The country of India whose functional currency is Rupees is home to a large chain of fixed-price discount stores called Daily Mart, which sells…

The country of India whose functional currency is Rupees is home to a large chain of fixed-price discount stores called Daily Mart, which sells ambient goods at a fixed price of 99. Fixed-price discount chain focus on unbranded commodity goods that they purchase from a number of small suppliers (apart from almonds which they import from California, US), of which these Daily Mart Stores are the most important customers. The products they sell have low profit margins and minimal overheads, and their target price is set. The products are typically functional, standardised, and undifferentiated. Daily Mart in order to minimise the overhead cost (in light of target price, to push the margins) working on efficiency and effectiveness. To achieve this, the company has strategically invested in automation and advanced technology. It has recently imported 4 advance level machines for printing and labelling on items or packing thereof from Japan which were directly entered for home consumption. These state-of-the-art machines are designed to enhance the speed and precision of printing and labeling on various items and packaging materials. By integrating these advanced machines into its operations, Daily Mart aims to streamline production processes, reduce labour dependency, and minimize wastage, ultimately leading to improved cost efficiency. Daily Mart has imported four high-tech printing and labeling machines from Japan and the cost structure for these machines includes various components. The price of raw materials amounts to 1,500 thousand Japanese Yen. In addition, processing charges incurred for these machines stand at 300 thousand Japanese Yen. Other expenses associated with the import are estimated at 90 thousand Japanese Yen. Furthermore, the usual profit margin considered in the cost structure is 150 thousand Japanese Yen. The cost of transport for bringing these machines to their destination is 60 thousand Japanese Yen. However, the cost of insurance for the machines is not ascertainable at this stage. The exchange rates applicable for conversion can be referred to in Annexure 1. As mentioned earlier, Daily Mart is striving towards effectiveness and efficiency; for this they are working in sync of system, strategy, staff, skill etc. The Management Accountant of Daily Mart had experience of using 7S framework and exited to apply the same framework at Daily Mart to support the drive for efficiency and effectiveness. She made a presentation to C-suite. CEO is convinced with utility that 7S framework is capable to produce, but has queries regarding the application of Mckinsey 7S; moreover, skeptic about; how Daily Mart going to get maximum out of 7S; MD of Daily Mart who is Operation Engineer by education qualification expressed his contentions about 7S in response. As a result of a prolonged economic downturn in the neighbour country Bangladesh, 'Everything at 99' bargain stores also have grown therein; which Daily Mart is aware of. At present, there are four major retail chains operating under the 99pricing model. These include Retail 99, Club Basket 99, Daily Shopee 99, and Quick Buy 99, each catering to budget-conscious consumers seeking affordable shopping options. Quick Buy 99 out of four stated above started its operations back in April 2023, while other three has been operating for more than 5 years, Retail 99 is oldest one. Year wise total revenue (converted using appropriate exchange rate in Lacs) of all four main discount fixed-price chains operating in Country Bangladesh is calculated. For the financial year 2024-25, the combined revenue of these chains reached - 2,260 lakhs. In the F.Y. 2023-24, the total revenue stood at 2,100 lakhs, reflecting steady expansion in the market. Meanwhile, in F.Y. 2022-23, the revenue was recorded at 1,450 lakhs, indicating a substantial increase in subsequent years. These four chains' stores are typically located on the main streets of cities and villages with high rates of economic distress. There are vacant stores in many of these cities and towns that may be rented for a reasonable price. These stores can now be rented for a relatively short fixed-term lease from landlords who previously demanded hefty rents and asking for lengthy leases. These 'Everything at 99 store chains' in Bangladesh promote their expansion intentions through various means. Only a few weeks pass before one of the businesses announces intentions to open many new stores around the nation. Given the rise of fixed-price discount stores in Bangladesh, Daily Mart is thinking about getting into this/market. Therefore, a brand awareness survey in Bangladesh was recently commissioned by Daily Mart. According to the survey's findings, respondents who work in the retail consumer products industry had a fair amount of knowledge about Daily Mart. The majority of these respondents accurately recognised the business as a major player in the Country India and a discount fixed-price enterprise. However, only 10% of respondents had heard of Daily Mart among ordinary consumers. On the other hand, over 85% of the respondents knew either or all the four fixed-price ‘Everything at 99' discount shops that are now operating in Country Bangladesh. The Daily Mart generates 24 crores in income in F.Y. 2024-25. Because of its cash reserves, it might be able to lease a sizable number of stores in Country Bangladesh and build a solid reputation in the marketplace. Competencies in efficient supplier management and selection, backed by efficient procurement procedures, have been acknowledged. One of the company's main advantages is its logistical systems and procedures. The success of Daily Mart can be attributed to its diversified and dedicated management team, whose collective expertise and strategic vision has been instrumental in driving the company forward. With vast experience across various domains such as retail operations, supply chain management, finance, marketing, and technology integration, the leadership team has successfully navigated market challenges while capitalizing on emerging opportunities. One of the key strengths of Daily Mart's management is its proactive approach to innovation and cost optimization. By continuously analyzing consumer trends, implementing advanced technology, and refining operational efficiencies, the team ensures that the company remains competitive in the dynamic retail landscape. Their hands-on decision-making, customer-centric strategies, and focus on sustainable growth have enabled Daily Mart to maintain a strong foothold in the market. Additionally, the management fosters a culture of adaptability and teamwork, ensuring that employees at all levels are aligned with the company's vision. This collaborative and forward-thinking approach has played a pivotal role in expanding the business, strengthening supplier relationships, and enhancing customer satisfaction, further solidifying Daily Mart's position as a market leader. Ms. Ambika recently appointed as additional director. Mr. Dehra, who is also Director on board of Daily Mart went to abroad for 6 months for attending a short-term executive course on business management, in his place Mr. Dun is appointed as alternate director in the manner as specified in Articles of Association. Mr. Dehra is going to retire at 22nd AGM i.e. the upcoming AGM. Mr. Dehra returned back to India after his course. In Bangladesh, there are also a lot of traditional grocery stores. The biggest of these generates - 8.50 crores in revenue annually (translated using the relevant currency rate). Out-of-town locations are becoming more and more popular among Bangladesh supermarkets since they enable the establishments to stock a greater variety and volume of goods. There is enough of parking for customers, and it is not too difficult for delivery cars to get to these locations. Most supermarkets carry a large variety of ambient goods in addition to nonambient items, frequently with competing brands available. Nevertheless, the cost of these items varies, and no supermarkets have yet to implement the fixed-price discount sales strategy. The big grocery chains generally compete with one another and don't give the 'everything at 99' discount stores much thought. Many supermarkets also offer online home ordering platforms, which allow consumers who are unable or unable to visit the store to have their orders delivered (generally for a fair delivery charge ranging - 25-50 per order). Daily Mart also sells the retail packing (of 100 grams, at 99) of almonds, which they import from California, US. Daily Mart owes a California based almond trader/exporter $10,000 due in 3 months' time. The spot exchange rate is (₹ / $) 85.7812 - 85.9345. Mr. Krishnan who is MD of Daily mart during the year executed certain transactions involving foreign exchange beyond the limits permitted, therefore recently received an order along with penalty notice under the Foreign Exchange Management Act, 1999 which he failed to pay. Daily Mart has recently introduced a newly developed product line featuring innovative designs and intricate handcrafting techniques. It enters into a contract to sell a product to Max Retail for a total consideration of 1,21,000, which is payable 24 months after the date of delivery. Max Retail obtains control of the product at contract inception. The contract permits Max Retail to return the product within 90 days. The product being sold is entirely new to the market, which presents a significant challenge in terms of estimating potential returns. Daily Mart has no prior sales history for this particular product, nor does it have access to comparable industry data or market benchmarks that could help forecast the return behavior of customers. In the absence of such data, the entity is unable to make a reliable estimate of the expected returns. The cash selling price of the product is 1,00,000 which represents the amount that the customer would pay upon delivery for the same product sold under otherwise identical terms and conditions as at contract inception. The entity's cost of the product is 80,000. The contract includes an implicit interest rate of 10 per cent (i.e. the interest rate that over 24 months discounts the promised consideration of 1,21,000 to the cash selling price of 1,00,000). Annexure 1 - The exchange rate between Rupees and Japanese Yen (₹ / ¥): Notified by On the date of filing of Bill of Entry On the date of arrival of vessel RBI (FBIL) 56.75 55.20 CBIC 57.05 55.50 Annexure 2 - Currently prevailing interest rate per annum in India and US are as follows: Borrowing Deposit India 8% 6% US 4% 3.2% Note - Ambient goods include things like stationery, small plastic items, cleaning supplies and specially packed consumables, which can be kept at room temperature and don't require any special storage facility.