Aditya Birla Fashion & Retail Ltd Directors Report.


Dear Members,

Your Companys Directors hereby present the Eleventh Annual Report of the Company together with the Audited Financial Statements of the Company for the Financial Year ended March 31, 2018 ("year under review/ FY 2017-18").


To avoid repetition of information, the Management Discussion and Analysis on performance of the Company is presented below.


The global economic outlook, as forecasted by International Monetary Fund ("IMF"), is better than previous year i.e. 2016. The growth for the world economy for 2017 is projected at 3.8% vs 3.2% last year. The revision reflects increased global growth momentum on account of changes in U.S. tax policies and notable upside surprises in Europe and Asia. The cyclical upswing underway since mid-2016 has continued to strengthen. More than 120 economies, accounting for three quarters of world GDP, have seen a pick-up in growth in year-on-year terms in FY 2017-18. IMF remains bullish for subsequent years as well, giving a growth forecast of 3.9% in both 2018 and 2019.

IMF remains positive on Indias growth potential and has retained its GDP forecast for the country at 7.4% in 2018. It also estimated that the Indian economy would grow by 7.8% in 2019, making it worlds fastest growing economy in 2018 and 2019.

FY 2017-18 was a landmark year due to implementation of much awaited Goods and Services Tax ("GST"). While sector experienced limited unfavourable impact early on due to roll out related disruptions, it gradually experienced steady recovery towards the end of the year. Your Company believes that this move has created a singular trading market across the country, creating an organised ecosystem under unified tax regime; expected to benefit both consumers and companies in the long run.

Industry Structure and Developments

Global Market

Global apparel market is close to 2%(1) of world GDP with Europe, USA and China being the largest markets, holding combined share of more than 50%. Europe and US comprise of ~11% of World population while their combined apparel consumption share is 40%; indicating very high per capita expenditure on apparel in these markets. This implies large headroom for growth in per capita apparel consumption for India to be played out over next few decades.

As per Mckinsey report(2), with the shift of economic growth from mature regions in West to emerging markets in South and East Asia, more than half of apparel and footwear sales will originate outside of Europe and North America. This further reflects available opportunities in these regions and companies have to seek new avenues of growth in emerging markets.

The biggest trend thats gaining momentum is that global fashion industry is moving towards a decisive phase of digital adoption by the mainstream consumers. The new age shoppers comfort with digital medium and content has changed the customer shopping journey from a linear process to a complex trajectory traversing across online and offline touch points. This offers an immense opportunity for fashion brands to create consumer delight by offering 24X7, deeply engaging and much more premium shopping experience.

In the fast fashion segment, the robust 20% growth in the past few years has led to incubation of new online fast fashion players. This business has gained traction also partly because of rapid introduction of fashion trends by social media to an exponentially increasing consumer base.

Indian Market

The apparel market for India is expected to grow at CAGR of 9%(3) from USD 51 Billion in FY 2017-18 to USD 65.8 Billion in FY 2019-20; backed by greater purchasing power leading to higher discretionary spends, better access to products, higher brand awareness, rising urbanisation and increasing digitisation. The share of organised retailing in apparel swelled from 14% in FY 2007 to 24% in FY 2017-18. Over the past decade, organised retail has not only captured new and incremental demand, but has also successfully shifted demand away from unorganised retail.

Over the next three years, while branded apparel is projected to grow at CAGR of 19%, organised retail is expected to outpace it with growth of 21%. Additionally, though the per capita spend of apparel in India is expected to increase from USD 38 in FY 2017-18 to USD 66 in FY 2025-26, it will still be lower than other developed and emerging markets, ushering apparel players into a phase of robust growth.

Menswear still occupies larger share of apparel market at 41%, while womenswear contributes 38%. However, womenswear across other countries constitutes 55% to 60% of total apparel market, highlighting the opportunity that exists for Indian market.

The industry continued with its rapid growth this fiscal, led by aggressive expansion by value and mass fashion players, strengthening of foreign brands and strong growth of e-commerce players.

Over the past few years, numerous International Brands established their presence in India. This year, many of these brands expanded their reach by setting up exclusive brand outlets, along with tailoring their products and price points to suit the Indian market.

NSSO rural consumption survey has been showing continued trend towards more urban consumption pattern, with spends becoming more discretionary than need based in rural and urban markets. The expenditure on clothing, durables and consumer services is growing much faster than decadal average. Growth of these markets is characterised by increasing aspiration of owning brands and rising discretionary spends, though constrained by high price sensitivity.

In line with the above, though Tier 1 cities continue to dominate the consumption space, rest of the country has been seeing a much faster shift from unorganised and unbranded play. It is expected that the total organized shopping space in top 10 cities will be lower than rest of India in next three years. With appropriate positioning and carefully carved out retail model, value & mass fashion players have been able to grow exponentially in these markets.

E-commerce continued to build upon its strength of providing rapid scale and deep access to markets and consumers -augmenting the opportunity that lies in strong brands to partner with them and recruit new buyers. Industry is still witnessing high discounting and promotions linked to aggressive growth being chased by key players. However, with increased focus on profitability, the disruptive impact that the sector had on traditional offline players few years back has somewhat diminished; creating a conducive ecosystem for offline and online players in India to partner and grow the market together.

Omni-channel emerged as a promising bet as both online and offline players dabbled with it – many online players started physical stores while established offline businesses invested in developing online capabilities.

Business Overview

Your Company is Indias largest pure-play fashion and lifestyle entity with an elegant bouquet of leading fashion brands and retail formats.

Lifestyle Brands

Riding on extensive and deeply penetrated distribution network, our lifestyle brands - Louis Philippe, Van Heusen, Allen Solly and Peter England, continue to be leaders within their respective segments. With continuous efforts towards offering consumer delight through high quality products and differentiated in-store experience, we expanded our loyal consumer base to approximately 12 million this fiscal.

These brands have created very strong equity amongst our loyal customers through years of persistent focus on product innovation, design development, consumer satisfaction and brand building.


(includes Management Discussion and Analysis)

During this fiscal, business expanded its reach through new store openings, alongwith improving same store performance through focused store-level interventions. The business focused on integrating consumer feedback into product design and planning, aiming at improving product satisfaction scores amongst consumers. Lifestyle business took significant strides towards adopting digital ways of working both in terms of consumer engagement and brand building. We were one of the early movers to adopt Omni-channel capabilities and our concerted efforts helped expand the coverage to more than 700 stores, giving our consumers unmatched access to wide variety and choice of products.


Pantaloons, is amongst the most widely present retailers in the value fashion segment with network of 275 stores spanning over 3.76 million square feet. During the year under review, as the value fashion segment grew strongly, Pantaloons added 66 new stores to its network and entered many new Tier 2 and Tier3 markets. These new stores will mature over the coming years and will add to our growth and profitability. Pantaloons also undertook various cost-optimisation initiatives, leading to improved profitability. The business continues to make sound progress towards increasing the share of franchisee stores in the network to improve capital efficiency.

Pantaloons has been awarded the IMAGES Most Admired Affordable Fashion Retailer of the year for second consecutive year along with the Best Turnaround Story Award - 2017. Pantaloons was also recognized as "Most Trusted Fashion Retailer" in the Brand Equity Survey of Economic Times, 2016-17. Its customer relationship programme with over 10 Million deeply engaged customers is one of the key drivers of the growth, contributing to more than 90% of sales.

Fast Fashion

Your Company took an early bet on Fast Fashion business by positioning itself in the segment through two "Youth fast fashion" retail brands – People and Forever 21. While Forever 21 is the iconic global fast fashion brand that enjoys an enviable following amongst young girls, People is a young and edgy brand that seeks to address the fashion aspirations of Indian youth.

This fiscal, your Company took calibrated approach towards this portfolio with clear focus on improving profitability. Many long vintage stores were rationalised during the year and new retail store models were tested and established. These initiatives led to improved profitability, thus establishing replicable profitable model for future expansion.

Your Company is poised to capture significant share of the fast fashion market through its varied offering across customer segments, wearing occasions and price points.


Innerwear is a large and attractive market, currently under-penetrated in the premium branded segment. Your Company forayed into this space with the launch of Van Heusen innerwear for men in mid of FY 2017-18 and is encouraged with the outcomes in a short span of time.

During this fiscal, Innerwear segment aggressively added points of distribution through pan India launches. Riding on product strategy focused on fit, fashion and innovation and favourable engagement models with channel partners, your Company considers this segment to become an important growth driver in coming years.

International Brands

International brands portfolio comprises The Collective, Indias largest multi-brand retailer of international brands and select mono brands. Simon Carter and Ted Baker, which were signed in FY 2016-17, opened their first store this fiscal and were well received by consumers.

Additionally, during the year under review, your Company signed few more premium international brands for the Indian market viz. Polo Ralph Lauren, American Eagle and Fred Perry. These brands will open their first store in the coming financial year. With aforesaid additions to its portfolio, your Company will continue on its trajectory on building a strong but selective play in the emerging Super Premium and Bridge to Luxury Segments.


The implementation of GST came in two phases – Introduction of GST across country on July 1, 2017, followed by the second phase of tax slab reductions implemented by the government in November 2017.

Your Company responded to this huge transformation with utmost agility and precision. However, as clarity on rules and processes came in gradually, Trade approached the change very cautiously. While your Company worked seamlessly with the partners to smoothen the transition, given the scale of change, the operating environment for your Company remained challenging for most part of this fiscal.

Business Strategy

Your Company will continue to build on its leadership position through investments in key strategic themes.

Building Strong Brands

In order to maintain its leadership position, your Company will continue to invest in brand building, product design and refreshed store experience. The product innovation focus will continue to drive the differentiation, supplemented with initiatives to incorporate customer feedback. Your Company will continue to adopt newer modes of engagement with its customers and create strong associations to strengthen its brands. The consumer-centricity framework is based on continuous research, big data analytics, real-time feedback from retail outlets and a constantly growing loyalty programme.

Enhancing Portfolio

Your Company has laid out a clear growth path for value creation by strengthening its existing businesses and accelerating play in emerging business segments. Your Company continuously identifies emerging segments in the market and seeks to enhance its play through a combination of brand extensions, new product launches and strategic acquisitions.

In the last few years, your Company expanded its presence in casual wear through brand extensions and also gained a strong position in the fast growing value fashion segment through Pantaloons. The portfolio has been strengthened with inclusion of Forever 21 in womens fast fashion and mens innerwear under the brand Van Heusen.

Going forward, your Company will continue to explore further growth opportunities in fast growing segments such as womenswear, casual and super-premium categories.

Building Agile Design and Supply Chain

Design and product development is at the core of the apparel business and your Company will continue to invest in these functions. Your Company will drive product innovation by incorporating customer feedback in the design cycle. In FY 2016-17 your Company shifted from a 2-season cycle to a 4-season cycle – Spring, Summer, Festive and Winter, thereby building an agile design and supply chain ecosystem. Your Company continued with the journey by increasing its proportion of closer to market lines to quickly address the changing needs of the market. This is a significant internal transformation that is enabling your Company to offer greater freshness and latest fashion in line with changing consumer trends.

Expanding Distribution Footprint

Your Company has been growing rapidly through its multi-channel distribution strategy and is now present in more than 750 cities.

With the expansion of retail opportunity across India, your Company intend to continue building reach and penetration through physical stores, alongwith strong Omni-channel play. Together with increasing its penetration in existing territories, your Company sees tremendous opportunity in the vast Tier 2, 3 and 4 markets of the country and plans to expand presence through appropriate business models. This will help the Company in gaining strong position across markets to meet the growing demand for high-quality ready-to-wear branded apparels.

Digital Transformation

The consumer behaviour in terms of buying is highly influenced by digital environment, ensuring way forward for fashion retail to have significant role of digital media and commerce. The digital space plays numerous roles for shoppers at varied stages of evolution in terms of digital adoption. The advent of digital has raised expectations of customer experience and put a higher value on convenience, price and personalisation. People are becoming comfortable using digital mediums, through social media, online videos and eventually shopping.

Your Company recognises the need for adoption of digital to ensure internal transformation and external market readiness. It has taken initiatives across Data analytics, In-store digitisation and marketing to ensure shifts in ways of doing business. The digital architecture is built around strong analytics framework, which gives a single customer view across physical and digital mediums, assisting in faster decision making. Your Company is pursuing In-store digitisation through virtual stores and Omni-channel initiatives, while also exploring additional functionalities. The customer shopping journey is not linear, thus, there is a significant focus to drive transformation using digital platforms, in the quest to build a future-ready organisation.

Financial Performance and Analysis

Financial Statements

( in Crore)
Particulars Year Ended March 31, 2018 Year Ended March 31, 2017
Revenue (1) 7,181 6,633
EBITDA (2) 501 476
Finance Costs 172 180
Depreciation 281 242
Earnings Before Tax 49 54
Provision for Taxation - -
Deferred Tax Assets (3) 69 -
Net Profit / (Loss) (2) 118 54


Particulars As on March 31, 2018 As on March 31, 2017
Net Fixed Assets (including Capital Advances and CWIP) 777 696
Goodwill 1,860 1,860
Net Working Capital 482 509
Capital Employed 3,119 3,065
Net Worth 1,093 958
Debt (4) 2,026 2,107


(1) Effective July 1, 2017, Revenue is recorded net of GST, whereas earlier the same was recorded gross of excise duty which forms part of expenses.

Hence, revenue from operations are not comparable with the previous period corresponding figures.

(2) Includes Other Income of 13 Crore (Previous Year: 22 Crore) and Finance income of 20 Crore (Previous Year: 16 Crore).

(3) Recognized Deferred tax assets on brought forward accumulated losses and their absorption based on reasonable certainty in coming years. (4) Includes interest accrued but not due on borrowings amounting to 164 Crore (Previous year: 62 Crore).

As on March 31, 2018, Goodwill (after testing for impairment in accordance with the Ind AS - 36 issued by the Institute of Chartered Accountants of India) stands at 1860 Crore.

Net Working Capital as on March 31, 2018 includes Inventory of 1,691 Crore, Trade Receivables of 552 Crore, Cash and Bank Balances of 73 Crore and Trade Payables of 2,009 Crore.


Your Company reported Revenue of 7,181 Crore (net of inter-segement adjustment) during the year, recording a growth of 8.3% over the previous year, due to overall improved performance in both segments.

Segment Performance: Madura Fashion and Lifestyle

MFL reported a revenue of 4,469 Crore recording growth of 9% over the previous year.

Its retail channel, which comprises of 1813 Exclusive Brand Outlets ("EBOs") and 229 value stores spanning 3.3 Million square feet, accounts for ~35% of MFLs revenue and reaches out to ~12 Million loyal consumers. Besides these EBOs, MFL is reaching customers through 9000+ additional points of sales including Multi Brand Outlets ("MBOs") and Shop-In-Shops ("SIS") in Department Stores.

Segment: Pantaloons

Pantaloons reported a revenue of 2,862 Crore recording growth of 12% over the previous year. During the year, it added 66 stores taking the total number of stores to 275 spanning 3.76 Million square feet. The business segment turned EBIT positive this year. Pantaloons reaches out to large middle class Indian households with its diversified offerings for men, women and kids.

Operating Profit (EBITDA)

The Operating Profit of the Company, including other income and finance income is 501 Crore (previous year

476 Crore) and grew by 5.4%. The EBITDA margin is at 7.0% and the Company is continuously making efforts to improve the same.

Finance Cost

Finance cost during the year was 172 Crore (down from 180 Crore in previous year). The average borrowing cost remains at 7.7%.


Depreciation during the year increased to 281 Crore from 242 Crore in previous year, due to opening of new stores in the last two years and accelerated depreciation provided on stores closed during the year.


While the Company has made a profit for the year, in view of accumulated losses of previous years, no amount is proposed to be transferred to reserves and your Directors have not recommended payment of any dividend for the year under review.


In order to ensure greater financial flexibility and an optimal financing structure, the Company, at the Ninth Annual General Meeting, obtained approval of the Members by way of a Special Resolution, to raise funds by issuance of Non-Convertible Debentures for an amount of up to 1,250 Crore, on private placement basis, within the overall borrowing limits of the Company as approved by the Members from time to time.

SWOT Analysis


Portfolio of Strong Brands

Your Companys brand portfolio is its strongest and most fundamental strategic pillar, enabling it to maintain leading position in domestic apparel industry. These brands have been established over more than 25 years through deep distribution, presence in finest shopping destinations and being marketed through some of the most iconic campaigns. These brands have not only achieved leadership status in their core positioning, but have also successfully extended themselves to newer consumers, markets and wearing occasions.

Your Company continues to selectively add newer brands, further strengthening its brand portfolio and expanding its presence across multiple segments.

Deep expertise in Design, Product Development and Sourcing

Brands derive the strength from the products created. Hence, your Company has invested deeply in building robust design and product development capabilities. Ably aided by its well established sourcing competence and agile supply chain, your Company has enabled itself to swiftly and appropriately respond to ever changing fashion trends by delivering innovative products satisfying consumer needs.

Largest Distribution Network

Your Company runs a wide and extensive distribution network of 2,500 stores and 9000+ points of Sale; making it one of the largest distribution networks of any apparel business in the country. As it increases its focus on Tier 2 and 3 markets, your Company expects its brands to travel even further and deeper, creating a distribution network that will become its dominant competitive advantage.

Strong People Processes

Your Company is the preferred choice for best talent in the industry due to its established reputation of being a people focused, meritocratic, professionally run and progressive organisation. People are at the core of its business strategy, and hence, your Company has established a strong system running on people development processes, career development plans, mentoring programmes and employee engagement initiatives.

Leadership Capability and Corporate Governance

Home to some of the finest talent in the industry, most of the leadership team in the Company is home grown and has contributed to many important milestones in its long journey of more than two decades. Your Company is governed by a board comprising of industry stalwarts with rich experience across diverse consumer facing industries and multiple geographies.


Inadequate representation in some high growth segments

With strong legacy of mens formal wear brands, the portfolio still needs more strength in other faster growing categories such as womenswear and kids; along with significant focus across wearing occasions such as casual wear, denims etc. In order to build a strong and balanced portfolio, your Company is taking aggressive positions to fill this gap, with the intent to organise the portfolio in line with the future configuration of apparel market.


Huge market with growing opportunity

Branded fashion is experiencing robust demand fuelled by rising incomes, increasing discretionary spending, improving access and growing aspiration for brands. Certain categories such as women and kids are expected to grow much faster due to rising proliferation of brands in these segments, more women joining workforce and discretion-based purchase replacing need-based buying.

Tremendous opportunity exists in Tier 2 and 3 towns with increasing urbanisation, growing propensity to spend and heightened aspiration to use branded products. The exposure to digital economy has greatly changed the aspirations and expectations of consumers in these markets. These markets will also see rise of high grade mall space, driving entry of numerous brands trying to address the needs of brand seeking consumers in better quality shopping space.

Rising affluence and increasing global exposure have led to growth in premium international brands business in India.

Digital Influence

Digital has emerged as the biggest force powering B2C businesses by creating digitally influenced and digitally enabled transactions. Your Company has embraced the digital revolution, upgrading the consumer shopping experience through Omni-channel play, blending post purchase consumer feedback in its product design process and digitally enabling the brick and mortar stores to offer more efficient and holistic shopping experience.

Threats and Risks

Increased discounting in industry

The unprecedented growth story of e-commerce created huge disruption in consumer retail over the last few years. Chasing customer acquisition and aggressive growth, the new/ e-commerce players rampaged offline commerce by resorting to aggressive discounting. End of Season Sale ("EOSS"), in its current form, heavily encouraged discount seeking behaviour and shifted a large portion of sales to discounting season; adversely impacting margins.

Increasing discounts is perceived as big risk for apparel industry – players are working on improving the core customer propositions comprising of innovative product, sharp pricing and delightful pre and post purchase experience, to shift consumers back to a full price sale regime.

Inadequate supply of good quality retail space

With larger part of FDI in real estate focusing on residential development in the last few years, commercial real estate development had slowed down. This has led to most of the cities having insufficient supply of grade A malls and good quality commercial space, translating into higher rentals and unviable economics for retail companies.

Limited availability of talent

Apparel industry experiences the demand for talent exceeding supply in many critical areas of analytical thinking, technical competency and leadership skills. Growth of e-commerce companies and advent of international players in India has also created tremendous challenge in terms of retaining key talent. The above two factors have made talent development and management, an extremely crucial component of business strategy.

Outlook – Way Forward

Your Company expects FY 2018-19 to be better as the after-effects of demonetisation and GST implementation seem to have subsided. As per economic surveys, India continues to be the fastest growing economies in the world, and is expected to continue in FY2018-19 as well. This is supported well by favorable factors such as policy reforms and encouraging monsoon forecasts.

Improving economic scenario is expected to translate into increased consumer spend. Furthermore, the fundamental themes driving consumer businesses such as increasing share of younger population, rising urbanisation, growing affluence, increasing discretionary spending and deeper penetration of digitisation continue to gain momentum.

In view of the above trends, the outlook is likely to remain positive for the sector. Your Company is well positioned to leverage the opportunity in this growing market with its diverse product offerings across varied categories, price points and portfolio of strong brands that will enable it in addressing changing consumer needs.

Risk Management

Effective governance and risk management form the bedrock of a companys sustained performance. The framework revolves around rigorous implementation of standardised policies and processes and development of strong internal control systems.

Your Companys Board has constituted a Risk Management Committee ("RMC") for identification, evaluation and mitigation of operational, strategic and external risks. RMC is supported by an Internal Committee, which consists of Chief Financial Officer, who is also the Chief Risk Officer of the Company alongwith experts from various business processes and segments. The Internal Committee assists the RMC in defining the framework for risk management & compliance and undertakes assessment of risks, adopts the risk mitigation plans and regularly monitors them in a structured and controlled environment. It also reviews developments in the socio-economic environment and identifies internal threats and opportunities, updates the framework and refines processes and systems for mitigation. Details of the composition of the RMC and the Risk Management Policy adopted by the Board, have been disclosed hereinafter.

The key identified risks are covered as part of Threats in SWOT analysis.

Internal Control Systems and their Adequacy

Your Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. Internal control systems comprising policies and procedures are designed to ensure sound management of your Companys operations, safekeeping of its assets, optimal utilisation of resources, reliability of its financial information and compliance. Systems and procedures are periodically reviewed and these are routinely tested and certified by Statutory as well as Internal Auditors and cover all functions and business areas. The Audit Committee reviews adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Companys risk management policies and systems.

Human Resources

People Vision of your Company is to "Drive a High Performing and Customer Centric Culture with Happy and Value oriented Employees". Its performance is anchored on its capabilities and productivity; customer-centric culture through a strong service orientation; happiness through purposeful behaviour by high quality talent; value-oriented through a deep commitment to the values of the Aditya Birla Group.

"The Biggest Brands and Best People" is the philosophy that drives ABFRL. Your Company have well-known brands; it is the people behind the brands who have made the Company what it is. Its unique Employee Value Proposition – "A World of Opportunities" makes your Company a preferred employer for professionals in the industry.

Your Company has a diverse workforce of 20,000+ employees with 50% women employees and with 53% of its employees in less than 30 years of age group. The Company has maintained healthy, cordial and harmonious industrial relations at all levels through Development Initiatives, Gender Diversity and Community Development.

Your Company has an environment of openness, enthusiasm and vibrancy. It continues to embed Company Values of Integrity, Commitment, Passion, Speed and Seamlessness within the organisation through well rounded value conversations between managers and employees. Its well-entrenched people processes enable the Company to attract and retain the best of talents in the industry.

Delivering ‘Employee Value Proposition (EVP) through its People Strategy:

Your Company is committed to strengthening its employee value proposition and provide its employees a world of opportunities in every aspect – learning and development, career growth, rewards and recognition and enrichment of life through healthy work environment and well-being programme. Its programme under EVP factors in diversity of employee profile, skills and age group.

? Learning and Development

Learning and Development initiatives equip employees to develop taller leadership capabilities armed with strong management competence in both domain specific and behavioural disciplines.

Your Company invests in multiple initiatives such as Gyanodaya - Aditya Birla Group Global Centre for Leadership Learning for its leaders; management development programs on various managerial capabilities; ABFRL University model for domain specific programme and Aditya Birla Centre for Retail Excellence focused on training and development for its employees in the stores. There are also significant opportunities for on the job development through various business and functional projects.

These not only help employees perform to their potential in the current roles, but also prepare them to aspire and occupy higher responsibilities.

? Career Growth

Anchored on the Aditya Birla Groups Talent Management Policy, your Company identifies, develops and grows its talent for current and future roles, using a matrix of current performance and future potential. Your Company plans for their growth through various development initiatives such as role movements, on the job projects and leadership learning programme.

Your Company provides visibility to its employees on their career paths and how they can achieve them. It has structured career conversations to understand aspirations of its employees and provide them with a direction. Your Company focus on succession planning to create a visible leadership pipeline. It believes in providing internal growth to it employees.

Your Company created strong ownership and governance on Careers through Talent Council, which are chaired by business leaders and meet at periodic intervals.

? Rewards and Recognition

Your Companys initiatives are aligned to driving the culture of meritocracy and ensuring market competitiveness. They celebrate successes and also help in raising the bar on performance and achievement.

Celebrating success through recognition programme are at the core of building vibrant ABFRL culture. Well-entrenched annual engagement events are forums where your Company celebrates and recognises team and individual achievements, value champions and feats achieved by employees beyond the call of duty.

Your Company has various forums where it recognises outstanding performance of its employees in the stores, warehouse, manufacturing facilities and its offices.

? Enrich Your Life

Your Company has embarked on multiple initiatives to create a wholesome approach for its employees. These include Retail Olympics focused on sports events leading to employee bonding and competitiveness. It also encourages its employees to volunteer in various CSR initiatives of the Company, offering them an opportunity to work together for the common good of the community. Your Companys initiatives also focus on the physical and mental well-being of its employees. It also offers flexible work arrangement for its employees to encourage them to balance their work, family, personal and professional commitments.


The Audited Financial Statements of your Company for the year under review ("financial statements") are in conformity with the requirements of the Companies Act, 2013 read with the rules made thereunder ("Act") and the Accounting Standards. The financial statements fairly reflect the form and substance of transactions carried out during the year under review and reasonably present your Companys financial condition and results of operations.

Your Directors confirm that: a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any; b) accounting policies selected have been applied consistently and reasonable & prudent judgments and estimates were made, so as to give a true and fair view of the state of affairs of your Company as at the end of the year under review and the profit & loss of your Company for the year under review; c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; d) the annual accounts of your Company have been prepared on a ‘going concern basis; e) adequate internal financial controls were laid down & followed by your Company and such internal financial controls were operating effectively; and f) proper systems have been devised by your Company to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

Further, your Directors confirm that during the year, the Company has been in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.


The paid-up Equity Share Capital of your Company as at the end of the year under review stood at 771.69 Crore vis--vis 770.53 Crore as at the end of previous year.

Details of Shares allotted during the year under review, are as under:

(i) Allotment to Non-Resident Shareholders of Aditya Birla Nuvo Limited ("ABNL") holding shares on repatriation basis ("NRE Shareholders")

In terms of Clause 21 of the Composite Scheme of Arrangement amongst the Company, ABNL and Madura Garments Lifestyle Retail Company Limited and their respective shareholders and creditors, under Sections 391 to 394 of the Companies Act, 1956 ("Composite Scheme"), the allotment of 37,82,178 Equity Shares of 10/- each ("said shares"), pertaining to the NRE Shareholders, was kept pending until the receipt of applicable regulatory approval(s).

Thereafter, your Company evaluated various options for settling the lawful entitlements of such NRE Shareholders in terms of the provisions of the applicable laws and had allotted 10,36,736 Equity Shares of 10/- each to 273 NRE Shareholders, in terms of the provisions of applicable laws, during the previous Financial Year.

During the period under review, the Company allotted further 10,34,529 Equity Shares of 10/- each to 1,134 NRE Shareholders. Hence, out of the said shares, allotment of 17,10,913 Equity Shares of 10/- each to 2,068 NRE Shareholders ("pending allotment") was pending as at the end of the period under review.

The NRE Shareholders, desirous of getting their respective entitlements allotted on Non-repatriation basis, may submit the details of their respective NRO account, vide a duly filled-in Consent Form, to the Company, in the manner as described in detail under the "Composite Scheme of Arrangement" tab in the "Investors" section on the website of the Company i.e. Alternatively, they may get in touch with the Registrar and Transfer Agent of the Company i.e. Link Intime India Private Limited, at the details mentioned in the "General Shareholder Information" section forming part of this Annual Report.

Further, your Company continues to evaluate various options for settling the matter with respect to the pending allotment, more specifically in terms of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 ("New FEMA 20 Regulations"), notified by the Reserve Bank of India ("RBI") on January 4, 2018 and any further development in this regard will be separately intimated to such NRE Shareholders.

(ii) Fractional Entitlements of NRE Shareholders

In terms of Clause 19(iii) of the Composite Scheme, 343 Equity Shares (out of the 10,34,529 Equity Shares allotted to the NRE Shareholders during the year under review), represent "Fractional Entitlements" arising out of the allotment of Equity Shares to 1,407 NRE Shareholders. The Company sold the said Fractional Entitlements in the Open Market on October 21, 2017, in terms of the Clause 19 of the Composite Scheme and the proceeds of the sale were distributed at a value of 171.83/- per Equity Share amongst the NRE Shareholders, as per their respective entitlements, through demand drafts and other prescribed electronic modes of payments alongwith necessary intimations of such payments to each of them.

(iii) Allotment made pursuant to the Employee Stock Option Scheme - 2013 ("Scheme 2013")

1,32,301 Equity Shares of 10/- each were allotted to the employees of the Company, pursuant to the exercise of Stock Options granted to them in terms of the provisions of the Scheme 2013.


A. Board of Directors ("Board")

(i) Number of Meetings

Board met 8 times during the year under review and the details of such meetings are disclosed in the Corporate Governance Report forming part of this Annual Report.

(ii) Appointments/ Resignations

Details of the Directors, who were appointed or have resigned during the year under review, are as under:

Name of the Director and DIN Designation

Effective Date

Appointment Resignation
Mr. Sanjeeb Chaudhuri Independent Director(1) January 9, 2017 -
DIN: 03594427
Mr. Pranab Barua Managing Director - January 31, 2018
DIN: 00230152 Non-Executive Director(2) February 1, 2018 -
Mr. Ashish Dikshit Managing Director(3) February 1, 2018 -
DIN: 01842066


(1) Appointed for a period of 5 consecutive years.

(2) Appointed as an Additional Director, proposed to be appointed as a Non-Executive Director, liable to retire by rotation, subject to the approval of the Members of the Company.

(3) Appointed for a term of 5 years, subject to the approval of the Members of the Company.

The aforesaid appointments were approved by the Board on recommendation of the Nomination and Remuneration Committee ("NRC") and the business with respect to the same forms part of the Notice of the ensuing 11th Annual General Meeting ("AGM") of the Company.

The Board places its gratitude on record for the immense contribution of Mr. Barua towards the growth of the Company and for his leadership during his tenure as the Managing Director of the Company.

Further, in accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Sushil Agarwal, Non-Executive Director of the Company, is due to retire by rotation at the ensuing 11th AGM and being eligible, he has offered himself for re-appointment. Business with respect to his re-appointment also forms part of the Notice of the ensuing AGM of the Company.

Brief profiles of the Directors proposed to be appointed/ re-appointed forms part of the Notice of the ensuing AGM of the Company.

(iii) Board Evaluation

In terms of the provisions of the Act, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and Nomination Policy of the Company, NRC and the Board have approved a framework, which lays down a structured approach, guidelines and processes to be adopted for carrying out an evaluation of the performance of the Board, its Committees and individual Directors.

During the year under review, the Board carried out the evaluation of its own performance and that of its Committees and the individual Directors.

The evaluation process focused on various aspects of the functioning of the Board and its Committees, such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues etc. The Board also carried out the evaluation of the performance of individual directors based on criteria such as contribution of the director at the meetings, strategic perspective or inputs regarding the growth and performance of the Company etc. Also, pursuant to the applicable provisions of the Act, the performance evaluation criteria for the Independent Directors is disclosed in the Corporate Governance Report forming part of this Annual Report.

Outcome of the Evaluation

The Board of your Company was completely satisfied with the functioning of the Board and its Committees. The Committees are functioning well and besides the Committees terms of reference, as mandated by law, and important issues are brought up and discussed in the Committee Meetings. The Board was also satisfied with the contribution of Directors, in their respective capacities, which reflects the overall engagement of the Individual Directors.

Further, in line with the familiarisation programme of the Company, during the year under review, Functional presentations covering methods of operation of specific functions of the Company were made to the Directors as a part of the Board Process. Going forward, it is proposed to continue with these presentations and a calendar drawing out the areas for such presentations has been outlined.

(iv) Declaration of Independence

All the Independent Directors of the Company have given their respective declarations stating that they meet the criteria of Independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations.

B. Committees of the Board

(i) Audit Committee

Your Company has a duly constituted Audit Committee comprising the following Members:

Name of the Members Designation
Mr. Arun Thiagarajan (Chairperson) Independent Director
Mr. Bharat Patel Independent Director


Name of the Members Designation
Mr. Pranab Barua Non-Executive Director
Ms. Sukanya Kripalu Independent Director
Mr. Sanjeeb Chaudhuri Independent Director
Mr. Sushil Agarwal Non-Executive Director

The recommendations made by the Audit Committee to the Board, from time to time during the year under review, have been accepted by the Board.

Vigil Mechanism

The Board has, on recommendation of its Audit Committee, adopted a Policy thereby enumerating the Vigil/ Whistle Blower Mechanism, for Directors and Employees of your Company, to report concerns about unethical behaviour, actual or suspected fraud or violation of the Code of Conduct of the Company and to voice genuine concerns or grievances about unprofessional conduct without fear of reprisal. Adequate safeguards are provided against victimisation to those who avail of the mechanism and direct access to the Chairperson of the Audit Committee is provided to them. The Vigil Mechanism is also available on the website of the Company i.e.

(ii) Nomination and Remuneration Committee

Your Company has a duly constituted NRC, with its composition, quorum, powers, role and scope in line with the applicable provisions of the Act and SEBI Listing Regulations. The detailed information with respect to the NRC is disclosed in the Corporate Governance Report forming part of this Annual Report.

Nomination Policy and Executive Remuneration Policy/ Philosophy

The Board has, on recommendation of the NRC, adopted a Nomination Policy, which enumerates your Companys policy on appointment of Directors and Key Managerial Personnel ("KMP"), including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Act.

The Nomination Policy is enacted mainly to deal with the following matters, falling within the scope of the NRC: ??to institute processes which enable the identification of individuals who are qualified to become Directors and who may be appointed as KMP and/or in senior management and recommend to the Board of Directors their appointment and removal from time to time; ??to devise a policy on Board Diversity; ??to review and implement the succession and development plans for Managing Director, Executive Directors and Senior Managers; ??to formulate the criteria for determining qualifications, positive attributes and independence of Directors; and ??to establish evaluation criteria of Board, its Committees and each Director.

Further, the Board has, on recommendation of the NRC, also adopted a policy entailing Executive Remuneration Philosophy, which covers the Directors, KMP and employees included in Senior Management of the Company.

The Executive Remuneration Policy/ Philosophy supports the design of programmes that align executive rewards - including incentive programmes, retirement benefit programmes, promotion and advancement opportunities - with the long-term success of the Stakeholders of the Company.

The Executive Remuneration Programme is designed to attract, retain and reward talented executives who will contribute to the long-term success of your Company and thereby build value for the Shareholders. The programme is intended to: ??provide for monetary and non-monetary remuneration elements to our executives on a holistic basis; and ??emphasise "Pay for Performance" by aligning incentives with business strategies to reward executives who achieve or exceed Group, business and individual goals.

Both the aforesaid policies are available on the website of the Company i.e.

(iii) Risk Management Committee ("RMC")

Your Company has a duly constituted RMC, which inter alia evaluates significant risk exposures of your Company and assesses managements actions to mitigate the exposures in a timely manner. The Committee also ensures that your Company is taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities.

Mr. Jagdish Bajaj, Chief Financial Officer of the Company, is also the Chief Risk Officer of your Company.

Risk Management Policy

Considering the susceptibility of your Company to the inherent business risks, the Board, on recommendation of RMC, has adopted a Risk Management Policy, to: ??develop and implement Risk Management procedure/ plan, including identification therein of elements of risk, if any, which may threaten the existence of the Company; ??enable the Company to proactively manage the uncertainty, changes in the internal and external environment to limit negative impacts; and ??capitalise on opportunities along with minimisation of identifiable risks, in compliance with the provisions of the Act and Regulations 4(2)(f)(ii)(7) and 17(9)(b) of the SEBI Listing Regulations, which require the Company to lay down procedure for risk assessment and procedure for risk minimisation.

The policy is reviewed periodically by the RMC, alongwith the key risks and related mitigation plans. More details on risks and threats have been disclosed hereinabove, as part of the Management Discussion and Analysis.

Further, in view of the ever increasing size and complexity of the business operations, your Company is exposed to various risks emanating from frauds. Accordingly, the Board has, on recommendation of the Audit Committee, also adopted an Anti-Fraud Policy and a Whistle Blower Policy, to put in place, a system for detecting and/or preventing and/or deterring and/or controlling the occurrence of frauds.

(iv) Corporate Social Responsibility Committee ("CSR Committee")

In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company has a duly constituted CSR Committee comprising the following members:

Name of the Members Designation
Mr. Bharat Patel (Chairperson) Independent Director
Mr. Pranab Barua Non-Executive Director
Mr. Sanjeeb Chaudhuri Independent Director
Mr. Sushil Agarwal Non-Executive Director

Mrs. Rajashree Birla - Chairperson, The Aditya Birla Centre for Community Initiatives and Rural Development and Dr. Pragnya Ram - Group Executive President, Corporate Communications & CSR are the Permanent Invitees to the CSR Committee Meetings, alongwith Mr. Ashish Dikshit, Managing Director.

Policy on Corporate Social Responsibility ("CSR")

The Board has, with a vision "to actively contribute to the social and economic development of the communities in which your Company operates and in doing so, build a better, sustainable way of life for the weaker sections of society and raise the countrys human development index", adopted a CSR Policy and the same is available on the website of the Company i.e.

The CSR Policy of the Company also mentions the process to be implemented with respect to the identification of projects and philosophy of the Company, alongwith key endeavours and goals i.e.

? Education - to spark the desire for learning and knowledge;

? Health care - to render quality health care facilities to people living in the villages and elsewhere through our Hospitals;

? Sustainable Livelihood - to provide livelihood in a locally appropriate and environmentally sustainable manner;

? Infrastructure Development - to set up essential services that form the foundation of sustainable development; and

? Social Cause - to bring about the Social Change we advocate and support.

CSR initiatives taken during the year

Your Companys CSR activities are mainly focused towards Girl Child Education, Skilling, Health and Sanitation.

As per the applicable provisions of Section 135 of the Act, your Company was not required to spend any amount towards the CSR activities. However, an Annual Report on CSR Activities of the Company for FY 2017-18 is annexed as Annexure I to this Report.

C. Key Managerial Personnel

Detailed profiles of the KMP and other key executives of your Company are disclosed in the Corporate Information forming part of this Annual Report.

Details of appointments/ resignations of KMP during the year under review are as under:

Name of the KMP
Effective Date Appointment Resignation
A. Managing Director
Mr. Pranab Barua - January 31, 2018
Mr. Ashish Dikshit February 1, 2018 -
B. Chief Financial Officer
Mr. S. Visvanathan - February 28, 2018
Mr. Jagdish Bajaj April 1, 2018 -
C. Chief Executive Officer, Pantaloons
Mr. Shital Mehta - September 15, 2017

The aforesaid appointments were approved by the Board on recommendation of the NRC.

The Board places on record its deep appreciation and gratitude for the valuable contributions of Mr. Shital Mehta and Mr. S. Visvanathan, during their respective tenures as the KMP of the Company.

In addition to the above, Mr. Vishak Kumar, Chief Executive Officer of the Madura Fashion & Lifestyle Division of the Company ("MFL Division"), who was appointed as one of the KMP of the Company with effect from November 1, 2016, in terms of the provisions of the Act, ceased to be one of the KMP of the Company with effect from May 11, 2018. However, he will continue to be the Chief Executive Officer of the MFL Division.

D. Remuneration of Directors and Employees

Disclosure comprising particulars with respect to the remuneration of directors and employees, as required to be disclosed in terms of the provisions of Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure II to this Report.

Further, a statement containing such particulars of employees as required 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, forms part of the Annual Report. However, in line with the provisions of the first proviso to Section 136(1) of the Act, the reports and accounts, as set out therein, are being sent to all Members of the Company, excluding the aforesaid information and the same is open for inspection at the Registered Office of the Company during working hours. Further, any Member interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company.

E. Employee Stock Option Scheme and Share Based Employee Benefits

Grant of share based benefits to employees is a mechanism to align the interest of employees, with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster the long-term commitment.

Your Company regards Employee Stock Options as instruments that would enable the employees to share the value they create for the Company in the years to come. Accordingly, in the year 2013, the Employee Stock Option Scheme - 2013 ("Scheme 2013") was instituted by the Company, to reward its employees for their past association and performance, as well as to motivate them to contribute in the Companys future growth and profitability.

During the year under review, pursuant to the approval of Members of the Company at the 10th AGM held on August 23, 2017, the NRC, at its meeting held on September 8, 2017, instituted and implemented the "Aditya Birla Fashion and Retail Limited Employee Stock Option Scheme 2017" ("Scheme 2017").

Both the Schemes of the Company i.e. Scheme 2013 and Scheme 2017, are governed by the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("SEBI SBEB Regulations") and in terms of the approvals granted by the Members of the Company, the NRC inter alia administers, implements and monitors the aforesaid Schemes, thereby governing the grant of share based benefits to its employees, in the form of Options and Restricted Stock Units ("RSUs") (collectively referred to as "Stock Options").

A certificate from the Statutory Auditor of the Company, confirming that the aforesaid Schemes have been implemented in accordance with the SEBI SBEB Regulations, will be placed at the ensuing Eleventh Annual General Meeting for inspection by the Members.

Disclosure pursuant to the Regulation 14 of the SEBI SBEB Regulations

Details of the Stock Options granted by the Company under the aforesaid Schemes are available on the website of the Company i.e., in terms of the provisions of Regulation 14 of the SEBI SBEB Regulations and a summary of the same is as under:


Scheme 2013

Scheme 2017

Options RSUs Options RSUs
No. of Stock Options granted Nil Nil 40,40,782 14,36,270
No. of Stock Options vested 1,50,146 5,000 Nil Nil
No. of Stock Options exercised(1) 1,04,642 50,491 Nil Nil
Total No. of Equity Shares of 10/- each, 1,04,642 50,491 Nil Nil
arising as a result of exercise of Stock Options
No. of Stock Options lapsed 28,771 Nil 2,75,067 92,716


(1) No loan was provided by your Company to exercise any of these Stock Options.

The aforesaid details have been also disclosed in the Financial Statements of your Company for the year under review.

Stock Appreciation Rights ("SARs")

Your Company has also instituted a "Stock Appreciation Rights Plan - 2013" ("Plan 2013"), which is a cash based plan linked to the actual stock price movement over the plan tenure. This plan doesnt give rise to any right towards any Equity Shares of the Company and hence, it is not covered under the provisions of SEBI SBEB Regulations. On exercise of the SARs granted under this plan, the employee exercising the SARs becomes entitled to receive Cash, in terms of the plan.

During the year under review, pursuant to the exercise of 95,665 SARs granted under the Plan 2013, your Company has credited 61,66,376.85 (Rupees Sixty One Lakh Sixty Six Thousand Three Hundred Seventy Six and Eighty Five Paise only) to its employees and the same have been also disclosed in the Financial Statements of your Company for the year under review.

Details of the SARs granted by your Company under the Plan 2013 are also available on the website of the Company i.e.

F. Related Party Transactions

All Related Party Transactions entered into during the year under review were approved by the Audit Committee and the Board, from time to time and the same are disclosed in the Financial Statements of your Company for the year under review. Further, pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board has, on recommendation of its Audit Committee, adopted a Policy on Related Party Transactions and the said policy is available on the website of the Company i.e.

Further, in terms of the provisions of Section 188(1) of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the SEBI Listing Regulations, all contracts/ arrangements/ transactions entered into by the Company with its related parties, during the year under review, were ??in "ordinary course of business" of the Company, ??on "an arms length basis" and ??not "material".

Accordingly, Form No. AOC-2, prescribed under the provisions of Section 134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, for disclosure of details of Related Party Transactions, which are "not at arms length basis" and also which are "material and at arms length basis", is not provided as an annexure of the Directors Report.

G. Dividend Distribution Policy

In terms of the provisions of Regulation 43A of the SEBI Listing Regulations, your Company has formulated a Dividend Distribution Policy, with an objective to provide the dividend distribution framework to the Stakeholders of the Company. The policy sets out various internal and external factors, which shall be considered by the Board in determining the dividend pay-out. The policy is annexed as Annexure III to this Report and is also available on the website of the Company i.e.

H. Subsidiaries, Joint Ventures, Associate Companies

During the year under review, no company became/ ceased to be a Subsidiary/ Associate/ Joint Venture of the Company. Also, the Company did not become a part of any Joint Venture during the year.

Accordingly, as at the end of the year under review and also as on the date of this Report, your Company does not have any Subsidiary and/or Associate Company and your Company is also not a part of any Joint Ventures.

I. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Your Company consciously makes all efforts to conserve energy across all its operations. A report containing details with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be disclosed in terms of Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, is annexed as Annexure IV to this Report.

J. Sustainability and Business Responsibility Report

Your Companys sustainability initiatives are aligned with the Aditya Birla Groups sustainability vision, which mainly comprises of Responsible Stewardship, Stakeholder Engagement and Future-proofing. Accordingly, under the aegis of the Aditya Birla Groups sustainability vision, your Company is strengthening its ‘ReEarth programme, to design a roadmap, which will align with the group level sustainability policies and international frameworks.

Through this mission, we hope to create a future ready organisation, which addresses the needs of all stakeholders thereby securing a sustainable future for tomorrow.

In accordance with our sustainability vision and in terms of Regulation 34(2)(f) of the SEBI Listing Regulations, a Sustainability and Business Responsibility Report forms a part of this Annual Report.

K. Auditors and Auditors Report

(i) Statutory Auditor

M/s. S R B C & CO LLP, Chartered Accountants (ICAI Registration No. 324982E/E30003), were appointed as the Statutory Auditors of the Company at the 9th AGM, for a term of 5 years i.e. till the conclusion of the 14th AGM, subject to the ratification of their appointment by the Members at every AGM. Accordingly, business with respect to the same forms part of the Notice of the ensuing 11th AGM of the Company.

Further, the Auditors Report "with an unmodified opinion", given by the Statutory Auditors on the Financial Statements of the Company for FY 2017-18, is disclosed in the Financial Statements forming part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Statutory Auditor in their Report for the year under review.

Also, no frauds in terms of the provisions of Section 143(12) of the Act, have been reported by the Statutory Auditors in their report for the year under review.

The Notes to the Financial Statements are self-explanatory and do not call for any further comments.

(ii) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act, M/s. Dilip Bharadiya & Associates, Company Secretaries, were appointed as the Secretarial Auditor of the Company, to conduct Secretarial Audit of the Board processes for the year under review.

The Secretarial Audit Report given by the Secretarial Auditor of the Company is annexed as Annexure V to this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditor in his Report for the year under review.

L. Other Disclosures

In terms of the applicable provisions of the Act and SEBI Listing Regulations, your Company additionally discloses that, during the year under review: ??there was no change in the nature of business of your Company; ??your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2018, there were no deposits which were unpaid or unclaimed and due for repayment, hence, there has been no default in repayment of deposits or payment of interest thereon; ??your Company has not issued any shares with differential voting rights; ??your Company has not any Sweat Equity Shares; and ??no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status operations of your Company in future.

It is further disclosed that:

? There is no plan to revise the Financial Statements or Directors Report in respect of any previous financial year.

? No Material changes and commitments have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of the report affecting the financial position of the Company.

? Particulars of the loans, guarantees and investments as required under Section 186 of the Act are disclosed in the Financial Statements of your Company for the year under review.

? Details pertaining to Unclaimed Shares Demat Suspense Account of your Company are disclosed in the General Shareholder Information forming part of this Annual Report.

? Your Company does not engage in Commodity hedging activities.


Your Company is committed to follow the best practices of Corporate Governance and the Board is responsible to ensure the same, from time to time.

Your Company has duly complied with the Corporate Governance requirements as set out under Chapter IV of the SEBI Listing Regulations, from time to time and the Statutory Auditors of the Company, vide their certificate dated May 11, 2018, have confirmed that the Company is and has been compliant with the conditions stipulated in the Chapter IV of the SEBI Listing Regulations. The said certificate is annexed as Annexure VI to this Report.

Further, a separate report on Corporate Governance forms part of this Annual Report.


As required under the provisions of Sections 92(3) and 134(3)(a) of the Act and the Companies (Management and Administration) Rules, 2014, an Extract of the Annual Return in Form No. MGT-9 is annexed as Annexure VII to this Report and is also available on the website of the Company i.e.


Your Company is committed towards providing a work environment that is professional and mature, free from animosity and one that reinforces our value of ‘integrity that includes respect for the individual.

I n line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"), your Company has adopted a Policy on Prevention of Sexual Harassment at Workplace. This policy is applicable to all employees, irrespective of their level and it also includes ‘Third Party Harassment cases i.e. where sexual harassment is committed by any person who is not an employee of the Company.

Your Company has also set up Internal Complaints Committee at each of its administrative office, which is duly constituted in terms of the provisions of the POSH Act. Further, the Company also conducts interactive sessions for all the employees, to build awareness amongst employees about the policy and the provisions of POSH Act.

During the year under review, no cases were filed under the POSH Act.


Your Company has been proud recipient of many Awards and Recognitions during the year under review and significant ones amongst them are as under:

? Pantaloons was recognised as Indias ‘Most Trusted Fashion Retailer in the Brand Equity survey of The Economic Times.

? Pantaloons also bagged:

- the IMAGES Award for "Most Admired Affordable Fashion Retailer, 2017", for second consecutive year and the IMAGES Award for "Best Turnaround Story, 2017"; - awards for "Best Festive Window" and "Best Winter Window" at the VM&RD (Visual Merchandising and Retail Design) Awards 2018; and - awards for "Best Use of Social Media to Enhance Loyalty" and "Best Regional Loyalty Marketing Campaign" at the Customer Loyalty Awards 2018.

? Simon Carter won the Awards for ‘Best In Store Visual Merchandising and ‘Best Retail Graphics at the VM&RD (Visual Merchandising and Retail Design) Awards 2018.

? The Company won the following awards for its Corporate Social Responsibility and Sustainability initiatives:

- "Sustainable Business of the Year", "Sustainable Leadership" and "Sustainable Professional of the Year", by World Sustainability - a global not-for-profit organisation;

- "Special Commendation" for Corporate Social Responsibility at the ‘Golden Peacock Awards 2017, by the Institute of Directors; and

- "Arogya World Platinum Award for Global Healthy Workplaces, 2017".

? All the factories of MFL Division of your Company were certified as "Healthy Workplace" at Global Healthy Workplace Awards and 2 of them were also awarded with ‘Unnatha Suraksha Puraskara 2017 by Karnataka Chapter of National Safety Council.

? Your Company was adjudged as winner of "PR Case Study" and "House Journal - In-House Magazine" Appreciation Awards at the 8th Annual Corporate Collateral Awards, 2018, conferred by the Public Relations Council of India Awards.


We take this opportunity to thank all the customers, members, investors, vendors, suppliers, business associates, bankers and financial institutions for their continuous support. We also thank the Central and State Governments and other Regulatory Authorities for their co-operation.

We acknowledge the patronage of the Aditya Birla Group and above all, we place on record our sincere appreciation for the hard-work, solidarity and contribution of each and every employee of the Company in driving the growth of the Company.