The Members,
The Directors are pleased to present the Twelfth Annual Report of the Company together with the Audited Financial Statements for the financial year ended March 31, 2019.
FINANCIAL HIGHLIGHTS
The financial performance of the Company is as follows:
(Rs. in crore)
|
Particulars
|
Standalone
|
Consolidated
|
| |
Financial Year 2018-19
|
Financial Year 2017-18
|
Financial Year 2018-19#
|
|
Revenue from Operations
|
20,164.90
|
18,477.97
|
20,332.58
|
|
Other Income
|
20.47
|
11.67
|
23.14
|
|
Total Revenue
|
20,185.37
|
18,489.64
|
20,355.72
|
|
Profit/(Loss) before Depreciation and Amortization Expense & Tax expense
|
833.40
|
668.61
|
831.22
|
|
Less: Depreciation and Amortization expense
|
100.59
|
53.43
|
104.02
|
|
Profit/(Loss) before Exceptional Item
|
732.81
|
615.18
|
727.20
|
|
Less: Exceptional Item
|
-
|
603.87
|
-
|
|
Profit/(Loss) before Tax
|
732.81
|
11.31
|
727.20
|
|
Less: Tax expense
|
-
|
-
|
0.01
|
|
Profit/(Loss) after Tax
|
732.81
|
11.31
|
727.19
|
|
Other Comprehensive Income for the year
|
5.81
|
1.96
|
5.85
|
|
Total Comprehensive Income for the year
|
738.62
|
13.27
|
733.04
|
|
Earnings Per Equity Share of Face Value of Rs. 2/- each
|
|
|
|
|
- Basic and Diluted (in Rs.)
|
14.58
|
0.23
|
14.47
|
(#)The Company has prepared the consolidated financial results as required under the provisions of the Companies Act, 2013 (hereinafter referred to as “the Act") and the applicable prescribed Accounting Standards under the Act, since this is the first year, when the Company has subsidiary and joint venture companies. There were no subsidiary or joint venture companies in previous year and hence no comparable numbers of previous year are available.
REVIEW OF PERFORMANCE
During the year under review, your Company recorded an increase of 9.13% in the Standalone Revenue from Operations at Rs. 20,164.90 crore as compared to Rs. 18,477.97 crore in the previous financial year. Consolidated Revenue from Operations was reported at Rs. 20,332.58 crore during the year under review. Your Company also reported an increase of 19.12% in the Profit of Rs. 732.81 crore as compared to Rs. 615.18 crore for the previous financial year, before exceptional item.
The year 2018-19 was a very fulfilling year. We now have a pan India presence with 1,511 stores in 428 cities as of March 31, 2019 and total retail space of approximately 16.14 million sq. ft. for various formats of our Company. As on March 31, 2019, we have 292 Big Bazaar/Hypercity stores, 94 fbb stores, 12 Foodhall stores, 1,106 small format stores (including WHSmith stores) and 7 eZone stores. Our retail format business is supported by various other businesses operated by Future Group companies and through investee companies of Future Group operating in various ventures including branded fashion, food & FMCG, insurance, warehousing & logistics, media and textiles.
As regard the well-developed formats like Big Bazaar, fbb, Foodhall, easyday etc. which has received good recognition and also acceptance by our stakeholders, we have been able to develop presence across India with good loyal customer base of approximately 50 million members across all formats as of March 31, 2019.
Fiscal 2019 also firmed up the stage for a strong omnichannel business and Online to Offline conversions. The Company has set the foot on a focused small-store membership program, higher paid-loyalty membership enrolments in large format stores and in parallel, several functional enrichment to serve such loyal customers better. To this extent, we have increased the retail technology play across our stores, enriched the Future Pay wallet and introduced many member service aspects.
SCHEME OF ARRANGEMENT AND ACQUISITION
a. Scheme of Arrangement between Hypercity Retail (India) Limited and the Company and their respective Shareholders ("Hypercity Scheme")
The Company had entered into Scheme of Arrangement with Hypercity Retail (India) Limited ("HRIL") and their respective Shareholders under Sections 230-232 and other applicable provisions of the Act in order to consolidate the retail business under singly entity, whereby the retail business undertaking of HRIL got demerged and vested with the Company. The Hypercity Scheme has been given effect on April 25, 2018 ("Effective Date"). The Appointed Date under Hypercity Scheme for Demerger was December 1, 2017.
b. Acquisition of Travel News Services (India) Private Limited ("TNSI")
During the year under review, the Company has executed necessary agreement(s) and on May 11, 2018 acquired the entire equity share capital of TNSI from its existing shareholders for cash consideration. Consequent to this, TNSI has become a wholly owned subsidiary of the Company.
In addition to this TNSI Retail Private Limited, a wholly owned subsidiary of TNSI and Welcome Retail Private Limited, a joint venture of TNSI in which TNSI holds 51% of the share capital have also become step down subsidiaries of the Company effective from the same date i.e. May 11, 2018.
c. Acquisition of "Foodworld" business
During the year under review, the Company has entered into necessary agreement(s) with Foodworld Supermarkets Private Limited and acquired the retail business undertaking under the brand name "Foodworld" for cash consideration.
d. Acquisition of SHME Food Brands Private Limited ("SHME")
During the year under review, the Company has acquired the entire equity share capital of SHME (now known as SHME Food Brands Limited) for cash consideration from its existing shareholders on February 28, 2019 and accordingly, SHME has become a wholly owned subsidiary of the Company.
SHARE CAPITAL
During the year under review, the Company has issued and allotted in aggregate 6,23,285 Equity Shares of Rs. 2/each to eligible employees of the Company, upon exercise of the vested options granted to the concerned employees under Future Retail Limited Employee Stock Option Plan - 2016 (FRL ESOP - 2016). None of the employees is in receipt of Equity Shares exceeding 1% of Equity Share capital of the Company against the vested options exercised by them under FRL ESOP - 2016. The breakup of allotment is as follows:
|
Sl. No.
|
No. of Equity Shares allotted
|
Date of allotment
|
|
1.
|
5,28,763
|
May 21, 2018
|
|
2.
|
64,522
|
August 09, 2018
|
|
3.
|
30,000
|
November 23, 2018
|
During the year under review, the Company has not issued any sweat equity shares or bonus shares or equity shares with differential rights.
Post March 31, 2019 and on receipt of initial warrant subscription amount of Rs. 500 crore equivalent to 25% of the warrant issue price as prescribed by the SEBI (ICDR) Regulations for allotment of the equity warrants, on April 23, 2019 the Company considered and allotted 3,96,03,960 equity warrants to M/s. Future Coupons Limited, a Promoter Group entity, on preferential basis. The conversion option can be exercised by Warrantholder(s) at any time during the period of 18 (Eighteen) months from the date of allotment of equity warrants, in one or more tranches, as the case may be and on such other terms and conditions as applicable.
BUSINESS OUTLOOK
We believe that your Company with its unparalleled network of stores spread across India is poised to get the maximum benefit of the surge in the consumption drive. We also believe that the network is strategically well placed to capture the growth in organised sector over unorganised as well as yield incumbency advantages.
Our Retail 3.0 organisation of small format stores has come together and we have now focussed strategy on a combined expansion of member platform and member-retail stores. The small stores are overlaid with digital & technology functionalities in many ways which makes the pace of the business management more efficient and allows the Company to expand at a very fast pace. We now have more than 11 lakh active, paid members on our small stores network. Currently, we are rolling out the easyday app for members to order digitally or through inter active commerce from their mobile phones and track delivery at home. The app has unique features like voice search and scheduling in-store or at-home delivery.
Future Group had launched a Future Consumer and Digital (C&D) Lab in Bengaluru that focuses on the consumer and digital space to bring in next-generation innovations using Artificial Intelligence, Big Data Analytics, Blockchains, Internet of Things, Robotics and allied technologies. The C&D Lab brings together multiple teams and companies that are working in these areas, housed in a common, collaborative space and will have ready access to test, experiment, and prototype their technologies across Future Group's brand and retail platforms that serve over a million customers every day.
The Lab is pursuing technology developments that will influence consumer experiences in areas such as payments, unique consumer identification and development of one-on-one consumer conversations, analytics and predictive modeling as well as in back-end functions such as supplier engagements, supply chain automation and infrastructure deployment.
As you are also aware, Future Group is the chosen partner for the launch of 7-Eleven brands of convenience stores in India. With over 67,000 stores across 17 countries, 7-Eleven is an iconic, global retail brand. In India, we will be scripting a unique story for 7-Eleven, combining food services, convenience and superb customer service in every urban neighbourhood. The growth and expansion of 7-Eleven will be a critical part of growing our food and FMCG brands and bringing new services, formats and conveniences for our customers. A dedicated team is being set up to bring together the best practices of 7-Eleven Inc. and our understanding of India, to create the best proposition and offerings for our customers.
As a consumer-driven business it is important for us to build upon new trends, new categories and new ideas that are going to shape consumption in the years ahead. Future Group's own brands represents one of our strongest pillars for the growth and value creation of our business. Our own brands allows us to earn higher end-to-end margins for the organisation. More importantly, it helps us own and deepen the relationship with customers, addresses gaps not fulfilled by our suppliers and also to meet the customers expectations.
As reported during last year performance, the Big Bazaar, the flagship format contributing good return as witnessed from Same Stores Sales Growth at 10.9% in the year 2018-19 and the management is optimistic to see improvement in performance going forward while their expansion plan of opening new stores and renovating existing Big Bazaar stores in place.
The Company is continuing its expansion plan for fbb format and will add more exclusive brand outlets in coming years. Your Company has already taken fbb brand to international markets through its joint venture with Oman based conglomerate Khimji Ramdas LLC and have already opened 2 (Two) stores in Oman in the current financial year. Over the past few years, fbb has undergone a significant transformation and we will continue our journey of improving products assortments, in-store experience and strengthening our supply chain.
DIVIDEND & RESERVES
Keeping in mind the future prospects and further expansion plans of the Company, the Board of Directors of the Company have decided not to recommend any Dividend during the financial year 2018-19. No amount is proposed to be transfer to General Reserve.
INVESTMENTS
During the year under review, the Company has made the following investments:
- Travel News Services (India) Private Limited ("TNSI")
The Board of Directors of the Company had approved the acquisition of entire equity share capital of TNSI and also executed necessary agreement(s) and related documents for the 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.
Further, on March 29, 2019, the Company had made an additional investment by subscribing 34,00,000 7% Cumulative Redeemable Preference Shares of Rs. 100/- each, aggregating to Rs. 34 crore in cash.
- Future Retail LLC
The Company had entered into shareholders agreement with Khimji Ramdas LLC and incorporated a joint venture company viz; Future Retail LLC ("JV Company") to operate "fbb" brand in Oman and then across other member state of GCC. The Company has in aggregate invested fund to the tune of Rs. 4.57 crore towards total 2,50,000 shares of Omani Rial 1 each in the share capital and accordingly it holds 50% of JV Company.
- SHME Food Brands Private Limited ("SHME")
Pursuant to the approval of the Board of Directors, the Company had acquired the entire equity share capital of SHME (now known as SHME Food Brands Limited) for cash consideration of Rs. 0.01 crore from its existing shareholders on February 28, 2019.
DIVESTMENTS
During the year under review, the Company has not made any divestment.
PUBLIC DEPOSITS
The Company has obtained the approval of Members for acceptance of fixed deposits from public and/or Members of the Company. However, the Company has not accepted any fixed deposits during the year under review and accordingly, no amount on account of principal or interest on deposits from public and/or Members were outstanding as at March 31, 2019.
DEBENTURES
During the year under review, the Members of the Company have granted the approval for issuance of Non-Convertible Debentures. However, the Company has not issued any Debentures during the year ended March 31, 2019.
CORPORATE GOVERNANCE
The Company's Corporate Governance Report for the year under review, forms part of this Annual Report.
A certificate from the Statutory Auditors of the Company regarding the compliance with the conditions of the Corporate Governance as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Listing Regulations"), is annexed to Corporate Governance Report and forms a part of this Report.
BUSINESS RESPONSIBILITY REPORT
Pursuant to SEBI Listing Regulations, a Business Responsibility Report is included and forms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis as required under Regulation 34 read with Schedule V of SEBI 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 been appointed for a period of 5 (Five) years from the conclusion of the Ninth Annual General Meeting till the conclusion of the Fourteenth Annual General Meeting of the Members of the Company.
Pursuant to the notification issued by the Ministry of Corporate Affairs on May 7, 2018, the mandatory requirement for ratification of appointment of Auditors by the Members at every Annual General Meeting ("AGM") has been omitted. Hence, no resolution was proposed for the ratification of appointment of Statutory Auditors at the ensuing AGM.
The Company has received a written confirmation from the Statutory Auditors confirming that their continued appointment shall be in accordance with the applicable provisions of the Act.
Auditors' Report
The Auditors' Report on the financial statements for the financial year ended March 31, 2019 is issued with unmodified opinion and does not contain any qualifications, reservations or adverse remarks.
Secretarial Auditor
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 & Associates, Practicing Company Secretaries was appointed as Secretarial Auditor to conduct the Secretarial Audit of the Company for the financial year 2018-19.
The Secretarial Audit Report for the financial year 2018-19 is appended as Annexure - I, which forms part of this Report. The said Secretarial Audit Report doesn't contain any qualifications, reservations or adverse remarks.
POLICIES & DISCLOSURE REQUIREMENTS
The Company has in place inter-alia following policies & code of conduct duly approved by the Board of Directors the Company:
-Details of programs for familiarization of Independent Directors with the Company are available on the website of the Company at the link https://www.futureretail.in/investors/Policies.html
- Policy for determining material subsidiaries of the Company is available on the website of the Company at the linkhttps://www.futureretail.in/investors/ Policies.html
- Policy for determining Materiality of Events of the Company is available on the website of the Company at the linkhttps://www.futureretail.in/investors/ Policies.html
- Policy for archival of documents of the Company is available on the website of the Company at the link https://www.futureretail.in/investors/Policies.html
- The code of conduct for the Board of Directors and senior management personnel of the Company is available on the website of the Company at the link https://www.futureretail.in/investors/corporate-governance-standards.html
- Policy on dealing with related party transactions is available on the website of the Company at the link https://www.futureretail.in/investors/Policies.html
- The Remuneration Policy is available on the website of the Company at the linkhttps://www.futureretail.in/ investors/Policies.html
- The Dividend distribution policy is given as Annexure - II to this Report. The same is also available on the website of the Company at the linkhttps:// www.futureretail.in/investors/Policies.html
The Company has formulated and disseminated a Whistle Blower Policy to provide Vigil Mechanism for employees and Directors of the Company to report genuine concerns that could have serious impact on the operations and performance of the business of the Company. This Policy is in compliance with the provisions of the Act and SEBI Listing Regulations.
DIRECTORS AND KEY MANAGERIAL PERSONNEL(S)
During the year under review, Mr. Rajan Bharti Mittal ceased to be a Director of the Company with effect from August 9, 2018 due to pre-occupation, which was noted by the Board.
Based on the recommendation of Nomination and Remuneration Committee ("NRC"), the Board has appointed Mr. Rahul Garg as an Additional Director (Non-Executive) of the Company with effect from August 9, 2018. Further, the Members at Eleventh AGM held on August 29, 2018 have approved the appointment of Mr. Garg as a Non-Executive Director of the Company.
Further, as recommended by NRC, the Board has considered and approved the re-appointment of Mr. Kishore Biyani as Managing Director and Mr. Rakesh Biyani as Jt. Managing Director both for a period of 3 (Three) years with effect from May 2, 2019, subject to the approval of Members of the Company.
In terms of Section 152 of the Act, Mr. Kishore Biyani who is liable to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.
The Company has received necessary disclosure and confirmation from concerned Director(s) in connection with their re-appointment. Additional information as required under Regulation 36 of SEBI Listing Regulations and Secretarial Standards, is given in the Notice convening the ensuing AGM.
The Company has received necessary declarations from Independent Directors under Section 149(7) of the Act stating that they meet the criteria of independence laid down in Section 149(6) of the Act and SEBI Listing Regulations.
COMMITTEES OF THE BOARD
Details of Committees of the Board of Directors of the Company along with their terms of reference, composition and meetings held during the year are provided in the Corporate Governance Report, which forms part of this Annual Report.
NUMBER OF MEETINGS OF THE BOARD
During the year under review, Six (6) meetings of the Board of Directors of the Company were held. The details of date of above meeting including the attendance of the Directors, are given in the Corporate Governance Report which forms part of this Annual Report.
VIGIL MECHANISM/WHISTLE BLOWER
The Company has established a vigil mechanism to provide a framework to promote responsible and secure whistle blowing and to provide a channel to the employee(s) and Directors to report to the management, concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct or policy/ies of the Company, as adopted/framed from time to time. The mechanism provides for adequate safeguards against victimisation of employee(s) and Directors to avail of the mechanism and also provide for direct access to the Chairperson of the Audit Committee in exceptional cases.
SUBSIDIARY, JOINT VENTURE, HOLDING COMPANY AND ASSOCIATE COMPANIES
During the year under review, your Company has the following subsidiaries and joint venture:
Travel News Services (India) Private Limited ("TNSI")
TNSI is a wholly owned subsidiary and is mainly into retail trade of confectionery, food, beverages, accessories etc. and it operates at various airports, corporate parks and also at universities in Delhi and NCR under the brand name "WHSmith" and also provides rental/leasing services. During the year under review, it has reported income from operations amounting to Rs. 158.36 crore and its net profit stood at Rs. 0.60 crore.
TNSI Retail Private Limited ("TNSI Retail")
TNSI Retail is subsidiary of TNSI and is mainly into retail trading and operates at Metro stations in Delhi and NCR under the brand name "WHSmith" and also deals in wholesale trading. During the year under review, it has reported income from operations amounting to Rs. 64.83 crore and incurred a net loss of Rs. 2.23 crore.
Welcome Retail Private Limited ("WRPL")
WRPL is a joint venture of TNSI & Felmingo Group and is into business of setting-up, developing, operating, renting and sub-leasing services for various spaces mainly at airports and metro stations. During the year under review, it has reported income from operations amounting to Rs. 24.16 crore and its net profit stood at Rs. 0.29 crore.
SHME Food Brands Private Limited ("SHME")
SHME (now known as SHME Food Brands Limited) is a wholly owned subsidiary of the Company and is into business of operating, developing, maintaining and running of convenience stores and commercial establishments of similar nature. SHME and the Company have executed a master franchise agreement with 7-Eleven, Inc to develop and operate 7-Eleven stores within India. During the year under review, it has reported income from operations amounting to Rs. 0.03 crore and a net profit of Rs. 0.02 crore.
Future Retail LLC ("FRLLC")
FRLLC is a joint venture incorporated in Oman to undertake business to operate "fbb"brand fashion outlets in Oman and across other member states of GCC. For the period ended December 31, 2018, the joint venture has not commenced any operation and has incurred expenses towards setting up of business and has reported loss of Rs. 0.49 crore.
INDIAN ACCOUNTING STANDARD (IND AS)
The Company has adopted Indian Accounting Standards ("IND AS") from April 01, 2016 with a transition date of April 01, 2015. Accordingly, the financial statement for the year 2018-19 have been prepared in accordance with IND AS, prescribed under Section 133 of the Act, read with the relevant rules issued thereunder and the other recognised accounting practices and policies to the extent applicable.
CONSOLIDATED FINANCIAL STATEMENT
During the year under review, the Board has reviewed the affairs of subsidiaries and joint venture. The Consolidated Financial Statement of the Company is prepared in accordance with the Act and applicable IND AS along with the relevant documents and Auditors' Report thereon form part of this Annual Report.
Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statement of the subsidiaries and joint venture in the prescribed Form AOC-1 is attached to the financial statement, which forms part of this Annual Report.
In accordance with the provisions of Section 136(1) of the Act, the Annual Report of the Company containing therein the audited standalone and consolidated financial statement and the audited financial statements of each of the subsidiary companies have been placed on the website of the Company. The audited financial statements in respect of subsidiaries shall also be kept open for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of ensuing AGM. The aforesaid documents are also available to Members interested in obtaining the same upon a request made to the Company.
PERFORMANCE EVALUATION OF BOARD
Pursuant to the provisions of the Act and SEBI Listing Regulations, the Board has carried out an annual evaluation of performance of its own, the Committees thereof and the Directors individually.
Based on guidance note, the performance of the Board was evaluated after seeking inputs on all the relevant factors from all the Directors on the basis of criteria such as the Board and Committee composition, structure, effectiveness of board processes, information and functioning etc.
The performance of the Committees were evaluated by the Board after taking input from the respective Committee members on all the relevant factors material for evaluation purpose.
A separate exercise was carried out at meeting of Independent Directors to evaluate the performance of individual Directors including the Chairman of the Board, who were inter-alia evaluated on parameters such as level of engagement, contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board except the Director being evaluated. The performance evaluation of the Chairman and Non-Independent Directors was carried 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 matters provided in Section 178(3) of the Act, has been disclosed in the Corporate Governance Report which forms part of this Annual Report.
The details of commission paid to Executive and Non-Executive Director, is given in Corporate Governance Report forming part of this Annual Report.
RISK MANAGEMENT AND INTERNAL FINANCIAL CONTROL
The Company has a well-defined risk management framework in place, which provides an integrated approach for identifying, assessing, mitigating, monitoring and reporting of risks associated with the businesses of the Company.
The Board has delegated responsibility to the Risk Management Committee to monitor and review risk management, assessment and minimisation procedures and to develop, implement and monitor the risk management plan and identify, review and mitigate all elements of risks which the Company may be exposed to. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The Audit Committee and the Board also periodically reviews the risk management assessment and minimisation procedures.
The Company has in place adequate internal financial controls with reference to financial statements. Key risks and threats to the Company and internal controls and their adequacy are analysed in the Management Discussion and Analysis, which forms part of this Annual Report.
EMPLOYEES STOCK OPTIONS PLAN
The Members of the Company have passed necessary resolutions through Postal Ballot and approved the FRL ESOP - 2016 and also approved to offer, issue and allot at any time or to acquire by way of secondary acquisition, to or for the benefit of eligible employees under FRL ESOP -2016, not exceeding 90,00,000 Equity Shares of Rs. 2/- each, in one or more tranches, at such price and on such terms and conditions as may be fixed or determined by the NRC or People Office.
Pursuant to the applicable provisions of the Act and the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations"), 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 Regulations as on March 31, 2019 with regard to the FRL ESOP - 2016 are provided in Annexure - III to this Report.
Further, the Company has constituted Employees Gratuity Trust in name of "Future Retail Limited - Employees Gratuity Trust" and constituted a Fund through Trust in the name of "Future Retail Employees Superannuation Trust" for benefits of eligible employees of the Company.
CREDIT RATING
The details pertaining to credit rating for the facilities obtained by the Company during the year under review is given in Corporate Governance Report forming part of this Annual Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company has always believed in providing a safe and harassment free workplace for every individual working in the Company through various training, awareness and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.
The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. The Company has complied with the provisions relating to Internal Complaints Committee ("ICC"). Further, ICC is responsible for redressal of complaints related to sexual harassment and follows the guidelines as provided in the policy. ICC conducts training workshop mainly focusing on investigation skills, basic counselling skills like listening, paraphrasing and dealing with biases through various kind of case studies, role plays activities based on real life examples, role of ICC, critical attitudes of an ICC member and investigation process & report writing, etc.
Information regarding the no. of complaints received/ resolved/remained unresolved is given in Corporate Governance Report forming part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY STATEMENT
In terms of the provisions of Section 135 of the Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility Committee ("CSR Committee"). The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report, which forms part of this Annual Report.
The disclosures as per Rule 9 of above mentioned Rules is made in prescribed form which is annexed to this Report as Annexure - IV.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of loans granted, guarantee provided and investment made by the Company which are covered under the provisions of Section 186 of the Act, is provided in Notes forming part of financial statement.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review, the transactions entered into by the Company with related parties as defined under the Act and SEBI Listing Regulations, were in the ordinary course of business and on an arm's length basis.
Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature with related parties. A statement of all such related party transactions was presented before the Audit Committee on periodic and need basis for its review and approval.
Particulars of contracts or arrangements with related parties as required under Section 134(3)(h) of the Act, in the prescribed Form AOC-2 is given in Annexure - V which forms part of this Report.
Disclosure of transactions with related parties (including entity belonging to the Promoter/Promoter Group which hold(s) 10% or more shareholding in the Company) as required under SEBI Listing Regulations and the applicable Accounting Standards have been given in the Notes forming part of the financial statement.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(5) of the Act, the Board, to the best of its ability confirms that:
i. in the preparation of the annual accounts for the financial year ended March 31, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year ended March 31, 2019;
iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. they have prepared the annual accounts for the financial year ended March 31, 2019 on a going concern basis;
v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
AUDIT COMMITTEE
The Audit Committee of the Company comprises of Ms. Gagan Singh, Independent Director as Chairperson of the Committee, Mr. Ravindra Dhariwal, Independent Director, Ms. Sridevi Badiga, Independent Director and Mr. Rakesh Biyani, Jt. Managing Director as other Members of the Committee. There are no instances where the Board did not accept the recommendations of the Audit Committee. The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of this Annual Report.
PARTICULARS OF EMPLOYEES
The information pertaining to the remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as Annexure - VI which forms part of this Report.
In terms of the provisions Section 197(12) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess 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 the aforesaid information is being sent to the Members of the Company. The said information is available for inspection by the Members at the Registered Office of the Company during business hours on working days and Members interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. Such details are also available on Company's website at www.futureretail.co.in.
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, are provided in Annexure - VII which forms part of this Report.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Act, an extract of annual return in the prescribed Form MGT-9 is given as Annexure - VIII which forms part of this Report.
In accordance with Section 92(3) of the Act, a copy of the Annual Return for the financial year ended March 31, 2019 is available on the website of the Company at https://www.futureretail.in/investors/annual-reports.html.
DETAILS UNDER REGULATION 39(4) OF SEBI LISTING REGULATIONS - UNCLAIMED SUSPENSE ACCOUNT
Pursuant to Regulation 39(4) read with Schedule V of SEBI Listing Regulations, the details pertaining to outstanding shares lying in Unclaimed Suspense Account are given in Corporate Governance Report forming part of this Annual Report. All the unclaimed shares are credited to a Demat Unclaimed Suspense Account and all the corporate benefits in terms of securities, accruing on these unclaimed shares shall be credited to such account. The voting rights on these shares shall remain frozen till the rightful owner(s) claim such shares.
SECRETARIAL STANDARDS
During the year under review and in terms of Section 118(10) of the Act, the Company has complied with Secretarial Standards on meetings 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 Company Secretaries of India.
AWARDS AND RECOGNITIONS
The Company and its formats received awards in categories like:
Big Bazaar
- Big Bazaar was ranked among the most valuable brand by Interbrand;
- Big Bazaar won IMAGES Most Admired Brand Retail Partnership of the Year 2018;
- Big Bazaar won IMAGES Most Admired Retailer of the Year under Digital Marketing Campaign category;
- Big Bazaar's Smart Search Campaign won MMG Awards, Troxy, London for Best Campaign in Fashion, Beauty & Retail Category for 2018 and the best Mobile Search Campaign globally by SMARTIES, New York;
- Big Bazaar's 24hr Facebook Live Campaign won:
- Gold in Exchange4Media - Maddies of the Year 2018;
- EMVIE Silver under the category Best Media Innovation, Digital, Social Media;
- Best Online Advertising Campaign by Exchange4Media, Indian Digital Media Awards 2018.
- Big Bazaar's Midnight Sale Campaign won Silver in Exchange4Media - Maddies of the Year 2018;
- Big Bazaar's Decide Your price won Gold in DMA Asia Echo 2018 under the Create Effect category;
- Big Bazaar Profit Club won Customer Loyalty Awards for the Best Card Based Loyalty Program and Best Loyalty Program in Retail Sector.
fbb (Fashion @ Big Bazaar)
- fbb's Airport Makeover won ET Now - Stars of the Industry Award under the best Experiential and Brand Experience of the year;
- fbb's "National Jeans Day" Campaign won:
- ET Now - Stars of the Industry Award for the best use of social media and marketing;
- Best Branded Regional Campaign by Foxglove -Afaqs!;
- Gold for the Best Use of Social Media to launch a product or service by SAMMIEs - Social Samosa;
- Gold for the Best Lead Gen Campaign at 9th IDA
- IAMAI;
- Best Launch of a Product by LIDMA - Lighthouse Insights;
- Digital Awards for the best lead generation campaign through mobile.
- fbb won the best Print Campaign of the year at the Activation Venue Forum - Umbrella Aegis;
- fbb "500 Festive Looks" Campaign won:
- Best Use of Instagram by Foxglove - Afaqs!;
- Silver for the Best Content Marketing - Retail by DIGIXX - AdGully.
- fbb's "World Shorts Day" Campaign won:
- Silver under Social Media - Retail category by DIGIXX - AdGully;
- the Best Digital Integrated Campaign by Global Marketing Congress - CMO Asia;
- Silver for the Best Use of Social Media to generate leads or drive revenues by SAMMIEs - Social Samosa.
- fbb won the Best Media Marketing Campaign, for "Dil Se Desi" Campaign by Global Marketing Congress -CMO Asia.
easyday
- easyday Club awarded Most Admired Food & Grocery Retailer of the Year under National Supermarket Category by IMAGES.
Foodhall
- Foodhall at MKT, Chanakyapuri won VM&RD Awards 2019, North in Food Groceries and General Merchandise;
- Foodhall at MKT, Chanakyapuri won VM&RD Awards 2019, North in Best Shop Fitting;
- Foodhall at Two Horizon Centre, Gurugram won VM&RD Awards 2019, North in Food Groceries and General Merchandise.
GENERAL DISCLOSURES
Your Directors state that:
- There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future;
- There were no material changes have taken place that could have an impact on the financial position of the Company from the date of closure of financial year under review till the date of signing of Accounts;
- There were no events relating to non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014;
- There were no events relating to receipt of any remuneration or commission from any of its subsidiary companies by the Managing Director / Jt. Managing Director of the Company;
- Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act are not applicable for the business activities carried out by the Company.
ACKNOWLEDGEMENT
Your Board of Directors would like to thank and place on record their appreciation for the continued support and co-operation provided to your Company by its Members, Future Group entities and in particular, their employees, regulatory authorities, suppliers, customers and its banks and financial institutions. Your Directors would also like to place on record its sincere appreciation for the efforts put in by employees of the Company whose efforts, hard work and dedication has enabled the Company to achieve the targets and recognitions during the year.
For and on behalf of the Board of Directors
Place : Mumbai Kishore Biyani
Date : May 25, 2019 Chairman & Managing Director
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