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Notes to Accounts of Future Lifestyle Fashions Ltd.

Mar 31, 2016

1. Disclosure Relating to Leases

The Company has entered into operating lease arrangements for premises. The future minimum lease rental obligation under non-cancellable operating leases in respect of these assets is Rs. 294.68 Crore (2014-15: Rs. 313.05 Crore). The Lease Rent payable not later than one year is Rs. 136.08 Crore (2014-15: Rs. 130.21 Crore), payable later than one year but not later than five year is Rs. 157.60 Crore (2014-15: Rs. 182.74 Crore) and payable later than five years is Rs. 1.00 Crore (2014-15: Rs. 0.09 Crore).

2. Capital and other Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 11.59 Crore (2014-15: Rs. 14.60 Crore).

3. Borrowing Cost

The borrowing cost capitalized during the year ended March 31, 2016 was Rs. Nil (2014-15: Rs. 4.23 Crore).

4. Related party Disclosures

As required under Accounting Standard 18 "Related Party Disclosures" are given below:

A. List of Related parties

a. Subsidiary Companies

i. Elisir Lifestyle Private Limited

ii. Future Style Lab Limited (w.e.f. July 06, 2015)

iii. Indus-League Clothing Limited

iv. Indus Tree Crafts Private Limited

v. Indus Tree Producer Transform Private Limited (100% Subsidiary of Indus Tree Crafts Private Limited)

vi. Rachika Trading Private Limited

b. Associate Companies

i. Eclat Life Style Private Limited

ii. KFC Shoemaker Private Limited

iii. Mineral Fashions Private Limited

iv. Resource World Exim Private Limited

v. Turtle Limited

c. Joint ventures

i. Celio Future Fashion Private Limited

ii. Clarks Future Footwear Private Limited

iii. Holii Accessories Private Limited

d. Enterprises over which key managerial personnel are able to exercise significant influence

i. Future Corporate Resources Limited

ii. Future Enterprises Limited (Formerly known as Future Retail Limited)

iii. Future Ideas Company Limited

e. key Management personnel (KMp)

i. Mr. Kishore Biyani - Managing Director

ii. Mr. C. P. Toshniwal - Executive Director & Chief Financial Officer

C. Significant Related party Transaction

i. Revenue from Operation includes Rachika Trading Private Limited Rs. 2.95 Crore (2014-15: Rs. 8.34 Crore), Turtle Limited Rs. 0.33 Crore (2014-15: Rs. 2.63 Crore), Future Enterprises Limited Rs. 95.32 Crore (2014-15: Rs. 170.78 Crore), Future Style Lab Limited Rs. 1.66 Crore (2014-15: Rs. Nil), Celio Future Fashion Private Limited Rs. 0.35 Crore (2014-15: Rs. 0.45 Crore).

ii. Purchase of Goods and Services includes Rachika Trading Private Limited Rs. 11.70 Crore (2014-15: Rs. 7.17 Crore), Indus Tree Producer Transform Private Limited Rs. 6.47 Crore (2014-15 : Rs. 1.16 Crore), Elisir Lifestyle Private Limited Rs. 15.84 Crore (2014-15: Rs. 2.15 Crore), Turtle Limited Rs. 25.68 Crore (2014-15: Rs. 37.25 Crore), Celio Future Fashion Private Limited Rs. 6.48 Crore (2014-15: Rs. 5.86 Crore), Future Enterprises Limited Rs. 4.17 Crore (2014-15: Rs. 57.97 Crore), KFC Shoemaker Private Limited Rs. 4.91 Crore (2014-15: Rs. 3.80 Crore), Future Corporate Resources Limited 49.52 Crore (2014-15: Rs. 41.10 Crore), Mineral Fashions Private Limited Rs. 5.90 Crore (2014-15 : Rs. 2.09 Crore).

iii. Purchase of Fixed Assets includes Future Enterprises Limited Rs. 0.69 Crore (2014-15: Rs. 0.55 Crore).

iv. Sale of Fixed Assets includes Future Enterprises Limited Rs. 0.07 Crore (2014-15: Rs. 1.83 Crore).

v. Investment made includes Rachika Trading Private Limited Rs. 20.00 Crore (2014-15: Rs. Nil), Future Style Lab Limited Rs. 4.97 Crore (2014-15: Rs. Nil), Mineral Fashions Private Limited Rs. 3.80 Crore (2014-15: Rs. 5.00 Crore), KFC Shoemaker Private Limited Rs. 0.99 Crore (2014-15: Rs. Nil), Holii Accessories Private Limited Rs. 2.50 Crore (2014-15: Rs. Nil), Celio Future Fashion Private Limited Rs. 0.88 Crore (2014-15: Rs. Nil).

5. Segment Reporting

The Company is primarily engaged in the business of fashion, which in terms of Accounting Standard 17 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) "Segment Reporting" constitutes a single reporting segment.

6. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues which are outstanding for more than 45 days during the year. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company and relied by the auditors.

7. a. The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivatives instruments for trading and speculative purposes. Forward Contract outstanding as at March 31, 2016 are Rs. 1.77 Crore (2014-15: Rs. 9.36 Crore).

b. As of Balance Sheet date the Company has net foreign currency exposures (in USD) that are not hedged by derivate instruments or otherwise amounting to Rs. 29.37 Crore (2014-15: Rs. 4.04 Crore)

8. Investment by the Company in Subsidiary companies, Joint Venture companies and Associate companies are held exclusively with a view to its subsequent disposal in near future and therefore it is not required to prepare consolidated financial statements under the provisions of the Companies Act, 2013 and the prescribed Accounting Standards.

9. There was a fire at the Company''s one of the Brand Factory store situated at Marathali Bangalore on October 02, 2015, due to which it has become non-operational. The loss incurred by the Company is adequately covered under insurance claim. The Company has also started a new Brand Factory store in the same vicinity on October 17, 2015.

10. For the Year ended March 31, 2016 the Board of Directors of the Company have recommended dividend of Rs. 0.40 Per Share (2014-15: Rs. 0.40) to Equity Shareholders aggregating to Rs. 9.13 Crore (2014-15 : Rs. 9.10 Crore) including Dividend Distribution Tax.

11. Previous Year''s Figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification/disclosure.


Mar 31, 2015

1. Disclosure Relating to Leases

The Company has entered into operating lease arrangements for fixed assets and premises. The future minimum lease rental obligation under non-cancellable operating leases in respect of these assets is Rs. 624.33 Crore (2014: Rs. 391.24 Crore). The Lease Rent payable not later than one year is Rs. 163.81 Crore (2014: Rs. 162.50 Crore), payable later than one year but not later than five year is Rs. 364.54 Crore (2014: Rs. 224.64 Crore) and payable later than five years is Rs. 95.97 Crore (2014: Rs. 4.10 Crore)

2. Capital and other Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 14.60 Crore (2014: Rs. 17.64 Crore).

3. Contingent Liabilities

(Rs. in Crore)

Particulars 2014-15 2013-14

A. Claims against the Company not acknowledged as debts 3.37 4.24

B. Corporate Guarantees given 24.20 5.00

C. Guarantees given by the bank on behalf of the Company 0.31 0.31

4. Borrowing Cost

The borrowing cost capitalized during the year ended March 31, 2015 was Rs. 4.23 Crore (2014: Rs. 10.88 Crore).

5. Related Party Disclosures

As required under Accounting Standard 18 "Related Party Disclosures" are given below:

A. List of Related Parties

a. Subsidiary Companies

i. Elisir Lifestyle Private Limited (w.e.f. October 17,2014)

ii. Indus-League Clothing Limited

iii. Indus Tree Crafts Private Limited

iv. Indus Tree Producer Transform Private Limited (100% Subsidiary of Indus Tree Crafts Private Limited)

v. Rachika Trading Private Limited (w.e.f. April 10,2014)

b. Associate Companies

i. Eclat Life Style Private Limited (w.e.f. August 08,2014)

ii. KFC Shoemaker Private Limited

iii. Mineral Fashions Private Limited

iv. Resource World Exim Private Limited

v. Turtle Limited

c. Joint Ventures

i. Celio Future Fashion Private Limited (Formerly known as Celio Future Fashion Limited)

ii. Clarks Future Footwear Private Limited ( Formerly known as Clarks Future Footwear Limited)

iii. Holii Accessories Private Limited

d. Enterprises over which key managerial personnel are able to exercise significant influence

i. Future Corporate Resources Limited

ii. Future Ideas Company Limited

iii. Future Retail Limited

e. Key Management Personnel

i. Mr. Kishore Biyani - Managing Director

ii. Mr. C. P. Toshniwal - Executive Director & Chief Financial Officer

i. Revenue from Operation includes Rachika Trading Private Limited Rs. 8.34 Crore (2014: Rs. Nil), Turtle Limited Rs. 2.63 Crore (2014: Rs. 0.38 Crore), Celio Future Fashion Private Limited Rs. 0.45 Crore (2014: Rs. 0.02 Crore), Future Retail Limited Rs. 170.78 Crore (2014: Rs. 14.75 Crore).

ii. Purchase of Goods and Services includes Rachika Trading Private Limited Rs. 7.17 Crore (2014 : '' Nil),Indus Tree Producer Transform Private Limited Rs. 1.16 Crore (2014 : Rs. Nil),Elisir Lifestyle Private Limited Rs. 2.15 Crore (2014 : Rs. Nil),Turtle Limited Rs. 37.25 Crore (2014: Rs. 17.99 Crore),Celio Future Fashion Private Limited Rs. 5.86 Crore (2014 : Rs. 3.97 Crore),Future Retail Limited Rs.57.97 Crore (2014 : Rs. Nil), Future Corporate Resources Limited Rs. 41.10 Crore (2014 : Rs. 27.03 Crore).

iii. Purchase of Fixed Assets includes Clarks Future Footwear Private Limited Rs. 0.14 Crore (2014: Rs. Nil), Future Retail Limited Rs. 0.55 Crore (2014: Rs. Nil).

iv. Sale of Fixed Assets includes Future Retail Limited Rs. 1.83 Crore (2014: Rs. Nil).

v. Investment made includes Indus Tree Crafts Private Limited Rs. 7.47 Crore (2014: Rs. 2 Crore) Mineral Fashions Private Limited Rs. 5.00 Crore (2014: Rs. Nil), Clarks Future Footwear Private Limited Rs. 5.00 Crore (2014: Rs. Nil).

vi. Loans and Advances Given includes Rachika Trading Private Limited Rs. 24.74 Crore (2014: Rs. Nil).

vii. Deposit Received includes Turtle Limited Rs. 0.74 Crore(2014: Rs. 0.17 Crore), Mineral Fashions Private Limited Rs. 0.28 Crore (2014: Rs. 0.11 Crore)

6. Segment Reporting

The Company is primarily engaged in the business of fashion, which in terms of Accounting Standard 17 notified under the Companies (Accounting Standards) Rules, 2006 (as amended) "Segment Reporting" constitutes a single reporting segment.

7. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues which are outstanding for more than 45 days during the period. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company and relied by the auditors.

8. a. The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivatives instruments for trading and speculative purposes. Forward contracts outstanding as at March 31, 2015 are Rs. 9.36 Crore (2014: Rs. 2.04 Crore)

b. As of Balance Sheet date the Company has net foreign currency exposures (in USD) that are not hedged by derivative instruments or otherwise amounting to Rs. 4.04 Crore (2014: Rs. 3.51 Crore).

9. Investment by the Company in Subsidiary companies, Joint Venture companies and Associate companies are held exclusively with a view to its subsequent disposal in near future and therefore it is not required to prepare consolidated financial statements under the provisions of Companies Act, 2013 and the prescribed Accounting Standards.

10. For the Year Ended March 31, 2015 the Board of Directors of the Company have recommended dividend of Rs. 0.40 Per Share (2014: Rs. 0.40) to Equity Shareholders and aggregating to Rs. 9.10 Crore (2014: Rs. 7.97 Crore) including Dividend Distribution Tax.

11. Previous Year''s Figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.

As per our report of even date attached For and on behalf of Board of Directors


Mar 31, 2013

1) Contingent Liabilities not provided for Nil.

2) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. NIL.

3) Related Party Disclosures

Disclosures as required by Accounting Standard 18 "Related Party Disclosures" are given below: a) Name of related party

Holding Company:

Future Retail Limited { Formerly known as Pantaloon Retail (India) Limited} (w.e.f November 9,2012)

Future Value Retail Limited (Till November 8, 2012)

Fellow Subsidiary:

Future Value Retail Limited (w.e.f November 9,2012)

4) The Board of Directors of the Company have approved the Composite Scheme of Arrangement and Amalgamation between indus-League Clothing Limited ("ILCL"), Lee Cooper (India) Limited ("LEE"), Future Ventures India Limited("FViL"), Future Retail Limited (formerly known as Pantaloon Retail (India) Limited) and the Company and their respective shareholders and creditors ("Fashion Demerger Scheme5'').

The Appointed Date for the Fashion Demerger Scheme is January 1, 2013 and the scheme would be given effect on receipt of requisite approvals from statutory authorities.

5) There are no Micro, Small and Medium Enterprises, to whom the Company owes dues which are outstanding for more than 45 days during the period. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

6) in absence of virtual certainty of future taxable income, deferred tax asset has not been calculated on losses as per Income Tax Act, 1961.

7) Company was incorporated on May 13, 2012 and the first accounting period is from May 13, 2012 to March 31, 2013.

 
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