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Your Directors are pleased to present the Seventh Annual Report of the Company together with the Audited Financial Statements for the financial year ended 31st March, 2018.
The financial performance of the Company is as follows
|Rs in Lakh|
|Particulars||Financial Year||Financial Year|
|Revenue from Operations||38,054.06||665.23|
|Profit / (Loss) before Depreciation and Amortization Expense & Tax expense||(248.11)||(1,989.41)|
|Less: Depreciation and Amortization expense||29.44||32.23|
|Profit / (Loss) before Tax||(277.55)||(2,021.64)|
|Less: Tax expense||(78.45)||(15.62)|
|Profit / (Loss) after Tax||(199.10)||(2,006.02)|
|Other Comprehensive Income for the year||20.93||(0.47)|
|Total Comprehensive Income for the year||(178.17)||(2,006.49)|
|Earnings Per Equity Share of Face Value of Rs 5/- each|
|- Basic (in Rs )||(2.67)||(12,602.35)|
|- Diluted (in Rs )||(2.67)||(12,602.35)|
REVIEW OF PERFORMANCE
During the financial year under review, the Company had a total income of Rs 38,291.57 Lakh. The total expenditure during the year was Rs 38,569.12 Lakh. During the year, the Scheme of Arrangement between Future Retail Limited (FRL) and Bluerock eServices Private Limited (BSPL) and the Company and their respective Shareholders under Sections 230 to 232 read with Section 66 of the Companies Act, 2013 ("the Act") and other applicable provisions of the Act was made effective on 20th November, 2017 from 1st August, 2017 (1st Appointed Date) for demerged Home Retail Business Undertaking of FRL and 15th April, 2016 (2nd Appointed Date) for e-Commerce Home Retail Business Undertaking of BSPL, hereinafter referred to as "the Respective Appointed Dates". The Company had implemented various adjustments including accounting treatments of incoming Business Undertakings from FRL and BSPL in pursuance of the Order passed by the Honble Mumbai Bench of National Company Law Tribunal (NCLT) dated 10th November, 2017 and as per Indian Accounting Standards (Ind AS) adopted for the first time from financial year 2017-18. The Company has incurred a loss of Rs 199.10 Lakh for the year under review after tax adjustments.
Your Directors do not recommend to carry any amount to the reserves.
We are the pioneers in home dcor in India. HomeTown is born out of a passion for design and quality, and the commitment to make beautiful homes and better life for our customers through our stores and online presence. Our product assortment is wide in function as well as style. Our retail business format started its journey in 2007 with our first store in Noida as a one-stop shop destination for home solutions. We offer a clearly defined home offering with a wide assortment in furniture, homeware, customized solutions in kitchen and wardrobes and home improvement. We extended our presence online in 2016 with a specially curated assortment of product offering, catering to the specific needs of the new-age online customers.
Today we have a strong presence with 39 stores across 26 cities. Our expansion plan is long-term and we plan to expand our brick and mortar as well as online presence through new stores across in existing and new potential markets and digital marketplaces respectively.
SCHEME OF ARRANGEMENT
Scheme of Arrangement between Future Retail Limited (FRL) and Bluerock eServices Private Limited (BSPL) and the Company and their respective Shareholders under Sections 230 to 232 read with Section 66 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 ("the Scheme").
During the year under review, pursuant to the Scheme of Arrangement between Future Retail Limited (FRL) and Bluerock eServices Private Limited (BSPL) and Praxis Home Retail Limited (PHRL or the Resulting Company or the Company) and their respective Shareholders under Sections 230 to 232 read with Section 66 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 ("the Scheme") and the post-effective date being 20th November, 2017, ("Effective date"), the Home Retail Business Undertaking of FRL and e-Commerce Home Retail Business Undertaking of BSPL vested with the Company with effect from the Respective Appointed Dates.
Pursuant to the provisions of Section 66 of the Act and in pursuance of the Scheme approved by the Honble Mumbai Bench of NCLT, the issued, subscribed and paid-upequitysharecapitaloftheCompanyaggregating to Rs 5,00,000/- was cancelled and consequently the paid-up share capital of the Company was reduced to that extent upon the Scheme becoming effective.
Further in consideration for the transfer and vesting of the Home Retail Business Undertaking of FRL in the Company, 1 (one) fully paid up Equity Share of Rs 5/- each was issued and allotted to the shareholders of FRL for every 20 (Twenty) fully paid up equity shares of Rs 2/- each held by them in FRL on 30th November, 2017 being the Record Date. Post issue of the aforesaid shares, the Equity Shares of the Company were listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE), w.e.f. 31st January, 2018.
Further, 17,061 fractional shares arising out of the said allotment were consolidated and Share Certificate was issued to Mr. Anant Gude, Trustee for the shares appointed by the Company in this behalf. The said shares were dematerialized and then sold in the open market on 4th April, 2018. The net sale proceeds to extent of the entitlement of the individual shareholders were then disbursed to them on 17th April, 2018 by either crediting their bank account or issuing warrant for the same.
Any unpaid / unclaimed amount lying in the said Bank Account of the Company with Axis Bank designated for Fractional Shares Sale Proceeds for seven years or more shall be transferred to the Investor Education and Protection Fund in terms of Section 125 (2) (l) of the Act and the relevant rules made thereunder.
Further pursuant to the Scheme and in consideration for transfer and vesting of e-Commerce Home Retail Business Undertaking of BSPL in the Company, 6,30,000 (Six Lakh Thirty Thousand) 9% Non-cumulative Redeemable Preference Shares of Rs 100/- each fully paid-up were issued to the shareholders of BSPL.
Over the last few years, home decor business has contributed to a visible share in the economy one of the biggest reason being that people have started taking their home as the reflection of themselves and so a lot of people are now spending more on both furniture and fixtures and also on home decor. Factors like rise in disposable income, better education and also the growing trend of individuals opting for professional services to do their interiors have together led to a rise in this industry.
The same is discussed in detail in Management Discussion and Analysis (MDA) which forms part of this Report.
Your Directors do not recommend any dividend for financial year 2017-18.
INVESTMENTS AND DISINVESTMENTS
During the year under review, the Company has neither made any investments nor divested any of its investment.
The Company has not accepted any fixed deposits from the public and as such, no amount in the nature of principal or interest on deposits from public was outstanding as at 31st March, 2018.
A Report on Corporate Governance along with a Certificate from Mr. Anant Gude, Practicing Company Secretary regarding the compliance with the conditions of Corporate Governance as stipulated under Regulation 34 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, hereinafter referred to as "Listing Regulations" forms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis as required under Regulation 34 read with Schedule V of the Listing Regulations forms part of this Report.
AUDITOR AND AUDITORS REPORT
M/s. Pathak H.D. & Associates, Chartered Accountants (Firm Registration No. 107783W) were appointed as the Statutory Auditor of the Company at the Sixth Annual General Meeting held on 21st September, 2017 for a period of five years from the conclusion of the Sixth Annual General Meeting till the conclusion of the Eleventh Annual General Meeting of the Company. However, pursuant to the first proviso to Section 139(1) of the Act, their appointment was subject to ratification by the Members in every Annual General Meeting during the said term.
The above mentioned proviso was omitted by Companies (Amendment) Act, 2017 and the same was notified by the Ministry of Corporate Affairs with effect from 7th May, 2018. Therefore, in light of the said amendment the appointment of M/s. Pathak H.D. & Associates, Chartered Accountants as Statutory Auditor continues for the aforesaid term of five years, without seeking any further ratification by the shareholders of the Company till the conclusion of their tenure and that the Board of Directors shall fix their remuneration for the said period in addition to reimbursement of actual out-of-pocket expenses as may be incurred by them in the performance of their duties.
The Company has received a written confirmation from the Statutory Auditor that their continued appointment shall be in accordance with the criteria as provided under Section 141 of the Act.
The Statutory Auditor of the Company has issued the Auditors Report on the Financial Statements of the Company for the year ended 31st March, 2018 with unmodified opinion and does not contain any qualification, reservation or adverse remark.
M/s. Anant Gude & Associates, Practicing Company Secretary (Membership No. 7219 / COP No. 18623), was appointed as Secretarial Auditor to conduct the secretarial audit of the Company for the financial year 2017-18, as required under Section 204 of the Act and the relevant Rules made thereunder.
The Secretarial Audit Report in prescribed Form MR-3 for the financial year 2017-18 is appended as AnnexureI which forms part of this Report. The said Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.
POLICIES & DISCLOSURE REQUIREMENTS
Your Directors have formulated and approved various statutory policies as applicable under the Act and Listing Regulations for promulgating better governance practices, disclosure and transparency norms. These policies are available on the website of the Company viz; www.praxisretail.in.
Details of programs for familiarization of Independent Directors with the Company, are available on the website of the Company at the link http://www. praxisretail.in/assets/download/3.Independent_ Director_Familiarization_Program_Final.pdf
Policy for determining material subsidiaries of the Company is available on the website of the Company at the link http://www.praxisretail.in/assets/download/9. Policy_for_determining_Material_Subsidiary.pdf
Policy for determining Materiality of Events of the Company is available on the website of the Company at the link http://www.praxisretail.in/assets/download/8. Policy_for_Determining_Materiality_of_Events_CG.pdf
Policy for archival of documents of the Company is available on the website of the Company at the link http://www.praxisretail.in/assets/download/7.Archival_ Policy_FInal.pdf
The Code of Conduct for the Board of Directors and Senior Management Personnel of the Company is available on the website of the Company at the link http://www.praxisretail.in/assets/download/1.Code-of-Conduct_for_Directors_and_Senior_Management_ Final.pdf
Policy on dealing with Related Party Transactions is available on the website of the Company at the link http://www.praxisretail.in/assets/download/10.Policy_ for_dealing_with_RPTs_Final.pdf
The Company is currently not required to formulate the Dividend Distribution Policy as the criteria prescribed by the Listing Regulations is not applicable to the Company.
The Company has formulated and disseminated a Whistle-Blower Policy to provide Vigil Mechanism for employees and Directors of the Company to promote responsible and secure whistle blowing mechanism and to provide a channel to the employee(s) and Directors of the Company to report to the Management genuine concerns about unethical behavior, actual or suspected fraud that could have serious impact on the operations and performance of the business or violation of the Code of Conduct or Policy(ies) of the Company, as adopted/framed from time to time. The aforesaid Policy is in compliance with the provisions of the Act and Listing Regulations. The aforesaid policy is available on the website of the Company at the link http://www.praxisretail.in/assets/download/5.Vigil_ Mechanism_Final.pdf
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review Mr. Pawan Agarwal, Mr. Mukesh Agarwal and Mr. Krishan Kumar Biyani were appointed as Additional Directors on the Board w.e.f. 18th April, 2017, subsequently they were appointed as Directors in the Sixth Annual General Meeting of the Company held on 21st September, 2017. Mr. Girdhar Pathak and Mr. Rajendra Chaturvedi, Directors of the Company resigned w.e.f. 20th April, 2017.
Mr. Viraj Didwania was appointed as Additional Director designated as Managing Director of the Company by the erstwhile Board of Directors w.e.f. 12thOctober,2017.TheshareholdersattheExtraordinary General Meeting of the Company held on the even date approved the appointment of Mr. Viraj Didwania as Managing Director with nil remuneration as the Company did not have any business activity during that period. The proposal for revision in his remuneration is set out at agenda item no. 4 of the Notice convening the ensuing Annual General Meeting of the Company. Further the Board re-designated Mr. Viraj Didwania as Chairman & Managing Director w.e.f. 12th December, 2017. Pursuant to the provisions of Section 152 of the Act, he holds the office of Additional Director upto the ensuing Annual General Meeting of the Company and is proposed to be appointed as a Director designated as "Chairman & Managing Director" of the Company pursuant to Section 160 of the Act. The Company has received notice from the member(s) under Section 160 of the Act signifying their intention to propose the candidature of Mr. Viraj Didwania for the Office of Director of the Company.
During the year under review, Mr. Shrirang Sarda was appointed as Additional Director designated as Non-Executive Non-Independent Director and Mr. Shantanu Shah, Mr. Pankaj Bhargava, Mr. S. Subramanian and Ms. Sridevi Badiga were appointed as Additional Directors w.e.f. 12th December, 2017, designated as Independent Directors on the Board of Directors of the Company and pursuant to the provisions of Section 152 of the Act hold office upto the date of the ensuing Annual General Meeting.
The Company has received notice(s) from the members under Section 160 of the Act signifying their intention to propose the candidatures of Mr. Shrirang Sarda, Mr. Shantanu Shah, Mr. Pankaj Bhargava, Mr. S. Subramanian and Ms. Sridevi Badiga for the Office of Director of the Company.
The Company has received necessary disclosure and confirmation from concerned Director(s) in connection with their appointment / re-appointment. Additional information on appointment / re-appointment of directors as required under Regulation 36 of the Listing Regulations and Secretarial Standard-2, is given in the Notice convening the Seventh Annual General Meeting of the Company.
The Company has received necessary declarations from all the Independent Directors under Section 149(7) of the Act that they meet the criteria of independence laid down in Section 149(6) of the Act and Regulations 16 (1) (b) and 25 of the Listing Regulations.
During the year under review (i) Mr. Harish Parasuram was appointed as Chief Financial Officer (CFO) with effect from 1st November, 2017 and (ii) Ms. Smita Chowdhury was appointed as Company Secretary with effect from 22nd August, 2017 and re-designated as Company Secretary & Compliance Officer with effect from 12th December, 2017.
COMMITTEES OF THE BOARD OF DIRECTORS
Post the Scheme becoming effective and the listing of equity shares of the Company on the Stock Exchanges, your Board has constituted various committees as required under the Act and the Listing Regulations.
Details of Committees of the Board of Directors along with their terms of reference, composition and meetings held during the year, are provided in the Corporate Governance Report, which forms part of this Annual Report.
NUMBER OF MEETINGS OF THE BOARD
During the year under review (14) fourteen meetings of the Board of Directors were held, details of which are given in the Corporate Governance Report which forms part of this Annual Report.
SUBSIDIARY, JOINT VENTURE, HOLDING COMPANY AND ASSOCIATE COMPANIES
The Company does not have any holding, subsidiary or joint venture or associate company.
PERFORMANCE EVALUATION OF BOARD
Pursuant to Section 178 of the Act and Regulation 19 of the Listing Regulations, the Board of Directors has constituted the Nomination and Remuneration Committee (NRC), the details of which are given in the Corporate Governance Report which forms part of this Annual Report. Further as prescribed NRC has formulated criteria for evaluation of performance of Independent Directors and the Board of Directors.
Accordingly, the Board has carried out an annual evaluation of its own performance, its Committees and the Directors individually.
Structured evaluation templates as approved by the NRC, were used for evaluating the performance of the Board, its Committees and the Directors on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board except the Independent Director being evaluated. The performance evaluation of the Chairman and Non-Independent Directors was carried out by the whole Board except the Director being evaluated. At the meeting of the Board all the relevant factors that are material for evaluating the performance of the Board, its Committees and that of the individual Directors were discussed in detail.
The Board of Directors expressed their satisfaction with the evaluation process and the performance of the Board, its Committees and Individual Directors.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Companys policy on Directors appointment and remuneration and other matters provided in Section 178(3) of the Act, has been disclosed in the Corporate Governance Report, which forms part of this Annual Report. The same is available on the website of the Company at the link http://www.praxisretail.in/assets/ download/4.Remuneration_Policy_Final.pdf
RISK MANAGEMENT AND INTERNAL FINANCIAL CONTROL
The Company has a well-defined risk management framework in place, which provides an integrated approach for identifying, assessing, mitigating, monitoring and reporting of various risks associated with the business of the Company.
The Board has delegated responsibility to the Audit Committee to monitor and review risk management, assessment and minimization procedures and to develop, implement and monitor the risk management plan and identify, review and mitigate all elements of risks which the Company may be exposed to. Further, the Audit Committee has delegated the Internal Auditors with the role of risk management assessment and minimization procedures and also periodically reviews with them the existing procedures and measures to improvise the same.
The Company has in place adequate internal financial controls with reference to financial statements. Key risks and threats to the Company and internal controls and their adequacy are analyzed in the Management Discussion and Analysis, which forms part of this Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company has employed women workforce and strives to its best to make the most conducive working environment for women employees in the Organization. The Company believes in providing a safe and harassment free workplace for every employee including women working in the Company through various training, awareness and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Company has adopted the policy of zero tolerance in case any sexual harassment issues are reported.
Further pursuant to Section 4 (2) of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, (POSH Act) the Company has constituted the Internal Complaints Committee for providing a mechanism to report any complaint against sexual harassment and redressal of the same.
Your Directors further state that during the year under review, there were no cases filed pursuant to the POSH Act.
CORPORATE SOCIAL RESPONSIBILITY STATEMENT
In terms of the provisions of Section 135 of the Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility ("CSR") Committee. The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report, which forms part of this Annual Report.
During the year under review, the Company was not required to spend any amount on CSR activities, since the Company does not fit into the criteria specified in Section 135 of the Act. The disclosures as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is made in prescribed form which is annexed to this Report as AnnexureII.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The Company has not granted any loans, provided any guarantee or made any Investments which are covered under the provisions of Section 186 of the Act.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review, all transactions entered into by the Company with Related Parties as defined under the Act and the Listing Regulations, were in the ordinary course of business and on an arms length basis. The disclosure of Related Party transactions as required under Section 134(3)(h) of the Act, in Form AOC-2 is given in Annexure-III of this Report.
Disclosure of transactions with related parties as required under the applicable Accounting Standards has been made in the Notes forming part of the Financial Statements.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act, the Board of Directors of the Company hereby confirms that:
i. in the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. 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 the profit / loss of the Company for the financial year ended 31st March, 2018;
iii. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the directors have prepared the annual accounts for the financial year ended 31st March, 2018 on a going concern basis; v. the directors, further state that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
vi. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The Audit Committee of the Company comprises of Mr. Shantanu Shah, Independent Director as Chairperson of the Committee, Ms. Sridevi Badiga, Independent Director, Mr. S. Subramanian, Independent Director, Mr. Pankaj Bhargava, Independent Director and Mr. Viraj Didwania, Chairman & Managing Director, as members of the Committee. There were no instances where the Board did not accept the recommendations of the Audit Committee. The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of this Annual Report.
Pursuant to Section 148(1) of the Act and the relevant rules made thereunder the Company is not required to maintain cost records hence the same is not maintained by the Company.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure-IV, which is annexed to this Report.
In terms of the provisions of second proviso to Section 136(1) of the Act, information pursuant to Section 197 of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is excluded from the Annual Report being sent to the members of the Company and is available for inspection by the members at registered office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary and the same will be furnished on request. The full Annual Report including aforesaid information is being sent electronically to all those members who have registered their e-mail addresses and also is available on the website of the Company.
PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO ETC.
The particulars as required under Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, are provided in Annexure-V which forms part of this Report.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Act, an extract of Annual Return in the prescribed Form MGT-9 is appended as AnnexureVI which forms part of this Report.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations in future.
REGULATION 39(4) OF THE LISTING REGULATIONS UNCLAIMED SUSPENSE ACCOUNT
Pursuant to the Scheme 1 (one) equity share of the Company was allotted to shareholders of Future Retail Limited (FRL) for every 20 equity shares held by them in FRL on 30th November, 2017, being the Record Date. Accordingly 5,034 equity shares allotted on 8th December, 2017 against 1,00,710 equity shares of FRL lying in the Unclaimed Suspense Account held by 184 shareholders were credited to the Unclaimed Suspense Account opened and maintained by the Company in this regard.
During the year under review, no shares were claimed out of such unclaimed shares. All the corporate benefits in terms of securities, accruing on these unclaimed shares shall be credited to such account. However, the Voting Rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.
Further details pursuant to Regulation 39 (4) read with Schedule V of the Listing Regulations is given in the Corporate Governance Report which forms part of this Annual Report.
During the year under review, the Company has complied with Secretarial Standards on Meetings of the Board of Directors ("SS-1") and on General Meetings ("SS-2") as amended and issued from time to time by the Institute of Company Secretaries of India in terms of Section 118(10) of the Act.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes that have taken place that could have an impact on the financial position of the Company from the date of closure of financial year under review till the date of signing of this Report.
Your Board of Directors would like to thank and place on record their appreciation for the continued support, firm confidence professed on us and co-operation provided to the Company by its partners viz; shareholders, customers, employees, suppliers, other business associates, regulatory authorities and all other stakeholders.
|For and on behalf of the Board of Directors|
|Place: Mumbai||Chairman & Managing Director|
|Date : 28th May, 2018||DIN : 02412474|