| Dear Shareholders,
The 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/Amortization 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 Company's strategy
of retailing brands with high awareness quotient and market pull would
continue to augment growth and profits.
Brand house Oviesse Limited, Subsidiary Company
During the year under review, Company's subsidiary, Brand house Oviesse
Limited (BOL) closed down its business in view of the unviable
operations.
As on 31st March 2013, your Company's equity participation in BOL was Rs.
2,898.10 Lacs for 2,89,81,030 equity shares of Rs. 10/- each representing
58% of BOL's 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 Practicing 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 Brand house Retails Limited
Nitin S. Kasliwal
Chairman & Managing Director
Place : Mumbai
Date : 16th July, 2013
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