Home  »  Company  »  Aditya Birla Fashion  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Aditya Birla Fashion and Retail Ltd.

Mar 31, 2015

(A) Terms/Rights attached to Equity Shares

The Company has only one class of equity shares having face value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution to all preference shareholders. The distribution will be in proportion to the number of the equity shares held by the shareholders.

(c) Terms of Conversion/Redemption of Preference Shares

500,000 8% Redeemable Cumulative Preference Share of Rs. 10/- each fully paid-up (31st March, 2014: 500,000).

Preference shares are entitled to a cumulative dividend @ 8% p.a. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting. These preference shares are redeemable by the Company at any time after completion of ten years from 31st March, 2009, at the face value. In the event of liquidation of the Company, before redemption of Preference Shares, the holders of Preference Shares will have priority over Equity Shares in the payment of dividend and repayment of capital.

500 6% Redeemable Cumulative Preference Share of Rs. 100/- each fully paid-up (31st March, 2014: 500). Preference shares are entitled to a cumulative dividend @ 6% p.a. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting. These preference shares are redeemable by the Company at any time after completion of ten years from 14th October, 2009, at the face value. In the event of liquidation of the Company, before redemption of Preference Shares, the holders of Preference Shares will have priority over Equity Shares in the payment of dividend and repayment of capital.

(d) Shares held by holding/ultimate holding company and/or their subsidiaries/associates

Out of equity and preference shares issued by the Company, shares held by its holding company, ultimate holding company and their subsidiaries/associates are as below:

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

(f) Shares Reserved for issue under options

For details of shares reserved for issue under the employee stock option (ESOP) plan of the Company, please refer Note 33.

(i) Cash credit is repayable on demand and is secured against first pari passu charge on all current assets both present and future on pari passu with all other lenders (existing and future) CC carries an interest rate of 10.40% to 11%.

(ii) 8.75% - 8.90% Commercial Papers repayable between 2 and 3 months (unsecured).

(iii) 9.5% Loan from Non-Banking Financial Institution repayable within one year (unsecured).

NOTE: 2

Related Party Disclosures as required under AS-18, "Related Party Disclosures', are given below:

Name of related parties and related party relationship

(a) Related Party where control exists Controlling Company's

Holding Company : Indigold Trade and Services Limited

Ultimate Holding Company : Aditya Birla Nuvo Limited (ABNL)

(b) Names of related parties with whom transactions have taken place during the year Madura Garments Lifestyle Retail Company Limited

Fellow Subsidiary (MGLRCL)

Aditya Birla Minacs Worldwide Limited

Fellow Subsidiary

Birla Sun Life Insurance Company Limited

Fellow Subsidiary

Aditya Birla Retail Limited

Key Managerial Personnel has significant influence

(c) Key Managerial Personnel

Pranab Barua (Managing Director with effect from 25th October, 2013) Manoj Kedia (Manager from 8th April, 2013 to 24th October, 2013. Key Managerial Personnel upto No amount in respect of the related parties have been written off/back are provided for during the year.

Expenses towards gratuity and leave encashment provisions are determined actuarially on an overall company basis at the end of each year and, accordingly, have not been considered in the above information.

NOTE: 3

EMPLOYEE BENEFITS General Description of the Plan

The Group operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement, whichever is earlier. The benefit vests after five years of continuous service. In case of some employees, the Group's scheme is more favourable as compared to the obligation under Payment of Gratuity Act, 1972. A small part of the gratuity plan, which is not material, is funded and managed within the Group has a plan asset of Rs. 8 Lakhs.

The Estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

The overall expected rate of return on plan assets is determined based on the market prices prevailing as on that date, applicable to the period over which the obligation is expected to be settled.

NOTE: 4 DEPRECIATION

The Company in pursuant to the requirement of Schedule II to the Companies Act, 2013, effective from 1st April, 2014, has revised depreciation based on useful life of asset. As a result of this change and based on transitional provision provided in Schedule II, an amount of Rs. 643 lakh being the WDV of assets whose useful life has already exhausted thereon has been adjusted against retained earnings.

Depreciation for the year ended 31st March, 2014 includes prior period depreciation of Rs. 1,302 lakh. Depreciation for the year ended 31st March, 2015 includes accelerated depreciation of 9,229 lakh (31st March, 2014: Rs.1,439 lakh) on account of refurbishment and pre-closure of certain stores.

NOTE: 5

I. Employee Stock Option Plans

The Company provides Share-based Payment schemes to its employees. During the year ended 31st March, 2014, an Employee Stock Option Plan (ESOP) was introduced. The relevant details of the scheme and the grant are as below: On 22nd July, 2013, the ESOP Compensation Committee ("Committee") and the Board of Directors ("Board") approved the introduction of an ESOP Scheme, viz., Pantaloons Employee Stock Option Scheme - 2013 (Scheme) for issue of Stock Options (Options) and Restricted Stock Units ("RSUs") to the Key Employees and Directors of the Company, subject to the approval of the Shareholders of the Company. Shareholders of the Company, vide a resolution passed at the Sixth Annual General Meeting of the Company, held on 23rd August, 2013, approved the introduction of the Scheme and authorised the Board/Committee to finalise and implement the Scheme. Accordingly, pursuant to the resolution passed by the Committee on 25th October, 2013, the Commit- tee finalised the Scheme and granted Options and RSUs to the Eligible Employees. The details of the Scheme, are as below:

The ESOP compensation cost is amortised on a straight-line basis over the total vesting period of the options. Accordingly Rs. 67 lakh (31st March, 2014: Rs. 33 lakh) has been charged to the Statement of Profit and Loss.

The remaining contractual life for the options outstanding as on 31st March, 2015, is 5 years (31st March, 2014, is 6 years) and for RSU outstanding as on 31st March, 2015, is 7 years (31st March, 2014, is 8 years).

(c) Fair Valuation:

The Fair Valuation of the options used to compute Pro forma net profit and earnings per share have been done by an independent valuer on the date of grant using Black-Scholes Merton Formula. The key as- sumptions and Fair Value are as under:

* Expected volatility of the Company's stock price is based on the Company's comparable peer group's stock price on NSE based on the price data of the last three years upto the date of grant as the Company has been listed only for a few months prior to the date of grant.

II. Stock Appreciation Rights - (SAR)

On 22nd July, 2013, the ESOP Compensation Committee ("Committee") and the Board of Directors ("Board") approved the introduction of an ESOP Scheme, viz., Pantaloons Employee Stock Option Scheme - 2013 ("Scheme") for Stock Appreciation Rights ("SAR") to the Key Employees and Directors of the Company, subject to the approval of the Shareholders of the Company. Shareholders of the Company, vide a resolution passed at the Sixth Annual General Meeting of the Company, held on 23rd August, 2013, approved the introduction of the Scheme and authorised the Board/Committee to finalise and implement the Scheme. Accordingly, pursuant to the resolution passed by the Committee on 25th October, 2013, the Committee finalised the SARs to the Eligible Employees. The details of the Scheme are as below:

Stock Appreciation Rights Scheme - (SAR)

The SAR compensation cost is amortised on a straight-line basis over the total vesting period of the options. Accordingly Rs. (38) lakh (31st March, 2014: 49 lakh) has been charged/(credited) to the Statement of Profit and Loss.

The remaining contractual life for SAR outstanding as on 31st March, 2015 is 5 years (31st March, 2014 is 6 years).

b) Fair Valuation

The Fair Valuation of the options used to compute Pro forma net profit and earnings per share have been done by an independent valuer on the date of grant using Black-Scholes Merton Formula. The key assumptions and Fair Value are as under:

* Expected volatility of the Company's stock price is based on the Company's comparable peer group's stock price on NSE based on the price data of the last three years upto the date of grant as the Company has been listed only for a few months prior to the date of grant.

III. Had the compensation cost for options and SAR been recognised based on fair value at the date of grant in accordance with Black-Scholes Merton Formula, the Pro forma net loss and earnings per share of the Company would have been as under:

# Since the conversion of stock options into equity shares Qty. 207,942 (31st March, 2014: Qty. 232,781) would decrease the loss per share, hence these potential equity shares are considered anti-dilutive and the effect of anti-dilutive potential equity shares are ignored.

NOTE: 6

Disclosure pursuant to Accounting Standard-19 - Leases is as under:

A. Assets Taken on Lease:

The Company has entered into agreements for taking on lease certain residential/office/store premises, warehouses, on leave and licence basis. The lease term is for a period ranging from 3 to 25 years. There are escalation clauses in the lease agreements. The specified disclosure in respect of these agreements is given below:

Notes:

The initial non-cancellable period of the lease agreement is for three years, beyond which there is an option for the lessee to renew the lease, which is reasonably certain and, hence, the entire lease period has been considered as non-cancellable for the purpose of above disclosure.

NOTE: 7

I. CONTINGENT LIABILITIES NOT PROVIDED FOR

Dividend on Cumulative Preference Shares 12 8

Dividend Distribution Tax on the above Dividend 2 1

Claims against the Company not acknowledged as Debt Labour Laws - Minimum Wages Act 78 72

Occupancy Cost 917 509

Others 93 28

1,102 618

(The contingent liabilities, if materialised, shall entirely be borne by the Company, as there is no likely reimbursement from any other party.)

The Company's pending litigations comprise of claims against the Company primarily for occupancy cost and proceedings pending with labour laws. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. Refer above note for details on contingent liability. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made a provision of Rs. 41 lakh as at 31st March, 2015.

II. The Company has a process whereby periodically all long-term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long-term contracts has been made in the books of account.

In absence of virtual certainty the Company has recognised deferred tax assets differences arising from carry forward of business loss and other items to the extent of deferred tax liability arising from depreciation.

NOTE: 8

SEGMENT INFORMATION

In accordance with the principles given in Accounting Standard on Segment Reporting (AS-17) notified by Companies (Accounting Standards) Rules, 2006, the Company has determined its primary business segment as "retail". The Company has no other reportable segment. Further, the entire business of the Company is within India, hence there is no geographical segment. Accordingly, disclosure of information as per AS-17 is not required.

NOTE: 9

Board of Directors of the Company ("Board") at their meeting held on 3rd May, 2015, have considered and approved a Composite Scheme of Arrangement between the Company, Aditya Birla Nuvo Limited ("ABNL"), Madura Garments Lifestyle Retail Company Limited ("MGLRCL") and their respective shareholders and creditors, under Sections 391 to 394 of the Companies Act, 1956 ("Composite Scheme"). Pursuant to the composite scheme, the branded apparels businesses of the Company, ABNL and MGLRCL will be consolidated under the Company in order to capitalise on their large market presence in the branded fashion space in India.

The composite scheme inter-alia involves:

(i) the transfer by way of a demerger of the Madura Undertaking of ABNL to the Company, consequent to which Equity Shareholders of ABNL will get 26 new Equity Shares of the Company for every 5 Equity Shares held by them in ABNL;

(ii) the transfer by way of a demerger of the MGL Retail Undertaking of MGLRCL to the Company, consequent to which Equity Shareholders of MGLRCL will get 7 new Equity Shares of the Company for every 500 Equity Shares held by them in MGLRCL and Preference Shareholder of MGLRCL will get 1 Equity Share of the Company; and

(iii) various other matters consequential or integrally connected therewith, including change of name and re-organisation of the share capital of the Company.

The Composite Scheme is subject to the necessary statutory and regulatory approvals, including approvals of the appropriate authorities including High Court(s), Stock Exchange(s), SEBI and respective shareholders and lenders and/or creditors of each of the companies involved in the Composite Scheme. The appointed date of the Composite Scheme will be 1st April, 2015.

NOTE: 10

The Company, in the current year, has incurred losses, hence no amount has been transferred to the debenture redemption reserve.

NOTE: 11

Previous Year Figures The Company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2013

1. Corporate Information

Pantaloons Fashion & Retail Limited (Formerly Peter England Fashions and Retail Limited) (the ''Company'') is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956.

In the current year, pursuant to a scheme of arrangement as sanctioned by the Honourable High Court of Bombay, vide order dated March 1, 2013, the ''Pantaloon Format'' of Pantaloon Retail (India) Limited (the ''Demerged Undertaking'') has been vested into the Company with effect from July 1, 2012 (the ''Appointed Date''). Pursuant to this scheme, the name of the Company has changed from Peter England Fashions and Retail Limited to Pantaloons Fashion & Retail Limited.

The Company operates a national chain of "Pantaloons" stores of apparels and fashion accessories.

NOTE: 2

Related Party Disclosures as required under AS-18, "Related Party Disclosures'', are given below: Name of related parties and related party relationship

(a) Related Party where control exists Controlling Company''s

Holding Company: Indigold Trade and Services Limited

Ultimate Holding Company: Aditya Birla Nuvo Limited (ABNL)

(b) Names of related parties with whom transactions have taken place during the year

Madura Garments Lifestyle Retail Company Limited (MGLRCL) - Fellow Subsidiary.

NOTE 3

EMPLOYEE BENEFITS

General Description of the Plan

The Group operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable On termination of service or retirement, whichever is earlier. The benefit vests after five years of continuous service. In case of some employees, the Group''s scheme is more favourable as compared to the obligation under Payment of Gratuity Act, 1972. A small part of the gratuity plan, which is not material, is funded and managed within the Group.

NOTE: 4

SCHEME OF ARRANGEMENT

1. Pursuant to the Scheme of Arrangement (the ''Scheme'') under Sections 391 to 394 of the Companies Act, 1956, the fashion retail business called the ''Pantaloon Format'' (hereinafter referred to as ''demerged undertaking'') of Pantaloon Retail (India) Limited (hereinafter referred to as 1PRIL'' or ''demerged Company''), as approved by the members at a court- convened meeting approved by the shareholders of the Company and PRIL, and subsequently sanctioned by the Hon''ble High Court of Bombay, vide its order dated March 1, 2013, has been transferred by way of demerger to Pantaloons Fashion & Retail Limited (Formerly Peter England Fashions and Retail limited, hereinafter referred to as PEFRL or ''resulting Company'') on a going concern basis with effect from the appointed date of the Scheme, i.e., July 1, 2012. The effective date of the Scheme as approved by the High Court of Bombay on is April 8, 2013.

The Scheme is operative from the appointed date, i.e., July 1, 2012.

2. In accordance with the Scheme, the Company has acquired the following assets and liabilities as on the appointed date of the demerged undertaking at book value as set out below:

3. 46,316,518 equity shares of Rs. 10/- each, fully paid-up, of the Company are to be issued to the holder of Equity and Differential Voting Rights (DVR''s) shares of PRIL, whose names are registered in the register of members on the record date, without payment being received in cash respectively, in the ratio of 1 (one) fully paid-up equity shares of Rs. 10/- each of the Company for every 5 (Five) fully paid-up equity shares and DVRs of X 2/- each held in PRIL. Pending allotment, the face value of such shares of X 4,632 has been shown under the "Share Suspense Account" as at March 31, 2013.

4. Further upon the Scheme coming into effect on April 8, 2013, 800 Zero Coupon Optionally Fully Convertible Debentures of face value of Rs.1,00 lakh each held by the holding company Indigold Trade and Services Limited (ITSL) will be converted into 45,977,011 equity shares of X 10/- each fully paid-up of the Company and an amount of X 75,402 lakh will be credited to the Securities Premium Account. Pending conversion, the face value and premium on such shares of X 80,000 lakh has been shown under the heading "Share Suspense Account" as at March 31, 2013.

5. In terms of the Scheme, all assets and liabilities of the demerged undertaking have been transferred and stands vested with the Company with effect from the appointed date, i.e., 1st July, 2012, at their respective book values as on that date. Further, with effect from the appointed date and upto and including the effective date the demerged Company shall be deemed to have been carrying on all business activities of the demerged undertaking and all the profits/Losses accruing to the demerged Company in relation to the demerged undertaking for the period commencing from the appointed date and upto the effective date shall for all purposes be treated as the profits or losses, as the case may be of the resulting Company.

6. In accordance with the Scheme, the difference between the share capital issued and the net liabilities taken over shall be treated as Goodwill. Further as per the Scheme, an amount of X 8,018 lakh being the difference on accounting treatment followed by the Company and the demerged Company related to the following items, have been adjusted to the goodwill arising from the Scheme:

9. Further expenses of X 910 lakh incidental to the Scheme on its implementation has been adjusted against the reserves of the resulting company, which is in accordance with the Scheme. Accordingly, the loss of the Company is lower by X 910 lakh.

10. In the absence of virtual certainty, the Company has not recognised net deferred tax asset arising on the assets and liabilities of the demerger undertaking taken over as on the appointed date.

11. From the effective date, the name of the resulting Company has been changed to ''Pantaloons Fashion & Retail Limited''.

12. The figures for the current year include figures of the demerged undertaking which is merged with the Company with effect from July 1, 2012, and are therefore to that extent not comparable with those of previous year.

NOTE: 5

Disclosure Pursuant to Accounting Standard-19 - Leases is as under:

A. Assets Taken on Lease:

The Company has entered into agreements for taking on lease certain residential/office/store premises, warehouses, on leave and licence basis. The lease term is for a period ranging from 3 to 25 years. There are escalation clauses in the lease agreements. The specified disclosure in respect of these agreements is given below:

NOTE: 6

SEGMENT INFORMATION

In accordance with the principles given in accounting standard on Segment Reporting (AS-17) notified by Companies (Accounting Standards) Rules, 2006, the Company has determined its primary business segment as "retail". The Company has no other reportable segment. Further, significant business of the Company is within India, hence, there is no geographical segment. Accordingly, disclosure of information as per AS-17 is not required.

NOTE: 7

PREVIOUS YEAR FIGURES

The figures of the previous year were audited by a Firm of Chartered Accountants other than S.R. Batliboi & Co. LLP.

The Company has reclassified previous year figures to conform to this year''s classification.

 
Subscribe now to get personal finance updates in your inbox!