FUTURE MARKET NETWORKS LIMITED
(FORMERLY KNOWN AS AGRE DEVELOPERS LIMITED)
ANNUAL REPORT 2011-2012
The Members of
Future Market Networks Limited
(Formerly known as Agre Developers Limited)
Your Directors are pleased to present the Fourth Annual Report together
with the Audited Statements of Accounts for the financial year ended 31st
(Rs. in lacs)
Particulars Year Ended
Revenue from Operations 2,929.06 2,434.49
Other Income 4,461.67 44.89
Total Income 7,390.73 2,479.38
Personnel Cost 1,473.51 1,134.93
Operating and other expenses 1,640.00 1,259.13
Total Expenditure 3,113.50 2,394.06
Profit before Interest, Depreciation and Tax 4,277.22 85.32
Less: Interest 4,378.27 0.52
Less: Depreciation 22.42 21.25
Profit/(Loss) before Taxation (123.46) 63.55
Less: Provision for taxation - 25.01
Less: Deferred Tax (3.65) 3.65
Profit/(Loss) after Taxation (119.81) 34.88
(Rs. in lacs)
Particulars Year Ended
Revenue from Operations 16,517.61 1413.74
Other Income 6,401.59 111.51
Total Revenue 22,919.20 10,525.25
Purchase 110.36 458.25
Personnel Cost 721.21 192.83
Operating and other expenses 10,536.58 463.75
Total Expenditure 12,368.15 9,114.83
Profit before Interest, Depreciation and Tax 10,551.05 410.42
Less: Interest 8,811.04 45.08
Less: Depreciation 2,498.58 1,030.26
Profit/(Loss) before Taxation (758.57) 335.09
Less: Provision for taxation 75.55 82.64
Less: Deferred Tax (802.34) 211.82
Profit/(Loss) after Taxation (31.78) 40.63
Scheme of Amalgamation:
Amalgamation of Future Realtors (India) Private Limited, Prudent Vintrade
Private Limited and AIGL Holding & Investments Pvt Ltd with the Company.
The Scheme of Amalgamation between the Company, Future Realtors (India)
Private Limited ('FRIPL'), Prudent Vintrade Private Limited ('Prudent') and
AIGL Holding & Investments Pvt. Ltd ('AIGL') and their respective
shareholders and creditors with appointed date April 1, 2011 has been
approved by the Hon'ble High Court of Judicature at Bombay on January 20,
2012 and the Company filed certified copy of the order with Registrar of
Companies on February 10, 2012, being the effective date.
Pursuant to the said scheme, investments held by Future Realtors India
Private Limited in its subsidiaries and associate companies which were
engaged in the business of development and leasing of retail real estate
properties and development of integrated townships in India are now vested
with the Company.
Prudent and AIGL through its associate company was holding beneficial
interest in Riverbank Project, that is developing an integrated township
called Calclutta Riverside at Batanagar in Kolkata. This township is spread
over an area of 262 acres and has been promoted by the Hiland and Belani
Groups in joint venture along with Kolkata Metropolitan Development
Authority. The said investments of Prudent and AIGL now vested with the
In terms of the aforesaid Scheme 4,46,83,440 equity shares of Rs 10/-each
was allotted to the shareholders of FRIPL, AIGL and Prudent on March 27,
2012 and the same were listed on Bombay Stock Exchange Limited and National
Stock Exchange of India Limited on May 8, 2012.
Scheme of Amalgamation:
Amalgamation of Agre Properties & Services Limited, wholly owned
subsidiary, with the Company.
The Board of Directors at their meeting held on February 7, 2012 considered
and approved a Scheme of Amalgamation with Agre Properties & Services
Limited (APSL), the Wholly Owned Subsidiary, and their respective
shareholders and creditors. The appointed date for the said Scheme is April
1, 2011. The Company application has been filed with Hon'ble High Court of
Bombay seeking directions for holding the meeting of the members of the
APSL is engaged in the business of retail arbitrage.
Scheme of Amalgamation:
Amalgamtion of KB Mall Management Company Limited, wholly owned subsidiary,
with the Company.
The Board of Directors at their meeting held on March 30, 2012 considered
and approved a Scheme of Arrangement with KB Mall Management Company
Limited (KB Mall), the Wholly Owned Subsidiary, and their respective
shareholders and creditors. The appointed date for the said Scheme is
January 1, 2012. The Company application has been filed with Hon'ble High
Court of Bombay seeking directions for holding the meeting of the members
of the Company.
KB Mall is in the business of development and leasing of retail real estate
In view of the losses incurred by the Company, your Directors have not
recommended any dividend for the financial year ended March 31, 2012.
Your Company has the following Subsidiaries as on 31st March 2012:
Name of the Subsidiary:
1. Agre Properties & Services Limited
2. Precision Realty Developers Private Limited
3. KB Mall Management Company Limited
4. Acute Realty Private Limited
5. Unique Malls Private Limited
6. Aashirwad Malls Private Limited
7. Aabha Hotels Private Limited
8. Shreya Malls Management Private Limited
9. Nishta Mall Management Company Private Limited
10. Niyman Mall Management Company Private Limited
11. Future Retail Destination Private Limited
12. Kshitij Retail Destination Private Limited
13. Ojas Mall Management Private Limited
14. Harmony Mall Management Private Limited
15. Suhani Mall Management Private Limited
16. Future Trade Markets Private Limited
17. Star Shopping Centres Private Limited
18. Sun City Properties Private Limited
The subsidiaries are engaged in the business of development and leasing of
retail spaces across the Country.
Future Retail Destination Private Limited has entered into a strategic
joint venture agreement with IL&FS Township & Urban Assets Limited for the
development of Infra Logistic Parks at strategic locations in the Country.
Trade Markets Private Limited (FTMPL) has entered into a strategic alliance
with SKC 3 Limited (investment vehicle of Fung Properties) to develop Whole
Sale Markets in India.
In accordance with the general circular issued by the Ministry of Corporate
Affairs, Government of India, the Balance Sheet, Profit and Loss Account
and other documents of the subsidiary companies are not being attached with
the Balance Sheet of the Company. However the financial information of the
subsidiary companies is disclosed in the Annual Report in compliance with
the said circular. The Company will make available the Annual Accounts of
the subsidiary companies and the related detailed information to any member
of the Company who may be interested in obtaining the same. The annual
accounts of the subsidiary companies will also be kept open for inspection
at the Registered Office of the Company and that of the respective
The Consolidated Financial Statements presented by the Company include the
financial results of its subsidiary companies.
During the year under review, consequent to the amalgamation of Future
Realtors India Private Limited, AIGL Holding & Investments Private Limited
and Prudent Vintrade Private Limited with the Company, the authorized share
capital of transferror Companies under the Scheme of Amalgamation were
stand combined to the authorized share capital of the Company. Accordingly
the authorized share capital of the Company as on the date of this report
is Rs. 80,26,00,000/- (Rupees Eighty Crores Twenty Six Lacs) divided into
8,02,10,000 equity shares of Rs. 10/- each and 5000 Preference Shares of
Rs. 100/- each.
In terms of the approved Scheme of Arrangement for the amalgamtion of
Future Realtors India Private Limited, AIGL Holding & Investments Private
Limited and Prudent Vintrade Private Limited 4,46,83,440 equity shares of
Rs.10/- each allotted to the Shareholders of FRIPL, AIGL and Prudent on
March 27, 2012 and the same were listed on Bombay Stock Exchange Limited
and National Stock Exchange of India Limited on May 8, 2012. Accordingly
the paid up share capital of the Company as on the date of this report is
Rs. 55,85,44,060/- divided into 5,58,54,406 equity shares of Rs. 10/- each.
Change of name:
During the year under review the Company, pursuant to Section 192A of the
Companies Act, 1956 read with Rule 2A of the Companies (Passing of the
resolution by postal ballot) Rules, 2001, sought the approval of the
shareholders by way of Postal Ballot for the Change in name of the Company
to 'Future Market Networks Limited' from 'Agre Developers Limited.'
The Shareholders approved the special resolution with requisite majority.
Subsequently ministry of corporate Affairs has issued a fresh certificate
of incorporation reflecting change in name of the Company on February 6,
Consolidated Financial Statements:
In accordance with the Accounting Standard AS-21 on Consolidated Financial
Statements read with Accounting Standard AS-23 on Accounting for
Investments in Associates and AS-27 on Financial Reporting of Interest in
Joint Ventures and in compliance with provisions of Listing Agreement with
Stock Exchanges, the audited Consolidated Financial Statements are provided
in the Annual Report.
Cash Flow Statement:
In Conformity with the provisions of clause 32 of the Listing Agreement
with the Stock Exchanges, the Cash Flow Statement for the year ended 31st
March, 2012 has been provided in the Annual Report and which forms part of
The Company has not accepted any deposits, within the meaning of Section
58-A of the Companies Act, 1956 read with the Companies (Acceptance of
Deposits) Rules, 1975 made there under.
The Board of Directors of the Company constitutes of Mr. Anil Baijal,
Mr.P.L Agarwal, Mr. Rahul Saraf, Independent Directors, Mr. K.K Rathi, Mr.
Rajesh Kalyani, Non Executive Directors and Mr. Sumit Dabriwala, Managing
The Company made an application under Section 269 and other applicable
provisions of the Companies Act, 1956, to the Ministry of Corporate Affairs
in connection with payment of managerial remuneration to its Managing
Director as per the limits approved by the shareholders through a Postal
Ballot on 30th December 2010.
Ministry of Corporate Affairs, Government of India vide their letter dated
August 3, 2011 had approved a total managerial remuneration of
Rs.1,50,00,000/- (Rupees one crore Fifty Lacs only) per annum for a period
of three years i.e. September 21, 2010 to September 20, 2013.
Directors retiring by rotation:
Mr. Rahul Saraf and Mr. Rajesh Kalyani, Directors, retire by rotation and
being eligible; offer themselves for reappointment at the ensuing Annual
General Meeting and are eligible for re-appointment.
The Board recommends their re-appointment.
Director's Responsibility Statement:
As required under section 217(2AA) of the Companies Act, 1956, your
Directors confirm that:
1. In the preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been made
2. The directors 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
3. The directors have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
4. The directors have prepared the annual accounts on a going concern
Report on Corporate Governance of the Company and Management Discussion and
Analysis Report for the year under review, as per the requirements of
Clause 49 of the Listing Agreement(s), have been given under a separate
section and forms part of this Annual Report.
The equity shares of the Company are listed on the Bombay Stock Exchange
Limited, Mumbai (BSE) and The National Stock Exchange of India Ltd. (NSE)
and the listing fee for the year 2012-13 has been paid.
The Company has entered into necessary agreements with the Central
Depository Services (India) Limited (CDSL) and National Securities
Depository Limited (NSDL) for availing the Depository services.
M/s NGS & Co., Chartered Accountants, Mumbai, Auditors of the Company,
bearing ICAI Registration Number 119850W retire at the ensuing Annual
General Meeting and are eligible for appointment. The Company has received
confirmation from NGS & Co. that their appointment will be within the
limits prescribed under Section 224(1B) of the Companies Act, 1956. The
Board recommendeds their appointment.
Particulars of Employees under Section 217(2A):
In terms of the provisions of Section 217(2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975 as amended,
the names and other particulars of the employees are set out in the
annexure to the Directors' Report.
However, having regard to the provisions of Section 219(1)(b)(iv) of the
said Act, the Annual Report excluding the aforesaid information is being
sent to all the members of the Company and others entitled thereto. Any
member interested in obtaining such particulars may write to the Company
Secretary at the registered office of the Company.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings
Information in accordance with the provisions of Section 217 (1)(e) of the
Companies Act, 1956, read with the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 regarding conservation of
energy, technology absorption and foreign exchange earnings and outgo is
given in the Annexure forming part of this report.
Your Directors would like to acknowledge and place on record their sincere
appreciation to all stakeholders, Financial Institutions, Banks, Central
and State Governments, the Company's valued investors and all other
business partners for their continued co-operation and excellent support
received during the year.
Your Directors recognize and appreciate the efforts and hard work of all
the employees of the Company and their continued contribution to its
For and on behalf of the Board of Directors
Place: Mumbai Sumit Dabriwala P.L. Agarwal
Date : May 30, 2012 Managing Director Director
ANEXURE TO THE DIRECTORS' REPORT
Particulars Required under the Companies (Disclosure of Particulars in the
Report of the Board of Directors) Rules, 1988.
A. CONSERVATION OF ENERGY:
a) Energy Conservation Measures Taken:
b) Additional investments and Proposals, if any, being implemented for
reduction of consumption of energy and
c) Impact of measures at (a) & (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods.
Disclosure for (a) to (c):
The operations of the Company do not involve high energy consumption.
However the Company has been laying great emphasis on the Conservation of
Energy and has taken several measures including regular monitoring of
consumption, implementation of viable energy saving proposals, improved
maintenance of systems etc.
d) Particulars of Energy consumption etc in respect of specified industries.
The disclosure on particulars regarding consumption of energy etc are not
applicable to the Company since industry to which the Company belongs is
not covered under the schedule prescribed by the said Rules.
B. TECHNOLOGY ABSORPTION:
The particulars regarding absorption of technology is given below as per
Form B of the Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988.
Research and Development (R & D):
1. Specific areas in which R&D is carried out by the Company:
Designing of Shopping malls and mixed use projects as per the best industry
standards are the areas in which general research and development work is
carried out by the Company.
2. Benefits derived as a result of the above R & D
3. Future Plan of Action
4. Expenditure on R & D }
a. Capital }
b. Recurring } Included in the project cost.
c. Total }
d. Total R & D expenditure as a }
percentage of total turnover }
Technology absorption, adaptation and innovation:
1. Efforts in brief, made towards technology absorption, }
adaptation and innovation } Nil
2. Benefit derived as a result of the above efforts e.g. }
product improvement, cost reduction, product development, }
import substitution etc. } Nil
3. In case of Imported Technology (imported during the }
last 5 years reckoned from the beginning of the financial }
year), following information may be furnished: }
a) Technology Imported }
b) Year of Import } Nil
c) Has technology been fully absorbed }
d) If not fully absorbed, areas where this has not taken }
place, reasons therefore and future plan of action }
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Current Year (Rs) Previous Year (Rs)
Foreign Exchange Earnings Nil Nil
Foreign Exchange Outgo 577,948 83,301
MANAGEMENT DISCUSSION AND ANALYSIS
During the year under review, the Company sharpened its focus on its three
business verticals-wholesale trade infrastructure, logistics infrastructure
and retail infrastructure. Given that its business is predicated on the
growth of consumption and is therefore focused on creating infrastructure
for it - and that it does not participate in the conventional 'real estate'
space-it felt the need to have this reflect in its name as well.
Accordingly, it secured approval of its shareholders on January 11, 2012
for changing its name from 'Agre Developers Limited' to 'Future Market
Networks Limited'. A fresh certificate of incorporation reflecting this
change was issued to it on February 6, 2012.
Even though the global economic slowdown has had an impact on the Indian
economy, the growth and potential of the consumption sector is considered
to be a secular trend. India has over 500 million people below the age of
25 years. Middle class consumers have grown from 15 million in 1991 to over
300 million in 2011. The number of people who own atleast a mobile phone or
a two wheeler is over 500 million, larger than the combined populations of
Brazil, Russia, Germany and the UK. Each of these indicate that the demand
for value added products in apparel, consumer durables and electronics,
home products and food and FMCG will continue to grow at a tremendous pace.
Reflecting the potential for the growth in the domestic consumption sector,
India continues to be counted among the top 5 most attractive markets for
retailers according to the AT Kearney's 2012 Global Retail Development
Index. The report states, 'India remains a high-potential market with
accelerated retail growth of 15 to 20 percent expected over the next five
The report also mentions the changing regulatory environment in India has
the potential to transform the consumption sector in the country. The
government has already allowed 100% foreign direct investment in
singlebrand retailing and is expected to soon revise the rules for foreign
investment in multi-brand retailing as well. In addition, the government
has announced its intention to implement the Goods and Services Tax (GST)
regime at the earliest. The implementation of the GST regime will bring in
more efficiency in the supply chain networks in India and will incentivize
consumer companies to pursue consolidation and modernization of logistics
and warehouse networks in the country. Global consumer-led companies like
Coca Cola, IKEA and Starbucks have announced billions of dollars of fresh
investments in the country, even as more and more retail and consumer
brands announce their intent to enter the Indian market.
The renewed interest in the Indian consumer space by multinational
companies, coupled with the improving regulatory environment bodies well
for the all the three business verticals of the company. The slowdown in
real estate development has come at a most opportune time for the company
as it goes out into the market to acquire site for our business verticals.
The management believes that it is finally finding sanity in the pricing
and transaction terms that are being offered to the company.
Outlook and opportunities:
The Company has made visible progress in each of its business verticals and
has aligned with 'best in class' partners in each of them.
The company has entered into a 50:50 partnership with IL&FS to set up
logistics infrastructure parks across the country. The company's expertise
in sourcing deals, project management, leasing and asset management is well
complimented by IL&FS' rich experience in the commercialization of
infrastructure projects, arrangement of mezzanine debt funding and
strategic relations with state government and various departments of the
central government to help deal with complex regulatory requirements.
The logistics industry is expected to grow at 15%-20% CAGR reaching
revenues of USD 385 billion by 2015.
According to KPMG estimates, there is a supply gap of around 120 million
square feet of warehousing space and this is growing at a fast pace. The
development of the Dedicated Freight Corridor (DFC) itself demands for over
340 million square feet warehouse space. The concept of Logistics Parks is
gaining popularity, where over 3,700 acres are going to be developed over
the next few years. Despite such strong outlook, there are only a few
organized players developing warehouse infrastructure for consumption led
companies and 92% of warehousing space are in unorganized sector providing
low value added services to the consumer companies.
The company plans to operate 10 million square feet of logistic park
facilities in the top eight metros by 2015. The special purpose vehicle
formed for this business has already begun the process of acquiring land in
Jhajjar in Haryana to set up a logistics infrastructure facility to address
consumption in Gurgaon and the balance of the south and south east region
of the Delhi NCR. It has also identified land at Dankuni to the north west
of Kolkata and applied to the Government of West Bengal for the necessary
permission to acquire it. Transactions have been agreed to in principle to
jointly develop land parcels in Ghaziabad and Gujarat. Each of these
logistics parks will be anchored by Future Supply Chains Limited, which is
growing at a fast pace and now has the pick of the FMCG, consumer durables
and retail industry as its clients. These parks will also directly serve
other participants in the logistics and consumption industry spectrums.
Modern wholesale markets are increasingly a common feature in fast growing
regions like China, South East Asia and the Middle East. Some of the
largest ones are located in China's wholesale trading hub, Yiwu andthe
Dragon Mart in Dubai. These wholesale markets provide requisite facilities
for domestic and international traders dealing in categories like
accessories, cosmetics, toys, electronics and home appliances, IT
accessories, stationery markets, kitchen and bathroom ware, bags and
leather products and construction hardware.
During the year under review, work has begun on two 'World Markets' - one
opposite the Mumbai Central Station in the heart of Mumbai and the other on
the Old Madras Road to the east of Bangalore city. Development and
marketing of these markets continues at a robust pace. Approximately 50% of
the World Market Mumbai has already been leased and is operational while
the World Market Bangalore has received an enthusiastic response and its
first phase is scheduled to open for business by December, 2012.
Your company has aligned with Fung Properties, part of the Hong Kong-based
Li & Fung Group, for this business and they are actively participating in
the bringing in their understanding of these markets in South East Asia as
also their very substantial relationships with traders and manufacturers
from this region. The company is in the process of negotiating sites in
Kolkata and Noida in the NCR for these markets as well.
The company has aligned this business with Star Shopping Centres Private
Limited (Star), a company set up by two outstanding professionals-Pranay
Sinha and Shilpa Malik. They were part of the team that created Select City
Walk in Delhi, one of the most successful shopping centers in the country.
Star already has a portfolio of approximately two million square feet of
space under management or contracted for management and under development
across the country and is actively negotiating more sites. The first Star
Centre has opened to rave reviews on MG Road in Bangalore and the next is
slated for opening on Jessore Road, Kolkata.
Star has crafted a unique model, quite akin to the model of commercial
engagement followed by international hotel management brands, by leveraging
its deep understanding of the category retail infrastructure and its
Our exposure to the prestigious Calcutta Riverside development at the
erstwhile Bata India Limited factory in the suburbs of Kolkata has also
been moving forward confidently. In what is a major boost to this
development, the Government of West Bengal has sponsored an 8km elevated
road that will dramatically cut travel time as also transform the travel
experience to Calcutta Riverside. This elevated road has been approved for
funding under the JNNURM scheme of the Government of India. An ILFS-
Government of West Bengal joint venture has been appointed transaction
advisor to bid it out.
The business of construction and development is heavily dependent on the
performance of the real estate market in India and could be adversely
affected if market conditions deteriorate. The real estate market is
significantly affected by changes in government policies, economic
conditions, demographic trends, employment and income levels and interest
rates, among other factors. The development of real estate projects
involves various risks including regulatory risks, financing risks and the
risks that these projects may ultimately prove to be unprofitable.
Economic and market conditions can adversely affect the performance of the
Company. In particular, the decline in the performance of the global and
Indian economies as a result of the economic downturn can reduce demand and
occupancy levels in property markets. An increase in interest rates or an
increase in the margin on which finance can be obtained may increase the
Company and the Subsidiary's financing costs and such increase in interest
rates may increase the cost of borrowing, which could have an adverse
impact on the Company and the Subsidiary's business, financial condition
and results of operations.
The Company achieved total revenue of Rs. 7,390 Lacs during the financial
year ended 31st March 2012.
During the year financial year ended 31st March 2012, the Company achieved
operating profit of Rs. 4,277 Lacs.
Profit/Loss after Tax:
The Company recorded a loss of Rs. 119 Lacs for financial year ended 31st
Risk, Internal Control System and Adequacy:
The Company has adequate internal control procedure commensurate with its
size and nature of the business.
The internal control system is supplemented by extensive internal audits,
regular reviews by management and well-documented policies and guidelines
to ensure reliability of financial and all other records to prepare
financial statements and other data. Moreover, the Company continuously
upgrades these systems in line with best accounting practices. The Company
has independent audit systems to monitor the entire operations and the
Audit Committee of the Board review the findings and recommendations of the
The Company regards its human resources as amongst its most valuable assets
and proactively reviews policies and processes by creating a work
environment that encourages initiative, provides challenges and
opportunities and recognizes the performance and potentials of its
employees. The industrial relations across different locations of the
Company were cordial during the year. The Company has, over the last few
months, built the team necessary to be able to build and execute the vision
that has been articulated in the preceding paragraphs. The total number of
employees of the Company as on 31st March 2012 stood at 79.
This report contains forward-looking statements based on certain
assumptions and expectations of future events.
Actual performance, results or achievements may differ from those expressed
or implied in any such forward looking statements. The Company assumes no
responsibility to publicly amend, modify or revise any forward looking
statements, on the basis of any subsequent developments, information or
For and on behalf of the Board of Directors
Place: Mumbai Sumit Dabriwala P.L. Agarwal
Date : May 30, 2012 Managing Director Director