From the managing director
With our support and involvement, we firmly believe that most of our businessventures will become the leading consumer companies and brands in India.
We are pleased to share with you the Annual Report of Future Ventures India Limited(Future Ventures) for the financial year 2011-12.
Future Ventures is focused on investing in and building the value chain in food andfashion categories that attract the highest share of Indian consumers' wallet. These arealso the categories that are going through the maximum amount of change as Indianconsumers demand more value-added, branded and aspirational products. At Future Group, wenow have over a decade of experience in retailing and distribution of consumer goods toIndian consumers. We believe, that during this period we have gathered some valuableinsights, knowledge and expertise on the consumption categories and brands in India. AtFuture Ventures, we are using these insights and knowledge to build businesses across thevalue chain of fashion and food categories. We are investing in Indian entrepreneurs, whowe believe have built credible brands and businesses and mentoring them in areas likestrategy, brand development, consumer insights and use of technology and supply chain.With our support and involvement, we firmly believe that most of these businesses willbecome the leading consumer companies and brands in India.
It has been an eventful year at Future Ventures. Your trust and belief in our visionenabled us to successfully complete the Initial Public Offering of Future Ventures. FutureVentures today has a networth of Rs 1,438 crore with investments in 15 fast growingbusinesses. During the year under review, Future Ventures made fresh investments of Rs 99crore in fashion business, Rs 108 crore in the food and distribution business and Rs 67crore in increasing our stake in the company that owns iconic Indian brands like AmarChitra Katha, Tinkle and Karadi Tales.
Despite the difficult market environment in the fashion and apparel category, yourCompany's fashion business grew by 62%. This was led by the flagship company, Indus LeagueClothing that posted a consolidated turnover on economic interest basis of Rs 572 crore.Your Company has a 95.29% stake in this company
BIBA is one of India's most popular women's wear brands. Led by a mother and son duo ofMeena and Siddharth Bindra, the company has grown at a rapid pace and now has 87 exclusiveoutlets and a presence in 199 multi-brand outlets. A firm focus in driving an efficientgrowth strategy in the business helped the company increase its operating margins by 56%on a tunrover of Rs 169 crore. Future Ventures has increased its stake to 28.30% in thecompany.
Anita Dongre, a noted fashion designer in the Country who has been able to build ascalable fashion business operates the retail chain AND. The company also recentlylaunched a new chain, GlobalDesi, focusing on fusion wear. The chain has gained immensepopularity in a short period of time. AND Designs now has 73 exclusive outlets and apresence in 241 multi-brand outlets. During the year under review, the company crossed theRs 100 crore turnover mark and also managed to grow its operating profit by 58%.
Future Ventures is leading a similar phase of growth within its other businesses aswell, including Turtle, Lee Cooper, Holii, IndusTree and its joint venture with Frenchbrand Celio. During the year under review, Future Ventures also invested into a jointventure with UK based globally renowned footwear brand Clarks. Within nine months ofoperations, the company has opened 15 exclusive outlets and established a point ofpresence in 152 multi brand outlets.
Food as a category attracts almost 60% of the total consumption expenditure of Indianconsumers. However, the nature and composition of this consumption is undergoing a rapidchange, as Indian consumers demand more value-added, processed and packaged food. However,despite the huge potential, food processing remains a small and fragmented industry inIndia, primarily due to the lack of investments and infrastructure in the sector. Buoyedby a new Government policy by the Ministry of Food Processing Industries, Future Ventureshas started investing in the first integrated food park in the Country. The investment isbeing made through Capital Foods, wherein Future Ventures has a 43.76% stake. Located nearTumkur, Karnataka, the project aims at developing food processing infrastructure, with theobjective of integrating "farm to plate" supply chain. We are working with anumber of domestic and foreign food companies to set up their sourcing, processing andpackaging facilities within the food park. The planned outlay for this project is Rs 144crore and is expected to generate business to the tune of over Rs 1500 crore once it goeson-stream. We have taken over 110 acres of land and the development work at the park is inprogress in full swing and it is expected to be operational in another 12-15 months;eventually becoming a 'State of the art' infrastructure to support growing food processingsector in India. Simultaneously your Company is scouting for similar opportunities inother parts of the Country.
The rural consumption market provides large untapped opportunities. However,distribution through traditional channel continues to be fraught with challenges due tothe dispersed nature of the market and high costs. In order to convert this into anopportunity, Aadhaar Retailing Limited (Aadhaar) is piloting a unique model of buildingwholesale and distribution hubs in large towns, coupled with franchised stores that extendinto villages in and around the town. Aadhaar has set up the first pilot wholesale marketat Kalol in Gujarat and has received an encouraging response from rural retailers tomanage franchise stores and source their merchandise from the Aadhaar wholesale market. Oncompletion of the pilot phase, Aadhaar intends to extend this within and outside thestate. Aadhaar continues to operate 35 other retail outlets in Punjab, Haryana andGujarat.
Our business ventures engaged in packaged and branded food business continues to growwith brands like Ching's Secret, Smith & Jones, Fresh & Pure, Premium Harvest,Sach, Caremate and Cleanmate. While the food business has grown by 26%, the continuedfocus on the working capital management has resulted in further improvement in Net WorkingCapital cycle by 13 days.
Future Ventures has made a strategic investment to revive and contemporize some ofIndia's oldest iconic brands - Amar Chitra Katha, Tinkle and Karadi Tales and has a 65.84%in Amar Chitra Katha Private Limited (ACK). The company has started converting some of itsproducts on digital platforms, offering merchandizing and licensing rights andstrengthening its books and magazine distribution business. In a first, the company willlaunch its movie based on one of its most popular titles and produced in association witha leading children's television network. The company has also acquired the rights topublish and distribute international magazine 'National Geographic' and 'NG Traveller'.Both the magazine's India avatar is expected to hit the stands in July' 12.
As you would appreciate, building new businesses demands patience, perseverance andbelief. My own journey as an entrepreneur involved as much joy from experiencing a newidea unfold into a successful business, as was frustration and eventual learning frommaking mistakes. While realizing mistakes is a part of the entrepreneurial journey, it ismy belief that appropriate mentoring of the new businesses that we hold through FutureVentures can help many of these new businesses and entrepreneurs go through the learningcurve faster and avoid many of the mistakes we may have made in our existing businesses.Few can doubt the potential of the consumption industry in India, and at Future Ventureswe are here to indentify the best businesses and best entrepreneurs who can make the mostof the consumption opportunities Indian consumers will provide in the near future.
Thank you for your continued trust, belief and patience in helping us realize ourdream.
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