DIRECTORS’ REPORT

To,

The Members of

Future Market Networks Limited

The Directors take pleasure in presenting the Seventh Annual Report together with the audited financial statements for the year ended March 31, 2015.

Dividend

In view of the losses incurred by the Company, your Directors have not recommended any dividend for the financial year ended March 31, 2015.

Share Capital

The Authorized Share Capital of the Company is Rs. 90,31,00,000/- (Rupees Ninety Crores Thirty One Lacs) divided into 9,02,60,000 equity shares of Rs. 10/- each and 5000 Preference Shares of Rs. 100/- each. The paid up share capital of the Company as on March 31, 2015 is Rs. 55,85,44,060/- divided into 5,58,54,406 equity shares of Rs. 10/- each.

Consolidated Financial Statements & Cash Flow Statement

In accordance with the Companies Act, 2013 and Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures and in compliance with provisions of Listing Agreement with Stock Exchanges, the audited consolidated financial statements are provided in the Annual Report.

In Conformity with the provisions of clause 32 of the Listing Agreement with the Stock Exchanges, the Cash Flow Statement for the year ended March 31, 2015 has been provided in the Annual Report and which forms part of this report.

Management’s Discussion and Analysis Report

Management’s Discussion and Analysis report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

Director’s Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of directors, to the best of their knowledge and ability, confirm the following:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no 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 Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and 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.

Corporate Governance

Report on Corporate Governance of the Company and Management Discussion and Analysis Report for the year under review, as per the requirements of Clause 49 of the Listing Agreement(s), have been given under a separate section and forms part of this Annual Report.

Listing

The equity shares of the Company are listed on the Bombay Stock Exchange Limited, Mumbai (BSE) and The National Stock Exchange of India Ltd. (NSE) and the listing fee for the year 2015-16 has been paid.

The Company has entered into necessary agreements with the Central Depository Services (India) Limited (CDSL) and National Securities Depository Limited (NSDL) for availing the Depository services.

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 has been 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 has been furnished.

Disclosure relating to Employee Stock Option Scheme and Employee Stock Purchase Scheme

During the year under review, 109750 options are vested to the employees of the Company and are available for exercise of options. 50000 options were lapsed during the year.

As on March 31, 2015, 439000 stock options are outstanding, in aggregate, for exercise and are exercisable at a price of Rs. 12/- per stock option. No options were exercised as on March 31, 2015.

The particulars with regard to the Employee Stock Options as on March 31, 2015 as required to be disclosed pursuant to the provisions of Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 and information as per provisions of Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014, as amended, are set out in Annexure ‘A’ to this Report.

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 Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.

Disclosure of 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 Company’s operations in future.

Deposits from Public

The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Subsidiaries:

The subsidiaries are engaged in the business of development and leasing of retail spaces across the Country. Future Trade Markets Private Limited (FTMPL) has entered into a strategic alliance with SKC 3 Limited (investment vehicle of Fung Properties) to develop an 11 acres land project a Bangalore.

During the year under review, Companies listed in Annexure ‘B’ to this report ceased to be the Company’s Subsidiaries, Joint Ventures and Associate Companies. A report on the performance and financial position of each of the subsidiaries, joint ventures and associate companies as per the Companies Act, 2013 is annexed herewith.

Particulars of Contracts or Arrangement with Related Parties

Vide Sanction Letter Ref. No. CFS/FRT/11/322 dated March 24, 2014, the Company availed a term loan of Rs. 100 crores from Bank of Baroda, one of the pre-conditions for disbursement was that Rs. 50.00 crores should be brought in as unsecured loan. In order to comply with the same, Future Corporate Resources Limited, one of the promoters of the Company, has infused the said amount in terms of the said sanction letter. In terms of Clause 49 of the Listing Agreement, the said Related Party Transaction is required to be approved by members at the ensuring Annual General Meeting and the details are provided under AOC-2 as Annexure ‘C’

Restructuring of Company

The shareholders of the Company passed special resolutions to disinvest the shareholdings held by the Company in Suhani Mall Management Company Private Limited (Suhani), Aashirwad Malls Private Limited (AMPL), F R Retail Destination Private Limited (FR) and Niyman Mall Management Company Private Limited (Niyman). The Board at its meeting held on August 26, 2015 resolved to disinvest the capital held by the Company in AMPL, FR and Niyman and authorised the Committee of Directors to negotiate and finalise the disinvestment. This will help the Company to restructure the business on a standalone basis with better financials.

Directors

The Board of Directors of the Company consists of Mr. Vijai Singh Dugar, Mr. Somayajulu  Ayyanna Kodukula, Ms. Udita Jhunjhunwala, Independent Directors, Mr. Rajesh Kalyani, Non Executive Director and Mr. Sunil Biyani, Managing Director.

The Board of Directors had appointed Mr. Somayajulu Ayyanna Kodukula, Ms. Udita Jhunjhunwala as Additional Directors of the Company in the category of Independent Directors with effect from November 13, 2014.

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr. Rajesh Kalyani retires by rotation and is eligible for re-appointment.

In accordance with the provisions of Section 149 of the Companies Act, 2013, read with clause 49 of the Listing Agreement your Board of Directors recommend the appointment of Mr. Somayajulu Ayyanna Kodukula and

Ms. Udita Jhunjhunwala, as Independent Directors for a term of 3 (three) consecutive years commencing from September 29, 2015 to September 28, 2018.

During the year under review Mr. Rahul Saraf and Mr. Krishan Kant Rathi resigned from the Board with effect from November 13, 2014. The Board has placed on record its appreciation for the outstanding contributions made by Mr. Rahul Saraf and Mr. Krishan Kant Rathi during their respective tenures of office.

The Company has received Notices under Section 160 of the Companies Act, 2013 from members signifying their intention to propose Mr. Somayajulu Ayyanna Kodukula and Ms. Udita Jhunjhunwala, as the candidates for the office of Independent Directors of the Company at the ensuing Annual General Meeting. Profile of all these Directors has been given in the Report on the Corporate Governance as well as in the Explanatory Statement to the Notice of the ensuing Annual General Meeting of the Company.

Declarations by Independent Directors

Pursuant to the provisions of sub-section (7) of Section 149 of the Companies Act, 2013, the Company has received individual declarations from all the Independent Directors confirming that they fulfill the criteria of independence as specified in Section 149(6) of the Companies Act, 2013.

The brief resume and other information as required under Clause 49 (VIII) (E) of the Listing Agreement relating to Mr. Somayajulu Ayyanna Kodukula, Ms. Udita Jhunjhunwala and Mr. Rajesh Kalyani, forms part of the Notice of ensuing Annual General Meeting.

Auditors and Auditors’ Report

M/s. NGS & CO LLP, Chartered Accountants, Statutory Auditors of the Company to hold office till the conclusion of the ensuing Annual General Meeting. However, they have intimated that they are un-willing to seek an appointment on account of their pre-occupation.

The Notes on financial statement referred to in the Auditor’s Report are self – explanatory and do not call for any further comments. The Auditor’s Report does not contain any qualification, reservation or adverse remark. M/s. Viren Gandhi & Co, Chartered Accountants, bearing ICAI Registration No. 111558W had consented to act as the Statutory Auditors of the Company for the financial year 2015-2016. They had confirmed their eligibility to the effect that their appointment, if made, would be within the prescribed limits under the Act and they are not disqualified for appointment.

As required under the provisions of section 139 of the Companies Act, 2013, 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.

They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for appointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Secretarial Audit

The Board has appointed Mr. Alwyn D’Souza of Alwyn D’Souza & Company, Practising Company Secretaries, to conduct Secretarial Audit for the financial year 2014-2015. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith as an Annexure ‘D’ to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Disclosures related to Board, Committees and Policies number of Board meetings Meetings

During the year Five (5) Board Meetings and Four (4) Audit Committee Meetings and one (1) Independent Directors Meeting were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Audit Committee

The Audit Committee comprises of Mr. Vijai Singh Dugar, Mr. Somayajulu Ayyanna Kodukula, Independent Directors and Mr. Rajesh Kalyani, Non-Executive Director. The detailed terms of reference and their particulars are forming part of corporate governance report.

Vigil Mechanism

In compliance with the provisions of Section 177(9) the Board of Directors of the Company has framed the “Whistle Blower Policy” as the vigil mechanism for Directors and employees of the Company. Protected disclosures can be made by a whistle blower through and e-mail, or dedicated telephone line or a letter to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company’s website.

Risk Management

The Board of Directors of the Company has formulated a Risk Management Policy which aims at enhancing shareholders’ value and providing an optimum risk reward trade off.

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.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors have carried out a process to evaluate of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees and finalized the criteria for the same.

Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

Policy on Directors’ Appointment and Remuneration

The Board has, in compliance with Section 178 of the Companies Act, 2013 and on the recommendation of the Nomination, Remuneration & Compensation Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The details of the said policy are stated in the Corporate Governance Report.

Internal Control Systems and their adequacy

The Company has adequate internal control procedure commensurate with its size and nature of the business. The internal control system is supplemented by extensive internal audits, regular reviews by management and well-documented policies and guidelines to ensure reliability of financial and all other records to prepare financial statements and other data. Moreover, the Company continuously upgrades these systems in line with best accounting practices. The Company has independent audit systems to monitor the entire operations and the Audit Committee of the Board review the findings and recommendations of the internal auditors.

Extract of Annual Return

Pursuant to the provisions of Section 134 (3) (a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended March 31, 2015 made under the provisions of Section 92 (3) of the Act is attached as Annexure ‘E’ which forms part of this Report.

Particulars of Employees and other additional information

For the financial year under review, none of the employees of the Company fall under the revised ceiling limits prescribed under Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Details pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been provided under Annexure ‘F’.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3)(m) of the Companies Act, 2013 read with Rule, 8(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure ‘G’.

Acknowledgement:

Your Directors takes the opportunity to express their deep sense of gratitude to the bankers, government authorities, employees, customers, vendors and suppliers. Your Director would also like to thank the Members for reposing their confidence and faith in the Company and its Management.

For and on behalf of Board of Directors

Vijai Singh Dugar  

Chairman

Sunil Biyani

Managing Director

Place : Mumbai

Date : August 26, 2015