Future Market Networks Ltd Directors Report.

BOARDS REPORT TO THE MEMBERS

Your Directors present their thirteenth report together with the audited financial statement of your Company for the year ended on March 31, 2021.

FINANCIAL HIGHLIGHTS

a) Standalone

(Rs. In Lakhs)

Particulars Year Ended Year Ended
March 31, 2021 March 31, 2020
Revenue from Operations 6454.79 12155.71
Other Income 775.15 4903.90
Total Income 7229.94 17059.61
Operating Cost 2164.67 3611.47
Cost of units sold 1.18 121.28
Personnel Cost 453.02 591.80
Other Expenses 2491.76 2659.22
Total Expenditure 5110.63 6983.77
Profit before Interest, Depreciation and Tax 2119.31 10075.84
Less: Interest 2056.28 2947.81
Less: Depreciation 3729.31 5113.97
Profit/(Loss) before exceptional item and tax (3666.28) 2014.06
Less: Exceptional Item - -
Less: Profit/(Loss) before tax (3666.28) 2014.06
Less: Current, Deferred Tax/Earlier Years Provision Written back 784.34 907.15
Profit (Loss) after Taxation (2881.94) 1106.91

b) Consolidated

(Rs. in Lakhs)

Particulars Year Ended Year Ended
March 31, 2021 March 31, 2020
Revenue from Operations 6899.73 12676.79
Other Income 723.60 6728.73
Total Revenue 7623.33 19405.52
Operating Cost 2172.22 3629.21
Cost of units sold 1.18 121.28
Personnel Cost 482.19 638.11
Other Expenses 2682.90 2869.18
Total Expenditure 5338.49 7257.28
Profit before Interest, Depreciation and Tax 2284.84 12147.74
Less: Interest 2233.91 3035.39
Less: Depreciation 3863.44 5248.10
Add: Share of net profit of associates and joint ventures accounted by using equity method (52.50) 76.87
Less: Exceptional Items - -
Profit before tax from Continuing Operations (3865.01) 3941.12
Less: Provision for taxation/Earlier Years Provision Written back 6.36 3.24
Less: Deferred Tax 792.60 928.10
Profit/(Loss) after Taxation from continuing operation (3078.77) 3009.78
Profit/(Loss) from discontinued operation - (17.03)
Profit/ (Loss) for the year (3078.77) 2992.75

Dividend

In view of the loss for Financial Year (FY) 2020-21 and considering the necessity to conserve resources of the Company during this uncertain and difficult times due to the COVID-19 pandemic, the Directors, have not recommended any dividend for the financial year ended March 31, 2021.

Dividend Distribution Policy

Since the Company has not yet declared any dividend till date, the Company has not yet formulated and adopted a ‘Dividend Distribution Policy in terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (Listing Regulations).

Reserves

During FY 2020-21, no amount has been transferred to any reserves.

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.

Operations / State of the Companys Affairs

India witnessed a steep contraction in output in 2020-21 following the Covid-19 pandemic. Gross Domestic Product (GDP) is estimated to have declined by 7.3 percent, compared to 4 percent growth in the previous year. As far as the real estate industry is concerned, construction activities severely affected due to lockdown and other restrictions. It was only in the second half of the year that the recovery gathered momentum and situation started to improve. Mall operations considerably reduced on account of restrictions imposed by government.

During 2020-21, the Company, through SPVs, has completed the construction and development of 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 for the aforesaid integrated large-scale warehouses.

The Company shall exit from the respective SPVs by way of sale of its investment in the respective SPVs.

Financials - Standalone Highlights

During the year ended March 31, 2021, your Company has achieved total Revenue (i.e. Revenue from Operations & Other income) of Rs. 7229.94 Lakhs as against Rs. 17059.61 Lakhs for the previous year ended March 31, 2020. Your Company has posted loss (i.e profit/loss before tax) of Rs. -3666.28 Lakhs for the current year as against Profit of Rs. 2014.06 Lakhs for the previous year (a negative growth in term of % is 282.04% against the previous year).

Consolidated Highlights

During the year ended March 31, 2021, your Companys consolidated Revenue stood at Rs. 7623.23 Lakhs as against Rs. 19405.52 Lakhs for the previous year ended March 31, 2020. Your Company has posted loss (i.e profit/loss before tax) of Rs. -3865.01 Lakhs for the current year as against of Rs. 3941.12 Lakhs (profit) for the previous year on consolidated basis.

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.

Cash Flow Statement

In conformity with the provisions of Regulation 34 of Listing Regulations, the Cash Flow Statement for the year ended March 31, 2021 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.

Appropriations

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

Fixed deposits

Your Company have 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.

The Covid-19 Pandemic

The year started amidst a strict nationwide lockdown in India with tough restrictions on economic activity and mobility.

To deal with the situation, the Company took care of the safety and health related challenges of its people, ensuring business continuity under lockdown and adapting the organisation to ramp-up operations as restrictions were gradually lifted. The Company continues to be fully aligned with government guidelines and best practices on safety, health and hygiene.

The Company is actively monitoring the impact of the Covid-19 pandemic on its financial condition, liquidity, operations, suppliers, industry, and workforce. It has used the principles of prudence in applying judgments, estimates and assumptions based on the current estimates. In assessing the recoverability of assets such as goodwill, inventories, financial and other assets, based on current indicators of future economic conditions, the Company expects to recover the carrying amounts of its assets. The extent to which Covid-19 impacts the operations will depend on future developments which remain uncertain.

Besides this, no material changes and commitments have occurred after the close of the year till the close of this Report, which affects the financial position of the Company.

Composite Scheme of Arrangement

The Board of Directors of the Company at its meeting held on August 29, 2020 has inter-alia, considered and approved the Composite Scheme of Arrangement which involves:

(i) merger of Future Market Networks Limited ("the Company" or Transferor Company 3"), and other 18 Transferor Companies with Future Enterprises Limited ("FEL" or "Transferee Company") and their respective Shareholders and Creditors;

(ii) 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");

(iii) 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

(iv) Preferential allotment of equity shares and warrants of FEL to RRVL WOS ("The Composite Scheme of Arrangement"/ Scheme"), pursuant to Sections 230 to 232 and other relevant provisions of the Companies Act, 2013. The combination contemplated under the scheme has been approved by Competition Commission of India on November 20, 2020. Further stock exchanges have issued observation letter without any adverse observation on January 20, 2021. Pursuant to this the scheme application has been filed with National Company Law Tribunal Mumbai (NCLT) on January 26, 2021 for convening the meeting of the Shareholders and Creditors of the Transferor Companies and Transferee Company.

Amazon has initiated proceedings after arbitration against the Future Retail Limited (FRL) and its promoters on October 5, 2020 before Singapore International Arbitration Centre (SIAC). After completion of Emergency Arbitration hearing held pursuant to application of Amazon, Emergency Arbitrator has passed and interim order on October 25, 2020 (EA Order) inter alia restraining FRL and promoters to take any steps in furtherance of the resolution passed on August 29, 2020. However, based on the legal advise received by FRL, it has contended that the EA Order would not be enforceable in view of FRL being not a signatory to the arbitration agreement under which arbitration has been initiated.

The Company shall update on matters related to the Scheme to Stock Exchanges for the information of members and public in terms of the Listing Regulations and you may refer such updates in this regard.

Share Capital

The Authorized Share Capital of the Company is Rs. 90,35,00,000/- (Rupees Ninety Crores Thirty-Five Lakhs) divided into 9,03,00,000 equity shares of Rs. 10/- each and 5000 Preference Shares of Rs. 100/- each.

The issued share capital of the Company as on March 31, 2021 is Rs. 57,54,49,510/- divided into 5,75,44,951 equity shares of Rs. 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, 2021 is Rs. 57,54,43,810/- divided into 5,75,44,381 equity shares of Rs. 10/- each.

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 Rs. 85/- per equity share. 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. 2,10,000 options are in force as on date. 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, 2021 are furnished as Annexure ‘1 attached herewith and forms part of this report.

Holding Company

As on March 31, 2021, the Promoter and the Holding company i.e. Future Corporate Resources Private Limited (FCRPL) holds 41129343 equity shares representing 71.47 % of the total paid-up equity capital of the Company. The Company continues to be a Subsidiary Company of FCRPL. All subsidiary companies of the Company are consequently subsidiary companies of FCRPL.

Subsidiaries and Associates

During the year, no company became or ceased to be a Subsidiary / Associate / Joint Venture company of the Company. A report highlighting performance of each of the subsidiaries, associates and joint venture companies as per the Act, and their contribution to the overall performance of the Company is provided in the consolidated financial statement at note no. 4.

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

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.

Consolidated IND AS financial Statements

The audited consolidated financial statement of the Company prepared in accordance with the applicable Accounting Standards along with all relevant documents and the Auditors Report forms part of this Annual Report. The audited financial statement of each of the subsidiaries is placed on the website of the Company at web link: www.fmn.co.in The Company will provide the financial statements of subsidiaries upon receipt of a written request from any member of the Company interested in obtaining the same. The financial statement of subsidiaries will also be available for inspection at the Registered Office of your Company during working hours up to the date of the Annual General Meeting.

Management Discussion and Analysis Report

In terms of the provisions of Regulation 34 of the Listing Regulations, The Management Discussion and Analysis Report, which gives a detailed account of state of affairs of the operations of the Company and its subsidiaries forms part of this Annual Report.

Secretarial Standards

During the financial year ended March 31, 2021, 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.

Corporate Governance

Our corporate governance practices reflect 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 always gain and retain the trust of our stakeholders.

A report on Corporate Governance along with a certificate from the Auditors of the Company regarding the compliance with the conditions of Corporate Governance as stipulated under the Listing Regulations forms part of this Annual Report.

Corporate Social Responsibility (CSR)

The Companys guiding principle for CSR is to build its relationship with stakeholders and the community at large and contribute to their long term social good and welfare. The Company, in every financial year, in line with the Companies Act, 2013, pledges to spend minimum two percentage of the average net profits made during the three immediately preceding financial years towards CSR initiatives.

The Company has constituted a Corporate Social Responsibility (CSR) Committee comprising of Mr. Rajesh Kalyani, Non-Executive Director, Ms. Udita Jhunjhunwala and Mr. Vijai Singh Dugar, Independent Directors. Ms. Udita Jhunjhunwala is the Chairperson of the Committee. During the year, Mr. K. A. Somayajulu ceased to be a member of the Committee consequent to his completion of Tenure as the Independent Director of the Company effective from the close of business hours of September 27, 2020. The Board at its meeting held on August 29, 2020 inducted Ms. Udita Jhunjhunwala as a member of the Committee. The role of the Committee, inter alia, is to formulate and recommend to the Board, a Corporate Social Responsibility Policy, expenditure to be incurred on the CSR activities, an annual action plan in pursuance of its CSR policy etc.

The Companys CSR Policy lays out the vision, objectives and implementation mechanism. The Companys CSR policy is available on the Companys weblink at www.fmn.co.in The Companys CSR activities, inter alia, have traditionally focused on education, skill development, health, and environment. The Companys commitment to CSR will be manifested by investing resources in any of the areas stipulated in Schedule VII to the Companies Act, 2013, as amended, from time to time. The Company gives preference to the local area and area around it where it operates for spending the amounts earmarked for CSR activities. During the year the Company has spent Rs. 26.46 lakhs as against the statutory requirement of CSR expenditure of Rs. 26.46 lakhs.

The composition of the Committee, brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure ‘3 of this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

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 6 Directors, 2 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 cessation of Mr. K.A. Somayajulu as an Independent Director of the Company w.e.f. September 27, 2020 upon expiry of his 2nd term as an Independent Director.

Appointment

Pursuant to Section 152 of the Companies Act, 2013 and Article 91 of the Articles of Association of the Company, Mr. Rajesh Kalyani (DIN: 00220632) and Mr. Sunil Biyani (DIN: 00006583) both Non-Executive Non-Independent Directors retires by rotation at the 13th Annual General Meeting of the Company and being eligible has offered themselves for re-appointment. The Board has recommended their reappointment at the forthcoming Annual General Meeting as Non-Executive Non-Independent Director of the Company, liable to retire by rotation.

The brief resume and other details of Mr. Rajesh Kalyani and Mr. Sunil Biyani, in terms of Regulation 36 (3) of the Listing Regulations and Secretarial Standards on General Meeting, are provided in the Notice of ensuing Annual General Meeting. Both the abovementioned Directors are not disqualified from being re-appointed / appointed as Directors by virtue of the provisions of Section 164 of the Companies Act, 2013.

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. The declarations also confirm compliance with sub-rule 1 and 2 of Rule 6 of the Companies (Appointment and Qualifications of Directors) Fifth Amendment Rules, 2019.

Performance Evaluation

The performance evaluation of Non-Independent Directors and the Board as a whole, Committees thereof and Chairman of the Company was carried out by Independent Directors. Pursuant to the provisions of the Act, the Nomination, Remuneration and Compensation Committee (NRC) specified the manner of effective evaluation of the performance of the Board, its Committees and individual Directors. In terms of manner of performance evaluation specified by the NRC, the performance evaluation of the Board, its Committees and individual Directors was carried out by NRC and the Board of Directors. Further, pursuant to Schedule IV of the Act and Regulation 17(10) of the the Listing Regulations, the evaluation of Independent Directors was done by the Board of Directors. For performance evaluation, structured questionnaires, covering various aspects of the evaluation such as adequacy of the size and composition of the Board and Committee thereof with regard to skill, experience, independence, diversity, attendance and adequacy of time given by the Directors to discharge their duties, Corporate Governance practices, etc. were circulated to the Directors for the evaluation process. All Directors unanimously expressed that the evaluation outcome reflected high level of engagement of the Board of Directors and its committees amongst its members with the Company and its management and that they are fully satisfied with the same.

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.

Key Managerial Personnel (KMP)

As on March 31, 2021, details of Key Managerial Personnel under the Companies Act, 2013 are given below:

Sr. No Name of Key Managerial Personnel Designation
1 Mr. Pawan Kumar Agarwal Executive Director and Chief Financial Officer
2 Mr. Anil Cherian Head - Legal & Company Secretary

Meetings of Board

The Board of Directors met Five (5) times during the financial year ended March 31, 2021 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 March 23, 2021, 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. All meetings of the Board meetings were held virtually in line with the relaxations provided by the Ministry of Corporate Affairs and the Securities Exchange Board of India.

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, 2021, the Board had six members, one of whom is an executive director, three non-executive and non-independent member and two 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 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.

Directors responsibility statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors, based on the representations received from the operating management and after due enquiry, confirm that:

a) in the preparation of the annual accounts for the financial year ended March 31, 2021, 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 Loss 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, 2021 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.

Internal Financial Control

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.

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.

Audit Committee

As on March 31, 2021, the Audit Committee comprised of Two Non-Executive Independent Directors, namely Mr. Vijai Singh Dugar and Ms. Udita Jhunjhunwala and one Non-Executive Non-Independent Director, Mr. Rajesh Kalyani. Mr. Vijai Singh Dugar is the Chairman of the Committee. During the year under review, Mr. K. A. Somayajulu ceased to be a member of the Committee consequent to his completion of Tenure as the Independent Director of the Company effective from the close of business hours of September 27, 2020. The Board at its meeting held on August 29, 2020 inducted Ms. Udita Jhunjhunwala as a member of the Committee.

All members of the Audit Committee possess strong knowledge of accounting and financial management. The Executive Director and Chief Financial Officer, the Internal Auditors and Statutory Auditors are regularly invited to attend the Audit Committee Meetings. The Company Secretary is the Secretary to the Committee. The Internal Auditor reports to the Chairman of the Audit Committee. The significant audit observations and corrective actions as may be required and taken by the management are presented to the Audit Committee. The Board has accepted all recommendations made by the Audit Committee from time to time.

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.

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.

Risk Management

The Company has appropriate risk management systems in place for identification and assessment of risks, measures to mitigate them, and mechanisms for their proper and timely monitoring and reporting. 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.

Audit reports and auditors Audit reports

• The Auditors Report for fiscal 2021 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 2021 does not contain any qualification, reservation or adverse remark. The Secretarial Auditors Report is enclosed as Annexure ‘4 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

The Shareholders of the Company at the 12th Annual General Meeting of the Company held on September 29, 2020, had appointed M/s. S K Patodia & Associates, Chartered Accountants, Mumbai, bearing ICAI Firm Registration No. 112723W as Statutory Auditors of the Company to hold office until the conclusion of the 17th Annual General Meeting to be held in the calendar year 2025 to conduct the audit of the Accounts of the Company, at such remuneration as may be mutually agreed upon between the Board of Directors of the Company and the Auditors.

As required under the provisions of Section 139(1) and 141 of the Companies Act, 2013 read with the Companies (Accounts and Auditors) Rules, 2014, the Company has received a written consent and certificate from the auditors to the effect that they are eligible to continue as Statutory Auditor of the Company.

The notes of the financial statements referred to in the Auditors Report issued by M/s. S K Patodia & Associates, Chartered Accountants, Mumbai for the financial year ended on March 31, 2021 are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.

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.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules thereunder, the Board has appointed Mr. Alwyn DSouza of M/s. Alwyn DSouza & Company, Practicing Company Secretary (Membership No. 5559 / Certificate of Practice No.5137) to conduct the secretarial audit of the Company for the financial year 2020-21.

Secretarial Audit of Material Unlisted Indian Subsidiary

For the financial year 2020-21, Suhani Mall Management Company Private Limited (‘Suhani) is the material unlisted subsidiaries of the Company. As per Regulation 24A of the Listing Regulations, the Secretarial Audit of the material subsidiary mentioned above has been conducted for the financial year 2020-21 by Mr. Amit Samani of M/s. Amit Samani & Co., Practising Company Secretary. The Audit Report does not contain any qualification, reservation or adverse remark or disclaimer. The Secretarial Audit Report of material subsidiary for the financial year ended March 31, 2021, is annexed herewith and marked as Annexure ‘5 to 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 Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

Contracts and Arrangements with Related Parties

In line with the requirements of the Companies Act, 2013 and the Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is also available on the Companys website at https://www.fmn.co.in. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions for transactions which are of repetitive nature and/or entered in the Ordinary Course of Business and are at Arms Length. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the requirements of Related Party Transactions under the Companies Act, 2013 and Listing Regulations.

All Related Party Transactions entered during the year were in Ordinary Course of the Business and at Arms Length basis. As required under Section 134(3)(h) of the Companies Act, 2013 the disclosure of Material Related Party Transactions, i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statement, in Form AOC-2 that were entered during the year by your Company is appended as Annexure ‘6 which forms part of this Report 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.

Deposits, Loans, Advances and Other Transactions

Your Company has not accepted any deposits from public or its employees and, as such no amount on account of principal or interest on deposit were outstanding as of the Balance Sheet date. The details of loans and advances, which are required to be disclosed in the annual accounts of the Company pursuant to Regulation 34(3) read with Schedule V of the the Listing Regulations are provided in the standalone financial statement at note no. 32.

Further, in terms of Regulation 34(3) read with Schedule V of the the Listing Regulations, details of the transactions of the Company, with the promoter and holding company Future Corporate Resources Private Limited holding 71.47 % in the paid-up equity capital of the Company as on March 31, 2021, in the format prescribed in the relevant accounting standards for annual results, are given in Note no. 28 to the standalone financial statement.

Credit Rating

During the year under review, the Rating assigned by Infomerics Valuation and Ratings Private Limited is withdrawn as per the request of the Company.

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.

Annual Return

Pursuant to Section 92(3) and Section 134(3)(a) of the Act, a copy of the Annual Return of the Company for the financial year ended March 31, 2021 in Form MGT – 7 will be available 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.

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.

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

Disclosure with respect to remuneration of Directors, KMPs and employees as required under Section 197(12) of the Companies Act, 2013 read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure ‘7 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 draws remuneration only from 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, 2021 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 ‘8.

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 ‘9 to the Boards report. The auditors certificate for financial year 2021 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.

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 Ltd. (NSE) in terms of the Regulation 34 (3) read with Schedule V of the Listing Regulations, and the listing fee for the year 2021-22 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, 2021, 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(3) of the Companies (Accounts) Rules, 2014 for the financial year ended March 31, 2021 with respect to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo has been annexed to this Report as Annexure ‘10 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: May 26, 2021 DIN: 06463399 DIN: 01435580