| Disclosure in board of directors report explanatory Your Directors take pleasure in submitting the Thirteenth Annual Report and Audited Accounts of the Company for the year ended 31st March 2013. Particulars of employees as per provisions of section 217As required under the provisions of Section 217(2A) of the Act, read with the Companies (Particulars of Employees) Rules, 1975, as amended, particulars of employees form part of this report. This report is being sent to the shareholders of the Company excluding the aforesaid information. Any shareholder may write to the Company for obtaining a copy thereof. Disclosures in director’s responsibility statementPursuant to Section 217(2AA) of the Act, the Directors hereunder confirm that: - in the preparation of annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
- they have selected such Accounting Policies and applied them consistently; and made judgment 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 financial year and of the loss of the Company for the year ended on that date;
- they 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 frauds and other irregularities;
- that the annual Accounts have been prepared on a ‘going concern’ basis.
Details regarding foreign exchange earnings and outgoDuring the year under review, the foreign exchange earning was NIL and expenditure in foreign currency amounted to Rs 0.92 million mainly due to miscellaneous foreign currency payments. Details regarding energy conservationThe provisions of Sec. 217(1)(e) of the Act relating to energy conservation do not apply to the Company. Details regarding technology absorptionThe provisions of Sec. 217(1)(e) of the Act relating to technology absorption do not apply to the Company. The Company widely uses information technology in its operations. Description of state of companies affairFINANCIAL RESULTS Rs/Million Particulars | 2012-13 | 2011-12 | Sales and Other Income | 13470 | 12063 | Operating Loss | 873 | 1509 | Interest | 341 | 381 | Depreciation | 320 | 504 | Loss for the year before exceptional items & Taxes | 1534 | 2395 | Exceptional Items | 447 | 159 | Taxes (Deferred Tax) | 110 | NIL | Loss after Taxes | 2091 | 2554 |
Other details mentioned board reportPERFORMANCE REVIEW AND OUTLOOK The Company continued its journey of growing top line by achieving a robust same store sales growth of 16% for the year with large format stores growing at about 20%. The Company completed consolidation of its operations by closing remaining non-profitable small format stores including complete exit from Pune cluster. The focused approach of growing the viable profitable business, along with the major steps taken in the areas of opex control and margin improvement, have resulted in much better performance at the company Ebidta level for the year over the previous year. The Company is implementing various initiatives to improve the business profitability of its non-food business viz, apparel and general merchandising. As a result of these measures, operating loss for the year was Rs.873 million vs. Rs.1509 million in the previous year. After consolidating its operations, the Company is gearing up for rolling out large format stores to improve its market position in the existing clusters. This will help in fully leveraging back end and advertising costs. Key priorities for the current year are growing in non food business, further improving in store experience along with building people capability to sustain the aggressive growth plan for the coming years for the Company. Company looks forward to further strengthening its performance in the coming years. NOTE ON SUBSIDIARIES The Company has two subsidiary companies namely Music World Retail Limited and Au Bon Pain Café India Limited. As required under Section 212 of the Companies Act, 1956 (‘the Act’), the Audited Statement of Accounts along with the Report of the Board of Directors of both the subsidiary companies and the respective Auditors Report thereon for the year ended 31 March 2013, are annexed to the Balance Sheet as at 31 March 2013 of your Company. A statement pursuant to Section 212 of the Act is also annexed. MERGER The Hon’ble Calcutta High Court has passed an Order sanctioning a scheme of amalgamation of Music World Retail Limited, a wholly-owned subsidiary, with the Company. Necessary steps will be taken in this regard on receipt of the certified copy of the said Order. DIRECTORS During the year, Mr. Soumyajit Roy resigned as Manager of the Company and Mr. Vineet Kumar Kapila was appointed as Managing Director on the Board of the Company with effect from 1 August 2012. Mr. Vineet Kumar Kapila resigned from the Board as Managing Director with effect from 30 November 2012 and Mr. Mohit Kampani was appointed as Additional Director and then the Whole- time Director on the Board of the Company for a period of 3 years with effect from 1 December 2012. The Company has received a notice from a member along with the requisite deposit of money signifying his intention to propose the appointment of Mr. Kampani as Director of the Company at the ensuing Annual General Meeting. Pursuant to Section 256 of the Act, Mr. Rajendra Jha retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment. AUDIT COMMITTEE The Audit Committee consists of three members namely Mr. Rajendra Jha, Mr. Subhasis Mitra and Mr. Bhanwarlal Chandak. AUDITORS M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, Statutory Auditors of the Company retire at the ensuing Annual General Meeting. M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, have expressed their unwillingness for re-appointment as Statutory Auditors at the forthcoming Annual General Meeting. In view of the above, the Board recommends appointment of M/s. S R B C & Co. LLP, Chartered Accountants, in place of the retiring Auditors, as Statutory Auditors of the Company at the forthcoming Annual General Meeting of the Company. M/s. S R B C & Co. LLP, Chartered Accountants, had conveyed their willingness to be the Auditors of the Company, if appointed, and confirmed that such an appointment would be in conformity with the provisions of Section 224(1B) of the Companies Act, 1956. FIXED DEPOSITS During the year under review, the Company has not accepted any deposit under Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975. ACKNOWLEDGEMENTS Your Directors wish to place on record their appreciation for the valuable services rendered by the employees of the Company at all levels. The Directors would also like to express their appreciation to bankers, trade suppliers, customers, financial institutions and the shareholders for their continued support and cooperation. Director's comments on qualification(s), reservation(s) or adverse remark(s) of auditors as per board's reportThe qualification of the Auditors on deferred tax asset has been explained in Note. 2.1.l of the Notes to Financial Statements as at and for the year ended 31 March 2013.
The text of the above referred note has been reproduced below:
Income Taxes
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act 1961 enacted in India.
Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on tax rates and tax laws enacted or substantively enacted at the Balance sheet date. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized. In situations where the company has unabsorbed depreciation or carried forward losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profit. At each balance sheet date, the Company re-assesses unrecognized deferred tax assets (DTA) and recognizes unrecognized DTA to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such DTA can be realized.
The carrying amounts of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
|