The Directors are pleased to present the Seventh Annual Report of your
Company together with the Audited Statement of Accounts for the
financial year ended 31st March, 2014.
During the year, business invested in organisation building, stores
expansion, people and processes. The Company opened 14 new Pantaloons
stores and closed two stores during the year.
The Company reported revenue at Rs. 1,661 Crore during fiscal 2013-14.
Merchandise availability issue and subdued consumer sentiments impacted
the sales growth. Gross margin improved year on year owing to improved
product mix and better pricing. However, bottom-line was strained,
reflecting full effect of organisation building costs compared to
allocation of costs till last year. The Company posted EBITDA excluding
other income at Rs. 33 Crore as against Rs. 66 Crore during last year.
(Rs. in Crore)
Particulars 2013-14 2012-13
Revenue 1,661 1,285
EBITDA* 39 129
Finance cost 117 144
EBDT (79) (14)
Depreciation 109 54
Earnings before tax (188) (69)
Provision for Taxation
Net Profit/(Loss) (188) (69)
Includes other income of Rs. 5 Crore (Previous year: Rs. 63 Crore)
The Company''s financials for 2012-13 include nine months financials of
Pantaloons business transferred to the Company with effect from the
appointed date, i.e., 1st July, 2012. Hence, to that extent,
performance is not comparable with that of the current year.
Scheme of Demerger
During the year under review, the Scheme of Arrangement under Sections
391-394 of the Companies Act, 1956, entered into between Future Retail
Limited (earlier known as Pantaloon Retail (India) Limited) (FRL),
the Company and their respective shareholders and creditors and
Indigold Trade and Services Limited (ITSL) (as the shareholder of the
Company), regarding the demerger of the Pantaloons Format Business
(Demerged Undertaking) of the FRL (Scheme), was made effective by
us (i.e. the Board of Directors of your Company), in our meeting held
on 8th April, 2013 (Effective Date), after receipt of all the
requisite approvals and on completion of all the conditions precedents
enumerated in the Scheme. Accordingly, as per the terms of the Scheme,
the entire Demerged Undertaking was transferred to and vested in your
Company w.e.f. 1st July, 2012 (Appointed Date under the Scheme).
In terms of the Scheme,
- the name of the Company was changed from Peter England Fashions and
Retail Limited to Pantaloons Fashion & Retail Limited; and
- the Authorised Equity Share Capital of the Company was increased from
Rs. 10 Crore to Rs. 100 Crore.
Effectiveness of the Scheme
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 of FRL (as per the information available as
on 18th April, 2013 i.e. the Record Date), for every 5 (five) fully
paid up FRL Equity Shares/FRL DVRs held by them (the Share Entitlement
Accordingly, total of 4,63,16,518 Equity Shares of the Company were
allotted to the shareholders of FRL on 19th April, 2013.
Also, the 800 OFCDs (Optionally Fully Convertible Debentures) of Rs.
1,00,00,000 each of the Company, issued by your Company to ITSL, which
were convertible into 4,59,77,011 Equity shares of Rs. 10/-each, on
effectiveness of the Scheme, were converted into 4,59,77,011 Equity
shares of Rs. 10/- each of the Company on 8th April, 2013.
Categorywise shareholding pattern of your Company, as on 31st March,
2014, is separately provided under the Shareholding Information Section
of this Annual Report.
Also, pursuant to the terms of the Scheme, ITSL and Aditya Birla Nuvo
Limited (i.e. Ultimate Holding Company of your Company), made an Open
Offer to the shareholders of the Company, for acquiring 2,31,14,868
Equity Shares representing 24.91% of Voting Capital of the Company.
On completion of Open Offer, ITSL alongwith ABNL acquired 1,65,79,185
Equity Shares of Rs. 10/- each constituting 17.87% of post issue paid
up capital of the Company.
Change of Registered Office
The Registered office of the Company was also changed from A-4, Aditya
Birla Centre, S. K. Ahire Marg, Worli, Mumbai 400 030, Maharashtra,
India to 701-704, 7th Floor, Skyline Icon Business Park, 86-92, Off.
Andheri-Kurla Road, Marol Village, Andheri (East), Mumbai 400059,
Listing of Shares on Stock Exchanges
During the year, the Equity Shares of the Company also got listed on
BSE Limited (BSE) and National Stock Exchange of India Limited
(NSE) on 17th July, 2013 and accordingly, provisions of the Equity
Listing Agreement as entered into with BSE and NSE, became applicable
from such date.
Management Discussion and Analysis Report
As stipulated under Clause 49 of the Equity Listing Agreement entered
into with BSE and NSE, the Management Discussion and Analysis Report,
for the year under review, is provided in a separate section forming
part of this Annual Report.
In view of the loss for the year under review, your Directors do not
recommend payment of any dividend for the financial year 2013-14.
Pursuant to the Scheme, a debt of Rs. 1600 Crore was transferred to the
Company with huge interest burden. 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 loan of Rs. 600
Crore and Non-convertible Debentures (NCDs) of Rs. 300 Crore and repaid
Rs. 800 Crore out of the transferred debt.
Your Company continues to explore various options for bringing down the
cost of borrowings and also for procuring funds at competitive cost
which inter-alia include availment of short-term instruments like
commercial paper, working capital borrowing, long term loans for
expansion at competitive terms. The average interest rate of long term
portfolio got reduced to ~ 10.40%.
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, 2014, there were no deposits which were unclaimed and
due for repayment.
Awards and Recognition
Award for Best Usage of Twitter at Social Media Awards- 2013
During the year, the Company, in a marketing campaign, created a micro
site on Twitter, under the name of Wish Wardrobe, whereon the
followers of the Company could post their wishes, about the products of
the Company that they wished to include in their wardrobe. Over the
course of the said campaign, which lasted for seven days, total of 5091
wish requests were received, out of which 15 were fulfilled by the
Company. The campaign was a huge success and the same ended up winning
an award at the Social Media Awards - 2013 held on 13th February,
2014, for the Best usage of Twitter for a marketing campaign.
Recognised as the Most Trusted Brand in Apparel Retail Category
Nielsen, an independent agency which specialises in conducting
nationwide surveys/research projects, conducts an Independent survey
for Economic Times'' Brand Equity on annual basis, which is among the
largest research project of its kind in India. The intention of the
survey is to identify the Most Trusted Brands that possess the most
special ingredient - the consumer''s trust and the Company is proud to
have been recognised as the Most Trusted Brand in Apparel Retail
Category, as per the results of the survey conducted during the year
The Company does not have any subsidiary as on 31st March, 2014 and as
on date of this Report.
Resignation of Director(s)
During the year under review, Mr. Ashish Dikshit (DIN: 01842066), Mr.
S. Visvanathan (DIN: 02312556), Mr. Anil Rustogi (DIN: 02678608), Mr.
Devendra Bhandari (DIN: 00339397) and Mr. Manoj Kedia (DIN: 00020419),
resigned from their respective Directorships of the Company w.e.f. 19th
Appointments of the Director(s)
During the year under review i.e. on 19th April, 2013, Mr. P. Murari
(DIN: 00020437), Mr. Bharat Patel (DIN: 00060998) and Dr. Rakesh Jain
(DIN: 00020425) were appointed as Additional Directors on the Board of
the Company pursuant to Articles of Association of the Company and
provisions of Section 260 of the Companies Act, 1956 and their
appointments as Non-executive Directors of the Company were approved by
the Shareholders of the Company at the Sixth Annual General Meeting
held on 23rd August, 2013.
Further, as per Articles of Association of the Company and provisions
of the Companies Act, 2013, Mr. Sushil Agarwal (DIN: 00060017), retires
by rotation at the ensuing Seventh Annual General Meeting and being
eligible for re-appointment, he seeks re-appointment as such.
Appointment of Managing Director
Pursuant to a letter dated 17th October, 2013 from Aditya Birla Nuvo
Limited thereby nominating Mr. Pranab Barua (DIN: 00230152) for the
post of Managing Director of your Company and also, considering his
position as the Business Director of Apparel Business of the Aditya
Birla Group alongwith his rich experience and expertise, the Board of
Directors of your Company at its meeting held on 25th October, 2013,
appointed Mr. Pranab Barua (then Non-executive Director of the Company)
as the Managing Director of the Company, for a period of 5 years
w.e.f., 25th October, 2013, subject to the approval of the Shareholders
of the Company, in the ensuing Seventh Annual General Meeting of the
Company. Resolution for Mr. Barua''s appointment as Managing Director
alongwith the detailed terms of his appointment is more particularly
set out in the Notice of the ensuing Seventh Annual General Meeting.
Appointment of Independent Director(s)
Mr. P. Murari and Mr. Bharat Patel were appointed as the Non-executive
Directors of the Company in the Sixth Annual General Meeting and were
liable to retire by rotation. Also, in terms of the provisions of
Clause 49 of the Equity Listing Agreement entered into with BSE and
NSE, Mr. Murari and Mr. Patel, were considered as Independent
However, pursuant to the enactment of Companies Act, 2013 and in terms
of the provisions of Section 149, 150, 152 and other applicable
provisions of the Companies Act, 2013 read with Schedule IV and the
Companies (Appointment and Qualification of Directors) Rules, 2014 and
Clause 49 of the Equity Listing Agreement, the Company needs to
specifically appoint Independent Director(s), on its Board.
Accordingly, the Board has, vide a Circular Resolution dated 3rd July,
2014, approved the appointment of Mr. P. Murari and Mr. Bharat Patel as
Independent Director(s) for a term of five years, beginning from the
conclusion of the ensuing Seventh Annual General Meeting of the Company
till the conclusion of the Twelfth Annual General Meeting of the
Company. The Company has also received the requisite notice in writing
from shareholder(s) of the Company, under Section 160 of the Companies
Act, 2013, signifying their intention to propose the candidature of Mr.
Murari and Mr. Patel for the office of Independent Director s of the
Company. Accordingly, resolutions for their appointment as Independent
Director(s) are more particularly set out in the Notice of the ensuing
Seventh Annual General Meeting of your Company.
Items seeking your approval on the above are included in the Notice
convening the Annual General Meeting together with a brief particulars
of the Directors being appointed / re-appointed.
Directors'' Responsibility Statement
The financial statements of the Company, for the FY 2013-14, are
prepared in accordance with the applicable Accounting Standards issued
by the Institute of Chartered Accountants of India, the requirements of
the Companies Act, 1956, the regulations/guidelines issued by SEBI and
the provisions of Equity Listing Agreement, to the extent they are
applicable as such. There are no material departures from the
applicable accounting standards.
The Board of Directors of the Company accepts the 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, unless specifically stated otherwise in
the notes accompanying relevant tables of the financial statements. The
estimates and judgements related to the financial statements have been
made in a prudent and responsible manner, so as to give a true and fair
view of the state of affairs of the Company, as at 31st March, 2014 and
of the accounts for the FY 2013-14.
The Board of Directors has 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. The Board of Directors also
confirm that the annual accounts of the Company are prepared on a going
As mentioned above, Equity Shares of the Company were listed on BSE and
NSE w.e.f. 17th July, 2013 and since then the Company has duly complied
with the Corporate Governance requirements as set out under Clause 49
of the Equity Listing Agreement entered into with BSE and NSE.
The Company is committed to follow the best practices of good Corporate
Governance, including the requirements under Clause 49 of Equity
Listing Agreement and Board of Directors is responsible to ensure the
same, from time to time.
M/s. S.R. Batliboi Co & LLP, Chartered Accountants, Statutory Auditors
of the Company have, vide their certificate dated 5th May, 2014
confirmed that the Company is compliant with the conditions stipulated
in the Clause 49 of the Equity Listing Agreement. The said certificate
is annexed to this report as Annexure A.
A separate section on Corporate Governance forms part of this Annual
The Human Resource philosophy and strategy of your Company is to build
a high performing organization, with aligned and engaged employees in a
culture of leadership, collaboration and growth. Deployment of this
strategy through a planned implementation of Human Resources
interventions and programs has successfully built and sustained your
Company''s standing as one of India''s most admired and valuable
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.
Your Company has constituted an ESOP Compensation Committee of the
Board of Directors (the Committee) on 23rd May, 2013, for the purpose
of administration, implementation and monitoring of Employees Stock
Options Scheme and plans thereunder, more particularly as per the
provisions of the Securities and Exchange Board of India (Employees
Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines,
The Committee and Board of Directors, approved the Pantaloons
Employees Stock Options Plan Scheme – 2013 (the ESOS – 2013 or the
Scheme) on 22nd July, 2013. The same was approved by the Shareholders
of the Company in the Sixth Annual General Meeting of the Company, held
on 23rd August, 2013.
Pursuant to the approval of the Members at the Sixth Annual General
Meeting of the Company, the Committee at its meeting held on 25th
October, 2013, finalised the Scheme and approved the grant of Employees
Stock Options (options), Restricted Stock Units (RSUs) (each being
convertible into one equity share of the face value of Rs. 10/- each of
the Company) and Stock Appreciation Rights (SARs) to the eligible
permanent employees of the Company and to its holding and/or subsidiary
The particulars of Options / RSUs / SARs issued under ESOS - 2013, as
required under Clause 12 of Securities and Exchange Board of India
(Employees Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 forms part of this Report and are more particularly
set out in the Annexure B hereto.
Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act,
1956 (Act) 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, re-appointed as the
Statutory Auditors of the Company by the Shareholders of the Company at
the Sixth Annual General Meeting for the Financial Year 2013-14, would
be retiring at the conclusion of the ensuing Seventh Annual General
However, M/s. S.R. Batliboi Co & LLP, Chartered Accountants, have
expressed their unwillingness to continue as the Statutory Auditors of
your Company, vide their letter dated 18th April, 2014 (said letter).
The said letter was placed before the Audit Committee of the Board of
Directors and Board of Directors, separately at their respective
meetings held on 5th May, 2014 and the Audit Committee and Board of
Directors have taken the same on record. Accordingly, they shall hold
office only till the conclusion of the forthcoming Annual General
Meeting of your Company.
It is proposed to appoint M/s. S. R. B. C & Co. LLP, a firm of
Chartered Accountants in the same network of firms as M/s. S.R.
Batliboi Co & LLP, Chartered Accountants, to act as the Statutory
Auditors of your
Company. M/s. S. R. B. C & Co. LLP have confirmed their willingness to
be appointed as the Statutory Auditors of the Company, more
particularly as per the provisions of Section 139 and other applicable
provisions of the Companies Act, 2013 vide their letter dated 21st
April, 2014. The Audit Committee of the Board of Directors and Board of
Directors in their meeting held on 5th May, 2014 have approved the
appointment of M/s. S. R. B. C & Co. LLP, Chartered Accountants, as the
Statutory Auditors of your Company from the conclusion of the Seventh
Annual General Meeting until the conclusion of the Eighth Annual
General Meeting of the Company; however subject to the approval of the
Shareholders of the Company in the ensuing Annual General Meeting.
M/s. S.R. Batliboi Co & LLP, Chartered Accountants i.e. the retiring
auditors of the Company, have duly audited the Annual Accounts of the
Company and have provided their report thereon, which forms a part of
this Annual Report. The Notes to the Financial Statements are
self-explanatory and do not call for any further comments.
Sustainability Mission of your Company has been detailed in a separate
section which forms part of this Annual Report.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The Company consciously makes all efforts to conserve energy across all
Technology Absorption: Nil
Foreign Exchange Earnings and Outgo: Foreign Exchange Earnings and
Outgo are stated on page 74 in the notes to the Balance Sheet and
Profit and Loss Account. The Company earned NIL in foreign currency
from Export of Goods and Foreign Exchange outgo was Rs. 6 Lakhs.
We place on record our sincere appreciation for the continued support
which the Company has received from its customers, suppliers,
investors, promoters, bankers, group companies and above all, its
Your Directors hereby state that the Company has devised proper system
to ensure compliance of all laws applicable to the Company.
For and on behalf of the
Board of Directors,
Place : Mumbai Pranab Barua
Date :3rd July, 2014 Managing Director