Directors
Dear Shareholders,
Your Directors have pleasure in presenting the Ninth Annual Report and Audited Accounts
of the Company for the year ended 31st March, 2013.
FINANCIAL HIGHLIGHTS:
|
|
(Rs. In Lacs) |
| Particulars |
2012-13 |
2011-12 |
| Sales & Other Income |
81,504 |
78,357 |
| Expenditure towards sale including cost of sales |
79,591 |
72,851 |
| Profit before Depreciation, Interest and Taxation (PBDIT) |
1,913 |
5,506 |
| Interest & Bank Charges |
3,962 |
2,992 |
| Depreciation/Amortisation |
670 |
974 |
| Profit/(Loss) before Exceptional Items and Tax |
(2719) |
1,540 |
| Exceptional Items |
4148 |
- |
| Profit/(Loss) before Tax |
(6867) |
1,540 |
| Income Tax for current year |
- |
702 |
| Income Tax for earlier years |
(1517) |
147 |
| Provision for Deferred Tax (Asset)/Liability |
200 |
(159) |
| Profit/(Loss) After Taxation (PAT) |
(5550) |
850 |
| PAT brought forward from last year |
614 |
- |
| Transferred to Debenture Redemption Reserve |
- |
236 |
| PAT carried forward to next year |
(4936) |
614 |
YEAR IN RETROSPECT:
The Sales & Other Income for the year was Rs. 81,504 Lacs recording an increase of
4.02% over the previous year. Profit before Depreciation, Interest and Taxation (PBDIT)
for the year was Rs. 1913 lacs against Rs. 5506 lacs in the previous year. Profit/(Loss)
after Taxation (PAT) for the year was Rs. (5550) lacs against Rs. 850 lacs in the previous
year. Higher discounts resulting in lower profit margins and higher interest burden have
impacted the profits. Other major reasons for the loss incurred during the year are
Exceptional Items aggregating to Rs. 4,148.14 Lacs i.e provision for diminution in the
value of Investment in unviable business of subsidiary amounting Rs. 2,898.10 Lacs and
written off Goodwill amounting to Rs. 1,250.04 Lacs during the year. Goodwill was created
in the earlier years as an asset representing future economic benefit upon the demerger of
business with the erstwhile parent company, and now, Company does not anticipate any
economic benefit in the future.
DIVIDEND:
As no surplus is available in current financial year, your Directors are unable
recommend payment of dividend on equity capital of the Company for the year ended 31st
March, 2013.
OPERATING RESULTS AND BUSINESS:
The challenges faced by the Indian organized apparel retail sector are various such as
lack of prominent retail space with real estate prices escalating, slow-down in the
economy, shortage of trained manpower, stiff competition from global retail giants,
increase in input and overhead costs and unfavorable scenario during the year.
The Company is facing pressure on margins because of higher costs and discount offers
in a competitive market. To ensure higher earnings, the Company is focusing on reducing
various expenses and costs and increasing internal rate of returns by way of slow and
steady growth. The Company is also responding by trying to become leaner and more
efficient.
A portfolio comprising brands that cater to various demographic and psychographic
profiles would act as an ideal impetus for creating presence in different geographies
across India. Your Companys strategy of retailing brands with high awareness quotient and
market pull would continue to augment growth and profits.
Brandhouse Oviesse Limited, Subsidiary Company:
During the year under review, Companys subsidiary, Brandhouse Oviesse Limited (BOL)
closed down its business in view of the unviable operations.
As on 31st March 2013, your Companys equity participation in BOL was Rs.
2,898.10 Lacs for 2,89,81,030 equity shares of Rs. 10/- each representing 58% of BOLs
total paid-up capital of Rs. 4,996.65 Lacs.
Since BOL is a loss-making company and it has closed down its operations, the Company
has made a provision for diminution in the value of its Investment in BOL.
The audited financials of BOL, could not be received by the Company for consolidation
because BOL had been in the discussion and negotiation with the Franchisor of BOL, for the
continuation or otherwise of the Franchisee Agreement and this has resulted in unforeseen
delay and interruption in adoption of audited accounts of BOL in its Board Meeting.
Therefore, the accounts of Subsidiary Company for the current financial year ended on
March 31, 2013 could not be consolidated with the accounts of the Company.
The Management is confident that diminution in the value of investment of its
subsidiary will not have any material effect on the profitability of the Company.
DIRECTORS:
During the year, Mrs. Jyoti N. Kasliwal had resigned as a Director from the Board of
Directors of the Company with effect from 24th August, 2012 due to her
pre-occupation and family commitments.
Mr. Denys Firth, Nominee Director, India Debt Management Pvt. Ltd. (IDM) withdrew
nomination of Mr. Alexander Shaik as his Alternate Director and appointed Mr. Navin
Sambtani in his place as his Alternate Director with effect from 10th November,
2012.
Mr. Jagadeesh S. Shetty, Director Finance (SKNL) & Group CFO was appointed as an
additional Non-Executive Director on the Board with effect from 10th November,
2012 pursuant to section 260, 264 of the Companies Act, 1956. The Company has received the
requisite notice from a member pursuant to Section 257 of the Companies Act, 1956
proposing the candidature of Mr. Jagadeesh S. Shetty for the office of Director.
Mr. Susheel Kak, Mr. Denys Firth and Mr. Navin Sambtani (Alternate to Mr. Denys Firth)
resigned as Directors upon withdrawal of nomination by India Debt Management Private
Limited (IDM) with effect from 10th January, 2013 and IDM has requested and
reserved the right to attend the Board Meetings as an Observer, until such time IDM
re-nominates individuals to the Board.
Mr. Nitin S. Kasliwal was reappointed as Managing Director for a further period of 5
years i.e from 30th January, 2013 to 29th January, 2018 without
payment of any remuneration and subject to approvals of the members and the Central
Government.
Mr. Dara D. Avari had resigned as a Director from the Board of Directors of the Company
with effect from 1st March, 2013 due to his preoccupation and advancing age.
In accordance with the provisions of the Companies Act, 1956 and Article 130 of the
Articles of Association of the company, Mr. Vijay G. Kalantri retires by rotation and
being eligible, offer himself for re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information and
explanations obtained by them, your Directors make the following statement in terms of
Section 217(2AA) of the Companies Act, 1956.
1. That in the preparation of the Annual accounts for the year ended on 31st
March, 2013 the applicable accounting standards have been followed along with proper
explanations relating to material departures, if any;
2. That the Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the company at the end of the
financial year and of profit of the company for the year.
3. That the Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this Act for safeguarding
the assets of the company and preventing and detecting fraud and other irregularities; and
4. That the Directors have prepared the annual accounts for the year ended on 31st
March, 2013 on a going concern basis.
DEPOSITS:
Fixed deposits received from shareholders and public stood at NIL as on 31st
March, 2013 (previous year Rs. NIL). The company does not have any fixed deposit scheme.
PARTICULARS OF EMPLOYEES:
Information as per Section 217 (2A) of the Companies Act, 1956 read with Companies
(Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However as
per the provisions of Section 219(1) (iv) of the Companies Act, 1956 the Reports and
Accounts are being sent to the shareholders of the Company excluding the statement of
employees under Section 217(2A) of the Companies Act. Any shareholder interested in
obtaining a copy of the said statement may write to the Secretary at the Registered Office
of the company.
CORPORATE GOVERNANCE:
As required under clause 49 of the Listing Agreement with the Stock Exchanges, the
Report on Corporate Governance together with the Certificate from the Practising Company
Secretary regarding compliance of the provisions of the Corporate Governance forms part of
this Directors Report.
MANAGEMENT DISCUSSION AND ANALYSIS:
Management Discussion and Analysis forming part of this Directors Report is attached.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTFLOW:
Your company has no activity relating to Conservation of Energy and Technology
absorption as stipulated in the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988.
During the year under review, the expenditure of your company in foreign exchange was
Rs. Nil (Previous year Rs. 39.47 Lacs) and there was no earning in foreign exchange
(Previous year NIL).
AUDITORS:
M/s. Haribhakti & Co., Chartered Accountants and M/s. Shyam Malpani &
Associates, Chartered Accountants, Joint Statutory Auditors of the Company, who holds the
office upto the conclusion of this Annual General Meeting.
M/s. Shyam Malpani & Associates, being eligible have offered themselves for
re-appointment. The other firm of Statutory Auditors M/s. Haribhakti & Co., have
expressed their desire not to seek reappointment in view of their heavy prior professional
commitments.
The Board of Directors, upon the recommendations of the Audit Committee, proposes the
reappointment of M/s. Shyam Malpani & Associates as Statutory Auditors of the Company
for conducting the audit of the accounts of the Company to hold office till the conclusion
of the next Annual General Meeting of the Company.
M/s. Shyam Malpani & Associates have furnished the required certificate to the
Company, under section 224(1B) of the Companies Act, 1956 regarding their eligibility for
re-appointment as Statutory Auditors of the Company. The necessary resolution is included
in the Notice of the ensuing Annual General Meeting.
In respect of the observations and Emphasis of Matter paragraph made by the Auditors,
please refer to Note 29, Note 38 and Note 39 of notes to Financial Statement, which are
self-explanatory and hence in the opinion of the Directors, do not require any further
explanation
ACKNOWLEDGEMENT:
Your Directors wish to place on record their gratitude to the shareholders of the
Company, Banks, Financial Institutions, valued Customers, suppliers and Business
Associates for their support and confidence in the Company. Your Directors gratefully
appreciate the co-operation and assistance extended by various Government Agencies and
place on record their appreciation for unstinted co-operation and assistance extended to
your Company by its employees at all levels.
On Behalf of the Board
For Brandhouse Retails Limited
Nitin S. Kasliwal
Chairman & Managing Director
Place : Mumbai
Date : 16th July, 2013.
+91-9892691696
