Two listed Future group firms -- Future Retail and Future Lifestyle Fashion -- on Tuesday expressed their inability to convene a board meeting before May 30, to approve their financial results for the quarter and year ended March 31, on account of vacant positions on their respective boards.
Past last two months, Future Retail Ltd (FRL), the flagship firm of Kishore Biyani-led Future Group, witnessed several top-level exits after the Rs 24,713-crore deal with Reliance Retail was called off.
Quickly this month, FRL's Chief Financial Officer C P Toshniwal and Company Secretary Virendra Samani had resigned from the company.
It's Managing Director Rakesh Biyani had also stepped down this month.
While at Future Lifestyle Fashion Ltd (FLFL), its Chairperson Shailesh Haribhakti had resigned from his position.
"Pursuant to cessation/resignation of a few Directors in recent past, the composition and structure of the Board of Directors and Audit Committee of the Company has become imbalanced and not in compliance with the provisions of the Companies Act, 2013 and the SEBI Regulations, 2015," said FRL and FLFL in regulatory filings.
Although both companies have been taking necessary actions to fill the vacancies caused by such resignations, the present structure of the Board of Directors and the Audit Committee "would not be competent to approve the audited financial results" for the quarter and fiscal year ended March 31, 2022.
"In view of the above, Meetings of Board of Directors and Audit Committee to approve the captioned financial results would not be possible to be convened and held before May 30, 2022," said FRL and FLFL.
As per Securities and Exchange Board of India (SEBI) norms, companies are required to file their quarterly results, within 45 days from the end of the quarter, and in case of annual financial results, within 60 days from end of the financial year.
per Securities and Exchange Board of India (SEBI) norms, companies are required to file their quarterly results within 45 days from the end of the quarter, and in case of annual financial results, within 60 days from the end of the financial year.
As per this timeframe, companies have to file their quarterly and annual results by May 15 and May 30 respectively. The Future Group companies said they would announce the results as early as possible.
FRL is facing an insolvency petition filed by its lenders before the National Company Law Tribunal (NCLT) as it has committed defaults.
As per this timeframe, companies have to file their quarterly and annual results by May 15 and May 30 respectively.
The company would announce the results as early as possible, after the composition of the Board of Directors and Audit Committee complied and statutorily capable to approve it, both the companies said.
FRL is facing an insolvency petition filed by its lenders before the National Company Law Tribunal as it has committed defaults.
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After Reliance Retail Ventures Ltd., the retail holding company of Reliance Industries (RIL), withdrew its ₹24,713 crore offer for Future group’s retail business, there is little hope of survival for Kishore Biyani companies. Future has a shade over 550 stores left after RIL took over 830 stores—including Big Bazaar, FBB and Easyday—for not paying rentals since early 2020. Of the 550 stores, over 70% are defunct, as vendors have stopped supplies for non-payment of dues.
Future’s business is a pale shadow of its past—1,700 stores and ₹30,524 revenue at its peak in FY2019. Today, it owes ₹20,000 crore to banks and ₹8,000 crore to unsecured creditors and vendors. Plus, there would be interest on loans.
Operational losses are huge—a combined loss of ₹5,129 crore on revenues of ₹9,456 crore in FY2021. In FY2019, it had posted a combined profit of ₹915 crore. Net debt was ₹10,108 crore in March 2019. Market value has since fallen from ₹34,399 crore to ₹3,815 crore (in March 2021).
In a notice to stock exchanges, RIL said secured creditors had voted against its scheme of arrangement. "In view thereof, the subject scheme of arrangement cannot be implemented," it said.
Shareholders and unsecured creditors voted in favour of the deal. Secured creditors (banks) had asked RIL whether it wanted to execute the earlier offer mentioned in the scheme of arrangement.
But RIL chose not to respond officially before the voting. Also, it sent feelers it wanted to cut the offer price drastically as it had already taken over a major portion of Future Group assets, says a banker.
The rejection of the deal is a blessing in disguise for RIL as Future has been engaged in a messy legal war with Amazon, the world's largest e-commerce player. Amazon, which has 3.58% stake in Future Retail Ltd. (FRL), indirectly, doesn’t want the ₹24,713 crore deal to go through. Amazon got an upper hand in the litigation after Supreme Court (SC) ordered resumption of arbitration in Singapore International Arbitration Centre (SIAC).
The Singapore Emergency Arbitrator had stopped the deal in an interim order in late 2020. However, Future fought the case in various courts in India with support from Reliance Retail. Sources say Amazon will continue its arbitration against Future Group though RIL has scrapped the deal.
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