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Pantaloons Fashion & Retail Directors Report, Pantaloons Fash Reports by Directors
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Pantaloons Fashion & Retail
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Download Annual Report PDF Format 2014 | 2013
Directors Report Year End : Mar '14    « Mar 13
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.
 
 Financial Performance
 
 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
 Ratio).
 
 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.
 
 Open Offer
 
 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,
 Maharashtra, India.
 
 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.
 
 Dividend
 
 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.
 
 Finance
 
 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%.
 
 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, 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
 under review.
 
 Subsidiary Company
 
 The Company does not have any subsidiary as on 31st March, 2014 and as
 on date of this Report.
 
 Directors
 
 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
 April, 2013.
 
 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
 Non-executive Directors.
 
 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
 concern basis.
 
 Corporate Governance
 
 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
 Report.
 
 Human Resource
 
 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
 corporations.
 
 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,
 1999.
 
 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
 Companies.
 
 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
 Meeting.
 
 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.
 
 Sustainable Development
 
 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
 its operations.
 
 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.
 
 Acknowledgements
 
 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
 employees.
 
 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
Source : Dion Global Solutions Limited
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