Annual Report 2015-16
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FAST FORWARD INDIA FORWARD FAST ANNUAL REPORT 201 Knowledge House, Shyam Nagar, Off Jogeshwari Vikhroli Link Road 5 Jogeshwari (East), Mumbai - 400 060, Maharashtra, India -16 http://futureretail.co.in/ KEY RETAIL BRANDS 7 STORES 738 EMPLOYEES 32,012 CITIES 221 ANNUAL CUSTOMER FOOTFALLS 295 MN CONNECTED COMMERCE In a 1.27 billion country, wherein modernity and tradition co-exist, needs and aspirations co-exist and logic and emotion co-exist, Future Retail Limited brings together winning brands, retail chains and digital platforms that speaks, connects and wins the hearts of every Indian. FUTURE RETAIL | ANNUAL REPORT 2015-16 | 1 CORPORATE INFORMATION BOARD OF DIRECTORS BANKERS Kishore Biyani Andhra Bank Chairman and Managing Director Allahabad Bank DIN: 00005740 Axis Bank Rakesh Biyani Jt. Managing Director Bank of Baroda DIN: 00005806 Bank of India Gagan Singh Central Bank of India Non-Executive and Independent Director Corporation Bank DIN: 01097014 Dena Bank Shailendra Bhandari IDBI Bank Non-Executive and Independent Director DIN: 00317334 Punjab National Bank State Bank of Travancore Ravindra Dhariwal Non-Executive and Independent Director UCO Bank DIN: 00003922 Union Bank of India Rajan Bharti Mittal Vijaya Bank Non-Executive Director DIN: 00028016 REGISTERED OFFICE Knowledge House, Shyam Nagar STATUTORY AUDITORS Off Jogeshwari-Vikhroli Link Road Jogeshwari (East), Mumbai - 400060 NGS & Co. LLP Tel : + 91 22 66442200 Fax : + 91 22 66442201 CHIEF FINANCIAL OFFICER C. P. Toshniwal CORPORATE OFFICE 247 Park, Tower ‘C’, LBS Marg DY. COMPANY SECRETARY Vikhroli (West), Mumbai - 400083 Tel : + 91 22 6199 0000 Virendra Samani Fax : + 91 22 6199 5019 SHARE TRANSFER AGENTS Website: www.futureretail.co.in Link Intime India Private Limited C-13, Pannalal Silk Mills Compound INVESTOR EMAIL ID LBS Marg, Bhandup (West) [email protected] Mumbai - 400078 Tel + 91 22 25946970 Fax + 91 22 25946969 Corporate IDENTITY NUMBER Website: www.linkintime.co.in U51909MH2007PLC268269 2 | FAST FORWARD INDIA CONTENTS 02 CORPORATE INFORMATION 04 LETTER FROM THE CMD 06 RETAIL BRANDS 17 MANAGEMENT DISCUSSION & ANALYSIS 21 DIRECTORS’ REPORT 39 CORPORATE GOVERNANCE REPORT 52 INDEPENDENT AUDITOR’S REPORT 56 BALANCE SHEET 57 STATEMENT OF PROFIT & LOSS 58 NOTES TO THE FINANCIAL STATEMENTS 75 CASH FLOW STATEMENT FUTURE RETAIL | ANNUAL REPORT 2015-16 | 3 LETTER FROM THE CHAIRMAN & MANAGING DIRECTOR Dear Stakeholders, Having built a robust and Taking this spirit ahead, the Company unparalleled retail network in the introduced Big Bazaar GenNxt During in the year, the erstwhile country, we today are moving stores in Noida and Mumbai. The Future Retail Limited announced towards building a connected stores integrate superior shopping the partnership with erstwhile commerce organization that lives, experiences with innovations such Bharti Retail Limited to combine the breathes and thrives in the digital era. as interactive digital screens, sit- businesses of the companies bringing Over last couple of years, substantial down checkouts and smart customer together winning retail brands such investments were made in building service. Soon, they will sport smart as loyalty and data analytics capabilities. trial rooms and endless aisles Big Bazaar, easyday, fbb, Food Bazaar, The Company is now benefitting or kiosks wherein the customer Home Town, eZone and Foodhall. As from this by interpreting and reacting can order from a larger range of part of the Scheme of Arrangement, to consumer data and information in merchandise, which may not be the front end operations of these a real-time in a much more efficient stocked within the store. Our stores retail chains were consolidated within and seamless manner. Our data are also turning into fulfillment Bharti Retail Limited. Subsequently, analytics program is helping improve centers and merchandise return name of the Company has been one-on-one communication with points for goods ordered online. changed to Future Retail Limited. customers, improving their frequency Payments are now possible through multiple channels including mobile Your Company is now a pure retail of visits, helping predict and shape consumption patterns and create wallets. Going ahead, we envision play that operates 738 retail stores a scenario wherein the customer in 221 cities, along with a number smarter promotion and engagement engines with customers. has the choice to choose to perform of digital platforms. These stores digitally or physically any of the catered to close to 295 million activities connected with buying - customer walk-ins and are spread The organisation has also started benefitting from engaging much discovery, choice, pickup, payments, over around 13 Mn. Sq. Ft. of space. fulfillment or return. Managing and growing these more effectively with consumers on social media. However, the biggest networks and retail brands forms the It is a brave and exciting future that change in happening within the only business of your Company, and we are headed towards. It is a future organization wherein most people catering to the consumption sector wherein change will be constant and processes are now embedded and consumers forms the driving organizations will continuously have with mobile and digital technology force of this business. to go through learning, unlearning catering to over 32,000 colleagues and relearning. We have so far who make this organization Consumers today live a seamless thrived in this environment and we succeed and transform. Many of life between the physical and the thank all our stakeholders who have digital world. As a retail organization our businesses have now moved helped us do so. catering consumers’ needs and into digital platforms – led by our aspirations, we believe the future electronics and home retailing of retail lies not in pure physical business. The prototypes and Rewrite Rules, Retain Values stores or pure ecommerce sites, but experiments conducted over the a seamless platform that integrates last couple of years across various with the seamless world that the platforms, has also helped shape the customer interacts with. We call it a stores and digital platforms that we connected commerce organization. are now creating. Kishore Biyani 4 | FAST FORWARD INDIA FUTURE RETAIL | ANNUAL REPORT 2015-16 | 5 STORES 218 BILLS 94 MN FOOTFALLS 183 MN 6 | FAST FORWARD INDIA The 218 store Big Bazaar chain is took a leadership position by being now present in 118 cities and covers among the first to form a partnership almost 10 Mn. Sq. Ft. of space. Yet, it with Patanjali and offer its range continues to be nimble and agile so across all stores. that continuous innovations can be introduced to create more value and a Decentralized decision making that stronger relationship with customers. allows stores to decide on 7 bets or promotions every week, unique A key focus area for the format was incentive plans for selling quantities to increase frequency of visits of above a threshold value and customers, that translates into higher hundred product collections that are velocity of sales and ensuring format championed by category teams were remains relevant to a fast changing some of the measures taken to allow consumer demographics. A whole the chain respond faster and at a local new consumer experience in the level. form of Big Bazaar GenNxt was introduced in two new, iconic malls - Integrating and advancing DLF Mall of India in Noida and Infinity technology-led innovations in all its Mall, Malad in Mumbai, to cater to consumer interactions will continue the young, working professionals to be a key focus for the Company. who live and shop in the vicinity of Even as the Company works towards the malls. Smart and experiential, introducing an omni-channel platform Big Bazaar GenNxt stores feature and the concept of digitally-enabled interactive, digital displays featuring endless aisles at its stores, product information, multi-sensory Big Bazaar today offers home environments and live kitchens, sit- delivery at multiple locations and down checkouts, superior customer a partnership with Amazon, now service and many more features that allows customers to order online. are designed to win the hearts of a Customers also have the option to more global, young, aspirational, pay through Mobikwik mobile wallets urban India. Many of these features at all Big Bazaar stores and soon can are also being progressively avail instant credit for any purchase introduced in a number of new and through a partnership with Bajaj existing stores. Finserv. Beyond the stores, the brand Big Bazaar is well regarded for connected with the younger creating consumption days that have audience - whether through a mass become the norm for the industry. media campaign, Paper Pataka that While signature events like Sabse championed a silent Diwali and Saste Din and Mahabachat during the through social media campaigns national holidays of January 26, and that offered more than over 3 brand August 15, continue to grow, during updates on an average every day, the year, the Company strengthened delivering 152 million impressions another property, Public Holiday across Facebook, Twitter, Instagram Sale. Held thrice around May 1, and YouTube. October 2, and December 25, the total eleven days of promotion brought in Simultaneously, the brand worked on significant business as well as new multiple fronts to ensure that its core customers. customer shops more frequently at its stores. Within the food category, the Consumers remain at the heart of focus was on staples and fresh fruits everything Big Bazaar attempts and and vegetables to ensure consistent for the fifth year, Big Bazaar was quality, high availability of core range adjudged among the top 5 most INDIA’S 3RD and regional emphasis. When the trusted brands in the services sector price of Tur Dal skyrocketed and in India in a consumer poll by Nielsen MOST TRUSTED made headline news, the chain and The Economic Times. maintained the price at ` 99 a SERVICE BRAND kilogram thereby recruiting new (Nielsen, Economic Times Survey) customers to its fold. The brand also FUTURE RETAIL | ANNUAL REPORT 2015-16 | 7 STORES 320 FOOTFALLS 49 MN SPACE 0.7 MN.SQ.FT.