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Future Consumer Ltd.

BSE: 533400 Sector: Others
NSE: FCONSUMER ISIN Code: INE220J01025
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OPEN 7.74
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VOLUME 3740186
52-Week high 30.15
52-Week low 5.44
P/E
Mkt Cap.(Rs cr) 1,595
Buy Price 8.30
Buy Qty 261487.00
Sell Price 8.29
Sell Qty 21501.00
OPEN 7.74
CLOSE 7.91
VOLUME 3740186
52-Week high 30.15
52-Week low 5.44
P/E
Mkt Cap.(Rs cr) 1,595
Buy Price 8.30
Buy Qty 261487.00
Sell Price 8.29
Sell Qty 21501.00

Future Consumer Ltd. (FCONSUMER) - Director Report

Company director report

Dear Shareholders

Your Directors are pleased to present the 23rd Annual Report and the Audited Accounts of the Company for the year ended 31st March 2019.

FINANCIAL HIGHLIGHTS

The summarized financial performance (Standalone and Consolidated) of the Company:

(Rs in Lakhs)

StandaloneConsolidated
FY 18-19FY 17-18FY 18-19FY 17-18
Total income304987.89248024.98391203.15303971.71
Profit / (Loss) before exceptional items6096.623262.37551.96(1151.77)
Share of Loss in Associate Company and Joint VenturesNANA(2949.42)(2162.30)
Add / (Less) : Exceptional Items(1923.14)-22.41-
Profit / (Loss) before Tax4173.483262.37(2375.05)(3314.07)
Profit / (Loss) After Tax6053.103234.68(718.31)(3064.35)
Profit / (Loss) After Share of Associates and Minority InterestNANA(638.75)(2598.42)

BUSINESS OPERATIONS

Future Consumer Limited (FCL) is a next generation food & HPC company focusing on launching new products in emerging categories and value-added space. The Company has followed a strategy of launching differentiated products catering to a wide range of categories of consumer's basket.

The Company continues its journey to launch new / innovative products and has entered mainstream categories such as biscuits snacking amongst others. Tasty Treat brand emerged into the leading snacks brand in FCL portfolio with a topline of over Rs 185 crores growing at 68% on YoY basis. The brand is gaining scale as we continue to advertise on prime-time television during widely viewed events such as IPL. The campaign featured brand ambassador Varun Dhawan celebrating every foodie's love for snacking munching and sipping. Karmiq the lifestyle wellness brand with a premium product range of dry fruits munchies and flavored dry-fruits nuts reached a new milestone recording sales ofover Rs 155 crore in FY 19 growing at 120% on YoY basis. FCL is also focusing on home care personal care and beauty as leading brands Clean Mate and Care Mate clocked revenues of over Rs 80 crore and Rs 60 crore in topline in FY 19. The Company's brand TS- in the beauty accessories space has recorded great acceptance with customers. FCL is becoming a data centric organization and is setting up tools that will enable real time demand sensing and build a predictive supply chain network.

During the year your Company expanded its distribution footprint to over ~120000 touch points. The Company expanded its presence though the 3500 Canteen Stores Department (CSD). Further the Company launched its rural distribution strategy through a membership-based program Mitra. The Company has created presence in over 4 states with 7 centers and has enrolled over 60 Mitras.

FCL has established a robust sourcing ecosystem and the capability to manufacture products in-house as well as through subsidiaries joint ventures and associate companies. The Integrated Food Park enables end-to-end food processing along the value chain from the farm to the market. It has also led to reduction in lead time for the introduction of new products. During the year FCL announced a joint venture partnership with global dairy nutrition company Fonterra. The partnership shall work towards building Dairy 2.0 through creation of value-added portfolio by leveraging more than 125 years of rich history and expertise ofFonterra and Future Group led modern trade network and select high end traditional food retail stores across the Country. Both the JV partners intend to follow an asset light model in the initial years to contain the capital investment at the same time keeping a strong focus on quality standards. The initial stages of the partnership will focus on product development and marketing with the right capital investment made during this period. The first consumer products will be launched by the middle of 2019 using both locally sourced milk and dairy products from New Zealand.

During the year under review your Company has recorded revenue from operations of Rs 388064.97 Lakhs as against revenue from operations of Rs 300746.50 Lakhs registering year over year growth of 29%. EBITDA of the Company almost doubled from Rs 6628.25 Lakhs in previous year to Rs 11543.59 Lakhs during the year under review. Profit before tax turned positive for the first time as FCL registered PBT of Rs 574.37 Lakhs in FY19 as against loss before tax of Rs 1151.77 Lakhs during FY18. The loss after tax attributable to the Company shrank significantly from Rs 2598.42 Lakhs in FY18 to Rs 638.75 Lakhs in FY19.

Save and expect those mentioned in this Report there were no material changes and commitments affecting the financial position of the Company between end of financial year under review and date of this report.

FUTURE OUTLOOK

India's GDP in FY 2017 stands at ~US$ 2464 bn and is projected to reach US$ 3555 bn in nominal terms by FY 2020. With a projected real GDP growth of 7%-8% till FY 2020 India is now among the fastest growing major economies in the world. The growth is driven by high private consumption favorable demographics dropping dependency ratio rapidly rising education levels and steady urbanization. A large consumer base driving high private consumption coupled with government's focus on skill development job creation infrastructure and investments will act as key drivers of growth for India.

Globally India is seen as one of the key consumer markets from where future growth is likely to emerge. It is estimated that India's consumption expenditure will increase from US$ 1453bn in FY 2016 to US$ 2062bn by FY 2020 and will surpass the consumption expenditure of developed economies like Italy France and UK.

Currently the food & groceries (F&G) segment forms the major share of the retail market (~67%). F&G will continue to be the dominant contributor in the retail market with 65% share in 2025. The Indian Food & Beverage (F&B) sector has seen multiple catalysts on the demand and supply sides. The sector is witnessing a strong shift from unbranded to branded products in categories such as staples led by increasing affluence level and consumer awareness. There has been a significant shift in consumer preferences led by digitization social media and strong product innovation on one hand and supply chain investments on the other.

FCL has a healthy mix of staples (with high volume) and premium food products (high margins) and is now expanding its household and personal care categories as well. FCL will continue to focus on emerging categories where there is immense headroom for growth. With constant innovations new offerings and change in product mix in brands like Golden Harvest Tasty Treat Karmiq Desi Atta Company Mother Earth and Cleanmate FCL is expected to continue its focus on delivering topline growth with margin expansion. FCL continues to focus on categories suitable for modern trade and is now exploring opportunities to expand into general trade. FCL will continue to leverage Future Group's retail muscle to expand its distribution reach.

UNCLAIMED SHARES

In terms of the provisions of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI Listing Regulations) details about unclaimed shares in d suspense account as on 31st March 2019 are as under:

DescriptionNo. of ShareholdersNo. of Shares
Aggregate number of shareholders and outstanding shares in the suspense account as on 1st April 2018218600
Aggregate number of shareholders who approached the Company for transfer from suspense account upto 31st March 2019118000
Number of shareholders to whom shares were transferred from suspense account upto 31st March 2019118000
Aggregate number of shareholders and outstanding shares in the suspense account as on 31st March 20191600

The Company has opened separate suspense account with Central Depository Services (India) Limited and has credited the said unclaimed shares to this suspense account. The voting rights in respect of shares maintained under the suspense account shall remain frozen till the rightful owner makes any claim over such shares.

TRANSFER TO RESERVES

Your Directors do not propose to transfer any amount to reserves.

DIVIDEND

Your Directors have not recommended any dividend on equity shares in respect of the financial year 2018-19 in view of conserving the funds for envisaged business requirements.

In terms of the provisions of Regulation 43A of SEBI Listing Regulations the Company has adopted a Dividend Distribution Policy. The Dividend Distribution Policy is annexed to this Report as Annexure I and is also available on the website of the Company - HREF=http://futureconsumer.in/Investors.aspx#policies.html>http://futureconsumer.in/Investors.aspx#policies.html

INCREASE IN SHARE CAPITAL

During the year under review your Company has issued and allotted in aggregate 7029017 equity shares of the Company to eligible employees on exercise of options granted under Employees Stock Option Scheme(s) formulated by the Company.

Consequent to the aforesaid the issued subscribed and paid-up capital of the Company increased from 1913433663 equity shares of ' 6/- each to 1920462680 equity shares of ' 6/- each.

SUBSIDIARIES AND JOINT VENTURE COMPANIES

As at 31st March 2019 your Company had following Subsidiary and Joint Venture companies:

Sr. No.Name of the companyCategory
1.Aadhaar Wholesale Trading and Distribution LimitedSubsidiary
2.Affluence Food Processors Private LimitedSubsidiary
3.Appu Nutritions Private LimitedSubsidiary
4.Aussee Oats India Limited (formerly known as Aussee Oats India Private Limited)Subsidiary
5.Aussee Oats Milling (Private) LimitedSubsidiary
6.Avante Snack Foods Private LimitedSubsidiary
7.Bloom Foods and Beverages Private LimitedSubsidiary
8.FCEL Food Processors LimitedSubsidiary
9.FCEL Overseas FZCOSubsidiary
10.FCL Tradevest Private LimitedSubsidiary (w.e.f. 24th December 2018)
11.Future Consumer Products LimitedSubsidiary
12.Future Food and Products LimitedSubsidiary
13.Future Food Processing Limited (formerly known as Future Food Processing Private Limited)Subsidiary
14.Fonterra Future Dairy Private LimitedJoint Venture (w.e.f. 1st December 2018)
15.Genoa Rice Mills Private LimitedJoint Venture
16.Hain Future Natural Products Private LimitedJoint Venture
17.Integrated Food Park Limited (formerly known as Integrated Food Park Private Limited)Subsidiary
18.Mibelle Future Consumer Products A.G.Joint Venture
19.MNS Foods Limited (formerly known as MNS Foods Private Limited)Subsidiary
20.Nilgiris Franchise Limited (formerly known as Nilgiris Franchise Private Limited)Subsidiary
21.Nilgiri's Mechanised Bakery Private LimitedSubsidiary
22.Sublime Foods Limited (formerly known as Sublime Foods Private Limited)Subsidiary
23.The Nilgiri Dairy Farm Private LimitedSubsidiary

During the year under review:

a) Amar Chitra Katha Private Limited (ACKPL) has ceased to be a subsidiary of the Company with effect from 14th December 2018. Consequent to the same ACK Media Direct Limited IBH Books & Magazines Distributors Limited and Ideas Box Entertainment Limited subsidiaries of ACKPL have also ceased to be the subsidiaries of the Company with effect from the same date.

b) Fonterra Future Dairy Private Limited is a joint venture entity pursuant to the joint venture agreement executed between the Company and Fonterra (Europe) Cooperatie U.A. joint venture partner.

c) Affluence Food Processors Private Limited become a wholly owned subsidiary of the Company with effect from 6th November 2018 consequent to acquisition of entire stake from of the joint venture partner by the Company.

d) For the purpose of consolidation of investments held by the Company in few subsidiary /joint venture companies engaged in manufacturing activities the respective shareholding of the Company in these companies have been transferred to a wholly owned subsidiary viz. FCL Tradevest Private Limited. Consequent to the same Affluence Food Processors Private Limited Aussee Oats India Limited Sublime Foods Limited MNS Foods Limited Integrated Food Park Limited Future Food and Products Limited Future Food Processing Limited have become subsidiary of FCL Tradevest Private Limited. Genoa Rice Mills Private Limited has become a joint venture of FCL Tradevest Private Limited.

Pursuant to the provisions of Section 129(3) of the Companies Act 2013 a statement containing salient features of financial statements of Subsidiaries and Joint Venture companies in Form AOC-1 is attached separately to this Annual Report.

The performance financial position and contribution of each of the Subsidiaries and Joint Venture companies to the performance of the Company is provided under Management Discussion and Analysis Report which is presented separately and forms part of this Report.

The policy for determining material subsidiaries as approved by the Board of Directors of the Company is available on the website of the Company - HREF=http://futureconsumer.in/Investors>http://futureconsumer.in/Investors . aspx#policies.html

As on 31st March 2019 FCL Tradevest Private Limited and Bloom Foods and Beverages Private Limited have been identified as material subsidiary of the Company as per the thresholds laid down under the aforesaid policy.

In accordance to the provisions of Section 136(1) of the Companies Act 2013 the Annual Report of the Company containing therein standalone and the consolidated financial statements of the Company and the audited financial statements of each of the subsidiary companies have been placed on the website of the Company - HREF=http://www.futureconsumer.in/> www.futureconsumer.in .

The audited financial statements in respect of each subsidiary company shall also be kept open for inspection at the Registered Office of the Company during working hours for a period of 21

days before the date of ensuing Annual General Meeting. The aforesaid documents relating to subsidiary companies can be made available to any Member interested in obtaining the same upon a request in that regards made to the Company.

FINANCIAL STATEMENTS

Pursuant to the Companies (Indian Accounting Standards) Rules 2015 (IND AS) notified by the Ministry of Corporate Affairs the Company has adopted the Indian Accounting Standards with effect from 1st April 2016. Accordingly the Standalone and Consolidated Financial Statements of the Company and its subsidiaries for the year ended 31st March 2019 and 31st March 2018 have been prepared in accordance with IND AS.

The audited Consolidated Financial Statements prepared in accordance with IND AS are provided in this Annual Report.

PARTICULARS OF LOANS GRANTED GUARANTEE PROVIDED AND INVESTMENTS MADE PURSUANT TO THE PROVISIONS OF SECTION 186 OF THE COMPANIES ACT 2013

Details of loans granted guarantees provided and investments made by the Company under the provisions of Section 186 of the Companies Act 2013 are provided in the Notes to Standalone Financial Statements of the Company forming part of this Annual Report.

RELATED PARTY TRANSACTIONS

The Company has formulated policy on materiality of related party transactions and dealing with related party transactions (RPT Policy) in accordance to the provisions of Companies Act2013 and SEBI Listing Regulations. The RPT Policy is available on the website of the Company - HREF=http://futureconsumer.in/>http://futureconsumer.in/ Investors.aspx#policies.html

All transactions with related parties are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for transactions with related parties which are repetitive in nature.

All transactions entered into with related parties during the financial year under review were in the ordinary course of business and on an arm's length basis. The disclosure in respect of material contracts or arrangements with related parties as required under Section 134(3)(h) of the Companies Act 2013 is made in Form AOC-2 which is annexed to this Report as Anneuxre II.

INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROLS

The Company has put in place an adequate internal control system to safeguard all its assets and ensure operational

excellence. The system meticulously records all transaction details and ensures regulatory compliance. The Company also has a team of internal auditors to conduct internal audit. KPMG as our Internal Auditor ensures that all transactions are correctly authorised and reported. The reports are reviewed by the Audit Committee. Wherever necessary internal control systems are strengthened and corrective actions are initiated. The Internal Auditors assist in setting Industry benchmarks and help us drive and implement best Industry practice within our organization.

Internal Audit team conducts Internal Financial Review (IFC) testing on yearly basis as per Companies Act 2013 to ensure adequate and effective Internal Control over Financial Reporting. The same is also being certified by our Statutory Auditors on a yearly basis.

Based on the assessment carried out by the Company the internal financial controls were adequate and effective and no reportable material weakness or significant deficiencies in the design or operation of internal financial controls were observed during the financial year ended 31st March 2019.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In terms of provisions of the Companies Act 2013 Mr. Deepak Malik and Ms. Ashni Biyani are liable to retire from the Board of the Company by rotation at the forthcoming Annual General Meeting (AGM) and being eligible have offered themselves for re-appointment.

Ms. Ashni Biyani has been appointed as the Managing Director of the Company with effect from 22nd May 2018 for a period of three years pursuant to the approval granted by the Shareholders of the Company at the Annual General Meeting held on 29th August 2018.

The Board of Directors of the Company (Board) had at their meeting held on 22nd May 2019 on the recommendation of the Nomination and Remuneration/Compensation Committee (Committee) and pursuant to the provision of Regulation 17(1A) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 approved re-appointment of Mr. G. N. Bajpai as the NonExecutive Independent Director on the Board of Directors of the Company for a further term of 5 (Five) consecutive years with effect from 26th August 2019 subject to approval of the Shareholders of the Company. Further the Board has at the said meeting based on the recommendation of the Committee and subject to approval of the Shareholders approved reappointment of Mr. Narendra Baheti as an Executive Director on the Board of Directors of the Company for a further period of 3 years with effect from 30th August 2019.

The Notice convening forthcoming Annual General Meeting includes the proposal for appointment / re-appointment of the aforesaid Directors. A brief resume of the Directors seeking appointment/ re-appointment at the forthcoming AGM and other details as required to be disclosed in terms of Regulation 36(3) of the SEBI Listing Regulations and Secretarial Standard on General Meetings (SS-2) forms part of the Notice calling the AGM.

As on 31st March 2019 none of the Directors are disqualified for appointment/re-appointment under Section 164 of the Companies Act 2013.

Mr. Harminder Sahni and Ms. Neha Bagaria have been appointed as an Independent Director(s) of the Company for a period of 5 years with effect from 14th September 2018 and 20th March 2019 respectively.

The Company has received individual declarations from following Independent Director(s) of the Company stating that they meet the criteria of independence as provided under sub-section (6) of Section 149 of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI Listing Regulations:

a) Mr. G. N. Bajpai

b) Mr. Harminder Sahni

c) Mr. Adhiraj Harish

d) Ms. Neha Bagaria

During the year under review Ms. Vibha Rishi resigned as an Independent Director of the Company with effect from 14th September 2018. The Board wish to place on record their appreciation for contributions made by Ms. Vibha Rishi during her tenure as a member of the Board of Directors of the Company.

MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors met 5 (five) times during the financial year 2018-19. The details of composition of the Board and its meetings held during the year under review and the attendance of the Directors at those meetings is provided in the Corporate Governance Report which forms part of this Annual Report.

AUDIT COMMITTEE

As on 31st March2019 the composition of Audit Committee has been as under:

a. Mr. G. N. Bajpai

b. Mr. Harminder Sahni

c. Mr. K K Rathi

d. Mr. Adhiraj Harish

During the year under review all the recommendations made by the Audit Committee were accepted by the Board.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

As on 31st March2019 the composition of Corporate Social Responsibility Committee has been as under:

a. Mr. Kishore Biyani

b. Ms. Ashni Biyani

c. Mr. Harminder Sahni

PERFORMANCE EVALUATION OF BOARD

A formal evaluation of performance of the Board its Committees the Chairman and that of the individual Directors was carried out for the financial year 2018-19. The evaluation process was done based on structured questionnaire in accordance to the Guidance Note on Board Evaluation issued by Securities and Exchange Board of India.

The evaluation of Individual Directors was done taking into consideration the contributions made by each Director as a member at the respective meetings in pursuit of the purpose and goals participation at the meetings independent views and judgement initiative ownership of value building.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of Committees effectiveness of Committee meetings information shared and participation of members. In respect of evaluation for performance of the Board the parameters inter alia comprised of key areas such as Board composition competency of Directors diversity frequency of Board and Committee meetings information sharing and disclosures made to the Board and its Committees. The responses received on evaluation of the Board and its Committees and that of the individual Directors were shared with the Chairman.

The overall performance evaluation process for functioning of Board and its Committees was based on discussions amongst the Board Members Committee Members and responses shared by each Member. The Board found that there was considerable value and richness in the discussions and deliberations and has agreed for possible continuous improvisation and effectiveness in functioning of the Board and Committees.

CORPORATE GOVERNANCE

A report on Corporate Governance together with Auditors' Certificate as required under Regulation 34 of SEBI Listing Regulations forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report as required under Regulation 34 of SEBI Listing Regulations is presented separately and forms part of this Annual Report.

BUSINESS RESPONSIBILITY REPORT

A report in terms of Regulation 34 of the SEBI Listing Regulations on the business responsibility initiatives taken by the Company is presented separately and forms part of this Annual Report.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism and Whistle Blower Policy to provide a framework for promoting responsible and secure whistle blowing and to provide a channel to the employee(s) Directors and other stakeholders to report to the management concerns about unethical behavior actual or suspected fraud or violation of the code of conduct or policy/ies of the Company. The details of said vigil mechanism is given in Corporate Governance Report which forms part of this Annual Report.

NOMINATION AND REMUNERATION POLICY

In terms of requirements prescribed under Section 178 of the Companies Act 2013 the Company has framed a Nomination and Remuneration Policy for appointment and remuneration of the Directors Key Managerial Personnel and Senior Management (the Policy).

During the year under review the Company has amended the Policy in terms of requirements prescribed under the SEBI Listing Regulations.

The purpose of this Policy is to establish and govern the procedure as applicable inter alia in respect to the following:

a) To evaluate the performance of the members of the Board.

b) To ensure remuneration to Directors Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and longterm performance objectives appropriate to the working of the Company and its goals.

c) To retain motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

The Policy is available on the website of the Company - HREF=http://futureconsumer.in/Investors.aspx#policies.html>http://futureconsumer.in/Investors.aspx#policies.html and is annexed to this Report as Annexure III.

CORPORATE SOCIAL RESPONSIBILITY STATEMENT

The Company has constituted a Corporate Social Responsibility Committee (CSR Committee) in accordance with Section 135 of the Companies Act 2013. The Board of Directors of the Company have based on recommendations made by the CSR Committee formulated and approved Corporate Social Responsibility Policy (CSR Policy) for the Company. The salient features of CSR Policy inter-alia comprises of framing of guidelines to make Corporate Social Responsibility (CSR) a key business process for sustainable development of the society to directly/indirectly undertake projects/programmes which will enhance the quality of life and economic well-being of the communities in and around our operations and society and to generate goodwill and recognition among all stakeholders of the Company.

The disclosure as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules 2014 is made in prescribed form which is annexed to this Report as Annexure IV.

RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY

Your Company has Enterprise Risk Management (ERM) Policy in place. The aim of this policy is not only to eliminate risks but to also assist FCL personnel to manage the risks involved concerning the business and to achieve maximum opportunities and minimize adverse consequences.

It involves:

 Identifying and taking opportunities to improve performance as well as taking actions to avoid or reduce the chances of adverse consequences

 A systematic process that can be used when making decisions to improve the effectiveness and efficiency of performance

 Effective communication

 Accountability in decision making

Risk Management Committee meeting is held once in every six months wherein all the critical risks along with current mitigation plans identified during the period are presented to the Board. This ensures all the critical risks are covered and suitable mitigation plans are in place or needs to be implemented to overcome /avoid the risk to ensure controls are operating effectively. The Audit Committee has additional oversight in the areas of financial risk and controls.

AUDITORS AND AUDITORS' REPORT

M/s. S R B C & CO LLP Chartered Accountants have been appointed as the Statutory Auditors of the Company for a period of five years at the 21st Annual General Meeting of the Company held on 29th August 2017.

The notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments and explanations. The Auditors' Report does not contain any qualification reservation or adverse remark. No instances of fraud have been reported by the Statutory Auditors of the Company under Section 143(12) of the Companies Act 2013.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

The Company has appointed M/s. Sanjay Dholakia & Associates Company Secretaries to conduct Secretarial Audit of the Company for the financial year 2018-19 in terms of the provisions of Section 204 of the Companies Act 2013. The Secretarial Audit Report is annexed to this Report as Annexure V. The Secretarial Audit Report does not contain any qualification reservation or adverse remark.

PUBLIC DEPOSITS

Your Company has not been accepting any deposits from the public and hence there are no unpaid / unclaimed deposits or any instance of default in repayment thereof.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return as on 31st March 2019 in Form MGT 9 in terms of provisions of Section 92(3) of the Companies Act 2013 read with Rules thereto is available on website of the Company HREF=https://futureconsumer.in/>https://futureconsumer.in/ investors.aspx#financials.html

PARTICULARS OF EMPLOYEES

Disclosure with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are provided under Annexure VI which is annexed to this Report.

In terms of the provisions of first proviso to Section 136(1) of the Companies Act 2013 the statement containing particulars of top ten employees and the employees drawing remuneration in excess of limits prescribed under Section 197 of the Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is excluded from the Annual Report being sent to the Members of the Company and is available for inspection by the Members at the Registered Office ofthe Company during business hours on working days up to the date of the forthcoming Annual General Meeting. If any Member is interested in obtaining a copy thereof such Member may write to the Company Secretary and the same shall be provided.

The full Annual Report including aforesaid information is being sent electronically to all those Members who have registered their email addresses and is also available on the website CD of the Company.

PARTICULARS OF EMPLOYEE STOCK OPTION PLAN

Pursuant to the approval of the Shareholders the Company has formulated following employee stock option schemes:

a. FVIL Employees Stock Option Plan-2011 (FVIL ESOP- 2011)

b. Future Consumer Enterprise Limited - Employee Stock Option Plan 2014 (FCEL ESOP - 2014)

The aforesaid Employee Stock Option Plans are in compliance with SEBI (Share Based Employee Benefits) Regulations 2014 as amended from time to time (SEBI Employee Benefits Regulations) and there have been no material changes to these Plans during the financial year under review.

The details of options granted and exercised under FVIL ESOP- 2011 and FCEL ESOP-2014 and other disclosures as required under SEBI Employee Benefits Regulations are available on the website of the Company - HREF=http://futureconsumer.in/investors>http://futureconsumer.in/investors . aspx#statutory-documents.html and are also provided in Annexure VII which is annexed to this Report.

MAINTENANCE OF COST RECORDS

Your Company is not required to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act 2013 and accordingly such accounts and records have not been maintained by the Company.

PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION EXPENDITURE ON RESEARCH AND DEVELOPMENT FOREIGN EXCHANGE EARNINGS AND OUTGO ETC.

The Company in its regular course of business is vigilant to conserve the resources and continuously implements measures required to save energy.

The Company's initiative towards Energy and Carbon Policy sets forth guidelines towards low carbon transformation through energy efficiency and sourcing energy from alternative and renewable sources. The Company's Environment Management Systems (EMS) help them in identifying and assessing environmental risks preventing and mitigating the environmental impact caused due to its operations and products. The Company monitors its environmental performance against key performance indicators and works towards increasing manufacturing efficiency wastage reduction and enhancing capacity utilization.

The business activities of the Company are not specific to any technology requirements. In the course of operations processes are formed and implemented to achieve operational efficiencies in the Company and also at its subsidiaries which assist in maintaining product quality and cost control.

In respect of the manufacturing units of the Company and its subsidiaries the brief particulars in respect of various steps and initiatives taken regarding conservation of energy and technology absorption are as under:

(A) Conservation of Energy

The energy utilization in each manufacturing unit is being monitored regularly in order to achieve effective conservation of energy. The significant energy conservation measures under taken during the year under review were as under:

(i) the steps taken or impact on conservation of energy:

 Controlled shut down of Freezers and freezer room design optimisation resulted in savings of 421 kwh/ day w.e.f. January 2019.

 Rationalization in capacity utilization of freezer and movement of man and materials in the freezer room restricted temperature increase.

 Light circuit modification for auto power cut-off through installation of limit switches at cold chambers has resulted in savings of 92 kwh/ month w.e.f. from March 2019.

 Height reduction in the ante room with false ceiling briquette fired steam boiler.

 Maximum utilization of the Steam in effective way by arresting steam through steam traps and monitoring water to steam ratio.

 Refurbishing of boiler through insulation of the steam line and replacement of refractory bricks has reduced loss of heat from the steam .

 Pressure regulating system have been initiate in steam line ensuring optimal utilization of steam.

 Electrical boiler replaced by briquette fired boiler has resulted in savings of 1152 kwh/day w.e.f. March 2019.

 Auto power factor correction (APFC) resulted in savings of600 kwh/month w.e.f. March 2019.

 Street lights automated by timer mechanism resulted in savings of 3.2 KWH/month w.e.f March 2019.

In the current year India Food Park plans to initiate following measures to conserve energy:

 Replace the use of LPG with PNG as fuel to boilers and the same will be complemented with briquettes at Food Park.

 Automate street lighting through timer based switches.

 Automate power factor correction at all units.

In the current year the Company plans to replace the Surface Aerating system by Diffuser Aeration system at 'Aerator Tank 02' and install condensate recovery systems at the F&V division.

(ii) the steps taken by the Company for utilising alternate sources of energy:

India Food Park at Tumkur has installed 3MW solar power generating units by third party which is operational now and is being used across manufacturing units at India Food Park. The Company currently consumes 451790 KWh at India Food Park. A 3 MW solar power plant caters to 48 % of the electricity requirements.

(iii) the capital investment on energy conservation equipments:

The total capital investment on energy conservation equipment during financial year 2018-19 across all the business verticals of the Company and its subsidiaries is approximately ' 24.50 lakhs.

(B) Technology absorption

In the India Food Park at Tumkur surface aeration system has been changed to diffused aeration system and migrated to renewable energy source over conventional energy sources. These changes are expected to bring in process improvement cost reduction and GHG reduction. The Company's water stewardship policy encourages water conservation efforts while monitoring measuring and reporting progress against key performance indicators and complying with the local regulations.

(C) Foreign exchange earning and outgo

The details in respect of Foreign Exchange earnings/ outgo for the year under review is provided below:

Foreign Exchange Earnings: ' 601.65 lakhs

ParticularsAmount (Rs in Lakhs)
Interest Income257.03
Sale of Goods297.36
Sales Promotion47.26
Total601.65

Foreign Exchange Outgo: ' 7273.53 lakhs

ParticularsAmount (Rs in Lakhs)
Marketing Expenses33.76
Purchases7138.17
Recruitment Expenses3.51
Royalty Fees96.01
Sitting Fees0.50
Travelling Expenses1.59
Total7273.54

GENERAL

1) The Company has not issued any equity shares with differential rights as to dividend voting or otherwise.

2) The Managing Director and Executive Director have not received any commission from the Company nor any remuneration in the form of salary/perquisites from any of its subsidiary companies.

3) There are no significant / material orders passed by the regulators/courts/tribunals during the year under review which would otherwise impact the going concern status of your Company and its future operations.

4) The Company has complied with the provisions regarding the constitution of the Internal Complaints Committee (ICC) in terms of Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and Rules thereto. During the year under review there were no reported instances of cases filed pursuant to Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

5) The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Companies Act 2013 with respect to Directors'

Responsibility Statement it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended 31st March 2019 the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

b) 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 as at 31st March 2019 and of the profit or loss of the Company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts for the financial year ended 31st March 2019 on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors would like to thank and place on record their appreciation for the support and co-operation provided to your Company by its Shareholders Future Group entities and in particular regulatory authorities and its bankers. Your Directors would also like to place on record their appreciation for the efforts put in by employees of the Company during the year under review.

On behalf of the Board of Directors

G.N. Bajpai Chairman

Date: 22nd May 2019

Place: Mumbai

   

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