Your Directors are pleased to present the Eleventh Annual Report of the Companytogether with the Audited Financial Statements for the financial year ended March 312018.
The financial performance of the Company is as follows:
| || ||( Rs.in Crore) |
| ||Financial Year ||Financial Year |
|Particulars || || |
| ||2017-18 ||2016-17 |
|Revenue from Operations ||18477.97 ||17075.09 |
|Other Income ||11.67 ||23.80 |
|Total Revenue ||18489.64 ||17098.89 |
|Profit / (Loss) before Depreciation and Amortization Expense & Tax expense ||668.61 ||400.86 |
|Less: Depreciation and Amortization expense ||53.43 ||32.58 |
|Profit / (Loss) before Exceptional Item ||615.18 ||368.28 |
|Less: Exceptional Item ||603.87 ||_ |
|Profit / (Loss) before Tax ||11.31 ||368.28 |
|Less: Tax expense ||_ ||_ |
|Profit / (Loss) after Tax ||11.31 ||368.28 |
|Other Comprehensive Income for the year ||1.96 ||(2.69) |
|Total Comprehensive Income for the year ||13.27 ||365.59 |
|Earnings Per Equity Share of Face Value of Rs.2/- each || || |
|- Basic and Diluted (in Rs) ||0.23 ||7.81 |
REVIEW OF PERFORMANCE
During the financial year the Company had a total income of Rs.18489.64 Crore. Thetotal expenditure during the financial year amounted to Rs.17874.46 Crore resulting inprofit before exceptional item and tax of Rs.615.18 Crore as compared to profit ofRs.368.28 Crore in previous year. The Profit after Tax for the year under review isRs.11.31 Crore after adjusting non-cash exceptional item of
The financial results for the twelve months ended March 31 2018 are notcomparable with previous year due to demerger of Home Retail Business undertaking toPraxis Home Retail Limited and vesting of demerged Retail undertaking of Heritage FoodsRetail Limited and Retail Business Undertaking of Hypercity Retail (India) Limited withthe Company.
The year 2017-18 was a very fulfilling year. We have a pan India presence with1035 stores in 321 cities in India as of March 31 2018 and total retail space ofapproximately 14.5 million sq. ft. for various formats of our Company. As on March 312018 we have 285 Big Bazaar / Hypercity stores 61 fbb stores 10 Foodhallstores 666 small format stores and 13 eZone stores. Our retail format business issupported by various other businesses operated by Future Group companies and throughFuture Group companies' investments in various ventures including branded fashion food&
FMCG insurance warehousing & logistics media textiles and online retailing.
As regards the well-developed formats like Big Bazaar fbb Foodhall easyday etc.which has received good recognition and also acceptance from our consumers we have beenable to develop presence across India with good loyal customer base as of March 31 2018of approximately 38 million members across all formats. The business continues to bedriven by growing consumer spending pattern. We strongly believe that our increased storepresence during the year would help grow faster in coming years.
Our constant efforts to connect with our customers on social sites like facebooktwitter etc. has not only helped in increasing brand building but also helped insatisfying the queries and complaints of our customers in shortest possible time. Thepresence of dedicated team for online screening and resolution of queries and complaintsof customer has also helped in developing a personal relationship with customers on panIndia basis.
We have partnered with People Strong a leading technology-led HR solutions company toenable the end to end digital transformation of the People Office. This is a crucial stepand that will enable us in building a far more digital organization and bring intechnology led solutions in all employee facing processes.
SCHEME OF ARRANGEMENT AND ACQUISITION a. Composite Scheme of Arrangement among HeritageFoods Limited and Heritage Foods Retail Limited and the Company and their respectiveShareholders and Creditors ("Heritage Scheme").
The Composite Scheme of Arrangement among Heritage Foods Limited ("HFL") andHeritage Foods Retail Limited ("HFRL") and the Company and their respectiveShareholders and Creditors under Sections 391-394 and Sections 100-103 of the CompaniesAct 1956 and/or Sections 230-232 and Section 66 of the Companies Act 2013 (asapplicable) and Section 52 of the Companies Act 2013 ("Heritage Scheme")inter-alia involving demerger of the Retail Business Undertaking of HFL throughits wholly owned subsidiary HFRL into the Company has been given effect on May 19 2017 ("EffectiveDate Heritage Demerger"). The Appointed Date under Heritage Scheme forDemerger was close of business on March 31 2017.
Pursuant to the Heritage Scheme the Retail Business Undertaking of HFRL has beentransferred to and vested with the Company. As consideration for the Demerger the Companyon July 27 2017 has issued 17847420 equity shares of the face value of Rs.2/- eachfully paid-up at a premium of Rs.163.29 per equity share to the shareholders of HFRL(i.e. HFL).
The shareholders of HFRL (i.e. HFL) have agreed to share with the Company an upside onthe realization out of the shares of the Company subject to certain broad terms andconditions. b. Composite Scheme of Arrangement among the Company and Bluerock eServicesPrivate Limited and Praxis Home Retail Limited and their respective Shareholders("Home Town Scheme").
The Composite Scheme of Arrangement among the Company and Bluerock eServices PrivateLimited ("BSPL") and Praxis Home Retail Limited ("PHRL") and theirrespective Shareholders under Sections 230-232 read with Section 66 of the Companies Act2013 and other applicable provisions of the Companies Act 2013 ("Home TownScheme") inter-alia involving demerger of the Home Retail BusinessUndertaking of the Company into PHRL has been given effect on November 20 2017 ("EffectiveDate Home Town Demerger"). The Appointed Date under Home Town Scheme forDemerger of Home Retail Business Undertaking was August 01 2017. Pursuant to the HomeTown Scheme the Home Retail Business of the Company carried on through Home Town Storeshave been transferred to and vested in PHRL. As a consideration for the said demerger onDecember 08 2017 PHRL issued and allotted 1 (One) fully paid up equity share ofRs.5/- each to the Shareholders of the Company for every 20 (Twenty) fully paid up equityshares of Rs.2/- each held in the Company on November 30 2017 the Record Date which wasfixed by the Company in this connection.
Post issue of such equity shares to the Shareholders of the Company and on January 312018 the equity shares of PHRL got listed on the stock exchanges viz BSE & NSE.
The Home Town Scheme which also provided for demerger of e-Commerce Home RetailBusiness Undertaking of BSPL into PHRL has also been given effect on Effective Date Home Town Demerger. c. Acquisition of Hypercity Retail (India) Limited
The Company acquired the entire share capital of Hypercity Retail (India)Limited ("HRIL") from its shareholders for combination of cash and shareconsideration and has executed Share Purchase Agreement in this connection. In order todischarge part of the consideration the Company issued and allotted in aggregate9310987 equity shares of Rs.2/- each fully paid up collectively to erstwhileshareholders of HRIL (in proportion to their shareholding in HRIL) at a premium ofRs.535/- per equity share on a preferential basis. Consequent to this acquisition HRILbecame a wholly owned subsidiary of the Company effective November 30 2017. d. Schemeof Arrangement between Hypercity Retail (India) Limited and the Company and theirrespective Shareholders ("Hypercity Scheme")
In order to consolidate the retail business under singly entity the Company enteredinto Scheme of Arrangement with Hypercity Retail (India) Limited ("HRIL") andtheir respective Shareholders under Sections 230-232 and other applicable provisions ofthe Companies Act 2013 ("Hypercity Scheme") whereby the Retail BusinessUndertaking of HRIL got demerged and vested with the Company. The said scheme was madeeffective on April 25 2018
("Effective Date Hypercity Demerger"). Further pursuant to theScheme Capital Reserve has been re-organised and recorded as Security Premium. The Schemehas been given effect in financials of the period under review. The Appointed Date underHypercity Scheme for Demerger was December 01 2017. e. Acquisition of"Foodworld" business
Post March 31 2018 the Company has entered into Business Transfer Agreement("BTA") with Foodworld Supermarkets Private Limited ("FSPL") andacquired the Retail Business Undertaking under the brand name "Foodworld" forcash consideration.
EQUITY SHARE CAPITAL
During the year under review the Company has issued and allotted in aggregate30162415 Equity Shares the details of which are as under:
Pursuant to FRL ESOP 2016
On July 13 2017 the Company allotted 151622 Equity Shares of Rs.2/- each toeligible employees of the Company upon exercise of the vested options granted to the saidemployees under Future Retail Limited Employee Stock Option Plan - 2016 (FRL ESOP - 2016).None of the employee is in receipt of Equity Shares exceeding 1% of Equity Share capitalof the Company against the vested options exercised by them under FRL ESOP - 2016.
Pursuant to Heritage Scheme
On July 27 2017 the Company allotted 17847420 Equity Shares of Rs.2/- each at apremium of Rs.163.29 per share to Heritage Foods Limited ("HFL") as aconsideration for the acquisition of business pursuant to the Composite Scheme ofArrangement among the Company HFL and HFRL and their respective Shareholders andCreditors.
On conversion of Optionally Convertible Debentures (OCDs)
On October 31 2017 the Company has made allotment of total 2852386 Equity Shares ofRs.2/- each at a premium of Rs.538.60 per share to Cedar Support Services Limited("CEDAR") upon conversion of Optionally Convertible Debentures (OCDs) which wereoriginally allotted to CEDAR pursuant to the Composite Scheme of Arrangement between theCompany and Future Enterprises Limited and their respective Shareholders and Creditors("FEL FRL Scheme"). After conversion there are no outstanding OCDsremains in the Company.
Pursuant to acquisition of Hypercity Retail (India) Limited
On December 01 2017 the Company has allotted 9310987 Equity Shares of Rs.2/- eachat a premium of Rs.535/- per share to the erstwhile shareholders of Hypercity Retail(India) Limited ("HRIL") in the ratio of their holding in HRIL as a part ofconsideration in order to acquire the entire share capital of HRIL from its erstwhileshareholders.
During the year under review the Company has not issued any shares with differentialrights as to dividend voting or otherwise.
Retail 3.0 is one of our most ambitious projects and a business model that we believewill change the way retail happens. We aim to open 10000 small format stores in thecoming years across the Country. Driven by Data Technology and People these stores willbe big on High Touch and High Tech'. These Members Only' store with 2000members per store will work on customer data and customer proximity. We will be connectedto our customers 24/7 in Real Time mode.
The expansion of our neighborhood stores format and the growth of a FMCG business areamong the two key pillars of realizing Future Group's Vision 2021. We are building ourneighborhood stores in clusters of 100 to 500 stores in and around large cities. The SmallFormat Retail model is an ambitious plan that will see us open around 10000 stores backedby a tech augmented High Touch and High Tech' model that will set the standards forthe future of retail in India. Enabling this ambition we have put in our efforts to setup and increase the size of the team that will ensure that we realise our ambition andrelentlessly drive the execution of this strategy.
Our decision to concentrate as pure-play asset light retail business has thrown moreopportunities across all our large & small stores. Development and implementation oftechnology tools across all stores and offices on pan India basis and continuouslyupdating of technology tools has helped in achieving our goals which were set during pastyears. The "Data" of our customer has helped in achieving more sales percustomer across all formats and we strongly believe that we can capitalize the same incoming years.
The effort to continue our unique extensions in form of Future Pay wallet Membership& Loyalty drive across formats have once again provided good response and wellaccepted by our customers. This will continue to guide us to understand our customer inbetter way by tracking their spending pattern and allow us opportunity to serve them in abetter way. It will continue to help in acquiring new customers in our fold.
Our initiative of Big Bazaar Gen Nxt across large metros and fbb stores at selectlocations has received good response and going forward we look to expand our presenceacross major locations for both these formats. These formats have been recognized asshopping destinations and we believe that our continuous efforts to make them unique willallow us to cater to aspiring Indians more efficiently and also increases the sales at ourstores. We are on our path to redefine the aspirations and consumption trend in our nationfor our customers. While we are taking a leap in building retail ecosystems for ourcustomers we will build an organization that will help realize this dream of ours. Ourefforts of past years in improving supply-chain capabilities technology-enabledprocesses increasing focus on membership experience and other services shall help increating an exceptional model for our neighborhood stores. We have already initiated ourjourney and continuous efforts in that direction will lead us to success in coming years.
We have already set up a C & D Lab at Bengaluru and a dedicated team is workingtowards making this transformation and also to create a digital and product organization.We are working to create a high tech and high touch experience for our customersincreasing our efforts in integrating data and technology in real time. Backed with dataintelligence we are on our journey to build an end-to-end unified retail commerceexperience for all our customers.
DIVIDEND & RESERVES
Due to accumulated losses of previous years and further with a view to preserve theprofits of current year for future prospects the Board of Directors of the Company wereunable to recommend any Dividend during the financial year 2017-18. No amount is proposedto be transfer to General Reserve.
The Company has made the following investments:
Hypercity Retail (India) Limited ("HRIL")
In terms of the share purchase agreement which was executed between the CompanyHRIL and erstwhile shareholders of HRIL (hereinafter collectively referred as Sellers) ofthe Company has acquired the entire share capital of HRIL from Sellers comprising of151030306 equity shares of Rs.10/- each. Consequent to this with effect from November30 2017 HRIL became a wholly owned subsidiary of the Company. In turn the Company hasallotted 9310987 equity shares to the Sellers in the proportion of their shareholding inHRIL and also paid cash consideration in terms of the aforesaid share purchase agreement.
Travel News Services (India) Private Limited ("TNSI")
The Board of Directors of the Company had approved the acquisition of entire equityshare capital of TNSI and also executed share purchase agreement and related documents forthe said transaction. On May 11 2018 the Company has paid Rs.65.42 Crore in cash(after adjustments) to the existing shareholders of TNSI towards the said acquisition.
Consequent to this and with effect from May 11 2018 TNSI has become a wholly ownedsubsidiary of the Company. In addition to this and with effect from May 11 2018TNSI Retail Private Limited which is a wholly owned subsidiary of TNSI and Welcome RetailPrivate Limited a joint venture of TNSI in which TNSI holds 51% of the share capital havebecome step down subsidiaries of the Company.
Pursuant to demerger of Retail Business Undertaking and vesting of the same withCompany on March 29 2018 the shares of HRIL comprising of Remaining Business Undertakingwere sold to Kalap Fabtraders Private Limited (Nominee of Jas Infra Space PrivateLimited) for an aggregate consideration of Rs.7.85 Crore and accordingly HRIL ceased tobe subsidiary of the Company.
The Company has not accepted any fixed deposits from the public and accordingly noamount on account of principal or interest on deposits from public was outstanding as atMarch 31 2018.
During the year under review total 1542 10% Optionally Convertible Debentures ofRs.10 Lakh each (OCDs) aggregating to Rs.154.20 Crore which were originally issued toCedar Support Services Limited ("CEDAR") and was standing in the books of theCompany have been converted into 2852386 equity shares of the Company at a price ofRs.540.60 (including the premium of Rs.538.60) which was determined as per the pricingformula as specified in SEBI (Issue of Capital and Disclosure Requirements) Regulations2009. The said 2852386 equity shares has been issued and allotted to CEDAR on October31 2017 and thereafter listed on BSE and NSE. The Company has not issued any otherdebentures during the year under review.
A report on Corporate Governance along with a Certificate from Statutory Auditors ofthe 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 (hereinafterreferred to as "Listing Regulations") forms part of this Annual Report.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Listing Regulations a Business Responsibility Report is included and formspart of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis as required under Regulation 34 read withSchedule V of the Listing Regulations forms part of this Annual Report.
AUDITORS AND AUDITORS' REPORT Statutory Auditors
M/s. NGS & Co. LLP Chartered Accountants (Firm Registration No. 119850W) have beenappointed for a period of 5 (Five) years from the conclusion of the Ninth Annual GeneralMeeting till the conclusion of the Fourteenth Annual General Meeting of the Companysubject to ratification by the Members in every Annual General Meeting.
In view of recent amendment in the Companies Act 2013 ("the Act") which werenotified with effect from May 07 2018 by the Ministry of Corporate Affairs therequirement of ratification of Auditors at every year has been removed and accordinglythere is no requirement of ratification of appointment of Auditors.
The Company has received a written confirmation from the Statutory Auditor that theircontinued appointment shall be in accordance with the criteria as provided under Section141 of the Act.
The Auditors' Report on the Financial Statement for the financial year ended March 312018 was issued with unmodified opinion and does not contain any qualificationsreservations or adverse remarks.
As required under provisions of Section 204 of the Act and Rules made thereunder Ms.Bindu Darshan Shah
(Membership No. A-20066 / CP No. 7378) Proprietor: K. Bindu & AssociatesPractising Company Secretaries was appointed as Secretarial Auditor to conduct theSecretarial Audit of the Company for the financial year 2017-18. The Secretarial AuditReport for the financial year 2017-18 is appended as Annexure I whichforms part of this Report. The said Secretarial Audit Report doesn't contain anyqualifications reservations or adverse remarks.
POLICIES & DISCLOSURE REQUIREMENTS
The Company has in place inter-alia following policies & code of conductduly approved by the Board of Directors the Company: l Details of programs forfamiliarization of Independent Directors with the Company are available on the website ofthe Company at the link http://www. futureretail.co.in/pdf/ID_Familiarization.pdf lPolicy for determining material subsidiaries of the Company is available on the website ofthe Company at the link http://www.futureretail.co.in/pdf/Mat_Sub_ Policy.pdf lPolicy for determining Materiality of Events of the Company is available on the website ofthe Company at the link http://www.futureretail.co.in/pdf/Policy_for_Determining_Materiality_of_Events.pdf l Policy for archival of documents of theCompany is available on the website of the Company at the linkhttp://www.futureretail.co.in/pdf/Archival_Policy.pdf l The code of conduct for theBoard of Directors and senior management personnel of the Company is available on thewebsite of the Company at the link http://www.futureretail.co.in/pdf/Code_of_Conduct_for_Key_Managerial_Persons.pdf l Policy on dealing with related party transactionsis available on the website of the Company at the linkhttp://www.futureretail.co.in/pdf/RPT_Policy.pdf l The Remuneration Policy isavailable on the website of the Company at the link http://www.futureretail.in/pdf/Remuneration_Policy.pdf. l The Dividend distribution policy is given asAnnexure II to this Report. The same is also available on the website of theCompany at the link http:// futureretail.co.in/pdf/ Dividend_Distribution_Policy.pdf TheCompany has formulated and disseminated a Whistle Blower Policy to provide Vigil Mechanismfor employees and Directors of the Company to report genuine concerns that could haveserious impact on the operations and performance of the business of the Company. ThisPolicy is in compliance with the provisions of the Act and Listing Regulations.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review Ms. Sridevi Badiga was appointed as an Additional(Independent) Director on April 20 2017 for a period of Five (5) years. Further the
Members at Tenth Annual General Meeting held on August 29 2017 have approved theappointment of Ms. Badiga as an Independent Director of the Company. In terms ofSection 152 of the Act Mr. Rakesh Biyani is liable to retire by rotation and beingeligible offers himself for re-appointment.
The Company has received necessary disclosure and confirmation from concernedDirector(s) in connection with their appointment / re-appointment. Additional informationon appointment / re-appointment of Directors as required under Regulation 36 of theListing Regulations is given in the Notice convening the ensuing Annual General Meeting.
The Company has received necessary declarations from all the Independent Directorsunder Section 149(7) of the Act that they meet the criteria of independence laid down inSection 149(6) of the Act and Regulation 25 of the Listing Regulations.
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 this Annual Report.
NUMBER OF MEETINGS OF THE BOARD
During the year under review total Nine (9) meetings of the Board were held detailsof which are given in the Corporate Governance Report that forms part of this AnnualReport.
VIGIL MECHANISM / WHISTLE BLOWER
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 Chairperson of the Audit Committee in exceptional cases.
SUBSIDIARY JOINT VENTURE HOLDING COMPANY AND ASSOCIATE COMPANIES
During the year under review the Company has entered into a joint venture agreementwith Khimji Ramdas LLC a company incorporated under the laws of the Sultanate of Omanwherein a joint venture company was established in Oman under the name "Future RetailLLC" effective May 01 2018. The Company shall be contributing 50% of the sharecapital of said joint venture company.
During the year under review the Company acquired 100% of equity share capital ofHypercity Retail (India) Limited ("HRIL") from its shareholders andconsequently it became a wholly owned subsidiary of the Company effective November 302017.
Subsequently pursuant to demerger of Retail Business Undertaking and vesting of thesame with Company on March 29 2018 the shares of HRIL comprising of Remaining BusinessUndertaking were sold to Kalap Fabtraders Private Limited (Nominee of Jas Infra SpacePrivate Limited) for an aggregate consideration of Rs.7.85 Crore and accordingly HRILceased to be subsidiary of the Company.
There is no subsidiary or holding company or associate company of our Company as onyear end.
PERFORMANCE EVALUATION OF BOARD
Pursuant to the provisions of the Act and the Listing Regulations the Board hascarried out an annual evaluation of performance of its own the Committees thereof and theDirectors individually.
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 separateexercise was carried out to evaluate the performance of individual Directors including theChairman of the Board who were inter-alia 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 with the evaluation process.
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.
RISK MANAGEMENT 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 ofrisks associated with the business of the Company.
The Board has delegated responsibility to the Risk Management Committee to monitor andreview risk management assessment and minimization procedures and to develop implementand monitor the risk management plan and identify review and mitigate all elements ofrisks which the Company may be exposed to. The Audit Committee and the Board alsoperiodically reviews the risk management assessment and minimization procedures.
The Company has in place adequate internal financial controls with reference tofinancial statements. Key risks and threats to the Company and internal controls and theiradequacy are analyzed in the Management Discussion and Analysis which forms part of thisAnnual Report.
EMPLOYEES STOCK OPTIONS PLAN
The Shareholders of the Company had passed resolutions through Postal Ballot onNovember 07 2016 and approved the Future Retail Limited Employees Stock Option Plan 2016 ("FRL ESOP 2016") and also approved to offer issue and allotat any time or to acquire by way of secondary acquisition to or for the benefit ofEligible Employees under FRL ESOP 2016 not exceeding 9000000 Equity Shares ofRs.2 each in one or more tranches at such price and on such terms and conditions as maybe fixed or determined by the Nomination and Remuneration Committee.
Pursuant to the applicable provisions of the Act and the Securities and Exchange Boardof India (Share Based Employee Benefits) Regulations 2014 ("SBEB Regulation")the Company has set up a Future Retail Limited Employees' Welfare Trust'("Trust") for implementation of the said scheme.
The applicable disclosures as stipulated under SBEB Regulation as on March 31 2018with regard to the FRL ESOP 2016 are provided in Annexure III to thisReport. Further the Company has constituted Employees Gratuity Trust in name of"Future Retail Limited - Employees Gratuity Trust" and constituted a Fundthrough Trust in the name of "Future Retail Employees Superannuation Trust" forbenefits of eligible employees of the Company.
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 through various training awareness and practices.The Company always endeavors to create and provide an environment that is free fromdiscrimination 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 an Internal Complaints Committee (ICC) which is responsiblefor redressal of complaints related to sexual harassment and follows the guidelinesprovided in the policy. ICC conducts training workshop mainly focusing on investigationskills basic counselling skills like listening paraphrasing and dealing with biasesthrough various kind of case studies role plays activities based on real life examplesrole of ICC critical attitudes of an ICC member and investigation process & reportwriting etc.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
CORPORATE SOCIAL RESPONSIBILITY STATEMENT (CSR)
In terms of the provisions of Section 135 of the Act read with Companies (CorporateSocial Responsibility Policy) Rules 2014 the Board of Directors of your Company hasconstituted a Corporate Social Responsibility ("CSR") Committee. The compositionand terms of reference of the CSR Committee is provided in the Corporate GovernanceReport which forms part of this Annual Report.
The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy)Rules 2014 is made in prescribed form which is annexed to this Report as
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Details of Loans granted Guarantee provided and Investment made by the Company whichare covered under the provisions of Section 186 of the Companies Act 2013 is provided inNotes forming part of Standalone Financial Statements.
INDIAN ACCOUNTING STANDARD (Ind AS)
The Company has adopted Indian Accounting Standards ("Ind AS") from April 012016 with a transition date of April 01 2015. Accordingly the Financial Results for theyear 2017-18 have been prepared in accordance with Ind AS prescribed under Section133 of the Act read with the relevant Rules issued thereunder and the other recognisedaccounting practices and policies to the extent applicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review the 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.
Omnibus approval is obtained for the transactions which are foreseen and repetitive innature with Related Parties. A statement of all such related party transactions ispresented before the Audit Committee on periodic and need basis for its review andapproval.
Particulars of contracts or arrangements with related parties as required under Section134(3)(h) of the Act in the prescribed Form AOC-2 is given in Annexure V ofthis Report.
Disclosure of transactions with related parties as required under the applicableAccounting Standards have been made in the notes forming part of the financial statements.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(5) of the Act the Board of Directors ofthe Company hereby confirms that: i. in the preparation of the annual accounts for thefinancial year ended March 31 2018 the applicable accounting standards have beenfollowed along with proper explanation relating to material departures; ii. the Directorshave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit of theCompany for the year ended March 31 2018; iii. the Directors have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; iv. the Directors have prepared the annualaccounts for the financial year ended March 31 2018 on a going concern basis; v. theDirectors further state that they have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and vi. the Directors have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.
The Audit Committee of the Company comprises of Ms. Gagan Singh IndependentDirector as Chairperson of the Committee Mr. Ravindra Dhariwal Independent Director Ms.Sridevi Badiga Independent Director and Mr. Rakesh Biyani Jt. Managing Director asMembers of the Committee. There are no instances where the Board did not accept therecommendations of the Audit Committee. The terms of reference powers and roles of theCommittee are disclosed in the Corporate Governance Report which forms part of thisAnnual 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 under Annexure VIwhich is annexed to this Report.
In terms of the provisions Section 197(12) of the Act read with Rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of employees drawing remuneration inexcess of the limits set out in the said rules are provided in this Annual Report.
In terms of the proviso to Section 136(1) of the Act the Annual Report excluding theaforesaid information is being sent to the Members of the Company. The said information isavailable for inspection by the Members at the Registered Office of the Company duringbusiness hours on working days and Member is interested in obtaining such information maywrite to the Company Secretary and the same will be furnished on request. The full AnnualReport including aforesaid information is being sent electronically to all those Memberswho have registered their e-mail addresses and is also available on Company's website.
PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO
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 technology absorptionand foreign exchange earnings and outgo are provided in Annexure VII whichforms part of this Annual Report.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Act an extract of annual return in theprescribed Form MGT-9 is appended as Annexure VIII which forms part of thisAnnual 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.
DETAILS UNDER REGULATION 39(4) OF THE LISTING REGULATIONS UNCLAIMED SUSPENSEACCOUNT
In connection with the details pursuant to Regulation
39 (4) read with Schedule V of the Listing Regulations pertaining to outstandingshares lying in Unclaimed Suspense Account at the beginning of financial year underreview there were 184 shareholders holding 100710 Equity Shares. All the unclaimedshares are credited to a Demat Unclaimed Suspense Account and all the corporate benefitsin terms of securities accruing on these unclaimed shares shall be credited to suchaccount. The Voting rights on these shares shall remain frozen till the rightful owner ofsuch shares claims the shares.
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 from time to time by the Institute of CompanySecretaries of India in terms of Section 118(10) of the Companies Act 2013.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes have taken place that could have an impact on thefinancial position of the Company from the date of closure of financial year under reviewtill the date of signing of Accounts.
AWARDS AND RECOGNITIONS
The Company or its formats received awards in categories like: l FRL awarded asMarketer of the Year at the prestigious Leadership Award for excellence in marketingadvertising and media; and l Board Diversity Award 2017
Big Bazaar l Big Bazaar won IMAGES Most Admired Food & Grocery Retailer of theYear 2017; l Big Bazaar's DecideYourPrice campaign won SILVER for BestCampaign to Drive Sales' at The Maddies Awards; l Big Bazaar's Smart Searchwon Best Search Marketing Campaign at CMO Asia Awards 2017; l Big Bazaar's DecideYour Price campaign won Gold for Best Social Media amplification at BW Applause awards; lBig Bazaar's Fast Billing campaign won Silver for Best Use of Digital marketing at BWApplause awards; l Big Bazaar won Silver for its Grahpravesh campaign at Effie 2018under the Retail section; and l Big Bazaar ranked Number 6 in the Brand Asia 2017' Survey by Market Xcel in association with Nikkei BP Japan.
Easyday l Easyday won IMAGES Most Admired National Supermarket. fbb (Fashion @Big Bazar) l fbb won IMAGES Most Effective Marketing and Promotions Campaign of theYear; l fbb won IMAGES Most Admired Retailer of the Year Innovative Retail Concept;and l fbb's World Shorts Day won Best Social media Campaign of the year CMO AsiaAwards 2017.
Your Board of Directors would like to thank and place on record their appreciation forthe continued support and co-operation provided to your Company by its ShareholdersFuture Group entities and in particular their employees regulatory authorities and itsbanks and financial institutions. Your Directors would also like to place on record itssincere appreciation for the efforts put in by employees of the Company whose effortshard work and dedication has enabled the Company to achieve the targets and recognitionsduring the year.
For and on behalf of the Board of Directors
|Place: Mumbai ||Kishore Biyani |
|Date : May 21 2018 ||Chairman & Managing Director |