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Avenue Supermarts Ltd.

BSE: 540376 Sector: Others
NSE: DMART ISIN Code: INE192R01011
BSE 00:00 | 24 Apr 2020 Avenue Supermarts Ltd
NSE 05:30 | 01 Jan 1970 Avenue Supermarts Ltd

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OPEN 2319.00
PREVIOUS CLOSE 2296.45
VOLUME 6704
52-Week high 2559.00
52-Week low 1225.95
P/E 118.29
Mkt Cap.(Rs cr) 149,726
Buy Price 2311.40
Buy Qty 10.00
Sell Price 2316.00
Sell Qty 48.00
OPEN 2319.00
CLOSE 2296.45
VOLUME 6704
52-Week high 2559.00
52-Week low 1225.95
P/E 118.29
Mkt Cap.(Rs cr) 149,726
Buy Price 2311.40
Buy Qty 10.00
Sell Price 2316.00
Sell Qty 48.00

Avenue Supermarts Ltd. (DMART) - Director Report


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Company director report

Dear Members

Your Directors are pleased to present the Nineteenth Annual Report of Avenue SupermartsLimited ("the Company") together with the audited financial statements of theCompany for the financial year ended 31st March 2019.

FINANCIAL PERFORMANCE

The Company's financial performance during the year ended 31st March 2019compared to the previous financial year is summarized below:

(Rs in crore)

Particulars Standalone Consolidated
2018-19 2017-18 2018-19 2017-18
Income from operations 19916.25 15008.89 20004.52 15033.20
Other Income 51.41 72.64 48.35 69.32
Total Income 19967.66 15081.53 20052.87 15102.52
Expenses 18520.02 13885.62 18630.93 13898.93
Share of Net Loss of Associate Company - - - -20.04
Gain on fair valuation of pre-existing equity interest in Associate - - - 38.52
Company
Profit before tax 1447.64 1195.91 1421.94 1222.07
Less: Tax Expense 511.29 411.23 519.48 415.79
Profit after Tax 936.35 784.68 902.46 806.28
Other comprehensive Income (net of taxes) -1.27 -0.52 -1.31 -0.50
Total Comprehensive income for the year 935.08 784.16 901.15 805.78

The financial statements for the year ended 31st March 2019 have beenprepared under Ind AS (Indian Accounting Standards).

BUSINESS AND OPERATIONS

Your Company delivered yet another year of steady growth by opening 21 (Twenty-one) newstores thereby taking the total count to 176 stores across the country. The Companycontinued to focus on its existing strategy of offering value retailing to the customersusing the EDLC/EDLP (Everyday Low Cost/Everyday Low Price) principle.

On standalone basis the total income for FY19 was `19967.66 crore which is 32.40%higher over the previous year's income of `15081.53 crore. Our total income onconsolidated basis for FY19 was Rs 20052.87 crore as against Rs 15102.52 crore during FY2018.

On standalone basis the net profit after tax (PAT) for FY19 stood at Rs 936.35 croreas against previous year's net profit of `784.68 crore thereby recording a growth of19.33%. Our net profit after tax (PAT) on consolidated basis for FY19 amounted for `902.46crore as compared to `806.28 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") and Credit Analysisand Research Limited ("CARE") for its debentures and long-term bank facilities/commercial paper programmes.

On 24th September 2018 CRISIL re-affirmed its rating on the Company'scommercial paper programme at ‘CRISIL A1+' from Rs 70 crore to Rs 200 crore.

On 25th September 2018 CRISIL upgraded its rating on the long-term bankfacilities and non-convertible debentures of the Company from "CRISILAA/Positive" to "CRISIL AA+/Stable".

Further on 26th October 2018 CRISIL re-affirmed its rating on theCompany's commercial paper programme at ‘CRISIL A1+' from Rs 200 crore to Rs500 crore.

"CARE A1+" (CARE A one plus) is reaffirmed by CARE for the Company'scommercial paper / short-term debt programme. Instruments with this rating are consideredto have very strong degree of safety regarding timely payment of financial obligations andcarries lowest credit risk.

With the above rating affirmations the Company continues to enjoy high credit qualityrating for its debentures and long-term bank facilities/commercial paper programme.

UTILIZATION OF IPO PROCEEDS

The proceeds of funds raised under IPO by the Company are being utilized as per Objectsof the Issue. The disclosure in compliance with the Regulation 32 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred to as"the Listing Regulations") is as under:

Particulars Projected utilization of IPO proceeds as per the Objects of the Issue

Actual utilization of IPO proceeds upto 31st March 2019

Deviation (if any)
Rs ( in crore) Rs ( in crore)
1. Repayment or Prepayment of a portion of loans and redemption or early redemption of NCDs availed by the Company 1080.00 1034.00 NIL
2. Construction and purchase of fit outs for new stores 366.60 320.03 NIL
3. General Corporate expenses (excluding IPO expenses) 394.02 394.01 NIL
Total 1840.62 1748.04

The Company appointed HDFC Bank Ltd. as a Monitoring Agency in accordance with theRegulation 41 of the Securities and Exchange Board of India (Issue of Capital andDisclosure Requirements) Regulations for monitoring the use of proceeds of IPO of theCompany.

There has been no deviation in the utilization of IPO proceeds by the Company asmentioned in the Prospectus and actuals.

SHARE CAPITAL

During FY 2019 there was no change in the authorised and paid-up share capital of theCompany. The paid up Equity Share Capital as on 31st March 2019 amounted to Rs624.08 crore.

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 Dividend Distribution Policy adopted by your Company is available on the Company'swebsite at http://www.dmartindia.com/investor-relationship. The said Policy is disclosedunder Annexure - I to this Report.

TRANSFER TO RESERVES

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

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared as per the relevant IndianAccounting standards (Ind AS) as issued by the Institute of Chartered Accountants of Indiaand notified under Section 133 of the Companies Act 2013 with the rules made thereunder.The said Consolidated Financial Statements form part of this Annual Report.

REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

The Company has 5 subsidiaries as on 31st March 2019.

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 2019 stood at Rs 920.10 crore against`701.86 crore infithe previous year and the Company posted net profit after tax of Rs10.10 crore for FY 2019 against Rs 5.68 crore for FY 2018.

AVENUE FOOD PLAZA PRIVATE LIMITED (AFPPL):

AFPPL is a wholly-owned subsidiary Company incorporated on 8th June 2004.It is engaged in the business of operating food stalls at DMart stores. The revenue fromoperations of the Company for FY 2019 stood at `23.59 crore as against `17.81 crore for FY2018. The Company reported net profit after tax of `5.67 crore against Rs 4.17 crore forprevious 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".fiAELcurrently operates its business in select areas of Mumbai region.fi AEL allows itscustomers to order a broad range of grocery and household products through its mobile appDMart online grocery shopping and through the websitefi www.dmart.in. Customers can eitherself-pick up their online orders from any designated Dmart Ready Pick-Up Points or getthem delivered at their doorstep.

AEL's revenue from operations for FY 2019 stood at `143.59 crore vis-a-vis `44.13 croreinfithe FY 2018. The Company registered a loss of `50.82 crore against the loss of Rs48.08 crore in FY 2018.

NAHAR SETH & JOGANI DEVELOPERS PRIVATE LIMITED (NSJDPL):

NSJDPL is a subsidiary Company incorporated on 21st February 2014 withmain object of among others development of land and construction. Revenue fromoperations of the Company for FY fi 2019 and FY 2018 was `0.75 crore and earned net profitafter tax of `0.47 crore for FY 2019 against `0.48 crore lakhs for FY 2018.

REFLECT WHOLESALE AND RETAIL PRIVATE LIMITED (RWRPL)

RWRPL a wholly-owned subsidiary Company incorporated on 28th May 2018 tocarry on the business of wholesale and retail of goods and products. It is yet to commenceits 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- II and 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 separate auditedfinancial statements in respect of subsidiaries is available on the website of the Companyunder web link http://www.dmartindia.com/investor-relationship. The same are alsoavailable to Members for inspection during business hours on all working days at theRegistered Office address of the Company.

RELATED PARTY TRANSACTIONS

All related party transactions entered into by the Company during the financial yearunder review were in the ordinary course of business and on arm's length basis and thesame were in compliance with the applicable provisions of the Companies Act 2013 readwith the relevant rules made thereunder and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended ("Listing Regulations"). Thetransactions entered into during the financial year were in conformity with the Company'sPolicy on Related Party Transactions.

During the year 2018-19 your Company did not enter into any material related partytransactions. Accordingly disclosure with respect to the Related Party Transactions inthe Form AOC – 2 in terms of Section 134 of the Companies Act 2013 is notapplicable.

The Company has formulated a policy on the Related Party Transactions which wasrevised and approved by the Board of Directors of the Company at their meeting held on 30thJuly 2018. The said Policy is hosted on the Company's website at www.dmartindia.com.

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 a Woman Director).The constitution of the Board of Directors of the Company isin accordance with Section 149 of the Companies Act 2013 and Regulation 17 of the ListingRegulations as amended from time to time.

Appointments

Re-appointment of Mr. Elvin Machado

The members of the Company at their 18th Annual General Meeting (AGM) heldon 28th August 2018 re-appointed Mr. Elvin Machado (DIN: 07206710) as aWhole-time Director of the Company for a term of three years commencing from 10thJune 2018.

Appointment of Ms. Kalpana Unadkat

Ms. Kalpana Unadkat (DIN: 02490816) was appointed as an Additional Director on theBoard of the Company (Independent Category) under Section 161 of the Companies Act 2013read with rules made there under with effect from 30th July 2018 upto theAnnual General Meeting of the Company.

Subsequently appointment of Ms. Kalpana Unadkat as an Independent Director of theCompany as per the provisions of Section 149 of the Companies Act 2013 read with rulesmade there under for a term of five years commencing from 30th July 2018 wasconfirmed by the members of the Company at their 18th Annual General Meeting(AGM) held on 28th August 2018.

Re-appointment of Mr. Ramesh Damani

The members of the Company re-appointed Mr. Ramesh Damani (DIN: 00304347) as anIndependent Director of the Company for a term of five years commencing from 1stApril 2019 through Postal Ballot on 6th March 2019.

Re-appointment of Mr. Ramakant Baheti

Mr. Ramakant Baheti (DIN: 00246480) was re-appointed as a Whole-time Director of theCompany designated as ‘Group Chief Financial Officer' for a term of five yearscommencing from 1st May 2019 by the members of the Company through PostalBallot on 6th March 2019.

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.

Mrs. Manjri Chandak (DIN: 03503615) Director being longest in the office is liable toretire by rotation at the ensuing Annual General Meeting of the Company and she beingeligible has offered herself for re-appointment. The Board of Directors recommend herre-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– 2 on General Meetings brief details of Mrs. Manjri Chandak are provided as anAnnexure to the Notice of the Annual General Meeting.

Key Managerial Personnel

During the year under review the Board at its meeting held on 5th May2018 as per the recommendations received from the Nomination & Remuneration Committeeand the Audit Committee re-designated Mr. Ramakant Baheti (DIN:00246480) as a Whole-timeDirector and Group Chief Financial Officer of the Company and appointed Mr. Niladri Deb asthe Chief Financial Officer of the Company.

Declarations by Independent Directors

In accordance with Section 149(7) of the Companies Act 2013 as amended eachIndependent Director of the Company has given written declaration confirming that he/shemeets the criteria of independence as stipulated under Section 149(6) of the CompaniesAct 2013.

Familiarization Programme

The Company has conducted familiarization programme 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 of Section177 of the Companies Act 2013 and Regulation 18 of the Listing Regulations.

The composition of the Audit Committee is as under:

Sr. No. 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. Mr. Ramakant Baheti Executive Director Member

* The Audit Committee was re-constituted w.e.f. 13th October 2018 byinducting Ms. Kalpana Unadkat Non-Executive and Independent Director as a Member of theCommittee.

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:

Sr. No. 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.

Taking into view the recommendations received from the Nomination & RemunerationCommittee the Board of Directors adopted revised Nomination and Remuneration Policy attheir meeting held on 30th July 2018.

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 Nominationand Remuneration Policy of the Company is disclosed under Annexure III and formspart 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:

Sr. No. 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 Stakeholders' Relationship Committee was re-constituted w.e.f. 30thJuly 2018 by inducting Mr. Ramesh Damani (DIN: 00304347) Non-Executive and IndependentDirector as a Member of the Committee.

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 the Board of Directors ofthe Company has constituted Corporate Social Responsibility (CSR) Committee. The Committeeis entrusted with the responsibility of: Formulating and recommending to the BoardCorporate Social Responsibility Policy (CSR Policy) indicating the activities to beundertaken; Monitoring the implementation of framework of the CSR Policy; and Recommendingthe amount to be spent on CSR activities.

The brief outline of the Company's CSR initiatives undertaken during the year underreview is disclosed in Annexure – IV in the format as prescribed in theCompanies (Corporate Social Responsibility Policy) Rules 2014. The Company's CSR Policyis placed on the website of the Company www.dmartindia.com.

The composition of the CSR Committee is as under:

Name Category Designation
Mr. Chandrashekhar Bhave Non-Executive and Independent Director Chairman
Mr. Ramesh Damani Non-Executive and Independent Director Member
Mrs. Manjri Chandak Non-Executive Director Member
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 management framework.A detailed analysis of the business risks and opportunities is given under ManagementDiscussion and Analysis Report.

The composition of the Risk Management Committee is as under:

Name Category Designation
Mr. Ignatius Navil Noronha Executive Director Chairman
Mr. Ramakant Baheti Executive Director Member
Mrs. Manjri Chandak Non-Executive Director Member
Mr. Ashutosh Dhar VP – Risk Management Member
Mr. Vikram Bhatia VP – Information Member
Technology

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 2019; theBoard of Directors hereby confirms that: a. in the preparation of annual accounts theapplicable accounting standards had been followed along with proper explanation relatingto material departures; b. such accounting policies have been selected and appliedconsistently and the Directors made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as at 31stMarch 2019 and of the profit of the Company for that year; c. proper and sufficient carewas taken for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d. the annual accounts of the Company have beenprepared on a going concern basis; e. they have laid down internal financial controls tobe followed by the Company and such internal financial controls are adequate and operatingeffectively. f. proper systems have been devised to ensure compliance with the provisionsof all applicable laws and 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 said Policy was revised and approved by the Board of Directors of the Company attheir meeting held on 24th March 2019. The Company is committed to adhere tothe highest standards of ethical moral and legal conduct of business operations. TheVigil Mechanism Policy is hosted on the Company's website 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 12th January2019 to review: The performance of Non- Independent Directors (including the Chairperson);

The performance of the Board as a whole and its Committees thereof taking into viewsof Executive and Non-executive Directors: and To assess the quality quantity andtimeliness of the flow of information between the Management 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.

Details of employee remuneration as required under provisions of Section 197 of theCompanies Act 2013 and rule 5(2) and rule 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are available at the Registered Officeof the Company for inspection and shall be made available to any member on request.

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 its eligibleemployees. The Employee Stock Option Scheme 2016 is being administered and monitored bythe ESOP Committee of the Company. During the year under review the Company has notgranted any Employee Stock Options.

There was no material change in the said scheme during the year under review and thescheme is in compliance with the SEBI (Share Based Employee Benefits) Regulations 2014.

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 placed at the ensuing 19th Annual General Meetingfor inspection by the Members and the copy of the same shall be made available forinspection at the Registered Office of the Company.

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 everyAGM. Pursuant to the amendments made to Section 139 of the Companies Act 2013 by theCompanies (Amendment) Act 2017 effective from 7th May 2018 the requirementof seeking ratification of the Members for the appointment of the Statutory Auditors hasbeen withdrawn from the Statute. Accordingly no resolution is being proposed forratification of appointment of statutory auditors at the ensuing AGM and a note in respectof same has been included in the Notice for this AGM.

Observations of Statutory Auditors on Accounts for the year ended 31stMarch 2019

The Auditors Report for the financial year ended 31st March 2019 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 2019

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 2018-19. 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 Saturday 5th May 2018 and the Internal Auditor directlyreports to the Audit Committee for functional matters. The Audit Committee in itsquarterly meetings reviews the internal audit and controls reports. Company's internalcontrols are commensurate with the size and operations of the business. Continuousinternal monitoring mechanism ensures 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:

Extract of Annual Return

The extract of annual return in From MGT-9 as required under Section 92(3) of theCompanies Act 2013 and Rule 12 of the Companies (Management and Administration) Rules2014 is disclosed under Annexure – VII and forms part to this report and isalso available on the website of the Company at www.dmartindia.com.

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 –VIII 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 Business ResponsibilityReport are in line with the key principles enunciated in "National VoluntaryGuidelines on Social Environmental and Economic Responsibilities of Business" framedby the Ministry of Corporate Affairs. Pursuant to the provisions of Regulation 34 of theListing Regulations the said report is attached separately which forms part of thisAnnual 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 workplace 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.

During the financial year 2018-19 the Company had received 19 complaints on sexualharassment and the same were disposed off in accordance with the Company's policy onprevention prohibition and redressal of sexual harassment at workplace.

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.

ACKNOWLEDGEMENTS AND APPRECIATION

Your Board takes this opportunity to thank Company's employees at all levels for theirhard work and commitment. Your Board also places on record its sincere appreciation forthe continued support received from the customers members suppliers bankers financialinstitutions and all other business partners/associates.

For and on behalf of the Board of Directors of
Avenue Supermarts Limited
Ignatius Navil Noronha Ramakant Baheti
Place: Thane Managing Director & CEO Whole-time Director & Group CFO
Date: 11th May 2019 DIN: 01787989 DIN: 00246480
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
Email Id: investorrelations@dmartindia.com
Website: www.dmartindia.com


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