Mar 31, 2012
The Directors have pleasure in presenting the Eighth Annual Report and
Audited Accounts of the Company for the year ended 31st March, 2012.
FINANCIAL HIGHLIGHTS (Rs.In Lacs)
Particulars 2011-12 2010-11
Sales & Other Income 78,357 73,773
Expenditure towards sale
including cost of sales 72,865 67,796
i Profit before Depreciation
Interest and Taxation (PBDIT) 5,492 5,977
- Interest & Bank Charges 2,977 2,816
- Provision for Current Tax 702 690
Cash Profit for the Year 1,813 2,471
Depreciation/Amortisation 974 988
Income Tax for earlier years 147 (444)
Provision for Deferred Tax (Asset) (159) (86)
Profit After Taxation (PAT) 851 2,013
PAT brought forward from last year NiL Nil
Transferred to Debenture Redemption Reserve 23 2,013
PAT carried forward to next year 61 Nil
YEAR IN RETROSPECT
The Sales & Other Income for the year was Rs. 78,357 Lacs recording an
increase of 6.21% over the previous year. Operating Profit for the year
was Rs. 1,813 lacs against Rs. 2,471 lacs in the previous year. Lower
margins in a challenging market affected the profits. This was on
account of the fact that Rs.End of Season Sale' (where merchandise is
offered at a discount) had to be made for extended period.
DIVIDEND
Your Directors do not recommend payment of dividend on equity capital
for the year ended 31st March, 2012 in order to conserve resources for
future development and growth.
OPERATING RESULTS AND BUSINESS
Market conditions, in line with the general trend were not very
favourable during the year, especially for apparel. To ensure higher
earnings, the company has focused on improving the key operational
matrix which include better working capital rotation, higher per square
foot sales, improving store ambience with a new look and overall
focusing on consumer experience.
All the improvements undertaken in the last year revolved around the
Customer and to better his/her experience at the store. With focus on
retention and to increase the frequency of loyal customers, new
merchandise is added on monthly basis. Newer categories with youth
appeal were launched at stores supported by online marketing. All the
stores are being refurbished with international standards aimed at
delivering better experience to customers. The ground reality is that
demand has not shrunk, but the Company has faced pressure on margins
because of higher costs that cannot be passed on to the customer. The
Company is 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.
Brandhouse Oviesse Limited - Joint Venture with Oviesse, S.p.A.Italy
During the year under review, your Company's subsidiary, Brandhouse
Oviesse Limited (BOL) extended its business operations by adding new
stores in Amritsar, Surat and Aurangabad, to offer affordable Italian
fast fashion for men, women and children under the brand "OVS" in the
Indian market for branded readymade garments.
During the year, the Company invested in 1,61,73,989 equity shares of Rs.
10/- each of BOL. At present, your Company's equity participation in
BOL is Rs. 2,898.10 Lacs for 2,89,81,030 equity shares of Rs. 10/- each
representing 62.5% of BOL's total paid-up capital of Rs. 4,636.96 Lacs.
The remaining 37.5% of the paid-up share capital of BOL is held by
Oviesse
S.p.A. Italy.
Revenue From Operations of BOL for the year was Rs. 1,636.1 9 Lacs and
Losses for the year was at Rs. 2,788.38 Lacs. The OVS brand is relatively
new to the Indian market and therefore is yet to establish itself in
the Indian context. Expenditure on expansion of activities and capex
have affected the margins so far.
The brand's high fashion offering is getting increasing acceptance from
the Indian youth. The expansion of the brand, fine- tuning of the
merchandising strategy post customer data analysis and increased
percentage of goods sourced from India will ensure that BOL shall soon
attain the break even mark and move towards profitability in the near
future.
DIRECTORS
Dr. A. C. Shah, Director and Chairman of the Audit Committee, passed
away on 16th January, 2012 after a brief illness. The Directors have
placed on record their appreciation for the guidance and support given
by Dr. Shah during his tenure as the Board member.
Mr. Vijay Kalantri was appointed by the Board with effect from 13th
February, 2012 pursuant to section 262 of the Companies Act, 1956, in
the casual vacancy caused by the death of Dr. A.C. Shah.
During the year, Mr. Anish Modi resigned as Director upon withdrawal of
nomination by India Debt Management Private Limited with effect from
15th September, 2011. For the vacancy so caused Mr. Susheel Kak,
nominated by IDM was appointed by the Board. The Company has received
the requisite notice from a member pursuant to Section 257 of the
Companies Act, 1956 proposing the candidature of Mr. Susheel Kak for
the office of Director.
In accordance with the provisions of the Companies Act, 1956 and
Article 130 of the Articles of Association of the company, Mr. Denys
Firth and Mr. Nitin. S. Kasliwal retire by rotation and being eligible,
offer themselves 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, 2012 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, 2012 on a going concern basis.
DEPOSITS
Fixed deposits received from shareholders and public stood at NIL as on
31st March, 2012 (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. 39.47 Lacs (Previous year Rs. 129.59 Lacs) and
there was no earning in foreign exchange (Previous year NIL).
CONSOLIDATION OF ACCOUNTS
As required by Accounting Standards AS-21 and AS-23 issued by the
Institute of Chartered Accountants of India (ICAI), the Audited
Consolidated Financial Statements reflecting the consolidation of the
Accounts of your Company with its subsidiary are annexed to this Annual
Report.
AUDITORS
M/s. Haribhakti & Co., Chartered Accountants and M/s. Malpani &
Associates, Chartered Accountants, the joint Statutory Auditors of the
company hold office till the conclusion of the ensuing Annual General
Meeting and are eligible for re-appointment. M/s. Haribhakti & Co. and
M/s Malpani & Associates, the joint Statutory Auditors have furnished
the required certificates under section 224(1B) of the Companies Act,
1956 regarding their eligibility for re-appointment as Statutory
Auditors of the Company.
In respect of the observations made by the Auditors, please refer to
notes to Financial Statements, Note 29 in respect of Standalone
Financial Statements and Note 34 in respect of Consolidated Financial
Statements 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
Nitin S. Kasliwal
Chairman & Managing Director
Place : Mumbai
Date: 30th May, 2012
Mar 31, 2010
The Board of Directors of your company have pleasure in presenting the
Sixth Annual Report together with the Audited Accounts of your company
for the year ended on 31st March, 2010.
FINANCIAL HIGHLIGHTS (Rs in Lacs)
Particulars 2009-10 2008-09
1 Turnover 65,746.07 55,234.91
2. Other Income 233.96 5.76
3. Profit from Operations (PBDIT) 5,874.78 4,117.96
Less: Interest 1,915.95 878.03
Less: Depreciation/Amortisation 856.04 827.57
4. Profit before Tax 3,102.79 2,412.36
Less : Provision for Current Tax 1,501.66 1,151.99
Less : Provision for Deferred Tax (19.74) (78.13)
5. Profit After Tax 1,620.87 1,338.50
6. PAT brought forward from last year - -
7. Transferred to Debenture Redemption
Reserve 1,620.87 1,338.50
8. PAT carried forward to next year - -
YEAR IN RETROSPECT
The Net Sales/Income from operations for the financial year under
review was Rs. 65,746.07 Lacs as against Rs. 55,234.91 Lacs for the
previous financial year registering an increase of 19.03%. The Profit
from ordinary activities before tax (after Interest and Depreciation
charges) stood at Rs. 3,102.79 Lacs and the Profit after tax recorded
at Rs. 1,620.87 Lacs for the financial year under review as against Rs.
2,412.36 Lacs and Rs. 1,338.50 Lacs respectively for the previous
financial year, improving by 28.62% and 21.10% respectively.
DIVIDEND
Your Directors do not recommend payment of dividend on equity capital
for the year ended 31st March, 2010 in order to build up reserves for
future development and growth.
DEPOSITORY SYSTEM
As the members are aware, your companys shares are compulsorily
tradeable in electronic form. As on 31st March, 2010, 87.9% of the
companys total paid-up capital representing 4,71,16,607 shares were in
dematerialized form. In view of the numerous advantages offered by the
Depository system, members holding shares in physical mode are advised
to avail of the facility of dematerialisation with either of the
Depositories.
LISTING OF COMPANYS SHARES
Out of total 5,36,02,767 Equity Shares of Rs. 10/- each of the company,
5,19,94,195 Equity Shares were listed with the Bombay Stock Exchange
Limited and the National Stock Exchange of India Limited with effect
from 27th March, 2009. The remaining 16,08,572 Equity Shares of the
company, held by the Promoters of S. Kumars Nationwide Limited were
listed with effect from 30th March, 2010.
OPERATING RESULTS AND BUSINESS
Your company completes its sixth successful year in the field of
fashion retailing.
Performance of your company has endured on the back of strong foothold
in the branded space with its presence across various segments of
domestic retail markets. The recent market upsurge and improved
customer sentiments have helped increase earnings during the year.
The widening store network of your company across key retail points in
the country has given continuous revenue growth which has translated
into stronger profit performance. As part of the strategy to enhance
its earnings, the company has expanded its own store network with focus
on improving the key operational matrix which include better working
capital rotation, higher per square foot sales, improving store sales
and well considered new store expansion. The retail space continues to
offer abundant prospects in India for the company to maximize the
benefit.
The company has an ideal blend of brands that cater to various
preferences and price points enabling it to penetrate smaller cities
with its budget brands and bigger cities with its premium,
super-premium and luxury brands. Your company has adopted a strategy of
offering brands that are already established and have a high degree of
brand recall, thereby maximizing the success rate of a particular
brand.
Joint Venture with Oviesse, S.p.A. Italy
During the year under review, your company promoted Brandhouse Oviesse
Limited as its wholly owned subsidiary with initial paid-up capital of
Rs. 5.00 Lacs pursuant to the Joint Venture Arrangement entered with
Oviesse S.p.A. of Italy to launch the Italian fast fashion brand
"Oviesse Industry" under single brand retail trade in India. On 12th
May, 2010, 37,18,000 equity shares and 22,60,800 equity shares of Rs.
10/- each of Brandhouse Oviesse Limited representing 62.5% and 37.5%
respectively of the paid-up capital of Rs. 603 Lacs of Brandhouse
Oviesse Limited have been allotted to your company and to Oviesse
S.p.A. in accordance with the Joint Venture Arrangement. The further
capital infusion in Brandhouse Oviesse Limited would be made in
accordance with the agreed Business Plan forming part of the Joint
Venture Arrangement.
The Brand "Oviesse Industry" is set for its launch later this year with
opening of stores in the major metro cities to provide affordable fast
fashion for men, women and kids. As per the Business Plan, Brandhouse
Oviesse Limited would set up 190 Oviesse stores across India over next
5 years. The joint venture for the first year will import the
merchandise from Italy and thereafter will introduce local sourcing in
a phased manner.
DIRECTORS
During the year, Mr. Tarun Joshi resigned as the Managing Director of
the company. At the Board meeting held on 30th January, 2010 Mr. Nitin
S. Kasliwal, the Chairman of the company was appointed as the Managing
Director pursuant to section 269 and 316 of the Companies Act, 1956 for
a period of three years with effect from 30th January, 2010 without any
remuneration subject to approval from the shareholders and the Central
Government.
In accordance with the provisions of the Companies Act, 1956 and
Article 130 of the Articles of Association of the company, Mr. Denys
Firth and Mr. Dara D. Avari retire by rotation and being eligible,
offer themselves 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, 2010 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, 2010 on a going concern basis.
DEPOSITS
Fixed deposits received from shareholders and public stood at NIL as on
31st March, 2010 (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.
PROMOTER GROUP COMPANIES
As required under Clause 3(1)(e) of the Securities and Exchange Board
of India (Substantial Acquisition of shares and Takeover) Regulations,
1997, persons constituting Group (within the meaning as defined in the
Monopolies and Restrictive Trade Practices Act, 1969) for the purpose
of availing exemption from applicability of the provisions of
Regulation 10 to 12 of the aforesaid SEBI Regulations are detailed in
Annexure A forming part of this Directorsà Report.
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. 182.94 Lacs (Previous year Rs. 357.81 Lacs)
and earning in foreign exchange was Rs. 222.56 Lacs (Previous year
NIL).
CONSOLIDATION OF ACCOUNTS
The Audited Consolidated Financial Statements reflecting the
consolidation of the Accounts of your Company with its subsidiary are
annexed to this Annual Report.
AUDITORS
M/s. Haribhakti & Co., Chartered Accountants and M/s. Malpani &
Associates, Chartered Accountants, the joint Statutory Auditors of the
company hold office till the conclusion of the ensuing Annual General
Meeting and are eligible for re-appointment. M/s. Haribhakti & Co. and
M/s Malpani & Associates, the joint Statutory Auditors have furnished
the required certificate under section 224(1B) of the Companies Act,
1956 regarding their eligibility for re-appointment as Statutory
Auditors of the company.
In respect of observation made by the Auditors, please refer to Note
No. 7 of Schedule 14 which is self-explanatory and hence in the opinion
of the Directors, does not require any further explanation.
ACKNOWLEDGEMENT
Your Directors wish to place on record their grateful appreciation for
the assistance, guidance and support provided by the customers,
suppliers and other business associates. Your Directors also
acknowledge the commitment and contribution of your companys employees
at all levels and the shareholders.
On behalf of the Board
Place : Mumbai NITIN S. KASLIWAL
Date : 28th May, 2010 CHAIRMAN & MANAGING DIRECTOR