shoppers stop ltd share price Directors report


To the Members,

Your Board of Directors present the 26th Annual Report of Shoppers Stop Limited on the business and operations of the Company together with the Audited Financial Statements, for the financial year ended March 31, 2023 ("the year under review" or "the year" or "FY 2023").

This report is in accordance with the applicable provisions of the Companies Act, 2013 ("the Act") and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations").

FINANCIAL PERFORMANCE – AN OVERVIEW

(in C crores)

Particulars For the year ended March 31, 2023 For the year ended March 31, 2022
Revenue from Operations 3,998.36 2,493.81
Other Income 56.07 166.05
Total Income 4,054.43 2,659.86
Profit / (Loss) before Interest, Depreciation, Tax & Exceptional Items 754.86 433.57
Less: Depreciation 381.60 351.97
Less: Finance costs 209.15 205.39
Profit / (Loss) before Tax & Exceptional Items 164.11 (123.79)
Exceptional Items 2.00 15.00
Profit / (Loss) before Tax 162.11 (138.79)
Less: Provision for Tax 42.86 (52.11)
Profit / (Loss) for the year (A) 119.25 (86.68)
Other comprehensive loss / (income) (B) (0.27) (0.82)
Total comprehensive income/(loss) for the year (A)-(B) 118.98 (87.50)

1. REVIEW OF OPERATIONS

Shoppers Stop Limited is part of the Retail Industry which continues to be one of the biggest and long-term sustainable business opportunities that our country offers. Indian Retail Industry has emerged as one of the most dynamic and fast-paced industries due to the opportunities it creates. It accounts for over 10% (Ten percent) of the countrys gross domestic product (GDP) and around 8% (Eight percent) of the employment. India is the worlds fifth- largest global destination in the retail space.

After two consecutive years of facing a challenging operating environment due to COVID-19 pandemic, the year under review came as a respite with improved market sentiment, which with efforts from your Company, enabled your Company to deliver robust growth over last year.

Your Company posted revenue from operations of C3,998 crores (as per GAAP financials), an increase of 60% over the previous year. The EBITDA stood at C 755 crores (as per GAAP financials) an increase of 74% over the previous year.

As at the end of the year under review, your Company has 98 Departmental stores, 7 HomeStop stores, 142 Beauty stores and 23 Airport stores in India, under its operations.

Key Financial Highlights for FY 2022-23

(i) Your Company continued to deliver robust sales growth during the year, which was broad based with a healthy balance of price, volume and mix. All the Strategic Pillars of your Company have delivered. Your Company continues its sharp focus on robust growth on each one of them and reported highest ever revenue and profitability: a) Revenue increased by 60% year-on-year to C3,998 crores in FY23. b) EBITDA increased by 74% year-on-year to C755 crores in FY23. c) Gross Margins was up by 210 bps year-on-year.

d) Private Brands revenue grew by 70% year-on- year. e) Beauty Segment revenue was up by 54% year-on- year. f) E-commerce sales grew by 8% year-on-year. g) First Citizen member base at 9 million adding 0.24 million members during the year.

(ii) Overall Customer visits increased by 7% year-on- year in FY23. The Average Selling Price (ASP) gained 10% year-on-year and the Average Transaction Value (ATV) improved by 8% year-on-year. The ATV of your Company has consistently grown over the last 12 quarters.

(iii) Your Company reported a Profit Before Tax (PBT) of C162 crores against a loss of C 139 crores in the previous year, while Profit After Tax (PAT) was C119 crores against a loss of C 88 crores in the previous year

Operating Highlights for FY 2022-23:

(i) Your Companys Store expansion is on track with continued investments in opening new stores and renovation of existing ones. Your Company spent a total of C206 crores in FY23 on capital expenditure, including C82 crores on New stores and H55 crores on Renovation stores. The highlights were as follows:

a) 23 stores opened during the year (11 Department and 12 Beauty)

b) Response from stores opened in Tier I/II was very encouraging on productivity as well as profitability front. We have opened 8 stores in Tier I/II out of the 11 department stores opened during this year.

c) 11 Department stores and 5 Beauty stores were renovated during the year. Your Company intends to renovate another 8-10 Department stores in FY24.

d) At the end of FY23, including the new stores opened and renovations done in last four years, 60% of your Companys Department Stores are with new identity. Your Company intends to take this number to 70% for FY24.

(ii) Your Companys wholly owned subsidiary, Global SS Beauty Brands Limited ("GSSBL") entered into Beauty distribution business and acquired exclusive distribution rights of 15 International brands from LOr?al International Division (LID), Clarins, Earthi and NARS cosmetics. During the year, GSSBL onboarded 10+ key retailers for distribution business and is in the process of onboarding a few more.

(iii) Your Company had launched co-branded credit card in partnership with HDFC Bank at the end of FY22 which gained good traction in the current financial year with 80K+ members enrolling during the year, thereby increasing business revenue.

(iv) With your Companys continued focus on First Citizen Members, your Company targeted inactive members during the year leading to incremental sales. Your Company also created Exclusive Customer Engagement experiences such as Mixology, Golfing and Sailing, Farm experience, Grape Stomping and Makeover sessions for its Black card members.

(v) The physical and emotional wellbeing of employees continues to be a top priority for your Company. Your Company initiated various employee engagement activities and introduced employee friendly measures and policies during the year. Your Company has been recognised as one of the Top 10 retailers by "Great Place to Work".

2. DIVIDEND

In accordance with Regulation 43A of the Listing Regulations, your Company has adopted the ‘Dividend Distribution Policy, which sets out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its Members and / or retaining profits earned by your Company, from time to time. This Policy is annexed as Annexure I to this report and is also available on the Companys corporate website at https://corporate. shoppersstop.com/wp-content/uploads/sp-client-document-manager/1/191b878-8de71.pdf.

In view of the carried forward losses, and in order to conserve cash the Board of Directors of your Company are unable to recommend dividend on equity shares (previous year dividend - Nil).

3. RESERVES

There is no amount proposed to be transferred to the Reserves, for the year under review.

4. SUBSIDIARIES, ASSOCIATES, AND JOINT VENTURE

As on March 31, 2023, your Company has four wholly owned subsidiaries and one associate company (in terms of the Act) upto October 12, 2022, details whereof are as under:

Shoppers Stop.Com (India) Limited (SSCL):

SSCL was incorporated in year 2000 with an objective of advancing the online presence. SSCL posted net loss of C0.37 crores for the year under review, against a net profit of C0.85 crores in the previous year. During the year the SSCLs turnover was C20.53 crores (previous year H 16.81 crores).

Global SS Beauty Brands Limited (GSSBL) (Formerly known as Upasna Trading Limited)

GSSBL was incorporated in year 1995 as Upasna Trading Limited. During the year under review, (i) name of the company was changed from Upasna Trading Limited to Global SS Beauty Brands Limited with effect from June 20, 2022, with the certificate for name change being received from the Ministry of Corporate Affairs, Office of the Registrar of Companies, (ii) the object clause of the company was altered to widen its range of business activities to include beauty distribution, (iii) the Authorised Capital of the company was increased to C30 crores (equity share capital of C5 crores and preference share capital of C25 crores), (iv) the company did a right issue of 495,000 Equity Shares of C100 each and 2,000 - 0.01% Non-Cumulative Optionally Convertible Preference Shares (‘NOCPS) of C100,000 each (v) the company entered into Beauty distribution business and acquiredexclusivedistributionrightsof15International brands from LOr?al International Division (LID), Clarins, Earthi and NARS cosmetics. It also onboarded 10+ key retailers for distribution business and is in the process of onboarding a few more.

During the year under review, GSSBL reported net profit of C0.90 crores for the year under review, against a net loss of C0.00 crores in the previous year. During the year its turnover was C14.02 crores (previous year Nil).

The other 2 (two) wholly owned subsidiaries of your Company viz. Shoppers Stop Brands (India) Limited (SSBIL) (Formerly known as Shoppers Stop Services (India) Limited) and Gateway Multichannel Retail (India) Limited; had no operations during the year under review.

During the year under review, the name of Shoppers Stop Services (India) Limited was changed to Shoppers Stop Brands (India) Limited with effect from June 23, 2022, with the certificate for name change being received from the Ministry of Corporate Affairs, Office of the Registrar of Companies.

Crossword Bookstores Private Limited (Crossword): In terms of the Share Purchase Agreement (SPA) executed by your Company with M/s. Dinesh Gupta, Aakash Gupta & Family (Owners of Agarwal Business House) (ABH), your Company had agreed to sell the complete stake in Crossword, over a period of three years. Accordingly, your Company has further disposed of 1,56,24,376 equity shares of C10/- each constituting 39% of the share capital of the Crossword to ABH on April 8, 2022 and October 12, 2022 respectively, as per terms of SPA. Your Company now holds 10% of equity shares in Crossword. Accordingly, Crossword ceased to be an associate company in terms of the Act, with effect from October 12, 2022.

Your Company has no joint venture.

A separate statement containing the salient features of the Financial Statement of all above subsidiaries and associates in prescribed format of AOC -1, forms part of this Annual Report.

In accordance with the provisions of Section 136(1) of the Act, the Financial Statements of each of the aforesaid subsidiaries along with related information are available on your Companys corporate website at https://corporate.shoppersstop.com/investors/ annual-report/ and the same are also available for inspection by the Members. The Members desiring inspection / interested in obtaining a copy of the Financial Statements may write at company.secretary@shoppersstop.com to the Company Secretary.

Your Company has adopted a policy for determining material subsidiaries, which is part of the Companys Policy on Related Party Transactions. The same is available on the Companys corporate website at https://corporate.shoppersstop.com/investors/ policies/. As per this Policy, as on March 31, 2023 (for purpose of determining material subsidiary for the year under review), your Company did not have any material subsidiary. Pursuant to the capitalisation of GSSBL during the year under review, GSBBL shall be a material subsidiary w.e.f. April 1, 2023. As per applicable requirements, your Company is in the process of appointing one of the Independent Director on its Board, as an Independent Director of GSSBL.

5. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of Section 129(3) of the Act and Regulation 34 of the Listing Regulations, the Consolidated Financial Statements forms part of this Annual Report. The Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) and Section 133 of the Act.

6. EMPLOYEES STOCK OPTION SCHEME / PLAN AND STATUTORY INFORMATION THEREON

Shoppers Stop Employee Stock Option Scheme 2008 (ESOP – 2008): The Members at 11th AGM held on July 29, 2008, had approved ESOP-2008 for issuance of the employee stock options (‘‘Options) to the eligible employees of the Company.

Shoppers Stop Employee Stock Option Scheme 2020 (ESOP 2020): The Members had by a special resolution passed by the way of postal ballot (remote e-voting) on December 03, 2020, approved ESOP-2020 for issuance of Options, in one or more tranches, not exceeding 10,00,000 (Ten Lakhs) to the eligible employees of your Company. Your Company has received in-principle approval for the same from the two stock exchanges where the Company is listed.

Shoppers Stop Employee Stock Option Scheme 2022 (ESOP 2022): The Members had by a special resolution passed by the way of postal ballot (remote e-voting) on June 04, 2022, approved ESOP-2022 for issuance of Options, in one or more tranches, not exceeding 20,00,000 (Twenty Lakhs) to the eligible employees of your Company. Your Company has received in-principle approval for the same from the two stock exchanges where the Company is listed.

The ESOP 2008, ESOP 2020 and ESOP 2022 (collectively "ESOP") have been issued with the objective to promote desired behavior among employees for meeting the Companys long-term objectives and enable retention of employees for desired objectives and duration, through a customised approach.

The Nomination, Remuneration & Corporate Governance Committee of your Company, inter-alia, administers and monitors ESOP, implemented by your Company in accordance with the Act and the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended ("the SEBI Regulations").

During the year under review your Company has:

(i) not granted Options under ESOP -2008.

(ii) granted 1,23,983 Options under ESOP – 2020, to the eligible employees of the Company during the year under review, out of the pool of Options available under the ESOP – 2020. Further 1,08,863 Options granted under ESOP – 2020 earlier, lapsed during the year under review.

(iii) granted (a) 9,51,327 ESOPs and 4,79,898 RSUs (Restricted Stock Units) on June 28, 2022, (b) 15,091 ESOPs and 7,546 RSUs on July 25, 2022, (c) 11,694 ESOPs and 5,847 RSUs on October 19, 2022, and (d) 27,519 ESOPs and 13,760 RSUs on January 23, 2023; under ESOP – 2022, to the eligible employees of the Company during the year under review, out of the pool of Options available under the ESOP – 2022. Further 1,70,621 ESOPs and 85,311 RSUs granted under ESOP – 2022, lapsed during the year under review.

Statutory Information on ESOP:

The disclosures requirements under the SEBI Regulations, for the aforesaid ESOP Scheme, in respect of the year ended March 31, 2023 are disclosed on the Companys website and can be accessed using the link https:// corporate.shoppersstop.com/investors/annual-report/. Further, a certificate from KP Capital Advisors Private Limited-ESOP Direct, with respect to implementation of Employee Stock Option Plan in compliance with the Act, the SEBI Regulations and the Members approval, is obtained and shall be available for inspection by the Members. The Members desiring inspection may write at company.secretary@ shoppersstop.com to the Company Secretary.

A certificate from the secretarial auditors, M/s. Kaushal Dalal & Associates, Practicing Company Secretaries (FCS -7141, CP- 7512) is being obtained confirming that the ESOP Scheme has been implemented in accordance with the SEBI Regulations and in accordance with the resolution of the company, and shall be available for inspection by the Members. The Members desiring inspection may write at company.secretary@shoppersstop.com to the Company Secretary.

7. PEOPLE

In your Company, our key priority is Health and Safety of our People. In the last two years, your Company has reinforced the importance of being a safe, inclusive and supportive place to work for all its employees. Health and safety of its employees, their families and the people in its extended value chain remained its #1 priority. Your Company continued to nurture a culture in which its people can thrive, become future-fit and bring their best selves to work.

8. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company remains committed as a good Corporate Citizen to integrate social, environmental and economic concerns in its values and operations, to improve the welfare of the stakeholders and the Society as a whole.

Your Company has in place the CSR Committee ("the Committee"), which performs the functions as mandated under the Act and the Rules framed thereunder. The composition of the Committee is detailed in the Corporate Governance Report.

Further, your Board has adopted a Policy on CSR, in terms of the Act and the Rules framed thereunder and in accordance thereof, your Company undertakes activities / projects / initiatives and makes contributions, from time to time. The salient features of the said Policy are outlined in the Corporate Governance Report and the said Policy is made available on the Companys corporate website at https://corporate.shoppersstop.com/investors/ policies/.

Pursuant to the provisions of Section 135 of the Act and Schedule VII thereto read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the prescribed CSR expenditure for the Financial Year 2022-23 is Nil.

9. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

i. Non-Independent Directors - Director Retiring by Rotation.

During the year under review, the Members at 25th AGM held on July 26, 2022, approved the re- appointment of Mr. B.S. Nagesh (DIN: 00027595) as a Director of the Company, who was due to retire by rotation at the said AGM and being eligible, had offered himself for appointment.

In accordance with the Act and the Articles of Association of the Company, Mr. Ravi C. Raheja, (DIN: 00028044) is liable to retire by rotation at the ensuing AGM and being eligible, has offered himself for re- appointment as a Director liable to retire by rotation. Accordingly, the reappointment of Mr. Ravi C. Raheja, Non-Executive Director is being placed for the approval of the Members at the ensuing AGM. A brief profile of Mr. Ravi C. Raheja along with other related information forms part of the Notice convening the ensuing AGM.

ii. Independent Directors

During the year under review, Mr. Robert Bready (DIN: 06842835) resigned as an Non Executive Independent Director and Member of the Corporate Social Responsibility Committee of the Company with effect from January 23, 2023 and Mr. Deepak Ghaisas (DIN: 00001811) retired as a Non-Executive Independent Director on completion of his second tenure with effect from March 31, 2023 and ceased to be Chairman of the Audit Committee, Risk Management Committee and Member of Stakeholders Relationship Committee with effect from January 23, 2023.

The Board places on record its appreciation for contribution made by them during their tenure as Independent Directors of your Company.

During the year under review, Mr. Mahesh Chhabria (DIN: 00166049) was appointed as an Additional and Non- Executive Independent Director of the Company, by the Board of Directors on January 23, 2023 for a term of 5 (five) consecutive years effective from January 23, 2023; and the appointment approved by Members through postal ballot on April 04, 2023. Also Ms. Smita Jatia (DIN: 03165703) was appointed as an Additional and Non- Executive Women Independent Director of the Company, by the Board of Directors on February 20, 2023 through a circular resolution for a term of 5 (five) consecutive years effective from February 20, 2023; and the appointment approved by Members through postal ballot on April 04, 2023.

Further, Mr. Mahesh Chhabria was appointed as Chairman of the Audit Committee, Risk Management Committee and Member of Stakeholder Relationship Committee and Corporate Social Responsibility Committee of the Company with effect from January 23, 2023. Ms. Smita Jatia was appointed as member of the Nomination, Remuneration & Corporate Governance Committee of the Company with effect from April 26, 2023.

iii. Declaration by Independent Directors

Your Company has received necessary confirmations/ declarations from each Independent Director of your Company confirming that they meet the criteria of independence as prescribed under the Act and the Listing Regulations. Based on such confirmations/ declaration, in the opinion of the Board, the Independent Directors of your Company fulfil the conditions specified under the Act, the Rules made thereunder and Listing Regulations and are independent of the Management of your Company.

Further, your Company has received declaration from all Independent Directors confirming that they have ensured inclusion of their names in the Independent Directors data bank created and maintained by Indian Institute of Corporate Affairs within stipulated timeframe, as mandated by the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended.

The Independent Directors of your Company, who do not have this exemption, shall ensure clearance of online proficiency self- assessment test within the stipulated timeframe.

iv. Executive Directors

Mr. Venu Nair was appointed as Managing Director & CEO of the Company for a period of 3 years w.e.f. November 6, 2020, by the Board of the Company and his appointment was approved by the Shareholders of the Company at the 24th AGM held on July 29, 2021.

Further, Mr. Venu Nair has been re-appointed as the MD & CEO of the Company w.e.f. November 06, 2023 for period of 3 years subject to the approval of the members of the Company, which special business is included in the notice of the 26th AGM along with other necessary disclosures required under the Act and the Regulations. A brief profile of Mr. Venu Nair along with other related information forms part of the Notice convening the ensuing AGM.

v. Key Managerial Personnel

During the year under review, there were no changes in the Key Managerial Personnel of the Company.

10. PERFORMANCE EVALUATION

In compliance with the relevant provisions of the Act read with the Rules made thereunder and the Listing Regulations, the performance evaluation of the Board as a whole, its specified Statutory Committees, the Chairman of the Board and the Individual Directors was carried out for the year under review.

The evaluation process consisted of structured questionnaires covering various aspects of the functioning of the Board and its committees, such as composition, experience and competencies, performance of specific duties and obligations, governance issues etc. The Board also carried out the evaluation of the performance of Individual Directors based on criteria such as contribution of the director at the meetings, strategic perspective or inputs regarding the growth and performance of the Company etc.

Further, the manner in which the annual evaluation was carried out and the outcome of the evaluation are explained in the Corporate Governance Report.

11. NOMINATION,REMUNERATION&CORPORATE

GOVERNANCE COMMITTEE AND COMPANYS POLICY ON NOMINATION, REMUNERATION, BOARD DIVERSITY, EVALUATION AND SUCCESSION.

Your Company has in place the Nomination, Remuneration & Corporate Governance Committee, which performs the functions as mandated under the Act and the Listing Regulations.

As on date the Committee comprises of four Independent Non- Executive Directors i.e. Mr. Nirvik Singh (Chairman), Mr. Arun Sirdeshmukh, Ms. Christine Kasoulis and Ms. Smita Jatia (appointed w.e.f. April 26, 2023); and one Promoter and Non-Executive Director Mr. Neel C. Raheja.

In terms of the Act and the Listing Regulations, the Board of Directors of your Company has framed and adopted a policy on appointment and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP) of the Company, which, inter-alia, includes Board Diversity, process of Evaluation of Directors, KMPs and SMPs of the Company, criteria for determining qualifications, positive attributes, independence of a Director and other related matters. The remuneration paid to Directors, KMP and SMP of the Company are as per the terms laid down in this Policy. The Managing Director & CEO of your Company does not receive remuneration or commission from any of the wholly owned subsidiaries of your Company. The salient features of the said Policy are outlined in the Corporate Governance Report and the said Policy is made available on the Companys corporate website at https://corporate.shoppersstop.com/investors/ policies/.

12. DISCLOSURES UNDER THE ACT

Annual Return: The Annual Return filed for the year 2021- 22 in prescribed form MGT – 7, pursuant to Section 92 of the Act read with the Rules framed thereunder, is available on your Companys corporate website at https://corporate.shoppersstop.com/ investors/annual-report/ The draft of the Annual Return for the year 2022-23 in prescribed form MGT – 7, is also available on your Companys corporate website at https://corporate.shoppersstop.com/investors/ annual-report/. The Company shall immediately after the filing of the Annual Return for the year 2022-23, make the same available on the website of your Company.

Meetings of the Board of Directors: A calendar of Meetings is prepared and circulated in advance to the Directors. The Board of Directors of your Company met 5 (five) times during the year under review. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Regulations. The details of the board meetings, the attendance of the Directors thereof and other particulars are provided in the Corporate Governance Report.

Change in the share capital: During the year under review, pursuant to the exercise of options under the Employee Stock Options Plan 2008 and Employee Stock Option Plan 2020, your Company issued and allotted 1,47,614 equity shares of the face value of C5 each and as a result, the share capital of the Company has increased from C54,75,01,125 (consisting of 10,95,00,225 equity share of C5 per share) to

C54,82,39,195 (consisting of 10,96,47,839 equity share of C5 per share).

Audit Committee: During the year under review, Mr. Deepak Ghaisas ceased to be Chairman and Member of the Audit Committee with effect from January 23, 2023 and ceased to be a Non-Executive Independent Director on completion of second tenure with effect from March 31, 2023. Mr. Mahesh Chhabria is appointed as Chairman and Member of the Audit Committee with effect from January 23, 2023.

The powers and role of the Committee are included in the Corporate Governance Report. During the year under review, all the recommendation made by the Committee were accepted by the Board.

As on date the Committee comprises of three Independent Non- Executive Directors i.e. Mr. Mahesh Chhabria (Chairman), Mr. Arun Sirdeshmukh, Ms. Christine Kasoulis; and one Promoter and Non-Executive Director Mr. Ravi C. Raheja.

Risk Management Committee: During the year under review, Mr. Deepak Ghaisas ceased to be Chairman and Member of the Risk Management Committee with effect from January 23, 2023 and ceased to be a Non-Executive Independent Director on completion of second tenure with effect from March 31, 2023. Mr. Mahesh Chhabria is appointed as Chairman and Member of the Risk Management Committee with effect from January 23, 2023. The powers and role of the Committee are included in the Corporate Governance Report.

As on date the Committee comprises of three Independent Non- Executive Directors i.e. Mr. Mahesh Chhabria (Chairman), Mr. Arun Sirdeshmukh, Ms. Christine Kasoulis; and one Promoter and Non-Executive Director Mr. Ravi C. Raheja.

Related Party Transactions: All transactions with related parties are placed before the Audit Committee ("the Committee") for its approval. An omnibus approval from the Independent Directors of the Committee is obtained for the related party transactions which are repetitive in nature, based on the criteria specified and approved by the Board, based on recommendation of the Committee and transactions which are unforeseen for each financial year. The Committee and the Board reviews on a quarterly basis, all transactions entered into by your Company pursuant to the omnibus approvals so granted.

During the year under review, the policy on Related Party Transactions, amended as per changes in Listing Regulations and Act during the year and adopted by your Company is available on the Companys corporate website at https://corporate.shoppersstop. com/investors/policies/

All transactions with Related Parties entered into during FY 2023, were in ordinary course of business and at arms length basis and in accordance with the provisions of the Act and the Rules made thereunder, the Listing Regulations and your Companys Policy on Related Party Transactions.

During the year under review, there were no transactions which were material, considering the aforesaid Policy. Accordingly, no disclosure is made in respect of related party transaction in Form AOC – 2 in terms of Section 134 of the Act and Rules framed thereunder. There are no related party transactions that may have potential conflict with the interest of your Company at large or which warrants the approval of shareholders. The attention of the Members is drawn to the notes to the Standalone Financial Statement setting out the related party transactions disclosures for FY 2023.

Particulars of loans, guarantees or investments: The details of the loans, guarantees or investments covered under Section 186 of the Act, forms part of the Notes to the Standalone Financial Statements provided in this Annual Report.

Other Disclosures: The Board hereby states that no disclosure and / or reporting and / or details is required, in respect of the following matters, as there were no transactions on these matters and / or instances / requirement / applicability, during the year under review:

Deposits covered under Sections 73 and 74 of the Act read with Companies (Acceptance of Deposits) Rules, 2014.

Issue of equity shares with differential rights as to dividend, voting or otherwise.

No significant or material orders were passed by the Regulators or Courts or Tribunals, impacting the going concern status of your Company and its operations in future.

There was no revision in the financial statements.

Maintenance of cost records in terms of Section 148 of the Act is not applicable to your Company.

No material changes and commitments affecting the financial position of your Company have occurred between the end of the financial year to which the financial statements relate and the date of this report, unless otherwise stated in the report.

• No reporting in respect of the matters listed under Rule 8(5) (xi) and (xii) of the Companies (Accounts) Rules, 2014.

13. PREVENTION OF SEXUAL HARASSMENT (POSH)

Your Company continues to follow all the statutory requirements and guidelines in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act") and the Rules framed thereunder. The POSH Committee established as per the statutory requirements, continues to operate in every unit and the registered office. In case of any instances, employees are advised to approach the local POSH Committee and appropriate action in this regard is initiated post- detailed review of the matter. Your Company stands strong against any kind of sexual harassment and has zero tolerance for sexual harassment at workplace.

Every associate at the time of joining undergoes an extensive training on POSH through an e-learning module that covers the definition, guidelines and detailed coverage of policy on POSH. It also covers the rights and responsibilities of the employees under the POSH guidelines and Companys policy. POSH Policy is uploaded on the internal intranet site. POSH helpline details are placed on the notice boards at all locations, for employees and other staff, to be aware about the provisions of the POSH Policy.

Your Company maintains a repository of all inquiries and documents as per the statutory guidelines and Companys POSH Policy. The Internal Complaints Committee members of the POSH Committee have been trained to update them with the best practices in this area, including for circumstances of POSH arising in a virtual environment. There were 20 POSH cases received during the financial year and they were resolved as per the guidelines of POSH Act and Rules made thereunder.

14. RISK MANAGEMENT

Your Company has established a robust risk management system to identify, assess the key risks and mitigate them appropriately. Further such system ensures smooth and efficient operations of the business. Your Company has adopted a Risk Management Policy, pursuant to Section 134 of the Act. The Policy is available on the company website at https://corporate.shoppersstop.com/wp-content/ uploads/sp-client-document-manager/1/79a6c57-96cb.pdf.

Your Company reviewed the major risks including risks on account of business continuity, supply chain management, third party risks, legal compliance and other risks which may affect or has affected its operations, employees, customers, vendors and all other stakeholders from both the external and the internal environment perspective. Basis this review, appropriate actions have been initiated to mitigate, partially mitigate, transfer or accept the risk (if need be) and monitor such risks on a regular basis.

Details of various risks faced by your Company are provided in the Management Discussion & Analysis Report.

Your Company has its Risk Management Committee, which assists the Board in monitoring and reviewing the risk management plan, implementation of the risk management framework of your Company and such other functions as the Board may deem fit. The detailed terms of reference of the Risk Management

Committee and composition thereof, forms part of the Corporate Governance Report.

15. INTERNAL FINANCIAL CONTROL

Internal financial controls are an integral part of the risk management process, addressing financial and its financial reporting risks. The internal financial controls have been documented and embedded in the business processes. Your Company has laid down internal financial controls, through a combination of entity level controls, process level controls and IT general controls inter-alia, to ensure orderly and efficient conduct of business, including adherence to your Companys policies and procedures, accuracy and completeness of accounting records and timely preparation and reporting of reliable financial statements/information, safeguarding of assets, prevention and detection of frauds and errors.

The evaluation of these internal financial controls is done through the internal audit process, established within your Company and also through appointing professional firm as the internal auditors to carry out such tests by way of systematic internal audit program. Based on the review of the reported evaluations, we believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended and for the preparation of financial statement for the year under review, that the applicable Accounting Standards have been followed and the internal financial controls related to financial statement are generally found to be adequate and were operating effectively and that no material weaknesses were noticed.

16. WHISTLE BLOWER / VIGIL MECHANISM

Your Company has established a Vigil Mechanism/ Whistle Blower policy in line with the Regulations 18 and 22 of the Listing Regulations and Section 177 of the Act. Your Company has engaged a third party for managing the "Ethics Hotline", which can be used by employees including brand staff, vendors and third-party vendor personnel. The Whistle Blower Policy is available on the website of the Company and can be accessed at https://corporate.shoppersstop.com/ wp-content/uploads/sp-client-document-manager/1/ bbb842f-9582.pdf.

Under this Policy, the Whistle Blower can raise concerns relating to reportable matters such as unethical behavior, actual or suspected fraud or violation of your Companys code of conduct or ethics policy or any other malpractice, impropriety or wrongdoings, illegality, of regulatory requirements. The reach of this hotline facility is also expanded further for placing complaints against sexual harassment, Insider Trading & other specific HR related matters. The mechanism adopted by your Company encourages to report genuine concerns or grievances and provides for adequate safeguards against victimisation of the Whistle Blower, who avail of such mechanism and also provide for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. We affirm that no employee of your Company was denied access to the Audit Committee. The guidelines are designed to ensure that stakeholders may raise any concern on integrity, value adherence without fear of being punished for raising that concern. This third party managed ‘Ethics Hotline provide independence and comfort to the designated personnel to blow the whistle in case they have any issues worth reporting.

17. CORPORATE GOVERNANCE REPORT

Pursuant to the Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with a certificate from S R B C & CO LLP, the Statutory Auditors of the Company, confirming its compliance, forms part of this Annual Report.

18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, on the business operations / performance review, as stipulated under the Listing Regulations, forms part of this Annual Report.

19. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report for the year under review, as stipulated under the Listing Regulations, describing the initiatives taken by your Company from social and governance perspective, forms an integral part of this Annual Report.

20. AUDITORS & AUDITORS REPORT

Statutory Auditors

M/s. S R B C & CO LLP (Registration No. 324982E/ E300003), Chartered Accountants, were re-appointed as Statutory Auditors of the Company by the Members for a second term of five (5) years i.e. from conclusion of the 25th AGM till the conclusion of 30th AGM.

The Auditors Report given by S R B C & CO LLP, Statutory Auditors, on the financial statements of the Company for the year ended March 31, 2023 forms part of the Annual Report. The Auditors Report does not contain any qualification, reservation or adverse remark. However, the statutory auditor has drawn attention i.e. an Emphasis of Matter with regard to Note No. 30(ii) of the Standalone Ind AS Financial Statements [Note No. 29(ii) of the Consolidated Ind AS Financial Statements] in their report, details of which are as follows:

Litigation

We draw attention to Note 30(ii) to the standalone and Note 29(ii) to the consolidated Ind AS financial statements which, describes the uncertainty related to the outcome of the appeal filed before the Supreme Court regarding non-provision of retrospective levy of service tax for the period from June 1, 2007 to March 31, 2010 on renting of immovable properties given for commercial use, aggregating to C 16.60 crores Standalone and C 20.11 crores Consolidated.

Detailed explanation in respect of the matter has been provided under Note 30(ii) of standalone Ind AS financial statements Note No. 29 (ii) of the Consolidated Ind AS Financial Statements.

During the year under review, the Auditor has not reported any fraud and therefore no detail are required to be disclosed under Section 134(3) (ca) of the Act.

Secretarial Auditors

The Secretarial Audit Report for FY2023 issued by M/s. Kaushal Dalal & Associates, Practicing Company Secretaries (FCS- 7141, CP-7512) the Secretarial Auditor for the year under review, is annexed as Annexure III to this report. The said report does not contain any qualification, reservation, adverse remark or disclaimer.

During the year under review, the above Auditors have not reported any fraud and therefore no details are required to be disclosed under Section 134(3) (ca) of the Act.

21. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy and technology absorption, as stipulated under the Act read with the Rules made thereunder, is annexed as Annexure IV to this Report. The foreign exchange earnings were C115.71 crores (Previous Year C33.69 crores) and outgo was C27.43 crores (Previous Year C8.41 crores), for the year under review.

22. PARTICULARSOFEMPLOYEESANDRELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended ("Rules"), disclosures pertaining to ratio of remuneration and other details as required therein are annexed as Annexure V to this Report.

Having regard to the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding the information showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Section 197(12) of the Act read with rules 5(2) and 5(3) of the Rules, is being sent to the Members of the Company and others entitled thereto. The said information is available for inspection by the Members. The Members desiring inspection/ interested in obtaining copy thereof, may write at company.secretary@shoppersstop.com to the Company Secretary. The Annual Report including the aforesaid information is made available on the Companys corporate website.

23. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Act, the Directors of your Company, to the best of their knowledge and based on the information and explanations received from your Company, hereby confirm that:

a. In the preparation of the annual accounts for the year under review, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

b. The Directors have selected appropriate accounting policies and have applied them consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2023, and of the profit of the Company, for the year under review.

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. The annual accounts have been prepared on a going concern basis.

e. Proper internal financial controls to be followed by the Company were laid down and such internal financial controls were adequate and operating effectively.

f. Proper systems to ensure compliance with the provisions of all applicable laws were devised and that such systems were adequate and operating effectively.

24. SECRETARIAL STANDARDS

During the year under review, your Company has complied with the Secretarial Standards, issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs, in terms of Section 118(10) of the Act.

25. AWARDS AND ACCOLADES

During the year under review, your Company received many awards and felicitations conferred by reputable organisations, some of them are:

• ‘Indias Best Workplaces for Women 2022

• ‘Indias Top 10 Best Workplaces for Retail 2023

• ‘Indias Best Workplace Top 10 in Health & Wellness 2022 across industries

26. ACKNOWLEDGEMENT

We thank our customers, business partners, suppliers, bankers and shareholders for their continued support during the year. We thank the Government of India, the State Governments where we have business operations and other government agencies for their support and look forward to their continued support in the future.

We place on record our sincere appreciation towards the contribution made by all Customer Care Associates at all levels.

For Shoppers Stop Limited
Place: Mumbai B. S. Nagesh
Date: April 26, 2023 Chairman