| Disclosure in board of directors report explanatory Report of the Board To, The Members Future Supply Chain Solutions Limited Directors of your Company are pleased to present the Ninth Annual Report of the Company for the financial year ended 31st March 2014. FINANCIALS (Rs. in Crore) | For the year ended 31 March 2014 | For the year ended 31 March 2013 | Operational Income | 330.16 | 353.56 | Other income | 3.04 | 0.50 | Total Income | 333.20 | 354.06 | Depreciation | 13.24 | 13.87 | Other Expenditure | 313.07 | 339.87 | Total expenditure | 326.31 | 353.73 | Exceptional Item | (2.03) | (2.80) | Profit before tax | 4.85 | (2.47) | Tax and Provisions (Deferred tax) | 0.63 | 1.71 | Profit after tax | 4.23 | (4.18) | Earnings Per Share-Basic (Rs.) | 1.08 | (1.07) |
FINANCIAL & OPERATIONAL OVERVIEW The year under review offered many opportunities and brought many challenges from operation point of view. Despite difficult time, your Company posted satisfactory performance for the year ended 31st March 2014. Revenues During the year under review, your Company recorded a total turnover of Rs.333.20 Crore as against Rs.354.06 Crore during the previous fiscal. The revenue were decreased due to competitive pricing for the warehousing and logistic services due to consolidation of all product categories, replacement strategies adopted by the Company and focussed loading. Revenues from external customers outside the Group increased considerably due to untiring and determined efforts made by the management to add the clientele from various industries like automobile, FMCG, Foods etc. Costs The total expenditure during the year under review stood at Rs.326.31 Crore as against 353.73 Crore suggesting effectiveness of the cost reduction plans laid down by the Company at various cost centres. Despite frequent hikes in fuel price, the Company effectively reduced the transportation costs without affecting the service level. Profits For the year under review, the Company posted net profits of Rs.4.23 Crore as against net loss of Rs.4.18 Crore during the previous fiscal due to stable margins in a few business verticals, effective cost management, process integration and transport integration. Reduction in long term debt During the year under review, the long term borrowings came down as against the previous fiscal due to repayment of the term loan indicating improved liquid ratio and better debt servicing. With the optimum utilization of capacity level and continuous reduction in occupancy rate, the management anticipate further servicing of long term borrowing in current fiscal. Space Occupancy During the year under review, the warehousing space occupancy rate for the Group business drastically came down without affecting the volume rate. This has considerably reduced the rental outgo and further resulted into cost effective services. The Company’s warehouse located at Nagpur has become fully functional with state of art structure and automated systems for handling of goods and merchandise. The said warehouse now caters to the requirements of many customers across the country in a very cost effective and efficient manner. Finest Infrastructure Ability to take risks and make commitments to build good quality infrastructure, even before it gets the business, is a unique ability of the Company. The Company has built a strong nationwide network of hubs and branches for its Express business and kept on increasing it. Similarly, in the CL business, the Company bets on building world-class warehousing infrastructure and Distribution Centres. The Company has also built several large DCs in MIHAN, Nagpur which offer unmatched opportunities to win against competition. Operational Efficiency The management of the Company is convinced with improvement in operational efficiency during the year with respect to innovative and unmatched service value addition, timely and cost effective services, expansion of service network and appropriate material handling equipment for deliveries. This has also bettered the addition of new clientele and improved relationship with the existing customers. Clientele During the year under review, your Company successfully added many new clients from various industries which signify a combination of business expertise and finest infrastructure and the core values of the Company. The management believes that such contracts are not only the commercial success, but will also open up new avenues and vistas which are mutually beneficial in the long run. The customers, on their part, have also shown tremendous confidence in world-class modern supply chain capabilities of the Company. Fire break out In an unfortunate event during the year under review, a major fire had taken place at Company’s warehouse located at Bengaluru. However, there was no adverse effect on the business of the Company due to such incidence. There was no interruption in service level due to immediate actions taken by the Company. EXPANSION & FUTURE PLANS Your Company would be implementing various strategies for capacity building for higher revenues, reduced costs of operations by though effective cost control mechanism and aggressive business development plans. The Company is strategising for asset investments in phased manner which would ensure best utilization of existing servicing levels and simultaneously focuses on scope for any addition therein. The Company is also aiming to build the automation for better and efficient servicing. With greater expectations on revival of economic conditions and business outlook across the sectors, your Directors anticipates that growth would further pick-up in current fiscal. DIVIDEND To conserve the financial resources, your directors do not recommend any dividend for the year under review. FIXED DEPOSIT During the year under review, your Company has not accepted any deposit within the meaning of section 58A of the Companies Act, 1956 from the public during the financial year under review. HOLDING COMPANY The Company is a subsidiary of Future Retail Limited, a leading organised retailer in the country. SUBSIDIARY The financial statements together with Directors’ Report and Auditors’ Report of Company’s subsidiary FSC Brand Distribution Services Limited are enclosed with this report. Further, a statement as required pursuant to the provisions of section 212 of the Companies Act, 1956 in respect of the said subsidiary is enclosed herewith as Annexure – I. DIRECTORS In terms of section 152 of the Companies Act, 2013, Mr. Anshuman Singh and Mr. C P Toshniwal, Directors of the Company, retire at the ensuing Annual General Meeting of the Company and being eligible, they have offered themselves for re-appointment as Directors. Members are requested to re-approve the re-appointment of Mr. Anshuman Singh and Mr. C P Toshniwal as Directors. DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed: 1. that in the preparation of the Annual Accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanations relating to material departures; 2. that 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 profits of the Company for the year ended 31st March, 2014; 3. that the Directors 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 frauds and other irregularities; 4. that the Directors have prepared the accounts for the financial year ended 31st March, 2014 on a going concern basis. AUDITORS M/s. NGS & Co. LLP; Chartered Accountants, Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for appointment. They have expressed their willingness to accept office as such. The Company has received a certificate from them in respect of their availability and eligibility pursuant to Section 139 read with section 141 of the Companies Act, 2013. Members are requested to consider and approve the appointment of M/s. NGS & Co. LLP; as Auditors of the Company which would be valid for a period of four years till the completion of next four annual general meetings to be held immediately after the ensuing annual general meeting. CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO A. Conservation of Energy: None B. Technology Absorption: Not applicable to the Company since the Company does not have / use any technology. C. Technology Absorption, adaptation & innovation: Not applicable to the Company since the Company does not have / use any technology. D. Foreign Exchange Earnings & Outgo : There is no expenditure on R&D, Technology Absorption, adoption & innovation during the financial year under report. The Company being catering to retail sector & being in service industry, does not have any specific exports initiatives to report to members. Foreign Exchange Earnings & Outgo | (Rs. In lacs) | | 2013-14 | 2012-13 | Foreign Exchange Earnings | Nil | Nil | Foreign Exchange Outgo: | | | Travel | 3.29 | 4.83 | Capital Goods | Nil | 75.39 | Freight Forwarding | 40.64 | 37.81 | Software License | 6.60 | Nil |
Form A to the Annexure to the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 does not apply to the Company. AUDIT COMMITTEE The Company has constituted an Audit Committee in terms of the provisions of section 292A of the Companies Act, 1956 comprising the following directors: 1. Mr. C P Toshniwal 2. Mr. Rajesh Ranavat 3. Mr. Rakesh Biyani The recommendations made by the Audit Committee are accepted by the Board and applied in the internal controls in a manner recommended by the Audit Committee. PARTICULARS OF EMPLOYEES A statement containing particulars of employees as required under section 217(2AA) of the Companies Act, 1956 and the rules made there under, is given as an Annexure - II appended hereto and forms part of this report. SCHEME OF AMALGAMATION At the end of the close of the financial year, the Board of Directors of the Company had approved the amalgamation of FSC Brand Distribution Services Limited, a wholly owned subsidiary, with the Company subject to the requisite approval including the approval of the High Court of judicature at Bombay. An application in the High Court of Judicature at Bombay has been filed by both the Companies after the close of the financial year under review. The amalgamation would simplify the business structure and remove multiple layers of business activities. The amalgamation would also enable the Company to consolidate the identical businesses and bring synergies in operation in order to bring efficiency and reduce cost of operations by abolishing different levels of business structure. AWARDS & RECOGNITION During the year under review, your Company won the following recognition: a. ‘Emerging Player of the Year’ awarded by Cabinet Minister of Road Transport and Highways; b. ‘Effective Retail through Supply Chain’ award hosted by Asia Retail Congress. ACKNOWLEDGEMENT Your Directors desire to place on record, their appreciation to all employees at all levels, who during the year under review, with sustained dedicated effort, enabled the Company to deliver a good performance. Your Directors also wish to place on record their appreciation and acknowledge with gratitude for the support and co-operation extended by the Government, clients, bankers, investors and other government agencies and look forward to their continued patronage in future. For and on behalf of the Board of Directors of Future Supply Chain Solutions Limited Anshuman Singh C P Toshniwal Managing Director Director Mumbai, 2nd May 2014
Annexure I FUTURE SUPPLY CHAIN SOLUTIONS LIMITED STATEMENT PURSUANT TO SEC. 212 OF THE COMPANIES ACT, 1956 RELATING TO COMPANY’S INTEREST IN SUBSIDIARY COMPANY AS ON 31 MARCH 2014 Name of the subsidiary company | FSC Brand Distribution Services Ltd. | 1. Financial period of subsidiary ended on | 31st March 2014 | 2. Date from which it became subsidiary | 19/12/2008 | 3. a) Number of shares held by the Company b) Extent of holding at the end of the financial year of the subsidiary company | 50,000 Equity Shares of Rs.10/- each fully paid up 100% | 4. The net aggregate amount of the subsidiary company’s Profit / (Loss) so far as it concerns the members of the Company a) Not dealt with the Holding Company’s accounts i. For the financial year ended 31/03/2014 (Rs. in Thousands) ii. For the previous financial years of the subsidiary company since they became the holding company’s subsidiary (Rs. in Thousands) b) Dealt with in holding Company’s accounts i. For the financial year ended 31/03/2014 ii. For the previous financial years of the subsidiary company since they became the holding company’s subsidiary | (152.26) (532.28) NIL NIL |
Annexure II Information as per section 217(2A) of the Companies Act, 1956 read with Company (Particulars of Employees) Rules, 1975 Particulars | | Employee | Name | : | Mr. Anshuman Singh | Designation of the employee | : | Managing Director | Remuneration paid (Rs.) | : | 1,78,13,102/- | Nature of duties | : | Overall Management | Other Terms and conditions | : | None | Qualification of the employee | : | B.E.; MBA | Experience of the employee (yrs) | : | 25 | Date of commencement of employment | : | 1 Nov. 2006 | Date of leaving | : | N.A. | Age of the employee (yrs) | : | 44 | Last employment held by such employee | : | Future Retail Limited | % of equity shares held by the employee | : | 2.56 |
Notes: 1. The employee has adequate experience to discharge the responsibilities assigned to him. 2. The nature of employment is contractual. 3. The said employee is Director of the Company. Disclosures relating to dividendsTo conserve the financial resources, your directors do not recommend any dividend for the year under review. Details regarding technology absorptionNot applicable to the Company since the Company does not have / use any technology. Details regarding foreign exchange earnings and outgoThere is no expenditure on R&D, Technology Absorption, adoption & innovation during the financial year under report. The Company being catering to retail sector & being in service industry, does not have any specific exports initiatives to report to members.
Foreign Exchange Earnings & Outgo (Rs. In lacs)
F.Y. 2013-14 F.Y. 2012-13
Foreign Exchange Earnings Nil Nil
Foreign Exchange Outgo:
Travel 3.29 4.83
Capital Goods Nil 75.39 Freight Forwarding 40.64 37.81 Software License 6.60 Nil Form A to the Annexure to the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 does not apply to the Company. Particulars of employees as per provisions of section 217A statement containing particulars of employees as required under section 217(2AA) of the Companies Act, 1956 and the rules made there under, is given as an Annexure - II appended hereto and forms part of this report. Disclosures in director’s responsibility statementPursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:
1. that in the preparation of the Annual Accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanations relating to material departures;
2. that 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 profits of the Company for the year ended 31st March, 2014;
3. that the Directors 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 frauds and other irregularities;
4. that the Directors have prepared the accounts for the financial year ended 31st March, 2014 on a 'going concern' basis. |