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Download Annual Report PDF Format 2014 | 2013
Directors Report Year End : Mar '13    «
Dear Members,
 
 The Directors are pleased to present the 6th Annual Report of your
 Company together with the Audited Statement of Accounts for the
 financial year ended 31st March 2013.
 
 SCHEME OF ARRANGEMENT BETWEEN THE COMPANY AND FUTURE RETAIL LIMITED
 
 In the year under review, your Board of Directors had approved
 acquisition of Pantaloons Format Business (Demerged Undertaking) of
 Future Retail Limited (FRL)(earlier known as Pantaloon Retail (India)
 Limited) by way of demerger through a Scheme of Arrangement under
 Sections 391-394 of the Companies Act, 1956 between FRL, the Company,
 and their respective shareholders and creditors and Indigold Trade and
 Services Limited(ITSL) (as the shareholder of the Company) (the
 Scheme).
 
 The demerger of the Demerged Undertaking will expand the variety of the
 Company''s offering in the market and complement its existing portfolio.
 Further, it will enable wider distribution of products and give a wider
 choice to the consumers and enable business to build on their systems
 and processes to improve efficiencies. The stores operating under the
 brand name Pantaloons and derivatives thereof would remain operational
 and the Company will carry the same brands.
 
 Hon''ble Competition Commission of India and Hon''ble High Court of
 Bombay vide their order dated December 21, 2012 and March 1, 2013
 respectively had approved the Scheme. On receipt of all the requisite
 approvals required and on completion of the Conditions Precedent listed
 in the Scheme, the Board of Directors of your Company in their meeting
 held on April 08, 2013 made Scheme effective on April 8, 2013
 (Effective Date). Accordingly, the entire Demerged Undertaking was
 transferred to and vested in your Company w.e.f July 1, 2012 (Appointed
 Date).
 
 CHANGE OF NAME
 
 In terms of the Scheme, the name of the Company was changed from Peter
 England Fashions and Retail Limited to Pantaloons Fashion & Retail
 Limited.
 
 CHANGE IN REGISTERED OFFICE
 
 The Registered office of the Company was changed from A-4, Aditya
 Birla Centre, S.K.Ahire Marg, Worli , Mumbai, 400 030 to 701-704, 7th
 Floor, Skyline Icon Business Park, 86-92, Off. Andheri-Kurla Road,
 Marol Village, Andheri (East), Mumbai -400059, India.
 
 CHANGES IN SHARE CAPITAL
 
 Pursuant to the Scheme the Authorised Equity Share Capital of the
 Company was increased from Rs. 10 Crore to Rs. 100 Crore.
 
 Upon this Scheme coming into effect, in consideration of the transfer
 of the Demerged Undertaking, your Company allotted 1 Equity Share of
 Rs. 10/- each credited as fully paid in the capital of the Company to
 all the Equity Shareholders whose name appeared in the records of FRL
 or as beneficiary in the records of the depositories of FRL in respect
 of the shares of FRL on April 18, 2013 (the Record Date), for every 5
 (five) fully paid up FRL Equity Shares/FRL DVRs held by them in FRL
 (the Share Entitlement Ratio). Accordingly, total of 4,63,16,518
 Equity Shares of the Company were allotted to the shareholders of FRL
 on April 19, 2013.
 
 CONVERSION OF OPTIONALLY FULLY CONVERTIBLE DEBENTURES INTO EQUITY
 SHARES
 
 During the period under review, the Board of Directors of the Company
 had approved issuance of 800 OFCDs of Rs. 1,00,00,000 each of the
 Company, to ITSL, convertible into 4,59,77,011 Equity shares of Rs.
 10/- each on effectiveness of the Scheme.
 
 Accordingly, on April 8, 2013, the said OFCDs were converted into
 4,59,77,011 Equity shares of Rs.10/- each on effectiveness of the
 Scheme.
 
 OPEN OFFER
 
 As on March 31, 2013, the Company was a wholly-owned Subsidiary of
 Indigold Trade and Services Limited (ITSL), a wholly owned subsidiary
 of Aditya Birla Nuvo Ltd. (ABNL), a Aditya Birla Group Company with
 revenue size of US$ 4.5 billion.
 
 Pursuant to the Scheme, ITSL and ABNL made Open Offer to shareholders
 of the Company for acquiring 23,114,868 Equity Shares representing
 24.91% of Voting Capital of the Company.
 
 On completion of Open Offer, ITSL along with ABNL acquired 1,65,79,185
 Equity Shares of Rs.10/- each constituting 17.87% of post issue paid up
 capital of the Company. Accordingly, ITSL holds 67.95% Equity Share and
 Voting Capital of the Company as on date.
 
 LISTING OF EQUITY SHARES OF THE COMPANY
 
 Pursuant to the Scheme, the Equity Shares were proposed to be listed on
 the BSE Limited and National Stock Exchange of India Limited.
 Accordingly, the Company had made application for seeking exemption
 from SEBI under the SEBI Circular SEBI/CFD/SCRR/01/2009/03/09 dated
 September 3, 2009.The Company has received the Listing approval on July
 15, 2013. Accordingly, the trading of the Equity Shares of the Company
 has commenced on July 17, 2013.
 
 FINANCIAL PERFORMANCE
 
 Your Company''s financials for FY 2012-13 include nine months financials
 of Pantaloons Format Business transferred to the Company with effect
 from the Appointed Date, i.e., July 1, 2012. Hence, to that extent,
 your Company''s performance is not comparable with that of previous
 year.
 
                                                           (Rs. Crore)
 
 Particulars                                      2012-13     2011-12
 
 Revenue                                             1285          18
 
 EBITDA                                               129           2
 
 Less : Finance Cost                                  144           0
 
 EBDT                                                 (14)          2
 
 Depreciation                                          54           0
 
 Earnings before Tax                                  (69)          2
 
 Less : Provision for Taxation (Net)                    -           1
 
 Net Profit / (Loss)                                  (69)          1
 
 REVIEW OF PERFORMANCE
 
 Your Company reported revenue at Rs. 1285 Crore during fiscal 2012-13.
 The Company opened 6 new Pantaloons stores and 3 Pantaloons Factory
 Outlets during the nine months ending 31st March 2013.
 
 Gross margin was sustained, however, moderated sales growth and higher
 retailing costs impacted EBITDA margin. Change in the accounting
 policy, for instance, with respect to Lease rental straight lining,
 also lowered profitability.
 
 It is pertinent to note that in terms of the Scheme the conduct of the
 Demerged Undertaking was managed by FRL on behalf of the Company till
 the Effective Date (i.e April 8, 2013) in the ordinary course of
 business.
 
 MANAGEMENT DISCUSSION & ANALYSIS REPORT
 
 The Management Discussion and Analysis Report, is prepared in
 accordance with the requirements laid out in Clause 49 of the Listing
 Agreement and forms part of this Annual Report.
 
 DIVIDEND
 
 In view of the loss for the year under review, your Directors do not
 recommend payment of any dividend for the financial year 2012-13
 
 FINANCE
 
 Your Company continues with various initiatives for bringing down the
 cost of borrowings which includes application of short-term instruments
 like commercial paper, working capital demand loans within working
 capital borrowing, long term loans for expansion at competitive terms,
 so as to have funds at competitive cost.
 
 Pursuant to the Scheme, debt of Rs. 1600 Crore at an interest rate of
 -13% was transferred to the Company. With a view to optimise the
 Finance Cost, it was decided to reshuffle the debt portfolio.
 Accordingly, post effectiveness of the Scheme, the Company raised term
 loans of Rs. 600 Crore and Non-convertible Debentures of Rs. 300 Crore
 and re-paid Rs. 800 Crore out of the transferred debt.  The average
 interest rate of long term debt portfolio got reduced to ~ 10.2%.
 
 FIXED DEPOSITS
 
 During the year under review, the Company has not accepted any deposit
 under section 58A of the Companies Act, 1956 read with Companies
 (Acceptance of Deposits) Rules, 1975.
 
 As on 31st March 2013, there were no deposits which were unclaimed and
 due for repayment.  
 
 HOLDING COMPANY
 
 As on March 31, 2013, the Company was a wholly-owned Subsidiary of
 Indigold Trade and Services Limited (ITSL), a wholly owned subsidiary
 of Aditya Birla Nuvo Ltd. (ABNL), a Aditya Birla Group Company with
 revenue size of US$ 4.5 billion.
 
 Post-Scheme of Arrangement, the holding of ITSL in the Company stood at
 50.09%.
 
 Pursuant to the Scheme, ITSL and ABNL made Open Offer to shareholders
 of the Company for acquiring 23,114,868 Equity Shares representing
 24.91% of Voting Capital of the Company.
 
 On completion of Open Offer, ITSL along with ABNL acquired 1,65,79,185
 Equity Shares of Rs.10/- each constituting 17.87% of post issue paid up
 capital of the Company.
 
 Accordingly, ITSL holds 67.95% Equity Share and Voting Capital of the
 Company as on date. 
 
 SUBSIDIARY COMPANY
 
 The Company does not have any subsidiary as on March 31, 2013 and as on
 date of this Report.  
 
 DIRECTORS
 
 During the period under review, the Board inducted Mr. Anil Rustogi,
 Mr. Devendra Bhandari and Mr. Manoj Kedia as Additional Directors of
 the Company on April 30, 2012. They resigned from the office of
 Director w.e.f April 19, 2013. We place on record our deep sense of
 appreciation for the services rendered by them.
 
 Further, on April 19, 2013, Mr. P Murari, Mr. Bharat Patel and Dr.
 Rakesh Jain were appointed as Additional Directors on the Board of the
 Company. They hold office upto the conclusion of the forthcoming Annual
 General Meeting. We seek your support in confirming their appointment
 as directors liable to retire by rotation.
 
 As per Article 106 of the Articles of Association of the Company, Mr.
 Sushil Agarwal and Mr. Pranab Barua retire by rotation in the
 forthcoming General Meeting. Both of them being eligible seek
 re-appointment.
 
 Brief particulars of Mr. Murari, Mr. Patel, Mr. Agarwal, Mr. Barua and
 Dr. Jain are annexed to the Notice of the Annual General Meeting in
 accordance with the Listing Agreement entered with the Stock Exchanges.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 The financial statements are prepared in accordance with the Accounting
 Standards issued by the Institute of Chartered Accountants of India and
 the requirements of the Companies Act, 1956 to the extent applicable to
 us. There are no material departures from prescribed accounting
 standards in the adoption of the accounting standards.
 
 The Board of Directors of the Company accepts responsibility for the
 integrity and objectivity of the financial statements. The Accounting
 Policies used in the preparation of the financial statements have been
 consistently applied except as otherwise stated in the notes to
 accounts accompanying relevant tables.
 
 The estimates and judgements related to the financial statements have
 been made on a prudent and responsible basis, in order that the
 financial statements reflect in a true and fair manner the form and
 substance of transaction and responsibly present our state of affairs
 and accounts for the year.
 
 We have taken sufficient care to maintain adequate Accounting records
 in accordance with the provisions of the Companies Act, 1956, to
 safeguard the assets of the company and to prevent and detect fraud and
 other irregularities.
 
 CORPORATE GOVERNANCE REPORT
 
 The Company has been adhering to Corporate Governance requirements as
 set out under Clause 49 of Listing Agreement. The Company has been
 following the best practices of good Corporate Governance and have
 taken adequate steps to ensure compliance with clause 49 of Listing
 Agreement as laid down by the Stock Exchanges.
 
 The Report on Corporate Governance as stipulated under Clause 49 of
 Listing Agreement forms part of the Annual Report.
 
 HUMAN RESOURCE
 
 The Human Resource philosophy and strategy of your Company is
 structured to attract and retain the best talent that encourages
 innovation and creates a work environment of inspiration, creativity
 and passion. This strategy has, through strong alignment with your
 Company''s vision, mission and values successfully built and sustained
 your Company''s standing as one of India''s most admired and valuable
 corporations despite unrelenting competitive pressures.
 
 EMPLOYEES STOCK OPTIONS (ESOPs)
 
 The grant of stock options to employees is a mechanism to align the
 interest of employees with those of the Company, to provide them with
 an opportunity to share the growth of the Company and also to foster
 the long-term commitment.
 
 Accordingly in terms of the Securities and Exchange Board of India
 (Employees Stock Option Scheme and Employees Stock Purchase Scheme)
 Guidelines, 1999 Guidelines, your Company has constituted a ESOP
 Compensation Committee comprising majority of independent directors for
 formulating the detailed terms and conditions of the scheme to be known
 as the Pantaloons Employee Stock Option Scheme - 2013 (the ESOS -
 2013 or the Scheme) and administering and supervising the
 implementation of the Scheme.
 
 Vide its resolution dated July 22, 2013, your Company has formulated
 and designed Pantaloons Employees Stock Option Plan Scheme - 2013 for
 its employees and proposes to grant options in accordance with SEBI
 Guidelines, as amended.
 
 Resolution seeking your approval for issue of ESOPs shall be placed in
 the forthcoming Annual General Meeting.
 
 PARTICULARS OF EMPLOYEES
 
 In terms of the provisions of Section 217(2A) of the Companies Act,
 1956 read with Companies (Particulars of Employees) Rules 1975, as
 amended, the names and other particulars of employees are set out in
 the Annexure to this Report. However, having regard to the provisions
 of Section 219(1 )(b)(iv) of the said Act, the Annual Report excluding
 the aforesaid information is being sent to all the members of the
 Company and others entitled thereto. The said information is available
 for inspection at the Registered office of the Company during its
 working hours. Any member interested in obtaining such particulars may
 write to the Company Secretary at the Registered Office of the Company.
 
 AUDITORS AND AUDITORS'' REPORT
 
 M/s. S.R. Batliboi Co & LLP, Chartered Accountants, Statutory Auditors
 of the Company hold office until the conclusion of the forthcoming
 Annual General meeting and are eligible for re-appointment.
 
 The Company has received letter from them to the effect that their
 re-appointment, if made, would be within the within the prescribed
 limits under Section 224(1 B) of the Companies Act, 1956 and that they
 are not disqualified for re-appointment within the meaning of Section
 226 of the Act.
 
 The Notes to the Financial Statements are self-explanatory and do not
 call for any further comments.
 
 SUSTAINIBILITY DEVELOPMENT AND BUSINESS RESPONSIBILITY REPORT
 
 Sustainability Mission of your Company has been detailed in the
 Sustainability Development Synergizing Growth with Responsibility
 Section which forms part of this Annual Report.
 
 In line with our Sustainability Mission, it is our continuous endeavour
 to evaluate steps towards responsible sustainability. The Company is in
 process of devising the Processes, in a manner that will take care of
 the social and environment concerns. Since, the Pantaloons Format
 Business has been transferred in the Company only on April 8, 2013; the
 Company shall take steps towards these Principles during the course of
 the Financial Year 2013-14.
 
 In line with its Sustainability Mission and Clause 55 of the Listing
 Agreement, your Company has adopted Principles under all the enshrined
 Principles.
 
 Accordingly, your Company shall publish detailed Business
 Responsibility Report from the next year. 
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
 
 The Pantaloons Format Business of the Company has been transferred to
 the Company w.e.f. July 1, 2012 on April 8, 2013. Therefore, the
 Company does not have anything to report in terms of steps taken during
 the period under review. However, the Company is in the continuous
 process of evaluating various energy conservation measures through
 improved operational and maintenance practices to conserve energy
 across all its operations.
 
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 Foreign Exchange outgoing and earnings are stated on page 54 and 55
 respectively in the notes to the Balance Sheet and Profit and Loss
 Account. The Company earned t 780 Lakhs in foreign currency from Export
 of Goods. Foreign Exchange outgo was Rs. 114 Lakhs.
 
 ACKNOWLEDGEMENTS
 
 We thank our customers, vendors, investors and bankers for their
 continued support during the year.  We place on record our appreciation
 of the contribution made by our employees at our levels.  Your
 Directors hereby state that the Company has devised proper system to
 ensure compliance of all laws applicable to the Company. Your Directors
 also place on record their gratitude for the continuing support of
 Shareholders, bankers and Business associates at all levels. Your
 Directors also appreciate the commitment of the executives, staff and
 workers of the Company.
 
                          For and on behalf of the Board of Directors,
 
 Place : Mumbai                                          Pranab Barua
 
 Date : July 22, 2013                                        Director
Source : Dion Global Solutions Limited
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