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Future Enterprises Ltd.

BSE: 523574 Sector: Industrials
NSE: FEL ISIN Code: INE623B01027
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OPEN 9.09
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VOLUME 60118
52-Week high 13.92
52-Week low 7.61
P/E
Mkt Cap.(Rs cr) 447
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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OPEN 9.09
CLOSE 8.85
VOLUME 60118
52-Week high 13.92
52-Week low 7.61
P/E
Mkt Cap.(Rs cr) 447
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Future Enterprises Ltd. (FEL) - Director Report

Company director report

To

The Members

Your Directors are pleased to present the Thirty-Second Annual Report of the Companytogether with the Audited financial statements for the financial year ended March 312020.

FINANCIAL HIGHLIGHTS:

The financial performance of the Company is as follows:

Particulars

Financial Year 2019-20

Financial Year 2018-19

Standalone Consolidated Standalone Consolidated
Revenue from operations 4043.15 5365.66 4565.64 5983.14
Other Income 42.05 67.40 27.11 81.82
Total Income 4085.20 5433.06 4592.75 6064.96
Profit before Depreciation & Tax 535.32 627.21 771.43 948.61
Less : Depreciation 860.68 1033.72 769.19 815.58
Profit/(Loss) before tax (325.36) (406.51) 2.24 153.66
Less : Tax expense (36.86) (37.00) (21.78) (21.78)
Profit/(Loss) after Tax (288.50) (369.51) 24.02 175.44
Other Comprehensive Income for the year (12.26) 10.10 12.57 13.90
Total Comprehensive Income for the year (300.76) (359.41) 36.59 189.34
Earnings Per Equity Share of Face Value of Rs.2/- each
- Basic and Diluted (in Rs.) (5.84) (6.71) 0.48 2.93
Earnings Per Equity Shares - Class B (Series 1) of Face Value of Rs.2/- each
- Basic and Diluted (in Rs.) (5.84) (6.71) 0.52 2.97

REVIEW OF PERFORMANCE

During the year under review the Company earned a total income on consolidated basisof Rs.5433.06 crore compared to Rs.6064.96 crore in previous year resulting in decrease of10.41% in consolidated revenue. Further the Company incurred losses of Rs.369.51 crore forthe year under review compared to profit of Rs.175.44 crore in previous year.

Furthermore during the year under review there was no material change in nature ofbusiness of the Company.

COVID 19

The outbreak of coronavirus COVID-19 is an unprecedented and highly evolving event withGovernment of India imposing restrictions on movement of people across the country and hasbrought a host of adaptations to the way we all function. These are challenging times forthe world at large. The outbreak of COVID-19 and its rapid acceleration across the globeare concerning. The most significant emerging risk is the ongoing outbreak of the novelcoronavirus (COVID-19). While the human impact of the virus takes precedence for all ofus we continue to monitor the developments closely and are wary of the adverse impact onour business. The manifold disruptions in terms of Government announced lockdownschallenges in running production managing supply and distribution network and fall inconsumer spending pose risks that are multi-dimensional and rapidly evolving.

With no precedence it has rattled lives and economies across the world and India hasnot been spared either. The year that started with weak demand along with liquiditysqueeze ended with the global economy coming to an indeterminate standstill following theoutbreak of COVID-19. Furthermore the Government's decision to put the country into fulllockdown during the latter phase of the fourth quarter had a major impact on the Company.Regardless of the challenging economic environment your company still managed to farewell. In our business we are facing a situation of very high uncertainty; a situationwhere both customer demand and supplier productivity was brought to a standstill foralmost seven months. In the short term the cash position of the company is solid and theliquidity is assured having enough unused credit lines.

In light of the above situation we have taken the following measures towards safety ofour stakeholders and continuity of our business:

• IT & Technology enablement measures are in place to facilitate remoteworking & seamless connectivity

• Regularly issuing updated preventive measures guidelines & communication toemployees

• Hygiene sanitisation of workplaces & retail stores ensured and 100%thermal scanning has been enabled

• Working closely with our associates & service partners through digital meansto ensure continuity of their services

• Remote working in a phased manner. Currently operating with minimumstaff/voluntary staff with the remaining are pursuing remote working.

COMPOSITE SCHEME OF ARRANGEMENT

The Board of Directors of the Company at its meeting held on 29th August 2020 has inter-aliaconsidered and approved the Composite Scheme of Arrangement which involves: (i) merger ofFuture Consumer Limited (Transferor Company 1") Future Lifestyle Fashions Limited("Transferor Company 2") Future Market Networks Limited ("TransferorCompany 3") Future Retail Limited ("Transferor Company 4") Future SupplyChain Solutions Limited ("Transferor Company 5") FutureBazaar India Limited("Transferor Company 6") Acute Retail Infra Private Limited ("TransferorCompany 7") Basuti Sales and Trading Private Limited ("Transferor Company8") Brattle Foods Private Limited ("Transferor Company 9") ChiragOperating Lease Co. Private Limited ("Transferor Company 10") Hare KrishnaOperating Lease Private Limited ("Transferor Company 11") Nice Texcot Trading& Agency Private Limited ("Transferor Company 12") Nishta Mall ManagementCompany Private Limited ("Transferor Company 13") Ojas Tradelease and MallManagement Private Limited ("Transferor Company 14") Precision RealtyDevelopers Private Limited ("Transferor Company 15") Rivaaz Trade VenturesPrivate Limited ("Transferor Company 16") Syntex Trading and Agency PrivateLimited ("Transferor Company 17) Taquito Lease Operators Private Limited("Transferor Company 18") and Unique Malls Private Limited ("TransferorCompany 19") collectively referred to as "Transferor Companies" with FutureEnterprises Limited ("the Company" or "FEL" or "TransfereeCompany") and their respective Shareholders and Creditors between the Company andReliance Retail Ventures Limited ("RRVL") and their respective shareholders andcreditors and between the Company and Reliance Retail and Fashion Lifestyle Limited("RRVL WOS") and their respective shareholders and creditors ("TheComposite Scheme of Arrangement"/Scheme") pursuant to Sections 230 to 232 andother relevant provisions of the Companies Act 2013.

Upon the proposed Scheme become effective the shareholders of FRL FCL FMNL FLFL andFSC will be allotted equity shares of the Company in the ratio as mentioned in the Scheme.

Fractional entitlement arising out of the aforesaid allotment will be consolidated andallotted to one of the person nominated by the Board. Sale Proceeds of these shares willbe distributed to shareholders who were entitled to such fractional shares. The new equityshares to be issued to the shareholders of Transferor Companies in terms of shareentitlement ratio shall rank pari passu in all respects with the existing equity shares ofthe Company and accordingly be listed on the stock exchanges subject to obtainingnecessary regulatory approvals.

No shares would be issued upon merger of wholly owned subsidiary Future Bazaar IndiaLimited (FBIL) and its wholly owned subsidiary companies pursuant to the Scheme sincemerging with holding company.

(ii) Transfer and vesting of the Logistics & Warehousing Undertaking from theCompany as a going concern on a slump sale basis to Reliance Retail Ventures Limited("RRVL");

(iii) Transfer and vesting of the Retail & Wholesale Undertaking from the Companyas a going concern on a slump sale basis to Reliance Retail and Fashion Lifestyle Limiteda wholly owned subsidiary of RRVL ("RRVL WOS");

(iv) Preferential allotment of equity shares and warrants of the Company to RRVL WOS("The Composite Scheme of Arrangement"/ Scheme") pursuant to Sections 230to 232 and other relevant provisions of the Companies Act 2013.

The Company is in process to file the application with the BSE Limited and NationalStock Exchange of India Limited for obtaining the no objection and observation letter fromSecurities and Exchange Board of India Competition Commission of India and NationalCompany Law Tribunal (NCLT) for its approval.

SHARE CAPITAL

During the year under review the Company has issued and allotted 713133 EquityShares the details of which are as under:

On November 5 2019 the Company has made allotment of 713133 Equity Shares of Rs.2/-each to the employee of the Company upon exercise their rights of vested options grantedto the said employee under Employees' Stock Option Scheme - 2012 (FEL ESOP 2012). None ofthe employee is in receipt of Equity Shares exceeding 1% of Equity Share capital of theCompany against the vested options exercised by them under FEL ESOP - 2012 & 2015.

DIVIDEND AND RESERVES

In view of losses the Company could not recommend any dividend for the year underreview.

As per Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirement) Regulation 2015 ("ListingRegulations") Dividend Distribution Policy is given as Annexure I to this Report andsame is also available on the website of the Company at the weblink:https://felindia.in/pdf/Dividend Distribution Policy.pdf.

In view of the losses the Board has noted that no amount can be transferred to GeneralReserve for the year under review.

INVESTMENTS

During the year under review the Company has made following investment which are asunder:

• Joint Venture/SPV Companies

The Company has made further investment of Rs.23.71 crore in Future Generali India LifeInsurance Company Limited Rs.22.69 crore in Sprint Advisory Services Private LimitedRs.24.23 crore in Future Generali India Insurance Company Limited Rs.23.19 crore inShendra Advisory Services Private Limited as a part of its entitlements and unsubscribedportion of other shareholders in Rights issue.

• Other Investments:

Company has made payment second tranche of Rs.5 crore in Livquik Technology (India)Private Limited of 71174377 Partly Paid Equity Shares.

Company has investments of Rs.15 crore in Leanbox Logistics Solutions Private Limitedby subscribing 508388 fully paid equity shares.

DIVESTMENTS

On February 12 2020 Company has transferred 545454 equity shares of Work StoreLimited ("WSL") to management share holders. Further on March 5 2020 buy-back1378000 equity shares of WSL representing 21.49% of equity share capital were givenunder buy-back scheme off the WSL. Consequent to this WSL as become the Associate of theCompany.

DEBENTURES

During the year under review the Company has raised long term funds throughNon-Convertible Debentures aggregating Rs.200 crore. The funds were utilised for theobjects as stated in the offer document issued at the time of raising funds. This hashelped the Company to improve its debt maturity profile and reduce the cost of debt.

The Company has made timely payment of interests and principal amount as and when itbecomes due on debentures issued by the Company. The Company has repaid the principalamount of Secured Redeemable Non-Convertible Debentures of approximately Rs.1357.50crore which includes non-convertible debentures due for payment in the year under reviewas well as for which the Company has exercised calls/put option for pre-payment togetherwith accrued interest payable thereon.

PUBLIC DEPOSITS

During the current financial year the Company has accepted Fixed Deposits from itsMembers and Public in accordance with the provisions of Sections 73 and 76 and otherapplicable provisions of the of the Companies Act 2013 ("the Act") and theCompanies (Acceptance of Deposits) Rules 2014.

The details relating to Deposits in terms of Rule 8(5)

(v) of the Companies (Accounts) Rules 2014 are given hereinunder:

Sr. No. Particulars Amount (Rs. crore)
1 Deposits accepted during the year 384.44
2 Deposit remaining unpaid or unclaimed at the end of the year -

3 Whether there has been any default in repayment of deposits or payment:

Particulars Number of such cases Total Amount Involved
At the beginning of the year
Maximum during the year
At the end of the year -
4 Details of the deposits which are not in compliance with the requirements of Chapter V of the Act

The Company has received a declaration as a part of Fixed Deposit Application formfrom its Directors at the time of receipt of money declaring that the amount is notbeing given out of funds acquired by him by way of any kind of borrowing or acceptingloans or deposits from others. The management has now decided not to accept any furtherdeposit w.e.f. September 07 2020.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis Report as required under Regulation 34 read withSchedule V of the Listing Regulations forms part of the Annual Report.

CORPORATE GOVERNANCE

A Report on Corporate Governance along with a Certificate from the Statutory Auditorsof the Company regarding the compliance with the conditions of Corporate Governance asstipulated under Regulation 34 read with Schedule V of the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations") forms part of the Annual Report.

POLICIES AND DISCLOSURE REQUIREMENTS

The Company has in inter-alia following policies and code of conduct dulyapproved by the Board of Directors of the Company:

• Details of programmes for familiarization of Independent Directors with theCompany are available on the website of the Company at the link https://felindia.in/pdf/Details of Familiarisation Programs Imparted to Independent Directors.pdf

• Policy for determining material subsidiaries of the Company is available on thewebsite of the Company at the link https://felindia.in/pdf/Policy For MaterialSubsidiary.pdf

• Policy for determining Materiality of Events of the Company is available on thewebsite of the Company at the link https://felindia.in/pdf/Policy For DeterminingMateriality Of Events.pdf

• Archival policy of the Company is available on the website of the Company at thelink https://felindia.in/ pdf/Archival Policy.pdf

• Policy for determining the code of conduct of board of directors and seniormanagement personnel of the Company is available on the website of the Company at the linkhttps://felindia.in/pdf/code-of-conduct.pdf

• The Remuneration Policy is available on the website of the Company at the linkhttps://felindia.in/pdf/ Remuneration Policy.pdf

• Policy on dealing with related party transactions is available on the website ofthe Company at the link https://felindia.in/pdf/Related Party Transaction Policy.pdf

• The Dividend distribution policy is given as Annexure I to this Report.The same is also available on the website of the Company at the link https://felindia.in/pdf/Dividend Distribution Policy.pdf

Furthermore the foregoing policies are approved and revised by the Board of Director(including concerned committees) from time to time.

NUMBER OF BOARD MEETINGS

The Board of Directors has met 6 (Six) times during the financial year 2019-20. Thedetails of Board meetings and the attendance of the Directors therein are provided in theCorporate Governance Report which forms part of the Annual Report.

COMMITTEES OF THE BOARD OF DIRECTORS

Details of Committees of the Company along with their terms of reference compositionand meetings held during the year are provided in the Corporate Governance Report whichforms part of the Annual Report.

SUBSIDIARY COMPANIES

The Company has following Subsidiaries (including step down subsidiaries) as at theend of financial year ended March 31 2020.

Futurebazaar India Limited

Futurebazaar India Limited ("FBIL") is a wholly owned subsidiary and is setup as the e-Retailing arm of the Future Group for providing on-line shopping experiencethrough e-portal www.futurebazaar.com. FBIL is successfully operating its e-retailingbusiness and during the financial year ended March 31 2020 it has registered income fromoperations amounting to Rs.0.08 crore and its net Loss stood at Rs.0.22 crore.

Future Media (India) Limited

Future Media (India) Limited ("FMIL") is the Future Group's media ventureaimed at creation of media properties in the ambience of consumption and thus offersactive engagement to brands and consumers. The Company holds equity capital of 93.10% inFMIL however considering the total capital comprising of convertible preference capitalthe Company's holding in the total capital of FMIL works out to 35.37%. FMIL also hasConvertible Preference Shares which has not yet been converted into equity shares. Duringthe financial year ended March 31 2020 FMIL registered income from operations amountingto Rs.29.03 crore and the net Profit stood at Rs.4.80 crore.

Bluerock eServices Private Limited

Bluerock eServices Private Limited ("BEPL") is wholly owned subsidiary of theCompany. BEPL deals in the business of providing services for operation and maintenance ofIT enabled platforms. BEPL has earned revenue of Rs.Nil crore & incurred net profit ofRs.0.20 crore during the year ended March 31 2020.

Future E-Commerce Infrastructure Limited

Future E-Commerce Infrastructure Limited ("FECIL") is to capture theconsumption space through the internet as well as other technology based and digitalmodes and provide infrastructure services for the same. The Company holds equity capitalof 81.67% however considering total capital comprising of convertible preference capitalthe Company's holding in the total capital of FECIL works out to 40.33%. FECIL also hasconvertible preference shares which has not yet been converted into equity shares. Duringthe financial year ended March 31 2020 FECIL registered income from operations amountingto Rs.0.08 crore and the net loss stood at Rs.0.26 crore.

Future Merchandising & Sourcing Pte. Ltd.

Future Merchandising & Sourcing Pte. Limited (FMSPL) is wholly owned subsidiary ofcompany based in Singapore to undertake the activity of global sourcing of food fashionfootwear and others from international markets. FMSPL has earned revenue of Rs.Nil crore& incurred net loss of Rs.0.05 crore during the year ended March 312020.

Ritvika Trading Private Limited

The Company acquired 100% equity share capital of Ritvika Trading Private Limited("RTPL") on November 19 2018 and consequently RTPL became the wholly ownedsubsidiary of the Company. The RTPL is in the business of buying selling importingexporting supplying trading dealing in all types of goods and services. During thefinancial year ended March 31 2020 RTPL registered income from operations amounting toRs.Nil crore and the net loss stood at Rs.9.45 crore.

Work Store Limited (until March 05 2020)

Work Stores Limited ("WSL") is designed to capture the consumption space ofoffice supplies office equipment and products. WSL was formed as a joint venture betweenthe Company and Staples Asia Investment Limited (a subsidiary of Staples Inc USA).

During the year under review WSL become associate company from subsidiary companyYour Company holds equity capital of 41.57% in WSL. During the financial year ended March31 2020 WSL has registered income from operations amounting to Rs.84.72 crore and thenet profit at Rs.3.60 crore.

Office Shop Private Limited (until March 05 2020)

Office Shop Private Limited ("OSPL") was incorporated to deal in the businessof distribution of office products. OSPL is 100% subsidiary of WSL and accordingly is astep-down subsidiary of the Company until March 05 2020. OSPL has earned revenue ofRs.Nil crore & incurred net loss of Rs.1.52 crore during the year ended March 312020.

Leanbox Logistics Solutions Pvt Ltd. (LLSL) (w.e.f. July 27 2019)

Leanbox Logistics Solutions Private Limited (LLSL) is engaged in business of providingtechnology driven logistics and delivery solutions to general retailers/retail stores andwholesale trading of FMCG products. LLSL is Associate of FSCSL. LLSL has earned revenue ofRs.102.07 crore & incurred net loss of Rs.40.97 crore during the year ended March 312020.

Future Supply Chain Solutions Limited subsidiary- it is associate of Ritvika TradingPrivate Limited

Future Supply Chain Solutions Limited ("FSCSL") covers the entire gamut ofsupply chain services across logistics value chain including smart warehousing anefficient transportation and distribution system temperature-controlled logistics andlast mile delivery logistics. The solution architecture is orchestrated throughsophisticated and highly automated state-of-the art technology systems pan-Indiadistribution network integrated warehouse management systems and hub and spoketransportation model enabling innovative service offering to the customers in an optimisedand cost-efficient manner.

During the year under review FSCSL became associate company from step down subsidiary.Ritvika Trading Private Limited (RTPL) w.e.f. December 17 2019 holds 46.75% stake inFSCSL. FSCSL has registered income from operations amounting to Rs.1140.55 crore and theearned net Loss of Rs.63.88 crore during the year ended March 31 2020.

ASSOCIATE COMPANY

Livquik Technology (India) Private Limited

LivQuik Technology (India) Private Limited ["LT(I) PL"] operates three keybusiness verticals - providing software solutions to enterprises issuance of prepaidpayment instruments and aggregating merchants for its payment gateway business. LT(I) PLis Associate Company of the Company. LT(I)PL has earned revenue of Rs.10.96 crore &incurred net loss of Rs.1.10 crore during the year ended March 31 2020.

JOINT VENTURES

Apollo Design Apparel Parks Limited and Goldmohur Design & Apparel Park Limited

The Company has entered joint venture with National Textile Corporation (NTC) for therestructuring and development of the Apollo Mills and Goldmohur Mills situated in Mumbai.For the same two separate SPV companies have been created viz. Apollo Design Apparel ParksLimited ("ADAPL") & Goldmohur Design & Apparel Park Limited("GDAPL"). The ADAPL & GDAPL would be working for the restructuring anddevelopment of the Apollo Mills and Goldmohur Mills respectively as per the memorandum ofunderstanding and other documents signed between Company and NTC. During the financialyear ended March 31 2020 ADAPL registered income from operations amounting to Rs.280.17crore and earned net profit of '10.37 crore. Furthermore GDAPL registered income fromoperations amounting to Rs.273.79 crore and earned net profit of Rs.8.65 crore.

Future Generali India Life Insurance Company Limited

Future Generali India Life Insurance Company Limited ("FGI-Life") isCompany's joint venture with Participatie Maatascchappij Graafsschap Holland NV(Generali) in the Life insurance sector. FGI-Life has introduced many insurance productsto suit requirements of various categories of customers. During the financial year endedMarch 31 2020 FGI-Life has registered income from operations of Rs.1278.14 crore andnet loss of Rs.189.61 crore.

Future Generali India Insurance Company Limited

Future Generali India Insurance Company Limited ("FGI- Nonlife") is Company'sjoint venture with Participatie Maatascchappij Graafsschap Holland NV (Generali) in thegeneral insurance sector. FGI-Nonlife has introduced insurance products for variousgeneral insurance needs of the different categories of customers. During the financialyear ended March 31 2020 FGI-Nonlife has registered income from operations ofRs.1981.58 crore and net profit of Rs.89.72 crore.

Shendra Advisory Services Private Limited

Shendra Advisory Services Private Limited ("Shendra") is a SPV with respectto the Company's insurance arm Future Generali India Insurance Company Limited. During thefinancial year ended March 31 2020 Shendra has registered income from operations ofRs.0.26 crore and net loss of Rs.0.02 crore.

Sprint Advisory Services Private Limited

Sprint Advisory Services Private Limited ("Sprint") is a SPV with respect tothe Company's insurance arm Future Generali India Life Insurance Company Limited. Duringthe financial year ended March 31 2020 Sprint has registered income from operations ofRs.Nil crore and net Loss of Rs.0.13 crore.

Separate statement containing the salient features of the financial statements ofsubsidiaries and associate companies including joint ventures is provided in Form AOC-1forming part of financial statements of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statement which isprepared in accordance with the Accounting Standards prescribed by the Institute ofChartered Accountants of India in this regard.

In accordance with the provisions of Section 136(1) of the Act the Annual Report ofthe Company containing therein the audited standalone and consolidated financial statementand the audited financial statements of each of the subsidiary companies have been placedon the website of the Company at a weblink www.felindia.in. The audited financialstatements in respect of subsidiaries shall also be available for electronic inspectionwithout any fees by the Members. The aforesaid documents are also available to Membersinterested in obtaining the same upon a request made to the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review Mr. Anil Harish an Independent Director of the Companyhas completed his term of appointment of five years on August 1 2019 and accordinglyceased to be a director with effect from said date.

During the year under review Mr. Haresh Chawla an Independent director of the Companyhas resigned from the Board of the Company and consequently from the various Committees ofthe Board in which he was a Member/Chairman with effect from March 31 2020 owing solelyto compelling personal factors. It has also been confirmed that there are no othermaterial reasons for his resignation.

Mr. Anandakrishnan Chandrsekaran was appointed as an Independent) Director on August10 2019 for a period of 5 (Five) years.

In terms of section 152 of the Act Mr. Kishore Biyani (DIN : 00005470) is liable toretire by rotation and being eligible offers himself for re-appointment.

The term of Mr. Vijay Biyani (DIN: 00005827) as Managing Director was for a period ofthree years and it is expiring on September 26 2020. The Board is seeking to reappointMr. Vijay Biyani as a Managing Director for a period of three years. Detail of theproposal for appointment of Mr. Vijay Biyani is mentioned in the Statement under Section102 of the Companies Act 2013 of the Notice of the 32nd Annual General Meeting.

Brief resume nature of expertise details of directorships held in other companies ofthe above Directors proposed to be appointed/re-appointed along with their shareholdingin the Company as stipulated under Secretarial Standard on General Meeting("SS-2") and Regulation 36 of the Listing Regulations is appended as anannexure to the Notice of ensuing Annual General Meeting.

During the year under review there were no changes in the Key Managerial Personnel ofthe Company.

DECLARATION OF INDEPENDENCE

The Company has received necessary declarations from all the Independent Directors thatthey meet the criteria of independence laid down in Section 149(6) of the Act andRegulation 16( 1 )(b) of the Listing Regulations and that they are not aware of anycircumstance or situation which exist or may be reasonably anticipated which could impairor impact their ability to discharge their duties with an objective of independentjudgment and without any external influence.

Further a confirmation in connection with enrolment in the Data Bank created byMinistry of Corporate Affairs for Independent Directors has been received from all theIndependent Directors of the Company.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Company's policy on directors' appointment and remuneration and other mattersprovided in section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which forms part of this Annual Report.

PARTICULARS OF EMPLOYEE STOCK OPTION SCHEME 2012 AND 2015 ("FEL ESOS 2012""FEL ESOS 2015") AND EMPLOYEE STOCK OPTION PLAN 2019 ("FEL ESOP2019")

On November 5 2019 the Company has made allotment of 713133 Equity Shares of Rs.2/-each to the employees of the Company upon exercise their rights of vested options grantedto the said employees under Employees' Stock Option Scheme - 2012 (FEL ESOP 2012).

On February 14 2020 the Nomination and Remuneration Committee of the Company hasgranted Options of 6651984 Restricted Stock Units (RSU) to the eligible employees of theCompany under Future Enterprises Limited Employees' Stock Option Scheme (FEL ESOP -2019"). Details of RSU are as under:

The Vesting Period: After the expiry of 12 months 24 months and 36 months from thedate of grant as the case may be.

Exercise Period: Not later than 3 years from the date of vesting

Exercise Price: Rs.2/- per Equity Share

Conversion: Each RSU is convertible into 1 (One) Equity Share of 2/- each

The applicable disclosures as stipulated under Rule 12 of Companies (Share Capital andDebentures) Rules 2014 and SEBI (Share Based Employee Benefits) Regulation 2014 as onMarch 312020 with regard to ESOS 2012 and ESOP 2015 are provided in Annexure II tothis Report.

EXTRACT OF ANNUAL RETURN

In terms of provisions of Section 92 and 134 of the Act an extract of Annual Return inprescribed format is annexed to this Report as Annexure III and copy of annualreturn is placed on the website of the Company at the web-link https://felindia.in.

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

Details of loans granted guarantee provided and investment made by the Company whichare covered under the provision of Section 186 of the Act is provided in note no. 47 ofNotes forming part of Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review all transactions entered into by the Company with relatedparties as defined under the Act and the Listing Regulations were in the ordinary courseof business and on an arm's length basis. There were no materially significanttransactions with the related parties during the financial year which were in conflictwith the interest of the Company. Disclosure of transactions with related parties asrequired under the Indian Accounting Standard (Ind AS) has been made in the notes formingpart of the financial statements.

Particulars of contract or arrangements with related parties referred to in section188(1) of the Act in the prescribed Form AOC-2 is appended as Annexure IV whichforms part of this Report.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and the Company's operations in future.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the Section 124 and other applicable provisions of the Act read with theIEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 all unpaid orunclaimed dividends are required to be transferred by the Company to the IEPF establishedby the Government of India after completion of seven years.

During the year under review there was no transfer of dividend or shares.

MATERIAL CHANGES AND COMMITMENTS

Your Directors further state that there were no material changes have taken place thatcould have an impact on the financial position of the Company from the date of closure offinancial year under review till the date of signing of this report.

FUTURE OUTLOOK

The basic foray of the Company retail industry would be up for multiple challenges inthe time ahead. The retail would need to face change of product choices due to change inclass of customer due to demographic change products becoming more costlier increasingdigitalisation and e-commerce options available due to lockdown would change preference ofthe customer due to wider choices available at click of button from the comfort of sittingat your home/workplace. A leading study of the retail has shown that there could be manymore challenges for the retail sector and hence same could also percolate to the Company.

The Company would need to ensure that the fashion offerings it provide are good andappealing not only on a brick and mortar store but also on a ecommerce website and samewould hold true for the various food processing products it propose to offer throughonline and offline retail market. The look and feel of the products would become veryimportant to attract the ultimate customer and hence the retailers who would be customersof the Company.

VIGIL MECHANISM

The Company has established a vigil mechanism to provide a framework to promoteresponsible and secure whistle blowing and to provide a channel to the employee(s) andDirectors to report to the management concerns about unethical behavior actual orsuspected fraud or violation of the code of conduct or policy/ies of the Company asadopted/framed from time to time. The mechanism provides for adequate safeguards againstvictimization of employees and Directors to avail of the mechanism and also provide fordirect access to the Chairman of the Audit Committee in exceptional cases.

The Company has formulated and disseminated a Whistle Blower Policy to provide VigilMechanism for employees and Directors of the Company to report genuine concerns that couldhave serious impact on the operations and performance of the business of the Company. ThisPolicy is in compliance with the provisions of the Act and the regulations of the ListingRegulations.

Furthermore the policy outlining this mechanism is approved and revised by the Boardof Directors from time to time.

AUDITORS AND AUDITORS' REPORT

As per Section 139 of the Act and the rules made thereunder M/s. DMKH & Co.Chartered Accountants (Firm Registration No.: 116886W) was appointed as the StatutoryAuditors of the Company to hold office for a period of 5 (Five) years consecutive yearsfrom the conclusion of the 29th Annual General Meeting of the Company held on August 292017 till the conclusion of the 34th Annual General Meeting to be held in the year 2022.

The Company has received a written confirmation from the M/s DMKH & Co. CharteredAccountants for their appointment as Statutory Auditors that their continued appointmentshall be in accordance with the criteria and provisions as provided under Section 139 and141 of the Act and rules made thereunder.

The statutory auditors included qualifications in their report on the ConsolidatedFinancial Statements for the year 2019-20. The Audit Committee and Board of Directors attheir respective meetings held while approving the said Financial Statements reviewed suchqualifications and provided appropriate explanations.

A statement containing the details of qualifications explanation by the Board andimpact of the qualifications as required under section 134(3)(f) and regulation 34(2)33(3(d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015are as follows.

a) Future Supply Chain Solutions Limited

During the year the Company has raised term loan from a bank amounting to Rs.22500lakhs which has not been utilised for the purpose for which it was sanctioned andconsequently used in the normal course of business. In the absence of any clarity onnon-compliance with the terms and conditions of sanction as well as breach of covenantswe are unable to comment on the impact of aforesaid utilisation and non-compliances on thefinancial statements.

Management Note:

The term loan raised has been initially utilised as per the terms of the arrangement.Subsequently expansion plans of the Company have been temporarily kept on hold on accountof slow-down of economy and outbreak of Coronavirus (COVID- 19) pandemic. The ordersraised were cancelled and advance refunded were subsequently utilised in the normal courseof business because of constraints. The Company plans to repay this loan within thisfinancial year.

b) Leanbox Logistics Solutions Private Limited

The Company is continuously suffering losses from operations with net loss for the yearended March 31 2020 amounting to Rs.409724322 and as of that date the Company'saccumulated losses amount to Rs.13109098 as against Company's share capital ofRs.13564560 and the net-worth of the Company has been fully eroded. These conditionsindicate the existence of a material uncertainty that may cast significant doubt about theCompany's ability to continue as a going concern. In the event that the going concernassumption of the company is inappropriate adjustments will have to be made as not agoing concern. However the financials has not been prepared with such adjustments for theyear ended March 31 2020.

Management Note:

During the year the Company has made significant growth in revenue from Rs.57 crore toRs.102 crore and the Company could also mobilise further funds through equitycontributions which ensured reduction of negative net worth. Further the new investorswould be able to provide further funds to ensure continuity of operations and accordinglyas going concern.

The Auditors' Report is enclosed with the financial statements as a part of this AnnualReport.

During the year 2019-20 there was no instance of fraud committed against the Companyby its officers or employees as reported by Statutory Auditors or Secretarial Auditor tothe Audit Committee under Section 143(12) of the Companies Act 2013.

SECRETARIAL AUDITOR

Pursuant to Section 179 and 204 of the Act and rules made thereunder M/s. VirendraBhatt Practicing Company Secretary (Membership No. 1157/Certificate of Practice No.124)was appointed as a Secretarial Auditor to conduct the secretarial audit of the Company forthe financial year 2019-20 as required under section 204 of the Act and rules madethereunder.

The Secretarial Audit Report for the financial year 201920 is appended as Annexure Vwhich forms part of this Report.

The said Secretarial Auditors' Report does not contain any qualifications reservationsor adverse remarks.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Act it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended March 312020 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2020 and of the loss ofthe Company for that year;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 March31 2020 on a going concern basis.

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

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

PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION ON FOREIGN EXCHANGE EARNINGSAND OUTGO ETC.

The particulars as required under Section 134(3)(m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 relating to conservation of energy technologyabsorption foreign exchange earnings and outgo are provided in Annexure VI whichforms part of this report.

The Company being concentrating on the domestic consumption space does not have anyspecific exports initiatives to report to members.

AUDIT COMMITTEE

The Composition terms of reference powers and roles of Audit Committee of the Companyare disclosed in the Corporate Governance Report which forms part of the Annual Report.There were no instances where the Board did not accept the recommendations of the AuditCommittee.

RISK MANAGEMENT POLICY AND INTERNAL FINANCIAL CONTROL

The Company has a well-defined risk management framework in place which provides anintegrated approach for identifying assessing mitigating monitoring and reporting of allrisk associated with the business of the Company.

The Board has delegated responsibility to the Risk Management Committee to monitor andreview risk management assessment and minimisation procedures and to develop implementand monitor the risk management plan and identify review and mitigate all elements ofrisk which the Company may be exposed to.

Moreover as per SEBI (Listing Obligations and Disclosure Requirements) (Amendment)Regulations 2018 the role of Committee has been widened by adding a function of lookingafter cyber security of the Company.

The Audit Committee and the Board also periodically review the risk managementassessment and minimisation procedures.

The Company has in place adequate internal financial controls with reference toFinancial Statements. Key risks and threats to the Company and internal Controls areanalysed and mentioned in the Management Discussion and Analysis which forms part of thisAnnual Report.

CORPORATE RESPONSIBILITY STATEMENT (CSR)

The Company has constituted a Corporate Social Responsibility Committee ("CSRCommittee") in accordance with Section 135 of the Act. The Board of Directors of theCompany has based on recommendation made by CSR Committee formulated and approved CSRPolicy of the Company and which has also been placed on website at a weblink :https://felindia.in/pdf/CSR Policy. pdf

The Company has set up "Sone Ki Chidiya" Foundation Trust with an objectiveto consolidate and merge the CSR funds at Future Group level so that the combined corpusfrom all the Group entities would help in undertaking better and larger CSR initiatives.

The disclosures including inter-alia the composition of CSR Committee and thebrief outline of CSR policy as per Rule 8 of Companies (Corporate Social ResponsibilityPolicy) Rules 2014 is made in prescribed form which is annexed to this Report as AnnexureVII.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013.

Your Company has always believed in providing a safe and harassment free workplace forevery individual working in the Company premises through various interventions andpractices. The Company always endeavors to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.

The Company has in place a robust policy on prevention of sexual harassment atworkplace. The policy aims at prevention of harassment of employees as well as contractorsand lays down the guidelines for identification reporting and prevention of sexualharassment. The Company has complied with the provisions relating to Internal ComplaintsCommittee ("ICC"). Further ICC is responsible for redressal of complaintsrelated to sexual harassment and follows the guidelines as provided in the policy. ICCconducts training workshop mainly focusing on investigation skills basic counsellingskills like listening paraphrasing and dealing with biases through various kind of casestudies role plays activities based on real life examples role of ICC criticalattitudes of an ICC member and investigation process & report writing etc.

The detail regarding the cases filed pursuant to the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 are disclosed in the CorporateGovernance Report which forms part of this Annual Report.

PERFORMANCE EVALUATION OF BOARD

Pursuant to the provisions of the Act the Board has carried out an annual evaluationof performance of its own the Committees and individual directors thereof.

At the meeting of the Board all the relevant factors that are material for evaluatingthe performance of the Committees and of the Board were discussed in detail.

A separate exercise was carried out to evaluate the performance of individual directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the independentdirectors was carried out by the entire Board except the independent director beingevaluated. The performance evaluation of the Chairman and Non-Independent Directors wascarried out by the Independent Directors. The Directors expressed their satisfaction withthe evaluation process.

Moreover further detail regarding skill expertise and competencies of directors aredisclosed in the Corporate Governance Report which forms part of the Annual Report.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in Annexure VIIIwhich is annexed to this Report.

In terms of the provisions of first proviso to Section 197(12) of the Act read withRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 a statement showing the names and other particulars of employees drawingremuneration in excess of the limits set out in the said rules are provided in this AnnualReport.

Furthermore none of the Director who is a Managing Director or Whole-time Director ofthe Company is in receipt of any remuneration from any subsidiary of the Company.

The statement also provides details of the performance and financial position of eachof the subsidiaries. In accordance with Section 136 of the Companies Act 2013 theaudited financial statements including the consolidated financial statements and otherrelated information of the Company and audited accounts of each of its subsidiaries areavailable on our website www.felindia.com.

If any member is interested in obtaining such information such member may write to theCompany Secretary and the same will be furnished on request. The full Annual Reportincluding aforesaid information is being sent electronically to all those Members who haveregistered their e-mail addresses and is also available on the Company's website.

CREDIT RATING

The details pertaining to credit rating obtained or assigned during the year underreview is given in Corporate Governance Report forming part of this Annual Report.

SECRETARIAL STANDARDS

During the year under review the Company has complied with Secretarial Standards onmeetings of the Board of Directors ("SS-1") and on General Meetings("SS-2") as amended and issued by the Institute of Company Secretaries of Indiain terms of Section 118(10) of the Act.

OTHER DISCLOSURES

During the year under review:

• There were no events relating to non-exercising of voting rights in respect ofshares purchased directly by employees under a scheme pursuant to Section 67(3) of the Actread with Rule 16(4) of Companies (Share Capital and Debentures) Rules 2014;

• None of Managing Director or the Whole-time Directors of the Company is inreceipt of any remuneration or commission from any of its subsidiary companies;

• Maintenance of cost records and requirement of cost audit as prescribed underthe provisions of Section 148(1) of the Act are not applicable for the business activitiescarried out by the Company.

ACKNOWLEDGEMENT

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

For and on behalf of the Board of Directors

Place : Mumbai V.K. Chopra
Date : September 07 2020 Chairman

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