To,
The Members,
Your Directors are pleased to present the Fourteenth Annual Report of the Company
together with the Audited Financial Statements for the financial year ended March 31,
2021.
FINANCIAL HIGHLIGHTS
The financial performance of the Company is as follows:
(Rs.in crore)
|
standalone |
Consolidated |
particulars |
Financial Year 2020-21 |
Financial year 2019-20 |
Financial year 2020-21 |
Financial year 2019-20 |
Revenue from Operations |
6,261.04 |
20,118.32 |
6,303.94 |
20,331.72 |
Other Income |
176.36 |
83.60 |
256.93 |
86.68 |
Total Revenue |
6,437.40 |
20,201.92 |
6,560.87 |
20,418.40 |
Profit / (Loss) before Depreciation and Amortization Expense & Tax expense |
(1,831.75) |
1,074.73 |
(1,785.69) |
1,112.79 |
Less: Depreciation and Amortization expense |
1,328.17 |
1,040.89 |
1,382.81 |
1,098.72 |
Profit / (Loss) before Exceptional Item |
(3,159.92) |
33.84 |
(3,168.49) |
14.08 |
Less: Exceptional Item |
- |
- |
- |
- |
Profit / (Loss) before Tax |
(3,159.92) |
33.84 |
(3,168.49) |
14.08 |
Less: Tax expense |
20.11 |
- |
21.03 |
2.79 |
Profit / (Loss) after Tax |
(3,180.03) |
33.84 |
(3,189.52) |
11.29 |
Other Comprehensive Income for the year |
98.99 |
(224.45) |
98.99 |
(224.67) |
Total Comprehensive Income for the year |
(3,081.04) |
(190.61) |
(3,090.53) |
(213.38) |
Earnings Per Equity Share of Face Value of Rs.2/- each |
|
|
|
|
- Basic (in Rs.) |
(58.86) |
0.67 |
(59.03) |
0.23 |
- Diluted (in Rs.) |
(58.86) |
0.65 |
(59.03) |
0.22 |
REVIEW OF PERFORMANCE
During the year under review, your Company recorded a decrease of 69% in the Standalone
Revenue from Operations at Rs.6,261.04 crore as compared to Rs.20,118.32 crore in the
previous financial year. Consolidated Revenue from Operations was reported at Rs.6,303.94
crore during the year under review. Your Company also reported Net Loss of Rs.3,180.03
crore as compared to Net Profit of Rs.33.84 crore for the previous financial year on
standalone basis.
We have a pan India presence with 1,308 stores in 397 cities as of March 31, 2021 and
total retail space of approximately 15.69 million sq. ft. for various formats of your
Company. As on March 31, 2021, we have 285 Big Bazaar / Hypercity stores, 88 fbb stores, 8
Foodhall stores and 927 small format stores (including 89 WHSmith stores). Our retail
format business is supported by various other businesses operated by Group companies and
through investee companies of the Group operating in various ventures including branded
fashion, food & FMCG, insurance, warehousing & logistics, media and textiles.
IMPACT OF COVID - 19
In the wake of the novel coronavirus (COVID-19) outbreak, most of the stores of the
Company, in most of the States, were closed except selling only essential commodities and
grocery items as directed by Local and State Government offices. The business of the
Company is adversely affected by temporarily shut down of stores, degrowth of revenue,
sizable drops in footfalls and selective spending on essentials only by the Customers.
Further, the Company's maximum staff except connected with essential services, were
working from their respective residence under "work from home policy"
implemented by the Company.
The countrywide lockdown began towards the latter half of March, 2020 and continued
through the end of May, 2020. During this period, more than half of our stores remained
closed for operations due to regulatory instructions and stores that were open, operated
for restricted hours. Customer footfalls were significantly lower and as per directives of
the authorities.
The Company is also leaving no stone unturned in redefining workplace hygiene. The
Company has implemented new standards of safe working with guidelines for social
distancing. Face masks were mandatory for all employees and customers visiting our
premises. We also ensured regular sanitisation of all our premises and adequate
availability of sanitising material. Similar protocols have been created for safe customer
engagements. We also commenced servicing our customers through several new channels of
delivery to provide them all essential goods through on-line apps.
COVID-19 pandemic and consequent lockdown imposed throughout the country, has had a
significant adverse impact on the business operations and the financial results of the
Company. The outbreak of Covid-19 pandemic has created economic disruption throughout the
world including India. Consequently the revenue and profitability for the year end of
March 2021 have been adversely impacted. The second wave across India has raised concern
over economic growth and business conditions, while the restrictions are currently more
localized and for shorter duration as compared to the previous year. Moreover, increasing
pace of Inoculation and efforts by the government are likely to help mitigate some of the
adverse impact.
In assessing the recoverability of the Receivables, Inventories and other financial and
non-financial assets, the Company was closely monitoring the development and possible
effect on the financial condition, liquidity, operations, and is actively working to
minimize the impact of this unprecedented situations. The impact of the pandemic may
differ from that estimated as on the date. The Company will continue to closely monitor
any material changes to future economic conditions. As the situation is continuously
evolving, the eventual impact may differ from the estimates made in financial statements.
SCHEME OF ARRANGEMENT AND MATTERS CONNECTED THEREWITH
On August 29, 2020, the Board of Directors of the Company has considered and approved
the amalgamation of the Company along with other transferor companies with Future
Enterprises Limited which would be carried out vide a Composite Scheme of Arrangement
between the Company along with other transferor companies with Future Enterprises Limited
("Transferee Company" or "FEL") and their respective Shareholders and
Creditors ("the Scheme"), in terms of Sections 230 to 232 and other relevant
provisions of the Companies Act, 2013 ("the Act").
The proposed Scheme inter-alia provides the following:
> Amalgamation of the Company along with other transferor companies with FEL;
> Transfer and vesting of the Logistics & Warehousing Undertaking from FEL as a
going concern on a slump sale basis to Reliance Retail Ventures Limited
("RRVL");
> Transfer and vesting of the Retail & Wholesale Undertaking from FEL as a going
concern on a slump sale basis to Reliance Retail and Fashion Lifestyle Limited, a wholly
owned subsidiary of RRVL ("RRVL WOS"); and
> Preferential allotment of equity shares and warrants of FEL to RRVL WOS.
As a consideration for the said amalgamation, FEL will issue 101 (One Hundred One)
fully paid up equity shares of Rs.2/- each to the equity shareholders of the Company as on
the Record Date (as may be determined in terms of the Scheme) for every 10 (Ten) fully
paid up equity share of Rs.2/- each of the Company. The said equity shares to be allotted
by FEL to the Shareholders of the Company will be listed on BSE Limited and National Stock
Exchange of India Limited and shall rank pari passu in all respects with the existing
equity shares of FEL.
The combination contemplated under the Scheme has been approved by Competition
Commission of India on November 20, 2020. Further, the Stock Exchanges have issued
observation letter without any adverse observation on January 20, 2021. Subsequently, the
Scheme application has been filed with National Company Law Tribunal Mumbai (NCLT) on
January 26, 2021 for seeking directions from NCLT for convening the meeting of the
Shareholders and Creditors of the Transferor Companies and Transferee Company. NCLT has
heard the said application and the intervention application filed by Amazon.com Investment
Holdings LLC. ("Amazon") and has reserved the order on the said application.
Amazon has initiated arbitration against the Company and its promoters on October 05,
2020 before Singapore International Arbitration Centre (SIAC). After completion of
Emergency Arbitration hearing held pursuant to application of Amazon, Emergency Arbitrator
has passed an interim order on October 25, 2020 (EA Order) inter-alia restraining the
Company and promoters to take any steps in furtherance of the resolution passed on August
29, 2020. However, based on the legal advise received by the Company, it has contended
that the EA Order would not be enforceable against the Company, in view of the fact that
the Company is not a signatory to the arbitration agreement under which arbitration has
been initiated.
The Company has filed a suit before Hon'ble Delhi High Court making a prayer to injunct
Amazon from tortuously interfering with the Scheme. The Hon'ble Single Judge of the Delhi
High Court has passed a Judgment in the Interim Application, wherein it has prima facie
held that there is no arbitration agreement between Amazon and the Company; Company's
Resolution dated August 29, 2020 approving the Scheme is neither void nor contrary to any
statutory provision nor the Articles of Association of the Company. The said Judgement
further prima facie held that Amazon's representations to various regulatory authorities
amounted to unlawful interference with the Scheme and a civil wrong actionable by both the
Company and Reliance. However, no injunction was granted in favour of the Company and all
the Statutory Authorities were directed to take the decision on the applications and
objections raised in accordance with the law. The Hon'ble Court also prima facie held that
conflation of the two shareholders agreements will be in violation of FEMA FDI Rules. An
Appeal was preferred by Amazon against certain observations contained in this Judgment.
In another application of Amazon under Section 17(2) of Arbitration & Conciliation
Act, 1996 to enforce EA Order, Hon'ble Delhi High Court vide its interim order dated
February 2, 2021 directed the parties to maintain status quo (Status Quo Order). The
Company challenged this Order before the Hon'ble Division Bench of Delhi High Court in an
appeal. The Learned Division Bench has stayed the aforesaid Status Quo Order on February
8, 2021. Amazon has preferred a Special Leave Petition before Hon'ble Supreme Court
against the order of the Hon'ble Division Bench on February 13, 2021. The Hon'ble Supreme
Court ruled that the proceedings before NCLT will be allowed to go on but will not
culminate in any final order of sanction of the Scheme.
On March 18, 2021 a detailed interim order was passed by the Single Judge of the Delhi
High Court ("Detailed Order") inter-alia confirming the directions in the Status
Quo Order passed by Hon'ble Delhi High Court in the application under Section 17(2) of
Arbitration & Conciliation Act, 1996, granting further reliefs in favour of Amazon and
inter-alia restricting all respondents from taking any further action in violation of the
EA Order.
An appeal was filed by the Company, as well as other respondents, before the Hon'ble
Division Bench against the Detailed Order. On March 22, 2021 the Hon'ble Division Bench
was pleased to pass a common order in both the appeals, staying the enforcement of the
Detailed Order.
Amazon filed Special Leave Petitions before the Hon'ble Supreme Court against the order
of the Hon'ble Division Bench passed on March 22, 2021. On April 19, 2021 the Hon'ble
Supreme Court stayed the proceedings before the Single Judge and the Division Bench of the
Delhi High Court and directed parties to complete the pleadings and listed all the three
SLPs for final disposal on May 04, 2021. Post summer vacation at Supreme Court, SLPs are
now being heard and argued before Supreme Court. Supreme Court may consider issuing order
in the matter after completion of the submissions by all the parties.
Further in relation to the Arbitration Proceedings, a Tribunal has been constituted by
SI AC on January 05, 2021 and the Company has filed two applications before the Tribunal,
first being an application under Section 16 of Arbitration & Conciliation Act, 1996
("Arbitration Act") challenging the jurisdiction of the Tribunal; and second
being an Application under Rule 10 of Schedule I of SIAC Rules for vacation of the EA
Order. As per the scheduled finalised by the Tribunal, the hearing commenced from July 12,
2021 and continued till July 16, 2021. The decision of Tribunal is awaited on both
applications.
One Time Restructuring (OTR)
Pursuant to RBI guidelines vide circular DOR.No.BP. BC/3/21.04.048/2020-21 dated August
06, 2020 on 'Resolution Framework for COVID-19-related Stress', the lenders of the Company
has invoked One Time Restructuring ("OTR") with regard to credit facilities
availed by the Company from Banks and other Institutions on October 29, 2020. The
aforesaid OTR has been implemented by execution of the documents by the Company and
eligible lenders on April 26, 2021. Accordingly, as per the agreed terms of OTR the
repayment of Long Term and Short Term obligation is extended, overdue working capital
limits is converted in Working Capital Term Loan ("WCTL"), and interest due till
September, 2021 on various credit facilities has been converted into Funded Interest Term
Loan ("FITL"). The terms of repayment of the NCDs and interest due thereon,
which are not part of the OTR has also been separately extended on the similar lines in
consultation with the debenture trustees and the concerned debenture holders.
SHARE CAPITAL
During the year under review, the following allotment were made by the Company
a) Allotment of 1,48,03,960 equity shares upon conversion of equity warrants
On May 19, 2020, the Company allotted 1,48,03,960 equity shares to M/s. Future Coupons
Private Limited (f.k.a. Future Coupons Limited) (FCPL), a Promoter Group entity, on
preferential basis upon conversion of balance equity warrants.
The Company has originally allotted 3,96,03,960 equity warrants on April 23, 2019, at a
price of Rs.505/- per warrant, each convertible into or exchangeable for One (1) equity
share of face value of Rs.2/- each at a premium of Rs.503/- per share to FCPL on
preferential basis and in terms of applicable provisions as prescribed under the
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018 ("SEBI ICDR Regulations") for allotment of the equity
warrants.
Further, on January 04, 2020, FCPL exercised their rights and partially converted
2,48,00,000 equity warrants into equal no. of equity shares of the Company and balance no.
of equity warrants i.e. 1,48,03,960 were converted during the year under review.
b) Allotment of 81,680 equity shares pursuant to FRL ESOP - 2016
On September 04, 2020, the Company allotted 81,680 Equity Shares of Rs.2/- each to
eligible employees of upon exercise of the vested options granted to the said employees
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 capital of the
Company against the vested options exercised by them.
During the year under review, the Company has not issued any sweat equity shares or
bonus shares or equity shares with differential rights.
DIVIDEND & RESERVES
While considering the Company's dividend distribution policy, the uncertainties created
by COVID-19 and in view of Loss during the year under review, the Board has not
recommended any dividend for the financial year ended March 31, 2021. Further, no amount
is proposed to be transfer to General Reserve.
INVESTMENTS & DIVESTMENTS
During the year under review, the Company has not made any investment / divestment.
PUBLIC DEPOSITS
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, 2021.
DEBENTURES
During the year under review and on June 01, 2020, the Company raised funds amounting
to Rs.200 crore by issue of Secured Rated Listed Redeemable Non-Convertible Debentures
("NCDs") under Series II on private placement. The said NCDs are listed on the
Wholesale Debt Market (WDM) segment of BSE effective June 05, 2020.
USD DENOMINATED NOTES AND OVERSEAS LISTING
During last year of 2019-20, the Company had raised funds amounting to US$ 500 million
by issue of Senior Secured Notes due 2025 ("USD Notes"). The said USD Notes are
listed on Singapore Stock Exchange ("SGX") effective January 23, 2020.
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 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
As required under Regulation 34 read with Schedule V of SEBI Listing Regulations, a
Management Discussion and Analysis report 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.
The Board on the recommendation of the Audit Committee, proposed to re-appoint M/s. NGS
& Co. LLP, Chartered Accountants for the second term of 1 (One) year from the
conclusion of Fourteenth Annual General Meeting till conclusion of the Fifteenth Annual
General Meeting of the Company.
Statutory Auditors have given their confirmation that their appointment as Statutory
Auditors of the Company, if made, shall be in compliance with the provisions of Sections
139 and 141 of the Act and related rules thereto.
Auditors' Report
The Auditors' Report on the financial statements for the financial year ended March 31,
2021 is issued with unmodified opinion and does not contain any qualifications,
reservations or adverse remarks.
Secretarial Auditor
Pursuant to provisions of Section 204 of the Act and related rules thereto, 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 2020-21.
The Secretarial Audit Report for the financial year 2020-21 is appended as Annexure -
I, which forms part of this Report and doesn't contain any qualifications, reservations or
adverse remarks.
During the year under review, neither the Statutory Auditors nor the Secretarial
Auditor has reported to the Audit Committee any instances of fraud committed against the
Company by its officers or employees, the details of which would need to be mentioned in
the Board's Report.
POLICIES & DISCLOSURE REQUIREMENTS
As required under SEBI Listing Regulations and provisions of the Act, following
policies were already made available on its website at https://www.futureretail.
in/investors/Policies.html
Details of programs for familiarization of Independent Directors with the
Company;
Policy for determining material subsidiaries of the Company;
Policy for determining Materiality of Events of the Company;
Policy for archival of documents of the Company;
Policy on dealing with related party transactions;
Remuneration Policy;
Dividend Distribution Policy (appended as annexure - II, which forms part of
this Report);
The Code of Conduct for the Board of Directors and Senior Management Personnel of the
Company is available at https://www.futureretail.in/investors/
corporate-governance-standards.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)
Post March 31, 2021 and based on the recommendation of Nomination and Remuneration
Committee ("NRC"), performance evaluation was carried out and subject to the
approval of the Shareholders of the Company the Board of Directors approved the following:
Re-appointment of Ms. Gagan Singh (DIN 01097014), Independent Director of the
Company for a second term of 1 (One) year effective April 30, 2021.
Re-appointment of Mr. Ravindra Dhariwal (DIN 00003922), Independent Director of
the Company for a second term of 5 (Five) years effective April 30, 2021.
Members may also note the following changes in Board structure:
Mr. Shailendra Bhandari (DIN: 00317334), ceased to be Independent Director of
the Company effective April 30, 2021 upon completion of his term.
Ms. Sridevi Badiga (DIN: 02362997) resigned as Independent Director effective
June 01, 2021.
Mr. Jacob Mathew (DIN: 00080144) was appointed as Additional (Independent)
Director for a term of 5 (Five) years effective July 27, 2021, subject to the approval of
Shareholders at the general meeting.
The Board placed on record its appreciation for the valuable contribution and support
made by Mr. Shailendra Bhandari and Ms. Sridevi Badiga during their respective tenure as
Independent Director of the Company.
In terms of Section 152 of the Act, Mr. Rakesh 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 him in connection with his
re-appointment.
The Company has also received necessary declarations / disclosures from the directors
seeking appointment / re-appointment. Additional information as required pursuant
applicable provisions of SEBI Listing Regulations and Secretarial Standards in respect of
the Directors seeking appointment / re-appointment at the forthcoming AGM, are given in
the Notice convening the ensuing AGM.
Members may note that the Company is in receipt of required declarations from
Independent Directors confirming that each of them meet the required criteria of
independence as provided in Section 149(6) of the Act (alongwith related rules thereto)
while read with applicable provisions of Regulation 16 of SEBI Listing Regulations. They
have also confirmed that they are not aware of any circumstance or situation, which exist
or may be reasonably anticipated, that could impair or impact their ability to discharge
their duties with an objective independent judgment and without any external influence and
that they are independent of the Management.
The Company has also received necessary details from Independent Directors in
connection with their enrolment in the Data Bank created by Ministry of Corporate Affairs.
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.
MEETINGS OF THE BOARD
During the year under review, 10 (Ten) meetings of the Board of Directors of the
Company were held. The details of date of above meetings 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 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 of the Company 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 region under the brand name
"WHSmith". During the year under review, it has reported income from operations
amounting to Rs.34.80 crore and its net loss stood at Rs.3.92 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.12.82 crore and its net loss stood at Rs.2.27 crore.
Welcome Retail Private Limited ("WRPL")
WRPL is a joint venture of TNSI & Rozeus Retail Private Limited (f.k.a Flemingo
Retail Private Limited) 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.9.20 crore
and its net profit stood at Rs.13.99 crore.
Future 7-India Convenience Limited (f.k.a SHME Food Brands Limited)
("Future7-India")
Future 7-India is incorporated mainly with object to operate, develop, maintain and run
convenience stores and commercial establishments of similar nature. Pandemic has affected
the retail business in India and in view of this, Future 7-India didn't opened any stores
as on March 31, 2021. During the year under review, there was no income from operations
and incurred a net loss of Rs.17.30 crore.
Future Retail LLC ("FRLLC")
FRLLC a joint venture was incorporated in Oman to operate "fbb" brand fashion
outlets in Oman and across other member states of GCC. In view of pandemic faced by all
retailers across various places and considering very limited growth opportunities, the
Board of FRLLLC had decided to voluntarily liquidate the entire operations and entity as
permitted under local laws of Oman. As on year end, the FRLLLC is in process of voluntary
liquidation.
INDIAN ACCOUNTING STANDARD (IND AS)
The financial statement for the year 2020-21 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 forms 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
As required by 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, the
Chairman and the Directors individually.
Based on guidance note and process set by NRC, 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 various parameters like - 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 also
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 and suggestions
made by them were noted by the Board.
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 remuneration to 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 Risk Management Committee is working 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
In past, the Members of the Company have 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 and/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 '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, 2021
with regard to the FRL ESOP - 2016 are provided in Annexure - III to this Report.
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 obtained or assigned 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 offering 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 policy on prevention of sexual harassment at workplace and
policy aims at prevention of harassment of employees as well as contractors and also 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
during the year under review 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 necessary disclosures as required in above mentioned Rules in prescribed form is
annexed as Annexure - IV to this Report.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of loans, guarantee and investment 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, related party transactions entered into by the Company
with related parties as defined under the Act and SEBI Listing Regulations were reviewed /
approved by the Audit Committee and were entered into in the ordinary course of business
and on an arm's length basis. There were no materially significant transactions entered
into with the related parties that may have potential conflict with the interests of the
Company at large.
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. i n the preparation of the annual accounts for the financial year ended March 31,
2021, 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 loss of
the Company for the year ended March 31, 2021;
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, 2021
on a going concern basis;
v. t hey 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
As on March 31,2021, the Audit Committee of the Company comprised of three Independent
Directors and Managing Director as its members. Ms. Gagan Singh, Independent Director
acting as Chairperson of the Committee. Other Members include Mr. Ravindra Dhariwal, Ms.
Sridevi Badiga and Mr. Rakesh Biyani. During the year under review, there were no
instances where the Board did not accept the recommendations of the Audit Committee.
Consequent to resignation of Ms. Sridevi Badiga as Independent Director effective June
01, 2021, she also ceased to be member of the Audit Committee. The Board had appointed Mr.
Jacob Mathew as an Independent Director effective July 27, 2021 and also as Member of the
Audit Committee. As on date of this Report, the details of members of the Audit Committee
is as follows:
Name |
Category |
Designation held in the Audit Committee |
Ms. Gagan Singh |
Independent Director |
Chairperson |
Mr. Ravindra Dhariwal |
Independent Director |
Member |
Mr. Jacob Mathew |
Independent Director |
Member |
Mr. Rakesh Biyani |
Managing Director |
Member |
The composition of the Audit Committee is in compliance with the applicable provisions
of the Act and SEBI Listing Regulations. The terms of reference, powers and roles of the
Committee are provided in the Corporate Governance Report, forming part 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 in 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 is being sent
to the Members of the Company excluding the aforesaid information. 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 - vil which forms part
of this Report.
ANNUAL RETURN
In accordance with provisions of the Act, a copy of the Annual Return for the financial
year ended March 31,2021 shall be 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
In accordance with provisions of 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 issued and amended by The
Institute of Company Secretaries of India from time to time.
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.
Other relevant details are provided in the notes to the financial statements;
Except as disclosed in this Report, there were no other 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 Chairman / 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
The Board of Directors would like to thank and place on record their appreciation for
the sustained support and co-operation provided 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 even during unforeseen pandemic whose
efforts, hard work and dedication has enabled the Company to achieve all recognitions
during the year.
for and on behalf of the Board of directors |
|
Place: Mumbai |
Kishore Biyani |
Date : July 29, 2021 |
Chairman |
|