Company Overview

Future Market Networks Limited (BSE: 533296, NSE: FMNL) published its Annual Report for FY 2025-26 and consolidated financial statements, revealing significant financial deterioration and ongoing legal challenges.

Financial Performance

Profitability Decline: The company reported an 88% YoY decline in consolidated net profit to ₹7.64 crore (standalone: ₹8.36 crore) on total income of ₹110.69 crore, with revenue from operations decreasing 2.4% to ₹98.54 crore. Other income increased 81.9% to ₹12.15 crore. Basic EPS fell to ₹1.30 from ₹11.44 in FY25.

Balance Sheet & Ratios: Total assets decreased 8.0% to ₹322.13 crore while total equity increased 13.1% to ₹111.77 crore. Key financial ratios deteriorated significantly - Return on Equity fell to 6.83% from 65.36%, Net Profit Margin dropped to 7.75% from 63.95%, and Debt Service Coverage Ratio declined to 2.52x from 5.03x.

Capital Structure & Corporate Actions

Share Capital: The company converted 30,00,000 warrants into equity shares on March 27, 2026, increasing paid-up equity share capital to ₹63.64 crores. No dividend was recommended for FY26, continuing the company's policy of not declaring dividends.

ESOP Scheme: Under the Employee Stock Option Scheme 2016, 15,30,000 options were granted at ₹11.21 per option, with 3,57,500 options vesting during the year and 1,00,000 options lapsing.

Legal & Contingent Liabilities

Major Disputes: The company faces significant contingent liabilities including:

  • ₹18,448.96 crore demand notice from Yes Bank (assigned to JC Flowers ARC) for corporate guarantees given to Basuti Sales & Trading Private Limited
  • Arbitration award of ₹12.90 crore in favor of Mr. Surana (₹10.25 crore already paid)
  • Arbitration award of ₹129.05 crore to Mahaveer Constructions
  • Multiple cases pending before DRT, NCLT, High Courts, and Supreme Court

Asset Security: Assets worth ₹118.03 crore are pledged as security, including properties and investment assets. The company has term loans of ₹69.67 crore from Axis Finance secured by Cosmos Mall (Ujjain).

Corporate Governance & AGM Details

The 18th Annual General Meeting is scheduled for September 28, 2026, with book closure from September 21-25, 2026. The Board consists of 6 directors including 3 independent directors. Mr. Shreesh Misra retires by rotation and seeks re-appointment.

Subsidiaries & Related Parties

The company has four subsidiaries (Aashirwad Malls, Suhani Mall Management, Sun City Properties, Jeremia Real Estate) and one joint venture (Riddhi Siddhi Mall Management). Related party transactions were significant, with key management personnel compensation of ₹14.57 crore and loans/advances to related parties of ₹15.59 crore.

Auditor Emphasis

Auditors emphasized matters regarding contingent liabilities against corporate guarantees and pledged assets, noting that investments in four subsidiaries (total assets ₹80.36 crore) were audited by other firms. Proceedings involving subsidiaries before NCLT regarding removal of goods and recovery of expenses were also highlighted.