Good morning, and a very warm welcome to all the shareholders to the 22nd annual general meeting of Avenue Supermarts Limited. I am Ashu Gupta, Company Secretary of your company. I hope all of you are safe and in good health. Before we commence, I would like to inform you that this annual general meeting is being held through video conferencing or other audiovisual means in accordance with the general circulars issued by Ministry of Corporate Affairs and Securities and Exchange Board of India from time to time, applicable provisions of the Companies Act and the SEBI regulations. The COVID teleconferencing Webex facility is being made available to the shareholders to attend this annual general meeting of the company on a first-come-first-serve basis. The members attending the meeting through video conferencing shall be counted for the purpose of quorum.
Since this AGM is being held through video conferencing, physical attendance of members has been dispensed with. Accordingly, the facility for appointment of proxies by the members is not available for the AGM, and hence, inspection of proxy register is also not applicable. The company has received requests from few members to speak in this AGM. Accordingly, floor will be open for the members to ask questions or express their views. It is informed that the company reserves the right to limit the number of speakers depending on the availability of time for the AGM. All the members joining this meeting are by default placed on mute mode to avoid any background noise and to ensure smooth and seamless conduct of this meeting. During the question answer session, the moderator will announce the names of registered speaker shareholders.
Speaker shareholders will thereafter be unmuted by the host of the AGM and will be allowed to express their views or ask questions. Each speaker will be given three minutes, and I request you all to adhere to this time limit. Members facing any technical issue are requested to call the helpline number of NSDL as mentioned in the notice of the AGM. Members may note that since the AGM is held through video conferencing or other audiovisual means, the resolutions mentioned in the notice convening this AGM have already been put to vote through remote e-voting. As the facility of e-voting is also available at the AGM, there will be no proposing or seconding of the resolutions.
Members who have not yet cast their vote by remote e-voting can exercise their voting rights at the AGM through e-voting by following instructions as mentioned in the notice of the AGM for remote e-voting. The members can vote at the AGM through e-voting from commencement of this AGM till 15 minutes after conclusion of the AGM. I now request our Chairman, Mr. Ramesh Damani, to take over proceedings of the meeting. Thank you. Over to you, sir.
Sure. Thank you so much, Ashu. On behalf of the Board of Directors, I, Ramesh Damani, Chairman of the Board, welcome you to the 22nd annual general meeting of Avenue Supermarts Limited. I am joining this meeting from my office in Nariman Point in Mumbai. I have been informed that the requisite quorum for the meeting is present, and accordingly, I hereby call the meeting to order. Participation of members through video conferencing has been reckoned as quorum in accordance with the circulars mentioned earlier, and as per Section 103 of the Companies Act, 2013. The statutory registers are available electronically for inspection by the members who are desirous to have an inspection of the AGM. Members seeking to inspect such documents can send the request to investorrelations@dmartindia.com from their registered email addresses.
Before I begin my address, let me take the honor of welcoming our board members who have joined us for this meeting. For safety reasons, we are all attending the meeting from different locations. Therefore, I now request the board members, as I speak their names, to introduce themselves. My first call upon Mr. Chandrashekhar Bhave to introduce himself.
Morning, everybody. I am Chandrashekhar Bhave. I am the Independent Director of your company on the Board of Directors. I am the Chairman of the Audit Committee, the Nomination and Remuneration Committee, and the Corporate Social Responsibility Committee of the board. I am joining this meeting from Hotel am Steinplatz in Berlin. Thank you.
Thank you, Mr. Bhave. May I request Ms. Kalpana Unadkat, our Independent Director, to introduce herself.
Thank you, Mr. Damani. Good morning, everyone. I am Kalpana Unadkat. I am an Independent Director of your company, and I am joining this meeting from Mumbai. Thank you.
Thank you, Kalpana. May I request our superstar MD, Ignatius Navil Noronha, to introduce himself. You are on mute, Navil.
Yeah. Thank you, sir. Good morning, everyone. My name is Ignatius Navil Noronha. I am the Managing Director and CEO of your company. I am also Chairman of the Risk Management Committee of the company. I am joining this meeting from Mumbai. Thank you.
Thank you, Navil. May I request Mr. Ramakant Baheti to introduce himself.
Good morning, everyone. I am Mr. Ramakant Baheti, Whole-time Director and Group CFO. I am attending this meeting from Mumbai. Thank you.
Thank you, Ramakant- ji. May I request Ms. Manjri Chandak to introduce herself.
Thank you, sir. Good morning. My name is Manjri Chandak. I am the Non-Executive Director of your company. I am also the Chairperson of the Stakeholder Relationship Committee, and I am attending this meeting from Mumbai. Thank you.
Thank you, Manjri-ji. May I request Mr. Elvin Machado to introduce himself.
Good morning, everyone. I'm Elvin Machado. I am the Whole-time Director of your company, and I'm attending this meeting from the Thane corporate office.
Thank you, Elvin. In addition to our directors, we are also joined by Mr. Niladri Deb, CFO, who is joining us from the head office of the company in Thane. Welcome, Mr. Niladri.
Thank you.
The Chairman of the Audit Committee, Nomination Committee, NRC, Nomination Remuneration Committee, and the Stakeholders Relationship Committee are present at the AGM. We also have Mr. Sudhir Soni, Partner, SRBC & Co LLP, statutory auditors of the company, and Mr. Himanshu Kamdar, Partner, M/s Rathi & Associates, secretarial auditors and scrutinizer for e-voting, attending this meeting through video conferencing. May I now address the shareholders. Good morning, dear shareholders. I'm extremely delighted to interact with you through this medium. We have adapted to a new normal way of life in the past two years due to COVID-19. The second wave of the pandemic further tested our will as a society. We, as an organization, focused on what we could do to help our customers, partners, employees, and the society at large as these events unfolded. Despite the challenging times, FY 2022 progressed positively.
This was driven by strong approach from the government to balance life and health, including lockdowns and widespread vaccination programs to safeguard public health, and implementation of much needed fiscal and monetary policy measures to boost liquidity into the system. We also observed the private and non-profit sectors, as well as healthcare personnel and others, working together to serve the country and its people. The Indian GDP is estimated to have grown at 8.7% in FY 2022, exceeding the pre-COVID levels in actual terms. The effects of various reforms for capital spending, greater capacity utilization, and more private investments are likely to enable this growth. At DMart, we saw growth across all our key financial parameters. We opened a record of 50 new stores during the financial year. With that, our retail footprint expanded to 284 stores by the end of March 2022.
As part of our CSR commitments, we have continued directing our support to the public education system in India. In the past two years, we have enabled virtual systems through which the pupils are able to study remotely. We also expanded our reach to two new cities, Pune and Aurangabad in Maharashtra, apart from extending our reach in the Mumbai metropolitan region. In addition, the company has made meaningful contributions to support some reputed and well-run external institutions in the fields of education, healthcare, and nutrition. We continue to strengthen our approach to sustainability through various means that will have a meaningful long-term positive impact on our company, its employees, the environment, and other stakeholders. Considering the overall development of the country, the mission per person, and the nature of our business model, we have developed a matrix for our go-to-market strategy on sustainability.
We have detailed the same in our annual report this year. I would like to express my gratitude to all our shareholders who continue to trust in us, in DMart, and what DMart and what it stands for. I want to express my sincere gratitude to all of our employees for their unwavering focus, passion, and dedication in assisting us in serving our consumers in time with the need. I am optimistic in India's resurgent consumption story and its growth potential, and in DMart's continuing ability to serve millions of Indians with our value proposition. As we continue to serve and grow, I request your extended cooperation. Thank you very much. One second, please. I conclude my speech, and now we'll carry on with the business of the meeting.
The notice convening the 22nd AGM, along with the annual report for the financial year ended 31st March 2022, consisting of financial statements, including the board's report, auditor's report, have been sent only to the members whose email IDs are registered with the company or the registrar and share transfer agents or the depository participants through electronic means. The notice has also been hosted on the website of the company. With your permission, I shall take the notice of the AGM as read. The company has presented the standalone and consolidated financial statements of the company for the financial year 31st March 2022, as to the requirements under the Companies Act, 2013. The auditor's report on the standalone and the consolidated financial statement does not have any qualification, observation, or comment on financial transactions or matters which have had any adverse effect on the functioning of the company.
With your permission, I will also take that auditor's report as read. I now invite our shareholders to express their views or ask questions pertaining to the performance of the company during the year under review of the resolutions placed for the approval of members. The shareholders are requested to be brief and avoid repetition. The shareholders are also requested to express views and raise queries pertaining specifically to the annual report for the financial year 2021-2022 and business matters for today's meeting.
The shareholders who have sent their queries on the email ID of the company provided in the notice of the meeting will be answered during the meeting. As regards any personal grievances or queries, if any, shareholders are requested to write directly to the Company Secretary or the Registrar and Transfer Agent to enable prompt and appropriate response. Now, may I invite shareholders who have registered themselves as speakers to express their views and ask questions or give suggestions. Moderator, will you take over?
Mrs. H.S. Patel, she's not available in the meeting now, so we'll move on to the second shareholder, Mrs. Elizabeth Mascarenhas.
Hello? Am I audible? Hello.
Yes, ma'am. You are audible.
Yes, very good. Chairman, sir, Mr. Ramesh Damani, MD and CEO, Ignatius, you're smiling, no? Ignatius Navil Noronha, members of the board, my fellow shareholders attending this virtual meeting. I am Mrs. Celestine Elizabeth Mascarenhas. I am attending from Mumbai. First of all, I will offer my condolence to Mr. Ramesh Damani. Ramesh Damani, I offer my condolence on the demise of his great friend of 30 years, Rakesh Jhunjhunwala. May his soul rest in peace and eternal rest grant him, oh Lord, and may the souls of the faithful rest in peace.
Thank you.
With this, I will go ahead. I thank the Company Secretary, Ms. Ashu Gupta, and her team for sending me the annual report and also registering me as a speaker at my instance, and I thank you very much and giving me this platform to speak. The annual report is very informative and self-explanatory. Working is good. Even PBT and PAT is up. EPS is also up 24.95% as against last year of 17.99%. But no dividend. I would like to know when, in which year, we will be having dividend. After three years, we will be celebrating silver jubilee. On page 26 and 27, I see all the directors are in smile. I feel some positive thing will come out to the minority shareholders. Or to do our DMart, think of making being like Berkshire of Warren Buffett, which is DMart of India.
Only give higher and higher valuation. Anyway, the task is to you. Rest, I'll go to the next one. Congratulations for all the awards and accolades received in these tough times. Thank you so much. I also appreciate the CSR work done, and it is a great thing the work is done so well. Of course, I am very happy that we have very good credit ratings on our bonds and whatever it is, and also ESG initiatives are taken. I would like to know whether we have gone for rating and if rating, which agency and what is our score. My query is, we have 284 stores and 50 stores added. How many are fully owned and how many leased? How long it takes for a store to be viable, a year or some months? Number two, the percentage of online sales to total sales.
What is our market share in the retailing? Number three, what is the CapEx for the next three years and getting ready for silver jubilee for organic growth and inorganic growth by acquisition like many retailers have done, like BigBasket, Nature's Basket, et cetera. Rest, I think there are many people who want to speak. I support all the resolutions and wish our DMart team the best of health, because health is wealth. Mr. Mascarenhas, my husband is also shareholder, wants to say two lines.
Respected Chairman, sir. Am I audible?
Yes.
Respected Chairman, sir, members of the board, and my fellow shareholders. Good morning to you all. My name is Aloysius Mascarenhas. I'm the best wisher of our company. It is doing so well. Our market share is going up day by, and my only question is, we are flourishing in India. Are there any plans to set up stores like Walmart or anything abroad or Dubai and all? So this is my only question. Like Warren Buffett, we are doing very well. So three years down the line, we'll be completing silver jubilee. I expect a bonus if not dividend because dividend is not a practice, at least a bonus. With this, I wish you personally our Chairman and Board of Directors and more importantly all the employees all the very best in the days and years to come. With this sir, thank you very much.
Thank you so much sir. Thank you. Next we will request our next speaker shareholder Mr. Yusuf Rangwala to please proceed with the question. Mr. Yusuf, we would also request you to kindly turn on your camera for a better interactive experience.
Good morning sir. [Non-English content]
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[Non-English content] Sir, how we are celebrate it?
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[Non-English content] Yes sir, thank you very much. I will end my speech around this sir. Thank you very much. [Non-English content]
Thank you sir.
Thank you so much Mr. Yusuf. We would like to proceed with our next speaker shareholder. We have Mr. Rajendra Sheth.
Hello.
Yes, go ahead.
Hello, [Non-English content]
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Thank you.
Thank you so much, sir. We would like to proceed with our next speaker shareholder. That is Mr. K. Sadananda Shastri, but unfortunately, he couldn't be with us. Going ahead, we have Ms. Prakashini Shenoy. She is also not found in the list of attendees. Going ahead, we have Mr. Satish Shah. Mr. Satish, we request you to please turn on your camera for a better experience. Now you have been unmuted. Can we have your question, please? Mr. Satish, can we go ahead with your question, please? I believe he is not able to hear us, or there is some connectivity issue at his end. Going ahead with the next speaker shareholder, can we proceed with Mr. Anil Parekh?
Hello, am I audible?
Yes, sir.
I am not able to join through video, so I will continue with audio, Chairman, sir. First of all, I would like to extend my gratitude to all the board members, Mr. Ramesh Damani, and all the board members. Also, I would like to join with Mrs. Elizabeth Mascarenhas in giving my condolences to our big bull. He has demised these two days before, and he was a role model to all of us. Really, I am thankful to you for allowing me to speak that. Sir, under the circumstances, excellent performance as always, and I have never seen a single family who is not going to DMart for their daily needs. So it is because of our Founder Chairman's vision, and you all people have done excellent work that every family, at least one member is going every day in DMart.
Sir, my second request is kindly have a physical meeting next time when we have everything very well placed because we missed the essence of physical meeting, sir. Now, sir, to continue with my questions. Sir, on page number five, we have presence all over India, but we have missed eastern parts, all the eastern part, where we do not have a single presence. So please give me your views on that and when we are going to establish there our stores also.
Sir, then on page number nine, excellent all the financial performance indicators. I do not want to spell out that, and it is because of your dedicated efforts and all the board members have done excellent work. Sir, on page number 24, about corporate CSR activities. We are helping CanKids KidsCan Trust. That is very good. I have gone through the details. This is excellent work we are doing for cancer patients.
Sir, continue helping them. Sir, on page number 29, I would like to extend my wholehearted support to Ms. Ashu Gupta, and your CS team is doing excellent work, and we all are happy. Sir, my only one question is that why we are missing dividend in spite of the fact we are doing excellent work, and this is the time when you can reward the shareholder by declaring dividend. So please give me your justification on that. Sir, also our Avenue E-Commerce, Nahar Seth, and Reflect Wholesale, kindly give your views on that, what they are doing and what you are going forward with them. Sir, last question is, sir, on page 132, we have done related party transactions with Avenue Food Plaza. It is a negligible. Nahar Seth also negligible.
Reflect Wholesale, 7 Apple Hotels , Bombay Swadeshi , Derive Trading, Damani Estates, Khaitan & Co, and boutique hotels. Sir, are all these having a related party at arm's length or what? Please give me your views on how it will help us, our top line and bottom lines. Thank you for listening here. I'm supporting all the resolutions. Thank you, sir.
Thank you.
Thank you so much, Mr. Anil. Our next speaker shareholder is Ms. Lekha Shah. Unfortunately, Ms. Lekha couldn't join us with this meeting. Going ahead with our next speaker shareholder, we have Mr. Hasmukhl al Vora. Mr. Hasmukh, you have been unmuted. Can we have your video turned on for the question, please?
Yeah. Thank you. Am I audible, sir?
Yes, you are.
Thank you. Good morning to you all. First of all, my name is Hasmukh Vora from Mumbai. First of all, compliments to our MD and CEO, Sri Ignatius Noronha, because he is the architect of our expansion activities and for continuing increased profits, profitability. My thanks are also due to the secretarial team led by the Company Secretary, Sri Ashu Gupta. They have sent me all the information which are required, which enables me to speak at this meeting. Second thig is the results are excellent. There is increased sales and increased profits. I would like to know if the management can share with us, what you think is the estimated CAGR in sales and profits for the current year, FY 2022-FY 2023, and for FY 2023-FY 2024. The third thing I would like to know is about the publicity.
Nowadays, if we see the newspapers, we see a lot of newspapers by Reliance Jio. Our DMart is not absent. There are not very many advertisements. I would like to know what are the management views in this respect. I personally believe that if we do the publicity, it will increase our business. Next thing is consolidated PAT, profit after tax, is less than standalone PAT. Consolidated profit is INR 1,492 crores and standalone is INR 1,616 crores. It means our subsidiaries or associate companies have contributed negatively in our profits. I would like to know about the management views when these subsidiaries and associates will come into profit stage. Lastly, sir, thank you and all the best.
Thank you so much, Hasmukh-ji. Going ahead with the next speaker shareholder. On the list, we have Ms. Swaran Lata.
Hello, am I audible?
Yes, ma'am.
Okay. Good morning, Chairman, sir, Board of Directors, and the fellow shareholders attending the e-meeting. Congratulations to the management and all the staff for providing the excellent results during the COVID pandemic. Sir, I have full faith in the management, and I have no doubt in the financial statements of annual report. Most of the points have been covered in Chairman's speech, but I would like to know that in this improved scenario in domestic market after the pandemic, how will you reward the shareholders in the financial year 2023? Shall we expect a bonus issue or split of equity face value? Second, I want to know what steps has the board taken to monitor that shareholders' interests are being protected. Last, I would like to know that, sir, is there any discount scheme to be given to the shareholders on their purchase from DMart store?
Further in this regard, I would request the management, and especially to the CMD, sir, that please consider my request of a discount voucher to be issued to the shareholders or at least to the members who are attending the e-meeting as a token of love and affection. Thank you very much to the secretary for allowing me to put up my points in the meeting, and hope the management will continue to hold the AGM through VC in the future, which enables the shareholders residing far away places like me to interact with the management. Thank you.
Thank you so much, ma'am. Going ahead with the next speaker shareholder. We were supposed to have Ms. Rekha, but she couldn't join us. After that, we were supposed to have Mr. Suresh Chand Jain. He couldn't be with us either. Going ahead with the list of the registered speaker shareholders, we have Mr. Ravi Kumar Naredi. So Ravi, we are ready for your question. Can we have your video turned on, please? Has been unmuted.
Hello. Hello. Hello.
Yes, go ahead.
Pranam to Chairman, to our company, my investment guru, Ramesh-ji, fantastic performer MD, Mr. Noronha, honorable Board of Directors, the employees of company, fellow shareholder, and at last, Sri Radhakishan-ji Damani, promoter of company. Sir, it is good you have added 12 location of DMart Ready. Congratulations for same. Whatever store we are planning, we are not asking, but want to know at existing store, do you have any plan to expand space? If yes, how much percentage we may do? Secondly, Avenue E-Commerce result as on 31st March 2022, our loss for financial year 2022 is INR 142 crore. When we get break-even likely. Sir, how many employees as on 31st March 2022 and how much grew in financial year 2022 and what are plans for financial year 2023? Sir, you said in larger town top line is higher in spite of higher property prices.
How many larger towns are still left in India to open our stores? Sir, these 12 cities we are doing DMart Ready. Do we have any plan to open any brick or mortar store or will we skip that? Sir, revenue from sales per square feet is INR 27,454 in financial year 2022 versus INR 35,647 in financial year 2019. As we grew 176 to 284, is this INR 35,647 a dream only or may we achieve this? Last, can we opt for a billing system in store in such a way that those who want a scheme without waiting and DMart charges extra service, can we implement that? That is my question, sir. Thank you very much. All the best for everything.
Thank you so much, sir. Thank you. Next, we were supposed to have Ms. Vasudha Vikas Thakur on the list, but she couldn't join us. Going ahead, the next registered speaker shareholder with the question we have Mr. Bharat Moolchand Shah. Bharat-j i, may I have your video turned on for the question, please.
Hello, hello sir. [Non-English content]
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Hello. Hello sir. [Non-English content]
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I believe her connection was cut off. We would request, if at all she has any questions, she can definitely put them down in the email. Moving ahead with the next speaker, shareholder, we have Ms. Hutokshi Sam Patel.
Hello.
Yes, go ahead.
Hello.
Yes, we can hear you.
Thank you. Respected Chairman, Mr. Ramesh Damani, Mr. Noronha, I am a little unwell, so my voice is a little hoarse. Kindly forgive me. Mr. Noronha, MD CEO. Mr. Machado, the Director. Ramakant Baheti. Just hold on. Please hold on. Yes, sir. Respected Chairman and Reverend Board of Directors. Mr. Baheti, the CFO of the company, Group CFO. Mr. Niladri, the CFO of the company. Ashu Gupta, Company Secretary. I am very much thankful to both of them, Niladri Deb and Ashu Gupta, for giving me a very good annual report. Mr. Deb, sir, very good financial figures you have given. All the points are very self-explanatory, and very good report. Ashu Gupta, thank you very much for your annual report. Whole secretariat team has worked very hard to compile a good report. Ankit Agrawal has been very helpful. Ankit is very competent, very capable, and efficient person.
Whenever I trouble him with all the different questions in the annual report, he never gets angry. He is very humble, very polite, but very competent and capable. I also thank Anita Shetty also for this. The company this time, though, revenue, PAT, net profit margin, operating margin have all gone up. Return on networks is also up. Paid-up capital has increased, turnover has increased, EPS has increased, but income has come down. Cash and bank balance are both down. Bank balance is also down, cash in hand is also down. I do not know what is the reason for that. If anybody from the finance is able to answer this, please, I request. Inventory level has gone high up. Depreciation expense has also gone higher, and other expenses. These things could have been controlled. Investment level has increased.
All the profits that you have earned has gone into the investments. Sir, why is it so? We are also the shareholders. We also spend our hard-earned money in investing with DMart, and we are not getting any dividend. It is okay. We do not mind. But in the hard crucial times, it is the dividend on which many of our senior citizens depend. We have, of course, shares of other companies also, but each company is giving us a dividend. While you have not provided any dividend to us, the company does not do anything for the shareholders. I feel it in that way. See, first of all, you all do not have any factories, so there is no factory visit that other companies give us. They take us to different places every year. Of course, in two, three years, just because of COVID, it was not there.
Otherwise, every year, even pharmaceutical companies also take us. Other companies take us, pharmaceutical also has taken us to the factory visit. Then we have get together. Then they celebrate the Diwali by sending us sweet box, the Christmas time or the New Year, 1st January. Nothing is done. So no activity at all. Nothing good is done for the shareholders. Damani Sahib, do not be so stingy. I know you have daughters, but we also have children at home. We also have to look up to our children. So it is not good to be so stingy. Because share, we are with your shareholders also. You do not give dividend to us. You do not do any other good things to us. You do not even give us coupons. At least some concession coupons. We are getting coupons from Future people.
We are getting coupons from Reliance, from innumerable companies, we are getting coupons. No, it is not by law. No, law is applicable to everybody. Yet we are given, yet we are taken care of. Good care is taken for the shareholders by other companies. Why Damani? Why DMart is not taking good care of the shareholders? You know your share price has gone very up. That is one thing good for us. But at the same time, we cannot increase our portfolio. If you are having 20, 40, 50 shares, we cannot make it into 100 because the price has gone up INR 4,000. Today, the share price of the company is INR 4,436. This is the 22nd AGM, and the share price today is this, and you have not given any dividend to us. I strongly support all your resolutions, especially resolution number two and all other resolutions.
Your CSR activity has been very good. Impact assessment report given by the other company has been very good. So good CSR activities is done. Out of INR 32.23 amount, your company has already spent INR 31.29. Last year's amount has carried forward INR 0.94. This year again, the balance is becoming equal. However, the activities of the CSR has been very good by the company. When you can be so good with the people outside, from which you have no returns. I do not know why government is forcing the companies to have 2% of their profit to the CSR activities. People keep on producing and producing, especially for children. There is no investment done by anybody from that section into your company. However, I find that Retailers Association of India has invested 10,000 shares in our company. If you can throw some light on it, what is it?
Since when they are holding 10,000 shares in our company? Have we allotted them, or they have purchased the shares? If you can throw some light on it when you answer our questions. Year by year, you also provide 8% salary increase to your employees. That is very good note to think because at the COVID times, they are working hard. Really, they are working hard in your shop to increase your sale, to increase the sales purchase, everything. Good facility was provided by DMart in the crucial times of COVID. I really congratulate all your employees for their hard work. But sir, even consider us also. We also look up to you. Dividend is not there, but in other means, you can do good to us.
In that time, you should not say, "No, no, it is not by law." Law is applicable to all the companies, and yet they are doing good to the shareholders. They are doing immense good to the shareholders. Can I know at least two, three things of yours, what good you have done for the shareholders alone? DMart Company Secretary, Ashu Gupta-j i, you are a link between the shareholders and the company and the management directors. Why don't you convey our message to them? Tell Damani sir that it is not good to be so stingy. Give out even to the shareholders. We are investing back in the company. We are investing our hard-earned money back in the company. Others are investing. Are they getting anything in return? Give them in return.
When you are coming in the business, you also want profit in return, isn't it, Damani sir? We also are investing our money. We also want in return. That's all I have to say. I thank very much. Even the OAVM system has given opportunity to all the people from all whole of India to participate in this AGM. Also, I would like to give one more important point. AGM is meant for the shareholders, not for anybody else. Board meeting is meant for the directors, but AGM is meant only for shareholders.
Importance is to be given to both shareholders at the time of AGM. That's all. Thank you very much, Noronha-j i. Please, and Mr. Baheti sir, you are a Group CFO. See that you advise Mr. Damani for making good for the shareholders. Thank you very much, Mr. Damani sir, all the directors on the board, all the employees who have worked very hard. Thank you very much, and good luck to the company.
Thank you.
Thank you so much, ma'am. We would like to proceed with our next speaker shareholder on the list. We have Ms. Khushali Sanjay Agrawal. Khushali-j i, you have been unmuted, and can we have your video turned on for the question, please?
Yes, sir. Am I audible?
Yes, you are.
Thank you, management of Avenue Supermarts Limited for giving me this opportunity. I am Khushali Agrawal, and my question is, Avenue E-Commerce Limited, [Non-English content] . Thank you so much.
Thank you.
Thank you so much, Ms. Khushali. Proceeding with our next speaker shareholder, we have Mr. Ashok Kumar Jain. Ashok-j i, can we have your video turned on for a better interactive experience during the question, please?
Hello, I am audible, sir? Hello.
Yes.
Am I ready, sir?
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Good morning, Chairman sir, Board of Directors, and all private shareholders. I am Ashok Kumar Jain. I join the meeting from far away distance, Delhi. First of all, I thank the Secretary Department who helped me to join the meeting on e-portal.
Thank you, sir. [Non-English content] Thank you, sir.
Thank you.
Thank you, sir.
Thank you.
Proceeding ahead with our next speaker shareholder, we have Mr. Ashish Bansal. Ashish-j i, can we have your video turned on for the question, please?
Respectful Chairman and Board of Directors, you can hear my voice, sir?
Yes, sir.
Thank you so much. This is a wonderful year of performance and YouTube has shown how the [inaudible] challenge has come up. [inaudible] wonderful, you have shown in the YouTube performance. I just want to know page number 25, material is provided by government and its content. Are you involved in this, in the kitchen? Please write something about that. Just three to five years is completed IPO. Please print that script page 10 to five to one. For this, give 10 script and by page you cannot go because you have 75%. Like this you can print. Something you have to done with the shareholder. This speaker also said dividend is not given. This is okay, but something you have to given to the shareholder. Thank you so much.
Thank you.
Thank you so much. Going ahead with the next speaker shareholder, we have Ms. Sandhya Srivastav. Sandhya-j i, can we have your question, please?
Hello. Hello.
Yes.
Good morning, sir- ji. [Non-English content] Thank you.
Thank you.
Thank you so much, Sandhya-ji . Our next speaker shareholder is Mr. Arjun R. Vadher. Mr. Arjun, can we have your video turned on for the question, please? You have been unmuted.
Hello, sir.
Hello.
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[Non- English content]
Thank you, sir. [Non-English content]
Thank you sir. Thank you so much.
Thank you so much. Our next speaker shareholder is Mr. Raja M ohan. Sir, can we have your question with the video turned on, please?
Yes. Am I audible?
Yes, you are.
I am unable to turn my video on. Anyway, thank you for the opportunity, and congratulations on managing the extraordinary situation prevalent in the last two years. First, before my queries, I want to commence with a deep appreciation of the super CEO, as the Chairman himself stated. On your simple yet clean, value-based, erudite responses, especially in this year's investor call. I keep learning a lot about how to keep things simple, especially in this dynamic digital world, without any fanfare from your level. I think I need to thank Radhakishan Damani sir, too, for laying this basic culture, which spreads to all who connect with your super professional organization. Coming to my queries, I would like to get your views on Avenue E-Commerce basically from an expansion collaboration angle.
Would it remain an organic endeavor, or is there a window open to evolving any partnerships either with global technology giants or Indian food tech aggregators? Only on the Avenue e-commerce side from a longer term. This is especially when the online quick delivery model is growing at such a feverish pace. As a veteran, Navil, wanted your views on the operating of these fledgling companies in the quick commerce space, whether they will be able to sustain with this model into the future on financial parameters. Second was generally, on a trending basis, are you gaining more confidence of opening more stores every successive year than previously for the foreseeable future? Do you see saturation on this front not happening in the probably next 10 years or much longer statement years?
In this context, wanted to bring in a figure you had given two years back of the store potential in India, which in this investor call, you had extended it. You had said 1,500 store potential is there for DMart probably in a country like India over the long term. I wanted to understand what this long term is. Is it over 15 years or is it over 10 years? Also, does this potential number have possibilities of steady improvement, like the 1,500 current potential that you see, can that also increase with higher per capita modernization, infrastructure development of the country? The next question was basket values are going up structurally, especially post-COVID. With more larger stores, is the potential to improve margins at the operating level remain structural?
With your estimate of gross margins not exceeding 15%, which you again indicated in the investor call, what is the scope for the operating margins to increase from the current 8% levels? In this context, wanted to understand the sales per square feet. This is a query which I was not able to give along with my query list. Wanted to understand the structural trend in sales per square feet. On ROIC, which you consider to be the most important parameter. Looking at very old cohorts, you had indicated to inflation-level increase in sales being satisfactory for you as they come with much higher turnover per square feet. Does it mean that productivity increases and cost leverage are possible in such stores which grow at inflation-level top line and driving further operating leverage and higher ROICs? Generally, what is the firm's, DMart's, band of satisfactory ROIC?
My second last question was based on your track record. Connected to the previous question only. Based on your track record, have most of the very old cohorts been always able to grow at higher than the inflation level? The last question is, you indicated to new stores nowadays attaining to larger scale much quicker. On the positive side, does this lead to quicker cluster formation and thereby keeping the pedal on the operating leverage meter accelerating? Thank you for the opportunity and best wishes.
Thank you.
Thank you so much, sir. Proceeding with the next shareholder on the list, we have Mr. [Ramesh Shanker]. [Ramesh], can we have your video turned on for the question, please? Do you have-
One minute. One minute. One minute.
Yeah.
One minute, sir.
Yeah, sure, sir.
Hello.
Yeah.
One minute, brother.
Sir, it is okay if you cannot turn on your video. We can have you-
One minute, please.
Okay.
Hello? Hello?
Yeah, tell.
Hello.
[Ramesh], S ir, please go ahead with your question. We can hear you.
One minute, [Non-English content]
Your question without the video would be fine as well.
[Non-English content] Hello?
Yeah, please go ahead.
Hello? Hello? Hello, moderator. Hello, moderator?
Yes sir, we can hear you. Can we have your question, please?
Okay. I am seeing you.
Yes sir, we can see you. We can hear you. Can we have the question, please?
Okay. Thank you very much for giving this opportunity, moderator. Thank you very much. Sir, [Non-English content ].
I hear you sir.
[Non-English content]
Anyway, your question please, sir.
Hello sir, Ramesh Damani- ji. I am [Ramesh Golla], speaking from Hyderabad, sir.
Yeah।-
Very good morning to you, sir.
Thank you.
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[Non-English content] -first importance I am giving to only DMart sir.
Next, another. [Non-English content] Sir, that too we want to coupons sir [Non-English content] Why? Because sir are you not giving dividend. [Non-English content] Sir, that too I strongly asking sir bonus shares, please sir.
[Non-English content] Belated Happy Independence Day to you sir, our lovely sir Ramesh Damani sir and to your near and dear all directors sir. Please tell me to also sir. Please sir. Have a good day to you, sir.
Thank you so much, sir.
Thank you. Thank you, and Happy Independence Day to you too.
Thank you. Going ahead with the list of the speaker shareholders who we invited before but couldn't join for some reason. Going back on the list, we have Ms. Prakashini Shenoy.
Hello.
Ma'am, can you give video? May I have a video connection for the question? We can hear your voice.
Yeah. I am Prakashini Shenoy from Bombay. Respected honorable Chairman, other dignitaries of the board, and my fellow shareholders. Good afternoon to all of you. I received the annual report well in time. It is self-explanatory. I thank the Company Secretary and his team for the same. Sir, since I am the last speaker, many questions I wanted to ask, everything is covered. I have nothing to ask. I appreciate the speech of Chairman. Thank you, sir. I wish the company good luck for a bright future and pray God that the profit of the company shall reach to peak in due course. Sir, I support all the resolutions put forth in today's meeting. Thank you, sir.
Thank you so much, ma'am. We have one more speaker shareholder left. We proceed with Ms. Lekha Shah.
Hello. Can you hear me, sir?
Yes, I can.
Thank you, sir. Respected Chairman, sir. Board of Directors and my fellow members, good afternoon to all of you. Myself Lekha Shah from Mumbai. Sir, [Non-English content ], including me also. Sir, I wish you all the success and support all the resolutions. Thank you, sir.
Thank you.
Thank you so much, ma'am. Here we come to the end of the list of the speaker shareholders who registered for the questions. Over to the board for the answers, please.
Thank you. Thank you, Mr. Moderator. We have received all the comments and suggestions from the registered speakers. May I now request our MD, Mr. Navil Noronha, to respond to the questions raised by the speaker shareholders and those received by email thereafter.
Thank you so much, sir. Thank you so much, sir. I will take them one by one. On the first question on the dividend. The company is still in its growth phase, and we have been listed for five years now, and our priority is to utilize our funds for future growth, and we believe the board believes that this is the best way of deployment of our capital. The country has huge opportunity, and it is best to deploy. We are growing very well. Last year we had the highest number of store openings. It is best to deploy all our accumulated profits into future growth. But at the same time, the board reviews things like dividend or stock splits from time to time, and depending on what the board advises, we will notify all the shareholders from time to time.
On the question of how many owned versus leased, we have 39 leased properties out of 294. That is 13% of our stores. So 13% of our stores are leased. Then somebody asked about the time it takes to break even. It is not so simple. Not all stores break even at the same time. So depending on the area, region, the amount of money we have invested, break evens could take anything from one year to maybe even three years, five years. So it is very dynamic. But in general, overall, we are doing fine. Somebody asked about online sales. Approximately as per last financial year, online sales was 5% of the overall company's turnover. Then somebody asked about opening stores outside of India. We have not considered that yet. We are totally focused on India, and India is a humongous opportunity.
Retail has direct correlation with the population of the country. We are a 140 crore population country, and there is immense opportunity in this country. So we want to focus our attention on this country now, on India. Why not in east of India? We believe in the cluster strategy. We like to open more and more stores in the states that we are operating in. But that doesn't mean that we will not go to other parts of the country, but we will evaluate from time to time. In fact, somebody asked also about U.P. We are already in Ghaziabad and Noida, and we are looking for locations in U.P. also. Then somebody asked about what is our estimated turnover, PAT, all of that for this year and the year after that.
We maintain a position that we do not give guidance for the future, and we will just declare our quarter- on- quarter results, but we usually do not give any guidance. On a question on related party, all related party transactions are at arm's length. Just want to clarify that all related party transactions are at arm's length. Somebody also asked about break even for the e-commerce business and when will that happen. We cannot comment on that. The only assurance we give to all our shareholders is that our e-commerce business approach would be very measured. We will ensure that we do not lose too much of money in the e-commerce business. I have commented about this multiple times. We are working on a model that will ensure that we have a minimal drain. But on when will it break even, we have no view of it right now.
As of end of last financial year, we have 11,312 employees. Somebody had a question on that, just commenting on that. We are in 117 towns. Somebody had a question on how many towns is DMart in, 117 towns. Somebody asked about our views on quick commerce and what do we want to do there. We are a value retailer. Quick commerce focuses more on convenience. We believe that we understand value retailing better. Even on the e-commerce platform, we will focus on the value side of the business and not necessarily the quick side. That is our position on quick commerce, that we will not be interested in doing the quick 10-minute, 20-minute delivery commerce. Somebody asked a question on the midday meal program and how are we working on that.
The Akshaya Patra is an NGO which partners with the Government of India. They set up kitchens and supply midday meals to all municipal or government schools in that vicinity. This NGO, Akshaya Patra then ties up with corporates like us to build the CapEx and provide part of the subsidy for the meals. In that context, we have built one central kitchen in Rewari, which has been totally sponsored by DMart. That is what we are doing with the Akshaya Patra on the midday meal scheme. Somebody had a question on the store potential for the country. I have mentioned about this, that we have around, we could go up to 1,500 stores as an opportunity, 1,300 to 1,500. That is an opportunity right now.
Obviously, if the country's GAP grows and per capita incomes grow, all of that, this opportunity will keep on increasing over a period of time. This is an opportunity right now. That is what I meant by that 1,300 or 1,500 number of store potentials for DMart. On basket values going up structurally and hence the opportunity on how much of operating margin we should target for, I have commented on this multiple times. I am saying this again. We are focusing on not earning more than 15% gross margin. What happens below that is a function of market forces. We do not guarantee what operating margins we will be able to give or basis operating leverage, how much more operating margin we will earn. It is purely dependent on market forces. The question was on inflation and inflation-led growth in high throughput stores, very old stores.
Usually, in most situations, our stores which are very matured and are delivering very high turnover square feet, grow at the rate of inflation. Unless there is another DMart store that has opened in the vicinity, then obviously there will be a decline. Otherwise, these stores usually grow at the rate of inflation. You do get a very marginal operating leverage over a long period of time if this continues, because the costs do not grow at the same rate. Yes, there is a very creeping, not very large, but a very creeping operating leverage that sets in. There was a specific question on why deposits, the cash and bank balance has reduced. The decrease is due to short-term deposit redeeming of INR 1,050 crore during the year for operational requirements. This is a natural course of business.
Yeah, so just wanted to clarify that. Even inventory going up or depreciation increasing, this is all natural course of business because we opened 50 stores. So we had a 50 store addition in last financial year, and that is why each of these stores needs inventory. So from a financial year period, you will see a higher inventory, but it is natural course of business. Then there is a question on RAI has invested in ASL. I would like to correct that. RAI has not invested in ASL.
DMart has become a statutory shareholder in an association, a Section 8 company called Retailers Association of India, and I think Ms. Patel is referring to that. So it is we have subscribed to some shares to this Section 8 company and become a statutory board member to this association. I will now move on to the questions that were asked by email.
So there was this one question on why e-commerce prices and brick-and-mortar prices are different. They are not intentionally kept different. In fact, our prices are a factor of at what price we buy. Prices do change from time to time. So whether it is e-commerce or even amongst all stores, there could be situations when the price will be slightly different, very marginally different. So I just wanted to clarify that. That India, the way the relationships between retailers and manufacturers are, that we keep doing some promo or the other once in a while, which is over and above the prices at which we negotiate for the long term. So there will be a slight marginal impact on pricing, but that is purely based on what price we buy from manufacturer. Yeah, so there is no such thing of distinction of pricing between online and brick-and-mortar.
Our endeavor is to ensure the pricing is the same. Then there was a question on will we focus on Tier 1 versus Tier 2 versus Tier 3. We do not have any preference. The beautiful thing about the DMart model is that it is relevant in a metro, it is relevant in Tier 1, it is relevant in Tier 2, Tier 3. Yeah, so wherever we see opportunity, our business development teams, our real estate teams are scouting for properties across the states. Wherever we see an opportunity, we will open stores. Yeah. So there is no specific preference for any type of tier or population strata. Then there is a question on what are the components of miscellaneous expenses. These are primarily around the payment gateway charges, advertising expenditure, and other activities for employee engagement and all of that.
These are the broad heads of expenditure that come under the miscellaneous expenses. Then, there was just one question on number of employees to calculate the median salary. There, the number is different from what we report at end of the year. That is because to calculate median salary, the number of the employees defined as per the rule is employees for the full financial year. Yeah. So the number of employees for the full financial year are different from the number of employees at the end of the year.
That is why the difference. Then there was a question on I will just read the question because it is a bit complicated. We refer to the note number 31 on page 186 of annual report for financial year 2022, depreciation and amortization expense. We observed that the company has capitalized expenses of INR 3.84 crore in the financial year 2021-2022.
Request you to help in understanding the nature of this capitalized expense. The response to that is amortization of leasehold land pertaining to sites not opened as on 31 March is capitalized and excluded from depreciation of INR 3.84 crore in financial year 2021-2022. I think I am done, sir. Ramesh, sir. I am done.
Sure. Thank you, Navil, for your comprehensive answers. I now wish to draw the attention of all members participating in the AGM to the e-voting platform provided by NSDL, which will remain open for 15 minutes after the conclusion of the AGM for voting on the agenda items as set out in the notice of the AGM. Mr. Himanshu Kamdar, scrutinizer, she has submitted report to the company on the votes cast through remote e-voting conducted prior to the AGM and e-voting at this AGM. The combined result of e-voting along with the scrutinizer's report will be declared and uploaded on the company's website, www.dmartindia.com, immediately on receipt of the scrutinizer's report, which will be within two working days from the conclusion of this meeting. On behalf of the Board of Directors, I wish to thank the members for participating in the AGM and the continuous support of the company.
I also, on behalf of the board, would like to thank the promoter family for their constant support and insights into the company. I also thank the other directors for joining the meeting remotely. The meeting is now concluded. I may hereby declare the proceedings of Avenue Supermarts Limited 22nd annual general meeting is closed. I authorize Mr. Ashu Gupta to conduct the voting procedure and conclude the meeting. With your consent, I and other board members would now like to take your leave. Thank you all very much for joining us. Thank you, sir. Can we sign out now, all of us? Thank you, guys.
Thank you.
Thank you.
Thank you.
Thank you. Ashu, over to you.
Thank you.