The Board of Directors hereby submit the report of the business andoperations of your Company ("the Company" or "FMNL") along with theaudited financial statements for the financial year ended March 312020 which areprepared in accordance with the relevant applicable IND AS and Regulation 33 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") and provisions of the Companies Act 2013 ("Act"). Theconsolidated performance of the Company and its subsidiaries has been referred to whereverrequired.
Results of our Operations and state of affairs
The Company's performance during the financial year ended March 312020as compared to the previous financial year is summarized below:
(' in lakhs)
|Particulars ||Year Ended March 312020 ||Year Ended March 31 2019 |
|Revenue from Operations ||12155.71 ||12644.83 |
|Other Income ||4903.90 ||1860.04 |
|Total Income ||17059.61 ||14504.87 |
|Operating Cost ||3611.47 ||6731.10 |
|Cost of units sold ||121.28 ||3.54 |
|Personnel Cost ||591.80 ||617.63 |
|Other Expenses ||2659.22 ||1371.10 |
|Total Expenditure ||6883.77 ||8723.37 |
|Profit before Interest Depreciation and Tax ||10075.84 ||5781.50 |
|Less: Interest ||2947.81 ||1967.65 |
|Less: Depreciation ||5113.97 ||2511.88 |
|Profit /(Loss) before exceptional items and tax ||2014.06 ||1301.97 |
|Less: Exceptional Item ||- ||34.59 |
|Less: Profit/(Loss) Before Tax ||2014.06 ||1267.38 |
|Less: Current Deferred Tax/Earlier Year's Provision Written back ||907.15 ||258.62 |
|Profit / (Loss) after Taxation ||1106.91 ||1008.76 |
|Particulars ||Year Ended ||Year Ended |
| ||March 312020 ||March 31 2019 |
|Revenue from Operations ||12676.79 ||13126.74 |
|Other Income ||6728.73 ||1710.28 |
|Total Revenue ||19405.52 ||14837.02 |
|Operating Cost ||3629.21 ||6806.18 |
|Cost of units sold ||121.28 ||3.54 |
|Personnel Cost ||638.11 ||646.03 |
|Other Expenses ||2869.19 ||1511.83 |
|Total Expenditure ||7257.79 ||8967.58 |
|Profit before Interest Depreciation and Tax ||12147.73 ||5869.44 |
|Less: Interest ||3035.39 ||2036.90 |
|Less: Depreciation ||5248.10 ||2632.32 |
|Add: Share of net profit of associates and joint ventures accounted by using equity method ||76.87 ||147.75 |
|Less: Exceptional Items ||- ||34.59 |
|Profit before tax from Continuing Operations ||3941.12 ||1313.38 |
|Less: Provision for taxation/Earlier Year's Provision Written back ||3.24 ||(26.71) |
|Less: Deferred Tax ||928.10 ||343.52 |
|Profit/(Loss) after Taxation from continuing operation ||3009.78 ||996.57 |
|Profit/(Loss) from discontinued operation ||(17.03) ||7.75 |
|Profit/ (Loss) for the year ||2992.75 ||1004.32 |
i. Your Company has adopted Indian Accounting Standards (Ind AS) witheffect from April 1 2016 pursuant to the notification of the Companies (Indian AccountingStandards) Rules 2015 issued by the Ministry of Corporate Affairs and your Company hasnot made any treatment other than provided under Ind AS while preparing its financialstatements.
ii. The figures for the financial year ended March 312019 for bothstandalone and consolidated are the figures after giving effect to the merger of StarShopping Centres Private Limited into the Company.
Global health pandemic from COVID-19
There are three major channels of impact for Indian businessesaccording to the report namely linkages supply chain and macroeconomic factors.
Reduction in the urban transaction can lead to a steep fall in theconsumption of non-essential goods. It can be severe if disruption causes by the lockdownand affect the availability of essential commodities. Due to weak domestic consumption andconsumer sentiment there can be a delay in investment which further add pressure on thegrowth.
The World Health Organization declared a global pandemic of the NovelCoronavirus disease (COVID-19) on February 112020. The Company would implement a phasedand safe return-to-work plan as and when lockdown restrictions are relaxed.
Scheme of Merger by Absorption of Star Shopping Centres Private Limitedby the Company
The Scheme of Merger by Absorption of Star Shopping Centres PrivateLimited (Star) and their respective Shareholders under Sections 230-232 and otherapplicable provisions of the Companies Act 2013 ("the Act") with the appointeddate April 012017 in order to consolidate the business into single entity has beenapproved by Hon'ble National Company Law Tribunal ("NCLT") Mumbai Bench onAugust 2 2019 and the Company has filed certified true copy of the order with Registrarof Companies on September 212019.
The Company's lease asset classes primarily consist of leases for landand buildings. Effective April 1 2019 the Company adopted Ind AS 116 Leases and appliedthe standard to all lease contracts existing on April 12019 using the modifiedretrospective method and has taken the cumulative adjustment to retained earnings on thedate of initial application.
On transition the adoption of the new standard resulted in therecognition of right-of-use (ROU) asset of ' 167.89 crore and a lease liabilities of '237.78 crore at a standalone level. The cumulative effect of applying the standardamounting to ' 50.44 crore at a standalone level was debited to retained earnings net oftaxes. The effect of this adoption is insignificant on the operating profit net profitfor the period and earnings per share. Ind AS 116 resulted in an increase in cash inflowsfrom operating activities and an increase in cash outflows from financing activities onaccount of lease payments.
Financials - Standalone Highlights
During the year ended March 31 2020 your Company has achieved totalRevenue (i.e. Revenue from Operations & Other income) of ' 17059.61 Lakhs as against '14504.87 Lakhs for the previous year ended March 312019. Your Company has achieved Profitbefore tax of ' 2014.06 Lakhs for the current year as against ' 1267.38 Lakhs for theprevious year (an increase of 58.91 % over the previous year).
During the year ended March 312020 your Company's consolidatedRevenue stood at '19406.53 Lakhs as against ' 14837.02 Lakhs for the previous year endedMarch 312019. Your Company has achieved Profit before tax of ' 3941.12 Lakhs for thecurrent year as against of ' 1313.38 Lakhs for the previous year on consolidated basis.
Business outlook / State of the Company's affair
Your Company is engaged in development and management of commercialretail and infra logistic projects. There was no change in nature of the business of yourCompany during the year under review.
Your Company is in the process of constructing and developing theintegrated large-scale warehouses at Jhajjar (Haryana) and Nagpur (Maharashtra)aggregating to 1.3 million square feet.
Your Company has along with Gati Realtors Private Limited (SPV-1) andFuture Retail Destination Private Limited (SPV-2) (SPV 1 and 2 (SPV's) entered into astrategic arrangement with ESR NAGPUR 1 PTE LTD and ESR DELHI 3 PTE LTD (investor SPV's)respectively.
Your Company has diluted its holding in its SPV's by way of sale of 51%of its investment to respective Investor SPV's in terms of Transaction Documents executedin relation to this arrangement. Upon completion of the Project and successful handoveryour Company shall exit from the respective SPV's by way of sale of balance 49% of itsinvestment in the respective SPVs.
Transfer to reserves
During the financial year ended March 312020 the Company has not madeany transfer to reserves.
During the financial year ended March 31 2020 the Company is incompliance with the Secretarial Standards with respect to Meeting of the Board ofDirectors ("SS-1") and General Meetings ("SS-2") issued and amended bythe Institute of Company Secretaries of India in terms of Section 118(10) of the CompaniesAct 2013. The same has also been confirmed by the Secretarial Auditor of the Company.
Consolidated IND AS financial Statements
In compliance with the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred to as the 'Listing Regulations') andSection 129 of the Act the Consolidated Financial Statements which have been prepared bythe Company in accordance with the applicable provisions of the Act and the applicableIndian Accounting Standards (Ind AS) forms part of this Annual Report.
Cash Flow Statement
In conformity with the provisions of Regulation 34 of ListingRegulations the Cash Flow Statement for the year ended March 312020 has been provided inthe Annual Report which forms part of this report.
The Annual Report of your Company containing the standalone andconsolidated Ind AS financial statements has been disseminated on the website of theCompany at www.fmn.co.in.
The Board is not recommending any dividend for the financial year endedMarch 31 2020 in order to conserve the resources. Regulation 43A of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) withregard to formulation of Dividend Distribution Policy is not applicable to your Company.
During the year under review your Company has not made anyappropriations.
Pursuant to Merger by Absorption of Star Shopping Centres PrivateLimited by the Company the Authorized Share Capital of the Company has been increased to '903500000/- (Rupees Ninety Crores Thirty Five Lakhs) divided into 90300000 equityshares of ' 10/- each and 5000 Preference Shares of ' 100/- each.
The issued share capital of the Company as on March 31 2020 is '575449510/- divided into 57544951 equity shares of ' 10/- each.
570 Equity Shares of the Company are kept in abeyance and the saidshares will be allotted subsequent to completion of legal formalities to allot theoriginal shares in Future Enterprises Limited (formerly known as Pantaloon Retail IndiaLimited).
The subscribed and paid up share capital of the Company as on March312020 is ' 575443810/- divided into 57544381 equity shares of '10/- each.
During the year under review the Company had allotted 1253100 equityshares of ' 10/- each to the eligible shareholders of Star Shopping Centres PrivateLimited (SSCPL) pursuant to the scheme of merger by absorption of SSCPL by the Company.
During the year under review your Company has not accepted any fixeddeposits including from the public and as such no amount of principal or interest wasoutstanding as of the Balance Sheet date.
Management Discussion and Analysis
In terms of the provisions of Regulation 34 of the Listing Regulationsthe Management's discussion and analysis is set out in this Annual Report.
Disclosures under section 134(3)(l) of the Act
Except as disclosed elsewhere in this report no material changes andcommitments which could affect the Company's financial position have occurred between theend of the financial year of the Company to which the financial statements relate and thedate of this report.
Particulars of loans guarantees investments under section 186 of theAct
Your Company has extended the support to the financial needs of theSpecial Purpose Vehicle Companies viz. Wholly Owned Subsidiaries and Joint Ventures /Associates.
Loans guarantees and investments covered under Section186 of the Actform part of the Notes to the financial statements provided in this Annual Report.
The Board of Directors of the Company has formulated a Risk ManagementPolicy which aims at minimizing the risk and enhancing the value and reviews the elementsof risks with regard to the business.
The risk management approach is based on a clear understanding of thevariety of risks that the organization faces disciplined risk monitoring and measurementand continuous risk assessment and mitigation measures.
Related Party Transactions
In line with the requirements of the Act and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions which is available onCompany's website at www.fmn.co.in. This policy deals with the review and approval ofrelated party transactions. The Board of Directors of the Company has approved thecriteria for giving the omnibus approval by the Audit Committee within the overallframework of the Policy on Related Party Transactions.
All Related Party Transactions that were entered into during thefinancial year were on arm's length and were in the ordinary course of business. AllRelated Party Transactions were placed before the Audit Committee of the Board ofDirectors for their approval. The Audit Committee has granted omnibus approval for RelatedParty Transactions as per the provisions and restrictions contained in the ListingRegulations.
Pursuant to Regulation 23 of the Listing Regulations all related partytransactions were placed before the Audit Committee on a quarterly basis specifying thenature value and terms & conditions of the transactions for their review andapproval.
The Company has entered into the material related party transactionsduring the financial year under review as required under Section 134(3)(h) of the Act.Particulars of contract or arrangements with related parties referred to in section 188(1)of the Act in the prescribed Form AOC-2 is appended as Annexure '1' which forms part ofthis Report. The said transactions were approved by the Board and Audit Committee.
The related party disclosures as specified in Para A of Schedule V readwith Regulation 34(3) of the Listing Regulations are given in the Financial Statements.
Subsidiaries and Associates
At the beginning of the year your Company had 8 subsidiaries and 1Joint Venture. During the year under review:
i. Gati Realtors Private Limited and *Future Retail Destination PrivateLimited became the Associates of the Company with effect from August 28 2019 and October25 2019 respectively as compared to the Wholly Owned Subsidiaries in the previousfinancial year.
ii. Star Shopping Centres Private Limited merged with the Company videorder dated August 2 2020 of the National Company Law Tribunal Mumbai Bench.
As on March 312020 the Company has the following Subsidiaries JointVentures and Associates:
|Sr. No. ||Name of the Subsidiary ||Sr. No. ||Name of the Subsidiary |
|1 ||Aashirwad Malls Private Limited ||4 ||Sun City Properties Private Limited |
|2 ||Suhani Mall Management Company Private Limited ||5 ||Jeremia Real Estate Private Limited |
|3 ||Future Trade Markets Private Limited || || |
| ||Name of the Joint Venture || ||Name of Associates |
|1 ||Riddhi Siddhi Mall Management Private Limited ||1 ||Future Retail Destination Private Limited |
| || ||2 ||Gati Realtors Private Limited |
* Note: Future Retail Destination Limited was converted into a PrivateLimited Company w.e.f. October 07 2019.
In accordance with the provisions of Section 129(3) of the Act readwith the Companies (Accounts) Rules 2014 a statement in Form AOC-1 containing thesalient features of the financial statements of the subsidiary companies is appendedhereto as Annexure '2'.
Audited Annual Accounts of the Subsidiary Companies have also beenplaced on the website of the Company and are available for inspection by the members atthe Registered Office of the Company. Members interested in obtaining copy of the AuditedAnnual Accounts of the Subsidiary Companies may write to the Company Secretary at theCompany's Registered Office address. These documents will also be available for inspectiontill the date of AGM during business hours at the registered office of the Company inMumbai.
Disclosure relating to Employee Stock Option Scheme
Future Market Networks Limited - Employee Stock Option Scheme 2016
Pursuant to the approval granted by the shareholders at the eightAnnual General Meeting held on September 20 2016 your Company has formulated FutureMarket Networks Limited - Employee Stock Option Scheme 2016 (FMNL - ESOS 2016). The Schemeis in Compliance with SEBI (Share Based Employee Benefits) Regulations 2014 as amendedfrom time to time ("SEBI Employee Benefits Regulations").
Your Company has granted 760000 options to the eligible employees onMay 25 2018 under Employee Stock Option Scheme 2016 ("ESOS 2016") at anexercise price of ' 85/- per equity share. These options shall vest over aperiod of four years in the proportion of 25% for each year from the date of grant. Theseoptions can be exercised anytime within a period of three years from the date of vesting.550000 options granted lapsed consequent to the resignation of an employee to whomOptions were granted.
In compliance with the provisions of Rule 12(9) of the Companies (ShareCapital and Debenture) Rules 2014 and SEBI (Employee Share Based Employee Benefits)Regulations 2014 the details of Employee Stock Option Scheme as on March 312020 arefurnished as Annexure '3' attached herewith and forms part of this report.
Infomerics Valuation and Ratings Private Limited has assigned therating of 'IVR A- / Stable' to your Company and the said rating denotes stable outlook ofsafety for timely servicing of debt obligation and carries low credit risk.
Our corporate governance practices are a reflection of our value systemencompassing our culture policies and relationships with our stakeholders. Integrity andtransparency are key to our corporate governance practices to ensure that we gain andretain the trust of our stakeholders at all times.
Corporate governance is about maximizing shareholder value legallyethically and sustainably. At FMNL the Board exercises its fiduciary responsibilities inthe widest sense of the term. Our disclosures seek to attain the best practices ininternational corporate governance. We also endeavour to enhance long-term shareholdervalue and respect minority rights in all our business decisions. Our Corporate governancereport for fiscal 2020 forms part of this Annual Report.
Matters related to Directors and Key Managerial Personnel
The current policy is to have an appropriate combination of executivenon-executive and independent directors to maintain the independence of the Board andseparate its functions of governance and management. As on the date of this report theBoard consists of 7 Directors 3 of whom are Independent Directors including a WomanDirector 3 Non-Executive Directors and 1 Executive Director.
Changes in Board
During the year under review there are no changes in the Board exceptappointment of Mr. Pawan Kumar Agarwal as Executive Director and Chief Financial Officerof the Company which was approved by the members at their Annual General Meeting held onSeptember 16 2019.
As per the provisions of the Companies Act 2013 Mr. Rajesh Kalyaniand Mr. Pramod Arora retires by rotation at the ensuing AGM and being eligible seeksreappointment. Based on the performance evaluation and recommendation of the nominationand remuneration committee the Board recommends their reappointment.
The brief resume and other information as required under Regulation 36(3) of Listing Regulations relating to Mr. Rajesh Kalyani and Mr. Pramod Arora forms partof the Notice of ensuing Annual General Meeting. None of the Directors are disqualifiedfor appointment / reappointment under Section 164 of the Act.
The Company has complied with provisions of Section 203 of the Act.
Declarations by Independent Directors
The Company has received necessary declaration from each independentdirector under Section 149(7) of the Companies Act 2013 that he / she meets the criteriaof independence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25of the Listing Regulations.
Pursuant to the provisions of Section 134(3)(d) 134(3)(p) Section149(6) of the Act read with Schedule IV of the Listing Regulations formal annualperformance evaluation of the Board the Directors as well as Committees of the Board hasbeen carried out and the details of evaluation carried out are provided in the CorporateGovernance Report.
Familiarization Programme for Independent Directors
All new independent directors inducted into the Board need to attend anorientation program. The details of the training and familiarization program are providedin the corporate governance report. Further at the time of the appointment of anindependent director the Company issues a formal letter of appointment outlining his /her role function duties and responsibilities.
The Familiarization Programme seeks to update the Independent Directorson various matters covering Company's strategy business model operations organizationstructure finance risk management etc. It also seeks to update the Independent Directorswith their roles rights responsibilities duties under the Act and other statutes.
Disclosures related to Board Committees and Policies
The details are provided in the Corporate Governance Report that formspart of this Report.
Meetings of Board
The Board of Directors met Four (4) times during the financial yearended March 31 2020 in accordance with the provisions of the Companies Act 2013 andrules made there under. All the Directors actively participated in the meetings andprovided their valuable inputs on the matters brought before the Board of Directors fromtime to time. On February 05 2020 the Independent Directors held a separate meeting incompliance with the requirements of Schedule IV of the Companies Act 2013 and theprovisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.The maximum interval between any two meetings did not exceed 120 days as prescribed inthe Act.
Nomination Remuneration and Compensation Committee
Nomination Remuneration and Compensation Committee is constituted inaccordance with the provisions of sub-section (1) of Section 178 of the Act. Kindly refersection on Corporate Governance which is forming part of this report under head'Nomination Remuneration and Compensation Committee for matters relating to constitutionmeetings functions of the Committee and the remuneration policy formulated by thisCommittee.
Policy on director's appointment and remuneration
The current policy is to have an appropriate mix of executivenon-executive and independent directors to maintain the independence of the Board andseparate its functions of governance and management. As of March 31 2020 the Board hadseven members one of whom is an executive director three non-executive andnon-independent member and three independent directors. One of the independent directorsof the Board is a woman.
The policy of the Company on director's appointment and remunerationincluding the criteria for determining qualifications positive attributes independenceof a director and other matters as required under Sub-section (3) of Section 178 of theCompanies Act 2013 is available on our website at https://www.fmn.co.in
We affirm that the remuneration paid to the directors is as per theterms laid out in the Remuneration Policy of the Company.
Audit Committee is constituted in accordance with the provisions ofSection 177 of the Act and Regulation 18 of the Listing Regulation. The Audit Committeecomprises of Mr. Vijai Singh Dugar Mr. K. A. Somayajulu Independent Directors and Mr.Rajesh Kalyani Non-Executive Director. Four meetings of the Committee were held duringthe year.
During the year under review all the recommendations made by the AuditCommittee were accepted by the Board. There were no instances where the Board has notaccepted any recommendation of the Audit Committee.
Details of Committees of the Board of Directors along with their termsof reference composition and meetings held during the year under review are providedseparately in the Corporate Governance Report which forms part of this Annual Report.
The management has established internal control systems commensuratewith the size and complexity of the business. The internal control manual provides astructured approach to identify rectify monitor and report gaps in the internal controlsystems and processes.
The Company follows well-documented Standard Operating Procedures(SOPs). The operating effectiveness of various controls is periodically tested anddeficiencies if any are promptly rectified.
During the year under review no material or serious observation hasbeen received from the Statutory Auditors and the Internal Auditors of the Company on theinefficiency or inadequacy of such controls.
Internal Control Systems
Adequate internal control systems commensurate with the nature of theCompany's business and size and complexity of its operations are in place and have beenoperating satisfactorily. Internal control systems comprising of policies and proceduresare designed to ensure reliability of financial reporting timely feedback on achievementof operational and strategic goals compliance with policies procedure applicable lawsand regulations and that all assets and resources are acquired economically usedefficiently and adequately protected.
Significant and Material Orders passed by Regulators or Courts orTribunal
No significant and material orders have been passed by any Regulator orCourt or Tribunal which can have an impact on the going concern status and the Company'soperations in future during the period under review. Other relevant details are providedin the notes to the standalone financial statements.
Reporting of frauds by auditors
During the year under review neither the statutory auditors nor thesecretarial auditor has reported to the audit committee under Section 143 (12) of theCompanies Act 2013 any instances of fraud committed against the Company by its officersor employees the details of which would need to be mentioned in the Board's report.
Extract of Annual Return
Pursuant to Section 92(3) of the Act read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of the Annual Return ofthe Company in Form MGT-9 is annexed as Annexure '4' and forms an integral part of thisreport.
The Annual Return as referred in Section 134(3)(a) of the Act for thefinancial year ended March 31 2020 shall be placed on the website of the Company atwww.fmn.co.in.
The Company complies with all applicable mandatory secretarialstandards issued by the Institute of Company Secretaries of India.
Investors Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act 2013 readwith the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 ("theIEPF Rules") all unpaid or unclaimed dividends are required to be transferred by theCompany to the IEPF established by the Government of India after the completion of sevenyears. Further according to the IEPF Rules the shares on which dividend has not beenpaid or claimed by the shareholders for seven consecutive years or more shall also betransferred to the demat account of the IEPF Authority. During the year under reviewCompany has neither declared any dividend nor there are outstanding amount of unclaimeddividends which were liable to be transferred to the IEPF.
Director's responsibility statement
The financial statements are prepared in accordance with the IndianAccounting Standards (Ind AS) under the historical cost convention on accrual basis exceptfor certain financial instruments which are measured at fair values the provisions ofthe Companies Act 2013 (to the extent notified) and guidelines issued by SEBI. The Ind ASare prescribed under Section 133 of the Companies Act 2013 read with Rule 3 of theCompanies (Indian Accounting Standards) Rules 2015 and Companies (Indian AccountingStandards) Amendment Rules 2016. Accounting policies have been consistently appliedexcept where a newly-issued accounting standard is initially adopted or a revision to anexisting accounting standard requires a change in the accounting policy hitherto in use.
Directors confirm that:
a) in the preparation of the annual accounts for the financial yearended March 312020 the applicable accounting standards have been followed along withproper explanations relating to material departures
b) They have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period.
c) they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) they have prepared the annual accounts for the financial year endedMarch 312020 on a going concern basis;
e) they have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and operatingeffectively; and
f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Audit reports and auditors Audit reports
The Auditor's Report for fiscal 2020 does not contain anyqualification reservation or adverse remark. The Report is enclosed with the financialstatements in this Annual Report.
The Secretarial Auditor's Report for fiscal 2020 does notcontain any qualification reservation or adverse remark. The Secretarial Auditor's Reportis enclosed as Annexure '5' to the Board's report in this Annual Report.
As required under SEBI (Share Based Employee Benefits)Regulations 2014 the auditor's certificate on the implementation of share-based schemesin accordance with these regulations will be made available at the AGM.
Under Section 139 of the Companies Act 2013 and the Rules madethereunder it is mandatory to rotate the statutory auditors on completion of the maximumterm permitted under the provisions of Companies Act 2013. In line with the requirementsof the Companies Act 2013 S K Patodia & Associates Chartered Accountants Mumbaibearing ICAI Registration No. 1 12723W Statutory Auditors of the Company holds officetill the conclusion of the ensuing Annual General Meeting and is eligible forre-appointment for the second term.
During the year the statutory auditors have confirmed that theysatisfy the independence criteria required under the Companies Act 2013 the Code ofEthics issued by the Institute of Chartered Accountants of India.
As required under the provisions of section 139 of the Act the Companyobtained a written certificate from the Auditors to the effect that their appointment ifmade would be in conformity with the limits specified in the said section. The Boardrecommends their appointment.
You are requested to re-appoint the retiring Statutory Auditors of theCompany for a period of five consecutive from the financial year 2020 - 2021 to 2024 -2025 and fix their remuneration.
The Auditors report to the members read together with the relevantnotes thereon are self-explanatory and hence do not warrant any comments under section134(1)(f) of the Act.
They have confirmed their eligibility under Section 141 of the Act andthe Rules framed there under for reappointment as Auditors of the Company. As requiredunder Regulation 33(d) of the Listing Regulations the auditors have also confirmed thatthey hold a valid certificate issued in terms of the Peer Review issued by the Peer ReviewBoard of the Institute of Chartered Accountants of India
The Notes on financial statement referred to in the Auditor's Reportare self - explanatory and do not call for any further explanation. The Auditor's Reportdoes not contain any qualification reservation or adverse remark or disclaimer.
As required under Section 204 of the Companies Act 2013 and Rulesthereunder the Board appointed Mr. Alwyn D'Souza of Alwyn D'Souza & CompanyPracticing Company Secretaries (CP No. 5137) as secretarial auditor of the Company forfiscal 2021.
Cost records and cost audit
Maintenance of cost records and requirement of cost audit as prescribedunder the provisions of Section 148(1) of the Companies Act 2013 are not applicable forthe business activities carried out by the Company.
Corporate Social Responsibility (CSR)
In accordance with the requirements of Section 135 of the CompaniesAct 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014your Board has constituted CSR Committee on May 21 2019 which comprises of Mr. VijaiSingh Dugar Chairman Mr. K. A. Somayajulu and Mr. Rajesh Kalyani as its members.
The Company shall implement Corporate Social Responsibility initiativesin due course as and when applicable.
Business Responsibility Report (BRR)
The Listing Regulations mandate the inclusion of the BRR as part of theAnnual Report for the top 1000 listed entities based on market capitalization. The saidregulation is not applicable for the Company during the period under review.
Disclosures of transactions with any Person or entity belonging to thePromoter/ Promoter group which hold(s) 10% or more Shareholding in the Company
During the year under review the Company is a Subsidiary of FutureCorporate Resources Private Limited (FCRPL) (formerly known as Suhani Trading andInvestment Consultants Private Limited). FCRPL holds 71.47 % of the paid up share capitalof the Company.
There were no transactions during the period under review with anyentity forming part of Promoter Group and holding more than 10% of the shareholding in theCompany.
Disclosure relating to equity shares with differential rights
The Company has not issued any equity shares with differential rightsduring the year under review and hence no information as per provisions of Rule 4(4) ofthe Companies (Share Capital and Debenture) Rules 2014 is furnished.
Disclosure relating to sweat equity share
The Company has not issued any sweat equity shares during the yearunder review and hence no information as per provisions of Rule 8(13) of the Companies(Share Capital and Debenture) Rules 2014 is furnished.
Particulars of Employees and other additional information
The statement of disclosure of Remuneration under Section 197(12) ofthe Act read with the Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 ('Rules') is appended as Annexure '6' to this Report.
Payment of remuneration / commission to executive directors fromholding or subsidiary companies
Mr. Pawan Kumar Agarwal Executive Director and Chief Financial Officerof the Company was appointed as an Executive Director of Future Retail Destination PrivateLimited (FRDPL) w.e.f. May 02 2019 which was a wholly owned subsidiary of the Company ata Nil remuneration. However he resigned as the Executive Director of FRDPL w.e.f. October25 2019 upon FRDPL ceased to be the subsidiary of the Company.
Disclosures in respect of voting rights not directly exercised byemployees
There are no shares held by trustees for the benefit of employees andhence no disclosure under section 67(3) read with Rule 16(4) of the Companies (ShareCapital and Debentures) Rules 2014 has been furnished.
Sexual Harassment of Women at workplace
The Company has constituted an Internal Complaints Committee asrequired under the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 (POSH). The details required to be disclosed under POSH forms Part ofthe Corporate Governance Report.
Material Changes and Commitments affecting financial position
There have been no material changes and commitments affecting thefinancial position of the Company which have occurred between March 312020 and the dateof this Report other than those disclosed in this Report.
Declaration by Executive Director
As per Regulation 34 (3) read with Schedule V of the ListingRegulations declaration stating that the members of board of directors and seniormanagement personnel have affirmed compliance with the code of conduct of board ofdirectors and senior management is enclosed as Annexure '7'.
Certificate on Corporate Governance
As per Regulation 34 (3) read with Schedule V of the ListingRegulations the auditor's certificate on corporate governance is enclosed as Annexure '8'to the Board's report. The auditor's certificate for financial year 2020 does not containany qualification reservation or adverse remark.
The Company recognizes and embraces the importance of a diverse board.We believe that a truly diverse board will leverage differences in thought perspectiveknowledge skill industry experiences age which will help us to have competitiveadvantage. The Board has adopted the Board Diversity Policy which sets out the approach todiversity of the Board of Directors. The Board Diversity Policy is available on ourwebsite at www.fmn.co.in.
Your Company has formed a Whistle Blower Policy for establishing avigil mechanism for directors and employees to report genuine concerns regarding unethicalbehaviour and mismanagement if any. The said mechanism also provides for strictconfidentiality adequate safeguards against victimization of persons who use suchmechanism and makes provision for direct access to the Chairman of the Audit Committee inappropriate cases. No personnel have been denied access to the Audit Committee pertainingto the Whistle Blower Policy.
The said Whistle Blower Policy has been disseminated on the Company'swebsite at viz. http://fmn.co.in/investor-relations/policies.html.
Code of conduct for prevention of insider trading
The Board of Directors has adopted the Insider Trading Policy inaccordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulations2015.
The Insider Trading Policy of the Company lays down guidelines andprocedures to be followed and disclosure to be made while dealing with shares of theCompany as well as the consequences of violation. The policy has been formulated toregulate monitor and ensure reporting of deals by employees and to maintain the highestethical standards of dealing in Company securities.
The Insider Trading Policy of the Company covering code of practicesand procedures for fair disclosure of unpublished price sensitive information and code ofconduct for the prevention of insider trading is available on our website atwww.fmn.co.in.
Your Company has taken appropriate insurance for all assets againstforeseeable perils.
Listing on stock exchanges
The Company has entered into Listing Agreement with BSE Limited (BSE)and The National Stock Exchange of India Limited (NSE) in terms of the Regulation 34 (3)read with Schedule V of the Listing Regulations and the listing fee for the year 2020-21has been paid.
Your Company's equity shares are available for dematerializationthrough National Securities Depository Limited and Central Depository Services (India)Limited. As on March 312020 99.93% of the equity shares of the Company are held indematerialised form.
Service of documents through electronic means
Subject to the applicable provisions of the Act all documentsincluding the Notice and Annual Report shall be sent through electronic transmission inrespect of members whose email IDs are registered in their demat account or are otherwiseprovided by the members. A member shall be entitled to request for physical copy of anysuch documents and shall be provided upon receiving specific request from members.
Conservation of energy technology absorption and foreign exchangeearnings and outgo
Your Company gives significant emphasis on improvement in methods andprocesses in its areas of Construction and Development.
The information as required under Section 134(3)(m) of the Act readwith Rule 8 of the Companies (Accounts) Rules 2014 for the financial year ended March 312020 with respect to the Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo has been annexed to this Report as Annexure '9' which forms anintegral part of this report.
Your Company has been able to perform better with the continuousimprovement in all functions and areas which coupled with an efficient utilization of theCompany's resources led to sustainable and profitable growth of the Organization. YourDirectors express their deep sense of appreciation to every employee and associates fortheir dedicated and sustained contribution and look forward the continuance of the same infuture.
The Board places on record its appreciation to all stakeholdersparticularly shareholders customers bankers suppliers business partners and theGovernment.
The statements forming part of the Director's Report may containcertain forward-looking remarks within the meaning of applicable securities laws andregulations. Many factors could cause the actual results performance or achievements ofthe Company to be materially different from any future results performances orachievements that may be expressed or implied by such forward looking statements.
| || ||For and on behalf of Board of Directors |
| ||Vijai Singh Dugar ||Pawan Kumar Agarwal |
|Place: Mumbai ||Chairman ||Executive Director & CFO |
|Date: June 30 2020 ||DIN: 06463399 ||DIN:01435580 |