regulations.The details of the board meetings the attendance of the Directors thereof and otherparticulars are provided in the Corporate Governance Report.
Change in the share capital: During FY20 there was no change in the paid up sharecapital of the Company.
Audit and Risk Management Committee: As on date the Committee comprises of fourIndependent- Non-Executive Directors i.e. Mr. Deepak Ghaisas (Chairman) Prof.Nitin Sanghavi Ms. Ameera Shah & Mr. Manish Chokhani (Members) and Mr. Ravi C.Raheja Promoter and Non-Executive Director (Member). The powers and role of the Committeeare included in the Corporate Governance Report. During the year under review all therecommendation made by the Committee were accepted by the Board.
Related Party Transactions: All transactions with related parties are placed beforethe Audit and Risk Management Committee ("the Committee") for its approval. Anomnibus approval from the Committee is obtained for the related party transactions whichare repetitive in nature based on the criteria specified and approved by the Board basedon recommendation of the Committee and transactions which are unforeseen year. TheCommittee and the Board foreach reviews on a quarterly basis all transactions enteredinto by the Company pursuant to the omnibus approvals so granted.
All transactions with Related Parties entered into during FY20 were in ordinary courseof business and at arm's length basis and in accordance with the provisions of the Act andthe Rules made thereunder the Listing Regulations and the Company's Policy on RelatedParty Transactions.
During the year under review there were no transactions which were materialconsidering the aforesaid Policy. Accordingly no disclosure is made in respect of relatedparty transaction in Form AOC - 2 in terms of Section 134 of the Act and Rules framedthereunder. There are no related party transactions that may have potential conflict withthe interest of the Company at large or which warrants the approval of shareholders. Theattention of the Members is drawn to the notes to the Standalone Financial Statementsetting out the related party transactions disclosures for FY20.
T he policy on Related Party Transactions formulated and adopted by your Company isavailable on the Company's corporate website athttps://corporate.shoppersstop.com/uploaded_ files/614043c-71cd.pdf
Particulars of loans guarantees or investments:
The details of the loans guarantees or investments covered under Section 186 of theAct forms part of the Notes to the Standalone Financial Statement provided in this AnnualReport.
Other Disclosures: The Board hereby states that no disclosure and / or reportingand / or details is required in respect of the following matters as there were notransactions on these matters and / or instances / requirement / applicability during theyear under review:
? Deposits covered under Sections 73 and 74 of the Act read with Companies (Acceptanceof Deposits) Rules 2014.
? Issue of shares (including sweat equity shares) to employees of the Company under anyscheme save and except ESOPs referred to in this report.
? Issue of equity shares with differential rights as to dividend voting or otherwise.
? No significant or material orders were passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations infuture.
? There was no revision in the financial statements.
? Maintenance of cost records in terms of Section 148 of the Act is not applicable tothe Company.
? Material changes and commitments affecting the financial position of the Company thathave occurred between the end of the financial year to which the financial statementsrelate and the date of this report unless otherwise stated in the report.
14. P revention Of Sexual Harassment (PoSH)
T he Company continues to follow all the requirements and guidelines in line with theprovisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules framed thereunder. The PoSH Committee established asper the statutory requirements continues to operate in every Unit and at the registeredoffice. In case of any instances employees are advised to approach the local PoSHCommittee and appropriate action in this regard is initiated post detailed review of thematter. The Company stands strong against any kind of sexual harassment and has zerotolerance for sexual harassment at workplace.
E very employee undergoes an extensive on PoSH through an E-learning module that coversthe definition guidelines and detailed coverage of PoSH examples. It also covers therights and responsibilities of the employees under the PoSH guidelines and Company'spolicy. A software program has been created to ensure faster and standardizeddocumentation of each and every PoSH complaint in line with the statutory guidelines andCompany's policy. The same is under testing phase. The Internal
Complaints Committee members of the PoSH have been trained and certified to update themwith the best practices in this area. There were 22 cases received during the year underreview and all the cases have been resolved as per the guidelines of PoSH Act & Rulesmade thereunder.
15. R isk Management
Y our Company has established a robust management system to identify assess the keyrisks and mitigate them appropriately. Further such system ensures smooth and efficientbusiness. The Company has in the light of the Covid-19 pandemic outbreak reviewed themajor risks including risks on account of business continuity supply chain managementthird party risks legal compliance and other risks which may affect or has effected itsoperations employees customers vendors and all other stakeholders from both theexternal and the internal environment perspective. Basis this review appropriate actionshave been initiated to mitigate partially mitigate transfer or accept the risk (if needbe) and monitor such risks on a regular basis.
Your Company has its Risk Management Committee subsumed with Audit Committee whichassists the Board in monitoring and reviewing the risk management plan implementation ofthe risk management framework of the Company and such other functions as the Board maydeem fit. The detailed terms of reference of the Audit and Risk Management Committee andcomposition thereof forms part of the Corporate Governance Report.
16. I nternal Financial Control
I nternal financial controls are an integral part the risk management processaddressing financial and financial reporting risks. The internal financial controls havebeen documented and embedded in the business processes. The Company has laid down internalfinancial controls through a combination of entity level controls process level controlsand IT general controls inter-alia to ensure orderly and efficient conduct of businessincluding adherence to the Company's policies and procedures accuracy and completeness ofaccounting records and timely preparation and reporting of reliable financialstatements/information safeguarding of assets prevention and detection of frauds anderrors.
The evaluation of these internal financial controls were done through the internalaudit process established within the Company and also through appointing professionalfirm as the internal auditors to carry out such tests by way of systematic internal auditprogramme. Based on the review of the reported evaluations we believe that these systemsprovide reasonable assurance that our internal financial controls are designed effectivelyand are operating as intended and for the preparation of financial statement for the yearunder review the applicable Accounting
Standards have been followed and the internal financial controls related to financialStatement are generally found to be adequate and were operating effectively and that nomaterial weaknesses were noticed. risk
17. W histle Blower / Vigil Mechanism
Y our Company has established a Vigil Mechanism and adopted a Whistle Blower policy inline with the operations of the Regulations 18 and 22 of the Listing Regulations andSection 177 of the Act. The Company has engaged a third party for managing the"Ethics Hotline" which can be used by employees including brand staff vendorsand third party vendor personnel.
Under this Policy the Whistle Blower can raise concerns relating to reportable matterssuch as unethical behaviour actual or suspected fraud or violation of the Company's codeof conduct or ethics policy or any other malpractice impropriety or wrongdoingsillegality of regulatory requirements. The mechanism adopted by the Company encourages toreport genuine concerns or grievances and provides for adequate safeguards againstvictimization of Whistle Blower who avail of such mechanism and also provide for directaccess to the Chairman of the Audit Committee in appropriate or exceptional cases. Weaffirm that no employee of the Company was denied access to the Audit Committee. Theguidelines are designed to ensure that stakeholders may raise any concern on integrityvalue adherence without fear of being punished for raising that concern. of This thirdparty managed Ethics Hotline' provide independence and comfort to the designatedpersonnel to blow the whistle in case they have any issues worth reporting. The reach ofthis hotline facility is also expanded further for placing complaints against sexualharassment Insider Trading & other specific HR related matters.
18. C orporate Governance Report
P ursuant to the Regulation 34 of the Regulations a separate report on CorporateGovernance along with the certificate from S R B C & CO LLP the Statutory Auditors ofthe Company confirming its compliance forms part of this Annual Report.
19. M anagement Discussion and Analysis
Ma nagement Discussion and Analysis the year under review on the business operations /performance review as stipulated under the Listing Regulations forms part of this AnnualReport.
20. B usiness Responsibility Report
T he Business Responsibility Report for the year review as stipulated under theListing Regulations describing the initiatives taken by the Company from social andgovernance perspective forms an integral part of this Annual Report.
21. A uditors & Auditors' Report
S tatutory Auditors
S R B C & CO LLP (Registration No. 324982E/E300003) Chartered Accountants wereappointed as the Statutory Auditors of the Company by the Members at the 20thAnnual General Meeting (AGM) held on July 28 2017 for a term of 5 years to hold theconclusion of the 25th AGM in accordance with the provisions of the Act andwill continue to be the Statutory Auditors of the Company till their term expires. TheCompany has received confirmation from the Statutory Auditors that their continuedappointment shall be in accordance with the criteria as provided under Section 141 of theAct.
The Auditors' Report for the year under review form part of this Annual report. Thesaid report was issued with unmodified opinion and does not contain any qualificationreservation adverse remark or disclaimer.
The Secretarial Audit Report for FY20 issued by Kaushal Dalal & Associatesthe Secretarial Auditor for the year under review is annexed as Annexure IV to thisreport. The said report does not contain any qualification reservation adverse remark ordisclaimer.
During the year under review the above Auditors have not reported any fraud andtherefore no details are required to be disclosed under Section 134(3) (ca) of the Act.
22. E nergy Conservation Technology Absorption
And Foreign Exchange Earnings And Outgo
T he information on conservation of energy technology absorption as stipulated underthe Act read with the Rules made thereunder is annexed as Annexure V to this Report. Theforeign exchange earnings were Rs. 85.50 crores (Previous Year Rs.96.25 crores) and outgowas Rs.18.60 crores (Previous Year Rs.19.69 crores) for the year under review.
23. P articulars of Employees and Related Disclosures
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended a statement for showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said rules and the disclosurespertaining to ratio of remuneration and other details as required under Section 197(12) ofthe Act read with under Rule 5(1) of the said Rules are annexed to this report.
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 and others entitled thereto. The said information is available for inspection bythe Members. The Members desiring inspection/ interested in obtaining copy thereof maywrite at email@example.com or to the Company Secretary. The Annual Reportincluding the aforesaid information is made available on the Company's corporate website.until
24. D irectors' Responsibility Statement
P ursuant to Section 134(3)(c) of the Act the of your Company to the best of theirknowledge and based on the information and explanations received from the Company herebyconfirm that: a. in the preparation of the annual accounts for the year under review theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any; b. the Directors have selected appropriate accountingpolicies and have applied them consistently and judgments and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as on March 31 2020 and of the loss of the Company for the year underreview; c. proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; d.the annual accounts have been prepared on a and going concern basis; e. proper internalfinancial controls to be followed by the Company were laid down and such internalfinancial controls were adequate and operating effectively; and f. proper systems toensure compliance with the provisions of all applicable laws were devised and that suchsystems were adequate and operating effectively.
25. S ecretarial Standards
D uring the year under review your Company complied with the Secretarial Standards 1and 2 on meetings of the Board of Directors and on General Meetings respectively issuedby the Institute of notified by the Company Secretaries of India and Ministry of CorporateAffairs in terms of Section 118 (10) of the Act.
26. A wards And Accolades
D uring the year under review your Company many awards and felicitations conferred byreputable organizations some of them are:
? Company of the Year Retail award from CNBC in collaboration with ChhattisgarhGovernment.
? HR Best Initiative Award (for Personal Shopper Program) and Recognition for PriorLearning - Skill Development by TRRAIN.
? Best Loyalty Program in Large Format Retail; First Citizen Black Best use ofRelationship marketing in Loyalty Program; Kids Earn Burn Campaign Best Loyalty Promotionand Best Loyalty Team at The Customers Fest Awards 2020.
? "Best in Class Supply Chain Strategy and Design" - 4th Year in arow at 13th ELSC Leadership Awards.
? The Coveted "Most Admired Retail Company of the year award" at MAPIC IndiaRetail Awards 2019.
27. Acknowledgement has W e thank our customers business partners suppliersbankers and shareholders for their continued support during the year. We thank theGovernment of India the State Governments where we have business operations and othergovernment agencies for their support and look forward to their continued support in thefuture.
We regret the loss of lives due to COVID-19 pandemic. We are deeply grateful and haveimmense respect for every individual who risked their life and safety to fight thispandemic.
We place on record our sincere appreciation towards the contribution made by allCustomer Care Associates at all levels.
|Mumbai June 15 2020 ||On behalf of the Board of Directors |
| ||B S Nagesh |
| ||Chairman |