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Metro Brands Ltd Directors Report

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Metro Brands Ltd Share Price directors Report

Dear Members, Metro Brands Limited

Your Directors are pleased to present the 46th (Forty-sixth) Annual Report together with the Audited Financial Statements, prepared in compliance with Indian Accounting Standards of Metro Brands Limited (‘your Company) for the Financial Year (FY) ended March 31, 2023.

1. FINANCIAL HIGHLIGHTS & PERFORMANCE SUMMARY

The standalone and consolidated Financial Statements for the FY ended March 31, 2023, forming part of this Annual Report, have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as "Ind AS") prescribed under Section 133 of the Companies Act, 2013 ("Act") and other recognized accounting practices and policies to the extent applicable. Necessary disclosures regarding Ind-AS reporting have been made under the Notes to Financial Statements. The Companys performance during the FY under review as compared to the previous FY is summarized below:

(Rs in Lacs)

Particulars Standalone Consolidated
2022-23 2021-22 2022-23 2021-22
Gross Sales 240,887 1,53,712 249,544 1,57,464
Less: Taxes 35,768 22,527 36,900 23,239
Sales (Net of Tax) 205,119 1,31,185 212,644 1,34,225
Profit before depreciation & Tax 67,351 41,137 67,010 41,737
Less: Depreciation & amortisation 17,522 13,383 18,101 13,424
Profit Before Tax 49,830 27,754 48,909 28,314
Less: Provision for tax 13,565 7,526 13,685 7,525
Less: Deferred Tax Liability (1,083) (590) (1,132) (562)
Less: Tax pertaining to earlier years 30 55 21 55
Add: Share of profit of Joint Venture - - 203 124
Profit After Tax 37,318 20,764 36,539 21,420
Add/ (Less): Other comprehensive income/(Loss) (net of taxes) (164) 51 (194) 41
Total Comprehensive Income 37,153 20,815 36,344 21,460
Less: Total Comprehensive Income attributable to Non-Controlling Interest - - 395 258
Total Comprehensive Income attributable to Owners of the Company 37,153 20,815 35,949 21,202

Standalone Financial Results

Your Company has a strong track record of revenue growth and profitability. During the FY 2022-23, your Company recorded the Gross Turnover of 2,408.87 Crore representing a growth of 56.71% as compared to Gross Turnover of 1,537.12 Crore during the previous FY.

The Profit before Tax increased by 79.54% to 498.30 Crore during FY 2022-23 as compared to 277.54 Crore in the previous FY. The Profit after Tax was higher at 371.53 Crore compared to 208.15 Crore in the previous FY, representing a growth of 78.49%.

Consolidated Financial Results

During the FY 2022-23, the Company recorded Gross Turnover of 2,495.44 Crore as against the Gross Turnover of 1,574.64 Crore during the previous FY, representing an increase of 58.48%.

The Profit before Tax was 489.09 Crore compared to 283.14 Crore in the previous FY, higher by 72.74%. The Profit after Tax was higher at 365.39 Crore compared to 214.20 Crore in the previous FY, representing a growth of 70.58%.

Your Company marked its presence in Top 200 Listed Companies

This FY has been a time of revival after the challenges posed by the Covid pandemic. As everyone adjusted to the ‘new normal, our business and customers experienced a significant technology, your Company became more data and digital driven. Today, your Company stands and as a more consistent, competitive, profitable, responsible organization, which has resulted in our market capitalization placing us among the Top 200 Companies in the market during the reviewed FY.

According to the market capitalization list released by the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE), your Companys ranking is 199 and 200, respectively, as of March 31, 2023. This achievement reflects our team in navigating through these unprecedented times and emerging stronger in the market.

2. SIGNIFICANT ACTIVITIES AND DEVELOPMENTS

(i) Acquisition of Metro Athleisure Limited (formerly known as Cravatex Brands Limited) ("MAL")

Your Company has acquired 100% stake in MAL w.e.f. December 1, 2023. Consequently, it became a wholly owned subsidiary of the Company from the aforesaid date.

MAL holds exclusive long-term license for the Italian sportswear brand FILA & owns the Indian sportswear brand Proline. This acquisition fits the strategic vision of the Company to expand its presence in the sports and athleisure space in India. Your Company looks forward to elevating the sportswear landscape in India and address significant white space in its product portfolio as of date. In addition, your Company will also be able to leverage sales across all formats i.e. Exclusive Brand Stores, Multi Brand Stores, Airport Stores, Distribution, Online Marketplaces and Webstores for these brands.

With an intention to leverage costs, operational synergies and focused management approach for pursuing revenue growth and value unlocking for improved cash flows, the Board of Directors in their meeting held on March 23, 2023, approved the Scheme of Arrangement between MAL and the Company for demerger of "FILA business" into the business of the Company. The same is pending at National Company Law Tribunal, Mumbai for approval.

(ii) Investment in Thaely Private Limited:

As part of the Companys commitment to promoting sustainable footwear, your Company has made an investment in Thaely Private Limited (‘Thaely), acquiring Compulsory Convertible Preference Shares resulting into approximately 2.72% of its Share Capital on a fully diluted basis in the first tranche of investment. Your Company intends to acquire an overall approximate 5.02% of Thaelys share capital on a fully diluted basis, subject to fulfillment of the conditions as per the agreement entered into with Thaely. efforts and adaptability of True to its name, "Thaely" is a brand that creates sneakers using waste plastic bags, which are transformed into a strong and flexiblefabric known as ThealyTex, resembling leather. Thaely is actively engaged in marketing and selling sustainable sneaker shoes not only in the United States and Europe but also in Dubai, India, and several other countries.

3. THE STATE OF THE COMPANYS AFFAIRS AND BUSINESS OPERATIONS

During FY 2022-23, your Company continued its expansion plan and opened 144 new stores including relocation of 13 existing stores. The total number of stores reached 739 at the end of the FY.

Your Company prioritizes its customers, maintaining a strong customer-centric approach, and offers loyalty programs such as Club Metro, My Mochi, and Crocs Club. These loyalty programs have provided valuable insights into customer preferences and trends over the years, enabling the Company to customize its product offerings accordingly. Continuous innovation in products remains a key strategy to attract and retain customers, contributing to the Companys overall success.

Furthermore, your Company has experienced robust growth in ecommerce sales, successfully transforming into an omni-channel footwear retailer. In the fiscal year, ecommerce sales, including omni-channel sales, reached 162 Crore, showcasing a remarkable 48% year-on-year growth. The momentum in online sales, including omni-channel, continues to be strong. In FY 2022-23, online sales (including omni-channel) accounted for 7.9% of the overall sales, as compared to 2.5% in FY 2019-20, 7.3% in FY 2020-21, and 8.4% in FY 2021-22. This shift demonstrates the Companys adaptability to changing consumer behavior and its ability to embrace modern retail trends.

4. UTILIZATION OF PROCEEDS OF INITIAL PUBLIC OFFERING ("IPO")

Pursuant to Regulation 32 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, ("SEBI Listing Regulations"), a statement in the use of proceeds of IPO is herein given below:

Particulars of Issue Shares Issued Amount Raised Deviation(s) or Variation(s) in the use of proceeds of issue if any
IPO 59,00,000 equity shares of face value of 5/- (Rupees five only) each by way of fresh issue through IPO of the Company. 295 Crores only There were no instances of deviation(s) or variation(s) in the utilization of proceeds as mentioned in the objects stated in the Prospectus dated December 15, 2021 in respect of the IPO issue of the Company.

The proceeds of IPO were utilized for the objects as disclosed in the Prospectus, the details are mentioned as below:

(Rs in Crore)

Sl. No. Name and brief description of the Object Amount as proposed in Offer Document () Amount utilized () Total unutilized Amount ()
1. Expenditure for the New Stores 225.37 85.60 139.77
2. General Corporate Purposes 61.94 61.94 -
Total 287.31 147.54 139.77

5. METRO STOCK OPTION PLAN 2008 (ESOP 2008):

ESOP 2008 is administered by the Nomination,

Remuneration and Compensation ("NRC") Committee and is in compliance with the Act and the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB Regulations"). During the FY under review, there has been no material changes in the ESOP 2008.

In September 2021, the Company granted 18.78 Lacs options to eligible Employees. Building on this, during FY, your Company has granted an additional 2.93 Lacs options. These options entitle the grantees to exercise one Equity share of 5/- each for every option exercised.

The total number of options granted now accounts for approximately 0.80% of the total equity capital.

This move reflects the Companys commitment to recognizing and rewarding its Employees contributions while aligning their interests with the Companys growth and success.

During the FY under review, 225,795 Equity shares of 5 each were exercised and allotted under the ESOP 2008. The disclosure required pursuant to clause

14 of the SEBI SBEB Regulations is uploaded on the website of the Company at https://metrobrands.com/ wp-content/uploads/2023/06/ESOP-details-Website-V3_02062023-Clean.pdf

6. SHARE CAPITAL

As on March 31, 2023, the Authorised Equity Share Capital of the Company was 1,50,00,00,000 comprising of 30,00,00,000 Equity Shares of 5 each; and the Paid-up Equity Share Capital of the Company was 1,358,666,105 comprising of 271,733,221 Equity Shares of 5 each.

After the end of the FY under review, the Company has allotted 1,835 Equity Shares of 5 each upon exercise of ESOP options. As on date, the Paid-up Capital of the Company is 1,358,675,280 comprising of 271,735,056 Equity Shares of 5 each.

7. PUBLIC DEPOSITS

During the FY under review, your Company has not accepted any deposits within the meaning of Section 73 and 76 of the Act read with Companies (Acceptance of Deposits) Rules, 2014. As on March 31, 2023, there were no deposits lying unpaid or unclaimed. As the Company has not accepted any deposit during the FY under review, there is no non-compliance with the requirements of Chapter V of the Act.

8. DIVIDEND AND APPROPRIATIONS

The Board of Directors of your Company in its meeting held on January 17, 2023 had declared and paid an Interim Dividend of 2.50/- per Equity Share of the face value of 5/- per share (50%). Keeping in view the strong performance, your Directors were pleased to recommend a Final Dividend of 1.50/-per Equity Share of face value 5/- per Equity Share (30%) for the FY 2022-23 in its Meeting held on May 23, 2023. Total Dividend payout for the FY 2022-23 would be 30%, which is the same level as previous FY. The Dividend declared and paid / proposed to be declared during the FY is in accordance with the Dividend Distribution Policy, as approved and adopted by the Board of Directors of the Company and dividend will be paid out of the profits for the FY. Total Dividend payment for FY 2022-23 would be 108.69 Crores.

As per Regulation 43A of the SEBI Listing Regulations, the Company has a Dividend Distribution Policy duly approved by the Board. The policy is available on the Companys website and can be accessed at https:// metrobrands.com/wp-content/uploads/2022/03/Dividend-Distribution-Policy_Metro-Brands-Ltd.-BM-dtd-070322.pdf

Based on the guidelines outlined in the Dividend Distribution Policy, the Board has recommended the dividend for the FY 2022-23.

9. TRANSFER TO RESERVES

The Board of Directors of your Company have decided to not transfer any amount to the reserves for the FY under review.

10. FINANCE

Your Company has been financing its operations and expansions through internal accruals. Your Company retained highest credit rating A1+ for short term and AA for long term by CARE, a leading rating agency.

Details of the same are provided in the Corporate Governance Report.

11. MATERIAL CHANGES AND COMMITMENT – IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY FROM THE END OF THE FY TILL THE DATE OF THIS REPORT

There has been no material change in commitment, affecting the financial performance of the Company which occurred between the end of the FY of the Company to which the financial statements relate and the date of this Report.

12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the FY under review, as stipulated under Regulation 34(2)(e) of the SEBI Listing Regulations, forms part of the Annual Report.

13. SUBSIDIARIES AND ASSOCIATE COMPANY

(i) MAL

On December 1, 2022, your Company acquired 100% equity share capital, optionally convertible debentures and compulsorily convertible preference shares of MAL. During the four-month period under review, MAL has reported Gross Sales of 36.95 Crores and loss after tax of 24.16 Crores.

Pursuant to Section 129(3) of the Act, read with Rule 5 of the Companies (Account) Rules, 2014 a separate statement containing the salient features of the financial statement of MAL in the prescribed format AOC - 1 is attached as Annexure - 4 to this Report.

The Audited Consolidated Financials of your Company for the FY ended March 31, 2023 prepared in compliance with the provisions of IND AS 27 issued by the Institute of Chartered Accountants of India and notified by the Ministry of Corporate Affairs (MCA), Government of also forms part of this Annual Report.

Further, pursuant to the provisions of Section 136 of the Act, the standalone and consolidated financial statements of the Company and separate audited financial statements in respect of wholly owned subsidiary, are available on the website of the Company at https://metrobrands.com/ group-company/.

After the end of FY under review, the name of the wholly owned subsidiary was changed from Cravatex Brands Limited to Metro Athleisure Limited pursuant to the Certificate dated July 14, 2023.

(ii) Metmill Footwear Private Limited

Metmill Footwear Private Limited ("Metmill"), a 51% subsidiary of your Company, was incorporated on September 16, 2009, and currently has a paid-up capital of 1,25,00,000/- (Rupees One Crore Twenty-Five Lacs only). In the FY under review, Metmill has achieved commendable results, with Gross Sales reaching 54.02 Crores, marking an impressive growth of 28.37% compared to the previous FY. Furthermore, the Profitafter Tax for the same period stands at 7.89 Crores, representing a substantial increase of 79.32% compared to the previous FY.

Pursuant to Section 129(3) of the Act, read with Officer (CEO),ChiefFinancial Rule 5 of the Companies (Account) Rules, 2014 a separate statement containing the salient features of the financial statement of Metmill in the prescribed format, AOC - 1 is attached as Annexure - 4 to this Report.

The Audited Consolidated Financials of your Company for the FY ended March 31, 2023 prepared in compliance with the provisions of IND AS 27 issued by the Institute of Chartered Accountants of India and notified by the MCA also forms part of this Annual Report.

Further, pursuant to the provisions of Section 136 of the Act, the standalone and consolidated financial statements of the Company and separate audited financial statements in respect of subsidiary, are available on the website of the Company at https://metrobrands.com/ group-company/

The Companys policy on determining the material subsidiaries, as approved by the Board is uploaded on the Companys website at https://metrobrands. com/wp-content/uploads/2022/07/Policy-on-Material-Subsidiary-Final-ver-dtd-07032022-1.pdf

(iii) M.V. Shoe Care Private Limited

M.V. Shoe Care Private Limited ("MVSC") is an Associate Company in which your Company holds 49% of Equity Shares. For the FY under review, MVSC has reported impressive Gross Sales of 48.32 Crores, reflectinga substantial increase of 86.64% compared to the previous FY. Additionally, the Profit after Tax for the same period has shown remarkable growth, amounting to 4.85 Crores, indicating a significant increase of 136.34% compared to the previous FY.

Pursuant to Section 129(3) of the Act, read with Rule 5 of the Companies (Account) Rules, 2014, a separate statement containing the salient features of the financial statement of MVSC in the prescribed format, AOC - 1 is attached as Annexure - 4 to this Report.

During the FY under review, there were no companies which has become/ceased to become an Associate Company / Joint Venture.

14. BOARD OF DIRECTORS

Your Companys governance structure is multi-tiered, comprising the Board of Directors, Board Committees, the Managing Director (MD), Chief Executive Officer Executive Committee.

The Board holds a strong commitment to upholding sound principles of Corporate Governance within the Company. Its primary responsibility lies in overseeing how the management serves the short and long-term interests of Shareholders and other stakeholders. During its meetings, the Board deliberates and makes decisions on strategic issues, including policy reviews, financial matters, discussions on business performance, and other critical aspects for the Company. It receives able support from the Board Committees, the CEO and MD.

The Committees established by the Board are dedicated to specific areas of focus, taking informed decisions within their delegated authority and responsibilities.

These Committees provide specific recommendations to the Board regarding matters under their purview.

Subsequently, the decisions and recommendations of the Committees are presented before the Board for careful consideration and approval, as required.

The Board of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Non-Independent Director and Non-Executive Independent Directors including Women Director in accordance with the provisions of Act and Regulation 17 of SEBI Listing Regulations. All the Directors possess extensive experience and specialized knowledge in various sectors, encompassing law, finance, accountancy, and other relevant areas.

As on March 31, 2023, the Board of your Company consists of nine (9) Directors as follows:

Executive Directors
1. Mr. Rafique Abdul Malik (DIN: 00521563),
2. Ms. Farah Malik Bhanji (DIN:00530676),
3. Mr. Mohammed Iqbal Hasanally Dossani (DIN:08908594)
Non-Executive Directors:
Non-Independent Director (Nominee Director)
1. Mr. Utpal Hemendra Sheth (DIN:00081012)
Independent Directors
2. Mr. Manoj Kumar Maheshwari (DIN:00012341),
3. Ms. Aruna Bhagwan Advani (DIN:00029256),
4. Mr. Arvind Kumar Singhal (DIN:00709084),
5. Mr. Vikas Vijaykumar Khemani (DIN:00065941),
6. Mr. Srikanth Velamakanni (DIN:01722758)

The Chairman of the Company is an Executive Director.

Mr. Mohammed Iqbal Hasanally Dossani (DIN: 08908594), retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Considering the integrity, relevant knowledge, expertise, and experience, as well as the contribution made by Mr. Vikas Vijaykumar Khemani (DIN: 00065941) during his current tenure as an Independent Director, the Board of Directors proposed re-appointment of Mr. Khemani as an Independent Director of the Company for a further period of five (5) consecutive years, on the expiry of hiscurrentterm office, i.e., from March 12, 2024 to March 11, 2029, witheffect subject to Shareholders approval. The Company has received the necessary declaration from Mr. Khemani that he continues to fulfil the criteria of independence as prescribed under the relevant provisions of the Act and the SEBI Listing Regulations.

The Board recommends their re-appointment for approval of the Members and the same forms part of the notice of the ensuing Annual General Meeting. The information about the Directors seeking their re-appointment as stipulated under Para 1.2.5 of Secretarial Standards on General Meetings and Regulation 36 of the SEBI Listing Regulations has been given in the notice convening the Annual General Meeting.

None of the Directors of the Company have incurred any disqualification under Section 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014. All the Directors have confirmed that they are not debarred from accessing the capital market as well as from holding the office of Director pursuant to any order of Securities and Exchange Board of India or MCA or any other such regulatory authority. In view of the Board, all the Directors possess the requisite skills, expertise, integrity, competence, as well as experience considered to be vital for business growth.

The composition of Board of Directors and detailed analysis of various skills, qualifications, and attributes as required and available with the Board has been presented in the Corporate Governance Report which forms part of the Annual Report.

15. KEY MANAGERIAL PERSONNEL (‘KMP):
Pursuant to the provisions of Section 203 of the Act, the KMP of the Company as on March 31, 2023, are:
1. Mr. Rafique Abdul Malik, Chairman
2. Ms. Farah Malik Bhanji, Managing Director
3. Mr. Mohammed Iqbal Hasanally Dossani, Whole Time Director
4. Mr. Nissan Joseph, Chief Executive
5. Mr. Kaushal Khodidas Parekh, Chief Financial Officer
6. Ms. Deepa Sood, VP-Legal, Company Secretary & Officer Compliance
7. Ms. Alisha Rafique Malik, President (E-commerce and CRM)
During the FY, there were no changes in the KMP of the Company.

16. SENIOR MANAGEMENT PERSONNEL (‘SMP)

Pursuant to the provisions of Regulation 34, read with Schedule V of SEBI Listing Regulations, as amended, the list of the SMP of the Company as on March 31, 2023, along with the changes therein since end of the previous FY are provided in the Corporate Governance Report, which forms part of the Annual Report.

17. DECLARATION BY INDEPENDENT DIRECTORS

There are five Independent Directors on the Board of the Company. Your Company has received declarations from all the Independent Directors confirming that:

n they meet the criteria of independence as prescribed under Section 149(6) and Schedule

IV of the Act and Regulation 16 of the SEBI Listing Regulations. There has been no change in the circumstances affecting Independent Directors of the Company;

n they have complied with the Code for Independent Directors prescribed under Schedule IV to the Act along with the Code of Conduct for Directors and SMP formulated by the Company as per SEBI Listing Regulations; and

n they have registered their names in the databank of Independent Directors as being maintained by the Indian Institute of Corporate Affairs in terms of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfill the conditions specified in the Act, and the rules made thereunder and are independent of the management.

None of the Independent Directors are aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Board of Directors have taken on record the declaration and confirmation submitted by the Independent Directors after undertaking due assessment of the same and in their opinion, the

Independent Directors fulfill the conditions in the Act and SEBI Listing Regulations and are independent of the management.

18. NUMBER OF MEETINGS OF BOARD

The Board meets at regular intervals to discuss and decide on Company/Business policy and strategy apart from other Board businesses. The Board and Committee Meetings are pre-scheduled and a tentative annual calendar of the Board and Committee Meetings is circulated to the Directors well in advance to facilitate them to plan their schedule and to ensure meaningful participation in the Meetings. However, in case of a special and urgent business need, the Boards approval is taken by passing resolutions through circulation, as permitted by law, which are noted and confirmed in the subsequent Board Meeting.

During the FY 2022-23, five (5) Board Meetings were held. The details relating to Board Meetings and attendance of Directors in each Board Meeting held during the FY 2022-23 has been separately provided in the Corporate Governance Report. status as

19. COMPANYS POLICY ON APPOINTMENT AND REMUNERATION FOR DIRECTORS, KMP AND SMP

The NRC Committee has devised a policy which is in accordance with the Act and the SEBI Listing Regulations for selection, appointment and remuneration of Directors, KMP and SMP. The Committee has also formulated the criteria for determining qualifications, positive attributes, and independence of Directors. The Policy, inter alia, covers the details of the remuneration of Directors, KMP and SMP, their performance assessment and retention features.

The Policy aims to attract, retain, and motivate qualified people at the Board and senior management levels and ensure that the interests of Board Members and senior executives are aligned with the Companys vision and mission statements and are in the long-term interests of the Company. The Policy can be accessed on the Companys website at https://metrobrands. com/wp-content/uploads/2023/04/MBL-Nomination-Remuneration-Compensation-Policy-Clean.pdf

20. ANNUAL GENERAL MEETING

The 45th Annual General Meeting of the Members of the Company was held on September 7, 2022, through video conference/other audio-visual means in accordance with various circulars issued by MCA specified and Securities and Exchange Board of India to approve Financial Statements and other matters. All the Whole-time Directors were present in the meeting.

21. PERFORMANCE EVALUATION OF THE INDIVIDUAL DIRECTORS, THE COMMITTEES AND THE BOARD

In terms of the requirement of the Act and the SEBI Listing Regulations and in consonance with the Guidance Note on Board Evaluation issued by SEBI and Policy for Performance Evaluation of the Board of Directors, an annual performance evaluation of the Board is undertaken where the Board formally assesses its own performance with the aim to improve the effectiveness of the Board and the Committees.

The Board along with the NRC Committee has laid down the criteria of performance evaluation of Board, its Committees and Individual Directors which is available on the website of the Company at https:// metrobrands.com/wp-content/uploads/2023/01/ Performance-evaluation-policy.pdf

The Board, on the recommendation of the NRC Committee, carried out an annual performance evaluation of the Board of Directors as a whole, Managing Director, Whole Time Directors, Non- Executive and Independent Directors, Committees, and the Chairman as per the evaluation reports placed at the meeting. The Board also carried evaluation of the performance of its various Committees for the FY under consideration. The performance evaluation of the Directors was carried out by the entire Board, other than the Director being evaluated. The performance evaluation of the Chairman and the Non-Independent Directors were carried out by the Independent Directors.

The evaluation methodology included techniques such as detailed questionnaires covering various parameters relevant for the Board and Committees and one-on-one discussion with the Directors. Separate exercise was carried out to evaluate the performance of individual Directors on various parameters. The Directors expressed their satisfaction over the evaluation process.

A separate meeting of the Independent Directors was held on February 28, 2023, without the attendance of non-independent Directors and Members of the management. All the Independent Directors of the Company attended the said meeting.

22. INDEPENDENT DIRECTORS INDUCTION AND FAMILIARIZATION

Appropriate familiarization programs and strategy discussions for Directors is a major contributor in maintaining the high corporate governance standards of the Company. These sessions provide a good understanding of the business to the Directors. The management provides such information and training at the meetings of Board of Directors and through other formal & informal meetings. The Independent Directors are made aware of their roles and responsibilities at the time of their appointment and a detailed letter of appointment is issued to them.

The details of such familiarization programmes for Independent Directors are posted on website of the Company at https://metrobrands.com/wp-content/ uploads/2023/01/Details-of-Fam-Program-2023-Website-Uploading.pdf

23. COMMITTEES OF THE BOARD OF DIRECTORS

The Board Committees play a crucial role in the governance structure of the Company and have been constituted to deal with specific areas / activities which concern the Company and need a closer review. The constitution of the Board Committees is in compliance with the provisions of the Act and the relevant rules made thereunder, SEBI Listing Regulations and the Articles of Association of the Company.

There have been no instances during the FY where recommendations of the Audit Committee were not accepted by the Board. The brief details of the composition of the Committees, terms of reference, the number of meetings held and attendance of Directors at such meetings are provided in the Corporate Governance Report, which forms part of the Annual Report.

24. BUSINESS RESPONSIBILITY AND SUSTANINBILITY REPORT

The Business Responsibility and Sustainability Report for the FY under review, as stipulated under Regulation 34(2) of the SEBI Listing Regulations, describing the initiatives taken by your Company from Environmental, Social and Governance perspective, forms an integral part of this Annual Report as Annexure - 6.

25. SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

26. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY (‘CSR)

Your Company has adopted and formulated a Corporate Social Responsibility and Sustainability Policy and has also constituted a Corporate Social Responsibility and Sustainability Committee in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. It is committed to ensure the social wellbeing of the communities through its CSR initiatives, in alignment with the Companys key priorities. The Policy is also available on website of the Company at https://metrobrands. com/wp-content/uploads/2022/05/Corporate-Social-Responsibility-Policy.pdf

The spirit of the Companys CSR projects is the Companys tagline, "We Care". Everything your Company does is driven by this and the Companys focus is to touch the lives of its stakeholders who are in need.

As part of the skilling initiative, your Company provide "On the Job" training to unemployed and uneducated youth at its retail showrooms under the Government of India sponsored National Apprenticeship Promotion Scheme. Through this initiative your Company supported 243 trainees, thus enhancing their skills and making them employable. TeamLease Skill University supports your Company in completing the compliances of this project.

Environmental health and sustainability have also been the Companys focus during the FY under review.

Footwear is difficult to decompose naturally. After normal use and reuse, once discarded, they remain in landfills and oceans for 100s of years. Through the Companys three implementing partners, the Company collected and processed 900 tons i.e., 21 Lacs pairs of discarded footwear in an eco-friendly manner, which is almost 27.5% of the fresh footwear pairs sold in the FY 2022-23.

Education and empowerment have always been your Companys focus and the Company is happy to emphasize it in every way possible. With the Sociallab Ventures Pvt Ltd, your Company is working to empower 150 Mumbai railway station based shoe shiners by covering the aspects of their livelihood, healthcare and financial literacy trainings.

Your Companys traditional CSR projects supported the education costs of 72 underprivileged girls, through Fidai Girls Educational Institute and helped in providing medical treatment to 82 needy people through Focus Humanitarian Assistance India.

The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company for the FY 2022-23, as required under Section 135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, and Rule 9 of the Companies (Accounts) Rules, 2014, is attached to this report as Annexure - 2.

27. RELATED PARTIES TRANSACTIONS

During the FY under review, all the transactions with related parties are placed before the Audit Committee for its approval. An omnibus approval from the Audit Committee is obtained for the related party transactions which are repetitive in nature. All the transactions with related parties entered into during the FY under review were at an arms length basis and in the ordinary course of business and in accordance with the provisions of the Act and the rules made thereunder, the SEBI Listing Regulations and the Related Party Transactions policy of your Company. Your Company has not entered into any transactions with related parties which could be considered material in terms of Section 188 of the Act. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act, in Form AOC 2, is not applicable.

The policy on related party transactions as approved by the Board can be accessed on the Companys website https://metrobrands.com/wp-content/ uploads/2022/04/Related-Party-Transaction-Policy-. its pdf. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and its related parties.

28. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments as per Section 186 of the Act by the Company, have been disclosed in the financial statements.

29. RISK MANAGEMENT

Your Company has an elaborate Risk Management procedure and has the Risk Management Policy in place, to identify the risks including those which, in the opinion of the Board, may threaten the existence of the Company, monitor the risks and their mitigating actions.

Risk Management processes have been established across the Company and are designed to identify, assess, and frame a response to threats that can adversely affect the achievement of Companys objectives. Further, it is embedded across all the major functions and revolves around the goals and objectives of the Company. The key risks are also discussed at the Audit and Risk Management Committee and Board meetings. The Board has set out a review process to report to the Board the progress on the action plans for the major risks of the Company.

The Company has also formed a Risk Management Committee (‘RMC) to monitor the existing risks as well as to formulate strategies for identifying new and emergent risks. The RMC identifies the key risks for the Company, develops and implements the risk mitigation plan, reviews, and monitors the risks and corresponding mitigation plans on a regular basis and prioritizes the risks, if required, depending upon theas effect on the business/reputation.

The Risk Management Policy is available on the website of the Company at https://metrobrands.com/wp-content/uploads/2023/08/Risk-Management-Policy-1. pdf. The other details in this regard are provided in the Corporate Governance Report, which forms part of this Annual Report.

During the FY under review, Risk Officer of your Company reviewed risk assessment of Companys operations in discussion with various stakeholders and updated the Risk Register accordingly.

30. INTERNAL FINANCIAL CONTROLS AND SYSTEMS

According to Section 134(5) (e) of the Act, the term ‘Internal Financial Control means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and early detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Your Companys internal control systems are commensurate with the nature of its business and the size and complexity of operations. These controls ensure safeguarding of the assets of the Company and deviations, if any, are reported for appropriate action.

Internal audit reports are discussed in the Audit Committee meetings to review adequacy and effectiveness of your Companys internal control environment and necessary action are taken to strengthen the control in the required areas of business operations. The process is in place to monitor the implementation of audit recommendations, including those relating to strengthening of your Companys risk management policies and systems. The control criteria ensure the orderly and efficient conduct of the Companys business, including adherence to its policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Based on the assessment carried out by the Management and the evaluation of the results of the assessment, the Board of Directors are of the opinion that the Company has adequate Internal Financial at Controls system that is operating effectively March 31, 2023.

Except one instance of misappropriation of stocks of the Company for personal gains by two Employees of the Company, which was duly intimated to the Stock Exchanges, there were no instances of fraud or material misstatement to the Companys operations which required the Statutory Auditors to report to the Audit Committee and / or to the Board as required under Section 143(12) of the Act and the rules made thereunder.

31. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at workplace and has in place a Policy for Prevention of Sexual Harassment at workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘POSH Act).

The Policy aims to provide protection to Employees at workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective to create a healthy working environment that enables Employees to work without fear of prejudice, gender bias and sexual harassment. During the FY under review, Internal Complaints Committee (ICC) has been reconstituted to redress complaints received regarding sexual harassment.

The Policy ensures that all Employees, including those on deputation, temporary, part-time, and others working as consultants or on contract, are covered and protected under its provisions. The Policy extends its safeguards to all individuals associated with the Company in various capacities. During the FY under review, the Company received one complaint related to sexual harassment. The Company took this complaint seriously and conducted a thorough investigation in accordance with the provisions of the POSH Act. Following the completion of the investigation and as per the requirements of the Act, the case was appropriately closed.

To build awareness in this area, the Company has been conducting induction/ refresher programmes in the organisation on a continuous basis. During the FY, your Company organised offline training sessions on POSH Policy of the Company sensitizing the provisions of the POSH Act to all the Employees of the Company.

32. EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules 2014, the Annual Return will be uploaded on the website of the Company for the FY 2022-23 and the same will be available at https://metrobrands.com/annual-return/

33. AUDITORS

Statutory Auditors:

At the 45th Annual General Meeting (‘AGM) held on September 7, 2022, the Members approved the appointment of M/s. S R B C & CO LLP, Chartered Accountants, (FRN: 324982E/E300003) as Statutory Auditors of the Company to hold office of five years from the conclusion of that AGM till the conclusion of the 50th AGM.

M/s. S R B C & CO LLP is a firm of Chartered Accountants registered with the Institute of Chartered Accountants of India. It is primarily engaged in providing audit and assurance related services to the clients. It is a Limited Liability Partnership Firm incorporated in India with its at 22, Camac Street, 3 registeredoffice rd Floor, Block ‘B, Kolkata. The firm is part of M/s. S.R. Batliboi & Affiliates network of audit firms.

Internal Auditor:

M/s. Aneja Assurance Private Limited (Chartered Accountants) (CIN: U74999MH2008PTC185702), were re-appointed as the Internal Auditors of the Company for the FY 2022-23 in the Board Meeting held on July 29, 2022, in accordance with the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014. The auditors have carried out internal audit during the FY 2022-23. Their reports were reviewed by the Audit Committee.

After reviewing the qualifications and experience of various Internal Auditors to commensurate with the size and requirement of the Company, the Audit Committee and the Board of Directors in its meeting held on March 23, 2023 appointed M/s. KPMG Assurance and Consulting Services LLP as the Internal Auditor, in accordance with the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014, for the period of one year with effect from the June 19, 2023 for the FY 2023-24 as per scope provided by the Board and the Audit Committee.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, CS A. Sekar, Practicing Company Secretary (COP No. 2450) was re-appointed by the Board of Directors at its meeting held on January 17, 2023 as the Secretarial Auditors of the Company for the FY 2022-23.

34. AUDITORS REPORT

(i) Statutory Audit Report:

The Auditors Report prepared by the Statutory Auditors both in respect of Standalone Financial Statement and Consolidated Financial Statement of the Company for the FY ended March 31, 2023for a period does not contain any qualification, reservation, adverse remark or disclaimer.

(ii) Secretarial Audit Report:

The Secretarial Audit Report issued by CS A Sekar does not contain any qualification, reservation or adverse remark or disclaimer. The Secretarial Audit Report in form MR-3 forms part of the annexures to this Directors Report as Annexure - 5.

Pursuant to provisions of Section 143 (12) of the Act, the Statutory Auditors and the Secretarial Auditor have not reported any incident of fraud to the Audit Committee or Central Government during the FY under review.

(iii) Annual Secretarial Compliance Audit Report:

Pursuant to the provisions of Regulation 24A of SEBI Listing Regulations, the Company has undertaken an audit for the FY 2022-23 for all applicable compliances as per SEBI Rules, Regulations, Circulars, Notifications, Guidelines etc. issued thereunder. The Annual Secretarial Compliance Audit Report issued by CS A. Sekar, Practicing Company Secretary (COP No. 2450) has been duly submitted to the Stock Exchanges within the prescribed time and also uploaded on our website https://metrobrands.com/wp-content/uploads/2023/05/Reg24AFiling.pdf

35. COST AUDIT

As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, your Company is not required to include cost records in their books of account and get its cost accounting records audited by a Cost Accountant and submit a compliance report in the prescribed form.

36. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS AND GENERAL MEETINGS

The Company has complied with all the applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India and notified by MCA.

37. PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time in respect of Directors/Employees of the Company. The statement containing information forming part of this Directors Report is provided in the Annexure – 1 to this Report.

The information required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time-to-time, forms part in the Annexure – 1.

38. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 for conservation of energy, technology absorption, foreign exchange earnings and outgo is provided as Annexure - 3 to this Report.

39. INSIDER TRADING CODE OF CONDUCT

Your Company has adopted a Code of Conduct to regulate, monitor and report trading by designated persons of the Company and their immediate relatives and to formulate a framework and policy for disclosure of events and occurrences that could impact price discovery in the market for its securities as per the requirements under SEBI(Prohibition of Insider Trading) Regulations, 2015. The Company has put in place a mechanism for monitoring the trades done by designated persons of the Company and their immediate relatives as well as generation of system based disclosures in line with the Code of Conduct on Insider Trading. The details of dealing in the Companys shares by designated persons are placed before the Audit Committee for information on quarterly basis. The Code of Conduct has been made available on the Companys website at https://metrobrands.com/wp-content/uploads/2023/04/MBL-Insider-Trading-Policy_ clean-copy.pdf

40. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy and established the necessary vigil mechanism for Directors and Employees in confirmation with Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations, to report concerns about unethical behavior, or actual or suspected fraud, any other malpractice, impropriety or wrongdoings, illegality, non-compliance of legal and regulatory requirements, retaliation against the directors and Employees, and instances of leakage of/suspected leakage of Unpublished Price Sensitive Information of the Company or violation of the Companys Code of Conduct or Ethics Policy.

The Policy implemented by the Company aims to protect Employees and Directors from any form of victimization when they raise concerns about potential violations of legal or regulatory requirements, as well as any instances of incorrect or misrepresented financial statements and reports. It ensures adequate safeguards are in place for those who come forward with such concerns.

Employees of the Company are provided with the right and option to report their concerns or grievances to the Chairperson of the Audit Committee, particularly in appropriate or exceptional cases. To ensure widespread awareness, information about these reporting channels is communicated to Employees during their mandatory training modules at the time or material orders which of joining the Company.

The functioning of this reporting mechanism is overseen by the Audit Committee, which ensures its effectiveness and proper implementation. No personnel were denied access to the Audit Committee during the FY under review, reflecting the Companys commitment to providing a safe and supportive environment for reporting concerns.

The details of this Policy are explained in the Corporate Governance Report which forms a part of this Annual Report and available at the website of the Company at https://metrobrands.com/wp-content/ uploads/2022/06/Vigil-Mechanism_Whistle-Blower- Policy-Final-BM-dtd-07032022.pdf

There were three instances of such reporting during the FY ended March 31, 2023, which was duly reported to the Board and Audit Committee and resolved during the said FY.

41. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act, the Board of Directors of your Company confirm that,

a) in the preparation of the annual accounts for the FY ended March 31, 2023, the applicable accounting standards had been followed.

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as on March 31, 2023 and of the profits of your Company for the period ended March 31, 2023.

c) they have taken proper and sufficient care 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 Directors had prepared the annual accounts for the period ended March 31, 2023 on a "going concern" basis.

e) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

42. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant passed by the Regulators or Courts or Tribunals which impact the going concern status and the Companys Operations in future.

43. AWARDS

During the FY under review, the Company has received the following awards:

n Best Womens Footwear Brand by MYNTRA – Tech Threads
n Best Vegan Shoe Line - Metro Shoes by PETA India
n Best Conversion Campaign SEO by - DMA Asia Sparkies
n Most Admired Retailer Footwear IMAGE RETAIL AWARDS – 2022
n Most Admired Retailer of the year 2022 - Footwear Category by MAPIC India Retail Awards
n Best Use Of Cloud Services Ecommerce by Technology Excellence Awards 2022
n Indias Most Admired Retailer IMAGE Fashion Awards
n Indias Retail Champions 2022 - Footwear

The Company was also featured as one of the iconic brands of India By Economic Times (ETEdge).

The name of the CEO of our Company, Mr. Nissan Joseph, was recognized as a Fashion Brand Icon by Image Business of Fashion. He was also honored as the most daring CEO by Entrepreneur Magazine.

After the close of the FY under review, the Company has also received Images Retail Awards 2023 - "Most Admired Footwear Retailer of the Year" in May 2023. The Companys executive also won TRRAIN Retail Award for Customer Impact under Individual Category in April 2023.

These achievements are a testament to the outstanding leadership and innovation within your Company.

44. GREEN INITIATIVES

In commitment to align with green initiatives and surpassing them, the electronic copy of the Notice of the 46th Annual General Meeting of the Company, along with the Annual Report for FY 2022-23, is being sent to all Members whose e-mail addresses are registered with the Company / Depository Participant(s).

45. CORPORATE GOVERNANCE AND DISCLOSURES

Maintaining high standards of Corporate Governance has been fundamental to the business of our Company since its inception. The Companys Corporate Governance practices reflect value system encompassing culture, policies, and relationships with the stakeholders.

Pursuant to Regulation 34(3) read with Schedule V of SEBI Listing Regulations a report on Corporate Governance along with a Certificate from the Secretarial Auditors towards compliance of the provisions of Corporate Governance, forms an integral part of this Annual Report and are given in Annexure – 7.

The CEO and the CFO have certified to the Board inter-alia, confirming the correctness statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee as required under Regulation 17(8) read with Schedule II to the SEBI Listing Regulations.

46. GENERAL DISCLOSURES

The Directors state that no disclosure or reporting is required in respect to the following items as there were no transactions / matters on these items during the FY under review:

i. There was no change in the nature of business of the Company during the FY ended March 31, 2023.

ii. Details relating to deposits covered under Chapter V of the Act.

iii. Issue of equity shares with differential rights as to dividend, voting or otherwise, issue of sweat equity shares and buyback of shares.

iv. Neither the Managing Director nor the Whole-time Director of your Company received any remuneration or commission from any of its subsidiaries.

v. No significant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and Companys operations in future.

vi. There is no one time settlement done with any bank or financial institution.

vii. No proceedings are filed by the Company or pending against the Company under the Insolvency and Bankruptcy Code, 2016.

47. ACKNOWLEDGEMENT

Your Directors would like to express their gratitude to the esteemed Shareholders for their trust and confidence in the management of the Company.

They would also like to place on record their sincere appreciation for the continued cooperation, guidance, support, and assistance extended by bankers, customers, suppliers, local authorities, business associates, government and non-government agencies, and various other stakeholders.

The Board acknowledges and appreciates the support and cooperation the Company has been receiving from its suppliers, distributors, retailers, business partners, and others associated with them. This collaboration has enabled the Company to provide higher levels of consumer delight through continuous improvement. of the financial

The Board extends its deep appreciation to all Employees and every Member of the Metro Brands Family at all levels for their hard work, dedication, and commitment. The enthusiasm and unwavering efforts of the Employees have enabled the Company to remain an industry leader.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

FOR METRO BRANDS LIMITED
Sd/-
Rafique Abdul Malik
Chairman and Executive Director
DIN: 00521563
.
Place: Mumbai
Date: August 1, 2023

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