Avenue Supermarts Ltd Directors Report.

Dear Members,

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

FINANCIAL PERFORMANCE

The Company’s financial performance during the year ended 31st March, 2021 compared to the previous financial year is summarized below: (Rs. in crore)

Particulars

Standalone

Consolidated

FY 2020-21 FY 2019-20 FY 2020-21 FY 2019-20
Income from operations 23,787.20 24,675.01 24,143.06 24,870.20
Other Income 208.90 63.33 196.21 59.99
Total Income 23,996.10 24,738.34 24,339.27 24,930.19
Expenses 22,451.31 22,955.45 22,855.82 23,185.42
Profit before tax 1,544.79 1,782.89 1,483.45 1,744.77
Less: Tax Expense 379.48 433.00 384.02 443.79
Profit after Tax 1,165.31 1,349.89 1,099.43 1,300.98
Other comprehensive Income (net of taxes) (1.44) (3.79) (1.90) (4.08)
Total Comprehensive income for the year 1,163.87 1,346.10 1,097.53 1,296.90

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

BUSINESS AND OPERATIONS

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

On standalone basis, the total income for FY 2021 was Rs.23,996.10 Crore, which is 3% lower than the previous year’s income of Rs.24,738.34 Crore. Our total income on consolidated basis for FY 2021 was Rs.24,339.27 Crore as against Rs.24,930.19 Crore during FY 2020.

On standalone basis, the net profit after tax (PAT) for FY 2021 stood at Rs.1,165.31 Crore as against previous year’s net profit of Rs.1,349.89 Crore thereby recording a de-growth of 13.67%.

Our net profit after tax (PAT) on consolidated basis for FY 2021 amounted for Rs. 1,099.43 Crore as compared to Rs.1,300.98 Crore in the previous year.

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

CREDIT RATING

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

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

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

UTILIZATION OF QUALIFIED INSTITUTIONAL PLACEMENT (QIP) PROCEEDS

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

Particulars Actual utilization of QIP proceeds upto 31st March, 2021 Actual utilization of QIP proceeds upto 31st March, 2020
(Rs. in crore) Rs. ( in crore)
1. Capex payment 783.00 -
2. Repayment of Non-convertible Debentures 300.00 300.00
3. Repayment of WCDL/ Commercial Paper 250.00 250.00
4. Repayment of Term Loan 158.00 158.00
5. WC/ General Corporate expenses (Excluding QIP expenses) 302.00 302.00
Total 1,793.00 1,010.00

Out of the total fund raised by the Company under Qualified Institutional Placement, an amount of Rs. 2,285 Crore is unutilized as on 31st March, 2021.

CHANGES IN SHARE CAPITAL

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

The Company has neither issued any shares with differential rights as to dividend, voting 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 have thought it prudent not to recommend any dividend for the financial year under review.

DIVIDEND DISTRIBUTION POLICY

The Company has in place a Dividend Distribution Policy in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same is available on the Company’s website at http://www.dmartindia. com/investor-relationship. The said Policy is disclosed under Annexure-I to this Report.

TRANSFER TO RESERVES

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

CONSOLIDATED FINANCIAL STATEMENTS

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

REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

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

ALIGN RETAIL TRADES PRIVATE LIMITED (ARTPL)

ARTPL, a wholly-owned subsidiary Company incorporated on 22nd September, 2006, is engaged in the business of packing and selling of grocery products, spices, dry fruits, etc. Its revenue from operations for FY 2021 stood at Rs. 1,296.15 Crore against Rs.1,177.62 Crore in the previous year and the Company posted net profit after tax of Rs.15.80 Crore for FY 2021 against Rs. 24.81 Crore for FY 2020.

AVENUE FOOD PLAZA PRIVATE LIMITED (AFPPL):

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

AVENUE E-COMMERCE LIMITED (AEL)

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

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

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

NAHAR SETH & JOGANI DEVELOPERS PRIVATE LIMITED (NSJDPL):

NSJDPL, subsidiary Company was incorporated on 21st February, 2014, with main object of, amongst others, development of land and construction. Revenue from operations of the Company for FY 2021 and FY 2020 was Rs. 0.75 Crore and the Company earned net profit after tax of Rs. 0.53 Crore for FY 2021 against Rs.0.54 Crore for FY 2020.

REFLECT WHOLESALE AND RETAIL PRIVATE LIMITED (RWRPL)

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

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

Pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 read with Rule 5 and 8 of the Companies (Accounts) Rules, 2014, the salient features of the financial 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 financial statements of the Company, consolidated financial statements and audited financial statements in respect of subsidiaries are available on the website of the Company under web link http://www.dmartindia.com/investor-relationship. The same shall also be sent to Members electronically who request for the same by sending email to Company at investorrelations@ dmartindia.com from their registered e-mail address.

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

RELATED PARTY TRANSACTIONS

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

All the related party transactions are placed before the Audit Committee for the review and approval. Prior Omnibus approval is obtained before the commencement of the new financial year, for the transactions which are repetitive in nature and also for the transactions which are not foreseen (subject to financial limit). A statement of all related party transactions is presented before the Audit Committee on a quarterly basis specifying the nature, value and terms & conditions of the transactions. All transactions entered with related parties were in compliance with the applicable provisions of the Companies Act, 2013 read with the relevant rules made there under and the Listing Regulations.

All related party transactions entered into by the Company during the financial year under review were generally in the ordinary course of business and always on arm’s length basis. All transactions entered with related parties were in compliance with the applicable provisions of the Companies Act, 2013 read with the relevant rules made thereunder and the Listing Regulations.

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

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

PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES

Particulars of loans given, investments made, guarantees given and securities provided during the year under review and as covered under the provisions of Section 186 of the Companies Act, 2013 have been disclosed in the notes to the standalone financial statements 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 are Executive Directors, one Non-executive Woman Director and three Independent Directors (including Woman Independent Director).The constitution of the Board of Directors of the Company is in accordance with Section 149 of the Companies Act, 2013 and Regulation 17 of the Listing Regulations, as amended from time to time.

Re-appointments:

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

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

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

Directors retiring by rotation

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

Consequently, Mr. Elvin Machado (DIN: 07206710), Director being longest in the office, is liable to retire by rotation at the ensuing Annual General Meeting of the Company and he being eligible has offered himself for re-appointment. The Board of Directors on the recommendations of the Nomination & Remuneration Committee has recommended his re-appointment and the matter is being placed for seeking approval of members at the ensuing 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 Mr. Elvin Machado, are provided as an Annexure to the Notice of the Annual General Meeting.

Key Managerial Personnel

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

Declarations by Independent Directors

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

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

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

Familiarization Programmes

The Company has conducted familiarization programmes for the Independent Directors of the Company covering the matters as specified in Regulation 25(7) of the Listing Regulations. The details of the training and familiarization program conducted by the Company are hosted on the Company’s website under the web link http://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. The details of the Board meetings and attendance of each Director thereat are provided in the Corporate Governance Report forming part of the Annual Report.

Audit Committee

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

The composition of the Audit Committee is as under:

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

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

The Members of the Audit Committee are financially literate and have requisite accounting and financial management expertise. The terms of reference of the Audit Committee and the particulars of meetings held and attendance thereat are mentioned in the Corporate Governance Report forming part of the Annual Report. During the year under review, 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 the provisions of the Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations.

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

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

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

The Company has formulated Nomination and Remuneration Policy, which sets standards for nomination, remuneration and evaluation of the Directors, Key Managerial Personnel, Senior Management Personnel and other employees of the Company.

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

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

Stakeholders Relationship Committee

Pursuant to Section 178 of the Companies Act, 2013 and Regulation 20 of the Listing Regulations, the Stakeholders’ Relationship Committee was constituted by the Board of Directors.

The composition of the Stakeholders Relationship Committee is as under:

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

The brief terms of reference of the Stakeholders’ Relationship Committee and the particulars of meetings held and attendance thereat are mentioned in the Corporate Governance 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 with Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time, the Board of Directors of the Company has constituted Corporate Social Responsibility (CSR) Committee. The Committee is entrusted with following responsibilities:

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

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

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

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

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

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

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

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

The brief outline of the Company’s CSR initiatives undertaken during the year under review is furnished in Annexure–IV in the format as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time. The Company’s CSR Policy is placed on the website of the Company www.dmartindia.com.

The composition of the CSR Committee is as under:

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

The brief terms of reference, particulars of meetings held and attendance thereat are mentioned 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 Risk Management Committee to frame, implement and monitor risk management plan of the Company. The Board has adopted the Risk Management Policy and guidelines to mitigate foreseeable risks, avoid events, situations or circumstances, which may lead to negative consequences on the Company’s businesses. The major risks identified are systematically approached through mitigating actions on continual basis. Risk evaluation is an ongoing and continuous process within the Company and it is regularly updated to the Board of the Company.

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

The composition of the Risk Management Committee is as under:

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

Director’s Responsibility Statement

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

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

b. such accounting policies have been selected and applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2021 and of the profit of the Company for that year;

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

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

e. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively and f. proper systems have been devised to ensure compliance with the provisions of 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 Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and in accordance with Regulation 22 of the Listing Regulations, the Company had adopted ‘Vigil Mechanism Policy’ for Directors and Employees of the Company to report concerns about unethical behavior. The policy provides a mechanism, which ensures adequate safeguards to Employees and Directors from any victimization on raising concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, and so on. The employees of the Company have the right/option to report their concern/grievance to the Chairman of the Audit Committee.

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. The Vigil 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 Listing Regulations, the Board of Directors has carried out annual performance evaluation of its own 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 the Board through structured questionnaire which covered various aspects such as the composition and quality, meetings and procedures, contribution to Board processes, effectiveness of the functions allocated, relationship with management, professional development, adequacy, appropriateness and timeliness of information etc.

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

In terms of requirements of Schedule IV of the Companies Act, 2013, a separate meeting of Independent Directors of the Company was held on Saturday, 09th January, 2021 to review:

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

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

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

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

PARTICULARS OF EMPLOYEES

The disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as

Annexure–V.

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

Employee Stock Options

The Members of the ESOP Committee vide circular resolution dated 14th March, 2017 approved grant of 13,973,325 options under the ESOP Scheme 2016 to 4,747 eligible employees of the Company, irrespective of their grade, pursuant to the eligibility criteria stipulated under the ESOP Scheme 2016.

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

During the year under review, no options were vested and exercised under the ESOP Scheme 2016.

In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, the details of the Stock Options granted under the aforesaid ESOP Scheme are uploaded on the website of the Company www.dmartindia.com.

A certificate from S R B C & Co. LLP, Statutory Auditors of the Company, has been obtained by the Company with respect to implementation of Employee Stock Option Scheme, 2016 and the same shall be available for inspection by Members who request for the same by sending e-mail to Company at investorrelations@ dmartindia.com from their registered e-mail address.

Internal Financial Control Systems and their adequacy

The details of the internal financial control systems and their adequacy are included in 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 General Meeting held on 6th September, 2017, for a term of five consecutive years from the conclusion of that Annual General Meeting until the conclusion of 22nd Annual General Meeting, subject to ratification of their appointment by members at every Annual General Meeting of the Company. The requirement for annual ratification of Auditors’ appointment at the AGM has been omitted pursuant to the Companies (Amendment) Act, 2017 notified on 7th May, 2018. Accordingly, no resolution is being proposed for ratification of appointment of Statutory Auditors at this AGM. The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors.

Observations of Statutory Auditors on Accounts for the year ended 31st March, 2021

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

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

Secretarial Audit Report for the year ended 31st March, 2021

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

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

Internal Audit and Control

The Company has robust internal audit system for assessment of audit findings and its mitigation. The Internal Audit function covers all the stores, inventory audit, stock takes, audit for project related accounts, corporate accounts etc.

Mr. Rajan Arora was appointed as an Internal Auditor of the Company by the Board at its meeting held on 23rd May, 2020 and the Internal Auditor directly reports to the Audit Committee for functional matters. The Audit Committee reviews internal audit report and controls at its quarterly meetings. Company’s internal controls are commensurate with the size and operations of the business. Continuous internal 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 read with Companies (Accounts) Rules, 2014 are furnished as under:

Annual Return

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

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

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

Report on Corporate Governance and Management Discussion and Analysis

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

Business Responsibility Report

The Company’s sustainability initiatives as provided in the Business Responsibility Report are in line with the key principles enunciated in "National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business" framed by the Ministry of Corporate Affairs. Pursuant to the provisions of Regulation 34 of the Listing Regulations, the said report is attached separately, which forms part of this Annual Report.

Secretarial Standards Compliance

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

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

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

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

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

Update on Covid-19

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

However, towards the end of FY 2020-21, a much stronger second wave of the pandemic with significantly higher infections has been witnessed across the country. The enforcements from authorities at local levels this time are much stricter. Enforcements vary from complete or partial lockdown in several cities and towns, to restricted hours of operations, to store closures on certain days of the week. Several of our stores have also been restricted to sell non-essential products on certain days of the week or for continuous periods. As the country continues to grapple with this situation, we frequently expect such restrictions throughout the country during the year.

The complete extent to which COVID-19 further impacts our business will depend on future developments, which are highly uncertain and cannot be predicted. At the same time, our business continues to rapidly adopt new guidelines announced by the Central Government, State Governments and the local authorities that enables shopping with adequate social distancing and other safety measures.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following 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 financial position, which have occurred between the end of the financial year of the Company and the date of this report;

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

4. Non-exercising of voting rights in respect of shares purchased directly by employees under 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 by the Managing Director or the Whole-Time Directors of the Company;

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

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

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

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

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

ACKNOWLEDGEMENTS AND APPRECIATION

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

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

Place: Mumbai

Date: 08th May, 2021

Registered Office:

Anjaneya CHS Limited, Orchard Avenue,

Opp. Hiranandani Foundation School,

Powai, Mumbai – 400 076

CIN: L51900MH2000PLC126473

Tel No.: 022-40496500

Fax No.: 022-40496503

EmailId:investorrelations@dmartindia.com

Website: www.dmartindia.com