Future Market Networks Ltd Directors Report.

Dear members,

The Board of Directors hereby submit the report of the business and operations of your Company ("the Company" or "FMNL"), along with the audited financial statements, for the financial year ended March 31,2020 which are prepared in accordance with the relevant applicable IND AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and provisions of the Companies Act, 2013 ("Act"). The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

Results of our Operations and state of affairs

The Companys performance during the financial year ended March 31,2020 as compared to the previous financial year is summarized below:

a) Standalone

( in lakhs)

Particulars Year Ended March 31,2020 Year Ended March 31, 2019
Revenue from Operations 12,155.71 12,644.83
Other Income 4,903.90 1,860.04
Total Income 17,059.61 14,504.87
Operating Cost 3,611.47 6,731.10
Cost of units sold 121.28 3.54
Personnel Cost 591.80 617.63
Other Expenses 2,659.22 1,371.10
Total Expenditure 6,883.77 8,723.37
Profit before Interest, Depreciation and Tax 10,075.84 5,781.50
Less: Interest 2,947.81 1,967.65
Less: Depreciation 5,113.97 2511.88
Profit /(Loss) before exceptional items and tax 2,014.06 1301.97
Less: Exceptional Item - 34.59
Less: Profit/(Loss) Before Tax 2,014.06 1,267.38
Less: Current ,Deferred Tax/Earlier Years Provision Written back 907.15 258.62
Profit / (Loss) after Taxation 1,106.91 1,008.76

b) Consolidated

Particulars Year Ended Year Ended
March 31,2020 March 31, 2019
Revenue from Operations 12,676.79 13,126.74
Other Income 6,728.73 1,710.28
Total Revenue 19,405.52 14,837.02
Operating Cost 3,629.21 6,806.18
Cost of units sold 121.28 3.54
Personnel Cost 638.11 646.03
Other Expenses 2,869.19 1,511.83
Total Expenditure 7,257.79 8,967.58
Profit before Interest, Depreciation and Tax 12,147.73 5,869.44
Less: Interest 3,035.39 2,036.90
Less: Depreciation 5,248.10 2,632.32
Add: Share of net profit of associates and joint ventures accounted by using equity method 76.87 147.75
Less: Exceptional Items - 34.59
Profit before tax from Continuing Operations 3,941.12 1,313.38
Less: Provision for taxation/Earlier Years Provision Written back 3.24 (26.71)
Less: Deferred Tax 928.10 343.52
Profit/(Loss) after Taxation from continuing operation 3,009.78 996.57
Profit/(Loss) from discontinued operation (17.03) 7.75
Profit/ (Loss) for the year 2,992.75 1,004.32

Notes:

i. Your Company has adopted Indian Accounting Standards (Ind AS) with effect from April 1, 2016 pursuant to the notification of the Companies (Indian Accounting Standards) Rules, 2015 issued by the Ministry of Corporate Affairs and your Company has not made any treatment other than provided under Ind AS while preparing its financial statements.

ii. The figures for the financial year ended March 31,2019 for both standalone and consolidated are the figures after giving effect to the merger of Star Shopping Centres Private Limited into the Company.

Global health pandemic from COVID-19

There are three major channels of impact for Indian businesses according to the report namely linkages, supply chain and macroeconomic factors.

Reduction in the urban transaction can lead to a steep fall in the consumption of non-essential goods. It can be severe if disruption causes by the lockdown and affect the availability of essential commodities. Due to weak domestic consumption and consumer sentiment, there can be a delay in investment which further add pressure on the growth.

The World Health Organization declared a global pandemic of the Novel Coronavirus disease (COVID-19) on February 11,2020. The Company would implement a phased and safe return-to-work plan as and when lockdown restrictions are relaxed.

Scheme of Merger by Absorption of Star Shopping Centres Private Limited by the Company

The Scheme of Merger by Absorption of Star Shopping Centres Private Limited (Star) and their respective Shareholders under Sections 230-232 and other applicable provisions of the Companies Act, 2013 ("the Act") with the appointed date April 01,2017 in order to consolidate the business into single entity, has been approved by Honble National Company Law Tribunal ("NCLT"), Mumbai Bench on August 2, 2019 and the Company has filed certified true copy of the order with Registrar of Companies on September 21,2019.

Leases

The Companys lease asset classes primarily consist of leases for land and buildings. Effective April 1, 2019, the Company adopted Ind AS 116, Leases and applied the standard to all lease contracts existing on April 1,2019 using the modified retrospective method and has taken the cumulative adjustment to retained earnings, on the date of initial application.

On transition, the adoption of the new standard resulted in the recognition of right-of-use (ROU) asset of 167.89 crore and a lease liabilities of 237.78 crore at a standalone level. The cumulative effect of applying the standard, amounting to 50.44 crore at a standalone level, was debited to retained earnings, net of taxes. The effect of this adoption is insignificant on the operating profit, net profit for the period and earnings per share. Ind AS 116 resulted in an increase in cash inflows from operating activities and an increase in cash outflows from financing activities on account of lease payments.

Financials - Standalone Highlights

During the year ended March 31, 2020, your Company has achieved total Revenue (i.e. Revenue from Operations & Other income) of 17059.61 Lakhs as against 14504.87 Lakhs for the previous year ended March 31,2019. Your Company has achieved Profit before tax of 2014.06 Lakhs for the current year as against 1267.38 Lakhs for the previous year (an increase of 58.91 % over the previous year).

Consolidated Highlights

During the year ended March 31,2020, your Companys consolidated Revenue stood at 19,406.53 Lakhs as against 14837.02 Lakhs for the previous year ended March 31,2019. Your Company has achieved Profit before tax of 3941.12 Lakhs for the current year as against of 1313.38 Lakhs for the previous year on consolidated basis.

Business outlook / State of the Companys affair

Your Company is engaged in development and management of commercial, retail and infra logistic projects. There was no change in nature of the business of your Company, during the year under review.

Your Company is in the process of constructing and developing the integrated large-scale warehouses at Jhajjar (Haryana) and Nagpur (Maharashtra) aggregating to 1.3 million square feet.

Your Company has, along with Gati Realtors Private Limited (SPV-1) and Future Retail Destination Private Limited (SPV-2) (SPV 1 and 2 (SPVs) entered into a strategic arrangement with ESR NAGPUR 1 PTE LTD and ESR DELHI 3 PTE LTD (investor SPVs) respectively.

Your Company has diluted its holding in its SPVs by way of sale of 51% of its investment to respective Investor SPVs in terms of Transaction Documents executed in relation to this arrangement. Upon completion of the Project and successful handover, your Company shall exit from the respective SPVs by way of sale of balance 49% of its investment in the respective SPVs.

Transfer to reserves

During the financial year ended March 31,2020, the Company has not made any transfer to reserves.

Secretarial Standards

During the financial year ended March 31, 2020, the Company is in compliance with the Secretarial Standards with respect to Meeting of the Board of Directors ("SS-1") and General Meetings ("SS-2") issued and amended by the Institute of Company Secretaries of India in terms of Section 118(10) of the Companies Act, 2013. The same has also been confirmed by the Secretarial Auditor of the Company.

Consolidated IND AS financial Statements

In compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the Listing Regulations) and Section 129 of the Act the Consolidated Financial Statements which have been prepared by the Company in accordance with the applicable provisions of the Act and the applicable Indian Accounting Standards (Ind AS) forms part of this Annual Report.

Cash Flow Statement

In conformity with the provisions of Regulation 34 of Listing Regulations, the Cash Flow Statement for the year ended March 31,2020 has been provided in the Annual Report which forms part of this report.

Accounts

The Annual Report of your Company containing the standalone and consolidated Ind AS financial statements has been disseminated on the website of the Company at www.fmn.co.in.

Dividend

The Board is not recommending any dividend for the financial year ended March 31, 2020 in order to conserve the resources. Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (Listing Regulations) with regard to formulation of Dividend Distribution Policy is not applicable to your Company.

Appropriations

During the year under review, your Company has not made any appropriations.

Share Capital

Pursuant to Merger by Absorption of Star Shopping Centres Private Limited by the Company, the Authorized Share Capital of the Company has been increased to 90,35,00,000/- (Rupees Ninety Crores Thirty Five Lakhs) divided into 9,03,00,000 equity shares of 10/- each and 5000 Preference Shares of 100/- each.

The issued share capital of the Company as on March 31, 2020 is 57,54,49,510/- divided into 5,75,44,951 equity shares of 10/- each.

570 Equity Shares of the Company are kept in abeyance and the said shares will be allotted subsequent to completion of legal formalities to allot the original shares in Future Enterprises Limited (formerly known as Pantaloon Retail India Limited).

The subscribed and paid up share capital of the Company as on March 31,2020 is 57,54,43,810/- divided into 5,75,44,381 equity shares of 10/- each.

During the year under review, the Company had allotted 12,53,100 equity shares of 10/- each to the eligible shareholders of Star Shopping Centres Private Limited (SSCPL) pursuant to the scheme of merger by absorption of SSCPL by the Company.

Fixed deposits

During the year under review, your Company has not accepted any fixed deposits, including from the public, and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

Management Discussion and Analysis

In terms of the provisions of Regulation 34 of the Listing Regulations, the Managements discussion and analysis is set out in this Annual Report.

Disclosures under section 134(3)(l) of the Act

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Companys financial position, have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

Particulars of loans, guarantees, investments under section 186 of the Act

Your Company has extended the support to the financial needs of the Special Purpose Vehicle Companies viz. Wholly Owned Subsidiaries and Joint Ventures / Associates.

Loans, guarantees and investments covered under Section186 of the Act form part of the Notes to the financial statements provided in this Annual Report.

Risk Management

The Board of Directors of the Company has formulated a Risk Management Policy which aims at minimizing the risk and enhancing the value and reviews the elements of risks with regard to the business.

The risk management approach is based on a clear understanding of the variety of risks that the organization faces, disciplined risk monitoring and measurement and continuous risk assessment and mitigation measures.

Related Party Transactions

In line with the requirements of the Act and Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is available on Companys website at www.fmn.co.in. This policy deals with the review and approval of related party transactions. The Board of Directors of the Company has approved the criteria for giving the omnibus approval by the Audit Committee within the overall framework of the Policy on Related Party Transactions.

All Related Party Transactions that were entered into during the financial year were on arms length and were in the ordinary course of business. All Related Party Transactions were placed before the Audit Committee of the Board of Directors for their approval. The Audit Committee has granted omnibus approval for Related Party Transactions as per the provisions and restrictions contained in the Listing Regulations.

Pursuant to Regulation 23 of the Listing Regulations, all related party transactions were placed before the Audit Committee on a quarterly basis, specifying the nature, value and terms & conditions of the transactions for their review and approval.

The Company has entered into the material related party transactions during the financial year under review as required under Section 134(3)(h) of the Act. Particulars of contract or arrangements with related parties referred to in section 188(1) of the Act, in the prescribed Form AOC-2, is appended as Annexure 1, which forms part of this Report. The said transactions were approved by the Board and Audit Committee.

The related party disclosures as specified in Para A of Schedule V read with Regulation 34(3) of the Listing Regulations are given in the Financial Statements.

Subsidiaries and Associates

At the beginning of the year, your Company had 8 subsidiaries and 1 Joint Venture. During the year under review:

i. Gati Realtors Private Limited and *Future Retail Destination Private Limited became the Associates of the Company with effect from August 28, 2019 and October 25, 2019 respectively as compared to the Wholly Owned Subsidiaries in the previous financial year.

ii. Star Shopping Centres Private Limited merged with the Company vide order dated August 2, 2020 of the National Company Law Tribunal, Mumbai Bench.

As on March 31,2020 the Company has the following Subsidiaries, Joint Ventures and Associates:

Sr. No. Name of the Subsidiary Sr. No. Name of the Subsidiary
1 Aashirwad Malls Private Limited 4 Sun City Properties Private Limited
2 Suhani Mall Management Company Private Limited 5 Jeremia Real Estate Private Limited
3 Future Trade Markets Private Limited
Name of the Joint Venture Name of Associates
1 Riddhi Siddhi Mall Management Private Limited 1 Future Retail Destination Private Limited
2 Gati Realtors Private Limited

* Note: Future Retail Destination Limited was converted into a Private Limited Company w.e.f. October 07, 2019.

In accordance with the provisions of Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, a statement in Form AOC-1 containing the salient features of the financial statements of the subsidiary companies is appended hereto as Annexure 2.

Audited Annual Accounts of the Subsidiary Companies have also been placed on the website of the Company and are available for inspection by the members at the Registered Office of the Company. Members interested in obtaining copy of the Audited Annual Accounts of the Subsidiary Companies may write to the Company Secretary at the Companys Registered Office address. These documents will also be available for inspection till the date of AGM during business hours at the registered office of the Company in Mumbai.

Disclosure relating to Employee Stock Option Scheme

Future Market Networks Limited - Employee Stock Option Scheme 2016

Pursuant to the approval granted by the shareholders at the eight Annual General Meeting held on September 20, 2016, your Company has formulated Future Market Networks Limited - Employee Stock Option Scheme 2016 (FMNL - ESOS 2016). The Scheme is in Compliance with SEBI (Share Based Employee Benefits) Regulations, 2014, as amended from time to time ("SEBI Employee Benefits Regulations").

Your Company has granted 7,60,000 options to the eligible employees on May 25, 2018 under Employee Stock Option Scheme 2016 ("ESOS 2016") at an exercise price of 85/- per equity share. These options shall vest over a period of four years in the proportion of 25% for each year from the date of grant. These options can be exercised anytime within a period of three years from the date of vesting. 5,50,000 options granted lapsed consequent to the resignation of an employee to whom Options were granted.

In compliance with the provisions of Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 and SEBI (Employee Share Based Employee Benefits) Regulations, 2014, the details of Employee Stock Option Scheme as on March 31,2020 are furnished as Annexure 3 attached herewith and forms part of this report.

Credit Rating

Infomerics Valuation and Ratings Private Limited has assigned the rating of IVR A- / Stable to your Company and the said rating denotes stable outlook of safety for timely servicing of debt obligation and carries low credit risk.

Corporate Governance

Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times.

Corporate governance is about maximizing shareholder value legally, ethically and sustainably. At FMNL, the Board exercises its fiduciary responsibilities in the widest sense of the term. Our disclosures seek to attain the best practices in international corporate governance. We also endeavour to enhance long-term shareholder value and respect minority rights in all our business decisions. Our Corporate governance report for fiscal 2020 forms part of this Annual Report.

Matters related to Directors and Key Managerial Personnel

Directors

The current policy is to have an appropriate combination of executive, non-executive and independent directors to maintain the independence of the Board and separate its functions of governance and management. As on the date of this report, the Board consists of 7 Directors, 3 of whom are Independent Directors including a Woman Director, 3 Non-Executive Directors and 1 Executive Director.

Changes in Board

During the year under review, there are no changes in the Board except appointment of Mr. Pawan Kumar Agarwal as Executive Director and Chief Financial Officer of the Company which was approved by the members at their Annual General Meeting held on September 16, 2019.

Appointment

As per the provisions of the Companies Act, 2013, Mr. Rajesh Kalyani and Mr. Pramod Arora, retires by rotation at the ensuing AGM and, being eligible, seeks reappointment. Based on the performance evaluation and recommendation of the nomination and remuneration committee, the Board recommends their reappointment.

The brief resume and other information as required under Regulation 36 (3) of Listing Regulations relating to Mr. Rajesh Kalyani and Mr. Pramod Arora forms part of the Notice of ensuing Annual General Meeting. None of the Directors are disqualified for appointment / reappointment under Section 164 of the Act.

The Company has complied with provisions of Section 203 of the Act.

Declarations by Independent Directors

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.

Performance Evaluation

Pursuant to the provisions of Section 134(3)(d), 134(3)(p), Section 149(6) of the Act read with Schedule IV of the Listing Regulations, formal annual performance evaluation of the Board, the Directors as well as Committees of the Board has been carried out and the details of evaluation carried out are provided in the Corporate Governance Report.

Familiarization Programme for Independent Directors

All new independent directors inducted into the Board need to attend an orientation program. The details of the training and familiarization program are provided in the corporate governance report. Further, at the time of the appointment of an independent director, the Company issues a formal letter of appointment outlining his / her role, function, duties and responsibilities.

The Familiarization Programme seeks to update the Independent Directors on various matters covering Companys strategy, business model, operations, organization structure, finance, risk management etc. It also seeks to update the Independent Directors with their roles, rights, responsibilities, duties under the Act and other statutes.

Disclosures related to Board, Committees and Policies

The details are provided in the Corporate Governance Report that forms part of this Report.

Meetings of Board

The Board of Directors met Four (4) times during the financial year ended March 31, 2020 in accordance with the provisions of the Companies Act, 2013 and rules made there under. All the Directors actively participated in the meetings and provided their valuable inputs on the matters brought before the Board of Directors from time to time. On February 05, 2020, the Independent Directors held a separate meeting in compliance with the requirements of Schedule IV of the Companies Act, 2013 and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Act.

Nomination, Remuneration and Compensation Committee

Nomination, Remuneration and Compensation Committee is constituted in accordance with the provisions of sub-section (1) of Section 178 of the Act. Kindly refer section on Corporate Governance, which is forming part of this report, under head Nomination, Remuneration and Compensation Committee for matters relating to constitution, meetings, functions of the Committee and the remuneration policy formulated by this Committee.

Policy on directors appointment and remuneration

The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of March 31, 2020, the Board had seven members, one of whom is an executive director, three non-executive and non-independent member and three independent directors. One of the independent directors of the Board is a woman.

The policy of the Company on directors appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under Sub-section (3) of Section 178 of the Companies Act, 2013, is available on our website, at https://www.fmn.co.in

We affirm that the remuneration paid to the directors is as per the terms laid out in the Remuneration Policy of the Company.

Audit Committee

Audit Committee is constituted in accordance with the provisions of Section 177 of the Act and Regulation 18 of the Listing Regulation. The Audit Committee comprises of Mr. Vijai Singh Dugar, Mr. K. A. Somayajulu, Independent Directors and Mr. Rajesh Kalyani, Non-Executive Director. Four meetings of the Committee were held during the year.

During the year under review, all the recommendations made by the Audit Committee were accepted by the Board. There were no instances where the Board has not accepted any recommendation of the Audit Committee.

Details of Committees of the Board of Directors along with their terms of reference, composition and meetings held during the year under review, are provided separately in the Corporate Governance Report, which forms part of this Annual Report.

Financial Controls

The management has established internal control systems commensurate with the size and complexity of the business. The internal control manual provides a structured approach to identify, rectify, monitor and report gaps in the internal control systems and processes.

The Company follows well-documented Standard Operating Procedures (SOPs). The operating effectiveness of various controls is periodically tested and deficiencies, if any, are promptly rectified.

During the year under review, no material or serious observation has been received from the Statutory Auditors and the Internal Auditors of the Company on the inefficiency or inadequacy of such controls.

Internal Control Systems

Adequate internal control systems commensurate with the nature of the Companys business and size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

Significant and Material Orders passed by Regulators or Courts or Tribunal

No significant and material orders have been passed by any Regulator or Court or Tribunal which can have an impact on the going concern status and the Companys operations in future during the period under review. Other relevant details are provided in the notes to the standalone financial statements.

Reporting of frauds by auditors

During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boards report.

Extract of Annual Return

Pursuant to Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return of the Company in Form MGT-9 is annexed as Annexure 4 and forms an integral part of this report.

The Annual Return as referred in Section 134(3)(a) of the Act for the financial year ended March 31, 2020 shall be placed on the website of the Company at www.fmn.co.in.

Secretarial standards

The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.

Investors Education and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF, established by the Government of India, after the completion of seven years. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. During the year under review, Company has neither declared any dividend nor there are outstanding amount of unclaimed dividends which were liable to be transferred to the IEPF.

Directors responsibility statement

The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values, the provisions of the Companies Act, 2013 (to the extent notified) and guidelines issued by SEBI. The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

Directors confirm that:

a) in the preparation of the annual accounts for the financial year ended March 31,2020, the applicable accounting standards have been followed along with proper explanations relating to material departures,

b) 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 that period.

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts for the financial year ended March 31,2020 on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; and

f) 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 reports and auditors Audit reports

• The Auditors Report for fiscal 2020 does not contain any qualification, reservation or adverse remark. The Report is enclosed with the financial statements in this Annual Report.

• The Secretarial Auditors Report for fiscal 2020 does not contain any qualification, reservation or adverse remark. The Secretarial Auditors Report is enclosed as Annexure 5 to the Boards report in this Annual Report.

• As required under SEBI (Share Based Employee Benefits) Regulations, 2014, the auditors certificate on the implementation of share-based schemes in accordance with these regulations will be made available at the AGM.

Statutory Auditors

Under Section 139 of the Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of the maximum term permitted under the provisions of Companies Act, 2013. In line with the requirements of the Companies Act, 2013, S K Patodia & Associates, Chartered Accountants, Mumbai, bearing ICAI Registration No. 1 12723W, Statutory Auditors of the Company, holds office till the conclusion of the ensuing Annual General Meeting and is eligible for re-appointment for the second term.

During the year, the statutory auditors have confirmed that they satisfy the independence criteria required under the Companies Act, 2013, the Code of Ethics issued by the Institute of Chartered Accountants of India.

As required under the provisions of section 139 of the Act, the Company obtained a written certificate from the Auditors to the effect that their appointment, if made, would be in conformity with the limits specified in the said section. The Board recommends their appointment.

You are requested to re-appoint the retiring Statutory Auditors of the Company for a period of five consecutive from the financial year 2020 - 2021 to 2024 - 2025 and fix their remuneration.

The Auditors report to the members read together with the relevant notes thereon are self-explanatory and hence do not warrant any comments under section 134(1)(f) of the Act.

They have confirmed their eligibility under Section 141 of the Act, and the Rules framed there under for reappointment as Auditors of the Company. As required under Regulation 33(d) of the Listing Regulations, the auditors have also confirmed that they hold a valid certificate issued in terms of the Peer Review issued by the Peer Review Board of the Institute of Chartered Accountants of India

The Notes on financial statement referred to in the Auditors Report are self - explanatory and do not call for any further explanation. The Auditors Report does not contain any qualification, reservation or adverse remark or disclaimer.

Secretarial Auditor

As required under Section 204 of the Companies Act, 2013 and Rules thereunder, the Board appointed Mr. Alwyn DSouza of Alwyn DSouza & Company, Practicing Company Secretaries (CP No. 5137), as secretarial auditor of the Company for fiscal 2021.

Cost records and cost audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

Corporate Social Responsibility (CSR)

In accordance with the requirements of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Board has constituted CSR Committee on May 21, 2019, which comprises of Mr. Vijai Singh Dugar, Chairman, Mr. K. A. Somayajulu and Mr. Rajesh Kalyani as its members.

The Company shall implement Corporate Social Responsibility initiatives in due course, as and when applicable.

Business Responsibility Report (BRR)

The Listing Regulations mandate the inclusion of the BRR as part of the Annual Report for the top 1,000 listed entities based on market capitalization. The said regulation is not applicable for the Company during the period under review.

Disclosures of transactions with any Person or entity belonging to the Promoter/ Promoter group which hold(s) 10% or more Shareholding in the Company

During the year under review, the Company is a Subsidiary of Future Corporate Resources Private Limited (FCRPL) (formerly known as Suhani Trading and Investment Consultants Private Limited). FCRPL holds 71.47 % of the paid up share capital of the Company.

There were no transactions during the period under review with any entity forming part of Promoter Group and holding more than 10% of the shareholding in the Company.

Disclosure relating to equity shares with differential rights

The Company has not issued any equity shares with differential rights during the year under review and hence no information as per provisions of Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

Disclosure relating to sweat equity share

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

Particulars of Employees and other additional information

The statement of disclosure of Remuneration under Section 197(12) of the Act read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Rules) is appended as Annexure 6 to this Report.

Payment of remuneration / commission to executive directors from holding or subsidiary companies

Mr. Pawan Kumar Agarwal, Executive Director and Chief Financial Officer of the Company was appointed as an Executive Director of Future Retail Destination Private Limited (FRDPL) w.e.f. May 02, 2019 which was a wholly owned subsidiary of the Company at a Nil remuneration. However, he resigned as the Executive Director of FRDPL w.e.f. October 25, 2019, upon FRDPL ceased to be the subsidiary of the Company.

Disclosures in respect of voting rights not directly exercised by employees

There are no shares held by trustees for the benefit of employees and hence no disclosure under section 67(3) read with Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.

Sexual Harassment of Women at workplace

The Company has constituted an Internal Complaints Committee as required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH). The details required to be disclosed under POSH forms Part of the Corporate Governance Report.

Material Changes and Commitments affecting financial position

There have been no material changes and commitments affecting the financial position of the Company which have occurred between March 31,2020 and the date of this Report, other than those disclosed in this Report.

Declaration by Executive Director

As per Regulation 34 (3) read with Schedule V of the Listing Regulations, declaration stating that the members of board of directors and senior management personnel have affirmed compliance with the code of conduct of board of directors and senior management is enclosed as Annexure 7.

Certificate on Corporate Governance

As per Regulation 34 (3) read with Schedule V of the Listing Regulations, the auditors certificate on corporate governance is enclosed as Annexure 8 to the Boards report. The auditors certificate for financial year 2020 does not contain any qualification, reservation or adverse remark.

Board diversity

The Company recognizes and embraces the importance of a diverse board. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, industry experiences, age, which will help us to have competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on our website at www.fmn.co.in.

Vigil Mechanism

Your Company has formed a Whistle Blower Policy for establishing a vigil mechanism for directors and employees to report genuine concerns regarding unethical behaviour and mismanagement, if any. The said mechanism also provides for strict confidentiality, adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the Chairman of the Audit Committee in appropriate cases. No personnel have been denied access to the Audit Committee pertaining to the Whistle Blower Policy.

The said Whistle Blower Policy has been disseminated on the Companys website at viz. http://fmn.co.in/investor-relations/policies.html.

Code of conduct for prevention of insider trading

The Board of Directors has adopted the Insider Trading Policy in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015.

The Insider Trading Policy of the Company lays down guidelines and procedures to be followed, and disclosure to be made while dealing with shares of the Company, as well as the consequences of violation. The policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company securities.

The Insider Trading Policy of the Company covering code of practices and procedures for fair disclosure of unpublished price sensitive information and code of conduct for the prevention of insider trading is available on our website at www.fmn.co.in.

Insurance

Your Company has taken appropriate insurance for all assets against foreseeable perils.

Listing on stock exchanges

The Company has entered into Listing Agreement with BSE Limited (BSE) and The National Stock Exchange of India Limited (NSE) in terms of the Regulation 34 (3) read with Schedule V of the Listing Regulations and the listing fee for the year 2020-21 has been paid.

Depository system

Your Companys equity shares are available for dematerialization through National Securities Depository Limited and Central Depository Services (India) Limited. As on March 31,2020, 99.93% of the equity shares of the Company are held in dematerialised form.

Service of documents through electronic means

Subject to the applicable provisions of the Act, all documents, including the Notice and Annual Report shall be sent through electronic transmission in respect of members whose email IDs are registered in their demat account or are otherwise provided by the members. A member shall be entitled to request for physical copy of any such documents and shall be provided upon receiving specific request from members.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

Your Company gives significant emphasis on improvement in methods and processes in its areas of Construction and Development.

The information as required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 for the financial year ended March 31, 2020 with respect to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo has been annexed to this Report as Annexure 9 which forms an integral part of this report.

Appreciation

Your Company has been able to perform better with the continuous improvement in all functions and areas which coupled with an efficient utilization of the Companys resources led to sustainable and profitable growth of the Organization. Your Directors express their deep sense of appreciation to every employee and associates for their dedicated and sustained contribution and look forward the continuance of the same in future.

Acknowledgement

The Board places on record its appreciation to all stakeholders particularly shareholders, customers, bankers, suppliers, business partners and the Government.

Cautionary Note

The statements forming part of the Directors Report may contain certain forward-looking remarks within the meaning of applicable securities laws and regulations. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward looking statements.

For and on behalf of Board of Directors
Vijai Singh Dugar Pawan Kumar Agarwal
Place: Mumbai Chairman Executive Director & CFO
Date: June 30, 2020 DIN: 06463399 DIN:01435580